Document:

ex41.htm

    Paivis,
      Corp.

    

    2007-I
      EMPLOYEE AND CONSULTANTS STOCK INCENTIVE PLAN

    As
      Adopted December 31st, 2007

    

    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 and its Subsidiaries, by offering them an opportunity
      to
      participate in the Company’s future performance through awards of Options,
      Compensation Stock, Restricted Stock and Stock Bonuses.  Capitalized
      terms not defined in the text are defined in Section 2.

    

    2.            
      DEFINITIONS.

    

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

    

    “AWARD”
means
      any
      award under this Plan, including any Option, Compensation Stock, Restricted
      Stock or Stock Bonus.

    

    “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.

    

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

    

    “CAUSE”
means
      any
      cause, as defined by applicable law, for the termination of a Participant’s
      employment with the Company or a Parent or Subsidiary of the
      Company.

    

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

    

    "COMMITTEE"
      - The
      Compensation Committee of the Company's Board, or such other committee of the
      Board that is designated by the Board to administer the Plan, composed of not
      less than two members of the Board all of whom are disinterested persons, as
      contemplated by Rule 16b-3 ("RULE 16B-3") promulgated under the Securities
      Exchange Act of 1934, as amended (the "EXCHANGE ACT").

    

    “COMPANY”
means
      Paivis, Corp., a Nevada corporation, or any successor corporation.

    

    “COMPENSATION
      STOCK
      AWARD” means an award of Shares pursuant to Section 7.

    

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

    

    “EXCHANGE
      ACT” means
      the Securities Exchange Act of 1934, as amended.

    

    “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 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;

            

    

    

    
      	
            	
              (b)

            	
              if
                such Common Stock is quoted on the NASDAQ National Market, its closing
                price on the NASDAQ National Market on the date of
                determination;

            

    

    

    
      	
            	
              (c)

            	
              if
                such Common Stock is publicly traded on the OTCBB but is not listed
                or
                admitted to trading on a national securities exchange, the closing
                price
                on the date of determination;

            

    

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    

    
      	
            	
              (d)

            	
              if
                such Common Stock is publicly traded but is not listed or admitted
                to
                trading on a national securities exchange, the closing price on the
                date
                of determination;

            

    

    

    
      	
            	
              (e)

            	
              in
                the case of an Award made on the Effective Date, the price per share
                at
                which shares of the Company’s Common Stock are initially offered for sale
                to the public by the Company’s underwriters in the initial public offering
                of the Company’s Common Stock pursuant to a registration statement filed
                with the SEC under the Securities Act;
                or

            

    

    

    
      	
            	
              (f)

            	
              if
                none of the foregoing is applicable, by the Board in good
                faith.

            

    

    

    “INSIDER”
means
      an
      officer or director of the Company or any other person whose transactions in
      the
      Company’s Common Stock are subject to Section 16 of the Exchange
      Act.

    

    “OPTION”
means
      an
      award of an option to purchase Shares pursuant to Section 6.

    

    “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
      possessing 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. A Participant may include
      employees, former employees, consultants and directors who are also officers
      of
      the Company, as well as any other Participant that the Board of Directors
      determines is entitled to receive an Award in accordance with this
      Plan.

    

    “PERFORMANCE
      FACTORS”
means the factors selected by the Board, in its sole and absolute discretion,
      from among the following measures to determine whether the performance goals
      applicable to Awards have been satisfied:

    

    
      	
            	
              (a)

            	
              Net
                revenue and/or net revenue growth;

            

    

    

    
      	
            	
              (b)

            	
              Earnings
                before income taxes and amortization and/or earnings before income
                taxes
                and amortization growth;

            

    

    

    
      	
            	
              (c)

            	
              Operating
                income and/or operating income
                growth;

            

    

    

    
      	
            	
              (d)

            	
              Net
                income and/or net income growth;

            

    

    

    
      	
            	
              (e)

            	
              Earnings
                per share and/or earnings per share
                growth;

            

    

    

    
      	
            	
              (f)

            	
              Total
                stockholder return and/or total stockholder return
                growth;

            

    

    

    
      	
            	
              (g)

            	
              Return
                on equity;

            

    

    

    
      	
            	
              (h)

            	
              Operating
                cash flow return on income;

            

    

    

    
      	
            	
              (i)

            	
              Adjusted
                operating cash flow return on
                income;

            

    

    

    
      	
            	
              (j)

            	
              Economic
                value added; and

            

    

    

    
      	
            	
              (k)

            	
              Individual
                confidential business objectives.

            

    

    

    “PERFORMANCE
      PERIOD”
means the period of service determined by the Board, not to exceed five
      years,
      during which years of service or performance is to be measured for Restricted
      Stock Awards or Stock Bonuses.

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    “PLAN”
means
      this
      Paivis, Corp. 2007 - I Employee and Consultants Stock Incentive Plan, as amended
      from time to time.

    

    “RESTRICTED
      STOCK
      AWARD” means an award of Shares pursuant to Section 8.

    

    “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  par value $0.0002 reserved for issuance
      under this Plan, as adjusted pursuant to Sections 3 and 19, and any successor
      security.

    

    “STOCK
      BONUS” means an
      award of Shares, or cash in lieu of Shares, pursuant to Section 9.

    

    “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 possessing 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, consultant, independent contractor, or advisor to the Company
      or a Parent or Subsidiary of the Company. An employee 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 Company, provided that
      such
      leave is for a period of not more than 90 days, unless reemployment upon the
      expiration of such leave is guaranteed by contract or statute or unless provided
      otherwise pursuant to a formal policy adopted from time to time by the Company
      and issued and promulgated to employees in writing.  In the case of
      any employee on an approved leave of absence, the Board may make such provisions
      respecting suspension of vesting of the Award while on leave from the employ
      of
      the Company or a Subsidiary 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
      Option agreement. The Board 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”).

    

    3.           
      SHARES SUBJECT TO THE PLAN.

    

    3.1           Number
      of Shares
      Available.  Subject to Sections 3.2 and 19, the total aggregate
      number of Shares reserved and available for grant and issuance pursuant to
      this
      Plan will be 50,000,000 plus Shares that are subject to: (a) issuance upon
      exercise of an Option but cease to be subject to such Option for any reason
      other than exercise of such Option; (b) an Award granted hereunder but forfeited
      or repurchased by the Company at the original issue price; and (c) an Award
      that
      otherwise terminates without Shares being issued.  At all times the
      Company shall reserve and keep available, or take sufficient action to make
      available a sufficient number of Shares as shall be required to satisfy the
      requirements of all outstanding Options granted under this Plan and all other
      outstanding but unvested Awards granted under this Plan. If an Option expires,
      terminates or is cancelled for any reason without having been exercised in
      full,
      the shares of the Common Stock not purchased thereunder shall again be available
      for purposes of this Plan.

    

    3.2           Adjustment
      of
      Shares.  In the event that the number of outstanding shares 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 (a) the number of Shares
      reserved for issuance under this Plan, (b) the Exercise Prices of and number
      of
      Shares subject to outstanding Options, and (c) the number of Shares subject
      to
      other outstanding Awards will be not be proportionately adjusted unless declared
      for adjustment  by the Board prior to such change in capital structure
      herein is effective.

    

    4.            ELIGIBILITY.

    

    ISOs
      (as
      defined in Section 6 below) 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.  All other Awards may be granted to
      employees, officers, directors, consultants, independent contractors and
      advisors of the Company or anyParent or Subsidiary of the
      Company; provided such consultants, contractors and advisors render bona fide
      services not in connection with the offer and sale of securities in a
      capital-raising transaction.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    5.           
      ADMINISTRATION.

    

    5.1           Board
      Authority.  This Plan will be administered by the Board
      provided however, that the Board may delegate such administration to the
      Committee. Subject to the general purposes, terms and conditions of this Plan,
      the Board will have full power to implement and carry out this Plan. Without
      limitation, the Board 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 or
                any
                Award;

            

    

    

    
      	
            	
              (c)

            	
              select
                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 any other incentive or compensation plan of the Company or
                any
                Parent or Subsidiary of the
                Company;

            

    

    

    
      	
            	
              (g)

            	
              grant
                waivers of Plan or Award
                conditions;

            

    

    

    
      	
            	
              (h)

            	
              determine
                the vesting, ability to exercise and payment of
                Awards;

            

    

    

    
      	
            	
              (i)

            	
              correct
                any defect, supply any omission or reconcile any inconsistency in
                this
                Plan, any Award or any Award
                Agreement;

            

    

    

    
      	
            	
              (j)

            	
              determine
                whether an Award has been earned;
                and

            

    

    

    
      	
            	
              (k)

            	
              make
                all other determinations necessary or advisable for the administration
                of
                this Plan.

            

    

    
    

    No
      member
      of the Board or the Committee shall be liable for any action or determination
      made in good faith with respect to the Plan or any Grant made
      thereunder.

     

    5.2           Board
      Discretion.  Any determination made by the Board with respect
      to any Award will be made at the time of grant of the Award or, unless in
      contravention of any express term of this Plan or Award, at any later time,
      and
      such determination will be final and binding on the Company and on all persons
      having an interest in any Award under this Plan.  The Board may
      delegate to one or more officers of the Company the authority to grant an Award
      under this Plan to Participants who are not Insiders of the
      Company.

    

    6.            OPTIONS.

    

    The
      Board
      may grant Options to eligible persons and will determine whether such Options
      will be Incentive Stock Options within the meaning of the Code (“ISO”) 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:

    

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

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    6.2           Date
      of
      Grant.  The date of grant of an Option will be the date on
      which the Board makes the determination to grant such Option, unless otherwise
      specified by the Board.  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.

    

    6.3           Exercise
      Period.
      Options may be exercisable within the times or upon the events determined by
      the
      Board 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
      STOCKHOLDER”) will be exercisable after the expiration of five (5) years from
      the date the ISO is granted.  The Board 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 Board
      determines.

    

    6.4           Exercise
      Price.  The Exercise Price of an Option will be determined by
      the Board when the Option is granted and stated in the respective Award
      Agreement, provided that the Exercise Price of the shares of Common Stock
      subject to such Option may not be less than Fair Market Value of such Common
      Stock on the Grant Date; provided that:  (a) the Exercise Price
      of an ISO will be not less than 100% of the Fair Market Value of the Shares
      on
      the date of grant; and (b) the Exercise Price of any ISO granted to a Ten
      Percent Stockholder will not be less than 110% of the Fair Market Value of
      the
      Shares on the date of grant.  Payment for the Shares purchased may be
      made in accordance with Section 10 of this Plan.

    6.5           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 Board, (which need not be the same for
      each Participant), stating the number of Shares being purchased, the
      restrictions imposed on the Shares purchased under such Exercise Agreement,
      if
      any, and 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, together
      with payment in full of the Exercise Price for the number of Shares being
      purchased.

    

    6.6           Termination.  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’s service is Terminated for any reason except death or
      Disability, then the Participant may exercise such Participant’s Options only to
      the extent that such Options would have been exercisable upon the Termination
      Date no later than three (3) months after the Termination Date (or such shorter
      or longer time period not exceeding five (5) years as may be determined by
      the
      Board, 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’s service is Terminated because of Participant’s death or
      Disability (or the Participant dies within three (3) months after a Termination
      other than for Cause or because of Participant’s Disability), then Participant’s
      Options may be exercised only to the extent that such Options would have been
      exercisable by Participant on the Termination Date and must be exercised by
      Participant (or Participant’s legal representative or authorized assignee) no
      later than twelve (12) months after the Termination Date (or such shorter or
      longer time period not exceeding five (5) years as may be determined by the
      Board, with any such 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, or (ii) twelve (12) months after the Termination Date when the
      Termination is for Participant’s death or Disability, deemed to be an NQSO), but
      in any event no later than the expiration date of the Options.

    

    (c)           Notwithstanding
      the provisions in paragraph 6.6(a) above, if a Participant’s service is
      Terminated for Cause, neither the Participant, the Participant’s estate nor such
      other person who may then hold the Option shall be entitled to exercise any
      Option with respect to any Shares whatsoever, after Termination, whether or
      not
      after Termination the Participant may receive payment from the Company or
      Subsidiary for vacation pay, for services rendered prior to Termination, for
      services rendered for the day on which Termination occurs, for salary in lieu
      of
      notice, or for any other benefits.  For the purpose of this paragraph,
      Termination shall be deemed to occur on the date when the Company dispatches
      notice or advice to the Participant that his service is
      Terminated.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    6.7           Limitations
      on
      Exercise.  The Board 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.

    

    6.8           Limitations
      on
      ISO.  The aggregate Fair Market Value (determined as of the
      date of grant) of Shares with respect to which ISO 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, Parent or Subsidiary of the
      Company) will not exceed $100,000.  If the Fair Market Value of Shares
      on the date of grant with respect to which ISO are exercisable for the first
      time by a Participant during any calendar year exceeds $100,000, then the
      Options for the first $100,000 worth of Shares to become exercisable in such
      calendar year will be ISO and the Options for the amount in excess of $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 of this Plan to provide for a different limit on the Fair
      Market Value of Shares permitted to be subject to ISO, such different limit
      will
      be automatically incorporated herein and will apply to any Options granted
      after
      the effective date of such amendment.

    

    6.9           Modification,
      Extension or
      Renewal.  The Board 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.  The Board may reduce the Exercise Price of outstanding Options
      without the consent of Participants affected 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 6.4 of this Plan for
      Options granted on the date the action is taken to reduce the Exercise
      Price.

    

    
      6.10    
          No
        Disqualification.  Notwithstanding any other provision in this
        Plan, no term of this Plan relating to ISO 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 affected, to disqualify any ISO under
        Section 422 of the Code.

    

    

    
      6.11       
        Type
        of
        Options. Each
        Option granted under the Plan may
        be designated by the Board, in its sole discretion, as either (i) an ISO,
        or
        (ii) a NQSOS. Options designated as ISO’s that fail to continue to meet the
        requirements of Code Section 422 shall be re-designated as NQSOS automatically
        on the date of such failure to continue to meet such requirements without
        further action by the Board. In the absence of any designation, Options granted
        under the Plan will be deemed to be NQSOS.

    

    

    
      6.12       
        Number
        Of Stock Options
        Granted. Participants may be granted more than one Option. In making any
        such determination, the Board shall obtain the advice and recommendation
        of the
        officers of the Company or a subsidiary which have supervisory authority
        over
        such Participants. The granting of an Option under the Plan shall not affect
        any
        outstanding Option previously granted to a Participant under the
        Plan.

    

    

    7.           COMPENSATION
      STOCK.

    

    A
      Compensation Stock Award is an award of shares of the Company’s Common Stock to
      an eligible person in lieu of cash compensation for the eligible person for
      bona-fide services being rendered or that have been rendered in the past to
      the
      Company or any Parent or Subsidiary of the Company.  A Compensation
      Stock Award will be awarded pursuant to an Award Agreement (the “COMPENSATION
      STOCK AGREEMENT”) that will be in such form (which need not be the same for each
      Participant) as the Board will from time to time approve, and will comply with
      and be subject to the terms and conditions of this Plan. The Board will
      determine to whom Compensation Stock Awards will be granted to and all terms
      and
      conditions of the Compensation Stock Award, subject to the
      following:

    

    
      7.1          
        Purchase
        Price.  The Purchase Price of Shares sold pursuant to a
        Compensation Stock Award will be determined by the terms of the agreement
        with
        the Participant (“Participant Agreement”) or if the Participant Agreement
        contains no terms related to the issuance of Shares of the Company to the
        Participant then by the Board on the date the Compensation Stock Award is
        granted.  Payment of the Purchase Price must be made in accordance
        with Section 10 of this Plan.

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    8.           RESTRICTED
      STOCK.

    

    A
      Restricted Stock Award is an offer by the Company to sell to an eligible person
      Shares that are subject to restrictions.  The Board will determine to
      whom an offer will be made, the number of Shares the person may purchase, the
      price to be paid (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:

    

    8.1           Form
      of Restricted Stock
      Award.  All purchases under a Restricted Stock Award made
      pursuant to this Plan will be evidenced by an Award Agreement (the “RESTRICTED
      STOCK PURCHASE AGREEMENT”) that will be in such form (which need not be the same
      for each Participant) as the Board will from time to time approve, and will
      comply with and be subject to the terms and conditions of this
      Plan.  The offer of Restricted Stock 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 thirty (30) days,
      then the offer will terminate, unless otherwise extended by the
      Board.

    

    8.2           Purchase
      Price.  The Purchase Price of Shares sold pursuant to a
      Restricted Stock Award will be determined by the Board on the date the
      Restricted Stock Award is granted, except in the case of a sale to a Ten Percent
      Stockholder, in which case the Purchase Price will be 100% of the Fair Market
      Value.  Payment of the Purchase Price must be made in accordance with
      Section 10 of this Plan.

    

    8.3           Terms
      of Restricted Stock
      Awards.  Restricted Stock Awards shall be subject to such
      restrictions as the Board may impose.  These restrictions may be based
      upon completion of a specified number of years of service with the Company
      or
      upon completion of the performance goals as set out in advance in the
      Participant’s individual Restricted Stock Purchase Agreement. Restricted Stock
      Awards may vary from Participant to Participant and between groups of
      Participants.  Prior to the grant of a Restricted Stock Award, the
      Board shall:  (a) determine the nature, length and starting date of
      any Performance Period for the Restricted Stock Award; (b) select from among
      the
      Performance Factors to be used to measure performance goals, if any; and (c)
      determine the number of Shares that may be awarded to the
      Participant.  Prior to the payment of any Restricted Stock Award, the
      Board shall determine the extent to which such Restricted Stock Award has been
      earned.  Performance Periods may overlap and Participants may
      participate simultaneously with respect to Restricted Stock Awards that are
      subject to different Performance Periods and have different performance goals
      and other criteria.

    

    8.4           Termination
      During
      Performance Period.  If a Participant is Terminated during a
      Performance Period for any reason, then such Participant will be entitled to
      payment (whether in Shares, cash or otherwise) with respect to the Restricted
      Stock Award only to the extent earned as of the date of Termination in
      accordance with the Restricted Stock Purchase Agreement, unless the Board
      determines otherwise.

    

    8.5           Unrestricted
      Shares.  Notwithstanding anything to the contrary in this
      Section 8, and subject to Applicable Laws, the Board may issue Shares of
      Restricted Stock without any applicable restrictions.

    

     9.           
      STOCK BONUSES.

    

    9.1           Awards
      of Stock
      Bonuses. A Stock Bonus is an award of Shares (which may consist of
      Restricted Stock) for extraordinary services rendered to the Company or any
      Parent or Subsidiary of the Company.  A Stock Bonus will be awarded
      pursuant to an Award Agreement (the “STOCK BONUS AGREEMENT”) that will be in
      such form (which need not be the same for each Participant) as the Board will
      from time to time approve, and will comply with and be subject to the terms
      and
      conditions of this Plan.  A Stock Bonus may be awarded upon
      satisfaction of such performance goals as are set out in advance in the
      Participant’s individual Award Agreement (the “PERFORMANCE STOCK BONUS
      AGREEMENT”) that will be in such form (which need not be the same for each
      Participant) as the Board will from time to time approve, and will comply with
      and be subject to the terms and conditions of this Plan.  Stock
      Bonuses may vary from Participant to Participant and between groups of
      Participants, and may be based upon the achievement of the Company, Parent
      or
      Subsidiary and/or individual performance factors or upon such other criteria
      as
      the Board may determine.

    

    9.2           Terms
      of Stock
      Bonuses.  The Board will determine the number of Shares to be
      awarded to the Participant.  If the Stock Bonus is being earned upon
      the satisfaction of performance goals pursuant to a Performance Stock Bonus
      Agreement, then the Board will: (a) determine the nature, length and starting
      date of anyPerformance Period for each Stock Bonus; (b)
      select from among the Performance Factors to be used to measure the performance,
      if any; and (c) determine the number of Shares that may be awarded to the
      Participant.  Prior to the payment of any Stock Bonus, the Board shall
      determine the extent to which such Stock Bonuses have been
      earned.  Performance Periods may overlap and Participants may
      participate simultaneously with respect to Stock Bonuses that are subject to
      different Performance Periods and different performance goals and other
      criteria.  The number of Shares may be fixed or may vary in accordance
      with such performance goals and criteria as may be determined by the
      Board.  The Board may adjust the performance goals applicable to the
      Stock Bonuses to take into account changes in law and accounting or tax rules
      and to make such adjustments as the Board deems necessary or appropriate to
      reflect the impact of extraordinary or unusual items, events or circumstances
      to
      avoid windfalls or hardships.

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    9.3           Form
      of
      Payment.  The earned portion of a Stock Bonus may be paid to
      the Participant by the Company either currently or on a deferred basis, with
      such interest or dividend equivalent, if any, as the Board may
      determine.  Payment may be made in the form of cash or whole Shares or
      a combination thereof, either in a lump sum payment or in installments, all
      as
      the Board will determine.

    

    10.           
      PAYMENT FOR SHARE PURCHASES.

    

    10.1           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 Board and where permitted
      by
      law:

    

    
      	 	
              (a)

            	
              by
                cancellation of indebtedness of the Company to the
                Participant;

            

    

    

    
      	
            	
              (b)

            	
              by
                surrender of shares that either: (1) have been owned by Participant
                for
                more than one year and have been paid for within the meaning of Rule
                144
                of the Securities Act of 1933 (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 (2) were obtained by Participant in the
                public
                market;

            

    

    

    
      	
            	
              (c)

            	
              by
                waiver of compensation due or accrued to the Participant for services
                rendered;

            

    

    

    
      	
            	
              (d)

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

            

    

    

    
      	
            	
              (1)

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

            

    

    

    
      	
            	
              (2)

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

            

    

    
      

      
        	
              	
                (e)

              	
                by
                  any combination of the foregoing.

              

      

       

    

    11.          WITHHOLDING
      TAXES.

    

    11.1           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, such payment will be net of
      an
      amount sufficient to satisfy federal, state, and local withholding tax
      requirements.

    

    11.2           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 isobligated to pay the Company the amount required to
      be withheld, the
      Board may allow the Participant to satisfy the minimum withholding tax
      obligation by electing to have the Company withhold from the Shares to be issued
      that 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.  All elections by a Participant to have
      Shares withheld for this purpose will be made in accordance with the
      requirements established by the Board and be in writing in a form acceptable
      to
      the Board.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    12.          PRIVILEGES
      OF STOCK OWNERSHIP.

    

    12.1           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 will 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; provided, further, that the Participant
      will have no right to retain such stock dividends or stock distributions with
      respect to Shares that are repurchased at the Participant’s Purchase Price or
      Exercise Price.

    

    13.          TRANSFERABILITY.

    

    Awards
      granted under this Plan, and any interest therein, will not be transferable
      or
      assignable by Participant, and may not be made subject to execution, attachment
      or similar process, other than by will or by the laws of descent and
      distribution.  During the lifetime of the Participant an Award will be
      exercisable only by the Participant.  During the lifetime of the
      Participant, any elections with respect to an Award may be made only by the
      Participant unless otherwise determined by the Board and set forth in the Award
      Agreement with respect to Awards that are not ISOs.

     

    14.          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
      Board 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.

    

    15.          ESCROW;
      PLEDGE OF SHARES.

    

    To
      enforce any restrictions on a Participant’s Shares, the Board may require the
      Participant to deposit all certificates representing Shares, together with
      stock
      powers or other instruments of transfer approved by the Board 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, and the Board
      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 Board 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 Board 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.

     

    16.          SECURITIES
      LAW AND OTHER REGULATORY COMPLIANCE.

    

    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:
      (a)obtaining any approvals from governmental agencies that
      the Company determines are necessary or advisable; and/or (b) 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 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.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    17.           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.

    

    18.          CORPORATE
      TRANSACTIONS.

    

    18.1           Assumption
      or Replacement of
      Awards by Successor.  In the event of (a) a dissolution or
      liquidation of the Company, (b) a merger or consolidation in which the Company
      is not the surviving corporation (other than a merger or consolidation with
      a
      wholly-owned subsidiary, a reincorporation of the Company in a different
      jurisdiction, or other transaction in which there is no substantial change
      in
      the stockholders of the Company or their relative stock holdings and the Awards
      granted under this Plan are assumed, converted or replaced by the successor
      corporation, which assumption will be binding on all Participants), (c) a merger
      in which the Company is the surviving corporation but after which the
      stockholders of the Company immediately prior to such merger (other than any
      stockholder that merges, or which owns or controls another corporation that
      merges, with the Company in such merger) cease to own their shares or other
      equity interest in the Company, (d) the sale of substantially all of the assets
      of the Company, or (e) the acquisition, sale, or transfer of more than 50%
      of
      the outstanding shares of the Company by tender offer or similar transaction,
      any or all outstanding Awards may be assumed, converted or replaced by the
      successor corporation (if any), which assumption, conversion or replacement
      will
      be binding on all Participants.  In the alternative, the successor
      corporation may substitute equivalent Awards or provide substantially similar
      consideration to Participants as was provided to stockholders (after taking
      into
      account the existing provisions of the Awards).

    

    The
      successor corporation may also issue, in place of outstanding Shares of the
      Company held by the Participant, substantially similar shares or other property
      subject to repurchase restrictions no less favorable to the
      Participant.  In the event such successor corporation (if any) refuses
      to assume or substitute Awards, as provided above, pursuant to a transaction
      described in this Subsection 18.1, such Awards will expire on such transaction
      at such time and on such conditions as the Board will
      determine.  Notwithstanding anything in this Plan to the contrary, the
      Board may provide that the vesting of any or all Awards granted pursuant to
      this
      Plan will accelerate upon a transaction described in this Section
      18.  If the Board exercises such discretion with respect to Options,
      such Options will become exercisable in full prior to the consummation of such
      event at such time and on such conditions as the Board determines, and if such
      Options are not exercised prior to the consummation of the corporate
      transaction, they shall terminate at such time as determined by the
      Board.

    

    18.2           Other
      Treatment of
      Awards.  Subject to any greater rights granted to Participants
      under the foregoing provisions of this Section 18, in the event of the
      occurrence of any transaction described in Section 18.1, any outstanding Awards
      will be treated as provided in the applicable agreement or plan of merger,
      consolidation, dissolution, liquidation, or sale of assets.

    

    18.3           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: (a) granting
      an Award under this Plan in substitution of such other company’s award; or (b)
      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.

    

    19.          ADOPTION
      AND STOCKHOLDER APPROVAL.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    

    This
      Plan
      will become effective on the date on which it is adopted by the Board (the
      “Effective Date”).  Upon the Effective Date, the Board may grant
      Awards pursuant to this Plan.  The Company intends to seek stockholder
      approval of the Plan within twelve (12) months after the date this Plan is
      adopted by the Board; provided, however, if the Company fails to obtain
      stockholder approval of the Plan during such 12-month period, pursuant to
      Section 422 of the Code, any Option granted as an ISO at any time under the
      Plan
      will not qualify as an ISO within the meaning of the Code and will be deemed
      to
      be an NQSO.

    

    20.          GOVERNING
      LAW.

    

    This
      Plan
      and all agreements there under shall be governed by and construed in accordance
      with the laws of the State of Nevada.

    

    21.           USE
      OF PROCEEDS.

    

    The
      proceeds received by the Company from the sale of Stock pursuant to the exercise
      of Options granted under the Plan shall be added to the Company's general funds
      and used for general corporate purposes.

     

    22.           
      TERM OF PLAN.

     

    No
      shares
      of the Common Stock shall be issued, unless and until the Directors of the
      Company have approved this Plan and all other legal requirements have been
      met.  This Plan was adopted by the Board effective December 31, 2007,
      and shall expire on December 31, 2009.

     

    23.          AMENDMENT
      OR TERMINATION OF PLAN.

    

    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.

    

    24.          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 bonuses otherwise than
      under this Plan, and such arrangements may be either generally applicable or
      applicable only in specific cases.

    

    25.          ACTION
      BY BOARD.

    

    Any
      action permitted or required to be taken by the Board or any decision or
      determination permitted or required to be made by the Board pursuant to this
      Plan shall be taken or made in the Board’s sole and absolute
      discretion.

    

    
      26.         
        INDEMNIFICATION
        OF BOARD.

    

    

    In
      addition to such other rights or indemnifications as they may have as directors
      or otherwise, and to the extent allowed by applicable law, the members of the
      Board and the Committee shall be indemnified by the Company against the
      reasonable expenses, including attorneys' fees, actually and necessarily
      incurred in connection with the defense of any claim, action, suit or
      proceeding, or in connection with any appeal thereof, to which they or any
      of
      them may be a party by reason of any action taken, or failure to act, under
      or
      in connection with the Plan or any Grant granted thereunder, and against all
      amounts paid by them in settlement thereof (provided such settlement is approved
      by independent legal counsel selected by the Company) or paid by them in
      satisfaction of a judgment in any such claim, action, suit or proceeding, except
      in any case in relation to matters as to which it shall be adjudged in such
      claim, action, suit or proceeding that such Board or  Committee member
      is liable for negligence or misconduct in the performance of his or her duties;
      provided that within sixty (60) days after institution of any such action,
      suit
      or Board proceeding the member involved shall offer the Company, in writing,
      the
      opportunity, at its own expense, to handle and defend the same. 

    
      
        
        

      

      
        -11-THE
      SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
      REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER THE SECURITIES
      ACT
      OR AN EXEMPTION FROM THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT
      TO COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND THE LAWS OF OTHER
      APPLICABLE JURISDICTIONS.

     

    COMMON
      STOCK PURCHASE WARRANT

    (CALLABLE)

    

    For
      the
      Purchase of __________ Shares

    of
      Common
      Stock, (no par value)

    of

     

    INFOBIONICS,
      INCORPORATED

    A
      Minnesota Corporation

     

    For
      value
      received, _____________________, or its permitted assigns (the “Holder”), is
      entitled to, on or before the date specified below on which this Common Stock
      Purchase Warrant (the “Warrant”) expires, but not thereafter, to subscribe for,
      purchase and receive the number of fully paid and nonassessable shares of the
      common stock, no par value (the “Warrant Shares”), of INFOBIONICS, INCORPORATED,
      a Minnesota corporation (the “Company”) set forth above, at the price of Two
      Dollars ( $2.00) per Warrant Share (the “Exercise Price”), upon presentation and
      surrender of this Warrant and upon payment by bank check of the Exercise Price
      for such Warrant Shares to the Company at the principal office of the
      Company.

     

    1. Exercise
      of Warrant.
      This
      Warrant may be exercised in whole or in part, from time to time, commencing
      on the date hereof (the “Issue Date”) and expiring Forty Two (42) Months from
      the date hereof; provided,
      however,
      that in
      the event of (i) the closing of the issuance and sale of shares of Common Stock
      of the Company in the Company’s first underwritten public offering pursuant to
      an effective registration statement under the Securities Act of 1933, as amended
      (an “IPO”), (b) the closing of the Company’s sale or transfer of all or
      substantially all of its assets, or (c) the closing of the acquisition by the
      Company by another entity by means of merger, consolidation or other transaction
      or series of transactions, resulting in the exchange of the outstanding shares
      of the Company’s capital stock such that the stockholders of the Company prior
      to such transaction would have owned, directly or indirectly, less than 50%
      of
      the voting power of the surviving entity, this Warrant shall, on the date of
      such event, no longer be exercisable and shall become null and void. In the
      event of a proposed transaction of the kind described above, the Company shall
      notify the Holder at least thirty (30) days prior to the consummation of such
      event or transaction, during which thirty (30) day period the Holder may
      exercise this Warrant in accordance with the provisions hereof. This Warrant
      may
      be exercised by
      presentation and surrender hereof to the Company, with the Exercise Form annexed
      hereto duly executed and accompanied by payment by bank check of the Exercise
      Price for the number of Warrant Shares specified in such form, together with
      all
      federal and state taxes applicable upon such exercise, if any. If this Warrant
      should be exercised in part only, the Company shall, upon surrender of this
      Warrant for cancellation, execute and deliver a new Warrant evidencing the
      right
      of the Holder to purchase the balance of the Warrant Shares purchasable
      hereunder. Upon receipt by the Company of this Warrant and the Exercise Price
      at
      the office of the Company, in proper form for exercise, the Holder shall be
      deemed to be the holder of record of the Warrant Shares issuable upon such
      exercise, notwithstanding that certificates representing such Warrant Shares
      shall not then be actually delivered to the Holder. If the subscription rights
      represented hereby shall not be exercised at or before 5:00 P.M., Eastern
      Standard Time, on the expiration date specified above, this Warrant shall become
      void and without further force or effect, and all rights represented hereby
      shall cease and expire.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2. Rights
      of the Holder.
      Prior
      to exercise of this Warrant, the Holder shall not, by virtue hereof, be entitled
      to any rights of a shareholder in the Company, either at law or equity, and
      the
      rights of the Holder are limited to those expressed in this Warrant and are
      not
      enforceable against the Company except to the extent set forth herein.

     

    3. Adjustment
      of Exercise Price and Number of Shares.

    

    (A)
       Mandatory
      Filing of Registration Statement.
      . In
      the
      event a resale registration statement (the “Resale Registration Statement”)
      registering the Warrant Shares is not filed with the Securities and Exchange
      Commission (the “Commission”) by December 31, 2007 (the “Filing Date”) then the
      exercise price of this Warrant shall be reduced by 25% and thereafter, 25%
      for
      each 30 day period or part thereof that the Registration Statement is not filed.
      For example, if the Resale Registration Statement is not filed by the Filing
      Date, the exercise price of this Warrant shall be reduced to $1.50. If the
      Resale Registration Statement is not filed within the first 30 day period,
      then
      the exercise price of this Warrant shall be reduced by an additional 25% to
      $1.125; and (ii) if after the Resale Registration Statement is filed, the Resale
      Registration Statement is not declared effective within six (6) months after
      such filing (the “Effective Date”), the exercise price of this Warrant, as may
      have been adjusted, shall be reduced by an additional 25% for each 30 day period
      or part thereof that the Resale Registration Statement is not declared effective
      by the SEC. The reduction in the exercise price of this Warrant shall be as
      partial relief for the damages to the Purchasers by reason of any such delay
      in
      their ability to sell the shares underlying this Warrant (which remedy shall
      not
      be exclusive of any other remedies available at law or in equity).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Anything
      to the contrary herein notwithstanding, Holder hereby acknowledges that it
      has
      granted to the Placement Agent the right to make good faith determinations
      that
      the Company has been working in a timely fashion to file the Resale Registration
      Statement with the Commission and to cause the Resale Registration Statement
      to
      become effective such that the Resale Registration Statement is filed by the
      Filing Date and the Resale Registration Statement is declared effective by
      the
      Effective Date.  Upon such good faith determination(s) by the Placement
      Agent that the Company has acted in a timely fashion, the Placement Agent shall
      waive the penalty provisions relating to the exercise price of the Warrants,
      and
      upon such waiver those penalty provisions shall not apply.  The Placement
      Agent shall make such determination(s) at each time that the penalty provisions
      otherwise would apply, as applicable. The Placement Agent shall advise the
      Company and Purchasers in writing of its good faith determination(s) no later
      than the date(s) on which the penalty provisions otherwise first would
      apply.

    .

    (B) Subdivisions,
      Combinations and Dividends.
      If
      after the Issue Date, the Company shall subdivide its shares of common stock
      (“Common Stock”), by split-up or otherwise, or combine its shares of Common
      Stock by reverse stock split or otherwise, or issue additional shares of common
      stock in payment of a stock dividend on its common stock, the number of Warrant
      Shares issuable upon exercise of this Warrant shall forthwith be proportionately
      increased in the case of a subdivision or stock dividend, or proportionately
      decreased in the case of a reverse stock split or combination, the Exercise
      Price shall be proportionately decreased in the case of a subdivision or stock
      dividend, or proportionately increased in the case of a reverse stock split
      or
      combination, provided that the aggregate purchase price for the total number
      of
      Warrant Shares purchasable under the Warrant (as adjusted) shall remain the
      same. 

    

    (C) Adjustment
      for Reorganization, Consolidation, Merger.
      Subject
      to the provision of Section 1 above, in case of any reorganization of the
      Company (or any other corporation the stock or other securities of which are
      at
      the time receivable on the exercise of this Warrant) after the Issue Date,
      or in
      case, after such date, the Company (or any such other corporation) shall
      consolidate with or merge into another corporation or convey all or
      substantially all of its assets to another corporation, then and in each such
      case the Holder, upon the exercise hereof as provided in Section 1, at any
      time
      after the consummation of such reorganization, consolidation, merger or
      conveyance, shall be entitled to receive, in lieu of the stock or other
      securities and property receivable upon the exercise of this Warrant prior
      to
      such consummation, the stock or other securities or property to which such
      Holder would be entitled had the Holders exercised this Warrant immediately
      prior thereto, all subject to further adjustment as provided herein; in each
      such case, the terms of this Warrant shall be applicable to the shares of stock
      or other securities or property receivable upon the exercise of this Warrant
      after such consummation.

     

    4.    Call
      of Warrants.
      

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

          (A) Procedures.
      Commencing at the close of business on September 1, 2008 the Company may,
      subject to the conditions set forth herein, call for the exercise of this
      Warrant (the “Call Notice”) provided that the fair market value of the Common
      Stock for the twenty (20) consecutive trading days ending three (3) days prior
      to the date of the Call Notice is at least $2.00, subject to adjustment for
      stock dividends, stock splits and other anti-dilution provisions as provided
      for
      in Section 3 of this Warrant. For purposes of this Section 4, “fair market
      value” at any date shall be deemed to be, as applicable: (i) the last sale price
      regular way as reported on the principal national securities exchange on which
      the Common Stock is listed or admitted to trading; or (ii) if the Common Stock
      is not listed or admitted to trading on any national securities exchange, the
      average of the closing bid and asked prices regular way for the Common Stock
      as
      reported by the Nasdaq National Market or Nasdaq SmallCap Market of the Nasdaq
      Stock Market, Inc. (“Nasdaq”); or (iii) if the Common Stock is not listed or
      admitted for trading on any national securities exchange, and is not reported
      by
      Nasdaq, the average of the closing bid and asked prices, as reported on the
      OTC
      Bulletin Board or if no such quotation is available, then the closing bid and
      asked prices in the over-the-counter market as furnished by the National
      Quotation Bureau, Inc; or (iv) if the Common Stock is not listed or admitted
      for
      trading on any national securities exchange, is not reported by Nasdaq, no
      quotation is available on the OTC Bulletin Board and no closing and asked prices
      are available from National Quotation Bureau, Inc., then the value determined
      by
      an independent, qualified appraiser selected by the Company in good faith.
      The
      Call Notice shall be deemed effective upon mailing and the time of mailing
      is
      the “Effective Date of the Notice.” The Call Notice shall state the exercise
      period and cancellation date not less than twenty (20) days from the Effective
      Date of the Notice (the “Cancellation Date”). In the event the number of shares
      of Common Stock issuable upon exercise of this Warrant being called are adjusted
      pursuant to Section 3 hereof, then upon each such adjustment the Exercise Price
      will be adjusted by multiplying the Exercise Price in effect immediately prior
      to such adjustment by a fraction, the numerator of which is the number of shares
      of Common Stock issuable upon exercise of this Warrant being exercised
      immediately prior to such adjustment and the denominator of which is the number
      of shares of Common Stock issuable upon exercise of this Warrant being exercised
      immediately after such adjustment. The Holder may exercise this Warrant between
      the Effective Date of the Notice and the Cancellation Date, such exercise being
      effective if done in accordance with Section 1 hereof, and if this Warrant,
      with
      the form of election to purchase duly executed, and the Exercise Price are
      actually received by the Company at its office located at 756 Goodrich Avenue,
      St. Paul, MN 55105, no later than 5:00 PM Eastern Standard time on the
      Cancellation Date. If, prior to the issuance of this Warrant, the Company shall
      have called all of its Common Stock Warrants (Callable) and, in connection
      therewith, the Cancellation Date shall have passed, then this Warrant shall,
      immediately upon issuance, be deemed no longer outstanding, and any rights
      with
      respect thereto shall cease and terminate. 

     
      

    (B)
       Return
      of Warrant.
      If the
      Holder does not wish to exercise this Warrant, the Holder should mail this
      Warrant to the Company at its office located at 756 Goodrich Avenue, St. Paul,
      MN 55105 after receiving the Call Notice required by this Section. If the Call
      Notice shall have been so mailed, then, on and after such Cancellation Date,
      notwithstanding that this Warrant subject to Call shall not have been
      surrendered for redemption, the obligation evidenced by this Warrant not so
      surrendered or effectively exercised shall be deemed no longer outstanding,
      and
      all rights with respect hereto shall forthwith cease and terminate.

     

    5. Officer’s
      Certificate.
      Whenever the number of Warrant Shares issuable upon exercise of this Warrant
      or
      the Exercise Price shall be adjusted as required by the provisions hereof,
      the
      Company shall forthwith file in the custody of its Secretary at its principal
      office, an officer’s certificate showing the adjusted number of Warrant Shares
      or Exercise Price determined as herein provided and setting forth in reasonable
      detail the facts requiring such adjustment. Each such officer’s certificate
      shall be made available at all reasonable times for inspection by the Holder
      and
      the Company shall, forthwith after each such adjustment, deliver a copy of
      such
      certificate to the Holder. Such certificate shall be conclusive as to the
      correctness of such adjustment.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    6. Restrictions
      on Transfer.
      Certificates for the Warrant Shares to be issued upon exercise of this Warrant
      shall bear a legend in substantially the following form:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
      STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
      HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT
      IN EFFECT WITH RESPECT TO THE SHARES UNDER THE SECURITIES ACT OR AN EXEMPTION
      FROM REGISTRATION UNDER THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE
      SUBJECT TO COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND THE LAWS OF
      OTHER APPLICABLE JURISDICTIONS.

     

    The
      Holder, by acceptance hereof, agrees that, absent an effective registration
      statement under the Securities Act of 1933, as amended (the “Securities Act”),
      covering the disposition of this Warrant or the Warrant Shares issued or
      issuable upon exercise hereof, such Holder will not sell or transfer this
      Warrant, in whole or in part, or such Warrant Shares without first providing
      the
      Company with an opinion of counsel reasonably satisfactory to the Company to
      the
      effect that such sale or transfer will be exempt from the registration and
      prospectus delivery requirements of the Securities Act. The Holder, at the
      time
      all or a portion of this Warrant is exercised, agrees to make such written
      representations to the Company as counsel for the Company may reasonably
      request, in order that the Company may be reasonably satisfied that such
      exercise of the Warrant and consequent issuance of Warrant Shares will not
      violate the registration and prospectus delivery requirements of the Securities
      Act, or other applicable state securities laws.

     

    7.
       Fractional
      Shares.
      In no
      event shall any fractional share of common stock be issued upon any exercise
      of
      this Warrant. If upon exercise of this Warrant, the Holder would, except as
      provided in this Section 7, be entitled to receive a fractional share of Common
      Stock, then the Company shall issue the next higher number of a full share
      of
      Common Stock, thereby issuing a full share with respect to such fractional
      share.

     

    8. Loss
      or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it (in the exercise of
      reasonable discretion) of the ownership of and the loss, theft, destruction
      or
      mutilation of any Warrant and (in the case of loss, theft or destruction) of
      indemnity satisfactory to it (in the exercise of reasonable discretion), and
      (in
      the case of mutilation) upon surrender and cancellation thereof, the Company
      will execute and deliver in lieu thereof a new Warrant of like
      tenor.

     

    9. Reservation
      of Common Stock.
      The
      Company shall at all times reserve and keep available for issue upon the
      exercise of the Warrants such number of its authorized but unissued shares
      of
      Common Stock as will be sufficient to permit the exercise in full of all
      outstanding Warrants.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    10. No
      Impairment.
      The
      Company will not, by amendment of its Articles of Incorporation or its Bylaws
      or
      through any reclassification, capital reorganization, consolidation, merger,
      sale or conveyance of assets, dissolution, liquidation, issue or sale of
      securities or any other voluntary action, avoid or seek to avoid the observance
      or performance of any of the terms and of this Warrant, but will, at all times,
      in good faith, assist in the carrying out of all such terms and in the taking
      of
      all such action as may be necessary or appropriate in order to protect the
      rights of the Holder

     

    11. Notices.
      All
      notices and other communications from the Company to the Holder of this Warrant
      shall be mailed by first class registered or certified mail, postage prepaid,
      to
      the address furnished to the Company in writing by the Holder.

     

    12. Change;
      Waiver.
      Neither
      this Warrant nor any term hereof may be changed, waived, discharged or
      terminated orally but only by an instrument in writing signed by the party
      against which enforcement of the change, waiver, discharge or termination is
      sought.

     

    13.
       Successors
      and Assigns.
      This
      Warrant shall be binding upon the Company’s successors and assigns and shall
      inure to the benefit of the Holders’ successors, legal representatives and
      permitted assigns.

     

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

     

    15. Law
      Governing.
      This
      Warrant shall be construed and enforced in accordance with and governed by
      the
      laws of New York.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
      authorized officer on __________________, 2007.

     

    
      	 	 	 
	 	INFOBIONICS, INCORPORATED
	 
 	 
 	 
 
	 	By:  	 
	 	
              
John
              I. Bjelland
	 	President and CEO

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Form
      to be used to exercise Warrant:

     

    DATE:
      ___________________________

     

    TO: INFOBIONICS,
      INCORPORATED

     

    The
      undersigned hereby irrevocably elects to exercise the within Warrant and to
      purchase     ________
      Warrant
      Shares of the Company called for thereby, and hereby makes payment by cashier’s
      check of $          
      __________
      (at the
      rate of $2.00 per share) in payment of the Exercise Price pursuant thereto.
      Please issue the Warrant Shares as to which this Warrant is exercised
      to:

     

    ___________________________

     

    ___________________________

     

    ___________________________

     

    and
      if
      said number of Warrants shall not be all the Warrants evidenced by the within
      Warrant Certificate, issue a new Warrant Certificate for the balance remaining
      of such Warrants to _____________________ at the address stated
      above.

     

    By:___________________________

     

    Print
      Name:___________________________

     

    
      
         

      

      
        8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]