Common use of Stock Options and Warrants Clause in Contracts

Stock Options and Warrants. At the Effective Time, each Company Option and Company Warrant held by Cashed Out Option Holders (collectively, “Cashed Out Options”) shall be cancelled and automatically converted into the right to receive, upon the surrender of such Cashed Out Option and the execution and delivery of (x) the Amendment to Stock Option Agreements and Consent to Appointment in the form attached hereto as Exhibit E (the “Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Options, and (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment in the form attached hereto as Exhibit F (the “Note and Warrant Amendment and Consent”) upon the terms and subject to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a portion of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund), an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options prior to the Effective Time and the shares issued upon such exercise were included in the number of outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior to the Closing, the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding immediately prior to the Effective Time shall be terminated and shall expire as of the Effective Time. Neither Parent nor the Surviving Corporation shall assume the Company Options or substitute similar options of Parent for Company Options. Prior to the Effective Time, the Company shall take all actions necessary to effectuate such termination at the Effective Time.

Stock Options and Warrants. (a) At the Effective Time, each Company Stock Option and Company Warrant held by Cashed Out Option Holders outstanding (collectively, whether or not vested or exercisable) that has a per share exercise price less than the Per Share Price (each a “Cashed Out OptionsCash Pay Option”) shall be cancelled canceled and automatically converted into the right to receivereceive (i) a cash payment equal to (A) the excess, upon the surrender of such Cashed Out Option and the execution and delivery if any, of (x1) the Amendment Per Share Price over (2) the exercise price per Common Share subject to such Company Stock Option, multiplied by (B) the number of Common Shares for which such Company Stock Option Agreements shall not theretofore have been exercised (the “Parent Option Consideration”) plus (ii) (A) the Additional Per Share Merger Consideration multiplied by (B) the number of Cashless Exercise Option Shares represented by such Company Stock Option (the “Company Option Consideration” and Consent collectively with the Parent Option Consideration, the “Option Consideration”). Each Cash Pay Option when so converted shall cease to Appointment be outstanding and each holder of a Cash Pay Option shall cease to have any rights with respect to such Cash Pay Options. Commencing at the Effective Time and continuing until the Company Warrants expire, each Company Warrant outstanding shall only represent the right to receive (i) a cash payment equal to (A) the excess, if any, of (1) the Per Share Price over (2) the exercise price per Common Share subject to such Company Warrant, multiplied by (B) the number of Common Shares for which such Company Warrant shall not theretofore have been exercised (the “Parent Warrant Consideration”) plus (ii) (A) the Additional Per Share Merger Consideration multiplied by (B) the number of Common Shares for which such Company Warrant shall not theretofore have been exercised (the “Company Warrant Consideration” and collectively with the Parent Warrant Consideration, the “Warrant Consideration”). For each Company Warrant (other than the Designated Warrants) that has not been exercised as of the Effective Date, an amount equal to the Additional Cash Per Share Merger Consideration multiplied by the number of Commons Shares for which such Company Warrant shall not theretofore have been exercised, is referred to as the “Company Warrant Cash Consideration”. Upon surrender to the Surviving Corporation of the original Company Stock Option agreement and an executed copy of the exercise notice in the form attached hereto as Exhibit E to the Company Stock Option (collectively, the “Option Amendment Documentation”), the Parent hereby agrees to cause the Surviving Corporation to promptly deliver (but in all cases not later than the fifth business day after the later of the Closing Date and Consent”the date of receipt of the Option Documentation) by each Cashed Out Option Holder that holds to the registered holder of such Company Options, and Stock Options (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment as indicated in the form attached hereto as Exhibit F (records of the “Note and Warrant Amendment and Consent”) upon Company), the terms and subject to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a cash portion of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund), an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options prior to less any required withholding taxes. At the Effective Time and the shares issued upon such exercise were included in the number of each Company Stock Option outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior to the Closing, the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding immediately prior to the Effective Time shall be terminated canceled and each holder of a certificate representing such canceled Company Stock Option shall cease to have any rights with respect to such Company Stock Option and shall expire not be entitled to receive any payment with respect thereto other than the Option Consideration. (b) The Board of Directors of the Company (or, if appropriate, any committee administering the Stock Plans) shall adopt such resolutions and the Company and the Board of Directors shall take all other actions as are required to (i) give effect to the transactions contemplated by this Section 2.4 and (ii) cause the Stock Plans and each Company Stock Option to be terminated as of the Effective Time. Neither Parent nor Time and cause any provision in any other agreement, arrangement or benefit plan providing for the issuance, transfer or grant of any capital stock of the Company or any interest in respect of any capital stock of the Company to be deleted as of the Effective Time and (iii) ensure that no person has any rights under any Stock Plan and Company Stock Option, or such other agreement, arrangement or benefit plan to acquire any capital stock of the Surviving Corporation shall assume or the Parent (other than rights under the Exchange Agreements by and between the Parent and the Rollover Holders) and that the Parent and the Surviving Corporation will not have any further obligation or liability under any of the foregoing Stock Plans and Company Stock Options and the Company Options Warrants or substitute similar options other such agreements, except as specifically contemplated by this Section 2.4. (c) For purposes of Parent for Company Options. Prior to this Agreement (i) the Effective Timeterm “Stock Plan” means any stock option, the Company shall take all actions necessary to effectuate such termination at the Effective Time.restricted stock or equity incentive plan, program or arrangement including, but not

Stock Options and Warrants. (a) At the Effective Time, each Company outstanding Participating Option and Company Participating Warrant held by Cashed Out Option Holders (collectively, “Cashed Out Options”) shall be entitled to receive that portion of the Merger Consideration set forth on the Distribution Waterfall (the “Option and Warrant Consideration”). For purposes of calculating the amount to be paid to each holder of a Participating Option or a Participating Warrant at the Effective Time, the Option and Warrant Consideration shall be calculated assuming that the Merger Consideration is equal to the Initial Merger Consideration, and shall be adjusted following the Closing as set forth herein, and shall also be reduced by such holder’s Escrow Account Allocation of the Escrow Amount and Seller Expense Amount, which amounts, subject to the terms of this Agreement, shall be released from the Escrow Account to the Exchange Agent in accordance with the terms and conditions of the Escrow Agreement and thereafter shall be payable to such holder by the Exchange Agent in accordance with the terms and conditions of the Exchange Agreement. The amount to be paid in cash to each such holder for each share of Company Capital Stock purchasable pursuant to a Participating Option and Participating Warrant shall be rounded down to the nearest whole cent. The Option and Warrant Consideration shall be allocated among the holders of Participating Options and Participating Warrants as provided in the Distribution Waterfall. At the Effective Time each outstanding Participating Option shall be terminated and cancelled and automatically shall be converted into the right into, and only be entitled to receive, upon that portion of the surrender Merger Consideration set forth on the Distribution Waterfall, subject to compliance with the terms of such Cashed Out this Agreement. At the Effective Time, each outstanding Participating Warrant containing terms which allow for the termination and cancellation thereof in consideration of a cash payment as provided in the Distribution Waterfall shall be terminated and cancelled and shall be converted into, and only be entitled to receive that portion of the Merger Consideration set forth on the Distribution Waterfall. At the Effective Time, each outstanding Participating Warrant containing terms which do not allow for the termination thereof if not exercised prior to the Effective Time and do not provide for the termination and cancellation thereof in consideration of a cash payment shall continue to be exercisable in accordance with its terms but shall thereafter only be exercised for that portion of the Merger Consideration set forth in the Distribution Waterfall, subject to compliance with the terms of this Agreement. (b) Upon receipt by the Exchange Agent of an Option and the execution and delivery of (x) the Amendment to Stock Option Agreements and Consent to Appointment Cancellation Agreement in the form attached hereto as Exhibit E (the “B-2 from a holder of a Participating Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Options, and (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment or a Warrant Cancellation Agreement in the form attached hereto as Exhibit F B-3 from a holder of a Participating Warrant, the holder of such Participating Option and Participating Warrants shall be entitled to receive, within five (5) Business Days after the “Note and Warrant Amendment and Consent”) upon later of such delivery or the terms and subject to the conditions Effective Time, in exchange therefor, cash in an amount set forth in this ARTICLE II and elsewhere the Distribution Waterfall, which amount shall be paid by the Exchange Agent by check. No interest or dividends will be paid or accrued on the consideration payable upon the surrender or transfer of any Participating Option or Participating Warrant. If the consideration provided for herein is to be delivered in this Agreement (including but not limited to the deposit name of a portion person other than the holder of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund)Participating Option or Participating Warrant, an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder it shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount a condition of such delivery that such holder would have received under Section 2.1(c) if the holder had exercised of the Participating Option or Participating Warrant shall have properly transferred such Cashed Out Options Participating Option or Participating Warrant prior to the Effective Time Time. Until the holder delivers a duly executed Option Cancellation Agreement or Warrant Cancellation Agreement in accordance with the provisions of this Section 2.7(b), each Participating Option and Participating Warrant shall represent, for all purposes, only the shares issued upon such exercise were included right to receive an aggregate amount in the number of outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior cash equal to the Closingportion of the Option and Warrant Consideration payable in respect thereof pursuant to Section 2.7(a), the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of without any interest or dividends thereon. (c) At the Effective Time. Each Company , each Stock Option other than those held by Cashed Out that is not a Participating Option Holders outstanding immediately prior to the Effective Time and each Warrant that is not a Participating Warrant shall be canceled and terminated without any consideration paid therefor and shall expire as without any further obligation or liability on the part of the Effective Time. Neither Parent nor the Surviving Corporation shall assume the Company Options or substitute similar options of Parent for Company Options. Company. (d) Prior to the Effective Time, the Company shall take all actions necessary (i) to effectuate such termination at give effect to the actions contemplated by this Section 2.7 and (ii) to terminate, effective immediately after the Effective Time, the Company Stock Plan and all awards thereunder so that on and after the Effective Time no employee, consultant or independent contractor of the Company or any participant under any Company Stock Plan or any other person shall have any Stock Option to purchase shares of Company Capital Stock or any right to receive any other equity interest in the Company (in each case, without the creation of any liability to the Company). (e) Each of the Surviving Corporation, Parent and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of a Participating Option or Participating Warrant pursuant to this Agreement such amounts as may be required to be deducted or withheld with respect to the making of such payment under the Code, or any applicable provision of state, local or foreign tax law, with such deductions first being made from the cash portion of such consideration. To the extent that amounts are so deducted or withheld and paid over to the appropriate taxing authority by the Company, the Surviving Corporation, Parent or the Exchange Agent, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

Stock Options and Warrants. (a) At the Effective Time, each outstanding and unexercised option to purchase shares of Company Common Stock ("COMPANY OPTIONS") under the Company's 1998 Stock Option Plan (the "COMPANY OPTION PLAN"), by virtue of the Merger and Company Warrant held by Cashed Out Option Holders (collectivelywithout any action on the part of the parties hereto or the holders thereof, “Cashed Out Options”) shall be cancelled and automatically converted into the right to receive, upon the surrender terminated. Following execution of such Cashed Out Option and the execution and delivery of (x) the Amendment to Stock Option Agreements and Consent to Appointment in the form attached hereto as Exhibit E (the “Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Options, and (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment in the form attached hereto as Exhibit F (the “Note and Warrant Amendment and Consent”) upon the terms and subject to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a portion of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund), an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options prior to the Effective Time and the shares issued upon such exercise were included in the number of outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior to the ClosingAgreement, the Company shall obtain the provide each option holder with written consent of each Cashed Out Option Holder to receive notice that any options held by such cash payment in lieu of exercise and to the effect holder that such Cashed Out Options shall terminate automatically are exercisable as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding immediately prior to date of this Agreement must be exercised within sixty (60) days after the Effective Time shall date of such notice, or they will be terminated and shall expire as of the Effective Time. Neither Parent nor the Surviving Corporation shall assume the Company Options or substitute similar options of Parent for Company Optionsterminated. Prior to the Effective Time, Parent agrees to establish a stock option plan (the "PARENT OPTION PLAN") that will be effective following the Effective Time, pursuant to which Parent, in its sole discretion, will be entitled to grant options to purchase Parent Stock (the "PARENT OPTION(S)") to certain employees of the Company that remain employed by the Surviving Corporation or the Parent following the Effective Time. The Parent Options will entitle the recipients to purchase the number of shares of Parent Stock in the amount and on the terms and conditions to be set forth in the Parent Option Plan and stock option agreements to be signed by such recipients. (b) At the Effective Time, each warrant or other right to purchase Company Common Stock (other than a Company Stock Option) that is then outstanding either shall be exercised or canceled. (c) As soon as practicable after the Effective Time, Parent shall deliver to the employees of the Company who continue to be employed by the Surviving Corporation or any affiliate thereof and to whom Parent grants Parent Options appropriate notices setting forth such employees' rights pursuant to the Parent Options and the Parent Option Plan. (d) The shares of Parent Stock issued upon exercise of any Parent Options granted by Parent after the Effective Time shall be listed on the Tel Aviv Stock Exchange ("TASE") and the Nasdaq National Market upon issuance pursuant to the procedures and requirements of the TASE and Nasdaq, as the case may be, and shall be registered under applicable Israeli and United States federal securities laws. As soon as practicable following the Closing, Parent shall take all actions action necessary to effectuate register such termination at shares of Parent Stock to be issued upon the Effective Timeexercise of such Parent Options with the SEC, including the filing of a Registration Statement on Form S-8.

Stock Options and Warrants. (a) At the Effective Time, the Target Stock Option Plan and each Company outstanding Target Option and Company Warrant held each outstanding Target Warrant, whether vested or unvested, shall, by Cashed Out Option Holders (collectivelyvirtue of the Merger and without any further consideration on the part of any holder thereof, “Cashed Out Options”) shall be cancelled assumed by Acquiror and automatically be converted into an option (or warrant, as the right case may be) to receivepurchase shares of Acquiror Common Stock as set forth below. Target has delivered to Acquiror a schedule (the "Option Schedule") which sets forth a true and complete list as of the date hereof of all Target Warrants and Target Options, upon including the surrender number of shares of Target Capital Stock subject to each such option or warrant, the exercise or vesting schedule, the exercise price per share and the term of each such option or warrant. On the Closing Date, Target shall deliver to Acquiror an updated Option Schedule current as of such Cashed Out date. Each such Target Option and the execution and delivery of (x) the Amendment or Target Warrant so assumed by Acquiror under this Agreement shall continue to Stock Option Agreements and Consent to Appointment in the form attached hereto as Exhibit E (the “Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Optionshave, and (y) be subject to, the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment in the form attached hereto as Exhibit F (the “Note and Warrant Amendment and Consent”) upon the same terms and subject to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a portion of Target Stock Option Plan or the cash payable pursuant to this Section 2.3 into Target Warrant, as the Escrow Fund and the Expense Fund)case may be, an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options immediately prior to the Effective Time and Time, except that (i) such option or warrant shall be exercisable for that number of whole shares of Acquiror Common Stock equal to the shares issued upon such exercise were included in product of the number of outstanding Company Shares, minus (ii) the aggregate shares of Target Common Stock that were issuable upon exercise prices under of such Cashed Out Options. Prior to the Closing, the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding option or warrant immediately prior to the Effective Time multiplied by the exchange ratio as set forth on the Option Schedule and rounded to the nearest whole number of shares of Acquiror Common Stock, and (ii) the per share exercise price for the shares of Acquiror Common Stock issuable upon exercise of such assumed option or warrant shall be terminated and equal to the quotient determined by dividing the exercise price per share of Target Common Stock at which such option or warrant was exercisable immediately prior to the Effective Time by the exchange ratio as set forth on the Option Schedule, rounded to the nearest whole cent. The exchange ratio set forth on the Option Schedule shall expire be adjusted, as of the Effective Time. Neither Parent nor the Surviving Corporation shall assume the Company , if necessary to reflect any exercise, cancellation or expiration of any Target Options or substitute similar options Target Warrants prior to the Effective Time such that the total number of Parent Acquiror Common Shares to be reserved for Company Optionsissuance upon the exercise of all Target Options and all Target Warrants assumed by Acquiror hereunder is equal to 1,583,200. Prior In no event, however, shall the number of Acquiror Common Shares reserved for issuance upon the exercise of Target Options and Target Warrants exceed 1,583,200 shares of Acquiror Common Stock. (b) Acquiror shall take all corporate action necessary to reserve and make available for issuance a sufficient number of shares of Acquiror Common Stock for delivery upon the exercise of the Target Options and Target Warrants assumed in accordance with this Section 5.13. At or prior to the Effective Time, Acquiror shall file a registration statement on Form S-8 (or any successor or other appropriate forms) with respect to the Company shares of Acquiror Common Stock subject to such Target Options and Target Warrants and shall take all actions necessary use its best efforts to effectuate maintain the effectiveness of such termination at registration statement or registration statements (and maintain the Effective Timecurrent status of the prospectus or prospectuses contained therein) for so long as such Target Options and Target Warrants remain outstanding.

Stock Options and Warrants. (a) At the Effective Time, each Company outstanding Target Option and Company Warrant held by Cashed Out under the Target Option Holders (collectivelyPlan, “Cashed Out Options”) whether vested or unvested, shall be cancelled assumed by Acquiror and automatically converted into deemed to constitute an option (a "ACQUIROR OPTION") to acquire, on the right to receivesame terms and conditions as were applicable under the Target Option, upon the surrender same number of shares of Acquiror Common Stock as the holder of such Cashed Out Target Option and the execution and delivery of (x) the Amendment would have been entitled to Stock Option Agreements and Consent to Appointment in the form attached hereto as Exhibit E (the “Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Options, and (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment in the form attached hereto as Exhibit F (the “Note and Warrant Amendment and Consent”) upon the terms and subject receive pursuant to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a portion of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund), an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that Merger had such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options prior to the Effective Time and the shares issued upon such exercise were included option in the number of outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior to the Closing, the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (rounded up to the nearest whole cent) equal to (i) the aggregate exercise price for the shares of Target Common Stock otherwise purchasable pursuant to such Target Option divided by (ii) the number of full shares of Acquiror Common Stock deemed purchasable pursuant to such Acquiror Option in accordance with the foregoing; PROVIDED, HOWEVER, that, in the case of any Target Option to which Section 422 of the Code applies ("INCENTIVE STOCK OPTIONS"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be terminated determined in order to comply with Section 424(a) of the Code. In connection with the assumption by Acquiror of the Target Options pursuant to this Section 6.5(a), Target shall be deemed to have assigned to Acquiror, effective at the Effective Time, Target's right to repurchase unvested shares of Target Common Stock issuable upon the exercise of the Target Options or previously issued upon the exercise of options granted under the Target Option Plan, in accordance with the terms of the Target Option Plan and the related stock option agreements and stock purchase agreements entered into under the Target Option Plan. (b) As soon as practicable after the Effective Time, Acquiror shall deliver to the participants in the Target Option Plan appropriate notice setting forth such participants' rights pursuant thereto and the grants pursuant to the Target Option Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 6.5 after giving effect to the Merger). Acquiror shall comply with the terms of the Target Option Plan and use best efforts to ensure, to the extent required by, and subject to the provisions of, such Target Option Plan and Sections 422 and 424(a) of the Code, that Target Options which qualified as incentive stock options prior the Effective Time continue to qualify as incentive stock options after the Effective Time. (c) Acquiror shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Acquiror Common Stock for delivery upon exercise of Target Options assumed in accordance with this Section 6.5. No later than the fifth business day after the Closing Date, Acquiror shall file a registration statement on Form S-8 (or any successor or other appropriate forms) under the Securities Act or another appropriate form with respect to the shares of Acquiror Common Stock subject to such options and shall expire use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as of such options remain outstanding. (d) Each Target Warrant, to the extent outstanding at the Effective Time, whether or not exercisable and whether or not vested at the Effective Time, shall remain outstanding at the Effective Time. Neither Parent nor At the Surviving Corporation Effective Time, Target Warrants shall, by virtue of the Merger and without any further action on the part of Target or the holder of any of Target Warrants (unless further action may be required by the terms of any of Target Warrants), be assumed by Acquiror and each Target Warrant assumed by Acquiror shall assume be exercisable upon the Company Options same terms and conditions as under the applicable warrant agreements with respect to such Target Warrants, except that (A) each such Target Warrant shall be exercisable for that whole number of shares of Acquiror Common Stock (rounded down to the nearest whole share) into which the number of shares of Target Common Stock subject to such Target Warrant would be converted under Section 2.1(c), and (B) the exercise price per share of Acquiror Common Stock shall be an amount equal to the exercise price per share of Target Common Stock subject to such Target Warrant in effect immediately prior to the Effective Time divided by the applicable Exchange Ratio (the exercise price per share, so determined, being rounded to the nearest full cent). From and after the Effective Time, all references to Target in the warrant agreements underlying Target Warrants shall be deemed to refer to Acquiror. Acquiror further agrees that, notwithstanding any other term of this Section 6.5(d) to the contrary, if required under the terms of Target Warrants or substitute similar options if otherwise appropriate under the terms of Parent Target Warrants, it will execute a supplemental agreement with the holders of Target Warrants to effectuate the foregoing. No payment shall be made for Company Optionsfractional shares. Prior Acquiror shall (i) on or prior to the Effective Time, reserve for issuance the Company shall take all actions necessary number of shares of Acquiror Common Stock that will become subject to effectuate such termination at warrants to purchase Acquiror Common Stock ("ACQUIROR WARRANTS") pursuant to this Section 6.5(d), (ii) from and after the Effective Time, upon exercise of the Acquiror Warrants in accordance with the terms thereof, make available for issuance all shares of Acquiror Common Stock covered thereby and (iii) as promptly as practicable following the Effective Time, issue to each holder of an outstanding Target Warrant a document evidencing the foregoing assumption by Acquiror.

Stock Options and Warrants. (a) At the Effective Time, each Company outstanding option granted to employees or individual consultants of Target under the Target Option and Company Warrant held by Cashed Out Option Holders Plan (collectively"Target Options"), “Cashed Out Options”) whether vested or unvested, shall be cancelled assumed by Acquiror and automatically converted into deemed to constitute an option (an "Acquiror Option") to acquire, on the right to receivesame terms and conditions as were applicable under the Target Option, upon the surrender same number of shares of Acquiror Common Stock as the holder of such Cashed Out Target Option and the execution and delivery of (x) the Amendment would have been entitled to Stock Option Agreements and Consent to Appointment in the form attached hereto as Exhibit E (the “Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Options, and (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment in the form attached hereto as Exhibit F (the “Note and Warrant Amendment and Consent”) upon the terms and subject receive pursuant to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a portion of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund), an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that Merger had such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options prior to the Effective Time and the shares issued upon such exercise were included option in the number of outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior to the Closing, the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (rounded up to the nearest whole cent) equal to (i) the aggregate exercise price for the shares of Target Common Stock otherwise purchasable pursuant to such Target Option divided by (ii) the number of full shares of Acquiror Common Stock deemed purchasable pursuant to such Acquiror Option in accordance with the foregoing; provided, however, that, -------- ------- in the case of any Target Option to which Section 422 of the Code applies ("incentive stock options"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be terminated determined in order to comply with Section 424(a) of the Code. (b) As soon as practicable after the Effective Time, Acquiror shall deliver to the participants in the Target Option Plan appropriate notice setting forth such participants' rights pursuant thereto and the grants pursuant to the Target Option Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section after giving effect to the Merger). Acquiror shall comply with the terms of the Target Option Plan and use reasonable commercial efforts to ensure, to the extent required by, and subject to the provisions of, such Target Option Plan and Sections 422 and 424(a) of the Code, that Target Options which qualified as incentive stock options prior the Effective Time continue to qualify as incentive stock options after the Effective Time. (c) Acquiror shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Acquiror Common Stock for delivery upon exercise of Target Options assumed in accordance with this Section. Within forty-five days of the Effective Date, Acquiror shall file a registration statement on Form S-8 (or any successor or other appropriate forms) under the Securities Act or another appropriate form with respect to the shares of Acquiror Common Stock subject to such options and shall expire use reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding. (d) Notwithstanding the provisions of paragraph (c), the Target Principal Shareholders agree that they may not, during the six months following the Effective Time, offer to sell, contract to sell, or otherwise sell, dispose of, loan, pledge or grant any rights with respect to (collectively, a "Disposition") any of the Acquiror Shares covered by such Form S-8 registration statement (the "Acquiror S-8 Shares") except to the extent such Acquiror S-8 Shares are transferred as a gift or gifts, bequested or transferred to a family trust (provided that any such case the transferee agrees in writing to be bound by the terms hereof). The foregoing restriction is expressly agreed to preclude the Target Principal Shareholders from engaging in any hedging or other transaction with respect to such Acquiror S-8 Shares which is designed to or reasonably expected to lead to or result in a Disposition during such period. Such prohibited hedging or other transactions include, without limitation, any short sale (whether or not against the box) or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to such Acquiror S-8 Shares or with respect to any security (other than a broad-based market basket or index) that includes, relates to or derives any significant part of its value from such Acquiror S-8 Shares. Acquiror shall have the right to impose a legend on the certificates representing such Acquiror S-8 Shares consistent with the foregoing and to enter stop transfer instructions with Acquiror's transfer agent against the transfer of the Acquiror Shares except in compliance with this restriction. (e) Each warrant to purchase Target shares and options granted to other than employees or individual consultants to Target (collectively "Target Warrants"), to the extent outstanding at the Effective Time, whether or not exercisable and whether or not vested at the Effective Time, shall remain outstanding at the Effective Time. Neither Parent nor At the Surviving Corporation Effective Time, Target Warrants shall, by virtue of the Merger and without any further action on the part of Target or the holder of any of Target Warrants (unless further action may be required by the terms of any of Target Warrants), be assumed by Acquiror and each Target Warrant assumed by Acquiror shall assume be exercisable upon the Company Options same terms and conditions as under the applicable warrant agreements with respect to such Target Warrants, except that (A) each such Target Warrant shall be exercisable for that whole number of shares of Acquiror Common Stock (rounded down to the nearest whole share) into which the number of shares of Target Common Stock subject to such Target Warrant would be converted under Section 2.2(b), and (B) the exercise price per share of Acquiror Common Stock shall be an amount equal to the exercise price per share of Target Common Stock subject to such Target Warrant in effect immediately prior to the Effective Time divided by the applicable Exchange Ratio (the exercise price per share, so determined, being rounded to the nearest full cent). From and after the Effective Time, all references to Target in the warrant agreements underlying Target Warrants shall be deemed to refer to Acquiror. Acquiror further agrees that, notwithstanding any other term of this Section 7.5(d) to the contrary, if required under the terms of Target Warrants or substitute similar options if otherwise appropriate under the terms of Parent Target Warrants, it will execute a supplemental agreement with the holders of Target Warrants to effectuate the foregoing. No payment shall be made for Company Optionsfractional shares. Prior Acquiror shall (i) on or prior to the Effective Time, reserve for issuance the Company shall take all actions necessary number of shares of Acquiror Common Stock that will become subject to effectuate such termination at warrants to purchase Acquiror Common Stock ("Acquiror Warrants") pursuant to this Section 7.5(d)(ii) from and after the Effective Time, upon exercise of the Acquiror Warrants in accordance with the terms thereof, make available for issuance all shares of Acquiror Common Stock covered thereby and (iii) promptly following the Effective Time, issue to each holder of an outstanding Target Warrant a document evidencing the foregoing assumption by Acquiror.

Stock Options and Warrants. (a) At the Effective Time, each Company outstanding Target Option and Company Warrant held by Cashed Out under the Target Option Holders (collectivelyPlan, “Cashed Out Options”) whether vested or unvested, shall be cancelled assumed by Acquiror and automatically converted into deemed to constitute an option (a "ACQUIROR OPTION") to acquire, on the right to receivesame terms and conditions as were applicable under the Target Option, upon the surrender same number of shares of Acquiror Common Stock as the holder of such Cashed Out Target Option and the execution and delivery of (x) the Amendment would have been entitled to Stock Option Agreements and Consent to Appointment in the form attached hereto as Exhibit E (the “Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Options, and (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment in the form attached hereto as Exhibit F (the “Note and Warrant Amendment and Consent”) upon the terms and subject receive pursuant to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a portion of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund), an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that Merger had such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options prior to the Effective Time and the shares issued upon such exercise were included option in the number of outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior to the Closing, the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (rounded up to the nearest whole cent) equal to (i) the aggregate exercise price for the shares of Target Common Stock otherwise purchasable pursuant to such Target Option divided by (ii) the number of full shares of Acquiror Common Stock deemed purchasable pursuant to such Acquiror Option in accordance with the foregoing; PROVIDED, HOWEVER, that, in the case of any Target Option to which Section 422 of the Code applies ("INCENTIVE STOCK OPTIONS"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be terminated determined in order to comply with Section 424(a) of the Code. In connection with the assumption by Acquiror of the Target Options pursuant to this Section 6.5(a), Target shall be deemed to have assigned to Acquiror, effective at the Effective Time, Target's right to repurchase unvested shares of Target Common Stock issuable upon the exercise of the Target Options or previously issued upon the exercise of options granted under the Target Option Plan, in accordance with the terms of the Target Option Plan and the related stock option agreements and stock purchase agreements entered into under the Target Option Plan. (b) As soon as practicable after the Effective Time, Acquiror shall deliver to the participants in the Target Option Plan appropriate notice setting forth such participants' rights pursuant thereto and the grants pursuant to the Target Option Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 6.5 after giving effect to the Merger). Acquiror shall comply with the terms of the Target Option Plan and the parties intend that, to the extent required by, and subject to the provisions of, such Target Option Plan and Sections 422 and 424(a) of the Code, that Target Options which qualified as incentive stock options prior the Effective Time continue to qualify as incentive stock options after the Effective Time, and this provision shall be interpreted consistent with that intent. (c) Acquiror shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Acquiror Common Stock for delivery upon exercise of Target Options assumed in accordance with this Section 6.5. As soon as practicable after the Effective Time and in any event no later than 30 days after the Closing Date, Acquiror shall file a registration statement on Form S-8 (or any successor or other appropriate forms) under the Securities Act or another appropriate form with respect to the shares of Acquiror Common Stock subject to such options and shall expire use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as of such options remain outstanding. (d) Each Target Warrant, to the extent outstanding at the Effective Time, whether or not exercisable and whether or not vested at the Effective Time, shall remain outstanding at the Effective Time. Neither Parent nor At the Surviving Corporation Effective Time, Target Warrants shall, by virtue of the Merger and without any further action on the part of Target or the holder of any of Target Warrants (unless further action may be required by the terms of any of Target Warrants), be assumed by Acquiror pursuant to such documentation as is reasonably acceptable to Target and each Target Warrant assumed by Acquiror shall assume be exercisable upon the Company Options same terms and conditions as under the applicable warrant agreements with respect to such Target Warrants, except that (A) each such Target Warrant shall be exercisable for that whole number of shares of Acquiror Common Stock (rounded down to the nearest whole share) into which the number of shares of Target Common Stock subject to such Target Warrant would be converted under Section 2.1(c), and (B) the exercise price per share of Acquiror Common Stock shall be an amount equal to the exercise price per share of Target Common Stock subject to such Target Warrant in effect immediately prior to the Effective Time divided by the applicable Exchange Ratio (the exercise price per share, so determined, being rounded to the nearest full cent). From and after the Effective Time, all references to Target in the warrant agreements underlying Target Warrants shall be deemed to refer to Acquiror. Acquiror further agrees that, notwithstanding any other term of this Section 6.5(d) to the contrary, if required under the terms of Target Warrants or substitute similar options if otherwise appropriate under the terms of Parent Target Warrants, it will execute a supplemental agreement with the holders of Target Warrants to effectuate the foregoing. No payment shall be made for Company Optionsfractional shares. Prior Acquiror shall (i) on or prior to the Effective Time, reserve for issuance the Company shall take all actions necessary number of shares of Acquiror Common Stock that will become subject to effectuate such termination at warrants to purchase Acquiro Common Stock ("ACQUIROR WARRANTS") pursuant to this Section 6.5(d), (ii) from and after the Effective Time, upon exercise of the Acquiror Warrants in accordance with the terms thereof, make available for issuance all shares of Acquiror Common Stock covered thereby and (iii) as promptly as practicable following the Effective Time, issue to each holder of an outstanding Target Warrant a document evidencing the foregoing assumption by Acquiror.

Stock Options and Warrants. (a) At the Effective Time, each Company outstanding Target Option and Company Warrant held by Cashed Out under the Target Option Holders (collectivelyPlan, “Cashed Out Options”) whether vested or unvested, shall be cancelled assumed by Acquiror and automatically converted into deemed to constitute an option (a "ACQUIROR OPTION") to acquire, on the right to receivesame terms and conditions as were applicable under the Target Option, upon the surrender same number of shares of Acquiror Common Stock as the holder of such Cashed Out Target Option and the execution and delivery of (x) the Amendment would have been entitled to Stock Option Agreements and Consent to Appointment in the form attached hereto as Exhibit E (the “Option Amendment and Consent”) by each Cashed Out Option Holder that holds Company Options, and (y) the Amendment to Convertible Promissory Notes and Stock Purchase Warrants and Consent to Appointment in the form attached hereto as Exhibit F (the “Note and Warrant Amendment and Consent”) upon the terms and subject receive pursuant to the conditions set forth in this ARTICLE II and elsewhere in this Agreement (including but not limited to the deposit of a portion of the cash payable pursuant to this Section 2.3 into the Escrow Fund and the Expense Fund), an amount of cash as set forth on the Capitalization and Payment Table (the “Option Consideration,” and together with the “Stock Consideration,” the “Equity Consideration”). The Option Consideration payable to each Cashed Out Option Holder shall be calculated (subject to the deductions and adjustments described herein) by taking (i) the aggregate amount that Merger had such holder would have received under Section 2.1(c) if the holder had exercised such Cashed Out Options prior to the Effective Time and the shares issued upon such exercise were included option in the number of outstanding Company Shares, minus (ii) the aggregate exercise prices under such Cashed Out Options. Prior to the Closing, the Company shall obtain the written consent of each Cashed Out Option Holder to receive such cash payment in lieu of exercise and to the effect that such Cashed Out Options shall terminate automatically as of the Effective Time. Each Company Option other than those held by Cashed Out Option Holders outstanding full immediately prior to the Effective Time (rounded down to the nearest whole number), at a price per share (rounded up to the nearest whole cent) equal to (i) the aggregate exercise price for the shares of Target Common Stock otherwise purchasable pursuant to such Target Option divided by (ii) the number of full shares of Acquiror Common Stock deemed purchasable pursuant to such Acquiror Option in accordance with the foregoing; provided, however, that, -------- ------- in the case of any Target Option to which Section 422 of the Code applies ("INCENTIVE STOCK OPTIONS"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be terminated determined in order to comply with Section 424(a) of the Code. In connection with the assumption by Acquiror of the Target Options pursuant to this Section 6.5(a), Target shall be deemed to have assigned to Acquiror, effective at the Effective Time, Target's right to repurchase unvested shares of Target Common Stock issuable upon the exercise of the Target Options or previously issued upon the exercise of options granted under the Target Option Plan, in accordance with the terms of the Target Option Plan and the related stock option agreements and stock purchase agreements entered into under the Target Option Plan. (b) As soon as practicable after the Effective Time, Acquiror shall deliver to the participants in the Target Option Plan appropriate notice setting forth such participants' rights pursuant thereto and the grants pursuant to the Target Option Plan shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 6.5 after giving effect to the Merger). Acquiror shall comply with the terms of the Target Option Plan and use best efforts to ensure, to the extent required by, and subject to the provisions of, such Target Option Plan and Sections 422 and 424(a) of the Code, that Target Options which qualified as incentive stock options prior the Effective Time continue to qualify as incentive stock options after the Effective Time. (c) Acquiror shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Acquiror Common Stock for delivery upon exercise of Target Options assumed in accordance with this Section 6.5. As soon as practicable after the Effective Time and in any event no later than 10 business days after the Closing Date, Acquiror shall file a registration statement on Form S-8 (or any successor or other appropriate forms) under the Securities Act or another appropriate form with respect to the shares of Acquiror Common Stock subject to such options and shall expire use its best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as of such options remain outstanding. (d) Each Target Warrant, to the extent outstanding at the Effective Time, whether or not exercisable and whether or not vested at the Effective Time, shall remain outstanding at the Effective Time. Neither Parent nor At the Surviving Corporation Effective Time, Target Warrants shall, by virtue of the Merger and without any further action on the part of Target or the holder of any of Target Warrants (unless further action may be required by the terms of any of Target Warrants), be assumed by Acquiror and each Target Warrant assumed by Acquiror shall assume be exercisable upon the Company Options same terms and conditions as under the applicable warrant agreements with respect to such Target Warrants, except that (A) each such Target Warrant shall be exercisable for that whole number of shares of Acquiror Common Stock (rounded to the nearest whole share) into which the number of shares of Target Common Stock subject to such Target Warrant would be converted under Section 2.1(c), and (B) the exercise price per share of Acquiror Common Stock shall be an amount equal to the exercise price per share of Target Common Stock subject to such Target Warrant in effect immediately prior to the Effective Time divided by the Exchange Ratio (the exercise price per share, so determined, being rounded to the nearest full cent). From and after the Effective Time, all references to Target in the warrant agreements underlying Target Warrants shall be deemed to refer to Acquiror. Acquiror further agrees that, notwithstanding any other term of this Section 6.5(d) to the contrary, if required under the terms of Target Warrants or substitute similar options if otherwise appropriate under the terms of Parent Target Warrants, it will execute a supplemental agreement with the holders of Target Warrants to effectuate the foregoing. No payment shall be made for Company Optionsfractional shares. Prior Acquiror shall (i) on or prior to the Effective Time, reserve for issuance the Company number of shares of Acquiror Common Stock that will become subject to warrants to purchase Acquiror Common Stock ("ACQUIROR WARRANTS") pursuant to this Section 6.5(d), (ii) from and after the Effective Time, upon exercise of the Acquiror Warrants in accordance with the terms thereof, make available for issuance all shares of Acquiror Common Stock covered thereby and (iii) as promptly as practicable following the Effective Time, issue to each holder of an outstanding Target Warrant a document evidencing the foregoing assumption by Acquiror. (e) Employees of Target as of the Effective Time shall take all actions necessary be permitted to effectuate participate in the ESPP commencing on the first enrollment date following the Effective Time, subject to compliance with the eligibility and other provisions of such termination plan. (f) Employees of Target at the Effective TimeTime will be provided with employee benefit plans by the Surviving Corporation or Acquiror which in the aggregate are no less favorable to such employees than those provided from time to time by Acquiror and its Subsidiaries to similarly situated employees. If any employee of Target becomes a participant in any employee benefit plan, program, policy or arrangement of Acquiror, such employee shall be given credit for all service prior to the Effective Time with Target to the extent permissible under such plan, program, policy or arrangement.