OUTSTANDING RIGHTS OF THE COMPANY WHICH
IT MAY HOLD IMMEDIATELY PRIOR TO THE EFFECTIVE TIME TO REPURCHASE UNVESTED
SHARES OF COMPANY COMMON STOCK (THE "REPURCHASE OPTIONS") SHALL CONTINUE IN
EFFECT FOLLOWING THE MERGER AND SHALL CONTINUE TO BE EXERCISABLE BY THE PARENT
UPON THE SAME TERMS AND CONDITIONS IN EFFECT IMMEDIATELY PRIOR TO THE EFFECTIVE
TIME, EXCEPT THAT THE SHARES PURCHASABLE PURSUANT TO THE REPURCHASE OPTIONS AND
THE PURCHASE PRICE PER SHALL BE ADJUSTED TO REFLECT THE CONVERSION TO PARENT
COMMON STOCK AND THE EXCHANGE RATIO.
(C)
PARENT SHALL TAKE ALL CORPORATE ACTION
NECESSARY TO RESERVE FOR ISSUANCE A SUFFICIENT NUMBER OF SHARES OF PARENT COMMON
STOCK FOR DELIVERY UPON EXERCISE OF THE ASSUMED COMPANY OPTIONS AND TO FILE ALL
DOCUMENTS REQUIRED TO BE FILED TO CAUSE THE SHARES OF PARENT COMMON STOCK
ISSUABLE UPON EXERCISE OF THE ASSUMED COMPANY OPTIONS TO BE LISTED ON THE NASDAQ
NATIONAL MARKET.
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE TIME, BUT SUBJECT
TO PARENT'S BLACKOUT PROCEDURES AND THE LOCK-UP AGREEMENT, PARENT SHALL FILE A
REGISTRATION STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE
"SEC") ON FORM S-8 (OR ANY SUCCESSOR FORM) OR ANOTHER APPROPRIATE FORM WITH
RESPECT TO THE PARENT COMMON STOCK SUBJECT TO SUCH ASSUMED COMPANY OPTIONS, AND
SHALL USE ALL COMMERCIALLY 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 ASSUMED COMPANY OPTIONS REMAIN OUTSTANDING.
AS SOON AS PRACTICABLE
AFTER THE EFFECTIVE TIME, PARENT SHALL INFORM IN WRITING THE HOLDERS OF COMPANY
OPTIONS OF THEIR RIGHTS PURSUANT TO THE COMPANY STOCK OPTION PLANS AND THE
AGREEMENTS EVIDENCING THE GRANTS OF SUCH COMPANY OPTIONS SHALL CONTINUE IN
EFFECT ON THE SAME TERMS AND CONDITIONS (SUBJECT TO THE ADJUSTMENTS REQUIRED BY
SECTION 2.2(A) HEREOF), AFTER GIVING EFFECT TO THE MERGER AND THE ASSUMPTION BY
PARENT OF THE COMPANY OPTIONS AS SET FORTH HEREIN.
(D)
IN THE CASE OF ANY COMPANY OPTION TO WHICH
SECTION 421 OF THE CODE APPLIES BY REASON OF SECTION 422 OF THE CODE ("INCENTIVE
STOCK OPTIONS"), THE OPTION EXERCISE PRICE, THE NUMBER OF SHARES OF PARENT
COMMON STOCK PURCHASABLE PURSUANT TO SUCH OPTION AND THE TERMS AND CONDITIONS OF
EXERCISE OF SUCH OPTION SHALL BE DETERMINED IN ORDER TO COMPLY WITH
SECTION 424(A) OF THE CODE TO THE EXTENT PRACTICABLE.
(E)
PARENT WILL MAKE GOOD FAITH EFFORTS TO
ENSURE, TO THE EXTENT PERMITTED BY THE CODE AND TO THE EXTENT REQUIRED BY AND
SUBJECT TO THE TERMS OF ANY SUCH INCENTIVE STOCK OPTIONS, THAT COMPANY OPTIONS
WHICH QUALIFIED AS INCENTIVE STOCK OPTIONS PRIOR TO THE CLOSING DATE CONTINUE TO
QUALIFY AS INCENTIVE STOCK OPTIONS OF PARENT AFTER THE CLOSING.
(f)
At the Effective Time, the Warrant shall
be assumed by Parent in accordance with Section 1.7.2 of the Warrant.
5
2.3.
EXCHANGE OF CERTIFICATES.
(A)
PRIOR TO THE EFFECTIVE TIME, PARENT SHALL
DESIGNATE A COMMERCIAL BANK, TRUST COMPANY OR OTHER FINANCIAL INSTITUTION, WHICH
MAY INCLUDE