Document:

Third Amendment to Lease

 Exhibit 10.7 
  
 THIRD AMENDMENT TO LEASE 
  
 THIS THIRD AMENDMENT TO LEASE (this “Third Amendment”) is made as of February 4, 2005 (the “Effective Date”) between C&B VENTURES
– NAPA TWO, LLC, a California limited liability company (“Landlord”), and SONIC SOLUTIONS, a California corporation (“Tenant”). 
  

RECITALS 
  
 A. Novato Gateway Associates, a California general partnership, Landlord’s predecessor-in-interest, and Tenant entered into a Golden Gate Plaza Full
Service Lease dated as of January 26, 1995, as amended by an Amendment to Lease dated as of November 20, 2000 and a Second Amendment to Lease dated as of July 2, 2004 (collectively, the “Lease”), whereby Tenant has leased approximately
38,345 rentable square feet of space in the building commonly known as 101 Rowland Way located in Novato, California. Capitalized terms not otherwise defined in this Third Amendment shall have the meanings given to such terms in the Lease.

  
 B. Landlord and Tenant seek to extend the term of the Lease
and to otherwise amend the Lease as provided in this Third Amendment. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of
the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 
  
 1. Extension of the Term. The “Renewal Commencement Date” shall mean February 1, 2005. The term of the Lease, which was originally
set to expire on May 31, 2006, is hereby extended so that the term of the Lease will now expire on January 31, 2010. 
  
 2. Base Rent. Commencing on the Renewal Commencement Date, the monthly Base Rent shall be as follows: 
  

				
	 Period

	  	Monthly Base Rent

	 February 1, 2005 – January 31, 2006
	  	$	88,193.50
	 February 1, 2006 – January 31, 2007
	  	$	90,839.31
	 February 1, 2007 – January 31, 2008
	  	$	93,564.48
	 February 1, 2008 – January 31, 2009
	  	$	96,371.42
	 February 1, 2009 – January 31, 2010
	  	$	99,262.56

  
 The parties agree that
the size of the Premises shall conclusively be 38,345 rentable square feet, regardless of whether the actual size of the Premises (whether rentable or useable) is greater or less than this specified size. 
  

 1. 

 3. Base Year. Commencing on the Renewal Commencement Date, the Base Year shall be 2005.

  
 4. Percentage Share. Commencing as of the
Renewal Commencement Date, (i) Tenant’s percentage share of Property Taxes and Operating Expenses for the Premises shall be calculated based on 38,345 rentable square feet, (ii) Tenant’s percentage share of Operating Expenses allocated to
the Building shall be sixty-one and 52/100ths percent (61.52%), and (iii) Tenant’s percentage share of Operating Expenses allocated to the Project shall be thirty-three and 5/100ths percent (33.05%). 
  
 5. Tenant Improvement Allowance. Landlord shall provide Tenant
with a tenant improvement allowance of up to Two Hundred Sixty-Eight Thousand Four Hundred Fifteen Dollars ($268,415.00) (the “Renewal TI Allowance”), to be applied by Tenant only toward the cost of refurbishing the Premises (e.g., walls,
offices, conference rooms and other similar improvements, new carpet, paint, power upgrades [excluding, however, any upgrades to redundant power sources such as uninterrupted power supply and back-up generators], HVAC work, lighting, etc.)
(“Refurbishing”). Tenant cannot use the Renewal TI Allowance to pay for, furniture or trade fixtures or for any other purpose other than Refurbishing the Premises. 
  
 Once Tenant has completed and paid for one or more particular Refurbishing projects, Landlord shall reimburse Tenant for the
costs of such Refurbishing work, in an aggregate amount not to exceed the Renewal TI Allowance, within thirty (30) days after Landlord’s receipt of the following: (i) a written request for reimbursement that itemizes, on a line item basis, the
Refurbishing costs for which Tenant seeks payment, (ii) invoices, contracts and other documents that reasonably evidence that Tenant has actually incurred Refurbishing costs in an amount equal to or exceeding the Renewal TI Allowance (provided,
however, Tenant can request multiple draws upon the Renewal TI Allowance for multiple Refurbishing projects so long as the total amount of all draws does not exceed the maximum Renewal TI Allowance of $268,415.00), (iii) final, unconditional lien
releases from all contractors and material and service providers who have provided materials and services for the Refurbishing work, which lien releases comply with California Civil Code Section 3262(d), and (iv) such other documents and information
as Landlord shall reasonably request. 
  
 6. Right of First
Offer. Subject to all existing rights of expansion, rights of first refusal, rights of first offer or similar rights given to existing tenants or occupants of the Building, if Landlord anticipates that space on the second and third floors of
the Building (the “Expansion Space”) will become available due to the expiration or earlier termination of leases or other occupancy agreements for such Expansion Space, then Landlord shall provide written notice to Tenant (the
“Availability Notice”) stating: (i) the anticipated availability of the Expansion Space, (ii) the then-current fair market value of such Expansion Space (including base rent, base year, increases in base rent, tenant improvement allowances
and other relevant economic terms), as determined by Landlord in its reasonable business judgment, and (iii) Landlord’s good faith estimate of the date such space will become available for Tenant’s occupancy (the “Anticipated
Expansion Commencement Date”). Landlord shall provide the Availability Notice to Tenant no earlier than seven months prior to the anticipated date the Expansion Space will become available. 
  

 2. 

 Tenant shall have thirty (30) days after receipt of the Availability Notice to notify Landlord in writing
if it elects to lease the Expansion Space. If Tenant timely notifies Landlord of its election to lease the Expansion Space, then, commencing upon the date Landlord delivers possession of the Expansion Space to Tenant, but in no event earlier than
the Anticipated Expansion Commencement Date unless otherwise agreed to by Tenant, the Expansion Space shall become part of the Premises, the Lease shall be deemed amended to incorporate the economic terms for the Expansion Space as set forth in the
Availability Notice, and the term of the Lease with respect to the Expansion Space shall run concurrently with the term of the Lease with respect to the balance of the Premises. Upon the request of either party, the parties shall execute a written
Lease amendment that incorporates the terms described in this Paragraph 5, although the failure of the parties to enter into such an amendment shall not diminish the rights and obligations of Landlord and Tenant with respect to the Expansion Space
as described in this Paragraph 5. 
  
 If Tenant elects not to
lease the Expansion Space, or Tenant fails to respond within the 30 day period described above, then Tenant shall no longer have the right to lease the Expansion Space, and Landlord shall be free to market and lease the Expansion Space on such terms
and conditions as it elects, for a period of six months following Tenant’s election or deemed election to forego leasing the Expansion Space. If Landlord has not leased the Expansion Space during this six month period, then Landlord must again
provide the Availability Notice to Tenant and afford Tenant the opportunity to expand into the Expansion Space on the terms as provided in this Paragraph 5 before Landlord can continue to market and/or lease the Expansion Space. 
  
 7. Brokers. Tenant represents and warrants that The Staubach
Company is the exclusive broker for Tenant in connection with this transaction. If a broker or finder (other than The Staubach Company) claims that it represented Tenant in connection with this Third Amendment and that it is entitled to a commission
or finder’s fee, then Tenant shall indemnify, protect and defend Landlord from all loss, claim, cause of action, cost, expense and liability arising out of such claim, including reasonable attorneys’ fees. Landlord shall pay the commission
owing to The Staubach Company in the amount of $167,882.00, equal to four percent (4%) of the Base Rent to be paid by Tenant over the incremental term of the Lease created under this Third Amendment beyond Tenant’s lease obligations existing
prior to this Third Amendment. Landlord shall pay this commission to The Staubach Company promptly after this Third Amendment has been fully executed. 
  
 8. Counterparts. This Third Amendment may be executed in any number of counterparts, each of which shall constitute an original hereof and
all of which shall constitute one and the same document. 
  
 9.
Entire Agreement. This Third Amendment and the documents described herein contain the entire agreement between the parties hereto with respect to the matters described herein and supersede all prior agreements, oral or written, between
the parties hereto with respect to such matters. This Third Amendment constitutes a part of and is incorporated into the Lease, and the Lease, as amended by this Third Amendment, remains in full force and effect. In the event of any conflict between
the terms of this Third Amendment and the terms of the Lease, the terms of this third Amendment shall govern. 
  

 3. 

 10. Representations and Warranties. Tenant and Landlord hereby represent, warrant and agree
as follows: (i) Landlord represents and warrants that it is the Owner of the Property and has the right and authority to enter into this Lease and convey the leasehold interest conveyed hereunder; (ii) Landlord and Tenant each represent and warrant
that, to their actual knowledge, without investigation, as of the date of this Third Amendment, there exists no breach, default or event of default under the Lease, as amended by this Third Amendment, or any event or condition which, with notice or
passage of time or both, would constitute a breach, default or event of default on the part of Tenant or Landlord under the Lease, as amended by this Third Amendment; and (iii) Tenant represents and warrants that, to its actual knowledge, without
investigation, as of the date of this Third Amendment, Tenant has no offset or defense to its performance or obligations under the Lease, as amended by this Third Amendment. Furthermore, each individual executing this Lease on behalf of Tenant, as a
California corporation, or on behalf of Landlord, as a California limited liability company, represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of Tenant or Landlord, respectively, and that this
Lease is binding upon Tenant and Landlord in accordance with their respective articles of incorporation and bylaws, or operating agreement. 
  
 IN WITNESS WHEREOF, Landlord and Tenant have executed this third Amendment as of the date first written above. 
  

							
	LANDLORD:	 	C&B VENTURES-NAPA TWO, LLC,
	 	 	a California limited liability company
			
	 	 	By:	 	G&W Ventures, LLC,
	 	 	 	 	a California limited liability company,
	 	 	 	 	Its Manager
				
	 	 	 	 	By:	 	  

	 	 	 	 	Name:	 	  

	 	 	 	 	Its:	 	  

		
	TENANT:	 	SONIC SOLUTIONS,
	 	 	a California corporation
			
	 	 	By:	 	 /s/ Robert J. Doris

	 	 	Name:	 	Robert J. Doris
	 	 	Its:	 	President
			
	 	 	By:	 	 /s/ A. Clay Leighton

	 	 	Name:	 	A. Clay Leighton
	 	 	Its:	 	Senior Vice President

  

 4.Amended 1997 Stock Option Plan

 EXHIBIT 4.1 
  

AMENDED 
 1997 STOCK OPTION PLAN 

OF 
 OSI SYSTEMS, INC. 
  
 1. PURPOSES OF THE PLAN 
  
 The purposes of the Amended Stock Option Plan (the “Plan”) of OSI
Systems, Inc., a California corporation (the “Company”), are to: 
  
 (a) Encourage selected employees, directors and consultants to improve operations and increase profits of the Company; 
  
 (b) Encourage selected employees, directors and consultants to accept or continue employment or association with the Company or its Affiliates; and

  
 (c) Increase the interest of selected employees, directors and
consultants in the Company’s welfare through participation in the growth in value of the common stock of the Company (the “Common Stock”). 
  
 Options granted under this Plan (“Options”) may be “incentive stock options” (“ISOs”) intended to satisfy the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”), or “nonqualified options” (“NQOs”). 
  
 2. ELIGIBLE PERSONS 
  
 Every person who at the date of grant of an Option is an employee of the Company or of any Affiliate (as defined below) of
the Company is eligible to receive NQOs or ISOs under this Plan. Every person who at the date of grant is a consultant to, or non-employee director of, the Company or any Affiliate (as defined below) of the Company is eligible to receive NQOs under
this Plan. The term “Affiliate” as used in the Plan means a parent or subsidiary corporation as defined in the applicable provisions (currently Sections 424(e) and (f), respectively) of the Code. The term “employee” includes an
officer or director who is an employee of the Company. The term “consultant” includes persons employed by, or otherwise affiliated with, a consultant. 
  

3. STOCK SUBJECT TO THIS PLAN; MAXIMUM NUMBER OF GRANTS 
  
 Subject to the provisions of Section 6.1.1 of the Plan, the total number of shares of stock which may be issued under
Options granted pursuant to this Plan shall not exceed 3,350,000 shares of Common Stock (which gives effect to a 1.5- for-1 stock split of the Common Stock (the “Stock Split”) effected in June 1997). The shares covered by the portion of
any grant under the Plan which expires unexercised shall become available again for grants under the Plan. No eligible person shall be granted Options during any twelve-month period covering more than 425,000 shares (which gives effect to the Stock
Split effected in June 1997). 
  
 4.
ADMINISTRATION 
  
 (a) The Plan shall be administered by the
Board of Directors of the Company (the “Board”) or by a committee (the “Committee”) to which administration of the Plan, or of part of the Plan, is delegated by the Board (in either case, the “Administrator”). The Board
shall appoint and remove members of the Committee in its discretion in accordance with applicable laws. If necessary in order to comply with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code, the Committee shall, in the Board’s
discretion, be comprised solely of “non-employee directors” within the meaning of said Rule 16b-3 and 

 “outside directors” within the meaning of Section 162(m) of the Code. The foregoing notwithstanding, the
Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper and the Board, in its absolute discretion, may at any time and from time to time exercise any and all rights and duties of the
Administrator under the Plan. 
  
 (b) Subject to the other
provisions of this Plan, the Administrator shall have the authority, in its discretion: (i) to grant Options; (ii) to determine the fair market value of the Common Stock subject to Options; (iii) to determine the exercise price of Options granted;
(iv) to determine the persons to whom, and the time or times at which, Options shall be granted, and the number of shares subject to each Option; (v) to interpret this Plan; (vi) to prescribe, amend, and rescind rules and regulations relating to
this Plan; (vii) to determine the terms and provisions of each Option granted (which need not be identical), including but not limited to, the time or times at which Options shall be exercisable; (viii) with the consent of the optionee, to modify or
amend any Option; (ix) to defer (with the consent of the optionee) the exercise date of any Option; (x) to authorize any person to execute on behalf of the Company any instrument evidencing the grant of an Option; and (xi) to make all other
determinations deemed necessary or advisable for the administration of this Plan. The Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper. 
  
 (c) All questions of interpretation, implementation, and application of this
Plan shall be determined by the Administrator. Such determinations shall be final and binding on all persons. 
  
 5. GRANTING OF OPTIONS; OPTION AGREEMENT 
  
 (a) No Options shall be granted under this Plan after 10 years from the date of adoption of this Plan by the Board. 
  
 (b) Each Option shall be evidenced by a written stock option agreement, in
form satisfactory to the Administrator, executed by the Company and the person to whom such Option is granted. 
  
 (c) The stock option agreement shall specify whether each Option it evidences is an NQO or an ISO. 
  
 (d) Subject to Section 6.3.3 with respect to ISOs, the Administrator may
approve the grant of Options under this Plan to persons who are expected to become employees, directors or consultants of the Company, but are not employees, directors or consultants at the date of approval, and the date of approval shall be deemed
to be the date of grant unless otherwise specified by the Administrator. 
  
 6. TERMS AND CONDITIONS OF OPTIONS 
  
 Each Option granted under this Plan shall be subject to the terms and conditions set forth in Section 6.1. NQOs shall be also subject to the terms and conditions set forth in Section 6.2, but not those set forth in Section 6.3. ISOs shall
also be subject to the terms and conditions set forth in Section 6.3, but not those set forth in Section 6.2. 
  
 6.1 Terms and Conditions to Which All Options Are Subject. All Options granted under this Plan shall be subject to the following terms and conditions:

  
 6.1.1 Changes in Capital Structure. Subject to Section 6.1.2,
if the stock of the Company is changed by reason of a stock split, reverse stock split, stock dividend, or recapitalization, combination or reclassification, appropriate adjustments shall be made by the Board in (a) the number and class of shares of
stock subject to this Plan and each Option outstanding under this Plan, and (b) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustments.
Each such adjustment shall be subject to approval by the Board in its sole discretion. 
  

 2 

 6.1.2 Corporate Transactions. In the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each optionee at least 30 days prior to such proposed action. To the extent not previously exercised, all Options will terminate immediately prior to the consummation of such proposed action; provided, however, that the
Administrator, in the exercise of his sole discretion, may permit exercise of any Options prior to their termination, even if such Options were not otherwise exercisable. In the event of a merger or consolidation of the Company with or into another
corporation or entity in which the Company does not survive, or in the event of a sale of all or substantially all of the assets of the Company in which the shareholders of the Company receive securities of the acquiring entity or an affiliate
thereof, all Options shall be assumed or equivalent options shall be substituted by the successor corporation (or other entity) or a parent or subsidiary of such successor corporation (or other entity); provided, however, that if such successor does
not agree to assume the Options or to substitute equivalent options therefor, the Administrator, in the exercise of its sole discretion, may permit the exercise of any of the Options prior to consummation of such event, even if such Options were not
otherwise exercisable. 
  
 6.1.3 Time of Option Exercise. Subject
to Section 5 and Section 6.3.4, Options granted under this Plan shall be exercisable (a) immediately as of the effective date of the stock option agreement granting the Option, or (b) in accordance with a schedule as may be set by the Administrator
(in any case, the “Vesting Base Date”) and specified in the written stock option agreement relating to such Option. In any case, no Option shall be exercisable until a written stock option agreement in form satisfactory to the Company is
executed by the Company and the optionee. Notwithstanding the foregoing, to the extent required by applicable laws, rules and regulations, the right to exercise Options granted pursuant to this Plan shall vest at the rate of at least 20% per year
from the date of grant. 
  
 6.1.4 Option Grant Date. The date of
grant of an Option under this Plan shall be the date as of which the Administrator approves the grant. 
  
 6.1.5 Nontransferability of Option Rights. Except with the express written approval of the Administrator which approval the Administrator is authorized to
give only with respect to NQOs, no Option granted under this Plan shall be assignable or otherwise transferable by the optionee except by will or by the laws of descent and distribution. During the life of the optionee, an Option shall be
exercisable only by the optionee. 
  
 6.1.6 Payment. Except as
provided below, payment in full, in cash, shall be made for all stock purchased at the time written notice of exercise of an Option is given to the Company, and proceeds of any payment shall constitute general funds of the Company. The
Administrator, in the exercise of its absolute discretion after considering any tax, accounting and financial consequences, may authorize any one or more of the following additional methods of payment: 
  
 (a) Acceptance of the optionee’s full recourse promissory note for all
or part of the Option price, payable on such terms and bearing such interest rate as determined by the Administrator (but in no event less than the minimum interest rate specified under the Code at which no additional interest would be imputed),
which promissory note may be either secured or unsecured in such manner as the Administrator shall approve (including, without limitation, by a security interest in the shares of the Company); 
  
 (b) Subject to the discretion of the Administrator and the terms of the stock
option agreement granting the Option, delivery by the optionee of shares of Common Stock already owned by the optionee for all or part of the Option price, provided the fair market value (determined as set forth in Section 6.1.10) of such shares of
Common Stock is equal on the date of exercise to the Option price, or such portion thereof as the optionee is authorized to pay by delivery of such stock; and 
  

(c) Subject to the discretion of the Administrator, through the surrender of shares of Common Stock then issuable upon exercise of the Option, provided
the fair market value (determined as set forth in Section 6.1.10) of such shares of Common Stock is equal on the date of exercise to the Option price, or such portion thereof as the optionee is authorized to pay by surrender of such stock.

  

 3 

 (d) By means of so-called cashless exercises as permitted under applicable rules and regulations of the
Securities and Exchange Commission and the Federal Reserve Board. 
  
 6.1.7 Termination of Employment. If for any reason other than death or permanent and total disability, an optionee ceases to be employed by the Company or any of its Affiliates (such event being called a “Termination”), Options
held at the date of Termination (to the extent then exercisable) may be exercised in whole or in part at any time within three months of the date of such Termination, or such other period of not less than 30 days after the date of such Termination
as is specified in the Option Agreement or by amendment thereof (but in no event after the Expiration Date); provided, however, that if such exercise of the Option would result in liability for the optionee under Section 16(b) of the Exchange Act,
then such three-month period automatically shall be extended until the tenth day following the last date upon which optionee has any liability under Section 16(b) (but in no event after the Expiration Date). If an optionee dies or becomes
permanently and totally disabled (within the meaning of Section 22(e)(3) of the Code) while employed by the Company or an Affiliate or within the period that the Option remains exercisable after Termination, Options then held (to the extent then
exercisable) may be exercised, in whole or in part, by the optionee, by the optionee’s personal representative or by the person to whom the Option is transferred by devise or the laws of descent and distribution, at any time within six months
after the death or six months after the permanent and total disability of the optionee or any longer period specified in the Option Agreement or by amendment thereof (but in no event after the Expiration Date). For purposes of this Section 6.1.7,
“employment” includes service as a director or as a consultant. For purposes of this Section 6.1.7, an optionee’s employment shall not be deemed to terminate by reason of sick leave, military leave or other leave of absence approved
by the Administrator, if the period of any such leave does not exceed 90 days or, if longer, if the optionee’s right to reemployment by the Company or any Affiliate is guaranteed either contractually or by statute. 
  
 6.1.8 Withholding and Employment Taxes. At the time of exercise of an Option
and as a condition thereto, or at such other time as the amount of such obligations becomes determinable (the “Tax Date”), the optionee shall remit to the Company in cash all applicable federal and state withholding and employment taxes.
Such obligation to remit may be satisfied, if authorized by the Administrator in its sole discretion, after considering any tax, accounting and financial consequences, by the optionee’s (i) delivery of a promissory note in the required amount
on such terms as the Administrator deems appropriate, (ii) tendering to the Company previously owned shares of Stock or other securities of the Company with a fair market value equal to the required amount, or (iii) agreeing to have shares of Common
Stock (with a fair market value equal to the required amount) which are acquired upon exercise of the Option withheld by the Company. 
  
 6.1.9 Other Provisions. Each Option granted under this Plan may contain such other terms, provisions, and conditions not inconsistent with this Plan as
may be determined by the Administrator, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify the Option as an “incentive stock option” within the meaning of Section 422 of the Code.

  
 6.1.10 Determination of Value. For purposes of the Plan, the
fair market value of Common Stock or other securities of the Company shall be determined as follows: 
  
 (a) If the stock of the Company is regularly quoted by a recognized securities dealer, and selling prices are reported, its fair market value shall be the
closing price of such stock on the date the value is to be determined, but if selling prices are not reported, its fair market value shall be the mean between the high bid and low asked prices for such stock on the date the value is to be determined
(or if there are no quoted prices for the date of grant, then for the last preceding business day on which there were quoted prices). 
  
 (b) In the absence of an established market for the stock, the fair market value thereof shall be determined in good faith by the Administrator, with
reference to the Company’s net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including the goodwill of the 
  

 4 

 Company, the economic outlook in the Company’s industry, the Company’s position in the industry, the
Company’s management, and the values of stock of other corporations in the same or a similar line of business. 
  
 6.1.11 Option Term. Subject to Section 6.3.4, no Option shall be exercisable more than 10 years after the date of grant, or such lesser period of time as
is set forth in the stock option agreement (the end of the maximum exercise period stated in the stock option agreement is referred to in this Plan as the “Expiration Date”). 
  
 6.2 Terms and Conditions to Which Only NQOs Are Subject. Options granted under this Plan which are designated as NQOs shall
be subject to the following terms and conditions: 
  
 6.2.1
Exercise Price. (a) Except as set forth in Section 6.2.1(b), the exercise price of a NQO shall be not less than 85% of the fair market value (determined in accordance with Section 6.1.10) of the stock subject to the Option on the date of grant.

  
 (b) To the extent required by applicable laws, rules and
regulations, the exercise price of a NQO granted to any person who owns, directly or by attribution under the Code (currently Section 424(d)), stock possessing more than ten percent of the total combined voting power of all classes of stock of the
Company or of any Affiliate (a “Ten Percent Shareholder”) shall in no event be less than 110% of the fair market value (determined in accordance with Section 6.1.10) of the stock covered by the Option at the time the Option is granted.

  
 6.3 Terms and Conditions to Which Only ISOs Are Subject.
Options granted under this Plan which are designated as ISOs shall be subject to the following terms and conditions: 
  
 6.3.1 Exercise Price. (a) Except as set forth in Section 6.3.1(b), the exercise price of an ISO shall be determined in accordance with the applicable
provisions of the Code and shall in no event be less than the fair market value (determined in accordance with Section 6.1.10) of the stock covered by the Option at the time the Option is granted. 
  
 (b) The exercise price of an ISO granted to any Ten Percent Shareholder shall
in no event be less than 110% of the fair market value (determined in accordance with Section 6.1.10) of the stock covered by the Option at the time the Option is granted. 
  
 6.3.2 Disqualifying Dispositions. If stock acquired by exercise of an ISO granted pursuant to this Plan is disposed of in a
“disqualifying disposition” within the meaning of Section 422 of the Code (a disposition within two years from the date of grant of the Option or within one year after the transfer such stock on exercise of the Option), the holder of the
stock immediately before the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other information regarding the Option as the Company may reasonably require. 
  
 6.3.3 Grant Date. If an ISO is granted in anticipation of employment as
provided in Section 5(d), the Option shall be deemed granted, without further approval, on the date the grantee assumes the employment relationship forming the basis for such grant, and, in addition, satisfies all requirements of this Plan for
Options granted on that date. 
  
 6.3.4 Term. Notwithstanding
Section 6.1.11, no ISO granted to any Ten Percent Shareholder shall be exercisable more than five years after the date of grant. 
  
 7. MANNER OF EXERCISE 
  
 (a) An optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, to the attention of the officer
of the Company designated by the Administrator, accompanied by payment of the exercise price and withholding taxes as provided in Sections 6.1.6 and 
  

 5 

 6.1.8. The date the Company receives written notice of an exercise hereunder accompanied by payment of the exercise price
will be considered as the date such Option was exercised. 
  
 (b)
Promptly after receipt of written notice of exercise of an Option and the payments called for by Section 7(a), the Company shall, without stock issue or transfer taxes to the optionee or other person entitled to exercise the Option, deliver to the
optionee or such other person a certificate or certificates for the requisite number of shares of stock. An optionee or permitted transferee of the Option shall not have any privileges as a shareholder with respect to any shares of stock covered by
the Option until the date of issuance (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent) of such shares. 
  
 8. EMPLOYMENT OR CONSULTING RELATIONSHIP 
  
 Nothing in this Plan or any Option granted hereunder shall interfere with or limit in any way the right of the Company or of any of its Affiliates to
terminate any optionee’s employment or consulting at any time, nor confer upon any optionee any right to continue in the employ of, or consult with, the Company or any of its Affiliates. 
  
 9. CONDITIONS UPON ISSUANCE OF SHARES 
  
 Shares of Common Stock shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended (the “Securities
Act”). 
  
 10. NONEXCLUSIVITY OF THE PLAN

  
 The adoption of the Plan shall not be construed as creating
any limitations on the power of the Company to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options other than under the Plan. 
  
 11. MARKET STANDOFF 
  
 Each optionee, if so requested by the Company or any representative of the
underwriters in connection with any registration of the offering of any securities of the Company under the Securities Act, shall not sell or otherwise transfer any shares of Common Stock acquired upon exercise of Options during the 180-day period
following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the
Securities Act after the date of adoption of this Plan which includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restriction until the end of such 180-day period. 
  
 12. AMENDMENTS TO PLAN 
  
 The Board may at any time amend, alter, suspend or discontinue this Plan. Without the consent of an optionee, no amendment, alteration, suspension or
discontinuance may adversely affect outstanding Options except to conform this Plan and ISOs granted under this Plan to the requirements of federal or other tax laws relating to incentive stock options. No amendment, alteration, suspension or
discontinuance shall require shareholder approval unless (a) shareholder approval is required to preserve incentive stock option treatment for federal income tax purposes or (b) the Board otherwise concludes that shareholder approval is advisable.

  

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 13. EFFECTIVE DATE OF PLAN; TERMINATION 
  
 This Plan shall become effective upon adoption by the Board provided,
however, that no Option shall be exercisable unless and until written consent of the shareholders of the Company, or approval of shareholders of the Company voting at a validly called shareholders’ meeting, is obtained within twelve months
after adoption by the Board. If such shareholder approval is not obtained within such time, Options granted hereunder shall terminate and be of no force and effect from and after expiration of such twelve-month period. Options may be granted and
exercised under this Plan only after there has been compliance with all applicable federal and state securities laws. This Plan (but not Options previously granted under this Plan) shall terminate within ten years from the date of its adoption by
the Board. 
  
 14. DELIVERY OF FINANCIAL
STATEMENTS 
  
 To the extent required by applicable laws, rules
and regulations, the Company shall deliver to each optionee financial statements of the Company at least annually while such optionee holds an outstanding Option. 
  

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