Common use of Company Stock Options and Warrants Clause in Contracts

Company Stock Options and Warrants. (a) At the Effective Time, each option and warrant granted by the Company to purchase shares of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms of the Company Stock Option Plan and stock option or warrant agreement by which it is evidenced, except that from and after the Effective Time, (i) Parent and its Compensation Committee shall be substituted for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (b) Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Options under any of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of the Company's stockholders).

Company Stock Options and Warrants. (a) All options and warrants (the "Company Stock Options and Warrants") outstanding, whether or not exercisable and whether or not vested, at the Effective Time, shall remain outstanding following the Effective Time. At the Effective Time, each option and warrant granted by the Company to purchase shares Stock Options and Warrants shall, by virtue of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by Merger and without any further action on the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms part of the Company or the holder thereof, be assumed by Parent in such manner that Parent (i) is a corporation "assuming a stock option in a transaction to which Section 424(a) applies" within the meaning of Section 424 of the Code and the regulations thereunder or (ii) to the extent that Section 424 of the Code does not apply to any such Company Stock Option Plan and/or Warrant, would be such a corporation were Section 424 of the Code applicable to such Company Stock Option and/or Warrant. Each Company Stock Option and stock Warrant assumed by Parent (each, a "Substitute Option and Warrant") shall be exercisable upon the same terms and conditions as under the applicable option or and/or warrant agreement by which it is evidencedissued thereunder, except that from (A) each such Substitute Option and after the Effective Time, (i) Parent and its Compensation Committee Warrant shall be substituted for exercisable for, and represent the Company and the Committee of the Company's Board of Directors (includingright to acquire, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the that whole number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded up or down to the nearest whole share) equal to the number of shares of Company Common Stock subject to such Company Stock Option and/or Warrant multiplied by the Exchange Ratio; and (B) the option or warrant price per share of Parent Common Stock shall be an amount equal to the option or warrant price per share of Company Common Stock subject to such Company Stock Option and/or Warrant in effect immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option divided by the Exchange Ratio and rounding up (the option or warrant price per share, as so determined, being rounded upward to the nearest full cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (b) Prior As soon as practicable after the Effective Time, Parent shall deliver to each holder of an outstanding Company Stock Option and/or Warrant an appropriate notice setting forth such holder's rights pursuant thereto and such Company Stock Option and/or Warrant shall continue in effect on the same terms and conditions (including any antidilution provisions, and subject to the adjustments required by this Section 2.04 after giving effect to the Merger). Parent shall comply with the terms of all such Company Stock Options and Warrants and ensure that Company Stock Options and Warrants which qualified as incentive stock options under Section 422 of the Code prior to the Effective Time continue to qualify as incentive stock options after the Effective Time. Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of Substitute Options and/or Warrants pursuant to the terms set forth in this Section 2.04. As soon as practicable, but in no event more than 5 business days, after the Effective Time, the shares of Parent Common Stock subject to Company Stock Options and Warrants will be covered by an effective registration statement on Form S-8 (or any successor form) or another appropriate form, and Parent shall use its reasonable best efforts to obtain maintain the effectiveness of such registration statement or registration statements for so long as Substitute Options and Warrants remain outstanding. In addition, Parent shall use all necessary consents or releases from holders reasonable efforts to cause the shares of Options under any of the Parent Common Stock subject to Company Stock Option Plans or Options and Warrants to be listed on the Non-Employee Directors' Warrant Plan or otherwise OTC and take all such other lawful action exchanges as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of the Company's stockholders)Parent shall determine.

Company Stock Options and Warrants. (a) At the Effective Time, each option by virtue of the Merger and warrant granted by without any further action on the part of the Company or the holder thereof each unexpired and unexercised option to purchase shares of Company Common Stock, which is outstanding immediately prior thereto Stock (an a "OPTION" or, collectively, Company Stock Option") granted under the "OPTIONS"), Company Stock Plans (as hereinafter defined) or otherwise granted by the Company under the Company's 1992outside of any Company Stock Plan, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at will be assumed by Parent as hereinafter provided. At the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms of 50%of the Company Stock Options which have a per share option exercise price equal to or less than the Cash Consideration ("Positive Value Options") shall be automatically converted into the right to receive cash equal to the difference between the Cash Consideration and the per share exercise price of such Positive Value Options and the remaining 50% of the Positive Value Options will be automatically converted into the right to receive options (the "Parent Stock Options") to purchase a number of shares of Parent Common Stock equal to the number of shares of Company Common Stock that could have been purchased under such Positive Value Options multiplied by the Conversion Ratio, at a price per share of Parent Common Stock equal to the per share option exercise prices specified in the Positive Value Option, divided by the Conversion Ratio. Positive Value Options will be equally allocated between cash and Parent Stock Options. Such Parent Stock Options shall otherwise be subject to the same terms and conditions as such Positive Value Options. All Company Stock Options which have a per share option exercise price greater than the Cash Consideration shall be automatically converted into an option to purchase a number of shares of Parent Common Stock equal to the number of shares of Company Common Stock that could have been purchased under such Company Stock Option Plan and stock multiplied by the Conversion Ratio, at a price per share of Parent Common Stock equal to the per share option or warrant agreement exercise price specified in the Company Stock Option, divided by which it is evidenced, except that from and after the Conversion Ratio. At the Effective Time, (i) Parent all references in the Company Stock Plans, the applicable stock option or other awards agreements issued thereunder and its Compensation Committee in any other Company Stock Options to the Company shall be substituted for deemed to refer to Parent; and (ii) Parent shall assume the Company Stock Plans and the Committee all of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such obligations with respect to the Company Stock Options. (b) In respect of each Company Stock Option Plan, (iias converted into a Parent Stock Option pursuant to Section 1.10(a) each Option and assumed by Parent may be exercised solely for Parent, and the shares of Parent Common Stock underlying such option, Parent shall file as soon as practicable after the Effective Time with the SEC, and keep current the effectiveness of, a registration statement on Form S-8 (which may be accomplished by amendment of the registration statement on Form S-4) or cash, if so provided under other appropriate form for as long as such options remain outstanding (and maintain the terms current status of such Optionthe prospectus with respect thereto), (iii) . Parent agrees to reserve a number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock subject to issuable upon the exercise of such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest centOptions. Notwithstanding the provisions of clauses (iii) and (ivthis Section 1.10, with respect to any Person subject to Section 16(b) of the first sentence Exchange Act, any cash paid in connection with the cancellation of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (b) Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Options under any of the Company Stock Option Plans or shall be paid as soon as practicable after the Non-Employee Directors' Warrant Plan or otherwise and take all first date payment can be made without liability of such other lawful action as may be necessary to give effect to the transactions contemplated by this Person under Section (except for such action that may require the approval of the Company's stockholders16(b).

Company Stock Options and Warrants. (a) At the Effective Time, each option all ---------------------------------- options and warrant granted by the Company to purchase shares of Company Common Stock, which is warrants then outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 1995 Incentive Stock Option Plans or Plan and the Officers' Contingent Stock Option 1996 Equity Participation Plan (collectively, the "COMPANY STOCK OPTION PLANSCompany Stock Option -------------------- Plans") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into assumed by Parent in such manner that Parent is a corporation ----- "assuming a stock option in a transaction to which section 424(a) applies" within the meaning of Section 424 of the Internal Revenue Code of 1986, as amended (the "Code"). The options and become rights with respect warrants assumed by Parent as provided ---- above and the warrants issued to Parent Common StockWinStar Communications, Inc. and Parent Electronic Press Services, Inc. shall assume each Option, in accordance with be exercisable upon the same terms of and conditions as under the Company Stock Option Plan Plans and stock the option agreements and warrants issued thereunder and such warrants, except that each such option or warrant agreement by which it is evidenced, except that from and after the Effective Time, (iA) Parent and its Compensation Committee shall be substituted exercisable for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the that number of shares of Parent Common Stock subject to such Option shall be equal to the product of (i) the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option option or warrant immediately prior to the Effective Time multiplied by (ii) a fraction, the Exchange Ratio, and (iv) the per share exercise price under each such Option numerator of which shall be adjusted by dividing the per Per Share Amount and the denominator of which shall be $27 1/8 (with any fractional share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iiiParent Common Stock being disregarded) and (ivB) the exercise price per share of Parent Common Stock shall equal the first sentence exercise price per share of this SECTION 3.08(a)Company Common Stock theretofore in effect multiplied by a fraction, each Option the numerator of which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, $27 1/8 and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal denominator of such Option, within which shall be the meaning of Section 424(h) of the Code. (b) Prior to Per Share Amount. From and after the Effective Time, no additional options or warrants shall be granted under Company Stock Option Plans. In connection with the assumption of the options outstanding under Company Stock Option Plans, Parent shall use its reasonable best efforts to obtain all necessary consents effect such assumption in such a manner as to not affect the incentive stock option status of those options which are intended to be incentive stock options at the Effective Time. From the date hereof, Company shall not accelerate, or releases from holders take any action which would cause the acceleration of, the vesting of Options under any of the options outstanding under the Company Stock Option Plans by reason of the Offer or the Non-Employee Directors' Warrant Plan or otherwise Merger and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except any agreement providing for such action that may require the approval of the Company's stockholders)acceleration shall be rescinded.

Company Stock Options and Warrants. Except as set forth below, the terms and provisions of the Company Stock Option Plan (aas defined below) shall continue in full force and effect and shall govern each option (or portion of the option, as the case may be) outstanding immediately prior to the Effective Time under the Company Stock Option Plan, whether vested, unvested, exercisable or unexercisable (a "Company Stock Option"). At the Effective Time, each option and warrant granted by the Company to purchase shares of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms of the Company Stock Option Plan then outstanding and stock option each warrant or warrant agreement by which it is evidencedother right (other than the Company Preferred Stock) to receive Company Common Stock then outstanding (together with Company Stock Options, except that from and after the Effective Time, (i"Company Rights") Parent and its Compensation Committee shall be substituted for the Company and the Committee of the Company's Board of Directors automatically converted, without any further action, into an option, warrant or right to purchase or acquire Parent Shares (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of a "Parent Common Stock (or cash, if so provided under the terms of such OptionRight"), (iii) the . The number of shares of Parent Common Stock subject to such Option Shares for which each Company Right shall be exercisable shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock that were subject to such Option the Company Right immediately prior to the Effective Time multiplied by the Exchange RatioRatio rounded down to the nearest whole number of Parent Shares, and (iv) at an exercise price per Parent Share equal to the per share exercise price under of each such Option shall be adjusted by dividing Company Right immediately prior to the per share exercise price under each such Option Effective Time divided by the Exchange Ratio and rounding rounded up to the nearest whole cent, subject to the receipt of consent from each holder of Company Options. Notwithstanding the provisions of clauses (iii) and (iv) Any Company Stock Options converted into options to purchase Parent Shares, other than Company Stock Options held by persons who are not employees of the first sentence Company as of the date of this SECTION 3.08(aAgreement and who are identified on Schedule 4.1(e), together with the number of options held by each Option which is an such person (the "incentive stock option" Non-Employee Company Stock Options"), shall be adjusted as required to vest in sixteen (16) equal quarterly installments at the end of each calendar quarter over forty-eight (48) months from date of grant to the extent the optionee has been continuously employed by Section 424 Parent until such vesting date, subject, in the case of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of each such Company Stock Option, within to the meaning receipt of Section 424(h) of the Code. (b) Prior to consent from its holder. All Non-Employee Company Stock Options shall accelerate and become fully vested immediately upon the Effective Time, subject, in the case of each such Non-Employee Company shall use Stock Option, to the receipt of consent from its reasonable best efforts to obtain all necessary consents or releases from holders holder. For purposes of Options under any of this Agreement, the term "Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of Plan" means the Company's stockholders)1998 Stock Option Plan and the Company's 2000 Stock Option Plan. Parent shall use all reasonable efforts to cause to be reserved for issuance the number of Parent Shares issuable upon exercise of the Parent Common Stock Options and rights to acquire Parent Common Stock issued in exchange for Company Rights referred to in this Section 4.1(e) and, Parent shall cause to be filed, as soon as reasonably practicable after the Effective Time but in no event later than sixty (60) days after the Effective Time, a registration statement on Form S-8 (or any successor or other appropriate form) under the Securities Act, or an amendment to an existing registration statement of Form S- 8, to register the Parent Shares issuable upon exercise of the Parent Common Stock Options.

Company Stock Options and Warrants. (a) At Before the Effective TimeClosing, each option and warrant granted by the Board of Directors of the Company to purchase shares of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectivelyif appropriate, any committee of the "OPTIONS"), granted by Board of Directors of the Company administering the Company Stock Plans) shall adopt such resolutions and take all such other actions as may be necessary to provide that each Company Stock Option granted under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Employee Stock Option Plan or the Stock Option Plan for Non-Employee Directors (collectivelytogether, the "COMPANY STOCK OPTION PLANSCompany Stock Plans") or ), as the Non-Employee Directors' Warrant Plan or otherwisecase may be, which are outstanding at immediately prior to the Effective Time, whether or not then vested or exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms canceled as of the Company Stock Option Plan and stock option or warrant agreement by which it is evidencedEffective Time in exchange for a lump sum payment in cash equal to the excess, except that from and after the Effective Timeif any, of (i) Parent and its Compensation Committee shall be substituted for the Company and the Committee product of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iiiA) the number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (ivB) the Common Stock Merger Consideration over (ii) the product of (x) the number of shares of Company Common Stock subject to such Company Stock Option and (y) the per share exercise price under of such Company Stock Option. Parent shall cause the Surviving Company to make such payment as promptly as practicable following the Effective Time. (b) Before the Closing, the Board of Directors of the Company shall adopt such resolutions and take all such other actions as may be necessary to provide that each warrant to purchase shares of Company Common Stock ("Warrants") outstanding immediately prior to the Effective Time, whether or not then vested or exercisable, shall become exercisable as of the Effective Time for a lump sum payment equal to the excess, if any, of (i) the product of (A) the number of shares of Company Common Stock subject to such Option shall be adjusted by dividing Warrant and (B) the Common Stock Merger Consideration over (ii) the product of (x) the number of shares of Company Common Stock subject to such Warrant and (y) the per share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within Warrant. Parent shall cause the meaning of Section 424(hSurviving Company to (x) of the Code. (b) Prior to as promptly as practicable after the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders notify each record holder of Options under any a Warrant in writing of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval consummation of the Company's stockholders)Merger and that such holder may obtain such payment by exercising its Warrant in accordance with its terms and (y) make such payment as promptly as practicable upon exercise of a Warrant by the holder thereof in accordance with its terms.

Company Stock Options and Warrants. (a) At Effective as of the Effective Time, each option and warrant granted by the Company to purchase shares of Stock Option Plan and each Company Common Stock, which Option that is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at to the Effective Time, whether or not exercisablethen exercisable or vested, shall be assumed by Parent. As of the Effective Time, each Company Option shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into and become rights with respect an option to purchase shares of Parent Common StockStock in an amount, at an exercise price and subject to such terms and conditions determined as provided below. Subject to the accelerated vesting of Company Options as described in Section 2.3(b) and Schedule 2.3(b) of the Company Disclosure Letter, each Company Option so assumed by Parent shall be subject to, and Parent shall assume each Optionexercisable and vested upon, in accordance with the same terms of and conditions as under the applicable Company Stock Option Plan and stock the applicable option or warrant agreement by which it is evidencedand other related agreements issued thereunder, including the maximum term of the Company Option and the provisions regarding termination of the Company Option following a termination of employment, except that from and after the Effective Time, (iA) Parent and its Compensation Committee each assumed Company Option shall be substituted for exercisable for, and represent the Company and the Committee of the Company's Board of Directors (includingright to acquire, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the that number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) equal to (i) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio, and ; (ivB) the exercise price per share exercise price under of Parent Common Stock subject to each such assumed Company Option shall be adjusted by dividing an amount equal to (i) the exercise price per share exercise price under each of Company Common Stock subject to such Company Option in effect immediately prior to the Effective Time divided by (ii) the Exchange Ratio and rounding (rounded up to the nearest whole cent. Notwithstanding the provisions of clauses (iii) ); and (ivC) references under the Company Option to a termination of employment shall mean, on and after the Effective Time, a termination of employment with the Surviving Corporation or any XXXX Corporation. (b) The Company’s Board of Directors, or its duly appointed committee to administer the Company Stock Option Plan, shall adopt resolutions and take such other actions as may be necessary, effective contingent upon the consummation of the first sentence transactions contemplated hereby, immediately prior to the Closing Date, to provide for the application of this SECTION 3.08(aSection 5.4(a) to the Company Stock Option Plan and the Company Options outstanding as of immediately prior to the Effective Time. (c) The conversion of Company Options provided for in Section 5.4(a) shall, with respect to any options which qualified as “incentive stock options” (as defined in Section 422 of the Code immediately prior to the Merger), each Option which is an "incentive stock option" shall be adjusted as required by effected in a manner consistent with Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h424(a) of the Code. (bd) As of the Effective Time, Parent shall, to the full extent permitted by applicable law, assume all of the Company Warrants identified on Schedule 2.3(c) of the Company Disclosure Letter and outstanding immediately prior to the Effective Time. Each Company Warrant shall, to the full extent permitted by applicable law, be assumed by Parent in such a manner that it shall be exercisable upon the same terms and conditions as under the Company Warrant pursuant to which it was issued; provided that (A) each Company Warrant so assumed shall be exercisable for, and represent the right to acquire, that number of shares of Parent Common Stock (rounded down to the nearest whole share) equal to (i) the number of shares of Company Common Stock subject to such Company Warrant immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio; (B) the exercise price per share of Parent Common Stock subject to each assumed Company Warrant shall be an amount equal to (i) the exercise price per share of Company Common Stock subject to such Company Warrant in effect immediately prior to the Effective Time divided by (ii) the Exchange Ratio (rounded up to the nearest whole cent). Prior to the Effective Time, the Company shall use its reasonable best efforts make all adjustments provided for in the Company Warrants with respect to obtain all necessary consents or releases from holders of Options under any the Company Warrants to facilitate the implementation of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise provisions of this Section 5.4(d) and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of the Company's stockholders5.4(d).

Company Stock Options and Warrants. (a) At Subject to the Effective Time, each option and warrant granted by the Company to purchase shares of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms consummation of the Company Stock Option Plan and stock option or warrant agreement by which it is evidencedMerger, except that from and after the Effective Time, (i) Parent and its Compensation Committee shall be substituted for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (b) Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain take all necessary consents or releases from holders action (i) to amend the Company's 1997 Director Stock Option Plan to provide that all shares of Options under any of the Company Stock subject to outstanding options under the 1997 Director Stock Option Plans Plan shall become fully vested and exercisable, whether or not previously vested and exercisable prior to the Non-Employee Directors' Warrant Plan or otherwise Effective Time, and take all such other lawful action as may be necessary to give effect options not exercised prior to the transactions contemplated Effective Time shall be cancelled and no options granted pursuant to the 1997 Director Stock Option Plan will be outstanding at or after the Effective Time (such amendment to be approved by this Section the Company's Board of Directors and by each Person who holds an option granted under the 1997 Director Stock Option Plan in his or her individual capacity); (except for such action that may require the approval ii) with respect to all options granted and outstanding under each of the Company's stockholdersAmended and Restated 1992 Equity Incentive Plan, the Company's 1997 Director Stock Option Plan, the Company's 1997 Employee Stock Purchase Plan, the Company's Amended and Restated 1999 Stock Incentive Plan, the Company's Amended and Restated 2000 California Stock Option Plan (collectively, with the 1997 Employee Stock Purchase Plan, the "COMPANY STOCK PLANS"), to accelerate the vesting and exercisability of outstanding options and rights to purchase Company Stock granted under the Company Stock Plans (each, a "COMPANY STOCK OPTION"), whether or not such Company Stock Options were previously vested and exercisable prior to the Effective Time; (iii) to take such actions as provided under the Company's 1997 Employee Stock Purchase Plan to cause options granted thereunder to become exercisable as of a date established by the Company's Board of Directors prior to the Effective Time; (iv) to permit each holder of a Company Stock Option (each, a "COMPANY OPTIONHOLDER") to exercise all of his Company Stock Options which are fully vested and exercisable, including as a result of aforementioned acceleration, prior to the Effective Time; (v) to take all action necessary, including, without limitation, obtaining consents of and providing written notice to the Company Optionholders to the extent necessary, to provide that all Company Stock Options not so exercised shall be cancelled and that no Company Stock Options will be outstanding at or after the Effective Time; and (vi) to terminate the Company Stock Plans as of the Effective Time. (b) In the event that at any time from and after the Effective Time a holder of warrants to purchase any Company equity securities (such warrants, the "COMPANY WARRANTS" and such holders, the "COMPANY WARRANT HOLDERS") that are not In-the-Money Warrants (as defined in SECTION 10.02(a) below) ("OUT-OF-THE-MONEY WARRANTS") properly exercises Out-of-the-Money Warrants ("EXERCISED WARRANTS") and delivers the exercise price for such Exercised Warrants to Parent or the Surviving Corporation, then (i) the portion (the "ALLOCATED CONSIDERATION") of the aggregate exercise price of such Exercised Warrants equal to the Common Stock Merger Consideration paid by 17 Parent to Common Holders pursuant to SECTION 2.02 prior to such exercise with respect to the number of shares of Company Common Stock for which such Exercised Warrants are exercised shall be repaid to the Person that exercises such Exercised Warrants (or upon the mutual agreement of Parent and such Person, shall be deducted from the exercise price actually paid by such Person to Parent or the Surviving Corporation in connection with such exercise); (ii) Parent shall pay to the Common Holders, in accordance with SECTION 2.02(f), an amount (the "EXCESS WARRANT PROCEEDS") equal to the amount by which (A) the aggregate exercise price of such Exercised Warrants exceeds (B) the Allocated Consideration; and (iii) with respect to any payment made to Common Holders following the exercise of such Exercised Warrants and the payment by Parent of the Excess Warrant Proceeds with respect to the exercise of such Exercised Warrants, (A) the Person exercising such Exercised Warrants shall be deemed a Common Holder for purposes of this Agreement, and (B) the Per Share Denominator (as defined below) shall be adjusted in accordance with the definition of such term. The parties acknowledge that the purpose of this SECTION 2.04(b) is to allocate the exercise price of the Exercised Warrants among the holders of such Exercised Warrants and the holders of Common Stock in a manner that has the same result as if such Exercised Warrants had been exercised prior to the Effective Time.

Company Stock Options and Warrants. (a) At Effective as of the Effective Time, each option and warrant granted by the Company to purchase shares of Stock Option Plan and each Company Common Stock, which Option that is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at to the Effective Time, whether or not exercisablethen exercisable or vested, shall be assumed by Parent. As of the Effective Time, each Company Option shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into and become rights with respect an option to purchase shares of Parent Common StockStock in an amount, at an exercise price and subject to such terms and conditions determined as provided below. Subject to the accelerated vesting of Company Options as described in Section 2.3(b) and Schedule 2.3(b) of the Company Disclosure Letter, each Company Option so assumed by Parent shall be subject to, and Parent shall assume each Optionexercisable and vested upon, in accordance with the same terms of and conditions as under the applicable Company Stock Option Plan and stock the applicable option or warrant agreement by which it is evidencedand other related agreements issued thereunder, including the maximum term of the Company Option and the provisions regarding termination of the Company Option following a termination of employment, except that from and after the Effective Time, (iA) Parent and its Compensation Committee each assumed Company Option shall be substituted for exercisable for, and represent the Company and the Committee of the Company's Board of Directors (includingright to acquire, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the that number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) equal to (i) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio, and ; (ivB) the exercise price per share exercise price under of Parent Common Stock subject to each such assumed Company Option shall be adjusted by dividing an amount equal to (i) the exercise price per share exercise price under each of Company Common Stock subject to such Company Option in effect immediately prior to the Effective Time divided by (ii) the Exchange Ratio and rounding (rounded up to the nearest whole cent. Notwithstanding the provisions of clauses (iii) ); and (ivC) references under the Company Option to a termination of employment shall mean, on and after the Effective Time, a termination of employment with the Surviving Corporation or any XXXX Corporation. (b) The Company's Board of Directors, or its duly appointed committee to administer the Company Stock Option Plan, shall adopt resolutions and take such other actions as may be necessary, effective contingent upon the consummation of the first sentence transactions contemplated hereby, immediately prior to the Closing Date, to provide for the application of this SECTION 3.08(aSection 5.4(a) to the Company Stock Option Plan and the Company Options outstanding as of immediately prior to the Effective Time. (c) The conversion of Company Options provided for in Section 5.4(a) shall, with respect to any options which qualified as "INCENTIVE STOCK OPTIONS" (as defined in Section 422 of the Code immediately prior to the Merger), each Option which is an "incentive stock option" shall be adjusted as required by effected in a manner consistent with Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h424(a) of the Code. (bd) As of the Effective Time, Parent shall, to the full extent permitted by applicable law, assume all of the Company Warrants identified on Schedule 2.3(c) of the Company Disclosure Letter and outstanding immediately prior to the Effective Time. Each Company Warrant shall, to the full extent permitted by applicable law, be assumed by Parent in such a manner that it shall be exercisable upon the same terms and conditions as under the Company Warrant pursuant to which it was issued; provided that (A) each Company Warrant so assumed shall be exercisable for, and represent the right to acquire, that number of shares of Parent Common Stock (rounded down to the nearest whole share) equal to (i) the number of shares of Company Common Stock subject to such Company Warrant immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio; (B) the exercise price per share of Parent Common Stock subject to each assumed Company Warrant shall be an amount equal to (i) the exercise price per share of Company Common Stock subject to such Company Warrant in effect immediately prior to the Effective Time divided by (ii) the Exchange Ratio (rounded up to the nearest whole cent). Prior to the Effective Time, the Company shall use its reasonable best efforts make all adjustments provided for in the Company Warrants with respect to obtain all necessary consents or releases from holders of Options under any the Company Warrants to facilitate the implementation of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise provisions of this Section 5.4(d) and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of the Company's stockholders5.4(d).

Company Stock Options and Warrants. (a) At the Effective Time, each option all options and warrant granted by the Company to purchase shares of Company Common Stock, which is Warrants warrants then outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 1995 Incentive Stock Option Plans or Plan and the Officers' Contingent Stock Option 1996 Equity Participation Plan (collectively, the "COMPANY STOCK OPTION PLANSCompany Stock Option Plans") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into assumed by Parent in such manner that Parent is a corporation "assuming a stock option in a transaction to which section 424(a) applies" within the meaning of Section 424 of the Internal Revenue Code of 1986, as amended (the "Code"). The options and become rights with respect warrants assumed by Parent as provided above and the warrants issued to Parent Common StockWinStar Communications, Inc. and Parent Electronic Press Services, Inc. shall assume each Option, in accordance with be exercisable upon the same terms of and conditions as under the Company Stock Option Plan Plans and stock the option agreements and warrants issued thereunder and such warrants, except that each such option or warrant agreement by which it is evidenced, except that from and after the Effective Time, (iA) Parent and its Compensation Committee shall be substituted exercisable for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the that number of shares of Parent Common Stock subject to such Option shall be equal to the product of (i) the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option option or warrant immediately prior to the Effective Time multiplied by (ii) a fraction, the Exchange Ratio, and (iv) the per share exercise price under each such Option numerator of which shall be adjusted by dividing the per Per Share Amount and the denominator of which shall be $27 1/8 (with any fractional share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iiiParent Common Stock being disregarded) and (ivB) the exercise price per share of Parent Common Stock shall equal the first sentence exercise price per share of this SECTION 3.08(a)Company Common Stock theretofore in effect multiplied by a fraction, each Option the numerator of which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, $27 1/8 and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal denominator of such Option, within which shall be the meaning of Section 424(h) of the Code. (b) Prior to Per Share Amount. From and after the Effective Time, no additional options or warrants shall be granted under Company Stock Option Plans. In connection with the assumption of the options outstanding under Company Stock Option Plans, Parent shall use its reasonable best efforts to obtain all necessary consents effect such assumption in such a manner as to not affect the incentive stock option status of those options which are intended to be incentive stock options at the Effective Time. From the date hereof, Company shall not accelerate, or releases from holders take any action which would cause the acceleration of, the vesting of Options under any of the options outstanding under the Company Stock Option Plans by reason of the Offer or the Non-Employee Directors' Warrant Plan or otherwise Merger and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except any agreement providing for such action that may require the approval of the Company's stockholders)acceleration shall be rescinded.

Company Stock Options and Warrants. (a) At the Effective Time, each option then-outstanding Company Warrant shall be cancelled without the payment of cash or issuance of other securities in respect thereof. The cancellation of a Company Warrant as provided in the immediately preceding sentence shall be deemed a release of any and warrant granted by all rights the holder thereof had or may have had in respect of such Company to purchase shares of Company Common Stock, which is outstanding immediately prior thereto Warrant. (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS"b) or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at At the Effective Time, whether or not exercisableeach then-outstanding Company Stock Option, including unvested Company Stock Options, shall be converted into and become rights with respect to Parent Common Stockcancelled, and Parent shall assume each Option, (i) in accordance with the terms case of the any Company Stock Option Plan and stock option or warrant agreement by which it is evidencedhaving a per share exercise price less than the Merger Consideration, except that for the right to receive from and after the Surviving Corporation for each share of Common Stock subject to such Company Stock Option immediately prior to the Effective Time, an amount (isubject to any applicable withholding tax) Parent and its Compensation Committee shall be substituted for in cash equal to the Company and the Committee product of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iiiA) the number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (ivB) the amount by which the Merger Consideration exceeds the per share exercise price under each of such Company Stock Option shall be adjusted by dividing (the “Option Consideration”) or (ii) in the case of any Company Stock Option having a per share exercise price under each equal to or greater than the Merger Consideration, without the payment of cash or issuance of other securities in respect thereof. Parent shall, or shall cause the Company to, pay to holders of Company Stock Options the Option Consideration, without interest thereon, less applicable Taxes required to be withheld with respect to such payments pursuant to Section 2.7, as soon as reasonably practicable following the Effective Time. The cancellation of a Company Stock Option by as provided in the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first immediately preceding sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 deemed a release of any and all rights the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension holder thereof had or renewal may have had in respect of such Company Stock Option, within the meaning of Section 424(h) of the Code. (bc) Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Options under any of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action actions as may be necessary to give effect to the transactions contemplated by this Section 1.7, including, but not limited to, satisfaction of the requirements of Rule 16b-3(e) under the Exchange Act. (except d) Except as otherwise agreed to by the parties, (i) the Company Option Plans shall terminate as of the Effective Time and the provisions in any other plan, program or arrangement providing for such action the issuance or grant of any other interest in respect of the capital stock of the Company or any Subsidiary thereof shall be canceled as of the Effective Time and (ii) the Company shall ensure that may require following the approval Effective Time no participant in the Company Option Plans or other plans, programs or arrangements shall have any right thereunder to acquire any equity securities of the Company's stockholders), the Surviving Corporation or any Subsidiary thereof. (e) Prior to the Effective Time, the Company shall deliver to the holders of Company Stock Options notices, in form and substance reasonably acceptable to Parent, setting forth such holders’ rights pursuant to this Agreement. The Company Board (or, if appropriate, any committee thereof administering the Company Option Plans) shall adopt such resolutions or take such other actions as may be required to effect the foregoing.

Company Stock Options and Warrants. (a) At the Effective Time, each then outstanding and unexercised option and warrant granted by the Company to purchase shares of Company acquire LiveDeal Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 whether or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding not exercisable at the Effective Time, whether or not exercisable(collectively, shall the “LiveDeal Options”) will be converted into and become rights with respect assumed by YP. Each LiveDeal Option so assumed by YP under this Agreement will continue to Parent Common Stockhave, and Parent shall assume be subject to, the same terms and conditions to which the applicable LiveDeal Option is subject (including the terms and conditions set forth in any applicable stock option agreement or other document evidencing such LiveDeal Option) immediately prior to the Effective Time (including any repurchase rights or vesting provisions), except that (i) each Option, LiveDeal Option will be exercisable (or will become exercisable in accordance with the terms its terms) for that number of the Company Stock Option Plan and stock option or warrant agreement by which it is evidenced, except that from and after the Effective Time, (i) Parent and its Compensation Committee shall be substituted for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for whole shares of Parent YP Common Stock (or cash, if so provided under equal to the terms product of such Option), (iii) the number of shares of Parent LiveDeal Common Stock subject to that were issuable upon exercise of such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such LiveDeal Option immediately prior to the Effective Time (disregarding any vesting schedule applicable to such option) multiplied by the Common Exchange Ratio, rounded down to the nearest whole number of shares of YP Common Stock and (ivii) the per share exercise price under each for the shares of YP Common Stock issuable upon exercise of such assumed LiveDeal Option shall will be adjusted equal to the quotient determined by dividing the exercise price per share exercise price under each of LiveDeal Common Stock of such LiveDeal Option by the Common Exchange Ratio and rounding Ratio, rounded up to the nearest whole cent. Notwithstanding ; provided, however, that in the provisions case of clauses (iii) and (iv) any LiveDeal Option to which Section 421 of the first sentence Code applies by reason of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by its qualification under Section 424 422 of the Code, the option price, the number of shares subject to such option, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal terms and conditions of exercise of such Option, within option shall be determined in a manner consistent with the meaning requirements of Section 424(h424(a) of the Code. Each assumed LiveDeal Option shall be vested immediately following the Effective Time as to the same percentage of the total number of shares subject thereto as it was vested as to immediately prior to the Effective Time, except to the extent such LiveDeal Option (either by its terms or by the terms of another agreement) provides for acceleration of vesting in which case such LiveDeal Option shall be vested immediately following the Effective Time as to the total number of shares in accordance with such terms and provisions. As soon as reasonably practicable, YP will issue to each holder of an assumed LiveDeal Option a document evidencing the foregoing assumption of such LiveDeal Option by YP and setting forth the holder’s rights under the LiveDeal Options after giving effect to the adjustment required by this Section 1.6(a). (b) Prior to At the Effective Time, each then outstanding and unexercised warrant to acquire LiveDeal Common Stock, whether or not exercisable at the Company Effective Time, (collectively, the “LiveDeal Warrants”) will be assumed by YP. Each LiveDeal Warrant shall use its reasonable best efforts be subject to obtain adjustment in the same manner as the LiveDeal Options, as set forth in subsection (a) above. (c) YP has taken all corporate action necessary consents or releases from holders to reserve for issuance a sufficient number of Options under any shares of YP Common Stock for delivery upon exercise of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise LiveDeal Options and take all such other lawful action as may be necessary to give effect to the transactions contemplated by LiveDeal Warrants in accordance with this Section (except for such action that may require the approval of the Company's stockholders)1.6.

Company Stock Options and Warrants. (a) At the Effective Time, by virtue of the Merger and without any action on the part of the Merger Sub, the Company or the holders of any shares of the capital stock of the Company, (a) Each outstanding option to purchase Company Common Stock (each option a "COMPANY OPTION") issued pursuant to the Company's 1999 Equity Participation Plan, the Company's 1999 Employee Equity Participation and warrant granted Incentive Plan, the Amended and Restated Digital On-Demand, Inc. 1998 General Stock Incentive Plan and the Amended and Restated Digital On-Demand, Inc. 1998 Executive Stock Incentive Plan (each a "COMPANY OPTION PLAN"), whether vested or unvested, shall by virtue of the Merger and regardless of the respective exercise prices thereof, be assumed by Source. Each Company Option so assumed by Source under this Agreement (each such option, an "ASSUMED OPTION") will become exercisable in accordance with its terms, for that number of shares of Source Common Stock equal to the Exchange Ratio multiplied by the number of shares of Company Common Stock subject to such Company Option, rounded to the nearest whole number of shares. The per share exercise price of the Assumed Option will equal the per share exercise price of such Company Option, divided by the Exchange Ratio, rounded to the nearest whole cent. No cash will be paid in lieu of fractional shares that are rounded pursuant to this Section 3.3. Any Company Option exercisable prior to the Effective Time, in whole or in part, for Company Preferred Stock shall become exercisable for Source Common Stock in accordance with the preceding four sentences (as if the Company Preferred Stock underlying such Company Option has been converted to Company Common Stock in accordance with the conversion rate applicable to the shares of such series of Company Preferred Stock). Prior to the Effective Time, the Company shall take all actions necessary to pay out any cash amounts which are currently due to certain holders of Company Options. In connection with any spin-off or other distribution by the Company to purchase shares its stockholders of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992ownership interest in the Spinco Business, 1993 or 1996 Incentive Stock each Company Option Plans or the Officers' Contingent Stock Option Plan (collectivelywill be adjusted, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Optionif necessary, in accordance with the terms of the Company Stock Option Plan and stock or option or warrant agreement by under which it is evidenced, except that from and after the Effective Time, (i) Parent and its Compensation Committee shall was granted. Each Company Option Plan will be substituted for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such OptionSource in accordance with Section 7.12(c), (iii) the number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (b) Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain take all action necessary consents or releases from holders of Options under any of the Company Stock Option Plans or otherwise, to permit Source to assume the Non-Employee Directors' Warrant Plan Company Options and shall have provided any notices to optionees required under the Company Option Plans or otherwise other agreements. (b) The term, exercisability, vesting schedule, and all other terms of each Assumed Option will be the same in all material respects as the corresponding Company Option other than for the delivery of Source Common Stock and any adjustment in the number of shares issuable and the exercise price. Continuous employment with the Company will be credited to holders of Assumed Options received upon Source's assumption of Company Options for purposes of determining the vesting of such Assumed Options from and after the Effective Time except to the extent the holder is no longer employed by the Company prior to the Effective Time. (c) As soon as practicable after the Effective Time, Source shall deliver to each holder of an outstanding Assumed Option an appropriate document evidencing the assumption of the holder's Company Options by Source. Promptly after the Effective Time, but in no event later than thirty (30) days thereafter, Source shall file one or more registration statements on Form S-8 (or any successor form) with respect to the shares of Source Common Stock subject to such Assumed Options (to the extent such a registration statement is available for such options) and shall use commercially reasonable efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. Source shall take all such other lawful corporate action as may be necessary to give effect reserve for issuance a sufficient number of shares of Source Common Stock for delivery upon exercise of all Assumed Options pursuant to the transactions contemplated by terms set forth in this Section 3.3. (except for such action that may require d) At the approval Effective Time, each outstanding warrant to purchase shares of Company Capital Stock (each a "COMPANY STOCK WARRANT") shall by virtue of the Merger be assumed by Source. Each Company Stock Warrant so assumed by Source under this Agreement will continue to have, and be subject to, the same terms and conditions of such warrant immediately prior to the Effective Time, except that (i) each Company Stock Warrant will be exercisable for the number of shares of Source Common Stock equal to the Exchange Ratio multiplied by the number of shares of Company's stockholders).

Company Stock Options and Warrants. (a) a. At the Effective Time, except as otherwise provided in this SECTION 3.08, each option and warrant granted by the Company to purchase shares of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), shall be cancelled and retired and shall cease to exist and no consideration shall be delivered or deliverable in exchange therefor, except to the extent that (i) any such Option granted by the Company under to purchase shares of Company Common Stock has vested and is exercisable immediately prior to the Effective Time, whether as a result of the passing of time, the Merger or otherwise, or (ii) any such Option was granted pursuant to the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwiseand such option has not yet vested. In such event, which are outstanding at the Effective Timeeach holder of such an Option shall, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Optionindividually, in accordance with settlement thereof, receive from the terms of Surviving Corporation for each share subject to such an Option an amount (subject to any applicable back-up withholding taxes) in cash equal to the Company Stock Option Plan and stock option or warrant agreement by which it is evidenced, except that from and after the Effective Time, difference between: (i) Parent the Merger Consideration and its Compensation Committee shall be substituted for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cash, if so provided under the terms of such Option), (iii) the number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iv) the per share exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within to the meaning of Section 424(h) extent such difference is a positive number (the "OPTION CONSIDERATION"). b. Upon receipt of the CodeOption Consideration, the Option shall be cancelled. The surrender of an Option to the Surviving Corporation in exchange for the Option Consideration shall be deemed a release of any and all rights the holder had or may have had in respect of such Option. (b) c. Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Options under any of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of the Company's stockholders). Except as otherwise agreed to by the parties: (i) the Company Stock Option Plans shall terminate as of the Effective Time and the provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company shall be cancelled as of the Effective Time and (ii) the Company shall take all commercially reasonable action in an effort to provide that following the Effective Time no participant in any stock option plans or other plans, programs or arrangements shall have any right thereunder to acquire equity securities of the Company or the Surviving Corporation and to terminate all such plans.

Company Stock Options and Warrants. Except as set forth below, the terms and provisions of the Company Stock Option Plan (aas defined below) shall continue in full force and effect and shall govern each option (or portion of the option, as the case may be) outstanding immediately prior to the Effective Time under the Company Stock Option Plan, whether vested, unvested, exercisable or unexercisable (a "Company Stock Option"). At the Effective Time, each option and warrant granted by the Company to purchase shares of Company Common Stock, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms of the Company Stock Option Plan then outstanding and stock option each warrant or warrant agreement by which it is evidencedother right (other than the Company Preferred Stock) to receive Company Common Stock then outstanding (together with Company Stock Options, except that from and after the Effective Time, (i"Company Rights") Parent and its Compensation Committee shall be substituted for the Company and the Committee of the Company's Board of Directors automatically converted, without any further action, into an option, warrant or right to purchase or acquire Parent Shares (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of a "Parent Common Stock (or cash, if so provided under the terms of such OptionRight"), (iii) the . The number of shares of Parent Common Stock subject to such Option Shares for which each Company Right shall be exercisable shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock that were subject to such Option the Company Right immediately prior to the Effective Time multiplied by the Exchange RatioRatio rounded down to the nearest whole number of Parent Shares, and (iv) at an exercise price per Parent Share equal to the per share exercise price under of each such Option shall be adjusted by dividing Company Right immediately prior to the per share exercise price under each such Option Effective Time divided by the Exchange Ratio and rounding rounded up to the nearest whole cent, subject to the receipt of consent from each holder of Company Options. Notwithstanding the provisions of clauses (iii) and (iv) Any Company Stock Options converted into options to purchase Parent Shares, other than Company Stock Options held by persons who are not employees of the first sentence Company as of the date of this SECTION 3.08(aAgreement and who are identified on Schedule 4.1(e), together with the number of options held by each Option which is an such person (the "incentive stock option" Non-Employee Company Stock Options"), shall be adjusted as required to vest in sixteen (16) equal quarterly installments at the end of each calendar quarter over forty-eight (48) months from date of grant to the extent the optionee has been continuously employed by Section 424 Parent until such vesting date, subject, in the case of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of each such Company Stock Option, within to the meaning receipt of Section 424(h) of the Code. (b) Prior to consent from its holder. All Non-Employee Company Stock Options shall accelerate and become fully vested immediately upon the Effective Time, subject, in the case of each such Non-Employee Company shall use Stock Option, to the receipt of consent from its reasonable best efforts to obtain all necessary consents or releases from holders holder. For purposes of Options under any of this Agreement, the term "Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of Plan" means the Company's stockholders)1998 Stock Option Plan and the Company's 2000 Stock Option Plan. Parent shall use all reasonable efforts to cause to be reserved for issuance the number of Parent Shares issuable upon exercise of the Parent Common Stock Options and rights to acquire Parent Common Stock issued in exchange for Company Rights referred to in this Section 4.1(e) and, Parent shall cause to be filed, as soon as reasonably practicable after the Effective Time but in no event later than sixty (60) days after the Effective Time, a registration statement on Form S-8 (or any successor or other appropriate form) under the Securities Act, or an amendment to an existing registration statement of Form S-8, to register the Parent Shares issuable upon exercise of the Parent Common Stock Options.

Company Stock Options and Warrants. (a) At the Effective Time, each option and warrant granted by the : (a) Each Company to purchase shares of Company Common Stock, which Stock Option that is outstanding and unexercised immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at to the Effective Time, whether or not exercisablevested, shall be converted into and become an option to purchase Parent Common Stock (a “New Company Option”) as set forth in this Section 1.10, and Parent shall assume such Company Stock Option in accordance with the terms of the Company’s 2011 Equity Incentive Plan (the “Company Option Plan”) and the terms of the agreement under which such Company Stock Option was issued (except that the call feature of such Company Stock Option shall cease to be of any force and effect), except that the form of the New Company Option shall be substantially similar to the Series 2 Warrant (as defined below). All rights with respect to Company Common Stock under Company Stock Options assumed by Parent shall thereupon be converted into rights with respect to Parent Common Stock. Accordingly, and Parent shall assume each Option, in accordance with the terms of the Company Stock Option Plan and stock option or warrant agreement by which it is evidenced, except that from and after the Effective Time, : (i) Parent and its Compensation Committee shall be substituted for the Company and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the each Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock Stock; (or cash, if so provided under the terms of such Option), (iiiii) the number of shares of Parent Common Stock subject to such each Company Stock Option assumed by Parent shall be equal to determined by multiplying the number of whole shares (rounded down of Company Common Stock that were subject to such Company Stock Option immediately prior to the nearest whole shareEffective Time by the Common Stock Exchange Ratio, and rounding the resulting number in accordance with Section 1.14 hereof; (iii) the per share exercise price for the Parent Common Stock issuable upon exercise of each Company Stock Option assumed by Parent shall be determined by dividing the per share exercise price of Company Common Stock subject to such Option Company Stock Option, as in effect immediately prior to the Effective Time multiplied Time, by the Common Stock Exchange Ratio, and (iv) rounding the per share resulting exercise price under each such Option shall be adjusted by dividing the per share exercise price under each such Option by the Exchange Ratio and rounding up to the nearest whole cent. Notwithstanding the provisions of clauses (iii) ; and (iv) any restriction on the exercise of any Company Stock Option assumed by Parent shall continue in full force and effect and the term, exercisability, vesting schedule and other provisions of such Company Stock Option shall otherwise remain unchanged as a result of the first sentence assumption of such Company Stock Option; provided, however, that the board of directors of Parent 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 Stock Option assumed by Parent. Prior to the Effective Time, the Company and Parent shall take all action that may be necessary (under the Company Stock Plans and otherwise) to effectuate the provisions of this SECTION 3.08(aSection 1.10(a) and to ensure that, from and after the Effective Time, holders of Company Stock Options have no rights with respect thereto other than those specifically provided in this Section 1.10(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (b) The Company Warrant that is outstanding and unexercised immediately prior to the Effective Time, shall be exchanged for 250,000 shares of Parent Common Stock and 850,000 warrants to purchase 850,000 shares of Parent Common Stock with an exercise price of $1.76 per share (“New Company Warrant”), with the form of the New Company Warrant to be in the form of the Series 2 Warrant. Prior to the Effective Time, the Company shall use its reasonable best efforts to obtain all necessary consents or releases from holders of Options under any of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be actions necessary or reasonably requested by Parent (including obtaining any necessary consents) to give effect to effectuate the transactions contemplated by provisions of this Section (except for such action that may require the approval of the Company's stockholders1.10(b).

Company Stock Options and Warrants. (a) At the Effective Time, the 2003 Plan and each outstanding option and warrant granted by the Company to purchase shares of Company Common StockStock (each, which is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the a “Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS"Option”) or the Non-Employee Directors' Warrant Plan thereunder or otherwise, whether or not vested, shall, by virtue of the Merger, be assumed by Parent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such options immediately prior to the Effective Time (including, without limitation, any repurchase rights or vesting provisions and provisions regarding the acceleration of vesting and exercisability on certain transactions), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock as determined by multiplying the number of shares of Company Common Stock that were subject to such Company Stock Option immediately prior to the Effective Time by the Common Stock Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Parent Common Stock , and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be determined by dividing the exercise price per share of Company Common Stock at which are outstanding at such Company Stock Option was exercisable immediately prior to the Effective Time, whether or not exercisableby the Common Stock Exchange Ratio, and rounding the resulting exercise price up to the nearest whole cent and that such number of shares of Parent Common Stock and exercise price shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, determined in accordance a manner consistent with the terms requirements of Sections 409A and 424 of the Code. No vesting periods for Company Stock Option Plan and stock option or warrant agreement by which it is evidenced, except that from and after Options will accelerate as a result of the transaction contemplated hereby. At the Effective Time, (i) all references in the 2003 Plan and related stock option agreements to the Company shall be deemed to refer to Parent and its Compensation Committee (ii) Parent shall be substituted for assume all of Company’s obligations with respect to the 2003 Plan and Company and Stock Options as so amended. (b) At the Committee Effective Time, each outstanding warrant to purchase shares of Company Common Stock (each, a “Warrant”), whether or not vested, shall, by virtue of the Company's Board Merger, be assumed by Parent. Each Warrant so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of Directors such Warrant immediately prior to the Effective Time (including, if applicablewithout limitation, any repurchase rights or vesting provisions and provisions regarding the entire Board acceleration of Directors of the Company) administering such the Company Stock Option Planvesting and exercisability on certain transactions), except that (iii) each Option assumed by Parent may Warrant will be exercised solely exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock (or cashas determined by multiplying the number of shares of Company Common Stock that were subject to such Warrant immediately prior to the Effective Time by the Common Stock Exchange Ratio, if so provided under and rounding the terms of such Option), (iii) resulting number down to the nearest whole number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) of Company Common Stock subject to such Option immediately prior to the Effective Time multiplied by the Exchange RatioStock, and (ivii) the per share exercise price under each for the shares of Parent Common Stock issuable upon exercise of such Option shall assumed Warrant will be adjusted determined by dividing the exercise price per share exercise price under each of Company Common Stock at which such Option by the Exchange Ratio and rounding up to the nearest cent. Notwithstanding the provisions of clauses (iii) and (iv) of the first sentence of this SECTION 3.08(a), each Option which is an "incentive stock option" shall be adjusted as required by Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (b) Prior Warrant was exercisable immediately prior to the Effective Time, by the Common Stock Exchange Ratio, and rounding the resulting exercise price up to the nearest whole cent. No vesting periods for any Warrants will accelerate as a result of the transaction contemplated hereby. At the Effective Time, (i) all references in the related stock warrant agreements to the Company shall use its reasonable best efforts be deemed to obtain refer to Parent and (ii) Parent shall assume all necessary consents or releases from holders of Options under any of the Company Stock Option Plans or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of the Company's stockholders)’s obligations with respect to the Warrants as so amended.

Company Stock Options and Warrants. (a) At Effective as of the Effective Time, each option and warrant granted by the Company to purchase shares of Stock Option Plans and each Company Common Stock, which Option that is outstanding immediately prior thereto (an "OPTION" or, collectively, the "OPTIONS"), granted by the Company under the Company's 1992, 1993 or 1996 Incentive Stock Option Plans or the Officers' Contingent Stock Option Plan (collectively, the "COMPANY STOCK OPTION PLANS") or the Non-Employee Directors' Warrant Plan or otherwise, which are outstanding at to the Effective Time, whether or not exercisablethen exercisable or vested, shall be converted into and become rights with respect to Parent Common Stock, and Parent shall assume each Option, in accordance with the terms assumed by Parent. As of the Company Stock Option Plan and stock option or warrant agreement by which it is evidenced, except that from and after the Effective Time, (i) Parent each Company Option shall cease to represent a right to acquire shares of Company Common Stock and its Compensation Committee shall be substituted for the Company converted automatically into a right to acquire cash and the Committee of the Company's Board of Directors (including, if applicable, the entire Board of Directors of the Company) administering such the Company Stock Option Plan, (ii) each Option assumed by Parent may be exercised solely for shares of Parent Common Stock (or cashin an amount, if at an exercise price and subject to such terms and conditions determined as provided below. Subject to the accelerated vesting of Company Options as described in Schedule 2.3(b) of the Company Disclosure Letter, each Company Option so provided assumed by Parent shall be subject to, and exercisable and vested upon, substantially the same terms and conditions as under the terms applicable Company Stock Option Plans, including the maximum term of such Option)the Company Option and the provisions regarding termination of the Company Option following a termination of employment, except that (iiii) each assumed Company Option shall be exercisable for, and represent the right to acquire (A) that number of shares of Parent Common Stock subject to such Option shall be equal to the number of whole shares (rounded down to the nearest whole share) equal to (1) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by (2) the Exchange RatioPer Share Stock Merger Consideration, plus (B) an amount of cash, without interest, equal to (1) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time multiplied by (2) the Per Share Cash Merger Consideration, if any; and (ivii) the exercise price per share of Parent Common Stock subject to each assumed Company Option (and any associated cash consideration) shall be an amount equal to (1) the exercise price under each such Option shall be adjusted by dividing the per share exercise price under each of Company Common Stock subject to such Company Option by the Exchange Ratio and rounding up in effect immediately prior to the nearest cent. Notwithstanding Effective Time divided by (2) the provisions sum of clauses the Per Share Stock Merger Consideration and the Stock Equivalent Cash Consideration; and (iii) references under the Company Option to a termination of employment shall mean, on and after the Effective Time, a termination of employment with the Surviving Entity or any AngioDynamics Corporation. (ivb) The Company's Board of Directors, or its duly appointed committee to administer the Company Stock Option Plans, shall adopt resolutions and the Company and the Company's Board of Directors shall take all such other actions as may be necessary or appropriate, effective contingent upon the consummation of the first sentence transactions contemplated hereby, immediately prior to the Closing Date, to provide for the application of this SECTION 3.08(a)Section 5.4(a) to the Company Stock Option Plans and the Company Options outstanding as of immediately prior to the Effective Time, each Option which is an "incentive stock option" including, without limitation, obtaining all necessary consents. (c) The conversion of Company Options provided for in Section 5.4(a) shall be adjusted as required by effected in a manner consistent with Section 424 of the Code, and the regulations promulgated thereunder, so as not to constitute a modification, extension or renewal of such Option, within the meaning of Section 424(h) of the Code. (bd) Prior As of the Effective Time, Parent shall, to the full extent permitted by applicable law, assume all of the Company Warrants identified on Schedule 2.3(c) of the Company Disclosure Letter and outstanding immediately prior to the Effective Time. Each Company Warrant shall, to the full extent permitted by applicable law, be assumed by Parent in such a manner that it shall be exercisable upon the same terms and conditions as under each Company Warrant pursuant to which it was issued; provided that (i) each Company Warrant so assumed shall be exercisable for, and represent the right to acquire (A) that number of shares of Parent Common Stock (rounded down to the nearest whole share) equal to (1) the number of shares of Company Common Stock subject to such Company Warrant immediately prior to the Effective Time multiplied by (2) the Per Share Stock Merger Consideration, plus (B) an amount of cash equal to (1) the number of shares of Company Common Stock subject to such Company Warrant immediately prior to the Effective Time multiplied by (2) the Per Share Cash Merger Consideration, if any; and (ii) the exercise price per share of Parent Common Stock subject to each assumed Company Warrant (and any associated cash consideration) shall be an amount equal to (1) the exercise price per share of Company Common Stock subject to such Company Warrant in effect immediately prior to the Effective Time divided by (2) the sum of the Per Share Stock Merger Consideration and the Stock Equivalent Cash Consideration. (e) As of the Effective Time, the Company shall use its reasonable best efforts take all actions necessary or appropriate as required pursuant to obtain all necessary consents or releases from holders of Options under any the terms of the Company Stock Option Plans ESPP so that each Purchase Period and Offering Period (each as defined in the Company ESPP) then in progress under the ESPP shall terminate no later than the Effective Time and each option thereunder shall be automatically exercised on or the Non-Employee Directors' Warrant Plan or otherwise and take all such other lawful action as may be necessary to give effect to the transactions contemplated by this Section (except for such action that may require the approval of the Company's stockholders)prior thereto.