Common use of Assumption of Company Options Clause in Contracts

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5, effective as of the Effective Time, each then outstanding Company Option shall be assumed by Acquirer and converted into an option to purchase Acquirer Common Stock. Except as otherwise set forth in this Agreement, each Company Option so assumed by Acquirer pursuant to this Section 2.5 shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Plan and the option agreements relating thereto, as in effect immediately prior to the Effective Time, except that (a) such assumed Company Option will be exercisable for that number of whole shares of Acquirer Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Common Stock, (b) the per share exercise price for the shares of Acquirer Common Stock issuable upon exercise of such assumed Company Option shall be equal to the quotient obtained by dividing the exercise price per share of Company Common Stock at which such assumed Company Option was exercisable immediately prior to the Closing Date by the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with the Mergers shall be fully vested and exercisable; provided, however, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, the number of shares purchasable pursuant to such Acquirer Option and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Time. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (a) Except The Company shall use commercially reasonable efforts to obtain the consent of the holders of the Company Options, to provide that, at the Effective Time, each Outstanding Company Option Award shall be cancelled in part in respect of a cash payment as otherwise provided in Section 3.2(b) and shall be assumed and converted in part as provided in Section 3.2(c); provided, however, that obtaining any such consents shall not be a requirement for, or a condition to, the right or authority of Parent and the Company to take any of the actions described in this Section 2.53.2. (b) At the Effective Time, effective each Outstanding Company Option Award shall be automatically cancelled with respect to a portion of the shares of Company Common Stock subject thereto, as described in this Section 3.2(b) (such cancelled portion, the "Cancelled Option Portion"). The number of shares of Company Common Stock subject to the Cancelled Option Portion of such Outstanding Company Option Award shall be determined immediately prior to the Effective Time and shall equal the product of (i) the Cancelled Option Percentage, multiplied by (ii) the total number of shares of Company Common Stock subject to such Outstanding Company Option Award. The Cancelled Option Portion shall consist of vested and unvested shares of Company Common Stock in the same proportion as existed under the Outstanding Company Option Award immediately prior to the Effective Time (after taking into consideration any accelerated vesting as a result of the Merger). In respect of the cancellation and termination of each holder's Cancelled Option Portion, Parent shall pay to such holder an amount in cash (if greater than zero dollars ($0)) equal to (x) the number of shares of Company Common Stock subject to such Cancelled Option Portion immediately prior to the Effective Time (without regard to whether such shares were vested or unvested immediately prior to the Effective Time), multiplied by (y) the amount equal to (i) the Company Common Stock Closing Value, less (ii) the exercise price per share under the Outstanding Company Option Award. Such Cancelled Option Portion, and any and all rights of the holder under such Cancelled Option Portion, shall terminate as of the Effective Time. The Cancelled Option Portion shall not be assumed by Parent in connection with the Merger, and Parent shall not grant an option to purchase shares of Parent Common Stock in substitution of the Cancelled Option Portion. Parent's payment of the consideration described in this Section 3.2(b) in respect of the Cancelled Option Portion shall be in full and final satisfaction of any and all obligations of Parent, the Company or the Surviving Corporation with respect to such Cancelled Option Portion under the Company Option Plan and the applicable agreements thereunder. Parent and the Company shall, and shall cause the administrator of the Company Option Plan to, take such commercially reasonable actions as are necessary or appropriate to accomplish the foregoing cancellation of the Cancelled Option Portion in accordance with the Company Option Plan. Parent and the Company shall be entitled to require payment in cash or deduction from compensation payable to each holder pursuant to this Section 3.2(b) of any sums required by federal, state or local tax law to be withheld with respect to the consideration to be paid to such holder with respect to the Cancelled Option Portion. (c) At the Effective Time, each then outstanding Outstanding Company Option Award shall be assumed by Acquirer Parent, and converted into an option to purchase Acquirer shares of Parent Common Stock. Except , with respect to a portion of the shares of Company Common Stock subject thereto, as otherwise set forth described in this AgreementSection 3.2(c) (such assumed portion, each the "Assumed Option Portion"). The number of shares of Company Common Stock subject to the Assumed Option Portion of such Outstanding Company Option so assumed Award shall be determined immediately prior to the Effective Time and shall equal the product of (i) the Assumed Option Percentage, multiplied by Acquirer pursuant (ii) the total number of shares of Company Common Stock subject to this Section 2.5 such Outstanding Company Option Award. The Assumed Option Portion shall consist of vested and unvested shares of Company Common Stock in the same proportion as existed under the Outstanding Company Option Award immediately prior to the Effective Time (after taking into consideration any accelerated vesting as a result of the Merger). Each Assumed Option Portion shall continue to have, and be subject to, the same terms and conditions as set forth in the Company Stock Option Plan and the option agreements relating theretoany agreement issued thereunder pursuant to which such Assumed Option Portion was granted, in each case, as in effect immediately prior to the Effective Time, except that that, upon assumption and conversion (ai) such assumed Company Assumed Option will Portion shall be exercisable (or shall become exercisable in accordance with its terms) for that number of whole shares of Acquirer 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 Company Assumed Option Portion immediately prior to the Effective Time Time, multiplied by (y) the Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Parent Common Stock, (bii) the per share exercise price for the shares of Acquirer Parent Common Stock issuable upon exercise of subject to such assumed Company Assumed Option Portion shall be equal to the quotient obtained by dividing (x) the exercise price per share of Company Common Stock at which subject to such assumed Company Assumed Option was exercisable Portion immediately prior to the Closing Date Effective Time by (y) the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (ciii) each any reference in the Assumed Option Portion to the Company Optionholder will shall be entitled deemed a reference to receive Parent, and (iv) any references in the Assumed Option Portion to Company Common Stock shall be deemed a portion reference to Parent Common Stock. Notwithstanding anything in this Section 3.2(c) to the contrary, the assumption and conversion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Assumed Option in connection with the Mergers Portion provided for herein shall be fully vested and exercisable; provided, however, that undertaken in such a manner so as to satisfy the case requirements of any Company Option to which Section 421 424(a) of the Code is intended to apply by reason of its qualification and Treasury Regulation Section 1.424-1 (assuming that such Assumed Option Portion were an "incentive stock option" under Section 422 of the Code, Code immediately prior to the exercise price assumption and conversion) and so as not to cause such Assumed Option Portion to constitute a deferral of compensation subject to Section 409A of the Acquirer OptionCode solely as a result of such assumption and conversion and otherwise in accordance with Q/A-4(d)(ii) of the Internal Revenue Service Notice 2005-1. Parent and the Company shall, and shall cause the number administrator of shares purchasable the Company Option Plan to, take such commercially reasonable actions as are necessary or appropriate to accomplish the foregoing assumption and conversion of the Assumed Option Portion in accordance with this Section 3.2(c) and the Company Option Plan and any agreement issued thereunder pursuant to which such Acquirer Assumed Option and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective TimePortion was granted. (bd) Prior to the Effective Time, the board of directors of Parent and subject its compensation committee, as applicable, may take all necessary action to assume and adopt, effective as of the review and approval of AcquirerEffective Time, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal)Plan.

Assumption of Company Options. (a) Except Prior to the Closing, the Company shall adopt the 2001 Stock Incentive Plan (the "2001 Plan") substantially in the form attached hereto as otherwise provided in this Section 2.5Exhibit I with such changes as the Purchaser and the Company may approve, effective as of acting reasonably. (b) Prior to the Effective TimeClosing, each then outstanding the Company Options granted pursuant to the Company Option Plans and outstanding on the date hereof shall have been either exercised in accordance with their terms or cancelled and terminated in form reasonably satisfactory to the Purchaser, including without limitation, obtaining any required consent of Israeli Tax authorities that such cancellation will not result in a taxable event. (c) Prior to the Closing, the Company shall have granted Company Stock Options under the 2001 Plan to acquire up to an aggregate of 9,150,146 Ordinary Shares to the individuals, at the exercise price, with the vesting commencement date and on the other terms and conditions as agreed upon between the Company and the Purchaser, and in a form reasonably satisfactory to the Purchaser. (d) At the Closing Date, the Company Options to be granted pursuant to the 2001 Plan in Section 7.04(c) above will be assumed by Acquirer and converted into an the Purchaser. Each such option to purchase Acquirer Common Stock. Except as otherwise set forth in this Agreement, each Company Option so assumed by Acquirer pursuant to Purchaser under the terms of this Section 2.5 Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Plan Options (or as agreed upon between the Company and the Purchaser) and the applicable stock option agreements relating thereto, as in effect agreement immediately prior to the Effective TimeClosing Date, except that (ai) such assumed Company Option option will be exercisable for that number of whole shares of Acquirer Purchaser Common Stock equal to the product of the number of shares of Company Common Stock Ordinary Shares that were issuable upon exercise of such Company Option option immediately prior to the Effective Time Closing Date multiplied by a fraction, (x) the Option numerator of which shall be 550,000 and (y) the denominator of which shall be the number of Ordinary Shares issued and outstanding immediately prior to Closing (the "Ordinary Exchange Ratio, ") and rounded down to the nearest whole number of shares of Acquirer Purchaser Common Stock, and (bii) the per share exercise price for the shares of Acquirer Purchaser Common Stock issuable upon exercise of such assumed Company Option shall option will be equal to the quotient obtained determined by dividing the exercise price per share of Company Common Stock Ordinary Share at which such assumed Company Option option was exercisable immediately prior to the Closing Date by the Option Ordinary Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each Company Optionholder will be entitled to receive a portion . Consistent with the terms of the Contingent Consideration pursuant to Section 2.8 Company Options and the documents governing the outstanding Company Options (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with the Mergers shall be fully vested and exercisable; provided, however, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, the number of shares purchasable pursuant to such Acquirer Option and or the terms and conditions agreed upon between the Company and the Purchaser), the transactions contemplated hereby will not terminate any of exercise the outstanding Company Options granted under the 2001 Plan or accelerate the exercisability or vesting of such Acquirer Option shall options or the shares of Purchaser Common Stock which will be determined in order subject to comply with Section 424 those options upon the Purchaser's assumption of the Codeoptions hereunder. The assumption of Within thirty (30) business days after the Closing Date, Purchaser will issue to each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (eachperson who, a “Lock-Up Agreement”) immediately prior to on or about the Closing Date providing was a holder of an outstanding Company Option a document in form and substance reasonably satisfactory to Company evidencing the foregoing assumption of such option by Purchaser. Purchaser shall reserve for issuance that such Company Optionholder will not sell or otherwise dispose number of the shares of Acquirer Purchaser Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee will become subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Timeunder this Section. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5, effective as of At the Effective Time, each then outstanding Company Option (or portion thereof) that is unexpired, unexercised, issued and outstanding immediately prior to the Effective Time (after giving effect to any vesting or termination that is contingent upon the completion of the Merger and to any exercises of Company Options prior to the Effective Time) (an “Outstanding Option”) and that is held by a Continuing Employee shall be assumed by Acquirer and converted into and become an option to purchase Acquirer Parent Common Stock. Except , and Parent shall assume such Company Option, subject to the remainder of this Section 1.6(a), in accordance with the same terms (as otherwise set forth in effect as of the date of this Agreement, each ) of the Company Option so Plan and the same terms of the stock option agreement by which such Company Option is evidenced, except as such terms may be modified (all Outstanding Options that are assumed by Acquirer pursuant to this Section 2.5 1.6(a) are hereafter referred to as “Assumed Options”). All rights to purchase shares of Company Common Stock under Assumed Options shall continue thereupon be converted into rights to havepurchase Parent Common Stock. Accordingly, from and after the Effective Time: (A) each Assumed Option may be exercised solely for shares of Parent Common Stock; (B) the number of shares of Parent Common Stock subject to each Assumed Option shall be determined by multiplying the number of shares of Company Common Stock that were subject to such Assumed Option immediately prior to the Effective Time by the Conversion Ratio, and rounding the resulting number to the nearest whole number of shares of Parent Common Stock; (C) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of each Assumed Option shall be determined by dividing the per share exercise price of shares of Company Common Stock subject to, the same terms and conditions set forth in the Company Stock Plan and the option agreements relating theretoto such Assumed Option, as in effect immediately prior to the Effective Time, except that (a) such assumed Company Option will be exercisable for that number of whole shares of Acquirer Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Option Exchange Conversion Ratio, rounded down to and rounding the nearest whole number of shares of Acquirer Common Stock, (b) the per share resulting exercise price for the shares of Acquirer Common Stock issuable upon exercise of such assumed Company Option shall be equal to the quotient obtained by dividing the exercise price per share of Company Common Stock at which such assumed Company Option was exercisable immediately prior to the Closing Date by the Option Exchange Ratio, the resulting number rounded up to the nearest whole one hundredth of a cent; and (D) any restriction on the exercise of any Assumed Option shall continue in full force and effect and the term, (c) each Company Optionholder will be entitled to receive exercisability, vesting schedule and other provisions of such Assumed Option shall otherwise remain unchanged as a portion result of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption or replacement of a Company Option in connection with the Mergers shall be fully vested and exercisablesuch Assumed Option; provided, however, that that: (1) each Assumed Option shall, in accordance with its terms, be subject to further proportionate adjustment as appropriate to reflect any stock split, division or subdivision of shares, stock dividend, issuance of bonus shares, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction with respect to Parent Common Stock subsequent to the case Effective Time; and (2) Parent’s board of any Company Option directors or a committee thereof shall succeed to which Section 421 the authority and responsibility of the Code is intended Company’s board of directors or any committee thereof with respect to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer each Assumed Option, the number of shares purchasable pursuant to such Acquirer Option . From and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment holders of any Transferred Employee subject to a Lock-Up Agreement (Outstanding Options shall have no rights with respect thereto other than Key Employees) is involuntarily terminated without “cause” (as defined those specifically provided in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Time. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal1.6(a).

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5, effective as of the Effective Time, each then outstanding Company Option shall be assumed by Acquirer and converted into an option to purchase Acquirer Common Stock. Except as otherwise set forth in this Agreementupon Closing, each Company Option will be exchanged and converted by Parent into a Parent Option. Each Company Option so assumed exchanged and converted by Acquirer Parent pursuant to this Section 2.5 shall 1.15(a) will continue to have, and --------------- be subject to, the same terms and conditions (subject to Section 5.16, including ------------ vesting terms) set forth in the Company Stock Plan Plan, and the option agreements relating thereto, as in effect immediately prior to the Effective TimeClosing, except that (ai) such assumed Company Option will be exercisable for that number of whole shares of Acquirer Parent Common Stock equal to the product of the number of shares of Company Common Stock Shares that were issuable upon exercise of such Company Option immediately prior to the Effective Time Closing multiplied by the Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Parent Common Stock, and (bii) the per share exercise price for the shares of Acquirer Parent Common Stock issuable upon exercise of such assumed Company Option shall will be equal to the quotient obtained by dividing the exercise price per share of Company Common Stock Shares at which such assumed Company Option was exercisable immediately prior to the Closing Date by the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each . No Company Optionholder Option will be entitled to receive a portion of exercisable until the Contingent Consideration pursuant to registration statement on Form S-8 described in Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with the Mergers shall be fully vested and exercisable; provided, however, that in the case of any Company Option to which Section 421 of the Code ------- 5.10 hereof is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, the number of shares purchasable pursuant to such Acquirer Option and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Codeeffective. The assumption of each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Time.---- (b) Prior to the Effective Time, and subject to the review and approval of AcquirerClosing, the Company shall and Parent will take all actions action necessary to effect the transactions anticipated by this Section 2.5 1.15(a) under all --------------- Company Option agreements and any other plan or arrangement of the Company related thereto. (whether written or oralc) As soon as practicable following the Closing, formal or informal)Parent will deliver to each holder of a Company Option to be exchanged and converted by Parent pursuant to Section 1.15(a) hereof a document in a form substantially similar to --------------- the form previously provided to the Company evidencing the conversion of such Company Option to a Parent Option, and each former holder of a Company Option so converted by Parent will acknowledge the receipt of the Parent Option in exchange for such holder's Company Option.

Assumption of Company Options. (ai) Except as otherwise provided in this Section 2.5, effective as of At the Effective Time, each then outstanding Participating Company Option that is outstanding immediately prior to the Effective Time for which the holder of such Participating Company Option has elected to have the provisions of this Section 3.01(e) apply shall be assumed by Acquirer the Surviving Company and converted into (A) an option to purchase Acquirer shares of Applicable Surviving Company Common Stock. Except as otherwise set forth Stock (each, a “Converted Option”) and (B) the contingent right to receive a number of Earnout Shares following the Closing in this Agreement, each accordance with Section 3.07 and Annex I. (ii) Each Converted Option will be issued under the Company Option so assumed by Acquirer pursuant to this Section 2.5 shall continue to have, Plan and will have and be subject to, to the same terms and conditions set forth in as were applicable to the applicable Participating Company Stock Plan and the option agreements relating thereto, as in effect Option immediately prior to before the Effective Time, except that (aA) such assumed Company from the Effective Time, each Converted Option will be fully vested and immediately exercisable for that number of whole shares of Acquirer Applicable Surviving Company Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Company Common Stock that were issuable upon exercise of such subject to the Company Option immediately prior to before the Effective Time multiplied by and (y) the Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Common Stock, Per Share Stock Consideration; and (bB) the per share exercise price for the shares each share of Acquirer Applicable Surviving Company Common Stock issuable upon exercise of such assumed Company the Converted Option shall will be equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (x) the exercise price per share of Company Common Stock at which of such assumed Company Option was exercisable immediately prior to before the Closing Date Effective Time by (y) the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Per Share Stock resulting from assumption of a Company Option in connection with the Mergers shall be fully vested and exercisableConsideration; provided, however, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, and the number of shares of Applicable Surviving Company Common Stock purchasable pursuant to such Acquirer under each Converted Option and the terms and conditions of exercise of such Acquirer Option shall will be determined in order to comply a manner consistent with the requirements of Section 424 409A of the Code. The Code and the applicable regulations promulgated thereunder. (iii) In connection with the assumption of each the Converted Options pursuant to this Section 3.01(e), the Company and Acquiror shall cause the Surviving Company to assume the Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto Plan as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Time. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions reasonably necessary to effect the transactions anticipated by this Section 2.5 3.01(e) under all the Company Option agreements Plan and any other plan or arrangement of the Contract applicable to any Company Option (whether written or oral, formal or informal), including delivering all required notices, obtaining all necessary approvals and consents, and delivering evidence reasonably satisfactory to Acquiror that all necessary determinations by the Company Board or applicable committee thereof to assume and convert Company Options in accordance with this Section 3.01(e) have been made.

Assumption of Company Options. (ai) Except At the Effective Time of the Merger, each unexpired option to purchase shares of Company Common Stock whether vested or unvested (a "COMPANY OPTION") granted under the stock option plans and agreements of the Company outstanding immediately prior to the Effective Time of the Merger shall, together with those stock option plans and agreements, be assumed by Parent (an "ASSUMED COMPANY OPTION"). SCHEDULE 2.1(D) hereto sets forth a true and complete list as otherwise of the date hereof of all holders of Company Options, including the number of shares of Company Common Stock subject to such options, a breakdown as between vested and unvested options, the exercise price per share and the term of such options. On the Closing Date, the Company shall deliver to Parent an updated SCHEDULE 2.1(D) hereto current as of the Closing Date. The terms of such stock option plan and agreements and the outstanding Company Options outstanding thereunder permit the assumption of those options by the Parent as provided in this Section 2.5SECTION 2.1(D), effective as without the consent or approval of the Effective Timeholders of those options, each then outstanding Company Option shall be assumed by Acquirer and converted into an option to purchase Acquirer Common Stockthe Company's shareholders or otherwise. Except as otherwise set forth in this Agreement, each Each Company Option so assumed by Acquirer pursuant to this Section 2.5 shall Parent will continue to have, and be subject to, the same terms and conditions set forth in the documents governing such Company Stock Plan and the option agreements relating thereto, as in effect Option immediately prior to the Effective TimeTime of the Merger, except that that: (aA) such assumed Assumed Company Option will be exercisable for that number of whole shares of Acquirer Common Stock of the Parent ("PARENT COMMON STOCK"), rounded down to the nearest share, equal to the product of (x) the number of whole shares of Company Stock that were purchasable under such Assumed Company Option immediately prior to the Effective Time of the Merger and (y) the quotient obtained by dividing (I) the Total Merger Consideration Per Share by (II) the Parent Fair Market Value (such quotient being referred as the "EXCHANGE RATIO"), where "TOTAL MERGER CONSIDERATION PER SHARE" means an amount equal to (i) $80,000,000 divided by (ii) the sum of (1) the Converted Share Rights and (2) the number of shares of Company Common Stock that were issuable upon exercise of such all Company Option Options outstanding immediately prior to the Effective Time multiplied by of the Option Exchange RatioMerger, rounded down to and where "PARENT FAIR MARKET VALUE" means the nearest whole number average daily trading price of shares of Acquirer the Parent Common Stock, Stock as quoted on the Nasdaq National Market for the ten (b10) trading days preceding the Closing Date; and (B) the per share exercise price for the shares of Acquirer Parent Common Stock issuable upon exercise of such assumed Assumed Company Option shall Options will be equal to the quotient obtained by dividing (x) the exercise price per share for the shares of Company Common Stock at which under such assumed Assumed Company Option was exercisable immediately prior to the Closing Date Effective Time of the Merger by (y) the Option Exchange Ratio, the resulting number rounded Ratio and rounding up to the nearest next whole cent. Consistent with the terms of the Company Options and the documents governing the Company Options, (c) each the Merger will not terminate or accelerate any Company Optionholder Option or any right of exercise, vesting or repurchase relating thereto with respect to shares of Parent Common Stock or Company Common Stock acquired upon exercise of such the Company Option. Holders of Company Options will not be entitled to receive acquire Company Capital Stock following the Merger. The parties recognize that the Parent has announced a portion 2 for 1 stock split of its common stock which is expected to be effected around the time of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) expected Closing Date. The parties acknowledge and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with agree that the Mergers shall be fully vested and exercisable; provided, however, that in the case of any Company Option to which Section 421 of the Code Parent Fair Market Value is intended to apply by reason of its qualification under Section 422 be determined on a consistent basis notwithstanding any such split. Consequently, should the Closing occur on or after the effective date of the Codestock split (being the date upon which the distribution of additional shares of common stock is made to the stockholders of Parent) and the look back period for the purposes of determining the Parent Fair Market Value would include one or more trading days prior to such date, the exercise price average daily trading prices for those days shall be adjusted to take account of the Acquirer Option, stock split by dividing the number average daily trading price for each of shares purchasable pursuant to such Acquirer Option and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Option those days by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Timetwo. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (ai) Except as otherwise provided in this Section 2.51.6(c), effective as of the Effective Time, each then outstanding Company Option shall be assumed by Acquirer and converted into an option to purchase Acquirer Common StockParent as a Parent Option. Except as otherwise set forth in this Agreement, each Company Option so assumed by Acquirer Parent pursuant to this Section 2.5 1.6(c) shall continue to have, and be subject to, the same terms and conditions (including vesting terms) set forth in the Company Stock Plan and the option agreements relating thereto, as in effect immediately prior to the Effective Time, except that (a) such assumed Company Option will be exercisable for that number of whole shares of Acquirer Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Parent Common Stock, Stock and (b) the per share exercise price for the shares of Acquirer Parent Common Stock issuable upon exercise of such assumed Company Option shall be equal to the quotient obtained by dividing the exercise price per share of Company Common Stock at which such assumed Company Option was exercisable immediately prior to the Closing Date by the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with the Mergers shall be fully vested and exercisable; provided, however, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Parent Option, the number of shares purchasable pursuant to such Acquirer Parent Option and the terms and conditions of exercise of such Acquirer Parent Option shall be determined in order to comply with Section 424 of the Code. The assumption . (ii) Notwithstanding the provisions of each Company Option by Acquirer shall be conditioned on Section 1.6(c)(i) or anything else to the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer contrary set forth in the form attached hereto as Exhibit D (eachthis Agreement, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following at the Effective Time, the market standoff provisions of the Lockeach then unexercised and outstanding Non-Up Agreement (but not the contingent termination provisions) related to such terminated employee Assumed Company Option shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will be cancelled and extinguished and shall not be assumed by Acquirer and such Company Options shall terminate at the Effective TimeParent pursuant to Section 1.6(c)(i) or otherwise. (biii) Prior to the Effective Time, and subject to the review and approval of AcquirerParent, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 1.6 under all Company Option agreements, all agreements related to Company Unvested Common Stock and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (ai) Except as otherwise provided in this Section 2.5, effective as of At the Effective Time, by virtue of the Merger and without any action on the part of any holder of Company Options, the Plan and each then outstanding Company Option (whether vested or unvested) that is outstanding immediately prior to the Effective Time shall be assumed by Acquirer Parent and converted into each Company Option shall become an option to purchase Acquirer acquire shares of Parent Common Stock. Except as otherwise set forth in this Agreement, each Company Option so assumed by Acquirer pursuant to this Section 2.5 shall continue to have, and be subject to, on the same terms and conditions set forth in as were applicable under the Company Stock Plan and the option agreements relating thereto, as in effect Option immediately prior to the Effective Time, except (i) that (a) such assumed Company Option will shall be exercisable for that number of whole shares of Acquirer Parent Common Stock equal to the product (rounded down to the nearest whole number of shares of Parent Common Stock) obtained by multiplying the number of shares of Company Common Stock issuable upon the exercise of such Company Option immediately prior to the Effective Time by the Conversion Ratio, (ii) that the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such Company Options shall be equal to the quotient (rounded up to the nearest whole cent) obtained by dividing the exercise price per share of the Company Common Stock for which the Company Option was exercisable immediately prior to the Effective Time by the Conversion Ratio, and (iii) that the vesting provisions applicable to such Company Option shall be as provided in the applicable Option Amendment Agreement. (ii) In furtherance of the foregoing, the Company shall have taken such actions prior to or as of the Effective Time as are reasonable and appropriate to effect the provisions of this Section 1.6(c), including, without limitation, (A) taking such actions as may be required to confirm that Parent’s Board of Directors shall, effective as of the Effective Time, become the administrator of the Plan with respect to the assumed Company Options, and (B) furnishing to holders of Company Options a description of the treatment of such options in connection with the Merger. (iii) Following the Effective Time, Parent will be able to grant stock awards, to the extent permissible by applicable law and Nasdaq regulations, under the terms of the Plan or the terms of another plan adopted by Parent to issue the reserved but unissued shares of Company Common Stock under such Plan and the shares that would otherwise return to such Plan pursuant to the cancellation, termination or expiration of awards granted thereunder or upon the repurchase of shares previously acquired with respect to awards granted thereunder, except that (A) stock covered by such awards will be shares of Parent Common Stock and (B) all references to a number of shares of Company Common Stock will be (x) changed to reference Parent Common Stock and (y) converted to a number of 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 Company Option immediately prior to the Effective Time multiplied by the Option Exchange Conversion Ratio, rounded down to the nearest whole number of shares of Acquirer Parent Common Stock. (iv) Within forty-five (45) days after the Closing, (b) Parent shall prepare and file with the per share exercise price for SEC a registration statement on Form S-8 covering the shares of Acquirer Parent Common Stock issuable upon exercise of such assumed Company Option shall be equal Options resulting from the assumption of Company Options in accordance with this Section 1.6(c), but only to the quotient obtained by dividing the exercise price per share extent that such shares of Company Parent Common Stock at which are eligible to be registered on such assumed Company Option was exercisable immediately prior to the Closing Date by the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with the Mergers shall be fully vested and exercisable; provided, however, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, the number of shares purchasable pursuant to such Acquirer Option and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Option by Acquirer shall be conditioned Registration Statement on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective TimeForm S-8. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5, effective as of At the Effective Time, each then outstanding ----------------------------- Company Option shall under the Company's 1997 Stock Option Plan (the "Option Plan") ----------- or otherwise (whether or not vested or exercisable), will, in connection with the Merger, be assumed by Acquirer and converted into an option to purchase Acquirer Common StockParent. Except as otherwise set forth in this Agreement, each Each Company Option so assumed by Acquirer pursuant to Parent under this Section 2.5 Agreement shall continue to have, and be subject to, the same terms and conditions conditions, excluding exercisability, as set forth in the Company Stock Option Plan and as provided in the respective option agreements relating thereto, as in effect immediately prior to the Effective Time, ; except that (aA) such assumed exercisability of the option shall be, at the ------ election of the option holder made on or before the Closing Date, either (1) unchanged from the exercisability schedule under the Company Option will Option, or (2) initially exercisable as to one-sixtieth (1/60th) of the total option grant for each full month that the option holder was employed by the Company (up to a maximum of fifty percent (50%) and as to one-thirty-sixth (1/36th) of the --- unexercisable portion of the option on each monthly anniversary of the Effective Time (so long as the optionee shall remain an employee or consultant of the Parent or its affiliate or as otherwise provided in Parent's option plan), (B) the option shall be exercisable for that number of whole shares of Acquirer Parent Common Stock equal to the product of obtained by multiplying the number of shares of Company Common Capital Stock that were issuable upon exercise in full of such assumed Company Option immediately prior to the Effective Time multiplied and after adjustment by the Option Exchange Ratio, Ratio (rounded down to the nearest whole number share of shares of Acquirer Parent Common Stock), (bC) the per share exercise price (the "Exercise Price") for the shares of Acquirer Parent Common -------------- Stock issuable upon exercise of such assumed Company Option shall be equal to the quotient obtained by dividing the exercise price per share of Company Common Capital Stock at which such assumed Company Option was exercisable immediately prior to the Closing Date Effective Time and after adjustment by the Option Exchange Ratio, the resulting number Ratio (rounded up to the nearest whole cent, (c) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (dD) each option to purchase Acquirer Common Stock resulting from assumption of a if such Company Option in connection with was held by a Principal Employee (as such term is defined below) prior to the Mergers shall be fully vested and exercisable; providedEffective Time (the "Principal Options"), however, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, the number of shares purchasable pursuant to then each such Acquirer Option and the terms and conditions of exercise of such Acquirer assumed Principal Option shall be determined in order ------------------ immediately exercisable at the Effective Time with respect to comply with Section 424 of the Code. The assumption of each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D fifty percent (each, a “Lock-Up Agreement”50%) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Locksuch assumed Principal Option and shall thereafter, so long as such Principal Employee shall remain an employee or consultant of Parent or its affiliate (except as otherwise provided in Parent's option plan), become exercisable as to one-Up Agreement third (other than Key Employees1/3) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related remaining shares subject to such terminated employee shall lapse immediately upon option on the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Time. (b) Prior date 12 months subsequent to the Effective Time, Time and to an additional one-thirty-sixth (1/36) of the remaining shares on each monthly anniversary of the Effective Time thereafter. The Principal Options shall be subject to such additional terms as are set forth in the review employment agreements to be entered into among Parent, Sub and approval of Acquirer, the Company shall take all actions necessary to effect individuals set forth on Exhibit E hereto (the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal"Principal Employees").. --------- -------------------

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5At the Closing, effective as by virtue of the Effective TimeMerger and without any action on the part of its holder, each then outstanding option exercisable for shares of Company Option shall Common Stock (“Company Stock Option”), whether vested or unvested, will be assumed by Acquirer Acquiror and automatically be converted into an option to purchase Acquirer shares of Domesticated Acquiror Common Stock. Except Stock (“Substitute Options”) as otherwise set forth in this Agreement, each Company below. Each Substitute Option so assumed by Acquirer pursuant to this Section 2.5 shall will continue to have, and be subject to, the same terms and conditions set forth in the applicable documents evidencing the terms of the Company Stock Plan Option (including any applicable incentive plan and the stock option agreements relating thereto, as in effect agreement or other document evidencing such Company Stock Option) immediately prior to the Effective TimeClosing, including any repurchase rights or vesting and termination-related provisions, except that (ai) such assumed Company each Substitute Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of Acquirer Domesticated Acquiror Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time Closing multiplied by the Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Domesticated Acquiror Common Stock, Stock and (bii) the per share exercise price for the shares of Acquirer Domesticated Acquiror Common Stock issuable upon exercise of such assumed Company Substitute Option shall will be equal to the quotient obtained determined by dividing the exercise price per share of Company Common Stock at which such assumed Company Stock Option was exercisable immediately prior to the Closing Date by the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each . The Company Optionholder shall take no action that will be entitled to receive a portion cause or result in the accelerated vesting of the Contingent Consideration pursuant to assumed Company Stock Options. Except as set forth on Schedule ‎3.1(b) or Section 2.8 (subject to Section 2.4(b4.6(c)) and (d) , each option to purchase Acquirer Common Stock resulting from assumption of a Company Substitute Option in connection with the Mergers shall be fully vested and exercisable; provided, however, that in immediately following the case of any Company Option Closing as to which Section 421 the same percentage of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, the total number of shares purchasable pursuant subject thereto as the Company Stock Option was vested as to such Acquirer immediately prior to the Closing. As soon as reasonably practicable following the Closing Date, Acquiror will use commercially reasonable efforts to issue to each Person who holds a Substitute Option and a document evidencing the terms and conditions of exercise foregoing assumption of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Stock Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective TimeAcquiror. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5, effective as of the Effective Time, each then Each outstanding Company ----------------------------- Option shall issued pursuant to Company's 1998 Stock Plan (the "Option Plan") or otherwise, whether vested or unvested, will be assumed by Acquirer and converted into an option to purchase Acquirer Common StockParent in connection with the Merger. Except as otherwise set forth in this Agreement, each Each Company Option so assumed by Acquirer pursuant to Parent under this Section 2.5 Agreement shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Option Plan and and/or as provided in the respective option agreements relating thereto, as in effect immediately prior to the Effective TimeTime (including, without limitation, any vesting schedule or repurchase rights), except that (ai) such assumed each Company Option will be exercisable for (A) that number of whole shares of Acquirer Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Option immediately prior to the Effective Time multiplied by the Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Parent Common StockStock and (B) cash equal to the Per Share Cash Amount multiplied by the number of shares of Company Common Stock that were issuable upon exercise of such Company Option, and (bii) the per share exercise price for the shares of Acquirer Parent Common Stock issuable upon exercise of such assumed Company Option shall will be equal to the quotient obtained determined by dividing the exercise price per share of Company Common Capital Stock at which such assumed Company Option was exercisable immediately prior to the Closing Date Effective Time by the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with the Mergers shall be fully vested and exercisable; provided, however, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification under Section 422 of the Code, the exercise price of the Acquirer Option, the number of shares purchasable pursuant to such Acquirer Option and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption rights of each first refusal with respect to Company Options issued under the Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer Plan, set forth in the form attached hereto of option agreement, are hereby waived by the Company and Parent as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at the Effective Time. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5, effective as of At the Effective Time, each then outstanding Company Option shall issued pursuant to a resolution of the Company's Board of Directors, at its December 15, 1998 meeting, a true and correct copy of which has been delivered to Parent (the "Option Plan") will, without further action by the holder thereof, be assumed by Acquirer by, exchanged for and converted into an option a right to purchase Acquirer Common Stock. Except as otherwise set forth in this Agreement, each Company Option so assumed by Acquirer pursuant to this Section 2.5 shall continue to have, and be subject to, the same terms and conditions set forth in the Company Stock Plan and the option agreements relating thereto, as in effect immediately prior to the Effective Time, except that (a) such assumed Company Option will be exercisable for receive that number of whole shares of Acquirer Common Stock Option Units (as defined below) equal to the product of the that number of shares of Company Common Stock that were issuable upon exercise of such would have been issuable, if the Company Option had been exercisable and exercised immediately prior to the Effective Time multiplied upon receipt by the Option Exchange Ratio, rounded down to the nearest whole number Parent of shares of Acquirer Common Stock, (b) the per share an exercise price for the shares of Acquirer Common Stock issuable upon exercise of each such assumed Company Option shall be Unit equal to the quotient obtained by dividing the exercise price per share of Company Common Capital Stock at which such assumed Company Option was exercisable immediately prior to the Closing Date Effective Time. Said exercise price for each Option Unit, at the election of the holder of the option, shall either be paid (aa) in cash by the holder of the Company Option Exchange Ratioto Cypress and/or (bb) by assignment by the Company Option holder to Parent of that number of shares of Parent Common Stock equal to the unpaid exercise price divided by the Parent Common Stock Price, the resulting number rounded up to the nearest whole cent, share of Parent Common Stock. Said options shall be unvested (c) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of if not exchanged for a Company Option in connection with that was vested prior to the Mergers Merger). For the purpose of the forgoing each "Option Unit" shall be fully vested and exercisable; provided, however, that in equal to an amount of shares from the case of any Company Option Aggregate Share Number equal to which Section 421 the Merger Exchange Ratio. It is the intention of the Code is intended parties hereto that the Company Options converted into options to apply acquire Parent Common Stock following the Closing pursuant to this Section 1.6 will, to the extent permitted by reason of its qualification under applicable law, qualify as incentive stock options as defined in Section 422 of the Code, to the exercise price of the Acquirer Option, the number of shares purchasable pursuant to such Acquirer Option and the terms and conditions of exercise of such Acquirer Option shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year after the Effective Time; provided, however, that in the event the employment of extent any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions of the Lock-Up Agreement (but not the contingent termination provisions) related to such terminated employee shall lapse immediately upon the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and such Company Options shall terminate at qualified as incentive stock options immediately prior to the Effective Time. (b) Prior to the Effective Time, and subject to the review and approval of Acquirer, the Company shall take all actions necessary to effect the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement of the Company (whether written or oral, formal or informal).

Assumption of Company Options. (a) Except as otherwise provided in this Section 2.5, effective as As of the Effective Time, each then outstanding all Company Options, whether vested or unvested, and the Company Option Plans, insofar as they relate to Company Options outstanding under such plans as of the Closing, shall be assumed by Acquirer and converted into an option to purchase Acquirer Common Stockthe Acquiror. Except as otherwise set forth in this AgreementImmediately after the Effective Time, each Company Option so assumed by Acquirer pursuant outstanding immediately prior to this Section 2.5 the Effective Time shall continue be deemed to haveconstitute an option to acquire, and be subject to, on the same terms and conditions set forth in the as were applicable under such Company Stock Plan and the option agreements relating thereto, as in effect immediately prior to Option at the Effective Time, except that (a) such assumed Company Option will be exercisable for that number of whole shares of Acquirer Acquiror Common Stock as is equal to the product of the number of shares of Company Common Stock that were issuable upon subject to the unexercised portion of such Company Option 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 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 Option Exchange Ratio, rounded down to the nearest whole number of shares of Acquirer Common Stock, Conversion Ratio (b) the per share exercise price for the shares of Acquirer Common Stock issuable upon exercise of such assumed Company Option shall be equal to the quotient obtained by dividing the exercise price per share of Company Common Stock at which such assumed Company Option was exercisable immediately prior to the Closing Date by the Option Exchange Ratio, the resulting number rounded up to the nearest whole cent, (c). Except for the acceleration of unvested Company Options immediately prior to the Effective Time in accordance with the provisions of Section 6.16 and except as otherwise provided in Section 4.16(h) each Company Optionholder will be entitled to receive a portion of the Contingent Consideration pursuant to Section 2.8 (subject to Section 2.4(b)) and (d) each option to purchase Acquirer Common Stock resulting from assumption of a Company Option in connection with Disclosure Schedule, the Mergers shall be fully vested and exercisable; providedterm, howeverexercisability, that in the case of any Company Option to which Section 421 of the Code is intended to apply by reason of its qualification vesting schedule, status as an “incentive stock option” under Section 422 of the Code, the exercise price if applicable, and all of the Acquirer Option, other terms of the number of shares purchasable Company Options assumed by Acquiror pursuant to such Acquirer Option and the terms and conditions of exercise of such Acquirer Option this Section 2.7(a) shall be determined in order to comply with Section 424 of the Code. The assumption of each Company Option by Acquirer shall be conditioned on the Company Optionholder entering into a written lock-up agreement and termination agreement with Acquirer in the form attached hereto otherwise remain unchanged. (b) As soon as Exhibit D (each, a “Lock-Up Agreement”) prior to on or about the Closing Date providing that such Company Optionholder will not sell or otherwise dispose of the shares of Acquirer Common Stock issuable upon the exercise thereof for one year practicable after the Effective Time; provided, however, that in the event the employment of any Transferred Employee subject to a Lock-Up Agreement (other than Key Employees) is involuntarily terminated without “cause” (as defined in the Lock-Up Agreement) within one year following the Effective Time, the market standoff provisions Acquiror or the Surviving Corporation shall deliver to the holders of the Lock-Up Agreement (but not the contingent termination provisionsCompany Options assumed by Acquiror pursuant to Section 2.7(a) related appropriate notices setting forth such holders’ rights pursuant to such terminated employee shall lapse immediately upon Company Options, as amended by this Section 2.7, and the termination of such employee’s employment. Notwithstanding the foregoing, any Company Options held by a Company Optionholder who does not enter into a Lock-Up Agreement prior to on or about the Closing Date will not be assumed by Acquirer and agreements evidencing such Company Options shall terminate at continue in effect on the Effective Timesame terms and conditions (subject to the amendments provided for in this Section 2.7 and such notice). (bc) Prior The 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 the Company Options assumed in accordance with Section 2.7(a). Within five (5) Business Days after the Effective Time, and the Acquiror shall file a Registration Statement on Form S-8 (or any successor form) under the Securities Act with respect to all shares of Acquiror Common Stock subject to such Company Options that may be registered on a Form S-8, and shall use its reasonable best efforts to maintain the review effectiveness of such Registration Statement for so long as such Company Options remain outstanding. (d) As soon as reasonably practicable after the execution of this Agreement, Acquiror shall cause its Israeli counsel to prepare and approval file with the Israeli Securities Authority an application for an exemption from the requirements of Acquirer, the Company shall take all actions necessary to effect Israeli Securities Law (1968) concerning the transactions anticipated by this Section 2.5 under all Company Option agreements and any other plan or arrangement publication of a prospectus in respect of the exchange of the Company Options for the Assumed Options, pursuant to Section 15D of the Securities Law of Israel (whether the “Israeli Securities Exemption”). The Company shall cooperate and cause its Representatives to cooperate with Acquiror and its Israeli counsel in connection with the preparation and filing of such application and in the preparation of any written or oraloral submissions that may be necessary, formal proper or informal)advisable to obtain the Israeli Securities Exemption.