Document:

exv4w9

 

Exhibit 4.9

FORM OF

TRUST PREFERRED SECURITIES

GUARANTEE AGREEMENT

VINEYARD NATIONAL BANCORP

Dated as of ________ __, 200_

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS AND INTERPRETATION
	 	 	 	 
	 
	 	 	 	 
	Section 1.1 Definitions and Interpretation 
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II TRUST INDENTURE ACT
	 	 	 	 
	 
	 	 	 	 
	Section 2.1 Trust Indenture Act; Application 
	 	 	5	 
	Section 2.2 Lists of Holders of Trust Preferred Securities 
	 	 	5	 
	Section 2.3 Reports by the Trust Preferred Securities Guarantee Trustee 
	 	 	5	 
	Section 2.4 Periodic Reports to Trust Preferred Securities Guarantee Trustee 
	 	 	5	 
	Section 2.5 Evidence of Compliance with Conditions Precedent 
	 	 	6	 
	Section 2.6 Guarantee Events of Default; Waiver 
	 	 	6	 
	Section 2.7 Guarantee Event of Default; Notice 
	 	 	6	 
	Section 2.8 Conflicting Interests 
	 	 	6	 
	 
	 	 	 	 
	ARTICLE
III POWERS, DUTIES AND RIGHTS OF TRUST PREFERRED SECURITIES GUARANTEE
	 	 	 	 
	 TRUSTEE
	 	 	 	 
	 
	 	 	 	 
	Section 3.1 Powers and Duties of the Trust Preferred Securities Guarantee Trustee 
	 	 	7	 
	Section 3.2 Certain Rights of Trust Preferred Securities Guarantee Trustee 
	 	 	8	 
	Section 3.3 Not Responsible for Recitals or Issuance of Trust Preferred
Securities Guarantee 
	 	 	10	 
	 
	 	 	 	 
	ARTICLE IV TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE
	 	 	 	 
	 
	 	 	 	 
	Section 4.1 Trust Preferred Securities Guarantee Trustee; Eligibility 
	 	 	11	 
	Section 4.2 Appointment, Removal and Resignation of Trust Preferred Securities
Guarantee Trustee 
	 	 	11	 
	 
	 	 	 	 
	ARTICLE V GUARANTEE
	 	 	 	 
	 
	 	 	 	 
	Section 5.1 Guarantee 
	 	 	12	 
	Section 5.2 Waiver of Notice and Demand 
	 	 	12	 
	Section 5.3 Obligations Not Affected 
	 	 	12	 
	Section 5.4 Rights of Holders 
	 	 	13	 
	Section 5.5 Guarantee of Payment 
	 	 	14	 
	Section 5.6 Subrogation 
	 	 	14	 
	Section 5.7 Independent Obligations 
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION
	 	 	 	 
	 
	 	 	 	 
	Section 6.1 Limitation of Transactions 
	 	 	14	 
	Section 6.2 Ranking 
	 	 	15	 

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	 	 	 	Page	 
	ARTICLE VII TERMINATION
	 	 	 	 
	 
	 	 	 	 
	Section 7.1 Termination 
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VIII INDEMNIFICATION
	 	 	 	 
	 
	 	 	 	 
	Section 8.1 Exculpation 
	 	 	16	 
	Section 8.2 Indemnification 
	 	 	16	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 9.1 Successors and Assigns 
	 	 	16	 
	Section 9.2 Amendments 
	 	 	17	 
	Section 9.3 Notices 
	 	 	17	 
	Section 9.4 Benefit 
	 	 	18	 
	Section 9.5 Governing Law 
	 	 	18	 

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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT

     This Trust Preferred Securities Guarantee Agreement (the “Trust Preferred Securities
Guarantee”), dated as of ___ __, 200_, is executed and delivered by Vineyard National Bancorp,
a California corporation (the “Guarantor”), and Wilmington Trust Company, a Delaware banking
corporation, as trustee, for the benefit of the Holders (as defined herein) from time to time of
the Trust Preferred Securities (as defined herein) of Vineyard Statutory Trust X, a Delaware
statutory trust (the “Issuer”).

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated
as of ___ __, 200_, among the trustees of the Issuer named therein, the Guarantor, as sponsor,
and the Holders from time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the date hereof, ___ trust preferred securities, having an
aggregate liquidation amount of $___, such trust preferred securities being designated
the ___% Cumulative Trust Preferred Securities (collectively the “Trust Preferred Securities”);
and

     WHEREAS, as incentive for the Holders to purchase the Trust Preferred Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Trust
Preferred Securities Guarantee, to pay to the Holders the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the purchase by each Holder, which purchase the Guarantor
hereby acknowledges shall benefit the Guarantor, the Guarantor executes and delivers this Trust
Preferred Securities Guarantee for the benefit of the Holders.

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1 Definitions and Interpretation

     In this Trust Preferred Securities Guarantee, unless the context otherwise requires:

     (a) capitalized terms used in this Trust Preferred Securities Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section 1.1;

     (b) a term defined in the Declaration as at the date of execution of this Trust Preferred
Securities Guarantee have the same meaning when used in this Trust Preferred Securities Guarantee
unless otherwise defined in this Trust Preferred Securities Guarantee;

     (c) a term defined anywhere in this Trust Preferred Securities Guarantee has the same meaning
throughout;

     (d) all references to “the Trust Preferred Securities Guarantee” or “this Trust Preferred
Securities Guarantee” are to this Trust Preferred Securities Guarantee as modified, supplemented or
amended from time to time;

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     (e) all references in this Trust Preferred Securities Guarantee to Articles and Sections are
to Articles and Sections of this Trust Preferred Securities Guarantee, unless otherwise specified;

     (f) a term defined in the Trust Indenture Act has the same meaning when used in this Trust
Preferred Securities Guarantee, unless otherwise defined in this Trust Preferred Securities
Guarantee or unless the context otherwise requires; and

     (g) a reference to the singular includes the plural and vice versa.

     “Affiliate” has the same meaning as given to that term in Rule 405 under the Securities Act of
1933, as amended, or any successor rule thereunder.

     “Business Day” means any day other than a Saturday or a Sunday, or a day on which banking
institutions in the cities of New York, New York, Wilmington, Delaware or Rancho Cucamonga,
California are authorized or required by law or executive order to close.

     “Common Securities” means the securities representing common undivided beneficial interests in
the assets of the Issuer.

     “Corporate Trust Office” means the office of the Trust Preferred Securities Guarantee Trustee
at which the corporate trust business of the Trust Preferred Securities Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of execution of this
Trust Preferred Securities Guarantee is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attn: Corporate Trust Administration.

     “Covered Person” means any Holder or beneficial owner of Trust Preferred Securities.

     “Debentures” means the series of subordinated deferrable interest debentures of the Guarantor
designated the ___% Junior Subordinated Deferrable Interest Debentures due _____ ___,
200___ held by the Property Trustee (as defined in the Declaration) of the Issuer.

     “Guarantee Event of Default” means a default by the Guarantor on any of its payment or other
obligations under this Trust Preferred Securities Guarantee; provided, however, that except with
respect to a default in payment of any Guarantee Payment, the Guarantor shall have received notice
of default and shall not have cured such default within 60 days after receipt of such notice.

     “Guarantee Payments” means the following payments or distributions, without duplication, with
respect to the Trust Preferred Securities, to the extent not paid or made by the Issuer: (i) any
accumulated and unpaid Distributions (as defined in the Declaration) that are required to be paid
on such Trust Preferred Securities to the extent the Issuer has funds on hand legally available
therefor at such time; (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the “Redemption Price”) to the extent the Issuer has funds
on hand legally available therefor at such time, with respect to any Trust Preferred Securities
called for redemption by the Issuer; and (iii) upon a voluntary or involuntary dissolution or
winding up of the Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Trust Preferred Securities as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accumulated and unpaid Distributions on the
Trust Preferred Securities to the date of payment, to the extent the Issuer has funds on hand
legally available therefor, and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer

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after satisfaction of liabilities to creditors (in either case, the “Liquidation
Distribution”). If an Event of Default has occurred and is continuing, no Guarantee Payments under
the Common Securities Guarantee with respect to the Common Securities or any guarantee payment
under any Other Common Securities Guarantees shall be made until the Holders shall be paid in full
the Guarantee Payments to which they are entitled under this Trust Preferred Securities Guarantee.

     “Holder” shall mean any holder, as registered on the books and records of the Issuer, of any
Trust Preferred Securities; provided, however, that, in determining whether the holders of the
requisite percentage of Trust Preferred Securities have given any request, notice, consent or
waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of the Guarantor.

     “Indemnified Person” means the Trust Preferred Securities Guarantee Trustee, any Affiliate of
the Trust Preferred Securities Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of the Trust
Preferred Securities Guarantee Trustee.

     “Indenture” means the Indenture dated as of _____ ___, 200_, between the Guarantor (the
“Debenture Issuer”) and Wilmington Trust Company, as trustee (the “Indenture Trustee”), pursuant to
which the Debentures are to be issued to the Property Trustee of the Issuer.

     “Indenture Event of Default” shall mean any event specified in Section 5.01 of the Indenture.

     “Majority in liquidation amount of the Trust Preferred Securities” means, except as provided
by the Declaration, the terms of the Preferred Securities or by the Trust Indenture Act, a vote by
Holder(s) of more than 50% of the aggregate liquidation amount of all Trust Preferred Securities.
In determining whether the Holders of the requisite amount of Trust Preferred Securities have
voted, Trust Preferred Securities which are owned by the Guarantor or any Affiliate of the
Guarantor or any other obligor on the Trust Preferred Securities shall be disregarded for the
purpose of any such determination.

     “Officers’ Certificate” means, with respect to the Guarantor, a certificate signed by any two
of the following: the Chairman, a Vice Chairman, the Chief Executive Officer, the President, a
Vice President, the Comptroller, the Secretary or an Assistant Secretary of the Guarantor. Any
Officers’ Certificate delivered with respect to compliance with a condition or covenant provided
for in this Trust Preferred Securities Guarantee (other than pursuant to Section 314(d)(4) of the
Trust Indenture Act) shall include:

     (a) a statement that each officer signing the Officers’ Certificate has read the covenant or
condition and the definitions relating thereto;

     (b) a statement that each such officer has made such examination or investigation as, in such
officer’s opinion, is necessary to enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and

     (c) a statement as to whether, in the opinion of each such officer, such condition or covenant
has been complied with.

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     “Other Common Securities Guarantees” shall have the same meaning as “Other Guarantees” as
defined in the Common Securities Guarantee.

     “Other Debentures” means all junior subordinated debentures issued by the Guarantor from time
to time and sold to trusts to be established by the Guarantor, in each case similar to the Issuer.

     “Other Guarantees” means all guarantees issued or to be issued by the Guarantor with respect
to trust preferred securities similar to the Trust Preferred Securities issued by other trusts
established or to be established by the Guarantor, in each case similar to the Issuer.

     “Person” means a legal person, including any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision thereof, or any other entity of
whatever nature.

     “Responsible Officer” means, with respect to the Trust Preferred Securities Guarantee Trustee,
any officer within the Corporate Trust Office of the Trust Preferred Securities Guarantee Trustee
with direct responsibility for the administration of this Trust Preferred Securities Guarantee and
also means, with respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer’s knowledge of and familiarity with the particular
subject.

     “Successor Trust Preferred Securities Guarantee Trustee” means a successor Trust Preferred
Securities Guarantee Trustee possessing the qualifications to act as Trust Preferred Securities
Guarantee Trustee under Section 4.1.

     “Trust Preferred Securities Guarantee Trustee” means Wilmington Trust Company, a Delaware
banking corporation, until a Successor Trust Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this Trust Preferred
Securities Guarantee and thereafter means each such Successor Trust Preferred Securities Guarantee
Trustee.

     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to time, or
any successor legislation.

     “Trust Securities” means the Common Securities and the Trust Preferred Securities,
collectively.

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ARTICLE II

TRUST INDENTURE ACT

Section 2.1 Trust Indenture Act; Application

     (a) This Trust Preferred Securities Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Preferred Securities Guarantee and shall,
to the extent applicable, be governed by such provisions; and

     (b) if and to the extent that any provision of this Trust Preferred Securities Guarantee
limits, qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.

Section 2.2 Lists of Holders of Trust Preferred Securities

     (a) The Guarantor shall provide the Trust Preferred Securities Guarantee Trustee (unless the
Trust Preferred Securities Guarantee Trustee is otherwise the registrar of the Trust Preferred
Securities) with a list, in such form as the Trust Preferred Securities Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Trust Preferred Securities
(“List of Holders”) as of such date, (i) within 14 days after each record date for payment of
Distributions, as defined in the Declaration, and (ii) at any other time within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Trust Preferred Securities Guarantee Trustee, provided,
that the Guarantor shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the Trust Preferred
Securities Guarantee Trustee by the Guarantor. The Trust Preferred Securities Guarantee Trustee
shall preserve, in as current a form as is reasonably practicable, all information contained in a
List of Holders given to it, provided that it may destroy any List of Holders previously given to
it on receipt of a new List of Holders.

     (b) The Trust Preferred Securities Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.

Section 2.3 Reports by the Trust Preferred Securities Guarantee Trustee

     On or before July 31 of each year, commencing July 31, 200___, the Trust Preferred Securities
Guarantee Trustee shall provide to the Holders such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Trust Preferred Securities Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.

Section 2.4 Periodic Reports to Trust Preferred Securities Guarantee Trustee

     The Guarantor shall provide to the Trust Preferred Securities Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust Indenture Act (if any)
and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in
the

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manner and at the times required by Section 314 of the Trust Indenture Act, provided that such
compliance certificate shall be delivered on or before 120 days after the end of each fiscal year
of the Guarantor.

Section 2.5 Evidence of Compliance with Conditions Precedent

     The Guarantor shall provide to the Trust Preferred Securities Guarantee Trustee such evidence
of compliance with any conditions precedent, if any, provided for in this Trust Preferred
Securities Guarantee that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers’ Certificate.

Section 2.6 Guarantee Events of Default; Waiver

     The Holders of a Majority in liquidation amount of Trust Preferred Securities may, by vote or
by written consent, on behalf of all Holders, waive any past Guarantee Event of Default and its
consequences. Upon such waiver, any such Guarantee Event of Default shall cease to exist, and any
Guarantee Event of Default arising therefrom shall be deemed to have been cured, for every purpose
of this Trust Preferred Securities Guarantee, but no such waiver shall extend to any subsequent or
other default or Guarantee Event of Default or impair any right consequent thereon.

Section 2.7 Guarantee Event of Default; Notice

     (a) The Trust Preferred Securities Guarantee Trustee shall, within 90 days after the
occurrence of a Guarantee Event of Default, mail by first class postage prepaid, to all Holders,
notices of all Guarantee Events of Default actually known to a Responsible Officer, unless such
defaults have been cured before the giving of such notice; provided, that, except in the case of a
Guarantee Event of Default in the timing or payment of any Guarantee Payment, the Trust Preferred
Securities Guarantee Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors and/or a Responsible
Officer of the Trust Preferred Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.

     (b) The Trust Preferred Securities Guarantee Trustee shall not be deemed to have knowledge of
any Guarantee Event of Default unless the Trust Preferred Securities Guarantee Trustee shall have
received written notice from the Guarantor, or a Responsible Officer charged with the
administration of this Trust Preferred Securities Guarantee shall have obtained actual knowledge,
of such Guarantee Event of Default.

Section 2.8 Conflicting Interests

     The Declaration shall be deemed to be specifically described in this Trust Preferred
Securities Guarantee for the purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.

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ARTICLE III

POWERS, DUTIES AND RIGHTS OF

TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE

Section 3.1 Powers and Duties of the Trust Preferred Securities Guarantee Trustee

     (a) This Trust Preferred Securities Guarantee shall be held by the Trust Preferred Securities
Guarantee Trustee for the benefit of the Holders, and the Trust Preferred Securities Guarantee
Trustee shall not transfer this Trust Preferred Securities Guarantee to any Person except a Holder
exercising his, her or its rights pursuant to Section 5.4(b) or to a Successor Trust Preferred
Securities Guarantee Trustee on acceptance by such Successor Trust Preferred Securities Guarantee
Trustee of its appointment to act as Successor Trust Preferred Securities Guarantee Trustee. The
right, title and interest of the Trust Preferred Securities Guarantee Trustee shall automatically
vest in any Successor Trust Preferred Securities Guarantee Trustee, and such vesting and succession
of title shall be effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Trust Preferred Securities Guarantee Trustee.

     (b) If a Guarantee Event of Default actually known to a Responsible Officer has occurred and
is continuing, the Trust Preferred Securities Guarantee Trustee shall enforce this Trust Preferred
Securities Guarantee for the benefit of the Holders.

     (c) The Trust Preferred Securities Guarantee Trustee, before the occurrence of any Guarantee
Event of Default and after the curing of all Guarantee Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in this Trust Preferred
Securities Guarantee, and no implied covenants shall be read into this Trust Preferred Securities
Guarantee against the Trust Preferred Securities Guarantee Trustee. In case a Guarantee Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer, the Trust Preferred Securities Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Trust Preferred Securities Guarantee, and use
the same degree of care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.

     (d) No provision of this Trust Preferred Securities Guarantee shall be construed to relieve
the Trust Preferred Securities Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

(i) prior to the occurrence of any Guarantee Event of Default and after the curing
or waiving of all such Guarantee Events of Default that may have occurred:

          (A) the duties and obligations of the Trust Preferred Securities Guarantee
Trustee shall be determined solely by the express provisions of this Trust Preferred
Securities Guarantee, and the Trust Preferred Securities Guarantee Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Trust Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this Trust Preferred Securities
Guarantee against the Trust Preferred Securities Guarantee Trustee; and

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          (B) in the absence of bad faith on the part of the Trust Preferred Securities
Guarantee Trustee, the Trust Preferred Securities Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trust
Preferred Securities Guarantee Trustee and conforming to the requirements of this
Trust Preferred Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be furnished to
the Trust Preferred Securities Guarantee Trustee, the Trust Preferred Securities
Guarantee Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Trust Preferred Securities Guarantee
(but need not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein);

(ii) the Trust Preferred Securities Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Trust Preferred Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;

(iii) the Trust Preferred Securities Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a Majority in liquidation amount of the Trust
Preferred Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trust Preferred Securities Guarantee
Trustee, or exercising any trust or power conferred upon the Trust Preferred
Securities Guarantee Trustee under this Trust Preferred Securities Guarantee; and

(iv) no provision of this Trust Preferred Securities Guarantee shall require the
Trust Preferred Securities Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Trust Preferred Securities
Guarantee Trustee shall have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it under the terms of this
Trust Preferred Securities Guarantee or indemnity, reasonably satisfactory to the
Trust Preferred Securities Guarantee Trustee, against such risk or liability is not
reasonably assured to it.

Section 3.2 Certain Rights of Trust Preferred Securities Guarantee Trustee

     (a) Subject to the provisions of Section 3.1:

(i) The Trust Preferred Securities Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting, upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties.

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(ii) Any direction or act of the Guarantor contemplated by this Trust Preferred
Securities Guarantee may be sufficiently evidenced by an Officers’ Certificate.

(iii) Whenever, in the administration of this Trust Preferred Securities Guarantee,
the Trust Preferred Securities Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any action
hereunder, the Trust Preferred Securities Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers’ Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor.

(iv) The Trust Preferred Securities Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).

(v) The Trust Preferred Securities Guarantee Trustee may consult with counsel of
its selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be counsel to the Guarantor or any of
its Affiliates and may include any of its employees. The Trust Preferred Securities
Guarantee Trustee shall have the right at any time to seek instructions concerning
the administration of this Trust Preferred Securities Guarantee from any court of
competent jurisdiction.

(vi) The Trust Preferred Securities Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Trust Preferred
Securities Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Trust Preferred Securities Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Trust Preferred Securities
Guarantee Trustee, against the costs, expenses (including attorneys’ fees and
expenses and the expenses of the Trust Preferred Securities Guarantee Trustee’s
agents, nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as may
be requested by the Trust Preferred Securities Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Trust
Preferred Securities Guarantee Trustee, upon the occurrence of a Guarantee Event of
Default, of its obligation to exercise the rights and powers vested in it by this
Trust Preferred Securities Guarantee.

(vii) The Trust Preferred Securities Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trust Preferred Securities Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see fit.

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(viii) The Trust Preferred Securities Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Trust Preferred
Securities Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent, custodian, nominee or attorney appointed with
due care by it hereunder.

(ix) Any action taken by the Trust Preferred Securities Guarantee Trustee or its
agents hereunder shall bind the Holders, and the signature of the Trust Preferred
Securities Guarantee Trustee or its agents alone shall be sufficient and effective
to perform any such action. No third party shall be required to inquire as to the
authority of the Trust Preferred Securities Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Trust Preferred Securities
Guarantee, both of which shall be conclusively evidenced by the Trust Preferred
Securities Guarantee Trustee’s or its agent’s taking such action.

(x) Whenever in the administration of this Trust Preferred Securities Guarantee the
Trust Preferred Securities Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Trust Preferred Securities Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the Trust
Preferred Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions.

(xi) The Trust Preferred Securities Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Trust Preferred Securities Guarantee.

     (b) No provision of this Trust Preferred Securities Guarantee shall be deemed to impose any
duty or obligation on the Trust Preferred Securities Guarantee Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Trust Preferred Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or authority available to
the Trust Preferred Securities Guarantee Trustee shall be construed to be a duty.

Section 3.3. Not Responsible for Recitals or Issuance of Trust Preferred Securities Guarantee

     The recitals contained in this Trust Preferred Securities Guarantee shall be taken as the
statements of the Guarantor, and the Trust Preferred Securities Guarantee Trustee does not assume
any responsibility for their correctness. The Trust Preferred Securities Guarantee Trustee makes
no representation as to the validity or sufficiency of this Trust Preferred Securities Guarantee.

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ARTICLE IV

TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE

Section 4.1 Trust Preferred Securities Guarantee Trustee; Eligibility

     (a) There shall at all times be a Trust Preferred Securities Guarantee Trustee which shall:

(i) not be an Affiliate of the Guarantor; and

(ii) be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of Columbia,
or a corporation or Person permitted by the Securities and Exchange Commission to
act as an institutional trustee under the Trust Indenture Act, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.

     (b) If at any time the Trust Preferred Securities Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Trust Preferred Securities Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).

     (c) If the Trust Preferred Securities Guarantee Trustee has or shall acquire any “conflicting
interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trust Preferred
Securities Guarantee Trustee and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.

Section 4.2 Appointment, Removal and Resignation of Trust Preferred Securities Guarantee Trustee

     (a) Subject to Section 4.2(b), the Trust Preferred Securities Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during a Guarantee Event of
Default.

     (b) The Trust Preferred Securities Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Trust Preferred Securities Guarantee Trustee has been appointed
and has accepted such appointment by written instrument executed by such Successor Trust Preferred
Securities Guarantee Trustee and delivered to the Guarantor.

     (c) The Trust Preferred Securities Guarantee Trustee shall hold office until a Successor Trust
Preferred Securities Guarantee Trustee shall have been appointed or until its removal or
resignation. The Trust Preferred Securities Guarantee Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument in writing executed by the Trust Preferred
Securities Guarantee Trustee and delivered to the Guarantor, which resignation shall not take
effect

11

 

until a Successor Trust Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor Trust Preferred
Securities Guarantee Trustee and delivered to the Guarantor and the resigning Trust Preferred
Securities Guarantee Trustee.

     (d) If no Successor Trust Preferred Securities Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after delivery of an instrument
of removal or resignation, the Trust Preferred Securities Guarantee Trustee resigning or being
removed may petition any court of competent jurisdiction for appointment of a Successor Trust
Preferred Securities Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Trust Preferred Securities Guarantee Trustee.

     (e) No Trust Preferred Securities Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Trust Preferred Securities Guarantee Trustee.

     (f) Upon termination of this Trust Preferred Securities Guarantee or removal or resignation of
the Trust Preferred Securities Guarantee Trustee pursuant to this Section 4.2, the Guarantor shall
pay to the Trust Preferred Securities Guarantee Trustee all amounts due to the Trust Preferred
Securities Guarantee Trustee for fees and reimbursement of expenses which have accrued to the date
of such termination, removal or resignation.

ARTICLE V

GUARANTEE

Section 5.1 Guarantee

     The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set- off or counterclaim that the Issuer may have or
assert. The Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct payment
of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.

Section 5.2 Waiver of Notice and Demand

     The Guarantor hereby waives notice of acceptance of this Trust Preferred Securities Guarantee
and of any liability to which it applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

Section 5.3 Obligations Not Affected

     The obligations, covenants, agreements and duties of the Guarantor under this Trust Preferred
Securities Guarantee shall be absolute and unconditional and shall remain in full force and effect
until the entire liquidation amount of all Trust Preferred Securities shall have been paid and such
obligations, covenants, agreements and duties shall in no way be affected or impaired by reason

12

 

of the happening from time to time of any event, including without limitation the following,
whether or not with notice to, or the consent of, the Guarantor:

     (a) the release or waiver, by operation of law or otherwise, of the performance or observance
by the Issuer of any express or implied agreement, covenant, term or condition relating to the
Trust Preferred Securities to be performed or observed by the Issuer;

     (b) the extension of time for the payment by the Issuer of all or any portion of the
Distributions, Redemption Price, Liquidation Distribution (as defined in the Declaration) or any
other sums payable under the terms of the Trust Preferred Securities or the extension of time for
the performance of any other obligation under, arising out of, or in connection with, the Trust
Preferred Securities (other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures permitted by the Indenture);

     (c) any failure, omission, delay or lack of diligence on the part of the Property Trustee or
the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the
Property Trustee or the Holders pursuant to the terms of the Trust Preferred Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;

     (e) any invalidity of, or defect or deficiency in, the Trust Preferred Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred;

     (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the intent of this Section 5.3 that the obligations
of the Guarantor with respect to the Guarantee Payments shall be absolute and unconditional under
any and all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain consent of, the
Guarantor with respect to the happening of any of the foregoing. No set-off, counterclaim,
reduction or diminution of any obligation, or any defense of any kind or nature that the Guarantor
has or may have against any Holder shall be available hereunder to the Guarantor against such
Holder to reduce the payments to it under this Trust Preferred Securities Guarantee.

Section 5.4 Rights of Holders

     (a) The Holders of a Majority in liquidation amount of the Trust Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for any remedy available to
the Trust Preferred Securities Guarantee Trustee in respect of this Trust Preferred Securities
Guarantee or exercising any trust or power conferred upon the Trust Preferred Securities Guarantee
Trustee under this Trust Preferred Securities Guarantee.

13

 

     (b) If the Trust Preferred Securities Guarantee Trustee fails to enforce such Trust Preferred
Securities Guarantee, any Holder may institute a legal proceeding directly against the Guarantor to
enforce the Trust Preferred Securities Guarantee Trustee’s rights under this Trust Preferred
Securities Guarantee, without first instituting a legal proceeding against the Issuer, the Trust
Preferred Securities Guarantee Trustee or any other Person or entity. Notwithstanding the
foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may directly institute
a proceeding against the Guarantor for enforcement of the Trust Preferred Securities Guarantee for
such payment to the Holder of the principal of or interest on the Debentures on or after the
respective due dates specified in the Debentures, and the amount of the payment will be based on
the Holder’s pro rata share of the amount due and owing on all of the Trust Preferred Securities.
The Guarantor waives any right or remedy to require that any action be brought first against the
Issuer or any other Person or entity before proceeding directly against the Guarantor.

Section 5.5 Guarantee of Payment

     This Trust Preferred Securities Guarantee creates a guarantee of payment and not of
collection.

Section 5.6 Subrogation

     The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in
respect of any amounts paid to such Holders by the Guarantor under this Trust Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Trust Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Trust Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.

Section 5.7 Independent Obligations

     The Guarantor acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Trust Preferred Securities, and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of
this Trust Preferred Securities Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 5.3 hereof.

ARTICLE VI

LIMITATION OF TRANSACTIONS; SUBORDINATION

Section 6.1 Limitation of Transactions

     So long as any Trust Preferred Securities remain outstanding, if there shall have occurred a
Guarantee Event of Default or an Event of Default, or an event that, with the giving of notice or
the lapse of time, or both, would be a Guarantee Event of Default or an Event of Default then,
prior to the payment of all accrued interest on outstanding Debentures , the Guarantor shall not
(i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation

14

 

payment with respect to, any of the Guarantor’s capital stock (which includes common and
preferred stock), (ii) make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor (including any Other Debentures) that
rank pari passu with or junior in right of payment to the Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Guarantor of the debt securities of any Subsidiary
(including under Other Guarantees) if such guarantee ranks equal or junior in right of payment to
the Debentures (other than (a) dividends or distributions in shares of, or options, warrants,
rights to subscribe for or purchase shares of, common stock of the Guarantor, (b) any declaration
of a dividend in connection with the implementation of a stockholders’ rights plan, or the issuance
of stock under any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Trust Preferred Securities Guarantee, (d) the purchase of
fractional shares resulting from a reclassification of the Guarantor’s capital stock, (e) the
purchase of fractional interests in shares of the Guarantor’s capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being converted or
exchanged and (f) purchases of common stock related to the issuance of common stock or rights under
any of the Guarantor’s benefit plans for its directors, officers or employees or any of the
Guarantor’s dividend reinvestment plans).

Section 6.2 Ranking

     This Trust Preferred Securities Guarantee will constitute an unsecured obligation of the
Guarantor and will rank (i) subordinate and junior in right of payment to Senior and Subordinated
Indebtedness (as defined in the Indenture), to the same extent and in the same manner that the
Debentures are subordinated to Senior and Subordinated Indebtedness pursuant to the Indenture, (ii)
pari passu with the Debentures, the Other Debentures, the Common Securities Guarantee, any Other
Guarantee and any Other Common Securities Guarantee, (iii) senior to the Guarantor’s capital stock
and (iv) effectively subordinated to the liabilities and obligations of the Guarantor’s
subsidiaries. If an Event of Default has occurred and is continuing, the rights of the holders of
the Common Securities to receive any payments shall be subordinated to the rights of the Holders to
receive Guarantee Payments hereunder.

ARTICLE VII

TERMINATION

Section 7.1 Termination

     This Trust Preferred Securities Guarantee shall terminate (i) upon full payment of the
Redemption Price (as defined in the Declaration) of all Trust Preferred Securities or (ii) upon
liquidation of the Issuer and the full payment of the amounts payable in accordance with the
Declaration or the distribution of the Debentures to the Holders and the holders of Common
Securities. Notwithstanding the foregoing, this Trust Preferred Securities Guarantee will continue
to be effective or will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sums paid under the Trust Preferred Securities or under this Trust Preferred
Securities Guarantee.

15

 

ARTICLE VII

INDEMNIFICATION

Section 8.1 Exculpation

     (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise
to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in accordance with this
Trust Preferred Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified Person by this Trust
Preferred Securities Guarantee or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful
misconduct with respect to such acts or omissions.

     (b) An Indemnified Person shall be fully protected in relying in good faith upon the records
of the Guarantor and upon such information, opinions, reports or statements presented to the
Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such
other Person’s professional or expert competence and who has been selected with reasonable care by
or on behalf of the Guarantor, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders might properly be paid.

Section 8.2 Indemnification

     The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified
Person harmless against, any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2 shall survive the termination of this
Trust Preferred Securities Guarantee.

ARTICLE IX

MISCELLANEOUS

Section 9.1 Successors and Assigns

     All guarantees and agreements contained in this Trust Preferred Securities Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders then outstanding.

16

 

Section 9.2 Amendments

     Except with respect to any changes that do not adversely affect the rights of Holders (in
which case no consent of Holders will be required), this Trust Preferred Securities Guarantee may
only be amended with the prior approval of the Holders of a Majority in liquidation amount of the
Trust Preferred Securities (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined). The provisions of the Declaration with respect to consents to
amendments thereof (whether at a meeting or otherwise) shall apply to the giving of such approval.

     Prior to executing any amendment hereto, the Trust Preferred Securities Guarantee Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Trust Preferred Securities Guarantee Agreement.

Section 9.3 Notices

     All notices provided for in this Trust Preferred Securities Guarantee shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first
class mail, as follows:

     (a) If given to the Issuer, in care of the Trustee at the Issuer’s mailing address set forth
below (or such other address as the Issuer may give notice of to the Holders and the Trust
Preferred Securities Guarantee Trustee):

Vineyard Statutory Trust X

c/o Vineyard National Bancorp

9590 Foothill Boulevard

Rancho Cucamonga, California 91730

Attention: _________________

                 Administrative Trustee

     (b) If given to the Trust Preferred Securities Guarantee Trustee, at the Trust Preferred
Securities Guarantee Trustee’s mailing address set forth below (or such other address as the Trust
Preferred Securities Guarantee Trustee may give notice of to the Holders, the Guarantor and the
Issuer):

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890

Attn: Corporate Trust Administration

17

 

     (c) If given to the Guarantor, at the Guarantor’s mailing address set forth below (or such
other address as the Guarantor may give notice of to the Holders and the Trust Preferred Securities
Guarantee Trustee):

Vineyard National Bancorp

9590 Foothill Boulevard

Rancho Cucamonga, California 91730

Attention: Chief Financial Officer

     (d) If given to any Holder, at the address set forth on the books and records of the Issuer.

     All such notices shall be deemed to have been given when received in person, telecopied with
receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.

Section 9.4 Benefit

     This Trust Preferred Securities Guarantee is solely for the benefit of the Holders and,
subject to Section 3.1(a), is not separately transferable from the Trust Preferred Securities.

Section 9.5 Governing Law

     THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.

Signatures appear on the following page.

18

 

     THIS TRUST PREFERRED SECURITIES GUARANTEE is executed as of the day and year first above
written.

	 	 	 	 	 
	 	 	VINEYARD NATIONAL
BANCORP,
	 

	 	 	 	as Guarantor
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY,
	 

	 	 	 	as Trust Preferred Securities Guarantee Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

19exv4w1

 

Exhibit 4.1

SHOPPING.COM LTD.

2003 OMNIBUS STOCK OPTION

AND RESTRICTED STOCK

INCENTIVE PLAN

	1.	 	PURPOSE; TYPES OF AWARDS; CONSTRUCTION.
	 
	 	 	Purpose. The purpose of the Shopping.com Ltd. 2003 Omnibus Stock Option and Restricted Stock
Incentive Plan (the “Plan”) is to afford an incentive to employees, officers, directors and
consultants of Shopping.com Ltd. (the “Company”), or any subsidiary of the Company which now
exists or hereafter is organized or acquired by the Company, to acquire a proprietary interest
in the Company, to continue as employees, officers, directors or consultants, to increase their
efforts on behalf of the Company and to promote the success of the Company’s business. This
Plan amends and replaces the DealTime Ltd. 1999 Omnibus Stock Option and Restricted Stock
Incentive Plan (the “1999 Plan”). The effective date of this Plan is January 1, 2003.
	 
	 	 	Types of Awards. The Plan is intended to enable the Company to issue Awards under varying tax
regimes, including without limitation (i) pursuant and subject to the “capital track”
provisions of Section 102 (“Section 102”) of the Israeli Income Tax Ordinance (New Version)
1961, as in effect on January 1, 2003 (the “Ordinance”) and any regulations, rules, orders or
procedures promulgated thereunder; (“102 Stock Options”) (ii) pursuant to Section 3(9) of the
Ordinance (“3(9) Stock Options”); (iii) as “incentive stock options” (“Incentive Stock
Options”) within the meaning of Section 422 of the United States Internal Revenue Code of 1986,
as amended (the “Code”); (iv) Nonqualified Stock Options (as defined below) (all 102 Stock
Options, 3(9) Stock Options, Incentive Stock Options and Nonqualified Stock Options, as well as
options issued under other tax regimes collectively, the “Options”); and (v) restricted Shares
(“Restricted Stock”) under the Plan. Apart from issuance under the relevant tax regimes of the
State of Israel and the United States of America, the Plan contemplates issuances to Grantees
(as defined below) in other jurisdictions with respect to which the Committee (as defined
below) is empowered make the requisite adjustments in the Plan and set forth the relevant
conditions in the Company’s agreement with the Grantees in order to comply with the
requirements of the tax regimes in said jurisdictions.
	 
	 	 	The Plan contemplates the issuance of Awards by the Company, both as a private company and, to
the extent applicable, as a publicly traded company.
	 
	 	 	Construction. To the extent any provision herein conflicts with the conditions of any relevant
tax law or regulation which are relied upon for tax relief in respect of a particular Option or
Share granted to a Grantee, the provisions of said law or regulation shall prevail over those
of the Plan, and the Committee (as defined below) is empowered hereunder to interpret and
enforce the said prevailing provisions.

	2.	 	DEFINITIONS.
	 
	 	 	As used in this Plan, the following words and phrases shall have the meanings indicated:

	 	2.1.	 	“Awards” shall mean grants of Options, Shares or Restricted Stock
	 
	 	2.2.	 	“Board” shall mean the Board of Directors of the Company.
	 
	 	2.3.	 	“Committee” shall mean a committee established by the Board to administer the Plan.
	 
	 	2.4.	 	“Companies Law” shall mean the Israel Companies Law – 1999, as amended.
	 
	 	2.5.	 	“Disability” shall mean, unless otherwise specified in the Option
Agreement, a Grantee’s inability to perform his duties with the
Company or any of its affiliates by reason of any medically
determinable physical or mental impairment, as determined by a
physician selected by the Grantee and acceptable to the Company.
	 
	 	2.6.	 	“Exercise Period” shall mean the period in which the Option shall be exercisable.
	 
	 	2.7.	 	“Exercise Price” shall mean the exercise price for each Ordinary Share covered by an Option.
	 
	 	2.8.	 	“Fair Market Value” per share as of a particular date shall mean (i)
the closing sales price per Share on the securities exchange on which
the Shares are principally traded on the day immediately preceding
such date or if there was no trading of Shares on such date, the
closing sales price per Share on such securities exchange as of the
last day on which there was a sale of such Shares on such exchange;
or (ii) if the Shares are listed on the Nasdaq National Market, the
last reported price per Share on the Nasdaq National Market on the
trading day immediately preceding such day; or (iii) if the Shares
are then traded in an over-the-counter market, the average of the
closing bid and asked prices for the Shares in such over-the-counter
market on the trading day immediately preceding such day; or (iv) if
the Shares are not then listed on a securities exchange or market or
traded in an over-the-counter market, such value as the Committee, in
its sole discretion, shall determine, which determination shall be
conclusive and binding on all persons.

1

 

	 	2.9.	 	“Grantee” shall mean a person who receives a grant of Options,
Restricted Stock or Shares or other Awards under the Plan, who at the
time of grant is an employee, officer, director or consultant of the
Company.
	 
	 	2.10.	 	“Initial Public Offering” shall mean the underwritten initial public offering of Shares.
	 
	 	2.11.	 	“Nonqualified Stock Option” shall mean any Option not designated as
an Incentive Stock Option, 102 Stock Option or 3(9) Stock Option.
	 
	 	2.12.	 	“Parent” shall mean any company (other than the Company) in an
unbroken chain of companies ending with the Company if, at the time
of granting an Award, each of the companies other than the Company
owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
companies in such chain.
	 
	 	2.13.	 	“Retirement” shall mean a Grantee’s retirement pursuant to
applicable law or in accordance with the terms of any tax-qualified
retirement plan maintained by the Company or any of its affiliates
in which the Grantee participates.
	 
	 	2.14.	 	“Shares” shall mean the Ordinary Shares of the Company, each bearing
a nominal value of NIS 0.01 or, at the discretion of the Committee
or the Board and if expressly specified in a grant of Options
hereunder, shares of the Company’s capital of any other class as may
be in existence at the time of such grant.
	 
	 	2.15.	 	“Subsidiary” shall mean any company (other than the Company) in an
unbroken chain of companies beginning with the Company if, at the
time of granting an Award, each of the companies other than the last
company in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other companies in such chain.
	 
	 	2.16.	 	“Ten Percent Shareholder” shall mean a Grantee who, at the time an
Incentive Stock Option (and also with respect to any grant of a
Nonqualified Stock Option when intended to be exempt from
qualification pursuant to California Corporations Code Sec.
25102(o)) is granted, owns shares possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary.
	 
	 	2.17.	 	“Trustee” shall mean the trustee appointed by the Committee or the
Board, as the case may be, to hold the respective Options,
Restricted Stock and/or Shares, if so appointed.

	3.	 	ADMINISTRATION.
	 
	 	 	The Plan shall be administered by the Committee. However, in the event that the Board does not
create a committee to administer the Plan, the Plan shall be administered by the Board in its
entirety. In such event, all references herein to the Committee shall be construed as
references to the Board.
	 
	 	 	The Committee shall have the authority in its discretion to administer the Plan and to exercise
all the powers and authorities either specifically granted to it under the Plan or necessary or
advisable in the administration of the Plan, including, without limitation:

	 	(i)	 	the authority to grant Awards;
	 
	 	(ii)	 	to determine which Options shall constitute 102 Stock Options, 3(9)
Stock Options, Incentive Stock Options, Nonqualified Stock Options or
otherwise;
	 
	 	(iii)	 	to determine the Exercise Price of the Shares covered by each Option;
	 
	 	(iv)	 	to determine the Grantees to whom, and the time or times at which Awards shall be granted;
	 
	 	(v)	 	to determine the number of Shares to be covered by each Award;
	 
	 	(vi)	 	to interpret the Plan;
	 
	 	(vii)	 	to prescribe, amend and rescind rules and regulations relating to the Plan;
	 
	 	(viii)	 	to determine the terms and provisions of the Option Agreements (as
defined in Section 6 below) (which need not be identical), and to
cancel or suspend Awards, as necessary;
	 
	 	(ix)	 	and to make all other determinations deemed necessary or advisable
for the administration of the Plan, including to adjust the terms of
the Plan or any Agreement so as to reflect (i) changes in applicable
Israeli, U.S. or other laws and (ii) the laws of other jurisdictions
within which the Company wishes to grant Awards.

2

 

	 	 	All decisions, determination and interpretations of the Committee shall be final and binding on
all Grantees of any Awards under this Plan. No member of the Committee shall be liable for any
action taken or determination made in good faith with respect to the Plan or any Award granted
hereunder.
	 
	4.	 	ELIGIBILITY.
	 
	 	 	Options, Restricted Stock and Shares may be granted to employees, officers, directors and
consultants of the Company and any Subsidiary, provided, however, that 102 Stock Options and
Incentive Stock Options may be granted only to employees of the Company or a Subsidiary and
who, in the case of 102 Stock Options are not “Controlling Parties” as defined in the
Ordinance, and 3(9) may not be issued to employees of the Company or a Subsidiary. A person who
has been granted an Option, Restricted Stock or Share hereunder may be granted additional
Options, Restricted Stock or Shares, if the Committee shall so determine. In determining the
persons to whom Awards shall be granted and the number of shares to be covered by each Award,
the Committee shall take into account the duties of the respective persons, their present and
potential contributions to the success of the Company and such other factors as the Committee
shall deem relevant in connection with accomplishing the purpose of the Plan.
	 
	5.	 	SHARES.
	 
	 	 	The cumulative maximum number of Shares reserved for the grant of Awards under the Plan and the
1999 Plan shall be 22,271,624 (twenty-two million, two hundred seventy-one thousand, six
hundred and twenty-four). Such Shares may, in whole or in part, be authorized but unissued
Shares or Shares that shall have been or may be reacquired by the Company (to the extent
permitted pursuant to the Companies Law) or by a trustee appointed by the Board. Any of such
Shares which may remain unsold and which are not subject to outstanding options at the
termination of the Plan shall cease to be reserved for the purpose of the Plan, but until
termination of the Plan, the Company shall at all times reserve a sufficient number of Shares
to meet the requirements of the Plan.
	 
	 	 	If any outstanding Award under the Plan should, for any reason, expire, be canceled or be
forfeited without having been exercised in full, the Shares allocable to the unexercised,
canceled or terminated portion of such Award shall (unless the Plan shall have been terminated)
become available for subsequent grants of Awards under the Plan.
	 
	6.	 	TERMS AND CONDITIONS OF OPTIONS.
	 
	 	 	Each Option granted pursuant to the Plan shall be evidenced by a written agreement between the
Company and the Grantee (the “Option Agreement”), in such form and containing such terms and
conditions as the Committee shall from time to time approve, which Option Agreement shall
comply with and be subject to the following terms and conditions, unless otherwise specifically
provided in such Option Agreement. For purposes of interpreting this Section 6, a director’s
service as a member of the Board shall be deemed to be employment with the Company provided,
that for the purpose of Incentive Stock Options and 102 Stock Options, a director of the
Company or Subsidiary shall only be entitled to such Options in the event that there exists an
employee-employer relationship between such director and the Company or Subsidiary.

	 	6.1.	 	NUMBER OF SHARES. Each Option Agreement shall state the number of Shares to which the Option relates.
	 
	 	6.2.	 	TYPE OF OPTION. Each Option Agreement shall specifically state the
type of Option granted thereunder and whether it constitutes a 102
Stock Option, 3(9) Stock Option, Incentive Stock Option, Nonqualified
Stock Option or otherwise.
	 
	 	6.3.	 	EXERCISE PRICE. Each Option Agreement shall state the Exercise Price,
which, in the case of an Incentive Stock Option, shall not be less
than one hundred percent (100%) of the Fair Market Value of the
Shares covered by the Option on the date of grant or such other
amount as may be required pursuant to the Code. In the case of a
Nonqualified Stock Option granted to any Grantee other than a
Ten-Percent Shareholder, the per Share exercise price shall be no
less than 85% of the Fair Market Value of the Shares covered by the
Option on the date of grant. In the case of an Incentive Stock Option
(and also with respect to any grant of a Nonqualified Stock Option
when intended to be exempt from qualification pursuant to California
Corporations Code Sec. 25102(o)) granted to any Ten-Percent
Shareholder, the Exercise Price shall be no less than 110% of the
Fair Market Value of the Shares covered by the Option on the date of
grant. In no event shall the Exercise Price of an Option be less than
the nominal value of the shares for which such Option is exercisable.
The Exercise Price shall also be subject to adjustment as provided in
Section 13 hereof.
	 
	 	6.4.	 	MANNER OF EXERCISE. An Option may be exercised, as to any or all
whole Shares as to which the Option has become exercisable (but not
less than 100 Shares unless the exercise is for all vested Options
held by such Grantee), by written notice delivered in person or by
mail to the Secretary of the Company, specifying the number of Shares
with respect to which the Option is being exercised, along with
payment of the Exercise Price for such Shares in the manner specified
in the following sentence. The Exercise Price shall be paid in full
with respect to each Share, at the time of exercise, in cash or cash
equivalents, or in such other manner as the Committee shall
determine.
	 
	 	6.5.	 	TERM AND VESTING OF OPTIONS. Each Option Agreement shall provide the
vesting schedule for the Option as determined by the Committee,
provided that the Committee shall have the authority to accelerate
the vesting of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate.
Unless otherwise stated in the Option Agreement, Options shall vest
and become exercisable under the following schedule: one-forty-eighth
(1/48) of the Option Shares shall vest at the end of each month of
continuous employment with the Company or one of its subsidiaries
(“Employment”) subsequent to the effective date of Option Grant,
provided, however, that any Option Shares that would otherwise vest
during the Grantee’s first twelve months of Employment shall vest,
instead, upon the completion of the first twelve months of
Employment; provided, however, that the Committee,

3

 

	 	 	 	in its absolute
discretion, may, on such terms and conditions as it may determine to
be appropriate, accelerate or otherwise change the time at which such
Option or any portion thereof may be exercised; provided further
that, in the case of a Grantee who is not an officer, director,
manager or consultant of the Company or a Subsidiary, the vesting
shall in no event be less favorable to the Grantee than 20% per year
over a period of five years from the date of grant. The Option
Agreement may contain performance goals and measurements, and the
provisions with respect to any Option need not be the same as the
provisions with respect to any other Option. The Exercise Period of
an Option will be ten (10) years from the date of the Grant of the
Option unless otherwise shortened by the Committee. The Exercise
Period shall be subject to earlier termination as provided in
Sections 6.6 and 6.7 hereof.
	 
	 	6.6.	 	TERMINATION. Except as provided in this Section 6.6 and in Section
6.7 hereof, an Option may not be exercised unless the Grantee is then
in the employ of or maintaining a director or consultant relationship
with the Company or a Subsidiary thereof or, in the case of an
Incentive Stock Option, a company or a parent or subsidiary company
of such company issuing or assuming the Option in a transaction to
which Section 424(a) of the Code applies, and unless the Grantee has
remained continuously so employed or in the director or consultant
relationship since the date of grant of the Option. In the event that
the employment or director or consultant relationship of a Grantee
shall terminate (other than by reason of death, Disability or
Retirement), all Options of such Grantee that are vested and
exercisable at the time of such termination may, unless earlier
terminated in accordance with their terms, be exercised within ninety
(90) days after the date of such termination (or such different
period as the Committee shall prescribe, but in no event less than
thirty (30) days, unless termination is for cause (as defined below),
in the case of an Option granted to a non-officer employee that is
intended to be exempt from qualification pursuant to California
Corporations Code Sec. 25102(o)); provided, however, that if the
Company or Subsidiary shall terminate the Grantee’s employment for
cause (as defined below) (as determined by the Committee), all
Options theretofore granted to such Grantee (whether vested or not)
shall, to the extent not theretofore exercised, terminate on the date
of such termination or cessation unless otherwise determined by the
Committee. In the case of a Grantee whose principal employer is a
Subsidiary, the Grantee’s employment shall be deemed terminated for
purposes of this Section 6.6 as of the date on which such principal
employer ceases to be a Subsidiary. Notwithstanding anything to the
contrary, the Committee, in its absolute discretion may, on such
terms and conditions as it may determine appropriate, extend the
periods for which the Options held by any individual may continue to
vest and be exercisable; provided, that such Options may lose their
status as Incentive Stock Options under applicable law and be deemed
Nonqualified Stock Options in the event that the period of vesting
and/or exercisability of any option is extended beyond the later of:
(i) ninety (90) days after the date of cessation of employment or
performance of services; or (ii) the applicable period under Section
6.7 below.
	 
	 	 	 	For purposes of this Plan, the term “cause” shall mean any of the following resulting from
an act or omission of Grantee: (a) fraud, embezzlement or felony or similar act; (b)
failure to substantially perform duties as an employee or to abide by the general policies
of the Company (or the Subsidiary employing the Grantee, as the case may be) applicable to
all employees (including, without limitation, policies relating to confidentiality and
reasonable workplace conduct); (c) an act of moral turpitude, or any similar act, to the
extent that such act causes injury to the reputation of the Company; (d) any other act or
omission which in the reasonable opinion of the Company could be financially injurious to
the Company or a Subsidiary or injurious to the business reputation of the Company or a
Subsidiary; or (e) any other acts or omissions constituting grounds for termination for
cause under the Grantee’s employment or consulting agreement with the Company or a
Subsidiary, to the extent applicable.
	 
	 	6.7.	 	DEATH, DISABILITY OR RETIREMENT OF GRANTEE. If a Grantee shall die
while employed by, or maintaining a director or consultant
relationship with, the Company or a Subsidiary, or within ninety (90)
days after the date of termination of such Grantee’s employment or
director or consultant relationship (or within such different period
as the Committee may have provided pursuant to Section 6.6 hereof),
or if the Grantee’s employment or director or consultant relationship
shall terminate by reason of Disability, all Options theretofore
granted to such Grantee (to the extent otherwise vested and
exercisable) may, unless earlier terminated in accordance with their
terms, be exercised by the Grantee or by the Grantee’s estate or by a
person who acquired the right to exercise such Options by bequest or
inheritance or otherwise by result of death or Disability of the
Grantee, at any time within one (1) year after the death or
Disability of the Grantee (or such different period as the Committee
shall prescribe, but in no event less than six (6) months, in the
case of an Option granted to a non-officer employee that is intended
to be exempt from qualification pursuant to California Corporations
Code Sec. 25102(o)). In the event that an Option granted hereunder
shall be exercised by the legal representatives of a deceased or
former Grantee, written notice of such exercise shall be accompanied
by a certified copy of letters testamentary or equivalent proof of
the right of such legal representative to exercise such Option. In
the event that the employment or director or consultant relationship
of a Grantee shall terminate on account of such Grantee’s Retirement,
all Options of such Grantee that are exercisable at the time of such
Retirement may, unless earlier terminated in accordance with their
terms, be exercised at any time within one hundred eighty (180) days
after the date of such Retirement (or such different period as the
Committee shall prescribe).
	 
	 	6.8.	 	LOANS. To the extent permitted under law, the Company or a Subsidiary
may make loans to Grantees as the Committee, in its discretion, may
determine in connection with the exercise of outstanding Options
granted under the Plan. Such loans shall: (i) be evidenced by
promissory notes entered into by the Grantees in favor of the Company
or Subsidiary, as the case may be; (ii) be subject to the terms and
conditions set forth in this Section 6.8 and such other terms and
conditions, not inconsistent with the Plan, as the Committee shall
determine; and (iii) bear interest, if any, at such rate as the
Committee shall determine. In no event may the principal amount of
any such loan exceed the aggregate Exercise Price less the nominal
value of the Shares covered by the Option, or portion thereof,
exercised by the Grantee. The initial term of the loan, the schedule
of payments of principal and interest under the loan, the extent to
which the loan is to be with or without recourse against the Grantee
with respect to principal and/or interest and the conditions upon
which the loan will become payable in the event of the Grantee’s
termination of employment or ceasing to perform services shall be
determined by the Committee; provided, however, that the term of the
loan including extensions, shall not exceed 10 years. Unless the
Committee determines otherwise, when a loan shall have been made,
Shares having a Fair Market Value at least equal to the principal

4

 

	 	 	 	amount of the loan shall be pledged by the Grantee to the Company,
the relevant Subsidiary or to a trustee appointed by the Company as
security for payment of the unpaid balance of the loan and such
pledge shall be evidenced by a pledge agreement, the terms of which
shall be determined by the Committee, in its discretion; provided,
however, that each loan shall comply with all applicable laws.
	 
	 	6.9.	 	ATTENDANCE AND VOTING BY TRUSTEE. So long as any such Shares are held
by a Trustee and unless the Trustee shall be directed otherwise by
the Board, the Trustee shall (i) attend and be present at all
meetings of the shareholders of the Company of which it receives
notice and be counted towards a quorum; and (ii) abstain from voting
such Shares at all such meetings.
	 
	 	6.10.	 	OTHER PROVISIONS. The Option Agreements evidencing Awards under the
Plan shall contain such other terms and conditions not inconsistent
with the Plan as the Committee may determine.

	7.	 	102 STOCK OPTIONS.
	 
	 	 	Options granted pursuant to this Section 7 are intended to constitute 102 Stock Options and
subject to Section 102 of the Ordinance and the rules and regulations promulgated thereunder,
as amended, the general terms and conditions specified in Section 6 hereof and other provisions
of the Plan, except for said provisions of the Plan applying to Options under a different tax
law or regulation, shall apply.
	 
	 	 	To the extent required by the Ordinance or the Income Tax Commissioner of the State of Israel
or otherwise deemed prudent or desirable by the Committee, the 102 Stock Options which shall be
granted pursuant to the Plan shall be issued to a Trustee nominated by the Committee in
accordance with the provisions of the Ordinance and the Options and Shares issued upon the
exercise of said Option shall be held for the benefit of the Grantee for the period from the
date of grant as is required by the Ordinance).
	 
	8.	 	3(9) STOCK OPTIONS.
	 
	 	 	Options granted pursuant to this Section 8 are intended to constitute 3(9) Stock Options and
shall be subject to the general terms and conditions specified in Section 6 hereof and other
provisions of the Plan, except for said provisions of the Plan applying to Options under a
different tax law or regulation.
	 
	 	 	To the extent required by the Ordinance or the Income Tax Commissioner of the State of Israel
or otherwise deemed prudent or desirable by the Committee, the 3(9) Stock Options which shall
be granted pursuant to the Plan shall be issued to a Trustee.
	 
	9.	 	NONQUALIFIED STOCK OPTIONS.
	 
	 	 	Options granted pursuant to this Section 9 are intended to constitute Nonqualified Stock
Options and shall be subject to the general terms and conditions specified in Section 6 hereof
and other provisions of the Plan, except for said provisions of the Plan applying to Options
under a different tax law or regulation.
	 
	10.	 	INCENTIVE STOCK OPTIONS.
	 
	 	 	Options granted pursuant to this Section 10 are intended to constitute Incentive Stock Options
and shall be subject to both the following special terms and conditions and the general terms
and conditions specified in Section 6 hereof and other provisions of the Plan, except for said
provisions of the Plan applying to Options under a different tax law or regulation:

	 	10.1.	 	VALUE OF SHARES. The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the Shares with
respect to which Incentive Stock Options granted under this Plan and
all other option plans of any Subsidiary become exercisable for the
first time by each Grantee during any calendar year shall not exceed
$100,000 with respect to such Grantee. To the extent that the
aggregate Fair Market Value of Shares with respect to which the
Incentive Stock Options are exercisable for the first time by any
Grantee during any calendar years exceeds $100,000, such Options
shall be treated as Non-Qualified Stock Options. The foregoing shall
be applied by taking options into account in the order in which they
were granted, with the Fair Market Value of any Share to be
determined at the time of the grant of the Option. In the event the
foregoing results in the portion of an Incentive Stock Option
exceeding the $100,000 limitation, only such excess shall be treated
as a Non-Qualified Stock Option.
	 
	 	10.2.	 	TEN PERCENT SHAREHOLDER. In the case of an Incentive Stock Option
granted to a Ten Percent Shareholder, (i) the Exercise Price shall
not be less than one hundred ten percent (110%) of the Fair Market
Value of the Shares on the date of grant of such Incentive Stock
Option, and (ii) the Exercise Period shall not exceed five (5) years
from the date of grant of such Incentive Stock Option.

	11.	 	RESTRICTED STOCK.
	 
	 	 	The Committee may award shares of Restricted Stock to any eligible employee, director or
consultant, including under Section 102 of the Ordinance. Each Award of Restricted Stock under
the Plan shall be evidenced by a written agreement between the Company and the Grantee
(the “Restricted Stock Agreement”), in such form as the Committee shall from time to time
approve, which Restricted Stock Agreement shall comply with and be subject to the following
terms and conditions, unless otherwise specifically provided in such Agreement:

	 	11.1.	 	NUMBER OF SHARES. Each Restricted Stock Agreement shall state the
number of shares of Restricted Stock to be subject to an Award.
	 
	 	11.2.	 	RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of,

5

 

	 	 	 	except by will or the laws of descent and distribution, for such period as
the Committee shall determine from the date on which the Award is
granted (the “Restricted Period”). The Committee may also impose
such additional or alternative restrictions and conditions on the
Shares of Restricted Stock as it deems appropriate including the
satisfaction of performance criteria. Such performance criteria may
include sales, earnings before interest and taxes, return on
investment, earnings per share, any combination of the foregoing or
rate of growth of any of the foregoing, as determined by the
Committee. Certificates for Shares issued pursuant to Restricted
Stock Awards shall bear an appropriate legend referring to such
restrictions, and any attempt to dispose of any such Shares in
contravention of such restrictions shall be null and void and
without effect. During the Restricted Period, such certificates
shall be held in escrow by an escrow agent appointed by the
Committee, or, if a Restricted Stock Award is made pursuant to
Section 102, by the Trustee. In determining the Restricted Period of
an Award the Committee may provide that the foregoing restrictions
shall lapse with respect to specified percentages of the awarded shares monthly or on any other periodic basis that the Committee may
decide. To the extent required by the Ordinance or the Income Tax
Commissioner of the State of Israel, the Restricted Stock issued
pursuant to Section 102 of the Ordinance shall be issued to a
trustee nominated by the Board or the Committee in accordance with
the provisions of the Ordinance (the “Trustee”) and the Restricted
Stock shall be held for the benefit of the Grantee for a period of
not less than twenty-four (24) months from the date of grant (or
such other period of time as may be required by the Ordinance).
	 
	 	11.3.	 	ADJUSTMENT OF PERFORMANCE GOALS. The Committee may adjust
performance goals to take into account changes in law and accounting
and tax rules and to make such adjustments as the Committee deems
necessary or appropriate to reflect the inclusion or the exclusion
of the impact of extraordinary or unusual items, events or
circumstances. The Committee also may adjust the performance goals
by reducing the amount to be received by any Grantee pursuant to an
Award if and to the extent that the Committee deems it appropriate.
	 
	 	11.4.	 	FORFEITURE. Subject to such exceptions as may be determined by the
Committee, if the Grantee’s continuous employment or director or
consultant relationship with the Company or any Subsidiary shall
terminate for any reason prior to the expiration of the Restricted
Period of an Award, any Shares remaining subject to restrictions
(after taking into account the provisions of Section 11.6) shall
thereupon be forfeited by the Grantee and transferred to, and
reacquired by, the Company or a Subsidiary at no cost to the Company
or Subsidiary, subject to all applicable law.
	 
	 	11.5.	 	OWNERSHIP. During the Restricted Period the Grantee shall possess
all incidents of ownership of such shares, subject to Section 11.2,
including the right to receive dividends with respect to such Shares
and to vote such Shares.
	 
	 	11.6.	 	ACCELERATED LAPSE OF RESTRICTIONS. Upon the occurrence of any of the
events listed in Sections 13.2 and subject to Section 13.3, all
restrictions then outstanding with respect to shares of Restricted
Stock awarded hereunder shall automatically expire and be of no
further force and effect. The Committee shall have the authority
(and the Agreement may so provide) to cancel all or any portion of
any outstanding restrictions prior to the expiration of the
Restricted Period with respect to any or all of the Shares of
Restricted Stock awarded on such terms and conditions as the
Committee shall deem appropriate.

	12.	 	OTHER SHARE-BASED AWARDS.
	 
	 	 	The Committee may grant other Awards under the Plan pursuant to which Shares (which may, but
need not, be shares of Restricted Stock pursuant to Section 11 hereof) are or may in the future
be acquired, or Awards denominated in stock units, including units valued on the basis of
measures other than market value. The Committee may also grant stock appreciation rights
without the grant of an accompanying option, which rights shall permit the Grantees to receive,
at the time of any exercise of such rights, cash equal to the amount by which the Fair Market
Value of all Shares in respect to which the right was granted exceeds the exercise price
thereof. Such other stock based Awards may be granted alone, in addition to, or in tandem with
any Award of any type granted under the plan and must be consistent with the purposes of the
Plan.
	 
	13.	 	EFFECT OF CERTAIN CHANGES.

	 	13.1.	 	General. In the event of a subdivision of the outstanding share
capital of the Company, any payment of a stock dividend
(distribution of bonus shares), a recapitalization, a reorganization
(which may include a combination or exchange of shares), a
consolidation, a stock split, a spin-off or other corporate
divestiture or division, a reclassification or other similar
occurrence, the Committee shall make appropriate adjustments in one
or more of (i) the number of Shares available for Awards; (ii) the
number of such Shares covered by outstanding Awards; and (iii) the
exercise price per share covered by the Option Awards; provided,
however, that any fractional shares resulting from such adjustment
shall be rounded down to the nearest whole share.
	 
	 	13.2.	 	Merger and Sale of Company. In the event of (i) a sale of all or
substantially all of the assets of the Company; or (ii) a sale
(including an exchange) of all of the shares of capital stock of the
Company; or (iii) the merger, consolidation, amalgamation or like
transaction of the Company with or into another corporation; or (iv)
scheme of arrangement for the purpose of effecting such sale, merger
or amalgamation (all such transactions being herein referred to as a
“Merger/Sale”), then, without the Grantee’s consent and action -

	 	13.2.1.	 	the Committee in its sole discretion will use its efforts to cause
that any Award then outstanding be assumed or an equivalent Award
shall be substituted by such successor corporation or, in such
event that such transaction is effected through a subsidiary, the
Parent of such successor corporation, under substantially the same
terms as the Award; and
	 
	 	13.2.2.	 	in such case that such successor corporation or other entity does
not agree to assume the Award or to substitute an equivalent

6

 

	 	 	 	Award and, if the Award is an Option (“Option Award”), then the
Committee shall, in lieu of such assumption or substitution of the
Option Award and in its sole discretion, either (i) provide for
the Grantee to have the right to exercise the Option Award as to
all of the Shares or any part thereof, including Shares covered by
the Option Award which would not otherwise be exercisable, under
such terms and conditions as the Committee shall determine or (ii)
provide for the cancellation of each outstanding Option Award at
the closing of said Merger/Sale, against payment to the Grantee of
an amount in cash equal to (a) the fair market value of each Share
covered by the Option Award as reflected under the terms of the
Merger/Sale, minus (b) the Exercise Price of each Share covered by
the Option Award.
	 
	 	13.2.3.	 	Notwithstanding the foregoing, in the event of a Merger/Sale, the
Committee may determine in its sole discretion that upon
completion of such Merger/Sale, the terms of any Award be
otherwise amended and modified, as the Committee shall deem in
good faith to be appropriate, and if an Option Award, that the
Option Award shall confer the right to purchase any other security
or asset, or any combination thereof, or that its terms be
otherwise amended or modified, as the Committee shall deem in good
faith to be appropriate.

	 	13.3.	 	Reservation of Rights. Except as expressly provided in this Section
13, the Grantee of an Award hereunder shall have no rights by reason
of any subdivision or consolidation of stock of any class or the
payment of any stock dividend (bonus shares) or any other increase
or decrease in the number of Shares of stock of any class or by
reason of any dissolution, liquidation, Merger/Sale, or
consolidation, divestiture or spin-off of assets or stock of another
company; and any issue by the Company of stock of any class, or
securities convertible into shares of stock of any class, shall not
effect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Award. The
grant of an Award pursuant to the Plan shall not affect in any way
the right of power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structures or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or part of its business or assets
or engage in any similar transactions.

	14.	 	NON-TRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.
	 
	 	 	Until the Initial Public Offering, all Awards granted under the Plan shall not be transferable
otherwise than by will or by the laws of descent and distribution, and Awards may be exercised
or otherwise realized, during the lifetime of the Grantee, only by the Grantee or by his
guardian, or legal representative, to the extent provided for herein. A Grantee may file with
the Committee a written designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation. If no designated
beneficiary survives the Grantee, the executor or administrator of the Grantee’s estate shall
be deemed to be the Grantee’s beneficiary.
	 
	15.	 	AGREEMENT BY GRANTEE REGARDING TAXES.
	 
	 	 	If the Committee shall so require, as a condition of exercise of an Option, the release of
Shares by the Trustee or the expiration of the Restricted Period (each a “Tax Event”), each
Grantee shall agree that, no later than the date of the Tax Event, he will pay to the Company
or make arrangements satisfactory to the Committee and the Trustee (if applicable) regarding
payment of any applicable taxes of any kind required by law to be withheld or paid upon the Tax
Event.
	 
	 	 	All tax consequences under any applicable law which may arise from the grant of any options,
restricted stock or shares, or in the case of an Option, from its exercise, from the sale or
disposition of the Shares or Restricted Stock or from any other act of the Grantee in
connection with the foregoing shall be borne solely by the Grantee, and the Grantee shall
indemnify the Company, and the Trustee, and shall hold them harmless against and from any
liability for any such tax or penalty, interest or indexation thereon or thereupon.
	 
	16.	 	RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.
	 
	 	 	A Grantee or a transferee of an Award shall have no rights as a shareholder with respect to any
Shares covered by the Award until the date of the issuance of a Share certificate to him for
such Shares, or, in the case of 102 Stock Options or 3(9) Stock Options (if such 3(9) Stock
Options are being held by a Trustee), until the date of the issuance of a Share certificate to
the Trustee. No adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distribution of other rights for which the record date
is prior to the date such Share Certificate is issued, except as provided in Section 13.1
hereof. In the event that a Trustee holds Shares issued upon the exercise of 102 Stock Options,
any cash dividends paid by the Company on such Shares shall be paid directly to the Grantee and
any stock dividends (bonus shares) shall be paid to the Trustee. Each Grantee will receive
financial statements of the Company at least annually.
	 
	17.	 	NO RIGHTS TO EMPLOYMENT.
	 
	 	 	Nothing in the Plan or in any Award granted or Agreement entered into pursuant hereto shall
confer upon any Grantee the right to continue in the employ of, or in a consultant relationship
with, the Company or any Subsidiary or to be entitled to any remuneration or benefits not set
forth in the Plan or such Agreement or to interfere with or limit in any way the right of the
Company or any such Subsidiary to terminate such
Grantee’s employment. Awards granted under the Plan shall not be affected by any change in
duties or position of a Grantee as long as such Grantee continues to be employed by, or in a
consultant or director relationship with, the Company or any Subsidiary.
	 
	18.	 	APPROVAL.
	 
	 	 	The Plan shall take effect upon its adoption by the Board and shall terminate on the tenth
anniversary of such date. Notwithstanding the foregoing, in the event that approval of the Plan
by the shareholders of the Company is required under applicable law, in connection with the

7

 

	 	 	application of certain tax treatment or pursuant to applicable stock exchange rules or
regulations or otherwise, such approval shall be obtained within the time required under the
applicable law.
	 
	19.	 	PERIOD DURING WHICH AWARDS MAY BE GRANTED.
	 
	 	 	Awards may be granted pursuant to the Plan from time to time within a period of ten (10) years
from the date the Plan is adopted by the Board.
	 
	20.	 	AMENDMENT AND TERMINATION OF THE PLAN.
	 
	 	 	The Board at any time and from time to time may suspend, terminate, modify or amend the Plan;
provided, however, that, unless otherwise determined by the Board, an amendment which requires
shareholder approval in order for the Plan to continue to comply with any law, regulation or
stock exchange requirement shall not be effective unless approved by the requisite vote of
stockholders. Except as provided in Section 13.1 hereof, no suspension, termination,
modification or amendment of the Plan may adversely affect any Award previously granted, unless
the written consent of the Grantee is obtained.
	 
	21.	 	GOVERNING LAW.
	 
	 	 	The Plan and all determinations made and actions taken pursuant hereto shall be governed by the
laws of the State of Israel.

8

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