Document:

OICco Acquisition IV, Inc. POS AM

 

Exhibit 10.b

 

EXCLUSIVE LICENSE AND OPTION TO LICENSE AGREEMENT

 

BETWEEN

 

Chong Corporation

 

AND

 

VapAria Corporation

 

LICENSE FOR

 

US Utility Patent No. 8,287,922 “VAPORIZED
LOBELIA PRODUCT AND METHODS OF USE,”

 

AND OPTION TO LICENSE FOR 

 

U.S. Patent Application No. 13/453,939 for “MEDICANT
DELIVERY SYSTEM,” US Patent Application No. 12/858,373 “VAPORIZED TOBACCO PRODUCT AND METHODS OF USE,” and US
Patent Application No. 13/653,320 “VAPORIZED MEDICANTS AND METHODS OF USE.”

 

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TABLE OF CONTENTS 

 

	PARTIES AND RECITALS	 	3
	1. GRANT	 	3
	2. SUBLICENSES	 	3
	3. LICENSE ISSUE FEE/MAINTENANCE FEES	 	4
	4. ROYALTIES	 	4
	5. DILIGENCE	 	4
	6. PROGRESS AND ROYALTY REPORTS	 	5
	7. PROCEDURE FOR EXERCISE OF THE OPTION	 	6
	8. BOOKS AND RECORDS	 	6
	9. LIFE OF THE AGREEMENT	 	6
	10. TERMINATION BY THE ASSIGNEE	 	6
	11. TERMINATION BY LO	 	7
	12. DISPOSITION OF LICENSED PRODUCTS UPON TERMINATION	 	7
	13. PATENT PROSECUTION AND MAINTENANCE	 	7
	14. MARKING	 	8
	15. USE OF NAMES AND TRADEMARKS	 	8
	16. LIMITED WARRANTIES	 	8
	17. PATENT INFRINGEMENT	 	9
	18. INDEMNIFICATION	 	10
	19. COMPLIANCE WITH LAWS/EXPORT CONTROLS	 	10
	20. GOVERNMENT APPROVAL OR REGISTRATION	 	10
	21. ASSIGNMENT OF AGREEMENT	 	10
	22. NOTICES	 	10
	23. PAYMENTS	 	11
	24. WAIVER	 	11
	25. CONFIDENTIALITY	 	11
	26. SEVERABILITY	 	12
	27. APPLICABLE LAW; VENUE; ATTORNEYS’ FEES	 	12
	28. SCOPE OF AGREEMENT	 	12

 

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PARTIES- AN EXCLUSIVE LICENSE AGREEMENT FOR 

 

This exclusive license agreement (“Agreement”) and option
to license agreement is effective December 31, 2013 (“Effective Date”), by and between (a) Chong Corporation, a Minnesota
Corporation, at 5550 Nicollet Avenue, Minneapolis, MN 55419 (“Assignee”) and (b) VapAria Corporation (“Licensee/Option””
or “LO”), a Minnesota corporation having a principal place of business at 5550 Nicollet Avenue, Minneapolis, MN 55419.
The Assignee and LO will be referred to herein, on occasion, individually as “Party” or collectively as “Parties”.

 

RECITALS 

 

Whereas, The Assignee has assignments of title to the inventions
entitled “MEDICANT DELIVERY SYSTEM,” “VAPORIZED LOBELIA PRODUCT AND METHODS OF USE,” “VAPORIZED TOBACCO
PRODUCT AND METHODS OF USE,” and “VAPORIZED MEDICANTS AND METHODS OF USE” and wishes to covey the rights to these
inventions to the LO.

 

Whereas, The LO has provided the Assignee a commercialization plan
for these Inventions;

 

Whereas, The Assignee and LO desire to have the Inventions developed
and commercialized so that products resulting therefrom may be available for public use and benefit; and

 

Whereas, LO desires to acquire, and The Assignee desires to grant,
a license under Patent Rights to make, use, sell, offer for sale, and import products, methods, and services in accordance with
the terms herein.

 

Now, therefore, the Parties agree as follows:

 

1. GRANT 

 

1.1 Subject to the limitations set forth in this Agreement, The
Assignee hereby grants to LO an exclusive license and an option to license under Patent Rights, in the Licensed Field of Use in
the Licensed Territory, (a) to make, use, offer for Sale, import, and Sell Licensed Products and Licensed Services, and (b) to
practice Licensed Methods for the Inventions identified herein.

 

2. SUBLICENSES 

 

2.1 The Assignee hereby further grants to LO the right to grant
to Affiliates of LO, to Affiliates of Sub-Licensees, and to third parties a Sublicense under the rights granted to LO hereunder,
provided that LO has exclusive rights under this Agreement at the time of the grant of the Sublicense. However, the option to license
is not transferable, but once optioned all rights to sublicense are then in force subject to the terms of this agreement.

 

2.2 LO will collect and guarantee payment of all monies and other
consideration due The Assignee under this Agreement from Sub-Licensees.

 

2.3 Upon termination of this Agreement for any reason, at The Assignee’s
discretion, all Sublicenses that are granted by LO pursuant to this Agreement, where the Sub-Licensee is in compliance with its
Sublicense Agreement as of the date of such termination, will remain in effect and will be assigned to The Assignee.

 

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3. LICENSE ISSUE FEE/MAINTENANCE FEES 

 

3. LO will issue to The Assignee a non-creditable, non-refundable
license issue fee (“License Issue Fee”) and option to license fee of $525,844 in the form of a five year, convertible
preferred stock upon execution of this Agreement. The description and designation of the preferred stock are provided in Exhibit
A of this license agreement. The License Issue and Option Issue Fee is non-refundable and not an advance against royalties or other
payments due under this Agreement. The licenses subject to option shall not be higher than $5 million and may be payable in cash,
equity or issuance of a note acceptable to LO. There shall be no minimum license fee.

 

4. ROYALTIES 

 

4.1 LO will pay to The Assignee earned royalties (“Earned
Royalties”) at the rate of three percent (3%) of the Net Sales of all Licensed Products and Licensed Services. The royalty
rate and procedure described herein will also apply to any patents subsequently licensed pursuant to the exercise of the option.

 

4.2 Earned Royalties accruing to The Assignee will be paid to The
Assignee, to be accompanied by the corresponding royalty report as required in Paragraph 7.4, quarterly within sixty (60) days
after the end of each calendar quarter as follows: May 31 (for first quarter), August 31 (for second quarter), November 30 (for
third quarter), and February 28 (for fourth quarter).

 

4.3 Beginning in the first calendar year immediately following the
calendar year in which the first Sale of Licensed Products or Licensed Services takes place, and in each calendar year thereafter,
LO will pay to The Assignee a minimum annual royalty (“Minimum Annual Royalty”) of fifty thousand dollars ($50,000.00)
for the life of this Agreement. The Minimum Annual Royalty will be paid to The Assignee by February 28 of each year and will be
credited against the Earned Royalties due and owing for the calendar year for which the Minimum Annual Royalty is made.

 

4.4 All payments due The Assignee will be payable in United States
dollars. When Licensed Products and Licensed Services are Sold for monies other than United States dollars, Earned Royalties will
first be determined in the foreign currency of the country in which the Sale was made and then converted into equivalent United
States dollars. The exchange rate will be that rate quoted in the Wall Street Journal on the last business day of the reporting
period.

 

4.5 Earned Royalty payments due to The Assignee for Sales occurring
in any country outside the United States will not be reduced by any taxes, fees, or other charges imposed by the government of
such country on the remittance of royalty income. LO will also be responsible for all bank transfer charges for payments to The
Assignee.

 

4.6 LO will make all payments under this Agreement either by check
or electronic transfer, payable to Chong Corporation and LO will forward such payments to The Assignee at its address as provided
above.

 

4.7 If any patent or patent application, or any claim thereof, included
within Patent Rights expires, or is held invalid or unpatentable in a final decision by a court of competent jurisdiction and last
resort and from which no appeal has been or can be taken, all obligations to pay Earned Royalties based on such patents, patent
applications, or claims will cease as of the date of such expiration or final decision. LO will not, however, be relieved from
paying any Earned Royalties that accrued before such expiration or final decision or that are based on another patent, patent application,
or claim within Patent Rights which is not expired, or which is not held invalid or unpatentable in such final decision.

 

5. DILIGENCE 

 

5.1 LO will diligently proceed with the development, manufacture,
marketing, and Sale of Licensed Products and Licensed Services in quantities sufficient to meet the market demand.

 

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5.2 In addition to LO’s obligations under Paragraph 5.1, LO
will accomplish the following milestones in LO’s activities under this Agreement: within 24 months of this agreement launch
a commercial product based upon the licenses and inventions described herein. This time frame shall be in effect on the intellectual
property covered by the option with the 24 months beginning upon exercise of the option.

 

5.3 If LO is unable to meet any of its diligence obligations set
forth in Paragraphs 5.1 and 5.2, then The Assignee will so notify LO of failure to perform. LO will have the right and option to
extend the target date of any such diligence obligation for a period of six (6) months upon the payment of Five Thousand dollars
($5,000) within the thirty (30)-day period prior to the date to be extended, for each such extension option exercised by LO. LO
may further extend the target date of any diligence obligation for an additional six (6) months upon payment of an additional Five
Thousand dollars ($5,000). Additional extensions may be granted only by written agreement of the Parties. These payments are in
addition to any other payments owed under this Agreement. Should LO opt not to extend the obligation or fail to meet the obligation
by the extended target date, then The Assignee will have the right and option either to terminate this Agreement or to reduce LO’s
exclusive license to a non-exclusive license. This right, if exercised by The Assignee, supersedes the rights granted in Article
2 (Grant).

 

5.4 To exercise either the right to terminate this Agreement or
to reduce the license to a non-exclusive license for lack of diligence under Paragraph 6.1 or 6.2, The Assignee will give LO written
notice of the deficiency. LO thereafter will have sixty (60) days to cure the deficiency. If The Assignee has not received satisfactory
written evidence that the deficiency has been cured by the end of the sixty (60)-day period, then The Assignee may, at its option,
either terminate the Agreement or reduce LO’s exclusive license to a non-exclusive license by giving written notice to LO. These
notices will be subject to Article 22 (Notices).

 

6. PROGRESS AND ROYALTY REPORTS 

 

6.1 For the six (6)-month period beginning no later than 24 months
from the effective date of this agreement, within sixty (60) days of each June 30 and December 31 following the end of such six
(6)-month period, LO will submit to The Assignee a semi-annual progress report covering LO’s activities related to the development
and testing of Licensed Products, Licensed Services, and Licensed Methods, including the obtaining of necessary governmental approvals,
if any, for marketing in the United States. These progress reports will be made until the first Sale occurs in the United States.

 

6.2 Each progress report will be a sufficiently detailed summary
of activities of LO and any SubLOs so that The Assignee may evaluate and determine LO’s progress in the development of Licensed
Products, Licensed Services, and Licensed Methods, and in meeting LO’s diligence obligations under Article 5.

 

6.3 After the first Sale of a Licensed Product or a Licensed Service,
LO will make quarterly royalty reports to The Assignee, to be accompanied by the corresponding Earned Royalty payment as required
in Paragraph 5.2, within sixty (60) days after the quarters ending March 31, June 30, September 30, and December 31, of each year.
Each such royalty report will include at least the following:

 

(a) the volume of Licensed Products and Licensed Services Sold;

 

(b) gross revenue from Sale of Licensed Products and Licensed Services;

 

(c) Net Sales pursuant to Paragraph 1.7, and the calculation of
Net Sales, including all deductions taken, so that The Assignee can confirm the calculation;

 

(d) total Earned Royalties due The Assignee; and (e) names and addresses
of Sub-Licensees for any new Sublicenses entered into during the reporting quarter.

 

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6.4 If no Sales of Licensed Products or Licensed Services have occurred
during the report period, the royalty report will contain a statement to this effect.

 

7. PROCEDURE FOR EXERCISE OF THE OPTION TO LICENSE

 

7.1 The LO may option to license that intellectual property of the
Assignee at any time during the term of this agreement by following the following procedure(s): by providing the Assignee no less
than 30 days written notice of intent to exercise.

 

7.2 Upon notice of intent to the Assignee will provide LO with the
cost of the license and the LO shall then have no more than 60 days to complete the license agreement and arrange for payment-
which can be in the form or cash, note or equity or some combination thereof.

 

8. BOOKS AND RECORDS 

 

8.1 LO will keep full, true, and accurate books of accounts containing
all particulars that may be necessary for the purpose of showing (a) the amount of Earned Royalties payable to The Assignee, and
(b) LO’s compliance with obligations under this Agreement. For five (5) years following the end of the calendar year to which
they pertain, said books and the supporting data will be open, during normal business hours upon reasonable notice, to the inspection
and audit by representatives of The Assignee for the purpose of verifying LO’s royalty reports or compliance in other respects
with this Agreement. Such representatives will be required to hold all information in confidence except as necessary to communicate
LO’s non-compliance with this Agreement to The Assignee.

 

8.2 The fees and expenses of The Assignee’s representatives
performing such an examination will be borne by The Assignee, provided that if an error in underpaid royalties to The Assignee
of more than five percent (5%) of the total Earned Royalties due for any year is discovered, then the fees and expenses of these
representatives in conducting such examination will be borne by LO.

 

9. LIFE OF THE AGREEMENT 

 

9.1 Unless otherwise terminated by operation of law or by acts of
the Parties in accordance with the terms of this Agreement, this Agreement will be in effect from the Effective Date and will remain
in effect for the life of the last-to-expire patent or last-to-be-abandoned patent application licensed under this Agreement, whichever
is later.

 

9.2 Any termination of this Agreement will not relieve LO of LO’s
obligation to pay any payment due or owing at the time of such termination and will not relieve any obligations, owed by either
Party to the other Party, established prior to termination.

 

10. TERMINATION BY THE ASSIGNEE 

 

10.1 If LO should violate or fail to perform any term of this Agreement,
then The Assignee may give written notice of such default (“Notice of Default”) to LO. If LO should fail to repair
such default within sixty (60) days of the effective date of such notice, The Assignee will have the right to terminate this Agreement
and the licenses herein by a second written notice (“Notice of Termination”) to LO. If a Notice of Termination is sent
to LO, this Agreement will automatically terminate on the effective date of such notice. Such termination will not relieve LO of
LO’s obligation to pay any royalty or license fees owing at the time of such termination and will not impair any accrued
rights of The Assignee. These notices will be subject to Article 22 (Notices).

 

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10.2 Notwithstanding Paragraph 9.1, this Agreement will terminate
immediately, if LO files a claim including in any way the assertion that any portion of Patent Rights is invalid or unenforceable,
where the filing of such claim is by LO, by a third party on behalf of LO, or by a third party at the urging of LO.

 

10.3 Notwithstanding Paragraph 9.1, this Agreement will terminate
immediately in the event of the filing of a petition for relief under the United States Bankruptcy Code by or against LO as a debtor
or alleged debtor.

 

11. TERMINATION BY LO 

 

11.1 LO will have the right at any time to terminate this Agreement
in whole or as to any portion of Patent Rights by giving notice in writing to The Assignee. Such notice of termination will be
subject to Article 22 (Notices) and such termination of this Agreement in whole or in part will be effective ninety (90) days after
the effective date of such notice of termination.

 

11.2 Any termination pursuant to Paragraph 10.1 will not relieve
LO of any obligation or liability accrued hereunder prior to such termination or rescind anything done by LO or any payments made
to The Assignee hereunder prior to the time such termination becomes effective, and such termination will not affect in any manner
any rights of The Assignee arising under this Agreement prior to such termination.

 

12. DISPOSITION OF LICENSED PRODUCTS UPON TERMINATION 

 

12.1 Upon termination of this Agreement, for a period of one hundred
and twenty (120) days after the date of termination, LO may complete the making of, and may Sell, any partially made Licensed Products,
and LO may continue the practice of Licensed Methods only to the extent necessary to do the foregoing; provided that all such Sales
will be subject to the terms of this Agreement including, but not limited to, the payment of royalties at the rate and at the time
provided herein and the rendering of reports thereon.

 

13. PATENT PROSECUTION AND MAINTENANCE 

 

13.1 The Assignee will prosecute and maintain the patent applications
and patents under Patent Rights, subject to LO’s reimbursement of The Assignees’ out-of-pocket costs. All patent applications
and patents under Patent Rights will be held by the Assignee. The Assignee will have sole responsibility for retaining and instructing
patent counsel. The Assignee will promptly provide LO with copies of all official patent office correspondence, and LO agrees to
keep this documentation confidential in accordance with Article 25 (Confidentiality). LO may comment upon such documentation, and
The Assignee will take such comments into account, provided that if LO has not commented upon such documentation in reasonable
time for The Assignee to sufficiently consider LO’s comments prior to the deadline for filing a response with the relevant
government patent office, The Assignee will be free to respond appropriately without consideration of LO’s comments.

 

13.2 The Assignee will use reasonable efforts to prepare or amend
any patent application within Patent Rights to include claims reasonably requested by LO to protect the Licensed Products or Licensed
Services contemplated to be Sold or Licensed Methods to be practiced under this Agreement.

 

13.3 Subject to Paragraph 12.4, all past, present, and future costs
for preparing, filing, prosecuting, and maintaining all patent applications and patents under Patent Rights (including, without
limitation, the cost of interferences, reexaminations, oppositions, post-grant review, inter partes review, supplemental examinations,
and other patent office administrative proceedings, and their appeals), which have not been previously reimbursed to The Assignee,
will be paid by LO, so long as the licenses granted to LO herein are exclusive- the payments by LO for such costs are due within
thirty (30) days after receipt by LO of an invoice from The Assignee. If, however, The Assignee reduces the exclusive licenses
granted herein to non-exclusive licenses pursuant to Paragraph 5.3 or Paragraph 5.4, and The Assignee grants one or more additional
licenses, the subsequent costs of preparing, filing, prosecuting, and maintaining such patent applications and patents will be
divided equally among the licensed parties from the effective date of each subsequently granted license agreement.

 

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13.4 LO’s obligation to pay all patent preparation, filing, prosecution,
and maintenance costs for Patent Rights will continue for so long as this Agreement remains in effect, provided that LO may terminate
LO’s obligations with respect to any given patent application or patent under Patent Rights in any designated country upon
three (3) months’ written notice to The Assignee. In the event of such notice to The Assignee, The Assignee will undertake
to curtail applicable patent costs billable to LO. The Assignee may continue prosecution and maintenance of such patent applications
or patents at The Assignees’ sole discretion and expense, provided that LO will have no further right or licenses thereunder.

 

14. MARKING 

 

14.1 LO will mark all Licensed Products made, used, offered for
Sale, imported, or Sold under this Agreement, or their containers, in accordance with applicable patent marking laws.

 

15. USE OF NAMES AND TRADEMARKS 

 

15.1 Nothing contained in this Agreement will be construed as conferring
upon either Party any right to use in advertising, publicity, or other promotional activities any name, trademark, trade name,
or other designation of the other Party (including any contraction, abbreviation, or simulation of any of the foregoing).

 

16. LIMITED WARRANTIES 

 

16.1 The Assignee warrants to LO that The Assignee has the lawful
right to grant this license.

 

16.2 This license and the associated rights to the Inventions are
provided to LO WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED.
THE ASSIGNEE MAKES NO REPRESENTATION OR WARRANTY THAT PRACTICE OF THE INVENTION OR PATENT RIGHTS (INCLUDING MAKING, USING, SELLING,
OFFERING TO SELL, OR IMPORTING LICENSED PRODUCTS, LICENSED SERVICES, OR LICENSED METHODS) WILL NOT INFRINGE ANY PATENT OR OTHER
PROPRIETARY RIGHT.

 

16.3 IN NO EVENT WILL THE ASSIGNEE BE LIABLE FOR ANY INCIDENTAL,
SPECIAL, OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR A SUBLICENSE, OR THE USE OF THE INVENTION, PATENT
RIGHTS, LICENSED METHODS, LICENSED SERVICES, OR LICENSED PRODUCTS.

 

16.4 Nothing in this Agreement is or will be construed as:

 

(a) a warranty or representation by The Assignee as to the patentability,
validity, enforceability, or scope of Patent Rights;

 

(b) a warranty or representation that anything made, used, Sold,
offered for Sale, or imported under any license granted in this Agreement is or will be free from infringement of patents of third
parties;

 

(c) an obligation to bring or prosecute actions or suits against
third parties for patent infringement;

 

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(d) conferring by implication, estoppel, or otherwise any license
or rights under any patent applications or patents of The Assignee other than Patent Rights, regardless of whether such patent
applications or patents are dominant or subordinate to Patent Rights; or

 

(e) an obligation to furnish any know-how not provided in the patents
and patent applications under Patent Rights.

 

17. PATENT INFRINGEMENT 

 

17.1 In the event that LO learns of the substantial infringement
of any Patent Rights, LO will promptly provide The Assignee with notice and reasonable evidence of such infringement (“Infringement
Notice”). During the time period and in a jurisdiction where LO has exclusive rights under this Agreement, neither Party
will notify a third party, including the infringer, of the infringement without first obtaining consent of the other Party, which
consent will not be unreasonably withheld. The Parties will use diligent efforts, in cooperation with each other, to terminate
such infringement without litigation.

 

17.2 (a) If such infringing activity has not been abated within
ninety (90) days following the effective date of the Infringement Notice, LO may initiate suit for patent infringement against
the infringer. The Assignee may voluntarily join as a party in such suit at The Assignees’ expense, but The Assignee may
not thereafter separately initiate suit against the infringer for the acts of infringement that are the subject of LO’s suit
or any judgment rendered in that suit. LO may not cause The Assignee to be joined as a party in a suit initiated by LO without
The Assignees’ prior written consent. If, in a suit initiated by LO, The Assignee is involuntarily caused to be joined as
a party, LO will pay any costs incurred by The Assignee arising out of such suit, including, but not limited to, any legal fees
of counsel that The Assignee selects and retains to represent it in the suit.

 

(b) If, within a hundred and twenty (120) days following the effective
date of the Infringement Notice, the infringing activity has not been abated and if LO has not initiated suit against the infringer,
The Assignee may in its sole discretion initiate suit for patent infringement against the infringer and LO may not thereafter separately
initiate suit against the infringer for the acts of infringement that are the subject of The Assignee’s suit or any judgment
rendered in that suit.

 

17.3 Such suit initiated under Paragraph 16.2 will be at the expense
of the initiating Party and all recoveries recovered thereby will belong to such Party, provided that suits initiated jointly by
The Assignee and LO will be at the joint expense of the Parties and all recoveries will be allocated in the following order: (a)
to each Party reimbursement for its attorneys’ costs, fees, and other related out-of-pocket expenses, to the extent such Party
paid for such costs, fees, and expenses until all such costs, fees, and expenses are consumed for such Party; and (b) any remaining
amount shared jointly by the Parties in proportion to the share of expenses paid by each Party, but in no event will The Assignee’s
share be less than twenty-five percent (25%) of such remaining amount. The foregoing notwithstanding, if such suit is initiated
by LO and The Assignee is not a party, The Assignee’s share of any recoveries will be twenty-five percent (25%) of the amount
of such recoveries remaining after reimbursement to LO of LO’s attorneys’ costs, fees and other related out-of-pocket
expenses. In any suit initiated by The Assignee, any recovery will belong to The Assignee.

 

17.4 Each Party will cooperate with the other Party in litigation
initiated hereunder but at the expense of the initiating Party. Such litigation will be controlled by the initiating Party bringing
the action, except that The Assignee may be represented by counsel of its choice in any suit initiated by LO.

 

17.5 Any agreement made by LO for the purposes of settling litigation
initiated hereunder or other related dispute will comply with the requirements of Article 3 (Sublicenses). In no event may LO admit
liability or wrongdoing on behalf of The Assignee without The Assignee’s prior written consent.

 

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18. INDEMNIFICATION 

 

18.1 LO will, and will require Sub-Licensees to, indemnify, hold
harmless, and defend The Assignee and its officers, employees, and agents; sponsors of the research that led to the Invention;
and the inventors of any patents and patent applications under Patent Rights and their employers; against any and all claims, suits,
losses, damages, costs, fees, and expenses resulting from or arising out of exercise of this license or any Sublicense. This indemnification
will include, but not be limited to, any product liability.

 

18.2 LO, at its sole cost and expense, will insure its activities
in connection with any work performed hereunder.

 

18.3 The coverage and limits referred of any and all insurance will
not in any way limit the liability of LO under this Article 17 (Indemnification).

 

18.4 The Assignee will promptly notify LO in writing of any claim
or suit brought against The Assignee for which The Assignee intends to invoke the provisions of this Article 17 (Indemnification).
In no event may LO admit liability or wrongdoing on behalf of The Assignee or any other indemnitee without The Assignee’s prior
written consent. LO will keep The Assignee informed of LO’s defense of any claims pursuant to this Article 18 (Indemnification).

 

19. COMPLIANCE WITH LAWS/EXPORT CONTROLS 

 

19.1 LO will comply with all applicable international, national,
state, regional, and local laws and regulations in performing its obligations hereunder and in LO’s use, manufacture, Sale,
offer for Sale, or import of the Licensed Products or Licensed Services, or in LO’s practice of Licensed Methods. LO will
observe all applicable United States and foreign laws and regulations governing the transfer to other countries of technical data
related to Licensed Products, Licensed Services, or Licensed Methods, including, without limitation, those with respect to the
International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.

 

20. GOVERNMENT APPROVAL OR REGISTRATION 

 

20.1 If this Agreement or any associated transaction is required
by the law of any nation to be either approved or registered with any governmental agency, LO will assume all legal obligations
to do so. LO will notify The Assignee if LO becomes aware that this Agreement is subject to a United States or foreign government
reporting or approval requirement. LO will make all necessary filings and pay all costs, including fees, penalties, and all other
out-of-pocket costs, associated with such reporting or approval process.

 

21. ASSIGNMENT OF AGREEMENT

 

21.1 This Agreement is binding upon and will inure to the benefit
of The Assignee and to The Assignee’s successors and assigns. This Agreement is personal to LO and assignable by LO only
with the written consent of The Assignee, provided that LO may, on written notice to The Assignee, assign this Agreement, including,
without limitation, all obligations owed to The Assignee hereunder, to an acquiror of all or substantially all of LO’s stock or
assets.

 

22. NOTICES 

 

22.1 All notices under this Agreement will be deemed to have been
fully given and effective when done in writing and (a) delivered in person, (b) mailed by registered or certified United States
mail, or (c) deposited with a carrier service requiring signature by recipient, and addressed as indicated previously.

 

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Either Party may change its address upon written notice to the other
Party.

 

23. PAYMENTS 

 

23.1 Payments to The Assignee will be made by check or bank wire
transfer.

 

23.2 If monies owed to The Assignee under this Agreement are not
received by The Assignee when due, LO will pay to The Assignee interest charges at a rate of ten percent (10%) per annum. Such
interest will be calculated from the date payment was due until actually received by The Regents. Such accrual of interest will
be in addition to, and not in lieu of, enforcement of any other rights of The Assignee related to such late payment. Acceptance
of any late payment will not constitute a waiver under Article 23 (Waiver).

 

24. WAIVER 

 

24.1 The failure of either Party to assert a right hereunder or
to insist upon compliance with any term or condition of this Agreement will not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition by the other Party. None of the terms and conditions of this Agreement
can be waived except by the written consent of the Party waiving compliance.

 

25. CONFIDENTIALITY 

 

25.1 With respect to disclosures by one Party (“Disclosing
Party”) to the other Party (“Receiving Party”) under this Agreement, the Receiving Party will, subject to Paragraphs
24.2 and 24.3, hold the Disclosing Party’s proprietary business and technical information, patent prosecution material, and other
proprietary information, including the negotiated terms of this Agreement (all such proprietary information referred to collectively
herein as “Proprietary Information”), in confidence and against disclosure to third parties, with at least the same
degree of care as the Disclosing Party exercises to protect the Disclosing Party’s own data and information of a similar
nature. This obligation will expire five (5) years after the termination or expiration of this Agreement.

 

25.2 With respect to Proprietary Information disclosed by the Disclosing
Party to the Receiving Party, nothing contained herein will in any way restrict or impair the right of the Receiving Party to use,
disclose, or otherwise deal with any information or data which:

 

(a) at the time of disclosure to the Receiving Party by the Disclosing
Party is available to the public by publication or otherwise, or thereafter becomes available to the public by publication or otherwise
through no act of the Receiving Party;

 

(b) the Receiving Party can show by written record was in the Receiving
Party’s possession prior to the time of disclosure to the Receiving Party hereunder and was not acquired by the Receiving
Party from the Disclosing Party;

 

(c) is independently made available to the Receiving Party without
restrictions as a matter of right by a third party, as demonstrated by written record;

 

(d) is independently developed by employees or agents of the Receiving
Party who did not have access to the information disclosed by the Disclosing Party, as demonstrated by written record.

 

25.3 The Assignee will be free to release to the inventors, the
terms and conditions of this Agreement upon their request. If such release is made, The Assignee will inform such individuals of
the confidentiality obligations set forth above and will request that such individuals not disclose such terms and conditions to
others. Should a third party inquire whether a license to Patent Rights is available, The Assignee may disclose the existence of
this Agreement and the extent of the grant in Articles 2 (Grant) and 3 (Sublicenses) to such third party but, unless LO so consents,
The Assignee will not otherwise disclose the name of LO (or other negotiated terms of this Agreement) unless the LO or a third
party has already made such disclosure publicly.

  

    	11

    	 

    

 

25.4 Within fifteen (15) days following the effective date of termination
or expiration of this Agreement, each Receiving Party agrees to destroy or return to the Disclosing Party Proprietary Information
received from the Disclosing Party which is in the possession of the Receiving Party. However, each Receiving Party may retain
one copy of Proprietary Information received from the Disclosing Party for archival purposes in non-working files for the sole
purpose of verifying the ownership of the Proprietary Information, provided such Proprietary Information will be subject to the
confidentiality provisions set forth in this Article 25 (Confidentiality). Subject to such right to retain for archival purposes,
each Receiving Party agrees to provide to the Disclosing Party, within thirty (30) days following termination of this Agreement,
a written notice that Proprietary Information received from the Disclosing Party has been returned or destroyed.

 

26. SEVERABILITY 

 

26.1 The provisions of this Agreement are severable, and in the
event that any provision of this Agreement is determined to be invalid or unenforceable under any controlling law, such invalidity
or enforceability will not in any way affect the validity or enforceability of the remaining provisions hereof

 

27. APPLICABLE LAW; VENUE; ATTORNEYS’ FEES 

 

27.1 This Agreement will be construed, interpreted, and applied
in accordance with the laws of the State of Minnesota, excluding any choice-of-law rules that would direct the application of the
laws of another jurisdiction, except that the scope and validity of any patent or patent application under Patent Rights will be
determined by the applicable law of the country of such patent or patent application. Any legal action brought by one Party against
the other Party relating to this Agreement will be conducted in Minnesota. The prevailing Party in any such legal action under
this Agreement will be entitled to recover its reasonable attorneys’ fees in addition to its costs and necessary disbursements.

 

28. SCOPE OF AGREEMENT 

 

28.1 This Agreement incorporates the entire agreement between the
Parties with respect to the subject matter hereof and supersedes all previous communications, representations, or understandings,
whether oral or written, between the Parties relating to the subject matter hereof. This Agreement may be modified only by written
amendment duly executed by the Parties.

 

In witness whereof, the Parties have executed this Agreement in
duplicate originals by their respective authorized officers or representatives on the respective dates below:

 

	//Alexander Chong	 	//William Bartkowski
	Name:	Alexander Chong	 	Name:	William Bartkowski
	Title:	CEO	 	Title:	 President
	For Chong Corporation	 	For VapAria Corporation
	Date:	December 31, 2013	 	Date:	December 31, 2013

 

12PCRX - 3.31.14 - EX10.1

Exhibit 10.1

PACIRA PHARMACEUTICALS, INC.
2014 INDUCEMENT PLAN
		
	1.
	Purpose

The purpose of this 2014 Inducement Plan (the “Plan”) of Pacira Pharmaceuticals, Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract persons who are expected to make important contributions to the Company, by providing such persons with equity ownership opportunities and performance-based incentives as an inducement material to such persons entering into employment with the Company and by providing such persons with a proprietary interest in the Company as an incentive for them to remain in such service, thereby aligning the interests of such persons with those of the Company’s stockholders.  Except where the context otherwise requires, the term “Company” shall include any of the Company’s parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations thereunder (the “Code”) at the time of grant and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).
		
	2.
	Eligibility

New employees of the Company who were not previously an employee or director of the Company are eligible to be granted Awards under the Plan.  Each person who is granted an Award under the Plan is deemed a “Participant.”  “Award” means Options (as defined in Section 5), SARs (as defined in Section 6), Restricted Stock (as defined in Section 7), Restricted Stock Units (as defined in Section 7) and Other Stock-Based Awards (as defined in Section 8).  
		
	3.
	Administration

The Plan will be administered by the Compensation Committee of the Board (the “Committee”), which shall be composed of two or more directors, each of whom is (a) independent as defined by the rules of the NASDAQ Stock Market (“NASDAQ”) and (b) a “non-employee director” within the meaning of Rule 16b-3(b)(3) promulgated under the Securities Exchange Act of 1934, as amended, or any successor definition adopted by the Securities and Exchange Commission.  The Committee shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable.  The Committee may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient and it shall be the sole and final judge of such expediency.  All decisions by the Committee shall be made in the Committee’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.
		
	4.
	Stock Available for Awards

(a)Authorized Number of Shares.  Subject to adjustment under Section 9, Awards may be made under the Plan for up to 175,000 shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”).  Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.
(b)Share Counting.  For purposes of counting the number of shares available for the grant of Awards under the Plan: 
(1)all shares of Common Stock covered by SARs shall be counted against the number of shares available for the grant of Awards under the Plan;  provided, however, that (i) SARs that may be settled only in cash shall not be so counted and (ii) if the Company grants an SAR in tandem with an Option for the same number of shares of Common Stock and provides that only one such Award may be exercised (a “Tandem SAR”), only the shares covered by the Option, and not the shares covered by the Tandem SAR, shall be so counted, and the expiration of one in connection with the other’s exercise will not restore shares to the Plan; 
(2)if any Award (i) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or (ii) results in any Common Stock not being issued (including as a result of an SAR that was settleable either in cash or in stock actually being settled in cash), the unused Common Stock covered by such Award shall again be available for the grant of Awards; provided, however, that (1) in the case of the exercise of an SAR, the number of shares counted against the shares available under the Plan and against the sublimits listed in the first clause of this Section 4(b) shall be the full number of shares subject to the SAR multiplied by the percentage of the SAR actually exercised, regardless of the number of shares actually used to settle such SAR upon exercise and (2) the shares covered by a Tandem SAR shall not again become available for grant upon the expiration or termination of such Tandem SAR; and

(3)shares of Common Stock delivered (either by actual delivery, attestation, or net exercise) to the Company by a Participant to (i) purchase shares of Common Stock upon the exercise of an Award or (ii) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards. 
		
	5.
	Stock Options

(a)General.  The Committee may grant nonstatutory stock options to purchase Common Stock, which are not intended to qualify as “incentive stock options” as defined in Section 422 of the Code (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable.  
(b)Exercise Price.  The Committee shall establish the exercise price of each Option and specify the exercise price in the applicable Option agreement.  The exercise price shall be not less than 100% of the fair market value per share of Common Stock as determined by (or in a manner approved by) the Committee (“Fair Market Value”) on the date the Option is granted; provided that if the Committee approves the grant of an Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Fair Market Value on such future date.
(c)Duration of Options.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable option agreement; provided, however, that no Option will be granted with a term in excess of 10 years.
(d)Exercise of Options.  Options may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with payment in full (in the manner specified in Section 5(e)) of the exercise price for the number of shares for which the Option is exercised.  Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.
(e)Payment Upon Exercise.  Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:
(1)in cash or by check, payable to the order of the Company;
(2)except as may otherwise be provided in the applicable Option agreement or approved by the Committee, in its sole discretion, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;
(3)to the extent provided for in the applicable Option agreement or approved by the Committee, in its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their Fair Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Committee in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
(4)to the extent provided for in the applicable Option agreement or approved by the Committee in its sole discretion, by delivery of a notice of “net exercise” to the Company, as a result of which the Participant would receive (i) the number of shares underlying the portion of the Option being exercised, less (ii) such number of shares as is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the Fair Market Value on the date of exercise;
(5)to the extent permitted by applicable law and provided for in the applicable Option agreement or approved by the Committee, in its sole discretion, by payment of such other lawful consideration as the Committee may determine; or
(6)by any combination of the above permitted forms of payment.
(f)Repricing.  Unless such action is approved by the Company’s stockholders, the Company may not (except as provided for under Section 9):  (1) amend any outstanding Option granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option, (2) cancel any outstanding option (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan  covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled option, (3) cancel in exchange for a cash payment any outstanding Option with an exercise price per share above the then-current Fair Market Value or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the NASDAQ.  
		
	6.
	Stock Appreciation Rights

(a)General.  The Committee may grant Awards consisting of stock appreciation rights (“SARs”) entitling the holder, upon exercise, to receive an amount of Common Stock or cash or a combination thereof (such form to be determined by the Committee) determined by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Common Stock over the measurement price established pursuant to Section 6(b).  The date as of which such appreciation is determined shall be the exercise date.  

(b)Measurement Price.  The Committee shall establish the measurement price of each SAR and specify it in the applicable SAR agreement.  The measurement price shall not be less than 100% of the Fair Market Value on the date the SAR is granted; provided that if the Committee approves the grant of an SAR effective as of a future date, the measurement price shall be not less than 100% of the Fair Market Value on such future date.
(c)Duration of SARs.  Each SAR shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable SAR agreement; provided, however, that no SAR will be granted with a term in excess of 10 years.
(d)Exercise of SARs.  SARs may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with any other documents required by the Committee.
(e)Repricing.  Unless such action is approved by the Company’s stockholders, the Committee may not (except as permitted under Section 9) (1) amend any outstanding SAR granted under the Plan to provide a measurement price per share that is lower than the then-current measurement price per share of such outstanding SAR, (2) cancel any outstanding stock appreciation right (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of shares of Common Stock and having a measurement price per share lower than the then-current exercise price per share of the canceled stock appreciation right, (3) cancel in exchange for a cash payment any outstanding SAR with a measurement price per share above the then-current Fair Market Value or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the NASDAQ.
		
	7.
	Restricted Stock; Restricted Stock Units

(a)General.  The Committee may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Committee in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Committee for such Award.  The Committee may also grant Awards entitling the recipient to receive shares of Common Stock or cash to be delivered at the time such Award vests (“Restricted Stock Units”) (Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).
(b)Terms and Conditions for All Restricted Stock Awards.  The Committee shall determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any.  
(c)Additional Provisions Relating to Restricted Stock.  
(1)Dividends.  Unless otherwise provided in the applicable Award agreement, any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of Restricted Stock (“Accrued Dividends”) shall be paid to the Participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares.  Each payment of Accrued Dividends will be made no later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the lapsing of the restrictions on transferability and the forfeitability provisions applicable to the underlying shares of Restricted Stock.  
(2)Stock Certificates.  The Company may require that any stock certificates issued in respect of shares of Restricted Stock, as well as dividends or distributions paid on such Restricted Stock, shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee).  At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to his or her Designated Beneficiary.  “Designated Beneficiary” means (i) the beneficiary designated, in a manner determined by the Committee, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death or (ii) in the absence of an effective designation by a Participant, the Participant’s estate.
(d)Additional Provisions Relating to Restricted Stock Units.
(1)Settlement.  Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to receive from the Company one share of Common Stock or (if so provided in the applicable Award agreement) an amount of cash equal to the Fair Market Value of one share of Common Stock.  The Committee may, in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a mandatory basis or at the election of the Participant in a manner that complies with Section 409A of the Code.
(2)Voting Rights.  A Participant shall have no voting rights with respect to any Restricted Stock Units.
(3)Dividend Equivalents.  The Award agreement for Restricted Stock Units may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”).  Dividend Equivalents may be paid currently or credited to an account for the Participant, may be settled in cash and/or shares of Common Stock and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, in each case to the extent provided in the Award agreement.

		
	8.
	Other Stock-Based Awards

(a)General.  Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“Other Stock-Based-Awards”).  Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled.  Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Committee shall determine.  
(b)Terms and Conditions.  Subject to the provisions of the Plan, the Committee shall determine the terms and conditions of each Other Stock-Based Award, including any purchase price applicable thereto.  
		
	9.
	Adjustments for Changes in Common Stock and Certain Other Events

(a)Changes in Capitalization.  In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) the share counting rules and sublimit set forth in Section 4(b), (iii) the number and class of securities and exercise price per share of each outstanding Option, (iv) the share and per-share provisions and the measurement price of each outstanding SAR, (v) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award and (vi) the share and per-share-related provisions and the purchase price, if any, of each outstanding Other Stock-Based Award, shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Committee.  Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.  
(b)Reorganization Events.
(1)Definition.  A “Reorganization Event” shall mean:  (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is canceled, (b) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.
(2)Consequences of a Reorganization Event on Awards Other than Restricted Stock.  
(A)In connection with a Reorganization Event, the Committee may take any one or more of the following actions as to all or any (or any portion of) outstanding Awards other than Restricted Stock on such terms as the Committee determines (except to the extent specifically provided otherwise in an applicable Award agreement or another agreement between the Company and the Participant):  (i) provide that such Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a Participant, provide that all of the Participant’s unexercised Awards will terminate immediately prior to the consummation of such Reorganization Event unless exercised by the Participant (to the extent then exercisable) within a specified period following the date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such Reorganization Event, (iv) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to Participants with respect to each Award held by a Participant equal to (A) the number of shares of Common Stock subject to the vested portion of the Award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such Reorganization Event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise, measurement or purchase price of such Award and any applicable tax withholdings, in exchange for the termination of such Award, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing.  In taking any of the actions permitted under this Section 9(b)(2), the Committee shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.  
(B)Notwithstanding the terms of Section 9(b)(2)(A), in the case of outstanding Restricted Stock Units that are subject to Section 409A of the Code: (i) if the applicable Restricted Stock Unit agreement provides that the Restricted Stock Units shall be settled upon a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i), and the Reorganization Event constitutes such a “change in control event”, then no assumption or substitution shall be permitted pursuant to Section 9(b)(2)(A)(i) and the Restricted Stock Units shall instead be settled in accordance with the terms of the applicable Restricted Stock Unit agreement; and (ii) the Committee may only undertake the actions set forth in clauses (iii), (iv) or (v) of Section 9(b)(2)(A) if the Reorganization Event constitutes a “change in control event” as defined under Treasury Regulation Section 1.409A-3(i)(5)(i) and/or such action is permitted or required by Section 

409A of the Code; if the Reorganization Event is not a “change in control event” as so defined or such action is not permitted or required by Section 409A of the Code, and the acquiring or succeeding corporation does not assume or substitute the Restricted Stock Units pursuant to clause (i) of Section 9(b)(2)(A), then the unvested Restricted Stock Units shall terminate immediately prior to the consummation of the Reorganization Event without any payment in exchange therefor.
(C)For purposes of Section 9(b)(2)(A)(i), an Award (other than Restricted Stock) shall be considered assumed if, following consummation of the Reorganization Event, such Award confers the right to purchase or receive pursuant to the terms of such Award, for each share of Common Stock subject to the Award immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise or settlement of the Award to consist solely of such number of shares of common stock of the acquiring or succeeding corporation (or an affiliate thereof) that the Committee determined to be equivalent in value (as of the date of such determination or another date specified by the Committee) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.
(3)Consequences of a Reorganization Event on Restricted Stock.  Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the repurchase and other rights of the Company with respect to outstanding Restricted Stock shall inure to the benefit of the Company’s successor and shall, unless the Committee determines otherwise, apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to such Restricted Stock; provided, however, that the Committee may provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, either initially or by amendment.  Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Stock then outstanding shall automatically be deemed terminated or satisfied.
		
	10.
	General Provisions Applicable to Awards

(a)Transferability of Awards.  Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of Awards that are subject to Section 409A of the Code, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant; provided, however, except with respect to Awards that are subject to Section 409A of the Code, that the Committee may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if the Company would be eligible to use a Form S-8 under the Securities Act of 1933, as amended, for the registration of the sale of the Common Stock subject to such Award to such proposed transferee; provided further, that the Company shall not be required to recognize any such permitted transfer until such time as such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award.  References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.  For the avoidance of doubt, nothing contained in this Section 10(a) shall be deemed to restrict a transfer to the Company.
(b)Documentation.  Each Award shall be evidenced in such form (written, electronic or otherwise) as the Committee shall determine.  Each Award may contain terms and conditions in addition to those set forth in the Plan.
(c)Committee Discretion.  Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award.  The terms of each Award need not be identical, and the Committee need not treat Participants uniformly.  
(d)Termination of Status.  The Committee shall determine the effect on an Award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.
(e)Withholding.  The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award.  The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages.  If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations.  Payment of withholding obligations is due before the Company will issue any shares on exercise, vesting or release from forfeiture of an Award or at the same time as payment of the exercise or purchase price, unless the 

Company determines otherwise.  If provided for in an Award or approved by the Committee in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery (either by actual delivery or attestation) of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided by the Committee, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income).  Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
(f)Amendment of Award.  Except as set forth in Sections 5(f) and 6(e) with respect to repricings, the Committee may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, and changing the date of exercise or realization.  The Participant’s consent to such action shall be required unless (i) the Committee determines that the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 9.
(g)Conditions on Delivery of Stock.  The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously issued or delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.
(h)Acceleration.  The Committee may at any time provide that any Award shall become immediately exercisable in whole or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part, as the case may be.
		
	11.
	Miscellaneous

(a)No Right To Employment or Other Status.  No person shall have any claim or right to be granted an Award by virtue of the adoption of the Plan, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company.  The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.
(b)No Rights As Stockholder.  Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares.
(c)Effective Date and Term of Plan.  The Plan shall become effective on the date the Plan is approved by the Board (the “Effective Date”).  No Awards shall be granted under the Plan after the expiration of 10 years from the Effective Date, but Awards previously granted may extend beyond that date.
(d)Amendment of Plan.  The Board or the Committee may amend, suspend or terminate the Plan or any portion thereof at any time provided that no amendment that would require stockholder approval under the rules of the NASDAQ may be made effective unless and until the Company’s stockholders approve such amendment.  Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 11(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board or the Committee determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of Participants under the Plan.  
(e)Authorization of Sub-Plans (including for Grants to non-U.S. Employees).  The Committee may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable securities, tax or other laws of various jurisdictions.  The Committee shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations on the Committee’s discretion under the Plan as the Committee deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Committee shall deem necessary or desirable.  All supplements adopted by the Committee shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.  
(f)Compliance with Section 409A of the Code.  Except as provided in individual Award agreements initially or by amendment, if and to the extent (i) any portion of any payment, compensation or other benefit provided to a Participant pursuant to the Plan in connection with his or her employment termination constitutes “nonqualified deferred compensation” within the meaning of Section 409A of the Code and (ii) the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in accordance with its procedures, by which determinations the Participant (through accepting the Award) agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of “separation from service” (as determined under Section 409A of the Code) (the “New Payment Date”), except as Section 409A of the Code may then permit.  The aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of 

separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.
The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not to satisfy the conditions of that section.
(g)Limitations on Liability.  Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, employee or agent of the Company.  The Company will indemnify and hold harmless each director, officer, employee or agent of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Committee’s approval) arising out of any act or omission to act concerning the Plan unless arising out of such person’s own fraud or bad faith.
(h)Governing Law.  The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than the State of Delaware.

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