NITROSECURITY, INC. Incentive Stock Option Agreement Granted Under 2005 Stock Incentive Plan

Exhibit 10.6

Agreement No.2005/04

NITROSECURITY, INC.

Incentive Stock Option Agreement
Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the “Company”), on February 21, 2005 (the “Grant Date”) to Xxxxx X. Xxxxxxxxxxx, an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 234,364 shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February 20, 2015 (the “Final Exercise Date”).

It is intended that the option evidenced by this agreement shall be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant,” as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

2. Vesting Schedule.

This option shall be exercisable (“vested”) as to 84,364 Shares immediately, and shall become exercisable as to (i) an additional 25,000 Shares on April 15, 2005 and (ii) an additional 4166²/₃ Shares on each one-month anniversary of April 15, 2005 until October 15, 2007.

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

3. Exercise of Option.

(a) Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no partial exercise of this option may be for any fractional share or for fewer than ten whole shares.

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the Grant Date, an employee or officer of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an “Eligible Participant”).

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the

right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. If the Participant ceases to be an Eligible Participant prior to October 15, 2012, during the thirty-day period following such cessation, the Participant may elect to convert this option, to the extent exercisable, to a nonstatutory stock option, and the Shares underlying such nonstatutory stock option shall remain exercisable until October 15, 2012. Notwithstanding the foregoing, if the Participant violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option, or any nonstatutory option into which is has been converted, shall terminate immediately upon written notice to the Participant from the Company describing such violation.

(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for “cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.

(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for “cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft, fraud or falsification of any employment or Company records in any material way, (iii) the Participant’s failure or inability to perform any material reasonable assigned duties after written notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or (iv) material breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company, which breach is not cured within ten (10) days following written notice of such breach. The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for cause was warranted.

4. Acceleration of Options.

This option shall vest in full immediately upon (i) the termination of the Participant’s employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).

A “Change in Control Event” shall mean the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions

is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) and the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”) immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination).

5. Agreement in Connection with Public Offering.

The Participant agrees, in connection with the initial underwritten public offering of the Company’s securities pursuant to a registration statement under the Securities Act of 1933, as amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of Common Stock held by the Participant (other than those shares included in the offering) without the prior written consent of the Company or the underwriters managing such initial underwritten public offering of the Company’s securities for a period of 180 days from the effective date of such registration statement, and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering.

6. Tax Matters.

(a) Withholding. No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

(b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.

7. Nontransferability of Option.

This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

8. Provisions of the Plan.

This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.


	NITROSECURITY, INC.
	By:	/s/ Xxxx X. Xxxxxxxx
		Xxxx X. Xxxxxxxx
		Vice President of Finance & Administration

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock Incentive Plan.


		PARTICIPANT:

		/s/ Xxxxx X. Xxxxxxxxxxx


		Address:		X.X. Xxx 000
				Xxxxxxxxx, XX 00000

NOTICE OF STOCK OPTION EXERCISE

Date: _________

NitroSecurity, Inc.
000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxxx, XX 00000

Attention: Treasurer

Dear Sir or Madam:

I am the holder of an Incentive Stock Option granted to me under the NitroSecurity, Inc. (the “Company”) 2005 Stock Incentive Plan on ______ for the purchase of ______ shares of Common Stock of the Company at a purchase price of $ per share.

I hereby exercise my option to purchase ______ shares of Common Stock (the “Shares”), for which I have enclosed [insert method of payment] in the amount of $______. Please register my stock certificate as follows:


		Name(s):



		Address:

		Tax I.D. #:

I represent, warrant and covenant as follows:

1. I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

2. I have had such opportunity as I have deemed adequate to obtain from representatives of the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company.

3. I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.

4. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.

5. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

(Signature)

Agreement No. 2005/05

NITROSECURITY, INC.

Incentive Stock Option Agreement
Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the “Company”), on February 21, 2005 (the “Grant Date”) to Xxxxx X. Xxxxxxxxxxx, an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 900,000 shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February 20, 2015 (the “Final Exercise Date”).

2. Vesting Schedule.

This option shall become exercisable (“vest”) as to ¹/₃₆ of the original number of Shares on each one-month anniversary of the Grant Date until the three-year anniversary of the Grant Date.

3. Exercise of Option.

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the

right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. During such three-month period, the Participant may elect to convert this option, to the extent exercisable, to a nonstatutory stock option, and the Shares underlying such nonstatutory stock option shall remain exercisable until February 21, 2018. Notwithstanding the foregoing, if the Participant violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option, or any nonstatutory option into which is has been converted, shall terminate immediately upon written notice to the Participant from the Company describing such violation.

(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for “cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft, fraud or falsification of any employment or Company records in any material way, (iii) the Participant’s failure or inability to perform any material reasonable assigned duties after written notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or (iv) material breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company, which breach is not cured within ten (10) days following written notice of such breach. The Participant shall be considered to have been discharged for “cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for cause was warranted.

4. Acceleration of Options.

This option shall vest in full immediately upon (i) the termination of the Participant’s employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).

owners of the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) and the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”) immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination).

5. Agreement in Connection with Public Offering.

6. Tax Matters.

7. Nontransferability of Option.

This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent

and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

8. Provisions of the Plan.

This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.


	NITROSECURITY, INC.
	By:	/s/ Xxxx X. Xxxxxxxx
		Xxxx X. Xxxxxxxx
		Vice President of Finance & Administration

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock Incentive Plan.


		PARTICIPANT:

		/s/ Xxxxx X. Xxxxxxxxxxx


		Address:		X.X. Xxx 000
				Xxxxxxxxx, XX 00000

NOTICE OF STOCK OPTION EXERCISE

Date:
NitroSecurity, Inc.
000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxxx, XX 00000

Attention: Treasurer

Dear Sir or Madam:


		Name(s):



		Address:

		Tax I.D. #:

I represent, warrant and covenant as follows:

6. I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

9. I have had such opportunity as I have deemed adequate to obtain from representatives of the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company.

10. I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.

11. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.

12. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the

Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

(Signature)

Agreement 2005/16

NITROSECURITY, INC.

Incentive Stock Option Agreement
Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the “Company”), on February 21, 2005 (the “Grant Date”) to Xxxx XxXxxxx, an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 100,000 shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February 20, 2015 (the “Final Exercise Date”).

2. Vesting Schedule.

This option shall become exercisable (“vest”) as to ¹/₆ of the original number of Shares on July 3, 2005, and as to an additional ¹/₃₆of the original number of Shares on each one-month anniversary of July 3, 2005 until the thirty-month anniversary of July 3, 2005.

3. Exercise of Option.

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the

(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for “cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for cause was warranted.

4. Acceleration of Options.

This option shall vest in full immediately upon (i) the closing of an initial underwritten public offering of the Company’s securities pursuant to a registration statement under the Securities Act of 1933, as amended, or (ii) a Change in Control Event (as defined below).

A “Change in Control Event” shall mean:

(a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (A) any

acquisition directly from the Company, or (B) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (b) of this definition; or

(b) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination).

5. Agreement in Connection with Public Offering.

6. Tax Matters.

(b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were

acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition.

7. Nontransferability of Option.

8. Provisions of the Plan.

This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.


	NITROSECURITY, INC.
Dated: 4/1/2005	By:	/s/ Xxxxx X. Xxxxxxxxxxx
		Xxxxx X. Xxxxxxxxxxx
		President and Chief Executive Officer

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock Incentive Plan.


		PARTICIPANT:

		/s/ Xxxx XxXxxxx


		Address:		00 Xxxxxxx Xxxxx
				Xxxxx, XX 00000

NOTICE OF STOCK OPTION EXERCISE

Date:
NitroSecurity, Inc.
000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxxx, XX 00000

Attention: Treasurer

Dear Sir or Madam:


		Name(s):



		Address:

		Tax I.D. #:

I represent, warrant and covenant as follows:

7. I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

11. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.

12. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the

Very truly yours,

(Signature)

Agreement No. 2005/38

NITROSECURITY, INC.

Nonstatutory Stock Option Agreement
Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the “Company”), on February 21, 2005 (the “Grant Date”) to Xxxxxxx Xxxxxx (the “Participant”) of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 580,000 shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February 21, 2015 (the “Final Exercise Date”).

It is intended that the option evidenced by this agreement shall not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant,” as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

2. Vesting Schedule.

This option shall become exercisable (“vest”) as to ¹/₂₄ of the original number of Shares on each one-month anniversary of the Grant Date until the two-year anniversary of the Grant Date.

3. Exercise of Option.

(b) Termination for Cause. If the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon written notice to the Participant from the Company describing such violation.

(c) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date

and the Company has not terminated such relationship as specified in paragraph (b) above, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.

4. Acceleration of Options.

A “Change in Control Event” shall mean:

generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination).

5. Agreement in Connection with Public Offering.

6. Withholding.

No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

7. Nontransferability of Option.

8. Provisions of the Plan.

This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.


	NITROSECURITY, INC.
Dated: 4/1/2005	By:	/s/ Xxxxx X. Xxxxxxxxxxx
		Xxxxx X. Xxxxxxxxxxx
		President and Chief Executive Officer

Agreement No. 2005/05

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock Incentive Plan.


		PARTICIPANT:

		/s/ Xxxxxxx Xxxxxx


		Address:		00 Xxxxxxxx Xxxxxx
				Xxxxxxxxx, XX 00000

NOTICE OF STOCK OPTION EXERCISE

Date:
NitroSecurity, Inc.
000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxxx, XX 00000

Attention: Treasurer

Dear Sir or Madam:

I am the holder of a Nonstatutory Stock Option granted to me under the NitroSecurity, Inc. (the “Company”) 2005 Stock Incentive Plan on ______ for the purchase of ______ shares of Common Stock of the Company at a purchase price of $ per share.


		Name(s):



		Address:

		Tax I.D. #:

I represent, warrant and covenant as follows:

8. I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act.

11. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.

12. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently

registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

(Signature)

Agreement No. 2005/70

NITROSECURITY, INC.

Incentive Stock Option Agreement
Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the “Company”), on July 1, 2005 (the “Grant Date”) to Xxxxx X. Xxxxxxxxxxx, an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 1,050,000 shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on June 30, 2015 (the “Final Exercise Date”).

2. Vesting Schedule.

This option shall become exercisable (“vest”) as to ¹/₃₆ of the original number of Shares on each one-month anniversary of the Grant Date until the three-year anniversary of the Grant Date.

3. Exercise of Option.

(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the

right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. During such three-month period, the Participant may elect to convert this option, to the extent exercisable, to a nonstatutory stock option, and the Shares underlying such nonstatutory stock option shall remain exercisable until February 21, 2018. Notwithstanding the foregoing, if the Participant violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option, or any nonstatutory option into which is has been converted, shall terminate immediately upon written notice to the Participant from the Company describing such violation.

(e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for “cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft, fraud or falsification of any employment or Company records in any material way, (iii) the Participant’s failure or inability to perform any material reasonable assigned duties after written notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or (iv) material breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company, which breach is not cured within ten (10) days following written notice of such breach. The Participant shall be considered to have been discharged for “cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for cause was warranted.

4. Acceleration of Options.

This option shall vest in full immediately upon (i) the termination of the Participant’s employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).

5. Agreement in Connection with Public Offering.

6. Tax Matters.

7. Nontransferability of Option.

This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent

and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

8. Provisions of the Plan.

This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option.

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument.


	NITROSECURITY, INC.
	By:	/s/ Xxxx X. Xxxxxxxx
		Xxxx X. Xxxxxxxx
		Vice President of Finance & Administration

PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock Incentive Plan.


		PARTICIPANT:

		/s/ Xxxxx X. Xxxxxxxxxxx


		Address:		0 Xxxxxxxx Xxxxx
				Xxxxxx, XX 00000

NOTICE OF STOCK OPTION EXERCISE

Date:
NitroSecurity, Inc.
000 Xxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxxx, XX 00000

Attention: Treasurer

Dear Sir or Madam:


		Name(s):



		Address:

		Tax I.D. #:

I represent, warrant and covenant as follows:

9. I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

11. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.

12. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the

Very truly yours,

(Signature)

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NITROSECURITY, INC. Incentive Stock Option Agreement Granted Under 2005 Stock Incentive Plan

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