Common use of Options and Warrants Clause in Contracts

Options and Warrants. (i) At the Effective Time, the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole cent.

Options and Warrants. (ia) At the Effective Time, the Company each option to purchase shares of Li3 Common Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options which is outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"each, a “Li3 Option”), whether vested or unvested, shall cease to represent a right to acquire shares of Li3 Common Stock and shall be assumed by Parent and thereafter constitute converted, at the Effective Time, into a right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(cacquire Ordinary Shares (a “Converted Option”). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, on the same contractual terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as were in effect immediately prior to the Effective Time, except that (i) Time under the terms of the Li3 Option or other related agreement or award pursuant to which such option will be exercisable for that Li3 Option was granted. The number of whole shares of Parent Common Stock equal Ordinary Shares subject to the product of the number of shares of Company Common Stock that were issuable upon exercise of each such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will Converted Option shall be equal to the quotient determined by dividing (1) Ordinary Share for every two hundred and fifty (250) shares of Li3 Common Stock underlying each such Li3 Option. Each Converted Option shall have an exercise price per share equal to the exercise price per share of Company Li3 Common Stock at which such option was exercisable immediately prior Stock, subject to the Effective Time by the Exchange Ratio, . Any portion of a Li3 Option exercisable for a fractional share of Ordinary Shares shall be rounded up to the next nearest whole centnumber. (iiib) At the Effective Time, each warrant to acquire purchase shares of Company Capital Li3 Common Stock (each a "Company Warrant") which is outstanding immediately prior to the Effective Time (each, a “Li3 Warrant”), shall cease to represent a right to acquire shares of Li3 Common Stock and shall be converted converted, at the Effective Time, into a right to acquire Ordinary Shares (a “Converted Warrant”), on the same contractual terms and exchanged for warrants to purchase such number of shares of Parent Common Stock conditions as shall be equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants in effect immediately prior to the Effective Time under the terms of the Li3 Warrant or other related agreement or award pursuant to which such Li3 Warrant was granted. The number of Ordinary Shares subject to each such Converted Warrant shall be equal to (1) Ordinary Share for every two hundred and fifty (b250) shares of Li3 Common Stock underlying each such Li3 Warrant. Each Converted Warrant shall have an exercise price per share equal to the exercise price per share of Li3 Common Stock, subject to the Exchange Ratio, such product to . Any portion of a Li3 Warrant exercisable for a fractional share of Ordinary Shares shall be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next nearest whole centnumber.

Options and Warrants. (i) At the Effective TimeTime and subject to Section 7.9, each option and warrant granted by the Company to purchase shares of the Company's Stock Option Plan(each, as amended a "Company Option" or a "Company Warrant") which is outstanding and exercisable immediately prior thereto shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option or warrant (the "Exchanged Option" or "Exchange Warrant") to purchase shares of Parent Common Stock exercisable until the current termination of the Company Option or Company Warrant, as the case may be, without accelerated termination by virtue of the Merger and in an amount and at an exercise price determined as provided below (and subject to the terms of the Company's 1995 Stock Option Plan")Inventive Plan or the terms of the option issued to Xxxx Xxxxxx in connection with the Company's acquisition of Cal Emblem, and all options outstanding under the Company Stock Option Plan immediately prior agreements evidencing such grants, including but not limited to the Effective Time accelerated vesting of any such options or warrants which shall occur by virtue of the consummation of the Merger to the extent required by such plans and agreements): ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such a) The number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will converted options and warrants shall be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior subject to the Effective Time multiplied by original options or warrants and the Exchange Ratio and rounded down to the next whole number of shares of Parent Common StockRatio, and (ii) the per share exercise price for the provided that any fractional shares of Parent Common Stock issuable upon resulting from such multiplication shall be rounded down to the nearest share; and (b) The exercise price per share of such assumed Parent Common Stock under the converted option will or warrant shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such under the original option was exercisable immediately prior to the Effective Time or warrant divided by the Exchange Ratio, provided that such exercise price shall be rounded up out to the next whole nearest cent. (iiic) At Parent shall (i) reserve for issuance the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock that will become issuable upon the exercise of the Exchanged Options and the Exchanged Warrants and (ii) promptly after the Effective Time, issue to each holder of an Exchanged Option and Exchanged Warrant a document evidencing Parent's assumption of the Company's obligations under the Company Options and Company Warrants. The Exchanged Options and the Exchanged Warrants shall have the same terms and conditions as shall be equal the Company Options and the Company Warrants, respectively. In the case of any converted options which are intended to qualify as "incentive stock options" (as defined in Section 422 of the product Internal Revenue Code of 1986, as amended (a) the "Code")), the exercise price, the number of shares purchasable pursuant to such options and the terms and conditions of Company Common Stock that were issuable upon exercise of such options shall be determined in order to comply with Section 424(a) of the Code. The duration and other terms of the converted option shall be the same as the original option except that all references to Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product shall be deemed to be rounded down references to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centParent.

Options and Warrants. (ia) At As of the Effective Time, the all outstanding Company Stock Option Plan, Options (as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")defined below) that remain unexercised, whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive shall be converted into options to purchase shares of Parent Common Stock (“Parent Options”) without further action by the holder thereof. Each Parent Option as so assumed and converted shall constitute an option to acquire such number of shares of Parent Common Stock determined as is equal to the number of shares of Company Common Stock subject to the Company Option immediately prior to the Effective Time multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded down to the nearest whole number). The exercise price per share of each Parent Option as so assumed and converted shall be equal to the exercise price of the Company Option prior to the assumption divided by the Conversion Ratio (rounded down to the nearest whole cent). Except as otherwise provided in accordance with this Section 1.6(c1.8(a). (ii) Each such option , each Parent Option as so assumed by Parent under this Agreement and converted shall continue to have, and shall be subject to, the same terms and conditions set forth as applied to the Company Option immediately prior to the Effective Time (but taking into account any changes thereto provided for in the applicable Company Stock Option Equity Plan and in any award agreement or in such Company Option by reason of this Agreement) and the applicable stock option agreement vesting schedule shall be the same as in effect that of the Company Option immediately prior to the Effective Time, except that . (ib) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior Prior to the Effective Time multiplied Time, the Company shall adopt such resolutions as are necessary to effect the treatment of the Company Options as contemplated by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) this Section 1.8. At the Effective Time, the Parent shall assume all obligations of the Company under the applicable Company Equity Plan, each warrant outstanding Company Option, and the agreements evidencing the grants thereof and shall administer and honor all such awards in accordance with the terms and conditions of such awards and the applicable Company Equity Plan (subject to the adjustments required by reason of this Agreement or such other adjustments or amendments made by Parent in accordance with such terms and conditions). (c) As of the Effective Time, all outstanding Company Warrants (as defined below) that remain unexercised shall terminate as of the Effective Date, and the Parent shall issue new warrants (the “Parent Warrants”) in substitution for the Company Warrants, on the same terms and conditions of the Company Warrants, but representing the right to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be is equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise or Company Preferred Stock, as the case may be, subject to the unexercised portion of the Company Warrant multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded up or down to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number (unless such Company Warrant provides for different treatment of fractions of a share in such circumstance, in which case the terms of such Company Warrants immediately Warrant pertaining to the treatment of a fraction of a cent shall control)). The exercise price per share of each Parent Warrant shall be equal to the exercise price of the Company Warrant prior to substitution divided by the Effective Time and Conversion Ratio (b) the Exchange Ratio, such product to be rounded down to the next nearest whole cent, and with $0.005 rounded upward to the nearest whole cent (unless such Company Warrant provides for different treatment of fractions of a cent in such circumstance, in which case the terms of such Company Warrant pertaining to the treatment of a fraction of a cent shall control)). (d) The Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock. The per share Stock for delivery upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (ai) the per share exercise price of assumed and converted Parent Options and (ii) the Parent Warrants to be issued for the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centWarrants, in accordance with this Section 1.8.

Options and Warrants. (i) At As of the Effective Time, the each outstanding option, warrant or other right to acquire shares of Company Common Stock Option Planthen outstanding (each, as amended (the a "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company OptionsOption"), whether vested or unvestednot then exercisable, shall be assumed by Parent and thereafter constitute the converted into an option, warrant or other right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c2.01(d). (ii) . Each such option Company Stock Option so assumed by Parent under this Agreement converted shall continue to have, and be subject to, the same material terms and conditions (including vesting schedule) as set forth in the applicable agreement pursuant to which such Company Stock Option Plan and the applicable stock option agreement as in effect was issued immediately prior to the Effective Time, except that that, as of the Effective Time, (i) such option will each Company Stock Option shall be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of subject to such option Company Stock Option immediately prior to the Effective Time multiplied by the Exchange Ratio and 0.0472, rounded down to the next nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the shares each share of Parent Common Stock issuable upon exercise of such assumed option will subject to each Company Stock Option so converted shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option Company Stock Option was exercisable immediately prior to the Effective Time by the Exchange Ratio0.0472, rounded up to the next nearest whole cent. (iii. The Company shall use its reasonable best efforts to obtain all consents necessary to allow for the conversion of the Company Stock Options as provided in this Section 2.01(d), which consents are set forth in Section 2.01(d) At of the Effective Time, each warrant to acquire Company Disclosure Letter. To the extent any shares of Company Capital Common Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase such number of agreement or other agreement with the Company or under which the Company has any rights, then the shares of Parent Common Stock as shall be equal to the product of (a) the number of issued in exchange for such shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior will also be unvested and subject to the Effective Time same repurchase option, risk of forfeiture or other condition, and (b) the Exchange Ratio, certificates representing such product to be rounded down to the next whole number of shares of Parent Common StockStock may accordingly be marked with appropriate legends. The per share exercise price No later than 30 days following the filing of each Company Warrant its first Annual Report on Form 10-K after the Effective Time, Parent shall equal file a registration statement on Form S-8 (or any successor or, including if Form S-8 is not available, other appropriate forms) with respect to the quotient obtained shares of Parent Common Stock subject to such options assumed by dividing Parent in accordance with this Section 2.01 (ad) and shall use commercially reasonable efforts to maintain the per share exercise price effectiveness of such registration statement or registration statements (and maintain the current status of the Company Warrant at which prospectus or prospectuses contained therein) for so long as such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centoptions awards remain outstanding.

Options and Warrants. (ia) At As of the Effective Time, the all outstanding Company Stock Option Plan, Options (as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")defined below) that remain unexercised, whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive shall be converted into options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii“Parent Options”) without further action by the holder thereof. Each such option Parent Option as so assumed by Parent under this Agreement and converted shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock constitute an option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be is equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior subject to the Effective Time and unexercised portion of the Company Option multiplied by the Applicable Conversion Ratio for Company Common Stock (b) the Exchange Ratio, with any fraction resulting from such product multiplication to be rounded down to the next nearest whole number). The exercise price per share of each Parent Option as so assumed and converted shall be equal to the exercise price of the Company Option prior to the assumption divided by the Applicable Conversion Ratio (rounded up to the nearest whole cent), and the vesting schedule shall be the same as that of the Company Option that is converted into the Parent Option. (b) Prior to the Effective Time, the Company shall adopt such resolutions as are necessary to effect the treatment of the Company Options as contemplated by this Section 1.8. At the Effective Time, the Parent shall assume all obligations of the Company under the applicable Company Equity Plan, each outstanding Company Option, and the agreements evidencing the grants thereof and shall administer and honor all such awards in accordance with the terms and conditions of such awards and the applicable Company Equity Plan (subject to the adjustments required by reason of this Agreement or such other adjustments or amendments made by Parent in accordance with such terms and conditions). Following the Closing, the Company shall notify each holder of the conversion of Company Options into Parent Options. (c) As of the Effective Time, all outstanding Company Warrants (as defined below) that remain unexercised shall be assumed by Parent and shall be converted into warrants to purchase shares of Parent Common Stock (the “Parent Warrants”) in substitution for the Company Warrants, on substantially the same terms and conditions of the Company Warrants, but representing the right to acquire such number of shares of Parent Common Stock as is equal to the number of shares of Company Common Stock or Company Preferred Stock, as the case may be, subject to the unexercised portion of the Company Warrant multiplied by the Applicable Conversion Ratio for the class or series of Company Stock for which such Company Warrant is exercisable (with any fraction resulting from such multiplication to be rounded up or down to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number (unless such Company Warrant provides for different treatment of fractions of a share in such circumstance, in which case the terms of such Company Warrant pertaining to the treatment of a fraction of a cent shall control)). The exercise price per share exercise price of each Company Parent Warrant shall be equal to the quotient obtained by dividing (a) the per share exercise price of the Warrant prior to substitution divided by the Applicable Conversion Ratio (rounded to the nearest whole cent, and with $0.005 rounded upward to the nearest whole cent (unless such Company Warrant at provides for different treatment of fractions of a cent in such circumstance, in which case the terms of such warrant was exercisable immediately prior Company Warrant pertaining to the Effective Time by treatment of a fraction of a cent shall control)). (bd) The 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 (i) the Exchange Ratio rounded up Parent Options to be issued for the next whole centCompany Options and (ii) the Parent Warrants to be issued for the Company Warrants, in accordance with this Section 1.8.

Options and Warrants. (ia) At As of the Effective Time, all Options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvested, shall be assumed by Parent canceled and thereafter constitute the right to receive exchanged for options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii“New Options”) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied without further action by the Exchange Ratio and rounded down to the next 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 holder thereof. The New Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be is equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior Shares subject to the Effective Time and unexercised portion of the Old Option multiplied by the Common Conversion Ratio (b) the Exchange Ratio, with any fraction resulting from such product multiplication to be rounded down to the next nearest whole number). The exercise price per share of each New Option shall be equal to $1.00. The New Options shall be granted under Parent’s 2006 Stock Option Plan (the “Parent Option Plan”) and that plan’s terms, exercisability, vesting schedule, and status as an “incentive stock option” under Section 422 of the Code, if applicable. (b) As of the Effective Time, all Company Class B Warrants to purchase Company Class B Shares, whether vested or unvested, shall be canceled and exchanged for New Warrants without further action by the holder thereof. The New Warrant shall constitute a warrant to acquire such number of shares of Parent Common Stock. The per share exercise price Stock as is equal to the number of each Company Warrant shall equal Shares subject to the quotient obtained by dividing (a) the per share exercise price unexercised portion of the Company Class B Warrant at which such warrant was exercisable immediately prior and shall be on the same terms and conditions as the Company Class B Warrant. As such, the exercise price per share of each New Warrant shall be equal to $1.50. (c) As soon as practicable after the Effective Time by Time, the Parent or the Surviving Corporation shall take appropriate actions to collect the Options and the agreements evidencing the Options, and the Company Class B Warrants, which shall be deemed to be canceled and shall entitle the holder to exchange the Options for New Options, and the Company Class B Warrants for New Warrants in the Parent. (bd) The 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 the Exchange Ratio rounded up New Options to be exchanged for Old Options and the next whole centNew Warrants to be exchanged for the Company Class B Warrants in accordance with this Section 1.8. (e) The Company shall cause the termination, as of the Effective Time, of any and all outstanding Warrants to purchase capital stock of the Company which remain unexercised, other than any Company Class B Warrants issued in connection with the Private Placement Offering.

Options and Warrants. (i) At the Effective TimeTime and subject to Section 7.9, each option and warrant granted by the Company to purchase shares of the Company's Stock Option Plan(each, as amended a "Company Option" or a "Company Warrant") which is outstanding and exercisable immediately prior thereto shall cease to represent a right to acquire shares of Company Common Stock and shall be converted automatically into an option or warrant (the "Exchanged Option" or "Exchange Warrant") to purchase shares of Parent Common Stock exercisable until the current termination of the Company Option or Company Warrant, as the case may be, without accelerated termination by virtue of the Merger and in an amount and at an exercise price determined as provided below (and subject to the terms of the Company's 1995 Stock Option Plan")Inventive Plan or the terms of the option issued to John Xxxxxx xx connection with the Company's acquisition of Cal Emblem, and all options outstanding under the Company Stock Option Plan immediately prior agreements evidencing such grants, including but not limited to the Effective Time accelerated vesting of any such options or warrants which shall occur by virtue of the consummation of the Merger to the extent required by such plans and agreements): ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such a) The number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will converted options and warrants shall be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior subject to the Effective Time multiplied by original options or warrants and the Exchange Ratio and rounded down to the next whole number of shares of Parent Common StockRatio, and (ii) the per share exercise price for the provided that any fractional shares of Parent Common Stock issuable upon resulting from such multiplication shall be rounded down to the nearest share; and (b) The exercise price per share of such assumed Parent Common Stock under the converted option will or warrant shall be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such under the original option was exercisable immediately prior to the Effective Time or warrant divided by the Exchange Ratio, provided that such exercise price shall be rounded up out to the next whole nearest cent. (iiic) At Parent shall (i) reserve for issuance the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock that will become issuable upon the exercise of the Exchanged Options and the Exchanged Warrants and (ii) promptly after the Effective Time, issue to each holder of an Exchanged Option and Exchanged Warrant a document evidencing Parent's assumption of the Company's obligations under the Company Options and Company Warrants. The Exchanged Options and the Exchanged Warrants shall have the same terms and conditions as shall be equal the Company Options and the Company Warrants, respectively. 12 In the case of any converted options which are intended to qualify as "incentive stock options" (as defined in Section 422 of the product Internal Revenue Code of 1986, as amended (a) the "Code")), the exercise price, the number of shares purchasable pursuant to such options and the terms and conditions of Company Common Stock that were issuable upon exercise of such options shall be determined in order to comply with Section 424(a) of the Code. The duration and other terms of the converted option shall be the same as the original option except that all references to Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product shall be deemed to be rounded down references to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centParent.

Options and Warrants. (ia) At the Effective Time, the each Company Stock Option Plan, as amended (the "Company Stock Option Plan"), that is outstanding and all options outstanding under the Company Stock Option Plan unexercised immediately prior to the Effective Time ("under the Company Options")Incentive Plan, whether vested or unvestednot vested, shall be converted into and become an option to purchase Parent Common Stock, and Parent shall assume the Company Incentive Plan (if necessary) and each such Company Option in accordance with the terms (as in effect as of the date of this Agreement) of the Company Incentive Plan and the terms of the stock option agreement by which such Company Option is evidenced (but with changes to such documents as Parent in good faith determines are appropriate to reflect the substitution of the Company Options by Parent to purchase shares of Parent Common Stock). All rights, terms, and restrictions with respect to Company Common Stock under Company Options assumed by Parent shall thereupon be converted into rights with respect to Parent Common Stock. Accordingly, from and thereafter constitute after the right to receive options to purchase such Effective Time: (i) each Company Option assumed by Parent may be exercised solely for shares of Parent Common Stock; (ii) the number of shares of Parent Common Stock subject to each Company Option assumed by Parent shall be determined in accordance with this the Allocation Certificate as provided in Section 1.6(c). 5.15; (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next whole number of shares of Parent Common Stock, and (iiiii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of each Company Option assumed by Parent shall be determined in accordance with the Allocation Certificate as provided in Section 5.15; and (iv) any restriction on the exercise of any Company Option assumed by Parent shall continue in full force and effect and the term, exercisability, vesting schedule, and other provisions of such Company Option shall otherwise remain unchanged; provided, however, that: (A) the determination in the Allocation Certificate of the number of shares of Parent Common Stock subject to each Company Option assumed option will by Parent shall be equal based on the same ratio as that applied to the quotient determined by dividing Company Common Stock to determine the exercise price per share number of shares of Parent Common Stock each holder of Company Common Stock at which shall receive; (B) the determination in the Allocation Certificate of the per share exercise price for the Parent Common Stock issuable upon exercise of each Company Option assumed by Parent shall be adjusted equitably to reflect the ratio described in clause (A); (C) to the extent provided under the terms of the respective stock option agreements governing the Company Options and the Company Incentive Plan, Parent may amend the terms of the Company Options and the Company Incentive Plan, in accordance with the terms thereof, to reflect Parent’s substitution of the Company Options with options to purchase Parent Common Stock (such option was exercisable immediately prior as by making any change in control or similar definition relate to Parent and having any provision that provides for the adjustment of Company Options upon the occurrence of certain corporate events relate to corporate events that relate to Parent and/or Parent Common Stock), and such Company Options shall be subject to further adjustment as appropriate and necessary to reflect any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization, or other similar transaction with respect to Parent Common Stock subsequent to the Effective Time by Time; and (D) the Exchange Ratio, rounded up Parent Board or a committee thereof shall succeed to the next whole centauthority and responsibility of the Company Board or any committee thereof with respect to each Company Option assumed by Parent. Each Company Option so assumed by Parent is a nonqualified stock option (that is, an option that is not intended to qualify as an incentive stock option as defined in Section 422 of the Code), and, further, the assumption of such Company Option pursuant to this Section 5.5(a) shall be effected in a manner that satisfies the requirements of Section 409A of the Code and the Treasury Regulations promulgated thereunder (including the applicable portions of Treasury Regulation Section 1.424-1 as applied under Treasury Regulation Section 1.409A-1(b)(5)(v)(D)), and this Section 5.5(a) will be construed consistent with this intent. (iiib) Parent shall file with the SEC, promptly, but no later than thirty (30) calendar days, after the Effective Time, a registration statement on Form S-8 (or any successor form), if available for use by Parent, relating to the shares of Parent Common Stock that are issuable with respect to Company Options assumed by Parent in accordance with Section 5.5(a). (c) At the Effective Time, each warrant to acquire shares Company Warrant that is outstanding and unexercised as of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time Time, if any, shall be converted into and exchanged for warrants become a warrant to purchase Parent Common Stock and Parent shall assume each such Company Warrant in accordance with its terms. All rights with respect to Company Capital Stock under Company Warrants assumed by Parent shall thereupon be converted into rights with respect to Parent Common Stock. Accordingly, from and after the Effective Time: (i) each Company Warrant assumed by Parent may be exercised solely for shares of Parent Common Stock; (ii) the number of shares of Parent Common Stock as subject to each Company Warrant assumed by Parent shall be equal to determined in accordance with the product of Allocation Certificate as provided in Section 5.15; (aiii) the number of shares of Company per share exercise price for the Parent Common Stock that were issuable upon exercise of each Company Warrant assumed by Parent shall be determined in accordance with the Allocation Certificate as provided in Section 5.15; and (iv) any restriction on any Company Warrant assumed by Parent shall continue in full force and effect and the term and other provisions of such Company Warrants immediately prior to the Effective Time and Warrant shall otherwise remain unchanged; provided, however, that: (bA) the Exchange Ratio, such product to be rounded down to determination in the next whole Allocation Certificate of the number of shares of Parent Common Stock. The per share exercise price of Stock subject to each Company Warrant assumed by Parent shall equal be based on the quotient obtained by dividing same ratio as that applied to the Company Common Stock to determine the number of shares of Parent Common Stock each holder of Company Common Stock shall receive; and (aB) the determination in the Allocation Certificate of the per share exercise price for the Parent Common Stock issuable upon exercise of each Company Warrant assumed by Parent shall be adjusted equitably to reflect the ratio described in clause (A). (d) Prior to the Effective Time, the Company shall take all actions that may be necessary (under the Company Incentive Plan, the Company Warrants and otherwise) to effectuate the provisions of this Section 5.5 and to ensure that, from and after the Effective Time, holders of Company Options and Company Warrants have no rights with respect thereto other than those specifically provided in this Section 5.5. (e) Immediately prior to the NYSE Reverse Split, each Out of the Company Warrant at which such warrant was exercisable Money Parent Option that is outstanding and unexercised as of immediately prior to the Effective Time by (b) NYSE Reverse Split, if any, shall be canceled without the Exchange Ratio rounded up payment of consideration therefor. In accordance with the terms and conditions set forth in the Parent Incentive Plan, Parent shall notify each holder of an Out of the Money Parent Option that each such Out of the Money Parent Option shall become exercisable at least ten days prior to the next whole centNYSE Reverse Split and shall thereafter be canceled.

Options and Warrants. (i) At the Effective Time, the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iiia) At the Effective Time, each option or warrant issued by the Company which entitles the holder to acquire shares Company Common Stock and is outstanding at the Effective Time will become the right to receive, upon exercise, the Merger Consideration with regard to each share of Company Capital Common Stock (which exercise price will be payable to Sema) as to which the option or warrant is exercised at the exercise price that would have been payable for each share of Company Common Stock, except that if the option or warrant specifically provides that upon exercise after a merger such as the Merger the holder of the option or warrant will be entitled to receive something other than what is paid or distributed as a result of the merger, the holder of the option or warrant will be entitled to receive upon exercise what is provided in the option or warrant. The Company and Sema agree to take all necessary steps to effectuate the foregoing provisions of this Section 1.10(a). (b) Sema will file before the Merger Date (or if that is not permitted, promptly after the Merger Date) a Registration Statement under the Securities Act of 1933, as amended (the "Company WarrantSecurities Act") outstanding immediately on Form S-8 relating to the Sema ADS's and Sema Ordinary Shares to be issued after the Effective Time upon exercise of options issued by the Company before the Effective Time under its stock option plans and will use its reasonable efforts to maintain the effectiveness of that registration statement (and maintain the current status of the prospectus or prospectuses in it) for so long as the options remain outstanding. That Registration Statement will include a prospectus relating to resales by persons who may be deemed to have been affiliates of the Company at the Effective Time of Sema ADS's and Sema Ordinary Shares they receive upon exercise of options issued by the Company before the Effective Time under its stock option plans. (c) The Company will take all necessary action under its Employee Qualified Stock Purchase Plan ("ESPP") to provide that the offering period under the ESPP that commenced on January 1, 2000 will terminate on the last trading date prior to the Effective Time shall be converted Merger Date, and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be equal to the product of (a) the number of cause shares of Company Common Stock to be purchased and allocated to participants with respect to that were issuable upon exercise of such Company Warrants immediately offering period prior to the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centTime.

Options and Warrants. (ia) At the Effective Time, the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, EDI shall cause all outstanding options (the "EDI Options") and warrants (the "EDI Warrants") exercisable for shares of EDI Common Stock identified on Schedule 1.6 attached hereto to be assumed by Bowmxx. Xxter such action has been taken, effective at the Effective Time, Bowmxx xxxll assume each such then-outstanding and unexercised EDI Option or EDI Warrant and each such EDI Option and EDI Warrant shall, by virtue of the Merger and without any action on the part of the holder thereof, represent options or warrants, respectively, exercisable for shares of Bowmxx Xxxck having the same terms and conditions as the EDI Options and EDI Warrants (including such terms and conditions as may be incorporated by reference into the agreements evidencing EDI Options and EDI Warrants pursuant to the plans or arrangements pursuant to which such EDI Options and EDI Warrants were granted) except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time shall be multiplied by the Exchange Ratio and rounded down to the next nearest whole number of shares of Parent Common Stock, Bowmxx Xxxck and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share of Company Common EDI Stock at which under such option was exercisable immediately or warrant shall be equal to the exercise price per share of EDI Stock under such EDI Option or EDI Warrant divided by the Exchange Ratio and rounded to the nearest cent. EDI and Bowmxx xxxll use all reasonable efforts to ensure that the EDI Options which qualified as incentive stock options under Section 422 of the Code prior to the Effective Time by the Exchange Ratio, rounded up continue to the next whole cent. (iii) At so qualify after the Effective Time, each warrant . Bowmxx xxxll take all corporate action necessary to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged reserve for warrants to purchase such number of shares of Parent Common Stock as shall be equal to the product of (issuance a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole cent.

Options and Warrants. (ia) At As of the Effective Time, all Company Options (as defined below) to purchase shares of Company Common Stock issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvested, shall be assumed by Parent canceled and thereafter constitute the right to receive exchanged for options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii“Parent Options”) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be is equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise subject to the unexercised portion of the Company Option multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number (unless such Company Warrants immediately Option provides for different treatment of fractions of a share in such circumstances)). The exercise price per share of each Parent Option shall be equal to the exercise price of the Company Option prior to conversion divided by the Effective Time Common Conversion Ratio (rounded to the nearest whole cent, and with $0.005 rounded upward to the nearest whole cent (unless such Company Option provides for different treatment of fractions of a cent in such circumstances)). (b) As soon as practicable after the Exchange RatioEffective Time, such product the Parent or the Surviving Corporation shall take appropriate actions to collect the Options and the agreements evidencing the Options, which shall be deemed to be rounded down canceled and shall entitle the holder to exchange the next whole Options for Parent Options in the Parent. (c) Any and all outstanding Company Warrants (as defined below) to purchase capital stock of the Company that remain unexercised shall terminate as of the Effective Date and the Parent shall issue new warrants (the “Parent Warrants”) in substitution for the Warrants, on substantially the same terms and conditions of the Warrants, but representing the right to acquire such number of shares of Parent Common Stock or Parent Series A Preferred Stock, as the case may be, as is equal to the number of shares of Company Common Stock or Company Series A Preferred Stock, as the case may be, subject to the unexercised portion of the Warrant multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number (unless such Company Warrant provides for different treatment of fractions of a share in such circumstances)). The exercise price per share exercise price of each Company Parent Warrant shall be equal to the quotient obtained by dividing (a) the per share exercise price of the Warrant prior to substitution divided by the Common Conversion Ratio (rounded to the nearest whole cent, and with $0.005 rounded upward to the nearest whole cent (unless such Company Warrant at which provides for different treatment of fractions of a cent in such warrant was exercisable immediately prior circumstances)). (d) The Parent shall take all corporate action necessary to the Effective Time by reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise of (bi) the Exchange Ratio rounded up Parent Options to be issued for the next whole centOptions and (ii) the Parent Warrants to be issued for the Warrants, in accordance with this Section 1.8.

Options and Warrants. (ia) At Immediately prior to the Effective Time, the Company each unexercised stock option outstanding to purchase shares of Common Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company 1998 Stock Plan other than any stock options held by any holder of Class A Common Stock and any employee of the Company identified on Schedule 2.7(a) (each an “Option”), whether or not vested or exercisable, shall be cancelled and each holder of any such Option Plan (“Optionholder”) shall be entitled to receive in exchange therefor cash in an amount equal to the product of (x) the number of shares of Common Stock subject to the Option and (y) the amount by which the Option/Warrant Per Share Consideration exceeds the exercise price per share of such Option, less any applicable Withholdings. Such cash payment shall be made at the same time as Stockholders receive the Closing Payment. The Company shall take such actions as are necessary and appropriate to cancel each Option each effective immediately prior to the Effective Time. The Company shall use its reasonable efforts to obtain from each Optionholder such documents as the Company and Safeguard determine are reasonably appropriate to evidence the surrender of such Options. Any Optionholder who does not provide sufficient evidence to the Company of the surrender of his or her Option shall have such Option terminated effective as of the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii11(c)(ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in of the Company 1998 Stock Option Plan and shall not be eligible to receive the applicable stock option agreement as cash payment described in effect the first sentence of this Section 2.7(a). All options held by holders of Class A Common Stock and any employee of the Company identified on Schedule 2.7(a) shall remain outstanding according to their terms on and after the Effective Time. (b) Prior to the Effective Time, each holder of a Warrant (“Warrantholder”) who holds an outstanding unexercised warrant to purchase shares of Common Stock (each a “Warrant”), whether or not vested or exercisable, will be provided the opportunity to have his, her or its Warrant cancelled immediately prior to the Effective Time, except that (i) and, if such option Warrantholder provides written consent to the cancellation of his, her or its Warrant, the Warrantholder will be exercisable for that number of whole shares of Parent Common Stock entitled to receive in exchange therefor cash in an amount equal to the product of (x) the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior subject to the Effective Time multiplied by the Exchange Ratio and rounded down to the next whole number of shares of Parent Common Stock, Warrant and (iiy) the per share exercise price for amount by which the shares of Parent Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing Option/Warrant Per Share Consideration exceeds the exercise price per share of such Warrant, less any applicable Withholdings. Such cash payment shall be made at the same time as Stockholders receive the Closing Payment. The Company Common Stock at which shall take such option was exercisable actions as are necessary and appropriate to ask each Warrantholder if the Warrantholder is willing to cancel his, her or its Warrant, effective immediately prior to the Effective Time by Time. The Company shall use its reasonable efforts to obtain from each Warrantholder such documents as the Exchange Ratio, rounded up Company determines appropriate to evidence the surrender of such Warrants. Any Warrantholder who does not consent to the next whole cent. (iii) At cancellation of his, her or its Warrant or does not provide sufficient evidence to the Effective TimeCompany of the surrender of his, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to her or its Warrant shall have such Warrant continue in accordance with its terms after the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be equal with respect to the product common stock of (a) Surviving Corporation without any further action by such Warrantholder, the number Company or the Surviving Corporation and such Warrantholder shall not be eligible to receive the cash payment described in the first sentence of shares of Company Common Stock that were issuable upon exercise of such Company this Section 2.7(b). Each Principal Stockholder who holds any Warrants immediately prior hereby agrees to the Effective Time and (b) the Exchange Ratiocancellation of his, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centher or its Warrants.

Options and Warrants. Each outstanding option and warrant to purchase shares of Company Common Stock (i) At the Effective Time, the each a “Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"Option”), whether vested or unvested, which does not otherwise terminate or expire by its terms as of the Effective Time, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Parent. Each Company Stock determined in accordance with this Section 1.6(c). (ii) Each such option Option so assumed by Parent under this Agreement shall will continue to have, and be subject to, the same terms and conditions set forth in the of such Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective TimeTime (including the term, vesting schedule, status as an “incentive stock option” under Section 422 of the Code, if applicable, and any repurchase rights or vesting provisions and provisions regarding the acceleration of vesting on certain transactions), except that (i) such option each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of the Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option Company Stock Option immediately prior to the Effective Time Closing multiplied by the Exchange Ratio and 1.74, rounded down to the next nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the shares of the Parent Common Stock issuable upon exercise of such assumed option Company Stock Option will be equal to the quotient determined by dividing (A) the exercise price per share of Company Common Stock at which such option Company Stock Option was exercisable immediately prior to the Effective Time Closing by the Exchange Ratio(B) 1.74, rounded up to the next nearest whole cent. . Notwithstanding the foregoing, solely to the minimum extent necessary (iii) At if any), the Effective Time, each warrant to acquire shares foregoing conversions of the exercise price of Company Capital Stock Options and the number of shares purchasable pursuant to such Company Stock Options shall be further adjusted: (each a "I) with respect to Company Warrant") outstanding Stock Options which immediately prior to the Effective Time qualified as incentive stock options under Section 422 of the Code, to comply with Section 1.424-1 of the Treasury Regulations such that the conversion is not treated as a "modification" of the Company Stock Option and (II) with respect to Company Stock Options other than those covered under clause (I), to comply with Section 1.409A-1(b)(5)(v)(D) of the Treasury Regulations such that the conversion is not treated as a "grant of a new stock right or a change in the form of payment." It is the intention of the parties that each Company Stock Option so assumed by Parent shall be converted and exchanged for warrants to purchase such number qualify immediately following the Effective Time as an incentive stock option as defined in Section 422 of shares of Parent Common Stock as shall be equal the Code to the product extent permitted under Section 422 of (a) the number of shares of Company Common Stock that were issuable upon exercise of Code and to the extent such Company Warrants Stock Option qualified as an incentive stock option immediately prior to the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centTime.

Options and Warrants. (ia) At As of the Effective Time, all Options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvested, shall be assumed by Parent canceled and thereafter constitute the right to receive exchanged for options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii“Parent Options”) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as is equal to the number of Company Shares subject to the unexercised portion of the Option multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). The exercise price per share of each Parent Option shall be equal to the product exercise price of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately Option prior to conversion divided by the Effective Time and Common Conversion Ratio. On October 19, 2007, the Parent adopted its 2007 Equity Incentive Plan (the “Parent Option Plan”). (b) As soon as practicable after the Exchange RatioEffective Time, such product the Parent or the Surviving Corporation shall take appropriate actions to collect the Options and the agreements evidencing the Options, which shall be deemed to be rounded down canceled and shall entitle the holder to exchange the next whole Options for Parent Options in the Parent. (c) The Company shall cause the termination, as of the Effective Time, of any and all outstanding Warrants to purchase capital stock of the Company which remain unexercised and the Parent shall, at Closing, issue new warrants (the “Parent Warrants”) in substitution for the Warrants, on substantially the same terms and conditions of the Warrants, but reflecting the Common Conversion Ratio. (d) The Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock. The per share Stock for delivery upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (ai) the per share exercise price of Parent Options to be issued for the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by Options and (bii) the Exchange Ratio rounded up Parent Warrants to be issued for the next whole centWarrants, in accordance with this Section 1.8.

Options and Warrants. (ia) At As of the Effective Time, all options to purchase shares of Company Common Stock issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior pursuant to the Effective Time its stock option plans or otherwise ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute Purchaser. Immediately after the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to haveEffective Time, and be subject toeach Company Option outstanding, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such option will be exercisable for that Company Option at the Effective Time, such number of whole shares of Parent Purchaser Common Stock as is equal to the product of the number of shares of Company Common Stock that were issuable upon exercise subject to the unexercised portion of such option Company Option multiplied by the Exchange Ratio (with any fraction resulting from such multiplication to be rounded down to the nearest whole number). The exercise price per share of each such assumed Company Option shall be equal to the exercise price of such Company Option immediately prior to the Effective Time multiplied Time, divided by the Exchange Ratio Ratio. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Tax Code, if applicable, and rounded down all of the other terms of the Company Options shall otherwise remain unchanged. (b) As soon as practicable after the Effective Time, Purchaser or the Surviving Corporation shall deliver to the next whole holders of Company Options appropriate notices setting forth such holders' rights pursuant to such Company Options, as amended by this Section 1.11, and the agreements evidencing such Options shall continue in effect on the same terms and conditions (subject to the amendments provided for herein). (c) Purchaser shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Purchaser Common Stock for delivery upon exercise of the Company Options assumed in accordance with this Section 1.11. As soon as practicable after the Effective Time, Purchaser shall file a Registration Statement on Form S-8 (or any successor form) under the Securities Act of 1933 (as amended, the "Securities Act") with respect to all shares of Purchaser Common Stock subject to such Company Options that may be registered on a Form S-8, and shall use its best efforts to maintain the effectiveness of such Registration Statement for so long as such Company Options remain outstanding. In connection with such filing on Form S-8, counsel to Purchaser will issue an opinion that the shares of Purchaser Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed option when issued, will be equal fully paid, validly issued and non-assessable. (d) The Company shall obtain, prior to the quotient determined by dividing Closing, the exercise price per share consent from each holder of a Company Option or an outstanding warrant to purchase shares of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants amendment thereof pursuant to purchase this Section 1.11 (unless such number of shares of Parent Common Stock as shall be equal to consent is not required under the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price terms of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centapplicable agreement, instrument or plan).

Options and Warrants. (ia) At As of the Effective Time, all stock options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvestedunvested (the “Company Options”), shall be assumed by automatically become Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied Options without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as is equal to the number of Company Shares subject to the unexercised portion of the Company Option multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). The exercise price per share of each Parent Option shall be equal to the product exercise price of the Company Option divided by the Common Conversion Ratio and the terms of such Parent Options shall otherwise remain the same. The Parent Options shall be granted under the Company's 2008 Equity Incentive Plan (athe “2008 Plan”), which shall be adopted and assumed in writing by the Parent in connection with the Merger, and under the 2008 Plan’s terms, exercisability, vesting schedule, and status as an “incentive stock option” under Section 422 of the Code, if applicable. It is the intention of the Parties that any Company Options intended to be “incentive stock options” under Section 422 of the Code shall remain incentive stock options as Parent Options. (b) As soon as practicable after the number of Effective Time, the Parent or the Surviving Corporation shall take appropriate actions to collect the Company Options and the agreements evidencing the Company Options, which shall be deemed to be canceled and shall entitle the holder to exchange the Company Options for Parent Options. (c) 896,256 shares of Company Parent Common Stock that were issuable shall be reserved for issuance under the 2008 Plan being assumed by Parent at Closing, and shall be issued upon the exercise of such the Parent Options in accordance with this Section 1.11. No additional Options shall at any time hereafter be granted under the 2008 Plan. (d) Upon the Closing of the Merger, (i) Parent Bridge Warrants to purchase an aggregate of 1,500,000 shares of Parent Common Stock at a price of $1.00 per share will be granted to the holders of Bridge Warrants; (ii) Placement Agent Parent Bridge Warrants to purchase an aggregate of 610,155 shares of Parent Common Stock at a price of $1.00 per share will be granted to the holders of Placement Agent Bridge Warrants; and (iii) Parent Exchange Warrants to purchase an aggregate of 1,409,750 shares of Parent Common Stock at a price of $1.00 per share will be granted to the holders of Exchange Warrants. An aggregate of 3,509,750 shares of Parent Common Stock shall be reserved for issuance upon the exercise of the Parent Bridge Warrants, Placement Parent Agent Bridge Warrants and the Parent Exchange Warrants. As of the Effective Time, any and all outstanding Company Warrants immediately to purchase capital stock of the Company, whether vested or unvested, shall be canceled. 6 (e) In the event that any issued and outstanding Company Options or Company Warrants are exercised prior to the Effective Time Time, the number of outstanding Company Shares shall be increased by the number of Company Shares issued upon exercise of Company Options and (b) Company Warrants, and the Exchange Rationumber of outstanding Company Options and Company Warrants shall be reduced by the same number, such product to be rounded down to as applicable. This will result in a decrease in the next whole aggregate number of shares of Parent Common Stock. The per share Stock reserved for issuance upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Parent Options, Parent Bridge Warrants, Placement Agent Bridge Warrants and Parent Exchange Warrants, and an increase in the number of shares of Parent Common Stock issuable to Company Warrant Stockholders at which such warrant was exercisable immediately prior the Effective Time. Accordingly, regardless of the exercise of any Company Warrants, the total number of shares of Parent Common Stock issuable to Company Stockholders, and, upon exercise, to the Effective Time by holders of Parent Options and Parent Warrants, in connection with the Merger (bin accordance with Section 1.5 and this Section 1.11) the Exchange Ratio rounded up to the next whole centshall remain constant. 1.12 [Intentionally Omitted].

Options and Warrants. (ia) At As of the Effective Time, the all outstanding Company Stock Option Plan, Options (as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")defined below) that remain unexercised, whether vested or unvested, shall be assumed by the Parent and thereafter constitute the right to receive shall be converted into options to purchase shares of Parent Common Stock (“Parent Options”) without further action by the holder thereof. Each Parent Option as so assumed and converted shall constitute an option to acquire such number of shares of Parent Common Stock determined in accordance as is equal to the number of shares of Company Common Stock subject to the outstanding and unexercised portion of the Company Option immediately prior to the Effective Time, multiplied by the Conversion Ratio for Company Common Stock (with this Section 1.6(cthe result rounded down to the nearest whole share of Parent Common Stock). (ii) Each such option . The exercise price per share of each Parent Option as so assumed and converted shall be equal to the exercise price of the Company Option immediately prior to the Effective Time divided by the Conversion Ratio (with the result rounded up to the nearest whole cent). Each Parent under this Agreement Option shall continue to have, and otherwise be subject to, to the same terms and conditions set forth as were applicable under the respective Company Option immediately prior to the Effective Time, provided, that the Board of Directors of the Parent or a committee thereof shall succeed to the authority and responsibility of the Company’s board of directors or any committee thereof with respect to each Company Option assumed by the Parent. It is the intention of the parties that (i) each Parent Option that qualified as an incentive stock option (as defined in Section 422 of the Code) immediately prior to the Effective Time shall continue to so qualify, to the maximum extent permissible, immediately following the Effective Time, and (ii) the number of shares of Parent Common Stock and exercise price per share of Parent Common Stock under each Parent Option shall be determined in a manner consistent with the requirements of Section 409A of the Code. (b) Prior to the Effective Time, Parent and the Company Stock Option Plan shall take such actions (including adopting any necessary resolutions) as are reasonably necessary to effect the treatment of the Company Options as contemplated by this Section 1.8. At the Effective Time, the Parent shall assume all obligations of the Company under the applicable Company Equity Plan, each outstanding Company Option, and the agreements evidencing the grants thereof, and shall administer and honor all such awards in accordance with the terms and conditions of such awards and the applicable stock option agreement Company Equity Plan (subject to the adjustments required by reason of this Agreement or such other adjustments or amendments made by the Parent in accordance with such terms and conditions). (c) As of the Effective Time, each outstanding Company Warrant (as defined below) that is outstanding as of immediately prior to the Effective time shall be assumed by Parent and shall be converted into warrants to purchase Parent Common Stock (“Parent Warrants”) without further action by the holder thereof. Accordingly, from and after the Effective Time: (i) each Company Warrant assumed by the Parent may be exercised solely for shares of Parent Common Stock; (ii) the number of shares of Parent Common Stock subject to each Company Warrant assumed by the Parent shall be determined by multiplying (A) the number of shares of Company Common Stock that would have been issuable upon exercise of each such Company Warrant had such Company Warrant been exercised prior to the Effective Time by (B) the Conversion Ratio for Company Common Stock and rounding the resulting number down to the nearest whole number of shares of Parent Common Stock; (iii) the per share exercise price for the Parent Common Stock issuable upon exercise of each Company Warrant assumed by the Parent shall be determined by dividing the per share exercise price of shares of Company Common Stock subject to such Company Warrant, as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable by the Conversion Ratio for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to and rounding the Effective Time multiplied by the Exchange Ratio and rounded down to the next whole number of shares of Parent Common Stock, and (ii) the per share resulting exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next nearest whole cent; and (iv) any restriction on any Company Warrant assumed by the Parent shall continue in full force and effect and the term and other provisions of such Company Warrant shall otherwise remain unchanged. (iiid) At the Effective Time, each warrant The Parent shall take all corporate action necessary to acquire shares of Company Capital Stock (each reserve for issuance a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such sufficient number of shares of Parent Common Stock as shall be equal to the product of (a) the number of shares of Company Common Stock that were issuable for delivery upon exercise of such Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product Parent Options to be rounded down to issued for the next whole number of shares of Parent Common Stock. The per share Company Options, and for delivery upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centParent Warrants, in each case, in accordance with this Section 1.8.

Options and Warrants. (ia) At As of the Effective Time, all stock options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvestedunvested (the “Company Options”), shall be assumed by automatically become Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied Options without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as is equal to the number of Company Shares subject to the unexercised portion of the Company Option multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). The exercise price per share of each Parent Option shall be equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at Option divided by the Common Conversion Ratio and the terms of such Parent Options shall otherwise remain the same. The Parent Options shall be granted under the Company’s 2007 Employee, Director and Consultant Stock Plan, as amended (the “2007 Plan”), which such warrant was exercisable immediately prior shall be adopted and assumed in writing by the Parent in connection with the Merger, and under the 2007 Plan’s terms, exercisability, vesting schedule, and status as an “incentive stock option” under Section 422 of the Code, if applicable. It is the intention of the Parties that any Company Options intended to be “incentive stock options” under Section 422 of the Effective Time by Code shall remain incentive stock options as Parent Options. (b) As soon as practicable after the Exchange Ratio rounded up Effective Time, the Parent or the Surviving Corporation shall take appropriate actions to collect the next whole centCompany Options and the agreements evidencing the Company Options, which shall be deemed to be canceled and shall entitle the holder to exchange the Company Options for Parent Options. (c) 5,915,615 shares of Parent Common Stock shall be reserved for issuance under the 2007 Plan being assumed by Parent at Closing, and shall be issued upon the exercise of the Parent Options in accordance with this Section 1.11. No additional Options shall at any time hereafter be granted under the 2007 Plan.

Options and Warrants. (ia) At the Effective TimeClosing, the terms of each outstanding option granted by the Company Stock Option Plan, as amended to purchase an aggregate of 2,457,422 Common Membership Units (a “Company Option”) under the Long-Term Incentive Plan of the Company (the "“Company Stock Option Incentive Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"”), whether vested or unvested, shall be assumed amended by Parent action of the Board of Directors of the Company to provide that, at the Closing, each Company Option outstanding immediately prior to the Closing shall be deemed to constitute and thereafter constitute shall become an option to acquire, on the right to receive options to purchase same terms and conditions as were applicable under such Company Option, the same number of shares of Parent Common Stock determined (the “Parent Stock Options”) as the holder of such Company Option would have been entitled to receive pursuant to the Exchange had such holder exercised such Company Option in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect full immediately prior to the Effective TimeClosing, except that (i) such option will be exercisable for that number of whole shares at a price per share of Parent Common Stock equal to (i) the product of aggregate exercise price for the number of shares of Common Membership Units otherwise purchasable pursuant to such Company Common Stock that were issuable upon exercise of such option immediately prior to Option divided by (ii) the Effective Time multiplied by the Exchange Ratio and rounded down to the next whole aggregate number of shares of Parent Common StockStock deemed purchasable pursuant to such Company Option; provided, however, that, after aggregating all the shares of a holder subject to Company Options, any fractional share of Parent Common Stock resulting from such calculation for such holder shall be rounded up to the nearest whole share. Schedule 1.5(a) attached hereto sets forth the name of each holder of Company Options, the aggregate number of shares of Common Membership Units which each such person may purchase pursuant to his or her Company Options and (ii) the per share exercise price for the aggregate number of shares of Parent Common Stock issuable which each such person may purchase pursuant to the operation of this Section 1.5(a). In connection with the implementation of this Section 1.5(a), prior to the Closing, the Board of Directors of the Company has, pursuant to authority granted to it under the Company Incentive Plan, adopted a resolution modifying the terms and conditions of the Company Options to provide that, following the Closing, such options shall be exercisable for shares of Parent Common Stock in accordance with the provisions of this Section 1.5(a). In furtherance of the foregoing, Parent agrees to assume at the Closing all the obligations of the Company under the Company Incentive Plan, including, without limitation, the outstanding Company Options and the obligation to issue the number of shares of Parent Common Stock set forth on Schedule 1.5(a) upon the exercise of such assumed option the Company Options. (i) At the Closing, all outstanding warrants issued by the Company to purchase an aggregate of 559,221 Common Membership Units (the “Company Warrants”), will by their terms be converted into a warrant to acquire that number of shares of Parent Common Stock which is equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such same number of shares of Parent Common Stock as shall be equal the holder of such Warrant would have been entitled to receive pursuant to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of Exchange had such Company Warrants holder exercised such Warrant in full immediately prior to the Effective Time and (bClosing. Schedule 1.5(b) attached hereto sets forth the Exchange Rationame of each holder of Company Warrants, the type of Company Warrant held by such product to be rounded down holder, the aggregate number of Common Membership Units which each such person may purchase pursuant to the next whole exercise of his or her Company Warrants and the aggregate number of shares of Parent Common StockStock which each such person may purchase upon exercise of Company Warrants acquired upon such exchange, conversion or amendment. The per share Parent expressly assumes the obligation to deliver on and after the Closing shares of Parent Common Stock to the holders of Company Warrants upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which Warrants in accordance with the applicable Exchange Ratio, all in accordance with the provisions of this Section 1.5(b). (ii) Without limiting the generality of the foregoing, the Company shall take all actions as may be necessary and desirable in order to effectuate the transactions contemplated by this Section 1.5(b). (c) As soon as practicable after the Closing, Parent shall deliver to the holders of: (i) Company Options appropriate notices setting forth such holders’ rights pursuant to the Company Incentive Plan and the agreements evidencing the grants of such Company Options and that such Company Options and agreements shall be assumed by Parent and shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 1.5 after giving effect to the Exchange), and (ii) Company Warrants new warrant was exercisable immediately agreements and/or warrants evidencing such holders' rights to purchase shares of Parent Common Stock (subject to the adjustments required by this Section 1.5 after giving effect to the Exchange). (d) Parent shall take all action necessary and appropriate, on or prior to the Effective Time Closing, to authorize and reserve a number of shares of Parent Common Stock sufficient for issuance upon the exercise of assumed Company Options and Company Warrants following the Closing as contemplated by this Section 1.5. (be) Other than the Exchange Ratio rounded up Company Options and the Company Warrants, all options, warrants and rights to purchase Membership Units outstanding as of the next whole centClosing will be exercised or terminated prior to or effective upon the Closing, and Parent shall not assume or have any obligation with respect to such options, warrants or rights.

Options and Warrants. All options, warrants, or other rights to purchase shares of Company Capital Stock (ieach, a “Company Option”) At the Effective Time, the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options which are outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall not be assumed by Parent Parent, First Surviving Corporation or Surviving Corporation and thereafter constitute the right shall therefore become, pursuant to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to havetheir respective terms, fully vested and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately exercisable prior to the Effective Time. Holders of Company Options shall be given the opportunity to exercise their Company Options effective prior to the Effective Time. All Company Options that remain unexercised and outstanding as of the Effective Time shall be terminated and canceled as of the Effective Time and converted into, except that (i) such option will be exercisable and represent only, the right to receive from Parent, for that number each share of whole shares of Parent Company Common Stock equal to that is issuable upon full exercise of the product of Company Option (including, for this purpose, the number of shares of Company Common Stock that were are issuable upon conversion of all shares of Company Preferred Stock that are issuable upon any exercise of such option immediately prior a Company Option) the Closing Date Per Share Consideration and the FDA Milestone Per Share Consideration all on the terms set forth in this Article II; provided, however, that (i) there shall be deducted from the aggregate Closing Date Cash Per Share Consideration payable with respect to each Company Option, an amount equal to (A) the Effective Time Closing Cash Percentage multiplied by the Exchange Ratio and rounded down to exercise per share price of the next whole applicable Company Option multiplied by (B) the total number of shares of Parent Company Common Stock, Stock issuable upon full exercise of the Company Option and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time there shall be converted and exchanged for warrants deducted from the aggregate Closing Date Stock Per Share Consideration payable with respect to purchase such each Company Option a number of shares of Parent Common Stock as shall be that have a value (based on the Applicable Denominator) equal to the product of (aC) the Closing Stock Percentage multiplied by the exercise per share price of the applicable Company Option multiplied by (D) the total number of shares of Company Common Stock that were issuable upon full exercise of such the Company Warrants immediately prior to Option, provided further, however, that if the Effective Time product of clause (A) and (bB) in clause (i) is greater than the Exchange Ratioaggregate Closing Date Cash Per Share Consideration payable with respect to a Company Option, such product to be rounded down to the next whole then a number of shares of Parent Common StockStock that have a value (based on the Applicable Denominator) equal to the amount of the excess of the product of (A) and (B) over the aggregate Closing Date Cash Per Share Consideration payable with respect to such Company Option shall also be deducted from the aggregate Closing Date Stock Per Share Consideration payable with respect to such Company Option. The per share exercise price Following the Effective Time, no holder of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price Options, or any participant in or beneficiary of any of the Company Warrant at which such warrant was exercisable immediately prior Benefit Plans, shall have any right to acquire or receive any equity securities or other interests in the Effective Time by (b) the Exchange Ratio rounded up to the next whole centFirst Surviving Corporation, Parent, Surviving Corporation or their respective Subsidiaries, or any other consideration.

Options and Warrants. (ia) At Except as otherwise agreed by Parent and the Company prior to the Effective Time, the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that all options to purchase shares of Company Common Stock (the “Company Stock Options”) granted under any plan, arrangement or agreement (the “Company Stock Option Plans”) set forth in Section 3.03(a)(i) of the disclosure schedule delivered by the Company to Parent and Merger Co concurrently with the execution and delivery of this Agreement (the “Company Disclosure Schedule”), whether or not then exercisable, shall be cancelled by the Company and shall no longer be outstanding thereafter. In consideration for such cancellation, the holder thereof shall thereupon be entitled to receive, as soon as reasonably practicable after the Effective Time (but in no event later than five business days following the Closing Date), a cash payment from the Company in respect of such cancellation in an amount (if any) equal to (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of (x) the number of shares of Company Common Stock that were issuable upon exercise of subject to such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next whole number of shares of Parent Common StockCompany Stock Option, whether or not then exercisable, and (iiy) the per share exercise price for excess, if any, of the shares of Parent Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing Merger Consideration over the exercise price per share of Company Common Stock at which subject to such option was exercisable Company Stock Option, minus (ii) all applicable federal, state and local Taxes required to be withheld by the Company. The Company agrees to take any and all actions necessary (including any action reasonably requested by Parent) to effectuate immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole centcancellation of all Company Stock Options. (iiib) At Prior to the Effective Time, the Company shall take all actions necessary to ensure that, at the Effective Time, each warrant then outstanding to acquire purchase shares of Company Capital Common Stock (each a "the “Company Warrant") outstanding immediately prior Warrants”), whether or not then exercisable, shall be cancelled by the Company in consideration for which the holder thereof shall thereupon be entitled to receive as soon as reasonably practicable after the Effective Time shall be converted and exchanged for warrants to purchase Time, a cash payment from the Company in respect of such number of shares of Parent Common Stock as shall be cancellation in an amount (if any) equal to (i) the product of (ax) the number of shares of Company Common Stock that were issuable upon exercise of subject to such Company Warrant, whether or not then exercisable, and (y) the excess, if any, of the Merger Consideration over the exercise price per share of Company Common Stock subject to such Company Warrant, minus (ii) all applicable federal, state and local Taxes required to be withheld by the Company. The Company shall take any and all actions reasonably requested by Parent to effectuate the cancellation of all Company Warrants immediately prior to at the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centTime.

Options and Warrants. (ia) At As of the Effective Time, all Options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvested, (the “Old Options”) shall be assumed by Parent and thereafter constitute the right automatically be converted to receive become options to purchase such number of shares of Parent Common Stock determined (“Parent Options”) without further action by the holder thereof, all in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to havethe applicable provisions of the Company’s Incentive Stock Option Plan, and be subject to, the same terms and conditions set forth in the Company Compensatory Stock Option Plan and Non-Employee Director Stock Option Plan, all as included within the applicable stock Company’s 1997 Stock Compensation Program. The Parent Option shall constitute an option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be is equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior Shares subject to the Effective Time and unexercised portion of the Old Options multiplied by the Common Conversion Ratio (b) the Exchange Ratio, with any fraction resulting from such product multiplication to be rounded down to the next nearest whole number). The exercise price per share of each Parent Option shall be equal to $1.35. The Parent Options shall be granted under Parent’s 2006 Stock Option Plan (the “Parent Option Plan”) and that plan’s terms, exercisability, vesting schedule, and status as an “incentive stock option” under Section 422 of the Code, if applicable. It is the Parties intention that any Old Options intended to be “incentive stock options” under Section 422 of the Code shall remain incentive stock options as Parent Options. (b) As soon as practicable after the Effective Time, the Parent or the Surviving Corporation shall take appropriate actions to collect the Old Options and the agreements evidencing the Old Options, which shall be deemed to be canceled and shall entitle the holder to exchange the Old Options for Parent Options in the Parent. (c) The Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock. The per share Stock for delivery upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior Parent Options to be issued for Old Options in accordance with this Section 1.8. (d) Prior to the Effective Time Time, the Company will solicit the settlement of rights represented by (b) the Exchange Ratio rounded up Existing Warrants by the issuance of Company Shares in amounts authorized to have been issued to holders of the Existing Warrants by the Company’s board of directors. If and to the next whole centextent that any holder of an Existing Warrant does not agree to accept such Company Shares in settlement of such rights, then such Existing Warrants by their terms will become exercisable for Parent Common Stock not to exceed an aggregate of 468,578 shares of the Parent Common Stock, which shares of the Parent Common Stock shall then be reserved for issuance upon the exercise of the Existing Warrants, subject to such adjustment as the Company shall make to the terms of the Existing Warrants to reflect the Common Conversion Ratio and the other terms and condition of the Merger.

Options and Warrants. (ia) At As of the Effective Time, all options to purchase Company Shares issued by the Company pursuant to its 1994 Stock Option Plan, as amended Plan (the "Company Stock Option Plan") or pursuant to the resolution of Company's Board of Directors or the Compensation Committee thereof ("Options"), whether vested, unvested or subject to repurchase by Company following such exercise, which are outstanding and all options outstanding under the Company Stock Option Plan not exercised immediately prior to the Effective Time ("Company Options")shall become and represent an option to acquire, whether vested or unvestedon the same terms and conditions as were applicable under such Option immediately prior to the Effective Time, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Buyer Common Stock determined in accordance as is equal to the number of Company Shares subject to the unexercised portion of such Option multiplied by the Standard Exchange Ratio (with any fraction resulting from such multiplication to be rounded down to the next lower whole number). The exercise price per share of each such assumed Option shall be equal to the exercise price of such Option immediately prior to the Effective Time, divided by the Standard Exchange Ratio (with any fraction of a cent resulting from such division to be rounded up to the next higher whole cent), but shall not be less than $.001. The term, exercisability (including any acceleration of exercisability as a result of this transaction), vesting schedule, repurchase provisions, status as an "incentive stock option" under Section 1.6(c422 of the Internal Revenue Code of 1986 (as amended, the "Code"). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, if applicable, and be subject to, all of the same other terms and conditions set forth in of the Company Stock Option Plan and the applicable stock option agreement as Options in effect immediately prior to the Effective Time and after giving effect to any acceleration of vesting for such Options as a result of this transaction shall otherwise remain unchanged. As of the Effective Time, except that the warrant to purchase Series C Convertible Preferred Stock issued by the Company (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal "the Warrant"), to the product of extent outstanding and not exercised immediately prior to the Effective Time, shall become and represent a Warrant to acquire, on the same terms and conditions as were applicable under such Warrant immediately prior to the Effective Time, such number of shares of Company Buyer Common Stock that were issuable upon exercise as is equal to the number of Company Shares subject to the unexercised portion of such option Warrant immediately prior to the Effective Time multiplied by the Series C Exchange Ratio and (with any fraction resulting from such multiplication to be rounded down to the next lower 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 option will be equal to the quotient determined by dividing the number). The exercise price per share of Company Common Stock at which each such option was exercisable assumed Warrant shall be equal to the exercise price of such Warrant immediately prior to the Effective Time Time, divided by the Series C Exchange Ratio, Ratio (with any fraction of a cent resulting from such division to be rounded up to the next higher whole cent. (iii) At ). The term and all of the Effective Time, each warrant to acquire shares other provisions of Company Capital Stock (each a "Company Warrant") outstanding the Warrant in effect immediately prior to the Effective Time shall be converted otherwise remain unchanged. (b) As soon as practicable after the Effective Time, Buyer or the Surviving Corporation shall deliver to the holders of Options and exchanged Warrant appropriate notices setting forth such holders' rights pursuant to such Options and Warrant, as amended by this Section 1.10, and the agreements evidencing such Options and Warrant shall continue in effect on the same terms and conditions (subject to the amendments provided for warrants in this Section 1.10 and such notice). (c) Buyer shall take all corporate action necessary to purchase such reserve for issuance a sufficient number of shares of Parent Buyer Common Stock as shall be equal to the product of (a) the number of shares of Company Common Stock that were issuable for delivery upon exercise of the Options exchanged in accordance with this Section 1.10. Not later than May 20, 1998, Buyer shall file a Registration Statement on Form S-8 (or any successor form) under the Securities Act of 1933 (as amended, the "Securities Act") with respect to all shares of Buyer Common Stock subject to such Options, and shall use its best efforts to maintain the effectiveness of such Registration Statement for so long as such Options remain outstanding. (d) The Company Warrants immediately shall use commercially reasonable efforts to obtain, prior to the Effective Time and (b) Closing, the Exchange Ratio, such product to be rounded down consent from each holder of an Option to the next whole number assumption of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal such Option pursuant to this Section 1.10, including an agreement not to sell under the quotient obtained Registration Statement on Form S-8 until August 5, 1998, unless such holder's employment is terminated by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to on or after the Effective Time by (b) the Exchange Ratio rounded up to the next whole centTime.

Options and Warrants. (ia) At As of the Effective Time, all stock options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvestedunvested (the “Company Options”), shall be assumed by automatically become Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied Options without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as is equal to the number of Company Shares subject to the unexercised portion of the Company Option multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). The exercise price per share of each Parent Option shall be equal to the product exercise price of the Company Option divided by the Common Conversion Ratio and the terms of such Parent Options shall otherwise remain the same. The Parent Options shall be granted under the Company's 2008 Equity Incentive Plan (athe “2008 Plan”), which shall be adopted and assumed in writing by the Parent in connection with the Merger, and under the 2008 Plan’s terms, exercisability, vesting schedule, and status as an “incentive stock option” under Section 422 of the Code, if applicable. It is the intention of the Parties that any Company Options intended to be “incentive stock options” under Section 422 of the Code shall remain incentive stock options as Parent Options. (b) As soon as practicable after the number of Effective Time, the Parent or the Surviving Corporation shall take appropriate actions to collect the Company Options and the agreements evidencing the Company Options, which shall be deemed to be canceled and shall entitle the holder to exchange the Company Options for Parent Options. (c) 896,256 shares of Company Parent Common Stock that were issuable shall be reserved for issuance under the 2008 Plan being assumed by Parent at Closing, and shall be issued upon the exercise of such the Parent Options in accordance with this Section 1.11. No additional Options shall at any time hereafter be granted under the 2008 Plan. (d) Upon the Closing of the Merger, (i) Parent Bridge Warrants to purchase an aggregate of 1,500,000 shares of Parent Common Stock at a price of $1.00 per share will be granted to the holders of Bridge Warrants; (ii) Placement Agent Parent Bridge Warrants to purchase an aggregate of 610,155 shares of Parent Common Stock at a price of $1.00 per share will be granted to the holders of Placement Agent Bridge Warrants; and (iii) Parent Exchange Warrants to purchase an aggregate of 1,409,750 shares of Parent Common Stock at a price of $1.00 per share will be granted to the holders of Exchange Warrants. An aggregate of 3,509,750 shares of Parent Common Stock shall be reserved for issuance upon the exercise of the Parent Bridge Warrants, Placement Parent Agent Bridge Warrants and the Parent Exchange Warrants. As of the Effective Time, any and all outstanding Company Warrants immediately to purchase capital stock of the Company, whether vested or unvested, shall be canceled. (e) In the event that any issued and outstanding Company Options or Company Warrants are exercised prior to the Effective Time Time, the number of outstanding Company Shares shall be increased by the number of Company Shares issued upon exercise of Company Options and (b) Company Warrants, and the Exchange Rationumber of outstanding Company Options and Company Warrants shall be reduced by the same number, such product to be rounded down to as applicable. This will result in a decrease in the next whole aggregate number of shares of Parent Common Stock. The per share Stock reserved for issuance upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Parent Options, Parent Bridge Warrants, Placement Agent Bridge Warrants and Parent Exchange Warrants, and an increase in the number of shares of Parent Common Stock issuable to Company Warrant Stockholders at which such warrant was exercisable immediately prior the Effective Time. Accordingly, regardless of the exercise of any Company Warrants, the total number of shares of Parent Common Stock issuable to Company Stockholders, and, upon exercise, to the Effective Time by holders of Parent Options and Parent Warrants, in connection with the Merger (bin accordance with Section 1.5 and this Section 1.11) the Exchange Ratio rounded up to the next whole centshall remain constant.

Options and Warrants. (ia) At As of the Effective Time, all options to purchase Company Common Stock issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company pursuant to its 1997 Stock Option Plan immediately prior to the Effective Time and 1997B Stock Option Plan ("Company Options") and the Warrant dated October 15, 1998 issued to Phoenix Leasing Incorporated, the Warrant dated October 15, 1998 issued to Xxxxxx Kingsbrook and the Series D Warrant (collectively, the "Warrants"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At Entrust. Immediately after the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") Option and Warrant outstanding immediately prior to the Effective Time shall be converted deemed to constitute an option or warrant (as the case may be) to acquire, on the same terms and exchanged for warrants to purchase conditions as were applicable under such Option or Warrant at the Effective Time, such number of shares of Parent Entrust Common Stock as shall be is equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise Shares subject to the unexercised portion of such Company Warrants immediately prior to Option or Warrant multiplied by the Effective Time and applicable Conversion Ratio (b) the Exchange Ratio, with any fraction resulting from such product multiplication to be rounded down to the next nearest whole number of shares of Parent Common Stocknumber). The exercise price per share of each such assumed Option and Warrant shall be equal to the exercise price of each Company such Option or Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time Time, divided by the applicable Conversion Ratio (b) the Exchange Ratio rounded up to the next nearest whole cent). The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), if applicable, and all of the other terms of such Options and Warrants shall otherwise remain unchanged. (b) As soon as practicable after the Effective Time, Entrust or the Surviving Corporation shall deliver to the holders of Options and Warrants appropriate notices setting forth such holders' rights pursuant to such Options and Warrants, as amended by this Section 1.9, and the agreements evidencing such Options and Warrants shall continue in effect on the same terms and conditions (subject to the amendments provided for in this Section 1.9 and contained in such notice). (c) Entrust shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Entrust Common Stock for delivery upon exercise of the Options and Warrants assumed in accordance with this Section 1.9. Within fifteen days after the receipt by Entrust of the consolidated audited and unaudited historical financial statements of the Company and the Subsidiaries (as defined below) required to be filed by Entrust with the Securities and Exchange Commission (the "SEC") pursuant to Item 7(a) of the Current Report on Form 8-K as a result of the transactions contemplated hereby, Entrust shall file a Registration Statement on Form S-8 (or any successor form) under the Securities Act of 1933, as amended (the "Securities Act"), with respect to all shares of Entrust Common Stock subject to the Options that may be registered on a Form S-8, and shall use its best efforts to maintain the effectiveness of such Registration Statement for so long as such Options remain outstanding.

Options and Warrants. (ia) At the Effective Time, each option and warrant granted or issued by the Company Stock Option Planand exercisable for shares of Company Common Stock, as amended (the "Company Stock Option Plan"), which is outstanding and all options outstanding under the Company Stock Option Plan unexercised or unconverted immediately prior to the Effective Time ("Company Options"), whether vested or unvestedthereto, shall be assumed by Parent pursuant to a writing to be executed at the Closing in form and thereafter constitute substance reasonably acceptable to the right Company, and, subject to receive options the following provisions, shall be converted into an option or warrant to purchase shares of Parent Common Stock. Each such option or warrant shall be converted into an option or warrant to purchase such number of shares of Parent Common Stock at such exercise price as is determined in accordance with this Section 1.6(c). as provided below (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, otherwise having the same duration and other terms and conditions set forth in as the Company Stock Option Plan and the applicable stock original option agreement as in effect immediately prior to the Effective Time, except that or warrant): (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as to be subject to the new option or warrant shall be equal to the product of (aA) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants subject to the option or warrant immediately prior to the Effective Time and (bB) the Exchange Ratio, such the product to be rounded down being rounded, if necessary, up or down, to the next nearest whole share; and (ii) the exercise or convertible price per share of Parent Common Stock under the new option or warrant shall be equal to (A) the exercise price per share of the Company Common Stock under the option or warrant immediately prior to the Effective Time divided by (B) the Exchange Ratio, rounded, if necessary, up or down, to the nearest cent. Notwithstanding the foregoing, those warrants that were issued by the Company and Parent that are by their terms exercisable for shares of Parent Common Stock (the "TLSP/CRW Warrants") shall be unaffected as a result of the Merger. ----------------- (b) At the Effective Time, the Purchaser shall deliver to holders of original options and warrants (except for the TLSP/CRW Warrants) appropriate agreements representing the new options and warrants on the terms and conditions set forth in this Section 1.5(b). The Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common StockStock for delivery upon exercise of the new options and warrants in accordance with this Section 1.5(b). The per share exercise price Parent shall file (i) a registration statement on Form S-8 (or any successor form) or another appropriate form, effective promptly after the Effective Time, with respect to shares of each Parent Common Stock subject to the new options (but not any such new warrants) and (ii) a registration statement on Form S-3 (or any successor form) or another appropriate form (such registration statement, the "Parent Form S-3"), effective promptly after the Effective Time, with respect to --------------- shares of Parent Common Stock subject to the new warrants (but only with respect to such shares of Parent Common Stock associated with shares of Company Warrant Common Stock that had been registered by the Company on a registration statement on Form S-3 (the "Company Form S-3"))). The Company, from time to time, shall equal also ---------------- prepare such resale prospectuses for inclusion in the quotient obtained Parent Form S-3 on the same basis as contemplated by dividing the Company Form S-3. The Company shall use all reasonable efforts to maintain the effectiveness of (ai) such Form S-8 registration statement for so along as such options remain outstanding and (ii) the per share exercise price Parent Form S-3 for such period covered by the existing Company Form S-3. In addition, with respect to those individuals who subsequent to the Merger will be subject to the reporting requirements under Section 16(a) of the Company Warrant at which Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act"), the Parent shall administer any option plans assumed pursuant ------------ to this Section 1.5(b) in a manner that complies with Rule 16b-3 promulgated under the Exchange Act to the extent such warrant was exercisable immediately option plan complied with such rule prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centMerger.

Options and Warrants. (ia) At As of the Effective Time, the all outstanding Company Stock Option Plan, Options (as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")defined below) that remain unexercised, whether vested or unvested, shall be assumed by Parent canceled and thereafter constitute the right to receive exchanged for options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c(each, a “Parent Option”) under Parent Equity Plan (as defined below). (ii) Each such , if the holder is eligible to be granted an option so assumed by under the Parent under this Agreement shall continue to haveEquity Plan, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product or outside of the number of shares of Company Common Stock that were issuable upon exercise of such Parent Equity Plan, if the Holder is not eligible to be granted an option immediately prior to under the Effective Time multiplied Parent Equity Plan, in either case, without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be is equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise subject to the unexercised portion of the Company Option multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded up to the nearest whole number, unless such Company Option provides for different treatment of fractions of a share in such circumstances, in which case the terms of such Company Warrants immediately Option pertaining to the treatment of a fraction of a share shall control). The exercise price per share of each Parent Option shall be equal to the exercise price of the Company Option prior to conversion divided by the Effective Time Conversion Ratio (rounded up to the nearest whole tenth of a cent, unless such Company Option provides for different treatment of fractions of a cent in such circumstance, in which case the terms of such Company Option pertaining to the treatment of a fraction of a cent shall control), and the vesting schedule shall be the same as that of the Company Option that is exchanged for Parent Option. (b) As soon as practicable after the Exchange RatioEffective Time, such product Parent or the Surviving Corporation shall take appropriate actions (i) to collect the Company Options and the agreements evidencing the Company Options, which shall be deemed to be rounded down canceled but shall entitle the holder to exchange the next whole Company Options for Parent Options in Parent, and (ii) to issue in lieu thereof new Parent Options pursuant to Section 1.8(a), including the delivery by Parent to such holders of new option agreements. (c) As of the Effective Time, all outstanding Company Warrants (as defined below) that remain unexercised shall terminate as of the Effective Date, and Parent shall issue new warrants (each, a “Parent Warrant”) in substitution for the Company Warrants, on substantially the same terms and conditions of the Company Warrants, but representing the right to acquire such number of shares of Parent Common StockStock as is equal to the number of shares of Company Common Stock subject to the unexercised portion of the Company Warrant multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded up to the nearest whole number, unless such Company Warrant provides for different treatment of fractions of a share in such circumstance, in which case the terms of such Company Warrant pertaining to the treatment of a fraction of a cent shall control). The exercise price per share exercise price of each Company Parent Warrant shall be equal to the quotient obtained by dividing (a) the per share exercise price of the Warrant prior to substitution divided by the Conversion Ratio (rounded to the nearest whole cent, and with $0.005 rounded upward to the nearest whole cent, unless such Company Warrant at provides for different treatment of fractions of a cent in such circumstance, in which case the terms of such warrant was exercisable immediately prior Company Warrant pertaining to the Effective Time by treatment of a fraction of a cent shall control). (bd) 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 (i) Parent Options to be issued for the Exchange Ratio rounded up Company Options and (ii) Parent Warrants to be issued for the next whole centCompany Warrants, in accordance with this Section 1.8.

Options and Warrants. (ia) At the Effective Time, The Target has provided the Company with a true and complete list as of the date hereof of all holders of outstanding options under the Target’s Stock Option Plan (the “Target Stock Option Plan”), as amended including the number of shares of The Target Common Stock subject to each such option, the exercise or vesting schedule, the exercise price and term of each such option. On the Closing Date, each outstanding option to purchase shares of the Target Common Stock (an “Target Stock Option”) under the "Company Target Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter shall constitute the right an option to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to haveacquire, and be subject to, on the same terms and conditions set forth in as were applicable under such Target Stock Option, the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the same number of shares of the Company Common Stock that were issuable upon exercise as the holder of such option immediately prior Target Stock Option would have been entitled to receive pursuant to the Effective Time multiplied transaction contemplated by this Agreement had such holder exercised such option (including any unvested portion thereof) in full (disregarding any limitation on exercisability thereof) immediately before the Exchange Ratio and Closing Date (rounded down downward to the next nearest whole number of shares of Parent Common Stocknumber), and at a price per share (iirounded upward to the nearest whole cent) equal to (y) the per share aggregate exercise price for the shares of Parent Target Common Stock issuable upon exercise purchasable pursuant to such Target Stock Option immediately before the Effective Date divided by (z) the number of such assumed option will be equal to full shares of the quotient determined by dividing the exercise price per share of Company Common Stock at which deemed purchasable pursuant to such Target Stock Option in accordance with the foregoing. (b) Except as otherwise provided in the Target Stock Option Plan, the documents governing the Target Stock Options, and offer letters and other agreements affecting such Target Stock Options, the transaction contemplated by this Agreement shall not result in the termination or acceleration of any outstanding Target Stock Options under the Target Stock Option Plan that are so assumed by the Company. It is the intention of the parties that the Target Stock Options so assumed by the Company qualify following the Closing Date as incentive stock options as defined in Section 422 of the Internal Revenue Code to the extent such Target Stock Options qualified as incentive stock options before the Closing Date. As promptly as reasonably practicable and in any event within thirty (30) business days after receipt of all option was exercisable documentation it requires relating to the outstanding Target Stock Options, the Company will issue to each person who, immediately prior to the Effective Time Closing Date, is a holder of an outstanding Target Stock Option under the Target Stock Option Plan that is to be assumed by the Exchange RatioCompany hereunder, rounded up to a document evidencing the next whole centforegoing assumption of such Target Stock Option by the Company. (iiic) At The Company shall take all corporate action necessary to reserve for issuance a sufficient number of shares of its Common Stock for delivery under The Target Stock Options assumed in accordance with this Section 1.4. The Board of Directors of the Target shall, as of the Closing Date, take all necessary actions, pursuant to and in accordance with the Target Stock Option Plan and the instruments evidencing the Target Stock Options, to provide for the assumption of Target Stock Options by the Company in accordance with this Section 1.4, and to provide that no consent of the holders of the Target Stock Options is required in connection with such assumption. (d) On the Effective TimeDate, each outstanding warrant to acquire purchase shares of Company Capital Target Common Stock (a “Target Warrant”) shall be assumed and shall constitute a warrant to acquire, on the same terms and conditions as were applicable under such Target Warrant, the same number of shares of Common Stock as the holder of such Target Warrant would have been entitled to receive pursuant to the transaction contemplated by this Agreement had such holder exercised such warrant (including any unvested portion thereof) in full (disregarding any limitation on exercisability thereof) immediately before the Closing Date (rounded downward to the nearest whole number), at a price per share (rounded upward to the nearest whole cent) equal to (y) the aggregate exercise price for the shares of Target Common Stock purchasable pursuant to such Target Warrant immediately before the Closing Date divided by (z) the number of full shares of Common Stock deemed purchasable pursuant to such Target Warrant in accordance with the foregoing. (e) Except as otherwise provided in the Target Warrants and other agreements affecting such Target Warrants, the transaction contemplated by this Agreement shall not result in the termination or acceleration of any outstanding Target Warrants that are so assumed by the Company. As promptly as reasonably practicable and in any event within thirty (30) business days after receipt of all documentation it requires relating to the outstanding Target Warrants, the Company will issue to each a "Company Warrant") outstanding person who, immediately prior to the Effective Time Closing Date, is a holder of an outstanding Target Warrant under that is to be assumed by the Company hereunder, a document evidencing the foregoing assumption of such Target Warrant by the Company. (f) The Company shall be converted and exchanged take all corporate action necessary to reserve for warrants to purchase such issuance a sufficient number of shares of Parent Common Stock for delivery under Target Warrants assumed in accordance with this Section 1.4. The Board of Directors of the Target shall, as shall be equal of the Closing Date, take all necessary actions, pursuant to the product Target Warrants, to provide for the assumption of (a) Target Warrants by the number of shares of Company Common Stock in accordance with this Section 1.4, and to provide that were issuable upon exercise of such Company Warrants immediately prior to the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price no consent of the Company Warrant at which holders of the Target Warrants is required in connection with such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centassumption.

Options and Warrants. (ia) At As of the Effective Time, all stock options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvestedunvested (the “Company Options”), shall be assumed by automatically become Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied Options without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as is equal to the number of Company Shares subject to the unexercised portion of the Company Option multiplied by one half (1/2). The exercise price per share of each Parent Option shall be equal to the product exercise price of the Company Option multiplied by a factor of two (a2) and the number of shares of Company Common Stock that were issuable upon exercise terms of such Parent Options shall otherwise remain the same. The Parent Options shall be granted under the Company's 2012 Equity Incentive Plan (the “2012 Plan”), which shall be adopted and assumed in writing by the Parent in connection with the Merger, and under the 2012 Plan’s terms, exercisability, vesting schedule, and status as an “incentive stock option” under Section 422 of the Code, if applicable. It is the intention of the Parties that any Company Warrants immediately prior Options intended to be “incentive stock options” under Section 422 of the Effective Time and Code shall remain incentive stock options as Parent Options. (b) As soon as practicable after the Exchange RatioEffective Time, such product the Parent or the Surviving Corporation shall take appropriate actions to collect the Company Options and the agreements evidencing the Company Options, which shall be deemed to be rounded down canceled and shall entitle the holder to exchange the next whole Company Options for Parent Options. (c) 3,000,000 shares of Parent Common Stock shall be reserved for issuance under the 2012 Plan being assumed by Parent at Closing, and shall be issued upon the exercise of the Parent Options in accordance with this Section 1.09. No additional Options shall at any time hereafter be granted under the 2012 Plan. (d) As of the Effective Time, all warrants to purchase Company Shares issued by the Company, whether vested or unvested (the “Company Warrant”), shall automatically become Parent Warrants without further action by the holder thereof. Each Parent Warrant shall constitute an option to acquire such number of shares of Parent Common StockStock as is equal to the number of Company Shares subject to the unexercised portion of the Company Warrant multiplied by one half (1/2). The exercise price per share exercise price of each Company Parent Warrant shall be equal to the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which multiplied by a factor of two (2) and the terms of such warrant was exercisable immediately prior to Parent Warrants shall otherwise remain the same. (e) As soon as practicable after the Effective Time by Time, the Parent or the Surviving Corporation shall take appropriate actions to collect the Company Warrants and the agreements evidencing the Company Warrant s, which shall be deemed to be canceled and shall entitle the holder to exchange the Company Warrants for Parent Warrants. (bf) 1,350,000 shares of Parent Common Stock shall be reserved for issuance, and shall be issued upon the Exchange Ratio rounded up to exercise of the next whole centParent Warrants in accordance with this Section 1.09.

Options and Warrants. (ia) At the Effective Time, each option and warrant granted or issued by the Company Stock Option Planand exercisable for shares of Company Common Stock, as amended (the "Company Stock Option Plan"), which is outstanding and all options outstanding under the Company Stock Option Plan unexercised or unconverted immediately prior to the Effective Time ("Company Options"), whether vested or unvestedthereto, shall be assumed by Parent pursuant to a writing to be executed at the Closing in form and thereafter constitute substance reasonably acceptable to the right Company, and, subject to receive options the following provisions, shall be converted into an option or warrant to purchase shares of Parent Common Stock. Each such option or warrant shall be converted into an option or warrant to purchase such number of shares of Parent Common Stock at such exercise price as is determined in accordance with this Section 1.6(c). as provided below (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, otherwise having the same duration and other terms and conditions set forth in as the Company Stock Option Plan and the applicable stock original option agreement as in effect immediately prior to the Effective Time, except that or warrant): (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as to be subject to the new option or warrant shall be equal to the product of (aA) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants subject to the option or warrant immediately prior to the Effective Time and (bB) the Exchange Ratio, such the product to be rounded down being rounded, if necessary, up or down, to the next nearest whole share; and (ii) the exercise or convertible price per share of Parent Common Stock under the new option or warrant shall be equal to (A) the exercise price per share of the Company Common Stock under the option or warrant immediately prior to the Effective Time divided by (B) the Exchange Ratio, rounded, if necessary, up or down, to the nearest cent. Notwithstanding the foregoing, those warrants that were issued by the Company and Parent that are by their terms exercisable for shares of Parent Common Stock (the "TLSP/CRW Warrants") shall be unaffected as a result of the Merger. (b) At the Effective Time, the Purchaser shall deliver to holders of original options and warrants (except for the TLSP/CRW Warrants) appropriate agreements representing the new options and warrants on the terms and conditions set forth in this Section 1.5(b). The Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common StockStock for delivery upon exercise of the new options and warrants in accordance with this Section 1.5(b). The per share exercise price Parent shall file (i) a registration statement on Form S-8 (or any successor form) or another appropriate form, effective promptly after the Effective Time, with respect to shares of each Parent Common Stock subject to the new options (but not any such new warrants) and (ii) a registration statement on Form S-3 (or any successor form) or another appropriate form (such registration statement, the "Parent Form S-3"), effective promptly after the Effective Time, with respect to shares of Parent Common Stock subject to the new warrants (but only with respect to such shares of Parent Common Stock associated with shares of Company Warrant Common Stock that had been registered by the Company on a registration statement on Form S-3 (the "Company Form S-3"))). The Company, from time to time, shall equal also prepare such resale prospectuses for inclusion in the quotient obtained Parent Form S-3 on the same basis as contemplated by dividing the Company Form S-3. The Company shall use all reasonable efforts to maintain the effectiveness of (ai) such Form S-8 registration statement for so along as such options remain outstanding and (ii) the per share exercise price Parent Form S-3 for such period covered by the existing Company Form S-3. In addition, with respect to those individuals who subsequent to the Merger will be subject to the reporting requirements under Section 16(a) of the Company Warrant at which Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act"), the Parent shall administer any option plans assumed pursuant to this Section 1.5(b) in a manner that complies with Rule 16b-3 promulgated under the Exchange Act to the extent such warrant was exercisable immediately option plan complied with such rule prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centMerger.

Options and Warrants. (ia) At As of the Effective Time, all stock options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvestedunvested (the “Company Options”), shall be assumed by automatically become Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied Options without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as is equal to the number of Company Shares subject to the unexercised portion of the Company Option multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). The exercise price per share of each Parent Option shall be equal to the product exercise price of the Company Option divided by the Common Conversion Ratio and the terms of such Parent Options shall otherwise remain the same. The Parent Options shall be granted under the Company's 2007 Employee, Director and Consultant Stock Plan, as amended (athe “2007 Plan”), which shall be adopted and assumed in writing by the Parent in connection with the Merger, and under the 2007 Plan’s terms, exercisability, vesting schedule, and status as an “incentive stock option” under Section 422 of the Code, if applicable. It is the intention of the Parties that any Company Options intended to be “incentive stock options” under Section 422 of the Code shall remain incentive stock options as Parent Options. (b) As soon as practicable after the number of Effective Time, the Parent or the Surviving Corporation shall take appropriate actions to collect the Company Options and the agreements evidencing the Company Options, which shall be deemed to be canceled and shall entitle the holder to exchange the Company Options for Parent Options. (c) 5,915,615 shares of Company Parent Common Stock that were issuable shall be reserved for issuance under the 2007 Plan being assumed by Parent at Closing, and shall be issued upon the exercise of such the Parent Options in accordance with this Section 1.11. No additional Options shall at any time hereafter be granted under the 2007 Plan. (d) Upon the Closing of the Merger, Parent Bridge Warrants to purchase an aggregate of 600,000 shares of Parent Common Stock at a price of $1.00 per share will be granted to the holders of Company common stock purchase warrants (the “Company Warrants”). 600,000 shares of Parent Common Stock shall be reserved for issuance upon the exercise of the Parent Bridge Warrants. As of the Effective Time, any and all outstanding Company Warrants immediately to purchase capital stock of the Company, whether vested or unvested, shall be canceled. (e) In the event that any issued and outstanding Company Options or Company Warrants are exercised prior to the Effective Time Time, the number of outstanding Company Shares shall be increased by the number of Company Shares issued upon exercise of Company Options and (b) Company Warrants, and the Exchange Rationumber of outstanding Company Options and Company Warrants shall be reduced by the same number, such product to be rounded down to as applicable. This will result in a decrease in the next whole aggregate number of shares of Parent Common Stock. The per share Stock reserved for issuance upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Parent Options and Parent Bridge Warrants, and an increase in the number of shares of Parent Common Stock issuable to Company Warrant Stockholders at which such warrant was exercisable immediately prior the Effective Time. Accordingly, regardless of the exercise of any Company Warrants, the total number of shares of Parent Common Stock issuable to Company Stockholders, and, upon exercise, to the Effective Time by holders of Parent Options and Parent Warrants, in connection with the Merger (bin accordance with Section 1.5 and this Section 1.11) the Exchange Ratio rounded up to the next whole centshall remain constant.

Options and Warrants. (i) At the Effective Time, the Company each option or warrant granted by CPI to purchase shares of CPI Common Stock Option Plan, as amended (the "Company Stock Option Plan")or CPI Preferred Stock, and all options each Target Option, which is outstanding under and unexercised immediately prior to the Company Effective Time, shall be assumed by Holdco and be converted into an option or warrant to purchase shares of Holdco Common Stock Option Plan in such amount and at such exercise price as provided below and otherwise having the same terms and conditions as are in effect immediately prior to the Effective Time ("Company Options")except to the extent that such terms, whether vested or unvested, shall conditions and restrictions may be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined altered in accordance with this Section 1.6(c).their terms as a result of the transactions contemplated hereby): (ii1) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Holdco Common Stock that were issuable upon exercise of such option immediately prior to be subject to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 new option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each or warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as shall be equal to the product of (ax) the number of shares of Company CPI Common Stock, CPI Preferred Stock or Target Common Stock that were issuable subject to the original option or warrant and (y) the CPI Exchange Ratio (if the original option or warrant related to CPI Common Stock or CPI Preferred Stock) or the Target Exchange Ratio (if the original option or warrant related to Target Common Stock), respectively; (2) the exercise price per share of Holdco Common Stock under the new option or warrant shall be equal to (x) the exercise price per share of the CPI Common Stock, CPI Preferred Stock or Target Common Stock under the original option or warrant divided by (y) the CPI Exchange Ratio (if the original option or warrant related to CPI Common Stock or CPI Preferred Stock) or the Target Exchange Ratio (if the original option or warrant related to Target Common Stock); and (3) upon each exercise of such Company Warrants immediately prior to options or warrants by a holder thereof, the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole aggregate number of shares of Parent Holdco Common StockStock deliverable upon such exercise shall be rounded down, if necessary, to the nearest whole share and the aggregate exercise price shall be rounded up, if necessary, to the nearest cent. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing adjustments provided herein with respect to any options that are "incentive stock options" (a) the per share exercise price as defined in Section 422 of the Company Warrant at which such warrant was exercisable immediately prior to Code) shall be effected in a manner consistent with Section 424(a) of the Effective Time by (b) the Exchange Ratio rounded up to the next whole centCode.

Options and Warrants. (i) At The Company and the Effective Time, the Company Stock Option Plan, Parent shall take all necessary steps to ensure that as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c).soon as practicable after Closing: (iia) Each such option so assumed by Parent under this Agreement shall continue to have, Option outstanding and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect unexercised immediately prior to the Effective Time, except that will be deemed cancelled as of the Effective Time. Upon (iand not before, or more than one week after) such the date of the Parent Shareholder Approval, Parent shall issue to each person who immediately prior to the Effective Time was the holder of an outstanding Option, an option to purchase Parent ADRs which will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Parent Common Stock ADRs equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option Option immediately prior to the Effective Time multiplied by the Exchange Ratio and Per Share Common Consideration (with each fractional share being rounded down to the next nearest whole number share) at an exercise price equal to the greater of shares of Parent Common Stock, and (iix) the per share exercise price for fair market value of the shares Parent ADRs covered by the option as of Parent Common Stock issuable upon exercise of such assumed option will be equal to the grant date or (y) the quotient determined by dividing the exercise price per share of Company Common Stock at which such option Option was exercisable immediately prior to the Effective Time by the Exchange Ratio, Per Share Common Consideration (rounded up to the next nearest whole cent). (iiib) At the Effective TimeParent shall take all such actions as may be necessary to authorize and deliver 4,921,791 Parent ADRs, each warrant to acquire shares at a price of Company Capital Stock $0.13 per Parent ADR within ninety (each a "Company Warrant"90) outstanding immediately prior to days of the Effective Time to Xxxxxx or its affiliates. Pursuant to Section 16.3, Parent shall take all such actions, including obtaining Parent Shareholder Approval as may be converted necessary to authorize and exchanged for warrants to purchase such number deliver an additional 2,761,135 Parent ADRs, at a price of shares $0.13 per Parent ADR, as soon as reasonably practicable after the amendment and restatement of Parent Common Stock as shall be equal to its Certificate of Incorporation or the product equivalent, but in no event later than the later of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately prior to the Effective Time October 15, 2008 and (b) the date 90 days after the Company shall have obtained, prepared and filed with the Securities and Exchange Ratio, such product to be rounded down Commission all information and financial statements relating to the next whole number Company that may be required by the SEC or otherwise in connection with the Parent Shareholder Approval. Receipt of shares such additional Parent ADRs by Xxxxxx or its affiliates shall be (i) in full satisfaction of a note payable for the amount of $450,000 from the Company payable to Xxxxxx or its affiliates and an additional investment of $550,000 in the Company, and (ii) subject to and conditioned upon the execution by Xxxxxx of an acknowledgment that upon receipt of such ADRs, Xxxxxx and its affiliates will have received full payment of all amounts owing to it by the Company or DDI LLC. (c) Xxxxx Xxxxx shall receive a warrant to purchase 8,551,450 Parent Common Stock. The per share exercise ADRs at a price of each Company Warrant $0.01 per Parent ADR in the form set forth in Exhibit E. (d) Windstone Capital Partners shall equal the quotient obtained by dividing (a) the per share exercise receive a warrant to purchase 3,603,876 Parent ADRs, at a price of $0.13 per Parent ADR in the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole cent.form set forth in Exhibit F.

Options and Warrants. (ia) At Except as otherwise agreed by Parent and the Company prior to the Effective Time, the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that all options to purchase shares of Company Common Stock (the "Company Stock Options") granted under any plan, arrangement or agreement (the "Company Stock Option Plans") set forth in Section 3.03(a)(i) of the disclosure schedule delivered by the Company to Parent and Merger Co concurrently with the execution and delivery of this Agreement (the "Company Disclosure Schedule"), whether or not then exercisable, shall be cancelled by the Company and shall no longer be outstanding thereafter. In consideration for such cancellation, the holder thereof shall thereupon be entitled to receive, as soon as reasonably practicable after the Effective Time (but in no event later than five business days following the Closing Date), a cash payment from the Company in respect of such cancellation in an amount (if any) equal to (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of (x) the number of shares of Company Common Stock that were issuable upon exercise of subject to such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next whole number of shares of Parent Common StockCompany Stock Option, whether or not then exercisable, and (iiy) the per share exercise price for excess, if any, of the shares of Parent Common Stock issuable upon exercise of such assumed option will be equal to the quotient determined by dividing Merger Consideration over the exercise price per share of Company Common Stock at which subject to such option was exercisable Company Stock Option, minus (ii) all applicable federal, state and local Taxes required to be withheld by the Company. The Company agrees to take any and all actions necessary (including any action reasonably requested by Parent) to effectuate immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole centcancellation of all Company Stock Options. (iiib) At Prior to the Effective Time, the Company shall take all actions necessary to ensure that, at the Effective Time, each warrant then outstanding to acquire purchase shares of Company Capital Common Stock (each a the "Company WarrantWarrants") outstanding immediately prior ), whether or not then exercisable, shall be cancelled by the Company in consideration for which the holder thereof shall thereupon be entitled to receive as soon as reasonably practicable after the Effective Time shall be converted and exchanged for warrants to purchase Time, a cash payment from the Company in respect of such number of shares of Parent Common Stock as shall be cancellation in an amount (if any) equal to (i) the product of (ax) the number of shares of Company Common Stock that were issuable upon exercise of subject to such Company Warrant, whether or not then exercisable, and (y) the excess, if any, of the Merger Consideration over the exercise price per share of Company Common Stock subject to such Company Warrant, minus (ii) all applicable federal, state and local Taxes required to be withheld by the Company. The Company shall take any and all actions reasonably requested by Parent to effectuate the cancellation of all Company Warrants immediately prior to at the Effective Time and (b) the Exchange Ratio, such product to be rounded down to the next whole number of shares of Parent Common Stock. The per share exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by (b) the Exchange Ratio rounded up to the next whole centTime.

Options and Warrants. (ia) At As of the Effective Time, all options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior pursuant to the Effective Time its stock option plans or otherwise ("Options") and warrants to purchase Company OptionsShares ("Warrants"), whether vested or unvested, shall be assumed by Parent and thereafter constitute the right to receive options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied by the Exchange Ratio and rounded down to the next 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 option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At Buyer. Immediately after the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") Option or Warrant outstanding immediately prior to the Effective Time shall be converted deemed to constitute an option or warrant to acquire, on the same terms and exchanged for warrants to purchase conditions as were applicable under such Option or Warrant at the Effective Time, such number of shares of Parent Buyer Common Stock as is equal to the number of Company Shares subject to the unexercised portion of such Option or Warrant multiplied by the Conversion Ratio (with any fraction resulting from such multiplication to be rounded up or down to the nearest whole number or, in the case of .5, to the nearest odd number). The exercise price per share of each such assumed Option or Warrant shall be equal to the product of (a) the number of shares of Company Common Stock that were issuable upon exercise price of such Company Warrants Option or Warrant immediately prior to the Effective Time divided by the Conversion Ratio. The term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Internal Revenue Code of 1986 (as amended, the "Code"), if applicable, and all of the other terms of the Options shall otherwise remain unchanged. (b) As soon as practicable after the Exchange RatioEffective Time, such product to be rounded down the Buyer or the Surviving Corporation shall deliver to the next whole holders of Options and Warrants appropriate notices setting forth such holders' rights pursuant to such Options and Warrants, as amended by this Section 1.10, and the agreements evidencing such Options and Warrants shall continue in effect on the same terms and conditions (subject to the amendments provided for in this Section 1.10). (c) The Buyer shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Buyer Common Stock. The per share Stock for delivery upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (a) the per share exercise price of the Company Warrant at which such warrant was exercisable immediately prior to Options and Warrants assumed in accordance with this Section 1.10. As soon as practicable after the Effective Time by Time, the Buyer shall file a Registration Statement on Form S-8 (bor any successor form) under the Exchange Ratio rounded up Securities Act of 1933, as amended (the "Securities Act") with respect to all shares of Buyer Common Stock subject to Options that may be registered on a Form S-8, and shall use its best efforts to maintain the next whole centeffectiveness of such Registration Statement for so long as such Options remain outstanding.

Options and Warrants. (ia) At As of the Effective Time, all Options to purchase Company Shares issued by the Company Stock Option Plan, as amended (the "Company Stock Option Plan"), and all options outstanding under the Company Stock Option Plan immediately prior to the Effective Time ("Company Options")Company, whether vested or unvested, shall be assumed by Parent canceled and thereafter constitute the right to receive exchanged for options to purchase such number of shares of Parent Common Stock determined in accordance with this Section 1.6(c). (ii“Parent Options”) Each such option so assumed by Parent under this Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and the applicable stock option agreement as in effect immediately prior to the Effective Time, except that (i) such option will be exercisable for that number of whole shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such option immediately prior to the Effective Time multiplied without further action by the Exchange Ratio and rounded down to the next whole number of shares of holder thereof. Each Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Option shall constitute an option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such option was exercisable immediately prior to the Effective Time by the Exchange Ratio, rounded up to the next whole cent. (iii) At the Effective Time, each warrant to acquire shares of Company Capital Stock (each a "Company Warrant") outstanding immediately prior to the Effective Time shall be converted and exchanged for warrants to purchase such number of shares of Parent Common Stock as is equal to the number of Company Shares subject to the unexercised portion of the Option multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). The exercise price per share of each Parent Option shall be equal to the product exercise price of (a) the number of shares of Company Common Stock that were issuable upon exercise of such Company Warrants immediately Option prior to conversion divided by the Effective Time and Common Conversion Ratio. . (b) As soon as practicable after the Exchange RatioEffective Time, such product the Parent or the Surviving Corporation shall take appropriate actions to collect the Options and the agreements evidencing the Options, which shall be deemed to be rounded down canceled and shall entitle the holder to exchange the next whole Options for Parent Options in the Parent. (c) The Company shall cause the termination, as of the Effective Time, of any and all outstanding Warrants to purchase capital stock of the Company which remain unexercised and the Parent shall, at Closing, issue new warrants (the “Parent Warrants”) in substitution for the Warrants, on substantially the same terms and conditions of the Warrants, but representing the right to acquire such number of shares of Parent Common Stock. Stock as is equal to the number of Company Shares subject to the unexercised portion of the Warrant multiplied by the Common Conversion Ratio (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). (d) The per share Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock for delivery upon exercise price of each Company Warrant shall equal the quotient obtained by dividing (ai) the per share exercise price of Parent Options to be issued for the Company Warrant at which such warrant was exercisable immediately prior to the Effective Time by Options and (bii) the Exchange Ratio rounded up Parent Warrants to be issued for the next whole centWarrants, in accordance with this Section 1.8.