Common use of Company Options and Warrants Clause in Contracts

Company Options and Warrants. (a) At the Effective Time, each Company Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall be assumed by the Acquiror and automatically converted into and become an option to purchase Acquiror Common Stock, and such assumed stock options shall remain subject to the terms and conditions of the agreements (including the Company Option Plan) pursuant to which such stock options were granted. All rights with respect to Company Common Stock under Company Options assumed by the Acquiror shall thereupon be converted into rights with respect to Acquiror Common Stock. Accordingly, from and after the Effective Time: (i) each Company Option assumed by the Acquiror may be exercised solely for shares of Acquiror Common Stock; (ii) the number of shares of Acquiror Common Stock subject to each Company Option assumed by the Acquiror shall be determined by multiplying (A) the number of shares of Company Common Stock that were subject to such Company Option, as in effect immediately prior to the Effective Time by (B) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of Acquiror Common Stock; (iii) the per share exercise price for Acquiror Common Stock issuable upon exercise of each Company Option assumed by the Acquiror shall be determined by dividing (A) the per share exercise price of Company Common Stock subject to such Company Option, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction on the exercise of any Company Option assumed by the Acquiror shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that: (A) to the extent provided under the terms of a Company Option, the Company Options assumed by the Acquiror in accordance with this Section 5.5(a) shall, in accordance with their terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to Acquiror Common Stock subsequent to the Effective Time; and (B) the Board of Directors of the Acquiror or a committee thereof shall succeed to the authority and responsibility of the Board of Directors of the Company or any committee thereof with respect to each Company Option assumed by the Acquiror. Notwithstanding anything to the contrary in this Section 5.5(a), the conversion of each Company Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of Acquiror Common Stock shall be made in a manner consistent with Treasury Regulation Section 1.424-1, such that the conversion of a Company Option shall not constitute a “modification” of such Company Option for purposes of Section 409A or Section 424 of the Code.

Company Options and Warrants. (a) At the Effective Time, each Company Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall be assumed by the Acquiror and automatically converted into and become an option to purchase Acquiror Common Stock, and such assumed stock options shall remain subject to the terms and conditions As of the agreements (including the Company Option Plan) pursuant to which such stock options were granted. All rights with respect to Company Common Stock under Company Options assumed by the Acquiror shall thereupon be converted into rights with respect to Acquiror Common Stock. Accordinglyclose of business on December 1, from and after the Effective Time2006: (i) each Company Option assumed by the Acquiror may be exercised solely for 1,397,970 shares of Acquiror Company Common Stock; Stock are issuable upon the exercise of outstanding Company Options granted under the Company’s 2000 Equity Incentive Plan (the “Company Stock Option Plan”) or otherwise, (ii) the number of 5,365,570 shares of Acquiror Company Common Stock, 1,685,025 shares of Series A Preferred Stock subject and 424,531 shares of Series B Preferred Stock are issuable pursuant to outstanding Company Warrants, and (iii) 1,698,113 shares of Series B Preferred Stock are issuable pursuant to outstanding Company Convertible Notes. Section 3.2(b) of the Company Disclosure Letter sets forth (A) a list of each outstanding Company Option, Company Warrant and Company Convertible Notes, (B) the name of the holder of each Company Option assumed by the Acquiror shall be determined by multiplying Option, Company Warrant and Company Convertible Note, (AC) the number of shares of Company Common Stock, Series A Preferred Stock that were and Series B Preferred Stock subject to such each Company Option, as in effect immediately prior to the Effective Time by Company Warrant and Company Convertible Note, (BD) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of Acquiror Common Stock; (iii) the per share exercise price for Acquiror Common Stock issuable upon exercise price, or conversion price, of each Company Option assumed by the Acquiror shall be determined by dividing Option, Company Warrant and Company Convertible Note, (AE) the per share exercise price date of grant or issue for each Company Option, Company Warrant and Company Convertible Note, (F) the applicable vesting schedule, if any, and the extent to which each Company Option and Warrant is vested and exercisable as of the date hereof, (G) details regarding the acceleration of vesting, if any, and (H) the date on which each Company Option and Company Warrant expires. All shares of Company Common Stock, Series A Preferred Stock and Series B Preferred Stock subject to such Company Option, as in effect immediately prior issuance pursuant to the Effective Timeexercise of Company Options, by (B) the Exchange Ratio Company Warrants and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction Company Convertible Notes, upon issuance on the exercise terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option assumed by or Company Warrant as a result of the Acquiror shall continue in full force and effect and Merger (whether alone or upon the termoccurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, exercisabilityphantom stock, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that: (A) to the extent provided under the terms of a Company Option, the Company Options assumed by the Acquiror in accordance with this Section 5.5(a) shall, in accordance with their terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization profit participation or other similar transaction rights with respect to Acquiror Common Stock subsequent to the Effective Time; and (B) the Board of Directors Company. Copies of the Acquiror or a committee thereof shall succeed to the authority Company’s capitalization table and responsibility stock ledger as of the Board of Directors date hereof are attached to Section 3.2(a) of the Company or any committee thereof with respect to each Company Option assumed by the Acquiror. Notwithstanding anything to the contrary in this Section 5.5(a), the conversion of each Company Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of Acquiror Common Stock shall be made in a manner consistent with Treasury Regulation Section 1.424-1, such that the conversion of a Company Option shall not constitute a “modification” of such Company Option for purposes of Section 409A or Section 424 of the CodeDisclosure Letter.

Company Options and Warrants. (a) At the Effective Time, each Company Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall be assumed by the Acquiror and automatically converted into and become an option to purchase Acquiror CGI Common Stock, and CGI shall assume (x) each such assumed stock options shall remain subject to the Company Option in accordance with its terms and conditions (as in effect as of the agreements date of this Agreement) and (including y) the Company Stock Option Plan) pursuant to which such stock options were granted. All rights with respect to Company Common Stock under Company Options assumed by the Acquiror shall thereupon be converted into rights with respect to Acquiror Common Stock. Accordingly, from and after the Effective Time: (i) each Company Option assumed by the Acquiror CGI may be exercised solely for shares of Acquiror CGI Common Stock; (ii) the number of shares of Acquiror CGI Common Stock subject to each Company Option assumed by the Acquiror CGI shall be determined by multiplying (A) the number of shares of Company Common Stock that were subject to such Company Option, as in effect immediately prior to the Effective Time by (B) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of Acquiror CGI Common Stock; (iii) the per per-share exercise price for Acquiror the CGI Common Stock issuable upon exercise of each Company Option assumed by the Acquiror CGI shall be determined by dividing (A) the per per-share exercise price of Company Common Stock subject to each such Company Option, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio Ratio, and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction on the exercise of any Company Option assumed by the Acquiror CGI shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that: (A) to the extent provided under the terms of the Company Stock Option Plan or a Company Option, the such Company Options Option assumed by the Acquiror CGI in accordance with this Section 5.5(a) shall, in accordance with their its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to Acquiror CGI Common Stock subsequent to the Effective Time; and (B) the CGI’s Board of Directors of the Acquiror or a committee thereof shall succeed to the authority and responsibility of the Company’s Board of Directors of the Company or any committee thereof under the Company Stock Option Plan with respect to each Company Option assumed by the AcquirorCGI. Notwithstanding anything to the contrary in this Section 5.5(a), the conversion of each Company Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of Acquiror CGI Common Stock shall be made in a manner intended to be consistent with Treasury Regulation Regulations Section 1.424-1, such that the conversion of a Company Option shall not constitute a “modification” of such Company Option for purposes of Section 409A or Section 424 of the Code.

Company Options and Warrants. (a) At the Effective Time, each Company Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, shall be assumed by the Acquiror and automatically converted into and become an option to purchase Acquiror Castle Common Stock, and Castle shall assume the Company Stock Option Plans and each such assumed stock options shall remain subject to the Company Option in accordance with its terms and conditions (as in effect as of the agreements (including the Company Option Plan) pursuant to which such stock options were granteddate of this Agreement). All rights with respect to Company Common Stock under Company Options assumed by the Acquiror Castle shall thereupon be converted into rights with respect to Acquiror Castle Common Stock. Accordingly, from and after the Effective Time: (i) each Company Option assumed by the Acquiror Castle may be exercised solely for shares of Acquiror Castle Common Stock; (ii) the number of shares of Acquiror Castle Common Stock subject to each Company Option assumed by the Acquiror Castle shall be determined by multiplying (A) the number of shares of Company Common Stock that were subject to such Company Option, as in effect immediately prior to the Effective Time by (B) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of Acquiror Castle Common Stock; (iii) the per share exercise price for Acquiror the Castle Common Stock issuable upon exercise of each Company Option assumed by the Acquiror Castle shall be determined by dividing (A) the per share exercise price of Company Common Stock subject to such Company Option, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction on the exercise of any Company Option assumed by the Acquiror Castle shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that: (A) to the extent provided under the terms of a Company Option, the such Company Options Option assumed by the Acquiror Castle in accordance with this Section 5.5(a) shall, in accordance with their its terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to Acquiror Castle Common Stock subsequent to the Effective Time; and (B) the Castle’s Board of Directors of the Acquiror or a committee thereof shall succeed to the authority and responsibility of the Company’s Board of Directors of the Company or any committee thereof with respect to each Company Option assumed by the AcquirorCastle. Notwithstanding anything to the contrary in this Section 5.5(a), the conversion of each Company Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of Acquiror Castle Common Stock shall be made in a manner consistent with Treasury Regulation Regulations Section 1.424-1, such that the conversion of a Company Option shall not constitute a “modification” of such Company Option for purposes of Section 409A or Section 424 of the Code.

Company Options and Warrants. On or before the Closing Date, each holder of options and warrants to purchase Company Capital Stock whether vested or unvested (acollectively, the "Company Options") At (including all outstanding options granted under the Company's Stock Option Plan adopted July 12, 1999 (the "Company Plan"), and any individual non-plan options) outstanding as of the Effective Time, each Time shall have entered into a written agreement providing that the Company Option that is outstanding and unexercised immediately prior to the Effective Time, whether or not vested, Options held by such holder shall be assumed replaced by the Acquiror and automatically converted into and become an option to purchase Acquiror Common Stock, and such assumed stock options shall remain subject to the terms and conditions of the agreements (including the Company Option Plan) pursuant to which such stock options were granted. All rights with respect to Company Common Stock under Company Options assumed by the Acquiror shall thereupon be converted into rights with respect to Acquiror Common Stock. Accordingly, from and after the Effective Time: (i) each Company Option assumed by the Acquiror may be exercised solely for shares of Acquiror Common Stock; (ii) the that whole number of shares of Acquiror Parent Common Stock subject to each Company Option assumed by the Acquiror shall be determined by multiplying (A) the number of shares of Company Common Capital Stock that were subject to such Company OptionOption at the Effective Time by the Exchange Ratio, as in effect at an exercise price per share of Parent Common Stock equal to the exercise price per share of such Company Option immediately prior to the Effective Time divided by (B) the Exchange Ratio and rounding Ratio, rounded up to the resulting nearest cent ("Replacement Options"). If the foregoing calculation results in a Replacement Option being exercisable for a fraction of a share of Parent Common Stock, then the number of shares of Parent Common Stock subject to such option will be rounded down to the nearest whole number of shares of Acquiror Common Stock; (iii) the per share exercise price for Acquiror Common Stock issuable upon exercise of each Company Option assumed by the Acquiror shall be determined by dividing (A) the per share exercise price of Company Common Stock subject to such Company Option, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction on the exercise of any Company Option assumed by the Acquiror shall continue in full force and effect and the shares. The term, exercisability, vesting schedule and other provisions vesting commencement date and characterization as incentive stock options or non-qualified stock options of such Company Option shall otherwise remain unchanged; provided, however, that: (A) to the extent provided under the terms of a Company Option, the Company Options assumed by the Acquiror in accordance with this Section 5.5(a) shallwill otherwise be unchanged, in accordance with their terms, except that all Replacement Options for unvested Company Options shall be subject to further adjustment a two-year quarterly vesting schedule commencing on the Closing Date. All other terms and conditions of the Replacement Options shall be as appropriate provided in Parent's Restated 1996 Flexible Stock Incentive Plan (the "1996 Plan") and standard form of agreement, copies of which have been provided to reflect any stock split, division or subdivision the Company. Continuous employment with the Company will be credited to an optionee of shares, stock dividend, reverse stock split, consolidation the Company for purposes of shares, reclassification, recapitalization or other similar transaction with respect to Acquiror determining the number of shares of Parent Common Stock subsequent subject to exercise under a Replacement Option after the Effective Time. Prior to the Effective Time; and (B) , the Board of Directors of the Acquiror or a committee thereof Company shall succeed take all action necessary so that all Company Options issued to the authority and responsibility of the Board of Directors non-employees of the Company are either exercised in full or any committee thereof with respect to each Company Option assumed by the Acquiror. Notwithstanding anything terminated prior to the contrary in this Section 5.5(a), the conversion of each Company Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of Acquiror Common Stock shall be made in a manner consistent with Treasury Regulation Section 1.424-1, such that the conversion of a Company Option shall not constitute a “modification” of such Company Option for purposes of Section 409A or Section 424 of the CodeEffective Time.

Company Options and Warrants. As of the close of business on November 3, 2006: (ai) At 2,481,123 shares of Company Common Stock are issuable upon the Effective Timeexercise of outstanding Company Options granted under the Company’s Amended and Restated 1999 Long-term Incentive Plan, Amended and Restated 1999 Non-Employees’ Stock Plan and 2005 Long-Term Incentive Plan (collectively, the “Company Stock Option Plans”) or otherwise, (ii) the weighted average exercise price of such Company Options is $3.03 and 1,560,734 such Company Options are vested and exercisable, (iii) 1,284,998 shares of Company Common Stock are available for future grant under the Company Stock Option Plans, (iv) 0 shares of Company Common Stock are issuable pursuant to Company Options that have been granted other than pursuant to the Company Stock Option Plans, and (v) 1,073,122 shares of Company Common Stock are issuable pursuant to outstanding Company Warrants. Section 3.2(b) of the Company Disclosure Letter sets forth (A) a list of each outstanding Company Option that is outstanding and unexercised immediately prior to Company Warrant, (B) the Effective Time, whether or not vested, shall be assumed by the Acquiror and automatically converted into and become an option to purchase Acquiror Common Stock, and such assumed stock options shall remain subject to the terms and conditions of the agreements particular Company Stock Option Plan (including the Company Option Planif any) pursuant to which any such stock options were Company Option was granted. All rights with respect to Company Common Stock under Company Options assumed by , (C) the Acquiror shall thereupon be converted into rights with respect to Acquiror Common Stock. Accordingly, from and after name of the Effective Time: (i) holder of each Company Option assumed by the Acquiror may be exercised solely for shares of Acquiror Common Stock; or Company Warrant, (ii) the number of shares of Acquiror Common Stock subject to each Company Option assumed by the Acquiror shall be determined by multiplying (AD) the number of shares of Company Common Stock that were subject to such each Company OptionOption and Company Warrant, as in effect immediately prior to the Effective Time by (BE) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of Acquiror Common Stock; (iii) the per share exercise price for Acquiror Common Stock issuable upon exercise of each Company Option assumed by the Acquiror shall be determined by dividing and Company Warrant, (AF) the per share exercise price date of grant or issue for each Company Option and Company Warrant, (G) the applicable vesting schedule, if any, and the extent to which each Company Option and Warrant is vested and exercisable as of the date hereof, (H) the date on which each Company Option and Company Warrant expires and (I) details regarding the acceleration of vesting, if any. All shares of Company Common Stock subject to such issuance under the Company OptionStock Option Plans and underlying Company Warrants, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent; and (iv) any restriction upon issuance on the exercise terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option assumed by or Company Warrant as a result of the Acquiror shall continue in full force and effect and Merger (whether alone or upon the termoccurrence of any additional or subsequent events). There are no outstanding or authorized stock appreciation, exercisabilityphantom stock, vesting schedule and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that: (A) to the extent provided under the terms of a Company Option, the Company Options assumed by the Acquiror in accordance with this Section 5.5(a) shall, in accordance with their terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization profit participation or other similar transaction rights with respect to Acquiror Common Stock subsequent to the Effective Time; and (B) the Board of Directors of the Acquiror or a committee thereof shall succeed to the authority and responsibility of the Board of Directors of the Company or any committee thereof with respect to each Company Option assumed by the Acquiror. Notwithstanding anything to the contrary in this Section 5.5(a), the conversion of each Company Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of Acquiror Common Stock shall be made in a manner consistent with Treasury Regulation Section 1.424-1, such that the conversion of a Company Option shall not constitute a “modification” of such Company Option for purposes of Section 409A or Section 424 of the CodeCompany.

Company Options and Warrants. (a) At the Effective Time, each then outstanding Company Option that is outstanding and unexercised immediately prior to the Effective Timeor Company Warrant, whether vested or not vestedunvested, shall be assumed by Parent in accordance with the Acquiror and automatically converted into and become an option to purchase Acquiror Common Stockterms (as in effect as of the date of this Agreement) of the Company Stock Option Plan under which such Company Option was issued, if any, and the stock option agreement or warrant agreement by which such assumed Company Option or Company Warrant is evidenced. To the extent that any Company Options are incentive stock options, within the meaning of Section 422 of the Code, the provisions of this Section 1.6 shall be interpreted and applied so as to comply with the requirements of Section 424(a) of the Code, so that such Company Options shall continue to qualify as incentive stock options shall remain subject to the terms and conditions of the agreements (including the Company Option Plan) pursuant to which such stock options were grantedafter their assumption by Parent. All rights with respect to Company Common Stock under outstanding Company Options assumed by the Acquiror or Company Warrants shall thereupon be converted into rights with respect to Acquiror Parent Common Stock. Accordingly, from and after the Effective Time: , (ia) each Company Option or Company Warrant assumed by the Acquiror Parent may be exercised solely for shares of Acquiror Parent Common Stock; , (iib) the number of shares of Acquiror Parent Common Stock subject to each such assumed Company Option assumed by the Acquiror or Company Warrant shall be determined by multiplying (A) equal to the number of shares of Company Common Stock that were subject to such Company Option, as in effect Option or Company Warrant immediately prior to the Effective Time multiplied by (B) the Exchange Ratio and rounding the resulting number Ratio, rounded down to the nearest whole number of shares of Acquiror Parent Common Stock; , (iiic) the per share exercise price for Acquiror the Parent Common Stock issuable upon exercise of each such assumed Company Option assumed by the Acquiror or Company Warrant shall be determined by dividing (A) the exercise price per share exercise price of Company Common Stock subject to such Company OptionOption or Company Warrant, as in effect immediately prior to the Effective Time, by (B) the Exchange Ratio Ratio, and rounding the resulting exercise price up to the nearest whole cent; , and (ivd) any restriction all restrictions on the exercise of any each such assumed Company Option assumed by the Acquiror or Company Warrant shall continue in full force and effect effect, and the term, exercisability, vesting schedule schedule, acceleration rights and other provisions of such Company Option or Company Warrant shall otherwise remain unchanged; provided, however, that: . The Company and Parent shall take all action that may be necessary (Aunder all Company Stock Option Plans and otherwise) to effectuate the extent provided under provisions of this Section 1.6. Parent shall file with the terms SEC, within 90 days after the Closing Date, a registration statement on Form S-8 registering the exercise of a Company Option, the Company Options assumed by the Acquiror in accordance with Parent pursuant to this Section 5.5(a) shall, in accordance with their terms, be subject to further adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to Acquiror Common Stock subsequent to the Effective Time; and (B) the Board of Directors of the Acquiror or a committee thereof shall succeed to the authority and responsibility of the Board of Directors of the Company or any committee thereof with respect to each Company Option assumed by the Acquiror. Notwithstanding anything to the contrary in this Section 5.5(a), the conversion of each Company Option (regardless of whether such option qualifies as an “incentive stock option” within the meaning of Section 422 of the Code) into an option to purchase shares of Acquiror Common Stock shall be made in a manner consistent with Treasury Regulation Section 1.424-1, such that the conversion of a Company Option shall not constitute a “modification” of such Company Option for purposes of Section 409A or Section 424 of the Code1.6.