Document:

raptor2006equityplan.htm

    Exhibit 4.12

     

    RAPTOR
PHARMACEUTICAL CORP.

     

    2006
EQUITY INCENTIVE PLAN

     

    

     

    1.           PURPOSE. The purpose of this Plan is
to provide incentives to attract, retain and motivate eligible persons whose
present and potential contributions are important to the success of the Company,
its Parent and Subsidiaries, by offering them an opportunity to participate in
the Company’s future performance through awards of Options and Restricted Stock.
Capitalized terms not defined in the text are defined in Section 22 hereof.
Although this Plan is intended to be a written compensatory benefit plan within
the meaning of Rule 701 promulgated under the Securities Act, grants may be
made pursuant to this plan, which do not qualify for exemption under Rule 701 or
Section 25102(o) of the California Corporations Code. Any requirement of this
Plan which is required in law only because of Section 25102(o) need not apply if
the Committee so provides.

     

    2.           SHARES
SUBJECT TO THE PLAN.

     

    2.1           Number of
Shares Available. Subject to Sections 2.2 and 17 hereof, the total
number of Shares reserved and available for grant and issuance pursuant to this
Plan will be 1,395,360 Shares or such lesser number of Shares as permitted by
applicable law.

     

    Subject
to Sections 2.2, 5.10 and 17 hereof, Shares subject to Awards previously
granted will again be available for grant and issuance in connection with future
Awards under this Plan to the extent such Shares:  (i) cease to
be subject to issuance upon exercise of an Option, other than due to exercise of
such Option; (ii) are subject to an Award granted hereunder but the Shares
subject to such Award are forfeited or repurchased by the Company at the
original issue price; or (iii) are subject to an Award that otherwise
terminates without Shares being issued. At all times the Company will reserve
and keep available a sufficient number of Shares as will be required to satisfy
the requirements of all Awards granted and outstanding under this
Plan.

     

    2.2           Adjustment
of Shares. In the event that the number of outstanding shares of the
Company’s Common Stock is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (i) the number of Shares reserved for issuance under this Plan,
(ii) the Exercise Prices of and number of Shares subject to outstanding
Options and (iii) the Purchase Prices of and number of Shares subject to
other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance
with applicable securities laws; provided, however, that fractions of a Share
will not be issued but will either be paid in cash at the Fair Market Value of
such fraction of a Share or will be rounded down to the nearest whole Share, as
determined by the Committee; and provided, further, that the Exercise Price of
any Option may not be decreased to below the par value of the
Shares.

     

    3.           ELIGIBILITY. ISOs (as defined in
Section 5 hereof) may be granted only to employees (including officers and
directors who are also employees) of the Company or of a Parent or Subsidiary of
the Company. NQSOs (as defined in Section 5 hereof) and Restricted Stock
Awards may be granted to employees, officers, directors and consultants of the
Company or any Parent or Subsidiary of the Company; provided such consultants
render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction. A person may be granted more than
one Award under this Plan.

     

    4.           ADMINISTRATION.

     

    4.1           Committee
Authority. This Plan will be administered by the Committee or the Board
if no Committee is created by the Board. Subject to the general purposes, terms
and conditions of this Plan, and to the direction of the Board, the Committee
will have full power to implement and carry out this Plan. Without limitation,
the Committee will have the authority to:

     

    (a)           construe
and interpret this Plan, any Award Agreement and any other agreement or document
executed pursuant to this Plan;

     

    (b)           prescribe,
amend and rescind rules and regulations relating to this Plan;

     

    (c)           approve
persons to receive Awards;

     

    (d)           determine
the form and terms of Awards;

     

    (e)           determine
the number of Shares or other consideration subject to Awards;

     

    (f)           determine
whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or awards
under any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;

     

    (g)           grant
waivers of any conditions of this Plan or any Award;

     

    (h)           determine
the terms of vesting, exercisability and payment of Awards;

     

    (i)           correct
any defect, supply any omission, or reconcile any inconsistency in this Plan,
any Award, any Award Agreement, any Exercise Agreement or any Restricted Stock
Purchase Agreement;

     

    (j)           determine
whether an Award has been earned;

     

    (k)           make
all other determinations necessary or advisable for the administration of this
Plan; and

     

    (l)           extend
the vesting period beyond a Participant’s Termination Date.

     

    4.2           Committee
Discretion. Unless in contravention of any express terms of this Plan or
Award, any determination made by the Committee with respect to any Award will be
made in its sole discretion either (i) at the time of grant of the Award,
or (ii) subject to Section 5.9 hereof, at any later time. Any such
determination will be final and binding on the Company and on all persons having
an interest in any Award under this Plan. The Committee may delegate to one or
more officers of the Company the authority to grant an Award under this Plan,
provided such officer or officers are members of the Board.

     

    5.           OPTIONS. The Committee may grant
Options to eligible persons described in Section 3 hereof and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code (“ISOs”) or
Nonqualified Stock Options (“NQSOs”),
the number of Shares subject to the Option, the Exercise Price of the Option,
the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:

     

    5.1           Form of
Option Grant. Each Option granted under this Plan will be evidenced by an
Award Agreement which will expressly identify the Option as an ISO or an NQSO
(“Stock
Option Agreement”), and will be in such form and contain such provisions
(which need not be the same for each Participant) as the Committee may from time
to time approve, and which will comply with and be subject to the terms and
conditions of this Plan.

     

    5.2           Date of
Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless a later date is
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

     

    5.3           Exercise
Period. Options may be exercisable immediately but subject to repurchase
pursuant to Section 11 hereof or may be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company (“Ten Percent
Shareholder”) will be exercisable after the expiration of five (5) years
from the date the ISO is granted. The Committee also may provide for Options to
become exercisable at one time or from time to time, periodically or otherwise,
in such number of Shares or percentage of Shares as the Committee determines.
Subject to earlier termination of the Option as provided herein, to the extent
section 25102(o) of the California Corporations Code is intended to apply, each
Participant who is not an officer, director or consultant of the Company or of a
Parent or Subsidiary of the Company shall have the right to exercise an Option
granted hereunder at the rate of no less than twenty percent (20%) per year over
five (5) years from the date such Option is granted.

     

    5.4           Exercise
Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may not be less than one hundred
percent (100%) of the Fair Market Value of the Shares on the date of grant;
provided that (i) the Exercise Price of an ISO will not be less than one
hundred percent (100%) of the Fair Market Value of the Shares on the date of
grant and (ii) the Exercise Price of any Option granted to a Ten Percent
Shareholder will not be less than one hundred ten percent (110%) of the Fair
Market Value of the Shares on the date of grant. Payment for the Shares
purchased must be made in accordance with Section 7 hereof.

     

    5.5           Method of
Exercise. Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (the “Exercise
Agreement”) in a form approved by the Committee (which need not be the
same for each Participant). The Exercise Agreement will state (i) the
number of Shares being purchased, (ii) the restrictions imposed on the
Shares purchased under such Exercise Agreement, if any, and (iii) such
representations and agreements regarding Participant’s investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws. Participant shall
execute and deliver to the Company the Exercise Agreement together with payment
in full of the Exercise Price, and any applicable taxes, for the number of
Shares being purchased.

     

    5.6           Termination.
Subject to earlier termination pursuant to Sections 17 and 18 hereof and
notwithstanding the exercise periods set forth in the Stock Option Agreement,
exercise of an Option will always be subject to the following:

     

    (a)           If
the Participant is Terminated for any reason other than death, Disability or for
Cause, then the Participant may exercise such Participant’s Options only to the
extent that such Options are exercisable as to Vested Shares upon the
Termination Date or as otherwise determined by the Committee. Such Options must
be exercised by the Participant, if at all, as to all or some of the Vested
Shares calculated as of the Termination Date or such other date determined by
the Committee, within three (3) months after the Termination Date (or within
such shorter time period, not less than thirty (30) days, or within such longer
time period, not exceeding five (5) years, after the Termination Date as may be
determined by the Committee, with any exercise beyond three (3) months after the
Termination Date deemed to be an NQSO) but in any event, no later than the
expiration date of the Options.

     

    (b)           If
the Participant is Terminated because of Participant’s death or Disability (or
the Participant dies within three (3) months after a Termination other than for
Cause), then Participant’s Options may be exercised only to the extent that such
Options are exercisable as to Vested Shares by Participant on the Termination
Date or as otherwise determined by the Committee. Such options must be exercised
by Participant (or Participant’s legal representative or authorized assignee),
if at all, as to all or some of the Vested Shares calculated as of the
Termination Date or such other date determined by the Committee, within twelve
(12) months after the Termination Date (or within such shorter time period, not
less than six (6) months, or within such longer time period, not exceeding five
(5) years, after the Termination Date as may be determined by the Committee,
with any exercise beyond (i) three (3) months after the Termination Date
when the Termination is for any reason other than the Participant’s death or
disability, within the meaning of Section 22(e)(3) of the Code, or
(ii) twelve (12) months after the Termination Date when the Termination is
for Participant’s disability, within the meaning of Section 22(e)(3) of the
Code, deemed to be an NQSO) but in any event no later than the expiration date
of the Options.

     

    (c)           If
the Participant is terminated for Cause, the Participant may exercise such
Participant’s Options, but not to an extent greater than such Options are
exercisable as to Vested Shares upon the Termination Date and Participant’s
Options shall expire on such Participant’s Termination Date, or at such later
time and on such conditions as are determined by the Committee.

     

    5.7           Limitations
on Exercise. The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent Participant from exercising the Option for the
full number of Shares for which it is then exercisable.

     

    5.8           Limitations
on ISOs. The aggregate Fair Market Value (determined as of the date of
grant) of Shares with respect to which ISOs are exercisable for the first time
by a Participant during any calendar year (under this Plan or under any other
incentive stock option plan of the Company or any Parent or Subsidiary of the
Company) will not exceed One Hundred Thousand Dollars ($100,000). If the Fair
Market Value of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year exceeds
One Hundred Thousand Dollars ($100,000), then the Options for the first One
Hundred Thousand Dollars ($100,000) worth of Shares to become exercisable in
such calendar year will be ISOs and the Options for the amount in excess of One
Hundred Thousand Dollars ($100,000) that become exercisable in that calendar
year will be NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date (as defined in Section 18
hereof) to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, then such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.

     

    5.9           Modification,
Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant’s rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the
Code. Subject to Section 5.10 hereof, the Committee may reduce the Exercise
Price of outstanding Options without the consent of Participants by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4
hereof for Options granted on the date the action is taken to reduce the
Exercise Price; provided, further, that the Exercise Price will not be reduced
below the par value of the Shares, if any.

     

    5.10           No
Disqualification. Notwithstanding any other provision in this Plan, no
term of this Plan relating to ISOs will be interpreted, amended or altered, nor
will any discretion or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or, without the consent
of the Participant, to disqualify any Participant’s ISO under Section 422
of the Code. In no event shall the total number of Shares issued (counting each
reissuance of a Share that was previously issued and then forfeited or
repurchased by the Company as a separate issuance) under the Plan upon exercise
of ISOs exceed 60,000,000  Shares (adjusted in proportion to any
adjustments under Section 2.2 hereof) over the term of the
Plan.

     

    6.           RESTRICTED
STOCK. A
Restricted Stock Award is an offer by the Company to sell to an eligible person
Shares that are subject to certain specified restrictions. The Committee will
determine to whom an offer will be made, the number of Shares the person may
purchase, the Purchase Price, the restrictions to which the Shares will be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:

     

    6.1           Form of
Restricted Stock Award. All purchases under a Restricted Stock Award made
pursuant to this Plan will be evidenced by an Award Agreement (“Restricted Stock
Purchase Agreement”) that will be in such form (which need not be the
same for each Participant) as the Committee will from time to time approve, and
will comply with and be subject to the terms and conditions of this Plan. The
Restricted Stock Award will be accepted by the Participant’s execution and
delivery of the Restricted Stock Purchase Agreement and full payment for the
Shares to the Company within thirty (30) days from the date the Restricted Stock
Purchase Agreement is delivered to the person. If such person does not execute
and deliver the Restricted Stock Purchase Agreement along with full payment for
the Shares to the Company within such thirty (30) days, then the offer will
terminate, unless otherwise determined by the Committee.

     

    6.2           Purchase
Price. The Purchase Price of Shares sold pursuant to a Restricted Stock
Award will be determined by the Committee and will be at least eighty-five
percent (85%) of the Fair Market Value of the Shares on the date the Restricted
Stock Award is granted or at the time the purchase is consummated, except in the
case of a sale to a Ten Percent Shareholder, in which case the Purchase Price
will be one hundred percent (100%) of the Fair Market Value on the date the
Restricted Stock Award is granted or at the time the purchase is consummated.
Payment of the Purchase Price must be made in accordance with Section 7
hereof.

     

    6.3           Restrictions.
Restricted Stock Awards may be subject to the restrictions set forth in
Section 11 hereof or such other restrictions not inconsistent with
Section 25102(o) of the California Corporations Code.

     

    7.           PAYMENT
FOR SHARE PURCHASES.

     

    7.1           Payment.
Payment for Shares purchased pursuant to this Plan may be made in cash (by
check) or, where expressly approved for the Participant by the Committee and
where permitted by law:

     

    (a)           by
cancellation of indebtedness of the Company owed to the
Participant;

     

    (b)           by
surrender of shares that:  (i) either (A) have been owned by
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the
Company by use of a promissory note, such note has been fully paid with respect
to such shares) or (B) were obtained by Participant in the public market
and (ii) are clear of all liens, claims, encumbrances or security
interests;

     

    (c)           by
tender of a full recourse promissory note having such terms as may be approved
by the Committee and bearing interest at a rate sufficient to avoid
(i) imputation of income under Sections 483 and 1274 of the Code and
(ii) variable accounting treatment under Financial Accounting Standards
Board Interpretation No. 44 to APB No. 25; provided, however, that Participants
who are not employees or directors of the Company will not be entitled to
purchase Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares; provided, further, that the portion of the
Exercise Price or Purchase Price, as the case may be, equal to the par value of
the Shares must be paid in cash or other legal consideration permitted by
Delaware General Corporation Law;

     

    (d)           by
waiver of compensation due or accrued to the Participant from the Company for
services rendered;

     

    (e)           with
respect only to purchases upon exercise of an Option, and provided that a public
market for the Company’s stock exists:

     

    (i)           through
a “same day sale” commitment from the Participant and a broker-dealer that is a
member of the National Association of Securities Dealers (a “FINRA
Dealer”) whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased sufficient to pay the
total Exercise Price, and whereby the FINRA Dealer irrevocably commits upon
receipt of such Shares to forward the total Exercise Price directly to the
Company; or

     

    (ii)           through
a “margin” commitment from the Participant and a FINRA Dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge the Shares
so purchased to the FINRA Dealer in a margin account as security for a loan from
the FINRA Dealer in the amount of the total Exercise Price, and whereby the
FINRA Dealer irrevocably commits upon receipt of such Shares to forward the
total Exercise Price directly to the Company; or

     

    (f)           by
any combination of the foregoing.

     

    7.2           Loan
Guarantees. The Committee may, in its sole discretion, elect to assist
the Participant in paying for Shares purchased under this Plan by authorizing a
guarantee by the Company of a third-party loan to the Participant.

     

    8.           WITHHOLDING
TAXES.

     

    8.1           Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards
granted under this Plan, the Company may require the Participant to remit to the
Company an amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares. Whenever, under this Plan, payments in satisfaction of Awards are to be
made in cash by the Company, such payment will be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.

     

    8.2           Stock
Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Award that is
subject to tax withholding and the Participant is obligated to pay the Company
the amount required to be withheld, the Committee may in its sole discretion
allow the Participant to satisfy the minimum withholding tax obligation by
electing to have the Company withhold from the Shares to be issued that minimum
number of Shares having a Fair Market Value equal to the minimum amount required
to be withheld, determined on the date that the amount of tax to be withheld is
to be determined; but in no event will the Company withhold Shares if such
withholding would result in adverse accounting consequences to the Company. All
elections by a Participant to have Shares withheld for this purpose will be made
in accordance with the requirements established by the Committee for such
elections and be in writing in a form acceptable to the Committee.

     

    9.           PRIVILEGES
OF STOCK OWNERSHIP.

     

    9.1           Voting
and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock. The Participant will have no right to retain such stock
dividends or stock distributions with respect to Unvested Shares that are
repurchased pursuant to Section 11 hereof. To the extent required, the
Company will comply with Section 260.140.1 of Title 10 of the
California Code of Regulations with respect to the voting rights of Common
Stock.

     

    9.2           Financial
Statements. The Company will provide financial statements to each
Participant annually during the period such Participant has Awards outstanding,
or as otherwise required under Section 260.140.46 of Title 10 of the
California Code of Regulations. Notwithstanding the foregoing, the Company will
not be required to provide such financial statements to Participants when
issuance of Awards is limited to key employees whose services in connection with
the Company assure them access to equivalent information.

     

    10.           TRANSFERABILITY. Except as permitted by the
Committee, Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, other than by will or by the laws of
descent and distribution, and, with respect to NQSOs, by instrument to an inter vivos or testamentary
trust in which the options are to be passed to beneficiaries upon the death of
the trustor (settlor), or by gift to “immediate family” as that term is defined
in 17 C.F.R. 240.16a-1(e), and may not be made subject to execution, attachment
or similar process. During the lifetime of the Participant an Award will be
exercisable only by the Participant or Participant’s legal representative and
any elections with respect to an Award may be made only by the Participant or
Participant’s legal representative.

     

    

     

    11.           RESTRICTIONS
ON SHARES.

     

    11.1           Right of
First Refusal. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right of first
refusal to purchase all Shares that a Participant (or a subsequent transferee)
may propose to transfer to a third party, unless otherwise not permitted by
Section 25102(o) of the California Corporations Code, provided that such
right of first refusal terminates upon the Company’s initial public offering of
Common Stock pursuant to an effective registration statement filed under the
Securities Act.

     

    11.2           Right of
Repurchase. At the discretion of the Committee, the Company may reserve
to itself and/or its assignee(s) in the Award Agreement a right to repurchase
Unvested Shares held by a Participant for cash and/or cancellation of purchase
money indebtedness owed to the Company by the Participant following such
Participant’s Termination at any time within the later of ninety (90) days after
the Participant’s Termination Date and the date the Participant purchases Shares
under the Plan at the Participant’s Exercise Price or Purchase Price, as the
case may be, provided that to the extent Section 25102(o) of the California
Corporations Code is intended to apply, unless the Participant is an officer,
director or consultant of the Company or of a Parent or Subsidiary of the
Company, such right of repurchase lapses at the rate of no less than twenty
percent (20%) per year over five (5) years from:  (a) the date of
grant of the Option or (b) in the case of Restricted Stock, the date the
Participant purchases the Shares.

     

    12.           CERTIFICATES. All certificates for Shares
or other securities delivered under this Plan will be subject to such stock
transfer orders, legends and other restrictions as the Committee may deem
necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other
requirements of the SEC or any stock exchange or automated quotation system upon
which the Shares may be listed or quoted.

     

    13.           ESCROW;
PLEDGE OF SHARES.
To enforce any restrictions on a Participant’s Shares set forth in
Section 11 hereof, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated. The Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant’s obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant’s Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.

     

    14.           EXCHANGE
AND BUYOUT OF AWARDS.
The Committee may, at any time or from time to time, authorize the
Company, with the consent of the respective Participants, to issue new Awards in
exchange for the surrender and cancellation of any or all outstanding Awards.
The Committee may at any time buy from a Participant an Award previously granted
with payment in cash, shares of Common Stock of the Company (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant may agree.

     

    15.           SECURITIES
LAW AND OTHER REGULATORY COMPLIANCE. Although this Plan is
intended to be a written compensatory benefit plan within the meaning of
Rule 701 promulgated under the Securities Act, grants may be made pursuant
to this plan which do not qualify for exemption under Rule 701 or Section
25102(o) of the California Corporations Code. Any requirement of this Plan which
is required in law only because of Section 25102(o) need not apply if the
Committee so provides. An Award will not be effective unless such Award is in
compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange
or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the Award and also on the
date of exercise or other issuance. Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver certificates for
Shares under this Plan prior to (i) obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable,
and/or (ii) compliance with any exemption, completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Shares with
the SEC or to effect compliance with the exemption, registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any
inability or failure to do so.

     

    16.           NO
OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or
be deemed to confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent or
Subsidiary of the Company or limit in any way the right of the Company or any
Parent or Subsidiary of the Company to terminate Participant’s employment or
other relationship at any time, with or without Cause.

     

    17.           CORPORATE
TRANSACTIONS.

     

    17.1           Assumption
or Replacement of Awards by Successor or Acquiring Company. In the event
of (i) a dissolution or liquidation of the Company, (ii) any
reorganization, consolidation, merger or similar transaction or series of
related transactions (each, a “combination
transaction”) in which the Company is a constituent corporation or is a
party if, as a result of such combination transaction, the voting securities of
the Company that are outstanding immediately prior to the consummation of such
combination transaction (other than any such
securities that are held by an “Acquiring Shareholder,” as defined below) do not
represent, or are not converted into, securities of the surviving corporation of
such combination transaction (or such surviving corporation’s parent corporation
if the surviving corporation is owned by the parent corporation) that,
immediately after the consummation of such combination transaction, together
possess at least a majority of the total voting power of all securities of such
surviving corporation (or its parent corporation, if applicable) that are
outstanding immediately after the consummation of such combination transaction,
including securities of such surviving corporation (or its parent corporation,
if applicable) that are held by the Acquiring Shareholder; or (b) a sale of all
or substantially all of the assets of the Company, that is followed by the
distribution of the proceeds to the Company’s stockholders, any or all
outstanding Awards may be assumed, converted or replaced by the successor or
acquiring corporation (if any), which assumption, conversion or replacement will
be binding on all Participants. In the alternative, the successor or acquiring
corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders of the Company
(after taking into account the existing provisions of the Awards). The successor
or acquiring corporation may also substitute by issuing, in place of outstanding
Shares of the Company held by the Participant, substantially similar shares or
other property subject to repurchase restrictions and other provisions no less
favorable to the Participant than those which applied to such outstanding Shares
immediately prior to such transaction described in this Section 17.1. For
purposes of this Section 17.1, an “Acquiring
Shareholder” means a stockholder or stockholders of the Company that (i)
merges or combines with the Company in such combination transaction or (ii) owns
or controls a majority of another corporation that merges or combines with
the Corporation in such combination transaction. In the event such successor or
acquiring corporation (if any) does not assume, convert, replace or substitute
Awards, as provided above, pursuant to a transaction described in this
Section 17.1, then notwithstanding any other provision in this Plan to the
contrary, the vesting of such Awards will accelerate and the Options will become
exercisable in full prior to the consummation of such event at such times and on
such conditions as the Committee determines, and if such Options are not
exercised prior to the consummation of the corporate transaction, they shall
terminate in accordance with the provisions of this Plan.

     

    17.2           Other
Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 17, in the
event of the occurrence of any transaction described in Section 17.1
hereof, any outstanding Awards will be treated as provided in the applicable
agreement or plan of reorganization, merger, consolidation, dissolution,
liquidation or sale of assets.

     

    17.3           Assumption
of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in
connection with an acquisition of such other company or otherwise, by either
(i) granting an Award under this Plan in substitution of such other
company’s award or (ii) assuming such award as if it had been granted under
this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the exercise price and the number and nature of shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.

     

    18.           ADOPTION
AND STOCKHOLDER APPROVAL. This Plan will become
effective on the date that it is adopted by the Board (the “Effective
Date”). This Plan will be approved by the stockholders of the Company
(excluding Shares issued pursuant to this Plan), consistent with applicable
laws, within twelve (12) months before or after the Effective Date. Upon the
Effective Date, the Board may grant Awards pursuant to this Plan; provided,
however, that:  (i) no Option may be exercised prior to initial
stockholder approval of this Plan; (ii) no Option granted pursuant to an
increase in the number of Shares approved by the Board shall be exercised prior
to the time such increase has been approved by the stockholders of the Company;
(iii) in the event that initial stockholder approval is not obtained within
the time period provided herein, all Awards granted hereunder shall be canceled,
any Shares issued pursuant to any Award shall be canceled and any purchase of
Shares issued hereunder shall be rescinded; and (iv) Awards granted
pursuant to an increase in the number of Shares approved by the Board which
increase is not timely approved by stockholders shall be canceled, any Shares
issued pursuant to any such Awards shall be canceled, and any purchase of Shares
subject to any such Award shall be rescinded.

     

    19.           TERM OF
PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate
ten (10) years from the Effective Date or, if earlier, the date of stockholder
approval. This Plan and all agreements hereunder shall be governed by and
construed in accordance with the laws of the State of California.

     

    20.           AMENDMENT
OR TERMINATION OF PLAN. Subject to Section 5.9 hereof, the Board may
at any time terminate or amend this Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Board will not, without the
approval of the stockholders of the Company, amend this Plan in any manner that
requires such stockholder approval pursuant to Section 25102(o) of the
California Corporations Code or the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.

     

    21.           NONEXCLUSIVITY
OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this
Plan to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem desirable,
including, without limitation, the granting of stock options and other equity
awards otherwise than under this Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.

     

    22.           DEFINITIONS. As used in this Plan, the
following terms will have the following meanings:

     

    “Award”
means any award under this Plan, including any Option or Restricted Stock
Award.

     

    “Award
Agreement” means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award, including the Stock Option Agreement and Restricted
Stock Agreement.

     

    “Board”
means the Board of Directors of the Company.

     

    “Cause”
means Termination because of (i) any willful, material violation by the
Participant of any law or regulation applicable to the business of the Company
or a Parent or Subsidiary of the Company, the Participant’s conviction for, or
guilty plea to, a felony or a crime involving moral turpitude, or any willful
perpetration by the Participant of a common law fraud, (ii) the
Participant’s commission of an act of personal dishonesty which involves
personal profit in connection with the Company or any other entity having a
business relationship with the Company, (iii) any material breach by the
Participant of any provision of any agreement or understanding between the
Company or any Parent or Subsidiary of the Company and the Participant regarding
the terms of the Participant’s service as an employee, officer, director or
consultant to the Company or a Parent or Subsidiary of the Company, including
without limitation, the willful and continued failure or refusal of the
Participant to perform the material duties required of such Participant as an
employee, officer, director or consultant of the Company or a Parent or
Subsidiary of the Company, other than as a result of having a Disability, or a
breach of any applicable invention assignment and confidentiality agreement or
similar agreement between the Company or a Parent or Subsidiary of the Company
and the Participant, (iv) Participant’s disregard of the policies of the
Company or any Parent or Subsidiary of the Company so as to cause loss, damage
or injury to the property, reputation or employees of the Company or a Parent or
Subsidiary of the Company, or (v) any other misconduct by the Participant
which is materially injurious to the financial condition or business reputation
of, or is otherwise materially injurious to, the Company or a Parent or
Subsidiary of the Company.

     

    “Code”
means the Internal Revenue Code of 1986, as amended.

     

    “Committee”
means the committee created and appointed by the Board to administer this Plan,
or if no committee is created and appointed, the Board.

     

    “Company”
means Raptor Pharmaceutical Corp., or any successor corporation.

     

    “Disability”
means a disability, whether temporary or permanent, partial or total, as
determined by the Committee.

     

    “Exercise
Price” means the price at which a holder of an Option may purchase the
Shares issuable upon exercise of the Option.

     

    “Fair Market
Value” means, as of any date, the value of a share of the Company’s
Common Stock determined as follows:

     

    (a)           if
such Common Stock is then quoted on the Nasdaq National Market, its closing
price on the Nasdaq National Market on the date of determination as reported in
The Wall Street
Journal;

     

    (b)           if
such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading as reported in The Wall Street
Journal;

     

    (c)           if
such Common Stock is publicly traded but is not quoted on the Nasdaq National
Market nor listed or admitted to trading on a national securities exchange, the
average of the closing bid and asked prices on the date of determination as
reported by The Wall
Street Journal (or, if not so reported, as otherwise reported by any
newspaper or other source as the Board may determine); or

     

    (d)           if
none of the foregoing is applicable, by the Committee in good
faith.

     

    “Option”
means an award of an option to purchase Shares pursuant to Section 5
hereof.

     

    “Parent”
means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock representing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

     

    “Participant”
means a person who receives an Award under this Plan.

     

    “Plan”
means this Raptor Pharmaceutical Corp. 2006 Equity Incentive Plan, as amended
from time to time.

     

    “Purchase
Price” means the price at which a Participant may purchase Restricted
Stock.

     

    “Restricted
Stock” means Shares purchased pursuant to a Restricted Stock
Award.

     

    “Restricted Stock
Award” means an award of Shares pursuant to Section 6
hereof.

     

    “SEC” means
the Securities and Exchange Commission.

     

    “Securities
Act” means the Securities Act of 1933, as amended.

     

    “Shares”
means shares of the Company’s Common Stock $0.001, par value, reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 17 hereof,
and any successor security.

     

    “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain owns stock representing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.

     

    “Termination”
or “Terminated”
means, for purposes of this Plan with respect to a Participant, that the
Participant has for any reason ceased to provide services as an employee,
officer, director or consultant to the Company or a Parent or Subsidiary of the
Company. A Participant will not be deemed to have ceased to provide services in
the case of (i) sick leave, (ii) military leave, or (iii) any
other leave of absence approved by the Committee, provided that such leave is
for a period of not more than ninety (90) days (a) unless reinstatement
(or, in the case of an employee with an ISO, reemployment) upon the expiration
of such leave is guaranteed by contract or statute, or (b) unless provided
otherwise pursuant to formal policy adopted from time to time by the Company’s
Board and issued and promulgated in writing. In the case of any Participant on
(i) sick leave, (ii) military leave or (iii) an approved leave of
absence, the Committee may make such provisions respecting suspension of vesting
of the Award while on leave from the Company or a Parent or Subsidiary of the
Company as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Stock Option
Agreement. The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the “Termination
Date”).

     

    “Unvested
Shares” means “Unvested
Shares” as defined in the Award Agreement.

     

    “Vested
Shares” means “Vested
Shares” as defined in the Award Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Incentive Stock Option Award
Agreement

     

    

    
      	
              RAPTOR
      PHARMACEUTICAL CORP.

               

            
	
              2006
      Equity Incentive Plan

               

            
	
              STOCK
      OPTION AWARD AGREEMENT

            

    

    

    

    

    Current
Date

    

    Optionee

    Optionee’s
Address

    

    Dear
Optionee:

    

    Pursuant
to the terms and conditions of the Company’s 2006 Equity Incentive Plan (the
“Plan”), you have been granted an Incentive Stock Option to purchase
________shares of stock as outlined below.

    

    
      	
              Granted
      To:_____________________________

               

            
	
              Grant
      Date:_____________________________

               

            
	
              Grant
      Number:__________________________

               

            
	
              Grant
      Price:_____________________________

               

            
	
              Total
      Cost to Exercise:____________________

               

            
	
              Expiration
      Date:_________________________

               

            
	
              Vesting
      Schedule:________________________

               

            

    

    By my
signature below, I hereby acknowledge receipt of this Grant on the date shown
above, which has been issued to me under the terms and conditions of the Plan
and Award Agreement. I further acknowledge receipt of the copy of the Plan and
agree to conform to all of the terms and conditions of the Grant and the
Plan.

    

    
      	
              Signature:________________________

            	 
      	
              Date:_________________________

            
	
                              Optionee

               

            	 
      	 
      
	 
      	 
      	 
      

    

     Note:  If
there are any discrepancies in the name or address shown above, please make the
appropriate corrections on this form.

    

    1.             Grant. The Optionee
specified above (the “Optionee”) has been granted an
option (the “Option”) to
purchase the number of shares of Common Stock of Raptor Pharmaceutical Corp.
(the “Company”)
specified above at the exercise price also specified above (the “Exercise Price”), subject to
the terms and conditions of this Incentive Stock Option Award Agreement (the
“Award Agreement”), and
the Raptor Pharmaceutical Corp. 2006 Equity Incentive Plan, as amended from time
to time (the “Plan”) as
follows. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Award Agreement. In the event of any
conflict between the terms and conditions of the Plan and this Award Agreement,
the terms and conditions of the Plan shall prevail.

     

    2.           Incentive Stock
Option. This Option is intended to qualify as an Incentive Stock Option
as defined in Section 422 of the Code. However, notwithstanding such
designation, the Option will qualify as an Incentive Stock Option under the Code
only to the extent the $100,000 dollar limitation of Section 422(d) of the Code
is not exceeded. The $100,000 limitation of Section 422(d) of the Code is
calculated based on the aggregate Fair Market Value of the Shares subject to
options designated as Incentive Stock Options which become exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company or any Parent or Subsidiary of the Company). For purposes of this
calculation, Incentive Stock Options shall be taken into account in the order in
which they were granted, and the Fair Market Value of the Shares subject to such
options shall be determined as of the grant date of the relevant
option.

     

    3.           Vesting Schedule.
Subject to the terms of this Award Agreement and the Plan, this Option may be
exercised, in whole or in part, according to the Vesting Schedule specified
above.

    However,
if the Optionee is on (i) sick leave (ii) military leave or (iii) an approved
leave of absence, subject to applicable laws, vesting of the Option shall be
suspended after such leave of absence exceeds ninety (90) days. Vesting shall
than only recommence upon Optionee’s return to service to the Company and the
Vesting Schedule shall be extended by the length of the suspension or by such
shorter period as the Committee determines is necessary to comply with Section
25102(o) of the California Corporations Code.

    

    4.           Exercise of
Option.

    

    (a)           Right to Exercise.
The Option shall be exercisable during its term only to the extent it has vested
in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Award Agreement. The Option shall be
subject to the provisions of Section 17 of the Plan relating to the
exerciseability or substitution upon the occurrence of certain corporate
transactions as therein described. In no event may the Option be exercised with
respect to any fractional Shares.

    

    (b)           Method of Exercise.
This Option shall be exercisable by delivery of an exercise notice in the form
attached as Exhibit
A (the “Exercise
Notice”) (or such other procedure as specified in writing from time to
time by the Committee) which shall state the election to exercise the Option,
the whole number of Shares with respect to which the Option is being exercised
(the “Exercised
Shares”), and such other provisions as may be required by the Committee.
The Exercise Notice shall be delivered in person, by certified mail or by such
other method as determined by the Committee, accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice accompanied by payment of Exercise Price. Payment of the Exercise Price
shall be made in the manner specified in Section 3 below.

    

    (c)           Taxes. No Shares will
be delivered to the Optionee or other person pursuant to the exercise of the
Option until the Optionee or other person has made arrangements acceptable to
the Committee for the satisfaction of applicable income tax and employment tax
withholding obligations, including, without limitation, such other tax
obligations of the Optionee incident to the receipt of the Shares. Upon exercise
of the Option, the Company (or the Optionee’s employer) may offset or withhold
(from any amount owed by the Company or the Optionee’s employer to the Optionee)
or collect from the Optionee or other person an amount sufficient to satisfy
such tax withholding obligations.

    

    5.           Method of Payment.
Subject to any applicable laws, payment of the aggregate Exercise Price shall be
made in cash (by check) or, where expressly approved for the Optionee by the
Committee and where permitted by law, any of the following (provided that the
portion of the Exercise Price equal to the par value of $0.001 per share of the
Shares with respect to which the Option is exercised must be paid in cash or
other legal consideration permitted by the Delaware General Corporation
Law):

    

    
      	
               
      

            	
              (a)

            	
              by
      cancellation of indebtedness of the Company owed to the
      Optionee.

            

    

     

    (b)           by
surrender of shares that:  (i) either (A) have been owned by Optionee
for more than six (6) months and have been paid for within the meaning of SEC
Rule 144 (and, if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares) or
(B) were obtained by Optionee in the public market and (ii) are clear of all
liens, claims, encumbrances or security interests;

     

    (c)           by
tender of a full recourse promissory note having such terms as may be approved
by the Committee and bearing interest at a rate sufficient to avoid (i)
imputation of income under Sections 483 and 1274 of the Code and (ii) variable
accounting treatment under Financial Accounting Standards Board Interpretation
No. 44 to APB No. 25; provided, however, if the Optionee is not an employee or
director of the Company, the Optionee will not be entitled to purchase Shares
with a promissory note unless the note is adequately secured by collateral other
than the Shares;

     

    (d)           by
waiver of compensation due or accrued to the Optionee from the Company for
services rendered;

     

    (e)           with
respect only to purchases upon exercise of an Option, and provided that a public
market for the Company’s stock exists:

    

    (i)           through
a “same day sale” commitment from the Optionee and a broker-dealer that is a
member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased sufficient to pay the total Exercise Price, and whereby the
FINRA Dealer irrevocably commits upon receipt of such Shares to forward the
total Exercise Price directly to the Company; or

    

    (ii)           through
a “margin” commitment from the Optionee and a FINRA Dealer whereby the Optionee
irrevocably elects to exercise the Option and to pledge the Shares so purchased
to the FINRA Dealer in a margin account as security for a loan from the FINRA
Dealer in the amount of the total Exercise Price, and whereby the FINRA Dealer
irrevocably commits upon receipt of such Shares to forward the total Exercise
Price directly to the Company; or

    

    (f)           by
any combination of the foregoing.

    

    6.           Restrictions on
Exercise. This Option may not be exercised if the issuance of such Shares
upon such exercise would constitute a violation of any applicable laws. If the
exercise of the Option within the applicable time periods set forth in Section 5
of this Award Agreement is prevented by the provisions of this Section 4, the
Option shall remain exercisable until one (1) month after the date the Optionee
is notified by the Company that the Option is exercisable, but in any event no
later than the Expiration Date set forth in the Notice.

     

    7.           Termination. Subject
to earlier termination pursuant to Section 17 of the Plan and notwithstanding
the exercise periods set forth in the Award Agreement, exercise of an Option
will always be subject to the following:

     

    (a)           If
the Optionee is Terminated for any reason other than death, Disability or for
Cause, then the Optionee may exercise the Option only to the extent it has
vested in accordance with the Vesting Schedule as of the Termination Date unless
otherwise determined by the Committee. The Option may be exercised by the
Optionee in whole or in part, within ninety (90) days after the Termination Date
(or within such shorter time period, being not less than thirty (30) days, or
within such longer time period, not exceeding five (5) years, after the
Termination Date as may be determined by the Committee, with any exercise beyond
ninety (90) days after the Termination Date deemed to be a non-qualified stock
option, but in any event no later than the Expiration Date).

     

    (b)           If
the Optionee is Terminated because of death or Disability (or the Optionee dies
within ninety (90) days after a Termination other than for Cause), then the
Option may be exercised only to the extent that it has vested in accordance with
the Vesting Schedule as of the Termination Date unless otherwise determined by
the Committee. The Option may be exercised by the Optionee (or the Optionee’s
legal representative or authorized designee) in whole or in part within twelve
(12) months after the Termination Date (or within such shorter time period,
being not less than six (6) months, or within such longer time period, not
exceeding five (5) years, after the Termination Date as may be determined by the
Committee, with any exercise beyond (i) ninety (90) days after the Termination
Date when the Termination is for any reason other than the Optionee’s death or
Disability, within the meaning of Section 22(e)(3) of the Code, or (ii) twelve
(12) months after the Termination Date when the Termination is for Disability,
within the meaning of Section 22(e)(3) of the Code, deemed to be a non-qualified
stock option but in any event no later than the Expiration Date).

     

    (c)           If
the Optionee is terminated for Cause, the Optionee may exercise the Option in
whole or in part within ninety (90) days of the Termination Date, but not to an
extent greater than the Option has vested in accordance with the Vesting
Schedule as of the Termination Date.

     

    (d)           To
the extent that the Option is unvested as of the Termination Date or if the
Optionee does not exercise the Option to the extent then vested within the time
limits specified above, the Option shall terminate automatically unless
otherwise determined by the Committee.

     

    8.           Transferability of
Option. This Option (or any interest therein) may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee.
Notwithstanding the foregoing, the Optionee may designate one or more
beneficiaries of this Option in the event of the Optionee’s death or a
beneficiary designation form provided by the Company. Notwithstanding the
foregoing, the Optionee may designate one or more beneficiaries of this Option
in the event of the Optionee’s death on a beneficiary form provided by the
Company. Following the death of the Optionee, to the extent provided in Section
7 above, the Option may be exercised (a) by the person or persons designated
under the deceased Optionee’s beneficiary designation or (b) in the absence of
an effectively designated beneficiary, by the Optionee’s legal representative(s)
or by any person approved to do so under the deceased Optionee’s will or under
the then applicable laws of descent and distribution. The terms of the Plan and
this Award Agreement shall be binding upon the executors, administrators, heirs,
successors and permitted assigns of the Optionee.

     

    9.           Term of Option. This
Option must be exercised not later than the Expiration Date set out in the
Notice, and may be exercised during such term only in accordance with the Plan
and the terms of this Award Agreement.

     

    10.           Rights as
Stockholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a stockholder shall exist with respect to the Shares, notwithstanding the
exercise of the Option. The Shares shall be issued to the Optionee as soon as
practicable after the Option is exercised.

     

    11.           Tax Consequences. The
Optionee may incur tax liability as a result of exercise of this Option and
disposition of the Shares. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

     

    12.           Successors and
Assigns. The Company may assign any of its rights under this Option
Agreement to single or multiple assignees, and this Award Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Award Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.

     

    13.           Entire Agreement. The
Plan is incorporated herein by reference. The Plan and this Award Agreement
(including the Notice) constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and
Optionee.

     

    14.           No Guarantee of Continued
Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH
OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS
A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

     

    15.           Representations of
Optionee. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof; and
hereby accepts this Option subject to all of the terms and provisions thereof.
Optionee has reviewed the Plan and this Award Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this Award
Agreement and fully understands all provisions of the Option. Optionee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan or
this Option. Optionee further agrees to notify the Company upon any change of
Optionee’s address indicated above.

     

    16.           Interpretation. Any
dispute regarding the interpretation of this Agreement shall be submitted by
Optionee or by the Company forthwith to the Committee who shall review such
dispute at its next regular meeting. The resolution of such a dispute by the
Committee shall be final and binding on all parties.

     

    17.           Governing Law. This
Award Agreement is governed by the internal substantive laws, but not the choice
of law rules, of the State of California.

    

    
      	
              OPTIONEE:

               

               

               

            	 
      	
              COMPANY:

               

              RAPTOR
      PHARMACEUTICAL CORP.

              a
      Delaware corporation

            
	
              Signature

               

               

            	 
      	
               

              By:

            
	
              Print
      Name

            	 
      	
              Kim
      R. Tsuchimoto

              CFO,
      Secretary and Treasurer

               

            

    

    

    
      
         

      

      
        
          

        

      

      
         

      

    

    

    
      	
              EXHIBIT A

               

            
	
              Raptor
      Pharmaceutical Corp. 2006 Equity Incentive Plan

               

            
	
              EXERCISE
      NOTICE

               

            

    

    

    

    

    To:  Raptor
Pharmaceutical Corp.

    Attention:  CFO,
Secretary and Treasurer

    

    1.           Exercise of Option.
Effective as of today, ___________________ (insert today’s date), the
undersigned (“Optionee”)
hereby elects to exercise Optionee’s option to purchase _____________ (insert number of Shares)
shares of the Common Stock (the “Shares”) of Raptor
Pharmaceutical Corp., a Delaware corporation (the “Company”) at an exercise price
of $____________ per Share (insert Exercise Price) under
and pursuant to the Company’s 2006 Equity Incentive Plan (the “Plan”) and the Award Agreement
dated __________________(insert date of Award
Agreement) (the “Award
Agreement”). Unless otherwise defined herein, the terms defined in the
Plan and the Award Agreement shall have the same meanings in this Exercise
Notice.

     

    2.           Representations of the
Optionee. The Optionee acknowledges that the Optionee has received, read
and understood the Notice, the Plan and the Award Agreement and agrees to abide
by and be bound by their terms and conditions.

     

    3.           Rights as
Stockholder. Until the stock certificate evidencing such Shares is issued
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued.

     

    4.           Delivery of Payment.
Optionee herewith delivers to the Company the full Exercise Price of the Shares
by check, or such other payment as is permitted under the Plan and the Award
Agreement.

     

    5.           Tax Consultation.
Optionee understands that Optionee may suffer adverse tax consequences as a
result of Optionee’s purchase or disposition of the Shares. Optionee represents
that Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that Optionee is
not relying on the Company for any tax advice.

     

    6.           Taxes. The Optionee
agrees to satisfy all applicable foreign, federal, state and local income and
employment tax withholding obligations and herewith delivers to the Company the
full amount of such obligations or has made arrangements acceptable to the
Company to satisfy such obligations. In the case of an Incentive Stock Option,
the Optionee also agrees, as partial consideration for the designation of the
Option as an Incentive Stock Option, to notify the Company in writing within
thirty (30) days of any disposition of any shares acquired by exercise of the
Option if such disposition occurs within two (2) years from the Date of Award or
within one (1) year from the date the Shares were transferred to the
Optionee.

     

    7.           Successors and
Assigns. The Company may assign any of its rights under this Exercise
Notice to single or multiple assignees, and this agreement shall inure to the
benefit of the successors and assigns of the Company. This Exercise Notice shall
be binding upon the Optionee and his or her heirs, executors, administrators,
successors and assigns.

     

    8.           Entire Agreement. The
Plan and the Award Agreement are incorporated herein by reference. The Plan, the
Award Agreement and this Exercise Notice constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee.

     

    9.           Interpretation. Any
dispute regarding the interpretation of this Exercise Notice shall be submitted
by Optionee or by the Company forthwith to the Committee who shall review such
dispute at its next regular meeting. The resolution of such a dispute by the
Committee shall be final and binding on all parties.

     

    10.           Further Instruments.
Optionee and the Company agree to execute such further instruments and to take
such further action as may be reasonably necessary to carry out the purpose and
intent of this agreement.

     

    11.           Governing Law. This
Exercise Notice is governed by the internal substantive laws, but not the choice
of law rules, of the State of California.

    

    
      	
              OPTIONEE:

               

            
	
               

              Signed:_________________________

            
	
               

              _______________________________

            
	
              Print
      Name

               

              Date:___________________________

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Nonqualified Stock Option
Award Agreement

     

     

    
      	
               

            
	
              RAPTOR
      PHARMACEUTICAL CORP.

               

            
	
              2006
      Equity Incentive Plan

               

            
	
              STOCK
      OPTION AWARD AGREEMENT

            

    

    

    

    Current
Date

    

    Optionee

    Optionee’s
Address

    

    Dear
Optionee:

    

    Pursuant
to the terms and conditions of the Company’s 2006 Equity Incentive Plan (the
“Plan”), you have been granted a Non-Qualified Stock Option to purchase
________shares of stock as outlined below.

    

    
      	
              Granted
      To:_____________________________

               

            
	
              Grant
      Date:_____________________________

               

            
	
              Grant
      Number:__________________________

               

            
	
              Grant
      Price:_____________________________

               

            
	
              Total
      Cost to Exercise:____________________

               

            
	
              Expiration
      Date:_________________________

               

            
	
              Vesting
      Schedule:________________________

               

            

    

    By my
signature below, I hereby acknowledge receipt of this Grant on the date shown
above, which has been issued to me under the terms and conditions of the Plan
and Award Agreement. I further acknowledge receipt of the copy of the Plan and
agree to conform to all of the terms and conditions of the Grant and the
Plan.

    

    
      	
              Signature:____________________________

            	 
      	
              Date:___________________________

            
	
                              Optionee

               

            	 
      	 
      
	 
      	 
      	 
      

    

     Note:  If
there are any discrepancies in the name or address shown above, please make the
appropriate corrections on this form.

    

    

    1.             Grant. The Optionee
specified above (the “Optionee”) has been granted an
option (the “Option”) to
purchase the number of shares of Common Stock of Raptor Pharmaceutical Corp.
(the “Company”)
specified above at the exercise price also specified above (the “Exercise Price”), subject to
the terms and conditions of this Non-Qualified Stock Option Award Agreement (the
“Award Agreement”), and
the Raptor Pharmaceutical Corp. 2006 Equity Incentive Plan, as amended from time
to time (the “Plan”) as
follows. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Award Agreement. In the event of any
conflict between the terms and conditions of the Plan and this Award Agreement,
the terms and conditions of the Plan shall prevail.

     

    2.           Non-Qualified Stock
Option. This Option is not intended to qualify as an Incentive Stock
Option as defined in Section 422 of the Code.

     

    3.           Vesting Schedule.
Subject to the terms of this Award Agreement and the Plan, this Option may be
exercised, in whole or in part, according to the Vesting Schedule specified
above.

    However,
if the Optionee is on (i) sick leave (ii) military leave or (iii) an approved
leave of absence, subject to applicable laws, vesting of the Option shall be
suspended after such leave of absence exceeds ninety (90) days. Vesting shall
than only recommence upon Optionee’s return to service to the Company and the
Vesting Schedule shall be extended by the length of the suspension or by such
shorter period as the Committee determines is necessary to comply with Section
25102(o) of the California Corporations Code.

    

    4.           Exercise of
Option.

    

    (a)           Right to Exercise.
The Option shall be exercisable during its term only to the extent it has vested
in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Award Agreement. The Option shall be
subject to the provisions of Section 17 of the Plan relating to the
exerciseability or substitution upon the occurrence of certain corporate
transactions as therein described. In no event may the Option be exercised with
respect to any fractional Shares.

    

    (b)           Method of Exercise.
This Option shall be exercisable by delivery of an exercise notice in the form
attached as Exhibit
A (the “Exercise
Notice”) (or such other procedure as specified in writing from time to
time by the Committee) which shall state the election to exercise the Option,
the whole number of Shares with respect to which the Option is being exercised
(the “Exercised
Shares”), and such other provisions as may be required by the Committee.
The Exercise Notice shall be delivered in person, by certified mail or by such
other method as determined by the Committee, accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice accompanied by payment of Exercise Price. Payment of the Exercise Price
shall be made in the manner specified in Section 3 below.

    

    (c)           Taxes. No Shares will
be delivered to the Optionee or other person pursuant to the exercise of the
Option until the Optionee or other person has made arrangements acceptable to
the Committee for the satisfaction of applicable income tax and employment tax
withholding obligations, including, without limitation, such other tax
obligations of the Optionee incident to the receipt of the Shares. Upon exercise
of the Option, the Company (or the Optionee’s employer) may offset or withhold
(from any amount owed by the Company or the Optionee’s employer to the Optionee)
or collect from the Optionee or other person an amount sufficient to satisfy
such tax withholding obligations.

    

    5.           Method of Payment.
Subject to any applicable laws, payment of the aggregate Exercise Price shall be
made in cash (by check) or, where expressly approved for the Optionee by the
Committee and where permitted by law, any of the following (provided that the
portion of the Exercise Price equal to the par value of $0.001 per share of the
Shares with respect to which the Option is exercised must be paid in cash or
other legal consideration permitted by the Delaware General Corporation
Law):

    

    
      	
               
      

            	
              (a)

            	
              by
      cancellation of indebtedness of the Company owed to the
      Optionee.

            

    

     

    (b)           by
surrender of shares that:  (i) either (A) have been owned by Optionee
for more than six (6) months and have been paid for within the meaning of SEC
Rule 144 (and, if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares) or
(B) were obtained by Optionee in the public market and (ii) are clear of all
liens, claims, encumbrances or security interests;

     

    (c)           by
tender of a full recourse promissory note having such terms as may be approved
by the Committee and bearing interest at a rate sufficient to avoid (i)
imputation of income under Sections 483 and 1274 of the Code and (ii) variable
accounting treatment under Financial Accounting Standards Board Interpretation
No. 44 to APB No. 25; provided, however, if the Optionee is not an employee or
director of the Company, the Optionee will not be entitled to purchase Shares
with a promissory note unless the note is adequately secured by collateral other
than the Shares;

     

    (d)           by
waiver of compensation due or accrued to the Optionee from the Company for
services rendered;

     

    (e)           with
respect only to purchases upon exercise of an Option, and provided that a public
market for the Company’s stock exists:

    

    (i)           through
a “same day sale” commitment from the Optionee and a broker-dealer that is a
member of the National Association of Securities Dealers (a “FINRA Dealer”) whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased sufficient to pay the total Exercise Price, and whereby the
FINRA Dealer irrevocably commits upon receipt of such Shares to forward the
total Exercise Price directly to the Company; or

    

    (ii)           through
a “margin” commitment from the Optionee and a FINRA Dealer whereby the Optionee
irrevocably elects to exercise the Option and to pledge the Shares so purchased
to the FINRA Dealer in a margin account as security for a loan from the FINRA
Dealer in the amount of the total Exercise Price, and whereby the FINRA Dealer
irrevocably commits upon receipt of such Shares to forward the total Exercise
Price directly to the Company; or

    

    (f)           by
any combination of the foregoing.

    

    6.           Restrictions on
Exercise. This Option may not be exercised if the issuance of such Shares
upon such exercise would constitute a violation of any applicable laws. If the
exercise of the Option within the applicable time periods set forth in Section 5
of this Award Agreement is prevented by the provisions of this Section 4, the
Option shall remain exercisable until one (1) month after the date the Optionee
is notified by the Company that the Option is exercisable, but in any event no
later than the Expiration Date set forth in the Notice.

     

    7.           Termination. Subject
to earlier termination pursuant to Section 17 of the Plan and notwithstanding
the exercise periods set forth in the Award Agreement, exercise of an Option
will always be subject to the following:

     

    (a)           If
the Optionee is Terminated for any reason other than death, Disability or for
Cause, then the Optionee may exercise the Option only to the extent it has
vested in accordance with the Vesting Schedule as of the Termination Date unless
otherwise determined by the Committee. The Option may be exercised by the
Optionee in whole or in part, within ninety (90) days after the Termination Date
(or within such shorter time period, being not less than thirty (30) days, or
within such longer time period, not exceeding five (5) years, after the
Termination Date as may be determined by the Committee.

     

    (b)           If
the Optionee is Terminated because of death or Disability (or the Optionee dies
within ninety (90) days after a Termination other than for Cause), then the
Option may be exercised only to the extent that it has vested in accordance with
the Vesting Schedule as of the Termination Date unless otherwise determined by
the Committee. The Option may be exercised by the Optionee (or the Optionee’s
legal representative or authorized designee) in whole or in part within twelve
(12) months after the Termination Date (or within such shorter time period,
being not less than six (6) months, or within such longer time period, not
exceeding five (5) years, after the Termination Date as may be determined by the
Committee.

     

    (c)           If
the Optionee is terminated for Cause, the Optionee may exercise the Option in
whole or in part within ninety (90) days of the Termination Date, but not to an
extent greater than the Option has vested in accordance with the Vesting
Schedule as of the Termination Date.

     

    (d)           To
the extent that the Option is unvested as of the Termination Date or if the
Optionee does not exercise the Option to the extent then vested within the time
limits specified above, the Option shall terminate automatically unless
otherwise determined by the Committee.

     

    8.           Transferability of
Option. This Option (or any interest therein) may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee.
Notwithstanding the foregoing, the Optionee may designate one or more
beneficiaries of this Option in the event of the Optionee’s death or a
beneficiary designation form provided by the Company. Notwithstanding the
foregoing, the Optionee may designate one or more beneficiaries of this Option
in the event of the Optionee’s death on a beneficiary form provided by the
Company. Following the death of the Optionee, to the extent provided in Section
7 above, the Option may be exercised (a) by the person or persons designated
under the deceased Optionee’s beneficiary designation or (b) in the absence of
an effectively designated beneficiary, by the Optionee’s legal representative(s)
or by any person approved to do so under the deceased Optionee’s will or under
the then applicable laws of descent and distribution. The terms of the Plan and
this Award Agreement shall be binding upon the executors, administrators, heirs,
successors and permitted assigns of the Optionee.

     

    9.           Term of Option. This
Option must be exercised not later than the Expiration Date set out in the
Notice, and may be exercised during such term only in accordance with the Plan
and the terms of this Award Agreement.

     

    10.           Rights as
Stockholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a stockholder shall exist with respect to the Shares, notwithstanding the
exercise of the Option. The Shares shall be issued to the Optionee as soon as
practicable after the Option is exercised.

     

    11.           Tax Consequences. The
Optionee may incur tax liability as a result of exercise of this Option and
disposition of the Shares. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

     

    12.           Successors and
Assigns. The Company may assign any of its rights under this Option
Agreement to single or multiple assignees, and this Award Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Award Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.

     

    13.           Entire Agreement. The
Plan is incorporated herein by reference. The Plan and this Award Agreement
(including the Notice) constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and
Optionee.

     

    14.           No Guarantee of Continued
Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH
OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS
A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

     

    15.           Representations of
Optionee. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof; and
hereby accepts this Option subject to all of the terms and provisions thereof.
Optionee has reviewed the Plan and this Award Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this Award
Agreement and fully understands all provisions of the Option. Optionee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan or
this Option. Optionee further agrees to notify the Company upon any change of
Optionee’s address indicated above.

     

    16.           Interpretation. Any
dispute regarding the interpretation of this Agreement shall be submitted by
Optionee or by the Company forthwith to the Committee who shall review such
dispute at its next regular meeting. The resolution of such a dispute by the
Committee shall be final and binding on all parties.

     

    17.           Governing Law. This
Award Agreement is governed by the internal substantive laws, but not the choice
of law rules, of the State of California.

    

    

    
      	
              OPTIONEE:

               

               

               

            	 
      	
              COMPANY:

               

              RAPTOR
      PHARMACEUTICAL CORP.

              a
      Delaware corporation

            
	
              Signature

               

               

            	 
      	
               

              By:

            
	
              Print
      Name

            	 
      	
              Kim
      R. Tsuchimoto

              CFO,
      Secretary and Treasurer

               

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              EXHIBIT A

               

            
	
              Raptor
      Pharmaceutical Corp. 2006 Equity Incentive Plan

               

            
	
              EXERCISE
      NOTICE

               

            

    

    

    

    To:  Raptor
Pharmaceutical Corp.

    Attention:  CFO,
Secretary and Treasurer

    

    1.           Exercise of Option.
Effective as of today, ___________________ (insert today’s date), the
undersigned (“Optionee”)
hereby elects to exercise Optionee’s option to purchase _____________ (insert number of Shares)
shares of the Common Stock (the “Shares”) of Raptor
Pharmaceutical Corp., a Delaware corporation (the “Company”) at an exercise price
of $____________ per Share (insert Exercise Price) under
and pursuant to the Company’s 2006 Equity Incentive Plan (the “Plan”) and the Award Agreement
dated __________________(insert date of Award
Agreement) (the “Award
Agreement”). Unless otherwise defined herein, the terms defined in the
Plan and the Award Agreement shall have the same meanings in this Exercise
Notice.

     

    2.           Representations of the
Optionee. The Optionee acknowledges that the Optionee has received, read
and understood the Notice, the Plan and the Award Agreement and agrees to abide
by and be bound by their terms and conditions.

     

    3.           Rights as
Stockholder. Until the stock certificate evidencing such Shares is issued
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued.

     

    4.           Delivery of Payment.
Optionee herewith delivers to the Company the full Exercise Price of the Shares
by check, or such other payment as is permitted under the Plan and the Award
Agreement.

     

    5.           Tax Consultation.
Optionee understands that Optionee may suffer adverse tax consequences as a
result of Optionee’s purchase or disposition of the Shares. Optionee represents
that Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that Optionee is
not relying on the Company for any tax advice.

     

    6.           Taxes. The Optionee
agrees to satisfy all applicable foreign, federal, state and local income and
employment tax withholding obligations and herewith delivers to the Company the
full amount of such obligations or has made arrangements acceptable to the
Company to satisfy such obligations. In the case of an Incentive Stock Option,
the Optionee also agrees, as partial consideration for the designation of the
Option as an Incentive Stock Option, to notify the Company in writing within
thirty (30) days of any disposition of any shares acquired by exercise of the
Option if such disposition occurs within two (2) years from the Date of Award or
within one (1) year from the date the Shares were transferred to the
Optionee.

     

    7.           Successors and
Assigns. The Company may assign any of its rights under this Exercise
Notice to single or multiple assignees, and this agreement shall inure to the
benefit of the successors and assigns of the Company. This Exercise Notice shall
be binding upon the Optionee and his or her heirs, executors, administrators,
successors and assigns.

     

    8.           Entire Agreement. The
Plan and the Award Agreement are incorporated herein by reference. The Plan, the
Award Agreement and this Exercise Notice constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee.

     

    9.           Interpretation. Any
dispute regarding the interpretation of this Exercise Notice shall be submitted
by Optionee or by the Company forthwith to the Committee who shall review such
dispute at its next regular meeting. The resolution of such a dispute by the
Committee shall be final and binding on all parties.

     

    10.           Further Instruments.
Optionee and the Company agree to execute such further instruments and to take
such further action as may be reasonably necessary to carry out the purpose and
intent of this agreement.

     

    11.           Governing Law. This
Exercise Notice is governed by the internal substantive laws, but not the choice
of law rules, of the State of California.

    

    
      	
              OPTIONEE:

               

            
	
               

              Signed:________________________

            
	
               

              ______________________________

            
	
              Print
      Name

               

              Date:__________________________EXHIBIT 10(ah)
                                                                  --------------

                                WAIVER AGREEMENT

     This Waiver Agreement (this "Waiver Agreement") is entered into on August
13, 2009, by and between SILICON VALLEY BANK, a California corporation, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054
and with a loan production office located at One Newton Executive Park, Suite
200, 2221 Washington Street, Newton, Massachusetts 02462 ("Bank") and SPIRE
CORPORATION, a Massachusetts corporation, SPIRE SOLAR, INC., a Massachusetts
corporation, SPIRE BIOMEDICAL, INC., a Massachusetts corporation, each with
offices located at One Patriots Park, Bedford, Massachusetts 01730, and SPIRE
SEMICONDUCTOR, LLC, a Delaware limited liability company (formerly known as
Bandwidth Semiconductor, LLC), with offices at 25 Sagamore Park Road, Hudson, NH
03051 (jointly and severally, individually and collectively, the "Borrower").

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a loan arrangement dated as of June 22, 2009,
evidenced by, among other documents, (i) a certain AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT dated as of June 22, 2009, with an effective date as of May
31, 2009, between Borrower and Bank, (as amended, the "Domestic Loan Agreement")
and (ii) a certain EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT (as amended,
the "EXIM Agreement") entered into as of June 22, 2009, with an effective date
of May 31, 2009. Capitalized terms used but not otherwise defined herein shall
have the same meaning as in the Domestic Loan Agreement.

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Domestic Loan Agreement and the EXIM Agreement.

Hereinafter, the Domestic Loan Agreement and the EXIM Agreement, together with
all other documents executed in connection therewith evidencing, securing or
otherwise relating to the Obligations shall be referred to as the "Existing Loan
Documents".

3. WAIVER. Bank hereby waives Borrower's (i) failure to comply with the minimum
Tangible Net Worth requirement set forth in Section 6.9(a) of the Domestic Loan
Agreement for the compliance period ended June 30, 2009 and (ii) Event of
Default (as such term is defined in the EXIM Agreement) pursuant to Section 8.4
(DOMESTIC DEFAULT) caused by virtue of Borrower's Tangible Net Worth violation
under the Domestic Loan Agreement described above (collectively, the events of
default described in clause (i) and (ii) above are referred to herein as the
"Existing Defaults"). The Bank's waiver of Borrower's compliance with said
foregoing Existing Defaults shall apply only to the foregoing specific period
and shall not constitute a continuing waiver.

4. FEES. Borrower shall pay to Bank a waiver fee equal to $5,000.00, which fee
shall be due on the date hereof and shall be deemed fully earned as of the date
hereof. Borrower shall also reimburse Bank for all legal fees and expenses
incurred by Bank in connection with the Existing Loan Documents and this Waiver
Agreement.

5. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in those
certain Perfection Certificates dated as of June 22, 2009 delivered to Bank, and
acknowledges, confirms and agrees the disclosures and information Borrower
provided to Bank in the Perfection Certificates has not changed, as of the date
hereof.

6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.

7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.

8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or
<PAGE>

unknown, at law or in equity, all of them are hereby expressly WAIVED and
Borrower hereby RELEASES Bank from any liability thereunder.

9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Waiver Agreement, the terms of the
Existing Loan Documents remain unchanged and in full force and effect. Bank's
agreement to waive the Existing Defaults pursuant to this Waiver Agreement in no
way shall obligate Bank to make any future waivers or any other modifications to
the Obligations. Nothing in this Waiver Agreement shall constitute a
satisfaction of the Obligations. It is the intention of Bank and Borrower to
retain as liable parties all makers of Existing Loan Documents, unless the party
is expressly released by Bank in writing. No maker will be released by virtue of
this Waiver Agreement.

10. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the exclusive jurisdiction of any state or federal
court of competent jurisdiction in the Commonwealth of Massachusetts in any
action, suit, or proceeding of any kind against it which arises out of or by
reason of this Waiver Agreement. NOTWITHSTANDING THE FOREGOING, THE BANK SHALL
HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY
OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE
BANK'S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY.

11. COUNTERSIGNATURE. This Waiver Agreement shall become effective only when it
shall have been executed by Borrower and Bank.

                  [remainder of page intentionally left blank]

                                        2
<PAGE>

     This Waiver Agreement is executed as a sealed instrument under the laws of
the Commonwealth of Massachusetts as of the date first written above.

BORROWER:

SPIRE CORPORATION

By     /s/ Roger G. Little           By     /s/ Christian Dufresne
       -------------------------            -----------------------------------
Name:  Roger G. Little               Name:  Christian Dufresne, Ph.D.
Title: Chief Executive Officer       Title: Chief Financial Officer & Treasurer

SPIRE SOLAR, INC.

By     /s/ Roger G. Little           By     /s/ Christian Dufresne
       -------------------------            -----------------------------------
Name:  Roger G. Little               Name:  Christian Dufresne, Ph.D.
Title: Chief Executive Officer       Title: Chief Financial Officer & Treasurer

SPIRE BIOMEDICAL, INC.

By     /s/ Roger G. Little           By     /s/ Christian Dufresne
       -------------------------            -----------------------------------
Name:  Roger G. Little               Name:  Christian Dufresne, Ph.D.
Title: Chief Executive Officer       Title: Chief Financial Officer & Treasurer

SPIRE SEMICONDUCTOR, LLC f/k/a BANDWITH
SEMICONDUCTOR, LLC

By: Spire Corporation, a Massachusetts corporation,
its sole Member and Manager

By     /s/ Roger G. Little           By     /s/ Christian Dufresne
       -------------------------            -----------------------------------
Name:  Roger G. Little               Name:  Christian Dufresne, Ph.D.
Title: Chief Executive Officer       Title: Chief Financial Officer & Treasurer

BANK:

SILICON VALLEY BANK

By     /s/ Jay T. Tracy
       -------------------------
Name:  Jay T. Tracy
Title: Vice President

                                        3

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