Document:

Unassociated Document

    THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
      STATE
      SECURITIES LAWS, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED,
      OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE
      REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
      COVERING ANY SUCH TRANSACTION, OR SUCH TRANSACTION IS EXEMPT FROM THE
      REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS, SUCH COMPLIANCE, AT THE OPTION
      OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION OF
      THE
      WARRANT HOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE CORPORATION, THAT NO
      VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED
      TRANSFER OR ASSIGNMENT.

     

    

    

    COMMON
      STOCK PURCHASE WARRANT

    

    AURIGA
      LABORATORIES, INC.

    

    
      	
              No.
                _____

            	
              ___________ Shares

            
	
              Issuance
                Date: ____________

            	 

    

    

    

    THIS
      CERTIFIES that for good and valuable consideration received, _____________,
      or a
      registered assignee (the “Holder”)
      is
      entitled, upon the terms and subject to the conditions hereinafter set forth,
      to
      acquire from Auriga Laboratories, Inc., a Delaware corporation (the
“Corporation”),
      up
      to _______ fully paid and nonassessable shares (the “Warrant
      Shares”)
      of
      common stock, no par value (the “Common
      Stock”),
      of
      the Corporation at a purchase price of U.S. $1.25 per share (the “Exercise
      Price”).
      This
      Common Stock Purchase Warrant (this “Warrant”)
      is
      issued pursuant to that certain Subscription Agreement entered into between
      the
      Corporation and the Holder.

     

    
      	1.  	
              Term
                of Warrant.

            

    

     

    Subject
      to the other terms and conditions set forth herein, this Warrant shall be
      exercisable, in whole or in part, at any time on or after the date hereof and
      at
      or prior to 11:59 p.m., local time in Los Angeles, California, U.S.A.,
      on ___________ (the “Expiration
      Time”).
      

     

    
      	2.  	
              Exercise
                of Warrant.

            

    

     

    (a)
      This
      Warrant may be exercised, in whole or in part, by the Holder during normal
      business hours on any business day prior to the Expiration Time by delivering
      to
      the Corporation the following: (i) a duly executed Notice of Exercise (in the
      form attached to this Warrant) specifying the number of Warrant Shares to be
      purchased, (ii) subject to Section 2(b) either (A) payment to the Corporation
      of
      the Exercise Price for the number of Warrant Shares specified in the Notice
      of
      Exercise by cash, wire transfer of immediately available funds to a bank account
      specified by the Corporation, or by certified or bank cashier’s check or (B)
      payment to the Corporation of the Exercise Price in accordance with the net
      exercise provisions set forth in Section 2(b), specifying the number of Warrant
      Shares to be applied to such exercise, and (iii) this Warrant (or an
      indemnification undertaking with respect to this Warrant in the case of its
      loss, theft or destruction). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      The
      Holder shall notify the Corporation in writing one business day in advance
      of
      exercing this Warrant of its intention to pay the Exercise Price in cash or
      in
      accordance with the net exercise provisions of this Section 2(b). In the event
      the Holder elects to pay the Exercise Price in cash, the Corporation shall
      have
      the right to require the Holder to exercise this Warrant in accordance with
      the
      net exercise provisions of this Section 2(b). In lieu of exercising this Warrant
      for cash, (i) the Holder may elect to exercise this Warrant by exchanging this
      Warrant for shares of Common Stock equal to the value of this Warrant or (ii)
      the Corporation shall have the right to require the Holder upon notice from
      the
      Holder that intends it to pay the Exericse Price in cash to exercise this
      Warrant by exchanging this Warrant for shares of Common Stock equal to the
      value
      of this Warrant. The number of shares of Common Stock to be issued upon exercise
      of this Warrant pursuant to this Section 2(b) shall equal the value of this
      Warrant computed as of the date of delivery of this Warrant to the Corporation
      using the following formula:

     

    X
      = Y
      (A-B)

    ---------------

    A

     

    Where:

    X=
      the
      number of shares of Common Stock to be issued to the Holder.

    Y=
      the
      number of shares of Common Stock with respect to which this Warrant is being
      exercised.

    A=
      the
      current market value per share of one share of Common Stock determined in
      accordance with this Section 2(b).

    B=
      the
      Exercise Price (as adjusted).

     

    For
      purposes of Section 2(b), the current market value shall be determined as
      follows:

     

    (a)
      if
      the Common Stock is traded in the over-the-counter market and not on any
      national securities exchange and not in the NASDAQ Reporting System, the average
      of the mean between the last bid and asked prices per share, as reported by
      the
      National Quotation Bureau, Inc., or an equivalent generally accepted reporting
      service, for the last business day prior to the date on which this Warrant
      is
      exercised, or, if not so reported, the average of the closing bid and asked
      prices for a share of Common Stock as furnished to the Corporation by any member
      of the National Association of Securities Dealers, Inc., selected by the
      Corporation for that purpose;

     

    (b)
      if
      the Common Stock is listed or traded on a national securities exchange or in
      the
      NASDAQ Reporting System, the closing price on the principal national securities
      exchange on which it is so listed or traded or in the NASDAQ Reporting System,
      as the case may be, on the last business day prior to the date of the exercise
      of the Warrant. The closing price referred to in this Clause (b) shall be the
      last reported sales price or, in case no such reported sale takes place on
      such
      day, the average of the reported closing bid and asked prices, in either case
      on
      the national securities exchange on which the Common Stock is then listed on
      in
      the NASDAQ Reporting System; or

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (c)
      if no
      such closing price or closing bid and asked prices are available, as determined
      in any reasonable manner as may be prescribed by the Board of Directors of
      the
      Corporation.

     

    Notwithstanding
      the foregoing, the Corporation shall not require that this Warrant be exercised
      pursuant to the net provisions of this Section 2(b) in the event such net
      exercise would be prohibited by law.

     

    
      	3.  	
              Registration
                and Other Rights.

            

    

     

    (a)  In
      the
      event that the Corporation files a registration statement with the Securities
      and Exchange Commission covering the sale of its shares of Common Stock (other
      than a registration statement on Form S-4, S-8 or similar form), then the Holder
      shall have the right to require the Corporation to register the resale of the
      Warrant Shares on such registration statement, provided
      that
      if
      such registration is underwritten, the inclusion of such shares shall be subject
      to cutback at the discretion of the managing underwriter and provided
      further
      that the
      inclusion of Warrant Shares on any registration statement shall be subject
      and
      subordinated to the registration rights of any other holders of the
      Corproation’s securities. In the event that the Holder requests the registration
      of less than all of the Warrant Shares represented hereby, prior to any such
      registration, the Holder shall request that the Company issue in exchange
      therefore new warrants representing the Warrant Shares in such denominations
      as
      the Holder shall request; provided, however, that no such certificate
      representing any Warrant Shares being registered shall also represent Warrant
      Shares not being registered.

     

    (b)  In
      the
      event that the Corporation (i) issues as a dividend or other similar
      distribution (an “Extraordinary
      Dividend”)
      on all
      of its then outstanding Common Stock, (A) securities of the Corporation of
      a
      class other than Common Stock, (B) rights, warrants or options (individually,
      a
“Right”
and
      collectively, the “Rights”)
      to
      acquire any securities of the Corporation (including Common Stock) or (C)
      evidences of its indebtedness or assets, or (ii) issues any dividend or other
      similar distribution (a “Secondary
      Extraordinary Dividend”)
      on any
      such securities in the form of securities of the Corporation (including Common
      Stock) (any securities (other than Rights) issued as an Extraordinary Dividend
      or Secondary Extraordinary Dividend or issued upon exercise of any Rights issued
      as an Extraordinary Dividend or Secondary Extraordinary Dividend shall be
      referred to as “Dividend
      Securities”):

     

    (i)  this
      Warrant shall thereafter be exercisable for (1) the original number of shares
      of
      Common Stock (subject to adjustment as herein provided), (2) such Dividend
      Securities and Rights as would theretofore have been issued in respect of such
      shares (adjusted as herein provided) had such shares been outstanding at the
      time of such Extraordinary Dividend, and (3) any Dividend Securities that would
      theretofore have been issued as a Secondary Extraordinary Dividend in respect
      of
      such Dividend Securities had such Dividend Securities been outstanding at the
      time of such Secondary Extraordinary Dividend; and

     

    (ii)  any
      Right
      issued as an Extraordinary Dividend or a Secondary Extraordinary Dividend shall
      (1) expire upon the later of (a) the original expiration date of such Right
      or
      (b) the 180th day following the exercise of this Warrant, and (2) be exercisable
      for (a) the Dividend Securities issuable upon exercise of such Right and (b)
      any
      property theretofore issued as a Secondary Extraordinary Dividend in respect
      of
      such Dividend Securities.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c)  In
      the
      event that at any time while this Warrant is outstanding, the Corporation shall
      offer to sell to all of the holders of Common Stock as a class, rights or
      options to purchase Common Stock or rights or options to purchase any stock
      or
      securities convertible into or exchangeable for Common Stock (such exchangeable
      or convertible stock or securities being herein called “Convertible
      Securities”),
      whether or not such rights or options are immediately exercisable, and the
      price
      per share for which Common Stock is issuable upon the exercise of such rights
      or
      options or upon conversion or exchange of such Convertible Securities
      (determined by dividing (i) the total amount received or receivable by the
      Corporation upon issuance and sale of such rights or options, plus the aggregate
      amount of additional consideration payable to the Corporation upon the exercise
      of all such rights or options, plus, in the case of rights or options which
      relate to Convertible Securities, the aggregate amount of additional
      consideration, if any, payable upon the conversion or exchange of all such
      Convertible Securities, by (ii) the total maximum number of shares of Common
      Stock issuable upon the exercise of all such rights or options or upon the
      conversion or exchange of all such Convertible Securities issuable upon the
      exercise of all such rights or options) shall be less than the Exercise Price
      in
      effect immediately prior to the initial sale of any such rights or options,
      the
      Corporation shall offer to sell to the Holder, at the price and upon the terms
      at which such rights or options are offered to holders of its Common Stock,
      such
      number of such rights or options as the Holder would have been entitled to
      purchase had the Holder exercised this Warrant immediately prior to the
      commencement of the offering of such rights or options.

     

    
      	4.  	
              Issuance
                of Shares; No Fractional Shares of
                Scrip.

            

    

     

    Certificates
      for shares of Common Stock purchased hereunder shall be delivered to the Holder
      hereof by the Corporation's transfer agent at the Corporation's expense within
      a
      reasonable time after the date on which this Warrant shall have been exercised
      in accordance with the terms hereof. Each certificate so delivered shall be
      in
      such denominations as may be requested by the Holder hereof and shall be
      registered in the name of the Holder or, subject to applicable laws, such other
      name as shall be requested by the Holder. If, upon exercise of this Warrant,
      fewer than all of the Warrant Shares evidenced by this Warrant are purchased
      prior to the Expiration Time, one or more new warrants substantially in the
      form
      of, and on the terms in, this Warrant will be promptly issued for the remaining
      number of Warrant Shares not purchased upon exercise of this Warrant. The
      Corporation hereby represents and warrants that all Warrant Shares which may
      be
      issued upon the exercise of this Warrant will, upon such exercise, be duly
      and
      validly authorized and issued, fully paid and nonassessable and free from all
      taxes, liens and charges in respect of the issuance thereof (other than liens
      or
      charges created by or imposed upon the Holder of the Warrant Shares). The
      Corporation agrees that the shares of Common Stock so issued shall be and will
      be deemed to be issued to such Holder as the record owner of such shares as
      of
      the close of business on the date on which this Warrant shall have been
      surrendered for exercise in accordance with the terms hereof, notwithstanding
      that the transfer books of the Corporation shall then be closed or certificates
      repesenting such shares of Common Stock shall not then have been actually
      delivered to the Holder. For purposes of Rule 144 promulgated under the
      Securities Act of 1933, as amended, it is intended, understood and acknowledged
      that the shares of Common Stock issued in a cashless exercise transaction
      purusant to Section 2(b) above shall be deemed to have been acquired by the
      Holder, and the holding period for the Warrant Shares shall be deemed to have
      commenced, on the the issue date of this Warrant. No fractional shares or scrip
      representing fractional shares shall be issued upon the exercise of this
      Warrant. With respect to any fraction of a share called for upon the exercise
      of
      this Warrant, an amount equal to such fraction multiplied by the then current
      price at which each share may be purchased hereunder shall be paid in cash
      to
      the Holder of this Warrant.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	5.  	
              Charges,
                Taxes and Expenses.

            

    

     

    Issuance
      of certificates for shares of Common Stock upon the exercise of this Warrant
      shall be made without charge to the Holder hereof for any issue or transfer
      tax
      or other incidental expense in respect of the issuance of such certificate,
      all
      of which taxes and expenses shall be paid by the Corporation, and such
      certificates shall be issued in the name of the Holder of this Warrant or in
      such name or names as may be directed by the Holder of this Warrant; provided,
      however, that in the event certificates for shares of Common Stock are to be
      issued in a name other than the name of the Holder of this Warrant, this Warrant
      when surrendered for exercise shall be accompanied by an Assignment Form (as
      defined below) duly executed by the Holder hereof.

     

    
      	6.  	
              No
                Rights as Stockholders.

            

    

     

    This
      Warrant does not entitle the Holder hereof to any voting rights or other rights
      as a stockholder of the Corporation prior to the exercise hereof.

     

    
      	7.  	
              Exchange
                and Registry of Warrant.

            

    

     

    This
      Warrant is exchangeable, upon the surrender hereof by the registered Holder
      at
      the above mentioned office or agency of the Corporation, for a new Warrant
      of
      like tenor and dated as of such exchange. The Corporation shall maintain at
      the
      above-mentioned office or agency a registry showing the name and address of
      the
      registered Holder of this Warrant. This Warrant may be surrendered for exchange,
      transfer or exercise, in accordance with its terms, at such office or agency
      of
      the Corporation, and the Corporation shall be entitled to rely in all respects,
      prior to written notice to the contrary, upon such registry.

     

    
      	8.  	
              Loss,
                Theft, Destruction or Mutilation of
                Warrant.

            

    

     

    Upon
      receipt by the Corporation of evidence reasonably satisfactory to it of the
      loss, theft, destruction or mutilation of this Warrant and in case of loss,
      theft or destruction of indemnity or security reasonably satisfactory to it,
      and
      upon reimbursement to the Corporation of all reasonable expenses incidental
      thereto, and upon surrender and cancellation of this Warrant, if mutilated,
      the
      Corporation will make and deliver a new Warrant of like date, tenor and
      denomination, in lieu of this Warrant.

     

    
      	9.  	
              Saturdays,
                Sundays and Holidays.

            

    

     

    If
      the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall be a Saturday
      or a Sunday or a legal holiday, then such action may be taken or such right
      may
      be exercised on the next succeeding
      day not a Saturday, Sunday or legal holiday.

     

    
      	10.  	
              Merger,
                Sale of Assets, Etc.

            

    

     

    If
      at any
      time the Corporation proposes to merge or consolidate with or into any other
      corporation, effect any reorganization, or sell or convey all or substantially
      all of its assets to any other entity, then, as a condition of such
      reorganization, consolidation, merger, sale or conveyance, the Corporation
      or its
      successor, as the case may be, shall enter into a supplemental
      agreement to make lawful and adequate provision whereby the Holder shall have
      the right to receive, upon exercise of the Warrant by exchanging the Warrant
      for
      the kind and amount of equity securities, property, cash, or any combination
      thereof, which would have been received upon such reorganization, consolidation,
      merger, sale or conveyance by a Holder of a number of shares of common stock
      equal to the number of shares issuable upon exercise of the Warrant immediately
      prior to such reorganization, consolidation, merger, sale or conveyance.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	11.  	
              Subdivision,
                Combination, Reclassification, Conversion,
                Etc.

            

    

     

    If
      the
      Corporation at any time shall by subdivision, combination, reclassification
      of
      securities or otherwise, change the Warrant Shares into the same or a different
      number of securities of any class or classes, this Warrant shall thereafter
      entitle the Holder to acquire such number and kind of securities as would have
      been issuable in respect of the Warrant Shares (or other securities which were
      subject to the purchase rights under this Warrant immediately prior to such
      subdivision, combination, reclassification or other change) as the result of
      such change if this Warrant had been exercised in full for cash immediately
      prior to such change. The Exercise Price hereunder shall be adjusted if and
      to
      the extent necessary to reflect such change. If the Warrant Shares or other
      securities issuable upon exercise hereof are subdivided or combined into a
      greater or smaller number of shares of such security, the number of shares
      issuable hereunder shall be proportionately increased or decreased, as the
      case
      may be, and the Exercise Price shall be proportionately reduced or increased,
      as
      the case may be, in both cases according to the ratio which the total number
      of
      shares of such security to be outstanding immediately after such event bears
      to
      the total number of shares of such security outstanding immediately prior to
      such event. The Corporation shall send the Holder prompt written notice by
      registered mail, postage prepaid, of any change in the type of securities
      issuable hereunder, any adjustment of the Exercise Price for the securities
      issuable hereunder, and any increase or decrease in the number of shares
      issuable hereunder, which notice shall be accompanied by an officer’s
      certificate setting forth the number of Warrant Shares purchasable upon the
      exercise of this Warrant and the Exercise Price after such adjustment and
      setting forth a brief statement of the facts requiring such adjustment and
      the
      computation thereof, which officer’s certificate shall be conclusive evidence of
      the correctness of any adjustment absent manifest error. 

     

    
      	12.  	
              Notice

            

    

     

    In
      case,
      at any time the Corporation shall propose:

     

    (a)  to
      declare a dividend (or any other distribution) on shares of Common Stock in
      shares of Common Stock or make any other distribution to all holders of Common
      Stock; or

     

    (b)  to
      issue
      any rights, warrants or other securities to all holders of Common Stock
      entitling them to subscribe for or purchase shares of Common Stock or of any
      other subscription rights or warrants; or

     

    (c)  to
      effect
      any reclassification of the Common Stock, any consolidation, merger or binding
      share exchange to which the Corporation is a party, or the sale or transfer
      of
      all or substantially all of the assets of the Corporation; or

     

    (d)  to
      effect
      any voluntary or involuntary dissolution, liquidation or winding up of the
      Corporation; or

     

    (e)  to
      take
      any other action which would cause an adjustment to the Exercise Price;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    then,
      the
      Corporation shall cause to be mailed to the Holder at least 30 days before
      the
      date hereinafter specified, a notice stating (i) the date on which a record
      is
      to be taken for the purpose of such dividend, distribution, rights or warrants,
      or, if a record is not to be taken, the date as of which the holders of shares
      of Common Stock of record to be entitled to such dividend, distribution, rights
      or warrants are to be determined, (ii) the date on which any such
      reclassification, consolidation, merger, binding share exchange, sale, transfer,
      dissolution, liquidation or winding up is expected to become effective, and
      the
      date as of which it is expected that holders of shares of Common Stock of record
      shall be entitled to exchange their shares for the applicable consideration,
      deliverable upon such reclassification, consolidation, merger, binding share
      exchange, sale, transfer, dissolution, liquidation or winding up, or (iii)
      the
      date of such action which would require an adjustment to the Exercise
      Price.

     

    
      	13.  	
              Transferability; Compliance
                with Securities Laws.

            

    

     

    (a)  This
      Warrant may not be transferred or assigned in whole or in part without
      compliance with all applicable federal and state securities laws by the
      transferor and transferee (including the delivery of investment representation
      letters and legal opinions reasonably satisfactory to the Corporation, if
      requested by the Corporation). Subject to such restrictions, prior to the
      Expiration Time, this Warrant and all rights hereunder are transferable by
      the
      Holder hereof, in whole or in part, at the office or agency of the Corporation.
      Any such transfer shall be made in person or by the Holder's duly authorized
      attorney, upon surrender of this Warrant together with the Assignment Form
      attached hereto properly endorsed (the “Assignment
      Form”).

     

    (b)  The
      Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
      and
      the Warrant Shares issuable upon exercise hereof are being acquired solely
      for
      the Holder's own account and not as a nominee for any other party, and for
      investment, and that the Holder will not offer, sell or otherwise dispose of
      this Warrant or any Warrant Shares to be issued upon exercise hereof except
      under circumstances that will not result in a violation of the Securities Act
      of
      1933, as amended, or any state securities laws. Upon exercise of this Warrant,
      the Holder shall, if requested by the Corporation, confirm in writing, in a
      form
      satisfactory to the Corporation, that the Warrant Shares so purchased are being
      acquired solely for the Holder's own account and not as a nominee for any other
      party, for investment, and not with a view toward distribution or
      resale.

     

    (c)  Until
      the
      Warrant Shares have been registered under the Securities Act of 1933, as
      amended, this Warrant may not be exercised except by (i) the original purchaser
      of this Warrant from the Corporation or (ii) an “accredited investor” as defined
      in Rule 501(a) under the Securities Act of 1933, as amended. Each certificate
      representing the Common Stock or other securities issued in respect of the
      Warrant Shares upon any stock split, stock dividend, recapitalization, merger,
      consolidation or similar event, shall be stamped or otherwise imprinted with
      a
      legend substantially in the following form (in addition to any legend required
      under applicable securities laws):

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
      NOT
      WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
      SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
      UNLESS THE SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
      DELIVERY REQUIREMENTS OF SAID ACT.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Once
      the
      Warrant Shares have been registered under the Securities Act of 1933, as
      amended, no such restrictive legend shall be required on any securities issued
      in respect of the Warrant Shares, unless otherwise required under the Securities
      Act of 1933, as amended.

     

    
      	14.  	
              Reservation
                of Shares of Common Stock.

            

    

     

    The
      Corporation hereby agrees that during the period that this Warrant is
      outstanding, the Corporation will reserve from its authorized and unissued
      Common Stock and other securities, solely for the purpose of providing for
      the
      exercise of the rights to purchase all Warrant Shares granted pursuant to this
      Warrant, such number of shares of Common Stock, Dividend Securities and Rights
      to permit the exercise in full of this Warrant.

     

    
      	15.  	
              Governing
                Law.

            

    

     

    This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of Delaware. The Corporation irrevocably consents to the jurisdication
      of
      the courts of the State of California and of any federal court located in such
      State in connection with any action or proceeding arising out of or relating
      to
      this Warrant, any document or instrument delivered pursuant to, in connection
      with or simultaneously with this Warrant, or a breach of this Warrant or any
      such document or instrument. In any such action or proceeding, the Company
      waives personal service of any summons, complaint or other process.

     

    IN
      WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by
      its
      duly authorized officers.

     

    
      	
              Dated:
                __________________________

               

               

              AURIGA
                LABORATORIES, INC.

               

               

              By:______________________________

              Philip
                S. Pesin, Chief Executive Officer

            	 

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    NOTICE
      OF EXERCISE

    

    To: Auriga
      Laboratories, Inc.

     

    (1) The
      undersigned hereby elects to purchase shares of common stock, no par value
      (the
“Common
      Stock”),
      of
      Auriga Laboratories, Inc., a Delaware corporation (the “Corporation”)
      pursuant to the terms of the attached Warrant and tenders payment herewith
      in
      the amount of $_________ by [tendering cash or delivering a certified check
      or
      bank cashier’s check, payable to the order of the Corporation in accordance with
      the terms thereof, together with all applicable transfer taxes, if any]
      [surrendering ____ shares of Common Stock received upon exercise of the attached
      Warrant, which shares have the current market value equal to such
      payment].

    

    (2) In
      exercising this Warrant, the undersigned hereby confirms and acknowledges that
      the shares of Common Stock to be issued upon exercise hereof are being acquired
      solely for the account of the undersigned and not as a nominee for any other
      party, and for investment and that the undersigned will not offer, sell or
      otherwise dispose of any such shares of Common Stock except under circumstances
      that will not result in a violation of the Securities Act of 1933, as amended,
      or any state securities laws.

    

    (3) Please
      issue a certificate or certificates representing said shares of Common Stock
      in
      the name of the undersigned or in such other name as is specified
      below:

    

    

    ______________________________________

    (Name)

    

    

    ______________________________________

    (Address)

    

    and,
      if
      such number of shares of Common Stock shall not be all the shares of Common
      Stock covered by the attached Warrant, that a new Warrant for the balance of
      the
      shares of Common Stock covered by the attached Warrant be registered in the
      name
      of, and delivered to, the undersigned at the address stated above. 

    

    (4) The
      undersigned represents that (a) he, she or it is the original purchaser from
      the
      Corporation of the attached Warrant or an “accredited investor” within the
      meaning of Rule 501(a) under the Securities Act of 1933, as amended and (b)
      the
      aforesaid shares of Common Stock are being acquired for the account of the
      undersigned for investment and not with a view to, or for resale in connection
      with, the distribution thereof and that the undersigned has no present intention
      of distributing or reselling such shares.

    

    Date:__________________________

    

    

    ______________________________

    (Signature)

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    FORM
      OF
      ASSIGNMENT

    

    

    (To
      be
      executed by the registered holder if such holder desires to transfer the
      attached Warrant.)

    

    FOR
      VALUE
      RECEIVED,       
      hereby
      sells, assigns, and transfers unto __________________ a Warrant to purchase
      __________ shares of Common Stock, no par value, of Auriga Laboratories, Inc.,
      a
      Delaware corporation (the “Corporation”),
      together with all right, title, and interest therein, and does hereby
      irrevocably constitute and appoint      
      attorney
      to transfer such Warrant on the books of the Corporation, with full power of
      substitution.

    

    Dated: 

     

    

    By:_____________________________________

    Signature 

    

    The
      signature on the foregoing Assignment must correspond to the name as written
      upon the face of this Warrant in every particular, without alteration or
      enlarge-ment or any change whatsoever.GENERAL FINANCE CORPORATION

                             2006 STOCK OPTION PLAN

1. PURPOSES OF THE PLAN

      The purposes of the 2006 Stock Option Plan (the "Plan") of General Finance
Corporation, a Delaware corporation (the "Company"), are to:

      1.1 Encourage selected employees, directors, consultants and advisers to
improve operations and increase the profitability of the Company;

      1.2 Encourage selected employees, directors, consultants and advisers to
accept or continue employment or association with the Company or its Affiliates;
and

      1.3 Increase the interest of selected employees, directors, consultants
and advisers in the Company's welfare through participation in the growth in
value of the common stock of the Company (the "Common Stock"). All references
herein to stock or shares, unless otherwise specified, shall mean the Common
Stock.

2. TYPES OF AWARDS; ELIGIBLE PERSONS

      2.1 The Administrator (as defined below) may, from time to time, take the
following action, separately or in combination, under the Plan: (a) grant
options intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder (the "Code"),
as "incentive stock options ("ISOs") and (b) grant options not intended to be
ISOs, so-called "non-qualified options" ("NQOs," and together with ISOs,
"Options"). Any such grants may be made to employees, including employees who
are officers or directors, and to individuals described in Section 1 of the Plan
who the Administrator believes have made or will make a contribution to the
Company or any Affiliate (as defined below); provided, however, that only a
person who is an employee of the Company or any Affiliate at the date of the
grant of an Option is eligible to receive ISOs under the Plan.

      2.2 For purposes of the Plan: (a) the term "Affiliate" means a parent or
subsidiary corporation as defined in the applicable provisions (currently
Sections 424(e) and (f), respectively) of the Code; (b) the term "employee"
includes an officer or director who is an employee of the Company; (c) the term
"consultant" includes persons employed by, or otherwise affiliated with, a
consultant; and (iv) the term "adviser" includes persons employed by, or
otherwise affiliated with, an adviser.

      2.3 Except as otherwise expressly set forth in the Plan, no right or
benefit under the Plan shall be subject in any manner to anticipation,
alienation, hypothecation, or charge, and any such attempted action shall be
void. No right or benefit under the Plan shall in any manner be liable for or
subject to debts, contracts, liabilities, or torts of any Grantee or any other
person except as otherwise may be expressly required by applicable law.

<PAGE>

3. STOCK SUBJECT TO THE PLAN; MAXIMUM NUMBER OF GRANTS

      3.1 Subject to the provisions of Section 3.2, the total number of shares
of Common Stock that may be issued under the Plan shall not exceed 1,500,000
shares. The shares subject to an Option granted under the Plan that expire,
terminate or are cancelled unexercised shall become available again for grants
under the Plan. Where the exercise price of an Option is paid by means of the
Grantee's surrender of previously owned shares of Common Stock or the Company's
withholding of shares otherwise issuable upon exercise of the Option as may be
permitted in the Plan, only the net number of shares issued and which remain
outstanding in connection with such exercise shall be deemed "issued" and no
longer available for issuance under the Plan. No eligible person shall be
granted Options during any twelve-month period covering more than 300,000
shares.

      3.2 If the Common Stock is changed by reason of a stock split, reverse
stock split, stock dividend, recapitalization, combination or reclassification,
then the number and class of shares of stock subject to the Plan that may be
issued under the Plan, and the maximum number of shares covered by Options to
any eligible person under Section 3.1, shall be proportionately adjusted
(provided that any fractional share resulting from such adjustment shall be
disregarded).

4. ADMINISTRATION

      4.1 The Plan shall be administered by the Board of Directors of the
Company (the "Board") or by a committee (the "Committee") to which the Board has
delegated administration of the Plan (or of part thereof) (in either case, the
"Administrator"). The Board shall appoint and remove members of the Committee in
its discretion in accordance with applicable laws. At the Board's discretion,
the Committee may be comprised solely of "non-employee directors" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or "outside directors" within the meaning of Section 162(m) of
the Code. The Administrator may delegate non-discretionary administrative duties
to such employees of the Company as the Administrator deems proper.
Notwithstanding the delegation of administration of the Plan by the Board to a
Committee, the Board, in its absolute discretion, may at any time and from time
to time exercise any and all rights and duties of the Administrator under the
Plan.

      4.2 Subject to the other provisions of the Plan, the Administrator shall
have the authority, in its discretion: (a) to grant Options; (b) to determine
the fair market value of the shares of Common Stock subject to Options; (c) to
determine the exercise price of Options granted, which shall be no less than the
fair market value of the Common Stock on the date of grant; (d) to determine the
persons to whom, and the time or times at which, Options shall be granted, and
the number of shares subject to each Option; (e) to construe and interpret the
terms and provisions of the Plan and all Options granted under the Plan; (f) to
prescribe, amend, and rescind rules and regulations relating to the Plan; (g) to
determine the terms and provisions of each Option granted (which need not be
identical), including but not limited to, the time or times at which Options
shall be exercisable; (h) with the consent of the Grantee, to rescind any grant
or exercise of an Option; (i) to modify or amend the terms of any Option (with
the consent of the Grantee if the modification or amendment is adverse to the
Grantee); (j) to accelerate or defer (with the consent of the Grantee) the
exercise date of any Option; (k) to authorize any person to execute on behalf of
the Company any instrument evidencing the grant of an Option; (l) to determine
the duration and purposes of leaves of absence which may be granted to
participants without constituting a termination of their employment for the
purposes of the Plan; and (m) to make all other determinations deemed necessary
or advisable for the administration of the Plan and any applicable Option. The
Administrator may not reduce the exercise price of any outstanding Option.

                                        2

<PAGE>

      4.3 All questions of interpretation, implementation, and application of
the Plan or any Option or Option agreement shall be determined by the
Administrator, which determination shall be final and binding on all persons.

5. GRANTING OF OPTIONS; AGREEMENTS

      5.1 No Options shall be granted under the Plan after 10 years from the
date of adoption of the Plan by the Board.

      5.2 Each Option shall be evidenced by a written agreement, in form
satisfactory to the Administrator, executed by the Company and the person to
whom such grant is made ("Grantee," which term shall include the permitted
successors and assigns of the Grantee with respect to the Option). In the event
of a conflict between the terms or conditions of an agreement and the terms and
conditions of the Plan, the terms and conditions of the Plan shall govern.

      5.3 Each Option agreement shall specify whether the Option it evidences is
an NQO or an ISO, provided, however, all Options granted under the Plan to
non-employee directors, consultants and advisers of the Company are intended to
be NQOs.

      5.4 Subject to Section 6.2.3 with respect to ISOs, the Administrator may
approve the grant of Options under the Plan to persons who are expected to
become employees, directors, consultants or advisers of the Company, but are not
employees, directors, consultants or advisers at the date of approval.

      5.5 For purposes of the Plan, the term "employment" shall be deemed to
include service as an employee, director, consultant or adviser.

6. TERMS AND CONDITIONS OF OPTIONS

      Each Option granted under the Plan shall be subject to the terms and
conditions set forth in Section 6.1. ISOs shall also be subject to the terms and
conditions set forth in Section 6.2.

      6.1 Terms and Conditions to Which All Options Are Subject. All Options
granted under the Plan shall be subject to the following terms and conditions:

            6.1.1 Exercise Price. The exercise price of each Option shall be the
amount determined by the Administrator, but shall not be less than the fair
market value of the Common Stock on the date of grant (determined under Section
6.1.9).

            6.1.2 Time of Option Exercise (Vesting). Subject to Section 6.2.4,
an Option granted under the Plan shall be exercisable (a) immediately as of the
effective date of the applicable agreement or (b) in accordance with a schedule
or performance criteria as may be set by the Administrator and specified in the
applicable agreement. However, in no case may an Option be exercisable until the
Company and the Grantee execute a written agreement in form and substance
satisfactory to the Company.

                                        3

<PAGE>

            6.1.3 Grant Date. The date of grant of an Option under the Plan
shall be the date approved by the Administrator or a future date specified by
the Administrator at the time of approval and reflected as the effective date of
the applicable agreement.

            6.1.4 Non-Transferability of Rights. Except with the express written
approval of the Administrator, which approval the Administrator is authorized to
give only with respect to NQOs, no Option granted under the Plan shall be
assignable or otherwise transferable by the Grantee except by will or by the
laws of descent and distribution. During the life of the Grantee, an Option
shall be exercisable only by the Grantee or permitted transferee.

            6.1.5 Payment. Except as provided below, payment in full, in cash,
shall be made for all Common Stock purchased at the time written notice of
exercise of an Option is given to the Company and the proceeds of any payment
shall be considered general funds of the Company. The Administrator in its
discretion may include in any Option agreement, or separately approve in
connection with the exercise of any Option, any one or more of the following
additional methods of payment (subject to applicable law):

                  (a) Acceptance of the Grantee's full recourse promissory note
for all or part of the Option price, payable on such terms and bearing such
interest rate as determined by the Administrator (but in no event less than the
minimum interest rate specified under the Code at which no additional interest
or original issue discount would be imputed), which promissory note may be
either secured or unsecured in such manner as the Administrator shall approve
(including, without limitation, by a security interest in the shares of the
Company);

                  (b) Delivery by the Grantee of shares of Common Stock already
owned by the Grantee for all or part of the Option price, provided the fair
market value of such shares of Common Stock is equal on the date of exercise to
the Option price, or such portion thereof as the Grantee is authorized to pay by
delivery of such stock;

                  (c) Through the surrender of shares of Common Stock then
issuable upon exercise of the Option, provided the fair market value (determined
as set forth in Section 6.1.9) of such shares of Common Stock is equal on the
date of exercise to the Option price, or such portion thereof as the Grantee is
authorized to pay by surrender of such stock; and

                  (d) By means of so-called cashless exercises through a
securities broker to the extent exercise in such manner does not violate
applicable law or regulation (including the Exchange Act and rules and
regulations of the Securities and Exchange Commission).

            6.1.6 Termination of Employment. Unless otherwise provided in the
applicable agreement, if for any reason a Grantee ceases to be employed by the
Company or any of its Affiliates, Options held by the Grantee at the date of
termination of employment (to the extent then exercisable) may be exercised in
whole or in part at any time (but in no event after the Expiration Date) within
one year of the date of termination in the case of termination by reason of
death or disability; at the commencement of business on the date of a
termination for "cause" (as defined in the applicable agreement or in any
agreement with the Company pertaining to employment); and, in all other cases,
within 90 days of the date of termination. For purposes of this Section 6.1.6, a
Grantee's employment shall not be deemed to terminate by reason of the Grantee's
transfer from the Company to an Affiliate, or vice versa, or sick leave,
military leave or other leave of absence approved by the Administrator, if the
period of any such leave does not exceed 90 days or, if longer, if the Grantee's
right to reemployment by the Company or any Affiliate is guaranteed either
contractually or by statute

                                        4

<PAGE>

            6.1.7 Withholding and Employment Taxes. At the time of exercise and
as a condition thereto, or at such other time as the amount of such obligation
becomes determinable, the Grantee of an Option shall remit to the Company in
cash all applicable federal and state withholding and employment taxes if
required by law. Such obligation to remit may be satisfied, if authorized by the
Administrator in its sole discretion, after considering any tax, accounting and
financial consequences, by the holder's (a) delivery of a promissory note in the
required amount on such terms as the Administrator deems appropriate, (b)
tendering to the Company previously owned shares of Common Stock or other
securities of the Company with a fair market value equal to the required amount,
or (c) agreeing to have shares of Common Stock (with a fair market value equal
to the required amount), which are acquired upon exercise of the Option,
withheld by the Company.

            6.1.8 Other Provisions. Each Option granted under the Plan may
contain such other terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Administrator, and each ISO granted under the
Plan shall include such provisions and conditions as are necessary to qualify
the Option as an "incentive stock option" within the meaning of Section 422 of
the Code.

            6.1.9 Determination of Fair Market Value. For purposes of the Plan,
the fair market value of Common Stock or other securities of the Company shall
be determined as follows:

                  (a) If the stock of the Company is listed on a securities
exchange or is regularly quoted by a recognized securities dealer, and selling
prices are reported, its fair market value shall be the closing price of such
stock on the date the value is to be determined, but if selling prices are not
reported, its fair market value shall be the mean between the high bid and low
asked prices for such stock on the date the value is to be determined (or if
there are no quoted prices for the date of grant, then for the last preceding
business day on which there were quoted prices).

                  (b) In the absence of an established market for the stock, the
fair market value thereof shall be determined in good faith by the
Administrator, with reference to the Company's net worth, prospective earning
power, dividend-paying capacity, and other relevant factors, including the
goodwill of the Company, the economic outlook in the Company's industry, the
Company's position in the industry, the Company's management, and the values of
stock of other corporations in the same or a similar line of business.

                                        5

<PAGE>

            6.1.10 Option Term. No Option shall be exercisable more than 10
years after the date of grant, or such lesser period of time as is set forth in
the applicable agreement (the end of the maximum exercise period stated in the
agreement is referred to in the Plan as the "Expiration Date").

            6.1.11 Corporate Transactions.

                  (a) Except as otherwise provided in the applicable Option
agreement, in the event of a Corporate Transaction, all Options shall terminate
upon consummation of the Corporate Transaction unless the Administrator
determines that they shall survive. If the Administrator determines that
outstanding Options shall survive, and if the Company shall not be the surviving
entity in the Corporate Transaction, the Administrator shall provide that the
outstanding Options shall be assumed or an equivalent Option substituted by an
applicable successor entity or any Affiliate of the successor entity. If
outstanding Options are to terminate upon consummation of the Corporate
Transaction, any Options outstanding immediately prior to the consummation of
the Corporate Transaction shall be deemed fully vested and exercisable
immediately prior to the consummation of the Corporate Transaction (provided
that the Option has not expired by its terms and that the Grantee takes all
steps necessary to exercise the Option prior to the Corporate Transaction as
required by the agreement evidencing the Option). The Administrator shall notify
each Grantee of an outstanding Option of a proposed Corporate Transaction at
least 20 days prior thereto or as soon as may be practicable, and the exercise
of any Option by a Grantee thereafter shall be contingent upon consummation of
the Corporate Transaction unless the Grantee expressly elects otherwise with
respect to vested shares.

                  (b) In a Corporate Transaction in which the holders of the
Common Stock are to receive only cash in exchange for or in cancellation of
their shares of Common Stock, the Administrator may provide that, with respect
to each Option whose exercise price per share is less that the per share cash
consideration to the holders of the Common Stock that: (i) such Option shall be
deemed automatically exercised in full as of the consummation of the Corporate
Transaction; and (ii) the Grantee shall not be obligated to tender the exercise
price in connection with such exercise, but shall be entitled to a payment equal
to the number of shares that may be acquired upon exercise of the Option
multiplied by the amount by which the per share cash consideration in the
Corporate Transaction exceeds the exercise price.

                  (c) A "Corporate Transaction" means: (i) the direct or
indirect sale, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Company; (ii) the adoption
of a plan relating to the liquidation or dissolution of the Company; (iii) a
merger or consolidation in which the Company is not the Surviving Entity; or
(iv) a reverse merger in which the Company is the Surviving Entity, but the
shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise. "Surviving Entity" means the Company if
immediately following any merger, consolidation or similar transaction, the
holders of outstanding voting securities of the Company immediately prior to the
merger or consolidation own equity securities possessing more than 50% of the
voting power of the entity existing following the merger, consolidation or
similar transaction. In all other cases, the other entity to the transaction and
not the Company shall be the Surviving Entity. In making the determination of
ownership by the stockholders of an entity immediately after the merger,
consolidation or similar transaction, equity securities that the stockholders
owned immediately before the merger, consolidation or similar transaction as
stockholders of another party to the transaction shall be disregarded. Further,
outstanding voting securities of an entity shall be calculated by assuming the
conversion of all equity securities convertible (immediately or at some future
time) into shares entitled to vote.

                                        6

<PAGE>

      6.2 Terms and Conditions to Which Only ISOs Are Subject. Options granted
under the Plan designated as ISOs shall be subject to the following terms and
conditions:

            6.2.1 Exercise Price. Notwithstanding Section 6.1, the exercise
price of an ISO granted to any person who owns, directly or by attribution under
the Code (currently Section 424(d)), stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any Affiliate
(a "10% Stockholder") shall in no event be less than 110% of the fair market
value (determined in accordance with Section 6.1.9) of the stock covered by the
Option at the time the Option is granted.

            6.2.2 Disqualifying Dispositions. If stock acquired by exercise of
an ISO granted pursuant to the Plan is disposed of in a "disqualifying
disposition" within the meaning of Section 422 of the Code (a disposition within
two years from the date of grant of the Option or within one year after the
issuance of such stock on exercise of the Option), the holder of the stock
immediately before the disposition shall promptly notify the Company in writing
of the date and terms of the disposition and shall provide such other
information regarding the Option as the Company may reasonably require.

            6.2.3 Grant Date. If an ISO is granted in anticipation of employment
as provided in Section 5.4, the Option shall be deemed granted, without further
approval, on the date the Grantee assumes the employment relationship forming
the basis for such grant, and, in addition, satisfies all requirements of the
Plan for Options granted on that date.

            6.2.4 Term. Notwithstanding Section 6.1.11, no ISO granted to any
10% Stockholder shall be exercisable more than five years after the date of
grant.

            6.2.5 $100,000 Limitation. To the extent that the aggregate fair
market value (determined at the time of grant) of Common Stock with respect to
which ISOs are exercisable for the first time by a Grantee during any calendar
year (under all plans of the Company and its Affiliates) exceeds $100,000, the
Options or portions thereof which exceed such limit (according to the order in
which they were granted) shall be treated as NQOs.

      6.3 Manner of Exercise. A Grantee wishing to exercise an Option shall give
written notice to the Company at its principal executive office, to the
attention of the officer of the Company designated by the Administrator,
accompanied by payment of the exercise price and/or withholding taxes as
provided in Sections 6.1.7 and 6.1.8. The date the Company receives written
notice of an exercise hereunder accompanied by the applicable payment will be
considered as the date such Option was exercised. Promptly after receipt of
written notice of exercise and the applicable payments called for by this
Section 6.3, the Company shall, without stock issue or transfer taxes to the
holder or other person entitled to exercise the Option, deliver to the holder or
such other person a certificate or certificates for the requisite number of
shares of Common Stock. A holder or permitted transferee of an Option shall not
have any privileges as a stockholder with respect to any shares of Common Stock
to be issued until the date of issuance (as evidenced by the appropriate entry
on the books of the Company or a duly authorized transfer agent) of such shares.

                                        7

<PAGE>

      6.4 Stock splits, mergers, etc.

            6.4.1 If outstanding shares of the Common Stock shall be subdivided
into a greater number of shares, or a dividend in Common Stock shall be paid in
respect of the Common Stock, the exercise price of any outstanding Option in
effect immediately prior to such subdivision or at the record date of such
dividend shall, simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend, be proportionately reduced,
and conversely, if the outstanding shares of the Common Stock shall be combined
into a smaller number of shares, the exercise price of any outstanding options
in effect immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased.

            6.4.2 When any adjustment is required to be made in the exercise
price, the number of shares purchasable upon the exercise of any outstanding
Option shall be adjusted to that number of shares determined by (a) multiplying
an amount equal to the number of shares purchasable upon the exercise of the
Option immediately prior to such adjustment by the exercise price in effect
immediately prior to such adjustment, and then (b) dividing that product by the
exercise price in effect immediately after such adjustment.

            6.4.3 In case of any merger, consolidation or capital reorganization
or any reclassification of the Common Stock (other than the matters described in
Section 6.4.1), upon exercise of any Option outstanding at the time of such
merger, consolidation or capital reorganization or reclassification of the
Common Stock, the holder shall receive the kind and number of shares of stock or
other securities or property receivable upon such event by a holder of the
number of shares of the Common Stock that such Option entitles the holder to
purchase from the Company immediately prior to such event. In every such case,
appropriate adjustment shall be made in the application of the provisions set
forth in the Option agreement and in the Plan with respect to the rights and
interests thereafter of the Grantee, to the end that the provisions set forth in
the Option agreements and in the Plan (including the specified changes and other
adjustments to the exercise price) shall thereafter be applicable in relation to
any shares or other property thereafter purchasable upon exercise of such
Option.

            6.4.4 Any adjustments required or contemplated by this Section 6.4
shall be made by the Administrator, whose determination in that respect shall be
final, binding and conclusive.

            6.4.5 Except as expressly provided in this Section 6.4, no Grantee
shall have any rights by reason of any subdivision or consolidation of shares of
stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, and the dissolution,
liquidation, merger, consolidation or split-up or sale of assets or stock to
another corporation, or any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of, or Exercise Price for, the shares.

                                        8

<PAGE>

            6.4.6 Neither the Plan, nor the grant or existence of Options under
the Plan, shall affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell
or transfer all or any part of its business or assets.

            6.4.7 The Company shall not be required to issue fractional shares
as a result of any adjustments pursuant to this Section 6.4. If an adjustment
under this Section 6.4 would result in a fractional share interest under an
Option or any vesting of any installment, the Administrator's decision as to
inclusion or exclusion of that fractional share interest shall be final, but no
fractional shares of stock shall be issued under the Plan on account of any such
adjustment.

7. EMPLOYMENT OR CONSULTING RELATIONSHIP

      Nothing in the Plan, or any Option granted under the Plan, shall interfere
with or limit in any way the right of the Company or of any of its Affiliates to
terminate the employment of any Grantee nor confer upon any Grantee any right to
continue in the employ of, or consult with, or advise, the Company or any of its
Affiliates.

8. CONDITIONS UPON ISSUANCE OF SHARES

      8.1 Securities Laws. Notwithstanding the provisions of any Option, the
Company shall have no obligation to issue shares under the Plan unless such
issuance shall be registered or qualified under applicable securities laws,
including, without limitation, the Securities Act of 1933, as amended (the
"Securities Act") or exempt from such registration or qualification. The Company
shall have no obligation to register or qualify such issuance under the
Securities Act or other securities laws.

      8.2 Non-Compete Agreement. As a further condition to the receipt of Common
Stock pursuant to the exercise of an Option, the Grantee may be required not to
render services for any organization, or engage directly or indirectly in any
business, competitive with the Company at any time during which an Option is
outstanding to such Grantee and for six months after any exercise of an Option.
Failure to comply with this condition shall cause such Option and the exercise
or issuance of shares thereunder to be rescinded and the benefit of such
exercise, issuance or award to be repaid to the Company.

9. NON-EXCLUSIVITY OF THE PLAN

      The adoption of the Plan shall not be construed as creating any
limitations on the power of the Company to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options other than under the Plan.

                                        9

<PAGE>

10. AMENDMENTS TO PLAN

      The Board may at any time amend, alter, suspend or discontinue the Plan.
Without the consent of a Grantee, no amendment, alteration, suspension or
discontinuance may adversely affect such person's outstanding Options except to
conform the Plan and ISOs granted under the Plan to the requirements of federal
or other tax laws relating to ISOs. No amendment, alteration, suspension or
discontinuance shall require stockholder approval unless (a) stockholder
approval is required to preserve incentive stock option treatment for federal
income tax purposes or (b) the Board otherwise concludes that stockholder
approval is advisable.

11. EFFECTIVE DATE OF PLAN; TERMINATION

      The Plan became effective on August 29, 2006, the date of adoption by the
Board; provided, however, that no shares of Common Stock shall be issued, and no
Option shall be exercisable, unless and until the Plan is approved by the
shareholders pursuant to Delaware law within 12 months after adoption by the
Board. If any Options are so granted and stockholder approval shall not have
been obtained within 12 months of the date of adoption of the Plan by the Board,
such Options shall terminate retroactively as of the date they were granted. The
Plan (but not Options previously granted under the Plan) shall terminate on June
30, 2016. Termination of the Plan shall not affect any outstanding Options,
which shall continue to be governed by the Plan and the related Option
agreement.

                                       10

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