Document:

Joint Development Agreement

 CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS OF THIS 

DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR 
 CONFIDENTIAL TREATMENT AND, WHERE APPLICABLE, HAVE BEEN MARKED 
 WITH AN
ASTERISK TO DENOTE WHERE OMISSIONS HAVE BEEN MADE. THE 
 CONFIDENTIAL MATERIAL HAS BEEN FILED SEPARATELY WITH

 THE SECURITIES AND EXCHANGE COMMISSION. 
 Exhibit 10.16 
 Confidential 

JOINT DEVELOPMENT AGREEMENT 
 Table of Contents 
  

					
	Headings	  	Page	 
	 ARTICLE 1. - BACKGROUND
	  	 	1	  
		
	 ARTICLE 2. - ADMINISTRATION
	  	 	1	  
		
	 ARTICLE 3. - RESEARCH AND DEVELOPMENT
	  	 	2	  
		
	 ARTICLE 4. - EXCLUSIVITY OF DEVELOPMENT EFFORTS
	  	 	2	  
		
	 ARTICLE 5. - INTELLECTUAL PROPERTY AND LICENSES
	  	 	3	  
		
	 ARTICLE 6. - COMMERCIALIZATION
	  	 	4	  
		
	 ARTICLE 7. - CONFIDENTIALITY
	  	 	5	  
		
	 ARTICLE 8. - RESPONSIBILITIES
	  	 	6	  
		
	 ARTICLE 9. - TERM AND TERMINATION
	  	 	8	  
		
	 ARTICLE 10. - GENERAL PROVISIONS
	  	 	8	  
		
	 ARTICLE 11. - DEFINITIONS
	  	 	10	  

  

This Joint Development Agreement (“JDA”) is between Solazyme, Inc., a Delaware corporation (hereinafter referred to as
“Solazyme”), having a principal place of business at 225 Gateway Boulevard, South San Francisco, California 94080, and The Dow Chemical Company, a Delaware corporation (hereinafter referred to as “Dow”), having an
office at 2301 N. Brazosport Blvd., Building B-1211, Freeport, Texas 77541-3257. Certain terms used in this JDA are defined in Article 11. 
 ARTICLE 1. - BACKGROUND 

1.1.    Solazyme owns and is developing novel, proprietary methods for the use of algae and yeast as
biocatalysts for converting carbon sources into lipids in non-photosynthetic processes. 

1.2.    Dow develops, manufactures and sells dielectric fluid formulations and articles made therefrom.

 1.3.    The Parties desire to (1) develop jointly new Non-Vegetable, Microbe-Based Oils and
new Products for use in the Field, and (2) commercialize new Non-Vegetable, Microbe-Based Oils and new Products. In particular, the Parties desire that this JDA outline the Parties’ respective rights and obligations and the goals to be
achieved. 
 Now, therefore, the Parties agree as follows: 

ARTICLE 2. - ADMINISTRATION 
 2.1.    Administration 
 The Parties will endeavor to perform their
respective duties and to meet the Success Criteria of this JDA. Each Party will appoint an Administrator who is responsible for ensuring that the Party meets its obligations under this JDA. 

2.2.    Expenses 
 The funding, milestone and other payments for a particular project shall be as set forth in the applicable Research and Development Plan (as defined herein). 

2.3.    Participation by Affiliates and Third Persons 

Any Party’s Affiliate may participate in this JDA, upon giving prior written notice to the other Party. Before any Third Person may participate in
this JDA, the Parties must mutually agree in writing to that participation. Each Affiliate or Third Person participating in this JDA must be bound by terms substantially 

  

			
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the same as this JDA (i.e., ensuring that each of the Parties obtains substantially the same benefits as set forth in this JDA). 

ARTICLE 3. - RESEARCH AND DEVELOPMENT 
 3.1.    Research and Development Program 
 Subject to the terms and
conditions set forth herein, Solazyme and Dow shall conduct a research and development program in accordance with the written plan attached as Exhibit A (the “Research and Development Plan”). The Research and Development Plan may be
amended by mutual agreement of the Parties. It is contemplated that there will/may be multiple Research and Development Plans that shall be sequentially numbered referencing different projects, and such agreed-upon additional Research and
Development Plans shall be attached as part of Exhibit A and Incorporated herein. 
 3.2.    Research and
Development Responsibilities 
  

	(a)	During the Activity Period, Solazyme shall use commercially reasonable efforts to conduct its activities as set forth in the Research and Development Plan.
Notwithstanding any other provision of this JDA, Solazyme shall not, without its written consent, be required to perform research activities other than as set forth in the Research and Development Plan. 

 

	(b)	During the Activity Period, Dow shall use commercially reasonable efforts to conduct its activities as set forth in the Research and Development Plan. Notwithstanding
any other provision of this JDA, Dow shall not, without its written consent, be required to perform research activities other than as set forth in the Research and Development Plan. 

3.3.    Discussion and Disclosure 
 Solazyme and Dow shall disclose to each other on a regular basis the status of its efforts in conducting the Research and Development Plan and shall disclose to each other the progress and results of the
research and development conducted under this JDA. At least once each calendar quarter Solazyme and Dow shall meet to formally review the progress under the JDA, the results of each Party’s efforts and plan for further research and development.

 3.4.    Research Reports and Records 
 Solazyme and Dow shall maintain records of their respective activities under the Research and Development Program (or cause such records to be maintained) in sufficient detail and in good scientific
manner as will properly reflect all work done and results achieved in the performance of the Research and Development Program (including information sufficient to establish dates of conception and reduction to practice of JDA Patent Rights). Each
Party will make those records available for review by the other Party at any reasonable time during regular working hours to the extent such records are reasonably necessary for the other Party’s activities under the Research and Development
Plan. Each Party will furnish copies of all or any part of those records to the other Party upon request for appropriate patent filing, prosecution, and enforcement efforts on Developments owned by that other Party, consistent with the other
Party’s obligations of confidentiality under Article 7; provided, however, that data supplied for patent filings shall not include information a Party intends to keep as a trade secret. However, if a Party believes such data is necessary
to satisfy a patentability requirement, the other Party will recommend alternative language or data for use instead of the objectionable trade secret. 
 ARTICLE 4. - EXCLUSIVITY OF DEVELOPMENT EFFORTS 

4.1.    Exclusive Development 
 Unless otherwise agreed, the Parties’ relationship to develop jointly Non-Vegetable, Microbe-Based Oils and Products that meet the Success Criteria is to be exclusive, in the Field during the
Exclusivity Period. This JDA does not preclude (1) routine, non-R&D collaborative interactions with other materials-suppliers or other customers and/or (2) Solazyme’s supply of non-vegetable, microbe-based oils that are designed
to meet its other customers’ specifications outside of the Field. 

  

			
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 4.2.    Right of First Refusal to Continue Exclusive Development

 If the Parties have not agreed to (a) an extension of the Phase 1 Research and Development Plan, (b) a Phase 2 Research and
Development Plan, or (c) another mutually acceptable development agreement with regard to Dielectric Fluids on or before the date on which the Exclusivity Period expires, Dow shall have a Right of First Refusal to enter an exclusive development
relationship for Phase 2 Research and Development projects during the ROFR Period. If a bona fide Third Person proposes entry into a Research and Development project with regard to Dielectric Fluids during the ROFR Period, Solazyme shall inform Dow
and Dow will have sixty (60) days to enter into the project, a Phase 2 Research and Development Plan, or other mutually acceptable development agreement with Solazyme; otherwise, Solazyme may enter the project with the Third Person. 

4.3.    Exceptions to Exclusive Development 
 If Dow determines that a Third Person has a special expertise needed for development of a Non-Vegetable, Microbe-Based Oil and Solazyme does not have that expertise, Dow will notify Solazyme of Dow’s
belief that Solazyme does not have the special expertise that is needed and of Dow’s preferred options for obtaining the necessary expertise. Those options may include bringing a Third Person into the JDA, discontinuing the JDA, or conducting a
parallel project (i.e., outside this JDA) with a Third Person having that expertise. If the Parties are unable to agree on the option to select and Dow is unwilling to proceed without the change, then either Party may terminate the JDA upon written
notice. 
 4.4.    Confidential Information 
 To avoid any doubt, this Article 4 does not authorize either Party to disclose the other Party’s Confidential Information contrary to the provisions of Article 7. 

ARTICLE 5. - INTELLECTUAL PROPERTY AND LICENSES 
 5.1.    Background Information and Background Technology 
 This JDA
does not change the ownership of any Party’s Background Information or Background Technology. (See Paragraph 6.4 for a disclaimer of any background licenses.) 
 5.2.    Ownership of Developments 
 Without regard to which
Party’s employees are inventors of a particular Development: 
  

	(a)	Solazyme will own Developments (as defined in Section 11.7) that are Microbial Technology; and 

 

	(b)	Dow will own all other Developments (as defined in Section 11.7), including new non-vegetable, microbe-based oil formulations that were further enriched and/or
physically modified from the oils described in Section 11.18(vii), and new articles made therefrom. 

5.3.    Ownership of and Access to JDA-Developed Information 

Each Party (or its Affiliates) will own all JDA-Developed Information that the Party (or its Affiliates) develops or acquires from a Third Person. Both
Parties (and their Affiliates) may use and/or disclose that JDA-Developed Information, subject to the obligations of confidentiality the Parties have undertaken with respect to the other Party’s Information under Article 7. 

5.4.    Filing and Prosecution of Patent Applications 

In its sole discretion, the owner of a Development may make all decisions on filing, prosecuting, and maintaining patent applications (both domestic and
foreign) that claim or disclose the Development, with three limitations. The owner must (i) obtain the other Party’s approval before using or disclosing the other Party’s Confidential Information (Including JDA-Developed Information)
in the filing or prosecuting of the patent application, (ii) provide the other Party with 30 days to review and comment on the patent application prior to its filing, and (iii) cooperate with the other Party to make related patent
application filings concurrently (i.e., on the same day). The other Party will not unreasonably withhold its approval when the owner’s use or disclosure of the other Party’s Development is necessary to satisfy the statutory requirements of
a patent office and the Parties will cooperate on determining appropriate changes to inventorship and assignment of applications on a case-by·case basis under such circumstances, including during patent prosecution. The other Party’s
approval will be deemed granted if the other Party does not 

  

			
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object in writing within 60 days of receipt of the owner’s request for approval. If the other Party objects, it will recommend reasonable alternative information for use instead of the
objectionable Development. The owner is solely responsible for paying the expenses for the patent applications. Each Party agrees to cooperate with the other Party, as requested, to establish, acquire and maintain intellectual-property protection
for the Developments, JDA-Developed Information, and Samples. This includes signing assignments and other appropriate documents, as requested. 
 5.5.    Status Reports on JDA Patent Rights 
 If a Party has JDA Patent
Rights, its Administrator will provide annually a status report (in a mutually agreed format and medium) on all of that Party’s JDA Patent Rights to the other Party’s Administrator. That reporting is required both during the term of this
JDA, and for so long thereafter as there are pending patent applications or maintained patents claiming any Development. Unintentional failure to provide this report shall not be deemed a material default under Paragraph 9.3. 

5.6.    Non-JDA Intellectual Property 
 Notwithstanding anything to the contrary in this JDA, each Party is free to file patent applications and otherwise protect Technology that is unrelated to this JDA, as well as Technology that does not
include Confidential Information of the other Party relating to Technology that it owns pursuant to Paragraph 5.2. 

5.7.    Research License 
 Subject to the terms and conditions of this JDA, each Party hereby grants to the other Party a non-exclusive, worldwide, non-sublicensable, royalty-free license under the Background Technology of the
granting Party, and the granting Party’s interest in the JDA Patent Rights, solely to conduct the other Party’s activities under the Research and Development Plan. 
 ARTICLE 6. - COMMERCIALIZATION 
 6.1.    Statement
of Intent 
 The Parties desire to have each Party profit from this collaboration by fostering the development and commercialization of new
Non-Vegetable, Microbe-Based Oils and new Products. The Parties also desire to balance (a) Solazyme’s desire to supply large volumes of Solazyme’s Non-Vegetable, Microbe-Based Oils at a reasonable price, either by the sale to Dow and
its Affiliates, or by the sale to other customers of Solazyme or its Affiliates, with (b) Dow’s desire for exclusive access to new Non-Vegetable, Microbe-Based Oils and JDA Patent Rights in the Field. 

6.2.    Commercialization Within the Field 
 Within the Field, Dow’s commercialization of Products, including Solazyme’s supply of JDA Non-Vegetable, Microbe-Based Oils used in the manufacture of those Products, will be defined in a
to-be-negotiated Supply Contract, generally consistent with the terms of this JDA, unless the Parties otherwise agree. 
  

	 	(a)	Subject to the negotiation of a to-be-negotiated Supply Contract, Solazyme and its Affiliates will have an exclusive, worldwide license (under all JDA Patent Rights) to
commercialize JDA Non-Vegetable, Microbe-Based Oils for use in the Field. 

  

	 	(b)	Subject to the negotiation of a to-be-negotiated Supply Contract, Dow and its Affiliates may be granted an exclusive, worldwide license (under all JDA Patent Rights) to
commercialize Products made from or containing JDA Non-Vegetable, Microbe-Based Oils purchased from Solazyme and/or its Affiliates for use in the Field, including the right to extend licenses to their customers for use or resale of the Products.

  

	 	(c)	It is the current expectation of Dow that it will obtain its supply of Non-Vegetable, Microbe-Based Oils for Products exclusively from Solazyme or an authorized
Solazyme licensee, provided Solazyme is able to produce a sufficient quantity and quality of Non-Vegetable, Microbe-Based Oils on commercially reasonable terms and otherwise in accordance with the to-be-negotiated Supply Contract. For the avoidance
of doubt, this Section 6.1 is a statement of intent and not a binding commitment. 

  

			
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 6.3.    No Other Licenses 

Except as set forth in Paragraph 5.7, this JDA does not grant to either Party or its Affiliates (or to anyone else) any other license under any of the
JDA Patent Rights of the other Party or its Affiliates. If the Parties agree to any such license, that license will be appropriately defined in a separate written agreement. 
 6.4.    No License Under Background Information, Background Technology, or Trademarks 
 Except as set forth in Section 5.7, this JDA does not grant to either Party or its Affiliates (or to anyone else) any license (express, implied or otherwise) under any of the Background Information,
Background Technology, or trademarks of the other Party or its Affiliates. If the Parties agree to any such license, that license will be appropriately defined in a separate written agreement. 

ARTICLE 7. - CONFIDENTIALITY 
 7.1.    Parallel Confidentiality Agreement 
 The Parties have a
separate Confidentiality Agreement, having an effective date of March 1, 2010 (Dow Agreement 229016) (the “Parallel Agreement”). The Parallel Agreement covered the Parties’ initial evaluation of Samples and Information.
The Parties expressly make the Samples and Information relating to the Field subject to this JDA. The provisions of this JDA supersede the Parallel Agreement with respect to those Samples and Information. The other Information and Samples remain
subject to the Parallel Agreement and the obligations stated therein. The Parties will cooperate to identify whether particular Information or Samples supplied by either Party to the other Party are provided under the Parallel Agreement or this JDA.

 7.2.    Disclosure and Use of Confidential Information 

For the Activity Period of this JDA and for an additional period of 5 years from the end (either completion or earlier termination) of this JDA, the
Party (“Recipient”) who receives the other Party’s (“Discloser’s”) Confidential Information agrees that (a) the Recipient will maintain that Confidential Information in confidence and prevent the disclosure
of the same to Affiliates and/or Third Persons, except when participating pursuant to Paragraph 2.3., and (b) the Recipient will use that Confidential Information exclusively for the JDA, to carry out the Recipient’s obligations under this
JDA, and/or to exercise the rights or licenses expressly granted under this JDA. 
 7.3.    Duty of Care

 In fulfilling the Recipient’s obligations under this Article, the Recipient shall use the same degree of care as that Recipient uses
to protect its own confidential information of a like nature. The Recipient shall not take less than reasonable precautions to protect the Discloser’s Confidential Information. 

7.4.    Permitted Disclosures 
 (a) Notwithstanding anything to the contrary in this Article, the Recipient may disclose the Discloser’s Confidential Information: 

 

	 	(i)	as may be required to comply with a court order or subpoena so long as the Recipient secures whatever confidentiality protections are available under that law, and
gives to the Discloser both reasonably prompt notice and an opportunity to intervene, and/or 

  

	 	(ii)	to the Recipient’s Affiliates, and/or to Third Persons, as may reasonably be required to carry out the Recipient’s obligations and/or to exercise the rights
or licenses expressly granted under this JDA, provided that each such Affiliate or Third Person undertakes obligations of confidentiality that are at least as stringent to those undertaken by the Parties hereunder, and obligations of limited use
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	 	(iii)	in a patent application for which the filing is authorized by Paragraph 5.4, but only to the extent that such Confidential information is reasonably necessary to
provide enabling support for any patent claim covering a Development owned by the Recipient, and/or 

  

	 	(iv)	to the Recipient’s legal counsel in confidence, and/or 

  

	 	(v)	to appropriate governmental agencies (and to Recipient’s relevant governmental-approval consultants) as, and when, reasonably required for regulatory review or
approval of the Product, so long as Discloser is first consulted and has been provided a reasonable time to perform any associated patent filings on Discloser-owned Developments or related background technologies. Where appropriate, the Recipient
will make a claim of confidentiality. 

  

	 	(vi)	as required by applicable law and regulations (including the regulations of a stock exchange), including without limitation the regulations. of the U.S. Securities and
Exchange Commission and Nasdaq, so long as Discloser is first consulted and has been provided a reasonable time to perform any associated patent filings on Discloser-owned Developments or related background technologies. Where appropriate, the
Recipient will make a claim of confidentiality. 

 (b) Notwithstanding anything to the contrary in this Article, Dow may disclose
(i) its Generated Items generated under the Parallel Agreement and/or (ii) such JDA Information relating to the purification of microbe-based oils and dielectric fluids, in a patent application currently with or subsequent to Solazyme’s
filing of a patent application that claims or discloses such JDA Information relating to the purification of microbe-based oils. 
 (c)
Notwithstanding anything to the contrary in this Article, the terms of this Agreement may be disclosed by a Party to investment bankers, investors, and potential investors or acquirers (and their agents), in the context of a potential transaction,
each of whom prior to disclosure must be bound by similar obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 7. 
 7.5.    Limited Analysis and Return of Samples 
 During the term of
this JDA, the Parties anticipate that Solazyme will provide Non-Vegetable, Microbe-Based Oil-Samples to Dow for evaluation. Except with Solazyme’s prior written consent, Dow will: 

 

	(a)	not use the Non-Vegetable, Microbe-Based Oil-Samples, except for the JDA; and 

 

	(b)	deliver to Solazyme or destroy any unused Non-Vegetable, Microbe-Based Oil-Samples, when requested by Solazyme; and 

 

	(c)	not measure the properties of the Non-Vegetable, Microbe-Based Oil-Samples, except as reasonably necessary to accomplish the purpose of the JDA;

  

	(d)	not reverse-engineer or reproduce the Non-Vegetable, Microbe-Based Oil-Samples; and 

 

	(e)	not make Non-Vegetable, Microbe-Based Oil-Samples available to Dow’s Affiliates and/or Third Persons, except when participating under Paragraph 2.3.

 7.6.    Pre-approval Required For Publicity and Publications 

Except with the other Party’s prior written consent, each Party must not use the other Party’s name(s) or trademark(s) or issue any press
release or public announcement (other than required by applicable law or regulations) of the Parties’ relationship under this JDA. Both Parties must approve technical publications disclosing results of the JDA before being presented or
submitted for publication, whichever is earlier. 
 ARTICLE 8. - RESPONSIBILITIES 

8.1.    The Parties’ Roles 
 This JDA is an experimental program that involves the manufacture and testing of chemical products and/or physical structures, some of which are experimental in nature. NEITHER PARTY MAKES ANY WARRANTIES
OR REPRESENTATIONS OF ACCURACY, RELIABILITY, COMPLETENESS, 

  

			
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MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO ANY SAMPLES OR TECHNICAL INFORMATION THAT IT SUPPLIES TO THE OTHER PARTY HEREUNDER. ALL INFORMATION AND SAMPLES SUPPLIED
HEREUNDER ARE PROVIDED ON AN “AS IS” BASIS AND EACH PARTY SUPPLYING THE SAME EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO THE SAME. Accordingly, each Party will be responsible for taking all reasonable precautions in using,
handling, and/or evaluating the same. Each Party will take reasonable steps to ensure that its Related Persons observe the appropriate safety and operational rules of the host location at which that work is being done. Each Party agrees that it is
in the best position to protect its property, its Related Persons, and the property of its Related Persons against injury, illness, death, damage, or loss as well as to insure against any of the same that may occur. Based upon the foregoing, the
Parties agree that the following provisions are a reasonable allocation of the responsibilities, risks, and liabilities with respect to their relationship under this JDA. 
 8.2.    Parties’ Own People and Property 
 Except to the extent
arising from the other Party’s gross negligence or willful misconduct, each Party assumes the risk of personal injury (including illness) or death of its Related Persons and the risk of any damage to, or loss of, its property and the property
of its Related Persons arising out of this JDA or the use of any Samples or Information received hereunder. Each Party agrees to release, defend, and indemnify the other Party and the other Party’s Related Persons from and against any and all
losses and/or liabilities (including but not limited to attorneys’ fees and other litigation costs) arising out of any such injury, illness, death, damage, or loss for which that Party has assumed the risk. It is the express intent of the
Parties that the foregoing release and indemnity shall apply notwithstanding any negligence, strict liability, or breach of warranty of that other Party or of that other Party’s Related Persons. 

8.3.    Intellectual Property Responsibility 
 Each Party agrees to advise the other Party of any potential intellectual property infringement problem of which it becomes aware that might adversely affect either Party’s ability to perform its
activities or exercise any of its rights or licenses under this JDA. However, neither Party makes any warranties or representations with respect to (a) the validity, scope, or enforceability of any of its intellectual property rights, and/or
(b) the freedom from infringement of the activities of either Party or their Related Persons under this JDA with respect to any intellectual property rights of any Third Person. Each Party agrees to assume the risk of any actual or alleged
Intellectual property infringement by the activities of that Party or its Related Persons under this JDA (e.g., the manufacture and sale of Non-Vegetable, Microbe-Based Oils by Solazyme and the manufacture, sale, and evaluation of Products by Dow).

 8.4.    Third Person Injury and Property Damage 

With respect to any damage to or loss of the property of Third Persons, as well as any personal injury (including illness) or death of Third Persons, any
of which damage, loss, injury or death arises out of this JDA or the use of any Samples or Information received hereunder from the other Party or its Affiliates, each Party will indemnify the other Party and the other Party’s Related Persons
(a) for the Indemnifying Party’s (or its Related Persons’) share of any comparative negligence or breach of warranty, which negligence or breach was the proximate cause of that liability, as well as (b) for the Indemnifying
Party’s (or its Related Persons’) share of any strict liability. 
 8.5.    Indemnity
Effectiveness 
 Any indemnity that is provided under this Article shall be effective to the maximum extent, scope, and amount permitted by
the applicable law. 
 8.6.    Disclaimer of Consequential Damages 

The Parties agree that neither Party nor its Related Persons will be liable to the other Party or its Related Persons for any indirect, incidental,
special, exemplary, punitive, or consequential damages arising out of or in connection with the execution, performance, or nonperformance of this JDA, regardless of whether the other Party’s or its Related Persons’ cause of action resides
in breach of contract or warranty, negligence, strict liability or other tort. Notwithstanding the foregoing, this Section 8.6 shall not restrict the ability of a Party or its Related Persons to recover its actual damages for breaches of
Article 7 (Confidentiality) or for any damages awarded to a Third Person for which a Party seeks indemnification pursuant to Paragraph 8.4. 

  

			
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 ARTICLE 9. - TERM AND TERMINATION 

9.1.    Agreement Term and Extensions 
 Unless earlier terminated under Paragraphs 9.2 or 9.3 or by mutual agreement, the term of this JDA will be for the Activity Period. The term of this JDA may be terminated early or extended by mutual
written agreement of the Parties. 
 9.2.    Termination Prior to Completion 

If the Success Criteria are not met within 60 days of the mutually agreed time schedule, either Party may terminate this JDA upon 10 business days
written notice. 
 9.3.    Termination for a Material Default 

If either Party defaults on any of its obligations hereunder, the other Party may give written notice to the defaulting Party specifying the particulars
of that default. If the defaulting Party does not remedy a material default within 30 days after the date of that notice (unless such remedy is not reasonably capable of being completed within 30 days, and, to the reasonable satisfaction of the
non-defaulting party, the other Party is diligently pursuing such remedy), the other Party shall have the right to terminate this JDA, by giving to the defaulting Party 10 days’ further written notice. Minor, readily remediable defaults (such
as failure to provide a report under Paragraph 5.5) do not give rise to a right of termination of this JDA. 

9.4.    Rights and Obligations Surviving Termination 
 If this JDA expires or is terminated for any reason, the licenses granted under Paragraph 5.8 shall terminate. 
 Any expiration or termination of this JDA shall not: 
  

	(a)	release either Party or its Related Persons from any claim of the other Party accrued hereunder prior to the effective date of expiration or termination; or

  

	(b)	affect the respective rights or obligations of either Party or its Related Persons under Articles 5 (other than Paragraph 5.7), 7 or 8, or under Paragraphs 6.3 or 6.4
(except as they relate to Paragraph 5.7), or under this Paragraphs 9.4 or 10.12 or under “Intellectual Property” In Exhibit A. 

 ARTICLE 10. - GENERAL PROVISIONS 

10.1.    Assignment 
 Either Party may assign this JDA to one or more of its Affiliates. Generally, no Party shall otherwise assign this JDA or that Party’s rights or obligations hereunder without the other Party’s
prior written approval, which approval will not be withheld unreasonably. Notwithstanding the preceding sentence, if Dow sells or otherwise divests its Wire and Cable business, Dow shall have the right to assign, sell, or transfer this Agreement to
the entity acquiring the Wire & Cable business. Notwithstanding the second preceding sentence, if Solazyme sells or otherwise divests its Chemicals business (including through an exclusive license of that portion of the Chemicals business
related to the Field), Solazyme shall have the right to assign, sell, or transfer this Agreement to the entity acquiring the Solazyme Chemicals business (or the licensee under such exclusive license). 

When properly assigned, this JDA shall be binding upon the assignor’s respective successors and assigns. However, where such an assignment might
materially affect either Party’s rights or obligations under this JDA, the non-assigning Party may elect to terminate this JDA. 
 10.2.    Extension to Affiliates 
 A Party’s rights and
obligations under this JDA may be extended by that Party to one or more of its Affiliates, provided that each such Affiliate agrees in writing to abide and be bound by the terms of this JDA. Each Party will be primarily responsible to ensure the
compliance of its Affiliates who agree to be bound by this JDA. 

  

			
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 10.3.    Subcontracting to Third Persons 

Each Party must obtain the other Party’s approval before subcontracting to a Third Person, which approval will not be withheld unreasonably. Subject
to that limitation and provided the Third Person agrees in writing to abide and be bound by the corresponding terms of this JDA, each Party may designate one or more Third Persons to fulfill one or more of that Party’s obligations or exercise
Party’s rights. No Party shall otherwise subcontract its rights or obligations to a Third Person hereunder without the other Party’s written approval. 
 10.4.    Effect of Assignment, Subcontract or other Transfers 
 Any
assignment, subcontract, or other transfer shall not release the involved Party or its Affiliates from any claim of the other Party accrued hereunder prior to the effective date of that transaction, or their respective obligations under Articles 5,
6, 7 or 8 or under Paragraph 10.12. 
 10.5.    Force Majeure 

If the performance of a Party is delayed hereunder as a result of any event or circumstance beyond its reasonable control, that Party’s performance
may be postponed until such time as the cause of that delay has been removed, provided that if a Party’s performance is delayed for more than 90 consecutive days the other Party may terminate this JDA without penalty by giving written notice to
the other Party. 
 10.6.    Governing Law 
 The Parties desire that any reviewing court or arbitrator(s) use the plain meaning of this JDA. Only in the event that such meaning is not clear, should such court or arbitrator(s) refer to the laws of
any jurisdiction to resolve any ambiguity, in which case the Parties select the laws of the State of Delaware, United States of America (exclusive of such State’s laws relating to the choice of a different jurisdiction’s laws) to resolve
such ambiguity. 
 10.7.    Severability 
 In the event that any provision of this JDA is declared null and void, that provision will be struck from this JDA. The remaining provisions of this JDA will remain in full effect. The Parties will seek
in good faith to negotiate terms to replace any provision so struck, so as to restore the balance of equities and the consideration present in the original Agreement terms. 
 10.8.    Disclaimer of Waivers 
 No omission or delay by either Party
at any time to enforce any right or remedy, or to require performance of any obligations of this JDA, will constitute a waiver of the same. 
 10.9.    No Partnership, Joint Venture, or Fiduciary Relationship 

This JDA does not create any partnership, joint venture, or fiduciary relationship. Neither Party has, nor will either Party attempt to assert, the
authority to act as an agent for the other Party. 
 10.10.    Notice 

Any notice or correspondence shall be given to the Parties at the following addresses, and will be effective when actually received: 

 

			
	(a) if to Solazyme:	  	Solazyme, Inc.
		  	225 Gateway Boulevard
		  	South San Francisco, California 94080
		  	Telephone No. 650-963-5231
		  	Facsimile No. 650-989-1292
		  	Attention: Walter Rakitsky
		  	e·mail: wrakitsky@solazyme.com

  

			
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 Confidential 

 

			
	With a copy to:	  	Solazyme, Inc.
		  	225 Gateway Boulevard
		  	South San Francisco, California 94080
		  	Telephone No. 650-780-4777
		  	Facsimile No. 650-989-1258
		  	Attention: General Counsel
		  	e-mail: pquinian@solazyme.com
		
	(b) if to Dow:	  	The Dow Chemical Company
		  	171 River Road
		  	Bound Brook, New Jersey 08854
		  	Telephone: 732-563-5101
		  	Facsimile No. 732-563-5209
		  	Attention: Mr. Brian R. Maurer
		  	e-mail: bmaurer@dow.com
		
	With a copy to:	  	The Dow Chemical Company
		  	2301 N. Brazosport Boulevard
		  	Building B-1211
		  	Freeport, Texas 77541-3257
		  	Phone: 979-238-9041
		  	Facsimile No. 979-238-0878
		  	Attention: Kevin R. Hansbro
		  	e-mail: krhansbro@dow.com

 In addition, a copy of any such
notice or correspondence will also be given to the other Party’s Administrator. Either Party may change its contacts and addresses by notice in writing under this Paragraph. 

10.11.    Entire Agreement and Amendments 
 This JDA constitutes the entire understanding and agreement between the Parties relating to the subject matter of this JDA, and supersedes all other understandings and/or agreements relating to that
subject matter. Additionally, the provisions of this JDA shall supersede any standard form language that any Party or Related Person of that Party has signed, or in the future may be asked or required to sign, as a condition of admittance to the
premises of the other Party or its Affiliates in connection with the Related Person’s work relating to a project. No waiver, modifications or amendments to this JDA will be valid unless made in writing specifying the particular waiver,
modification or amendment and signed by an authorized representative of each Party. 
 10.12.    Export
Control and Customs Regulations 
 Each Party agrees that it will not export or re-export any U.S.-source technology, software or products
received from the other Party or the direct products of such technology or software or products to any country, person or entity, or for any use, prohibited by the export control regulations of the United States. 

ARTICLE 11. - DEFINITIONS 

As used herein, the following terms will have the following meanings: 
 11.1.    “Activity Period” means the period of time for performing the JDA activities. The Activity Period for a particular project shall be set forth in the
applicable Research and Development Plan. 
 11.2.    “Administrator” means the person
designated as such by each Party, with responsibilities as stated in Paragraph 2.1. 

11.3.    “Affiliate” means (a) any parent company (if any) that owns, directly or indirectly, a
majority of that Party, and (b) any other company that is majority-owned, directly or indirectly, by a Party or by its parent company(ies) in item (a). 

  

			
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 11.4.    “Background Information,” as used with
respect to a designated Party, means any Information owned or controlled by that Party or its Affiliates prior to the Effective Date, as well as any Information developed by or for that Party or its Affiliates independently of this JDA. By
definition, JDA-Developed Information is not Background Information. 
 11.5.    “Background
Technology,” as used with respect to a designated Party, means any Technology and all intellectual property rights with respect thereto controlled by that Party or its Affiliates prior to the Effective Date, as well as any Technology
developed by or for that Party or its Affiliates independently of this JDA. 
 11.6.    Confidential
Information” shall mean the Discloser’s Background Information and JDA-Developed Information first developed or discovered by the Discloser: 
  

	(1)	disclosed in writing or other tangible form and labeled “[Discloser’s name] - confidential,” or 

 

	(2)	disclosed orally or by observation and confirmed to the Recipient in writing as being “[Discloser’s name] - confidential” within 60 days after the
initial disclosure, 

 except with respect to any particular information that Recipient can prove: 

 

	(a)	was available to the public through no fault of Recipient, or 

  

	(b)	Recipient already possessed prior to receipt from Discloser, or 

  

	(c)	Recipient acquired from a Third Person without obligation of confidence, or 

 

	(d)	was independently developed by or for Recipient. 

Specific Information is not within any of the above exclusions merely because it is within the scope of more general information within an exclusion. A
combination of features is not within any of the above exclusions unless the combination itself, including its principles of operation, is within the above exclusions. 
 11.7.    “Development” means any invention, whether patentable or unpatentable, that is: 

 

	(a)	an improvement to Microbial Technology (as defined in 11.18), and/or 

  

	(b)	a new Product (as defined in 11.23), 

 which
invention is first actually reduced to practice by a Party (and/or by its participating Affiliates or subcontractors), alone or with others, and which reduction to practice occurs both during the Activity Period and as a result of work performed in
connection with this JDA. 
 11.8.    “Dielectric Fluid” means a fluid intended to be used
in medium to extra high voltage applications, e.g. transformers, capacitors, high voltage cables, and switchgear (namely high voltage switchgear) and whose function is to provide electrical insulation, suppress corona and arcing, and to serve as a
coolant in such electrical application. 
 11.9.    “Effective Date” shall mean
January 15, 2011. 
 11.10.    “Exclusivity Period” means the period of time for which
the Parties’ relationship to develop jointly Non-Vegetable, Microbe-Based Oils and Products that meet the Success Criteria is to be exclusive. The Exclusivity Period shall be from the Effective Date of the JDA until January 1, 2013.

 11.11.    “Field” means non-vegetable, microbe-based oils for dielectric fluid
applications. 
 11.12.    “Information” means technical or business information pertaining
to (a) the composition, structure and/or properties of any Non-Vegetable, Microbe-Based Oil and/or Product (including but not limited to the Success Criteria), and/or (b) the use of a Non-Vegetable, Microbe-Based Oil or Product in any
end-use application. 
 11.13.    “JDA-Developed Information” means any new
information, owned or controlled by either Party or by its participating Affiliates, that is first developed or acquired both (a) during the Activity Period, 

  

			
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 Confidential 

 

 
and (b) in connection with work performed on this JDA. 

11.14.    “JDA Non-Vegetable, Microbe-Based Oil” means any new Non-Vegetable, Microbe-Based Oil
first developed in and for this JDA that either (a) meets the Success Criteria, or (b) the Parties otherwise mutually designate as a “JDA Non-Vegetable, Microbe-Based Oil” that is deemed to meet those Success Criteria.

 11.15.    “JDA Patent Rights” means any claim of any patent or patent application, owned
or controlled by either Party or its Affiliates, that defines a Development. 
 11.16.    “JDA
Product” means any new Product first developed in and for this JDA that meets the Success Criteria. 

11.17.    “Microbe-Based Catalysis” means a process in which a Non-Vegetable Microbe is used as a
biocatalyst to convert a carbon source into oil and/or other materials. 
 11.18.    “Microbial
Technology” means any Technology consisting of (i) Microbe-Based Catalysis; (ii) any biomass that results from Microbe-Based Catalysis, (iii) any Non-Vegetable Microbes themselves; (iv) any screening, selecting,
cultivating, or processing of a Non-Vegetable Microbe, and the materials directly resulting from such screening, selecting, cultivating, or processing; (v) any genetic or metabolic engineering or mutagenesis of a Non-Vegetable Microbe, and the
materials directly resulting from such genetic or metabolic engineering or mutagenesis; (vi) any selecting, screening, processing or modification of carbon sources for Microbe-Based Catalysis, (vii) any oils or other materials resulting
from Microbe-Based Catalysis and any properties thereof and uses with respect thereto, (viii) any method or process for separating, recovering, purifying and/or extracting any material from any biomass that results from Microbe-Based Catalysis
that occurs prior to Solazyme’s delivery of the Non-Vegetable, Microbe-Based Oil to Dow, (ix) any processes with respect to any of the foregoing, and (ix) any equipment, software, or research methods invented or created for use with
respect to any of the foregoing. 
 11.19.    “Non-Vegetable Microbe” means a microbe with
oil-producing capability. 
 11.20,    “Non-Vegetable, Microbe-Based Oil” means any oil
produced by, or extracted from, Non-Vegetable Microbes. 
 11.21.    “Non-Vegetable, Microbe-Based
Oil-Sample” means a sample of any Non-Vegetable, Microbe-Based Oil that has not been sold commercially prior to the time when it is first sampled to the other Party hereunder. 

11.22.    “Party” means Solazyme or Dow, and “Parties” means Solazyme and Dow.

 11.23.    “Product” means any Dielectric Fluid or article, made from or containing a
Non-Vegetable, Microbe-Based Oil. 
 11.24.    “Product-Sample” means a sample of any
Product that (a) has not been sold commercially prior to the time when that Product is first sampled to the other Party hereunder, or (b) contains a Non-Vegetable, Microbe-Based Oil that has not been sold commercially prior to the time
when that Non-Vegetable, Microbe-Based Oil is first sampled to the other Party hereunder. 

11.25.    “Related Persons,” as used with respect to a designated Party, shall mean (a) that
Party’s Affiliates, and (b) the officers, directors, and employees of that Party and/or that Party’s Affiliates. 

11.26.    “ROFR Period” means the period of time for which Solazyme grants Dow the Right of First
Refusal to enter an exclusive development relationship for Phase 2 Research and Development projects with regard to Dielectric Fluids. The ROFR Period shall be from the end of the Exclusivity Period until December 31, 2015. 

11.27.    “Samples” means Product-Samples and/or Non-Vegetable, Microbe-Based Oil-Samples, as the
context indicates. 

  

			
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 11.28.    “Success Criteria” means the technical
and business parameters to be met for the JDA to be considered successfully completed. The Success Criteria for a particular project shall be as set forth in the applicable Research and Development Plan. 

11.29.    “Supply Contract” means one or more separate, written contracts to-be-negotiated for
Solazyme (or its Affiliates) to supply one or more Non-Vegetable, Microbe-Based Oils (typically the JDA Non-Vegetable, Microbe-Based Oil(s)) for the manufacture of Products. 
 11.30.    “Technology” shall mean any conception, idea, improvement, innovation, discovery, invention, process, know-how, formulae, trade secret, composition, model,
prototype, calculation, algorithm, design, data, result, software, methodology, or other information, and embodiments of the foregoing and tangible media incorporating any such technology, in whole or in part, whether or not patentable,
copyrightable, or susceptible to any other form of legal protection. 
 11.31.    “Third
Person” shall mean any natural person or legal entity, which is neither a Party nor a Party’s Related Person. 
 Each Party has
caused this JDA to be executed by its respective authorized representative. 
  

									
	THE DOW CHEMICAL COMPANY	 		 	SOLAZYME, INC.
					
	By	 	/s/ Brian R. Maurer	 		 	By	 	/s/ Jonathan Wolfson
	Name	 	Brian R. Maurer	 		 	Name	 	Jonathan Wolfson
	Title:	 	Sr. R&D Director	 		 	Title	 	CEO
	Date	 	2-4-11	 		 	Date	 	2-4-11

  

			
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 Confidential 

 

 EXHIBIT A 
 RESEARCH AND DEVELOPMENT PLAN 
 PHASE 1 
 [*] 

  

			
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	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions. 

 Confidential 

 

 [*] 
 AGREED AND ACCEPTED, 
  

									
	THE DOW CHEMICAL COMPANY	 		 	SOLAZYME, INC.
					
	By	 	/s/ Brian R. Maurer	 		 	By	 	/s/ Jonathan Wolfson
	Name	 	Brian R. Maurer	 		 	Name	 	Jonathan Wolfson
	Title:	 	Sr. R&D Director	 		 	Title	 	CEO
	Date	 	2-4-11	 		 	Date	 	2-4-11

  

			
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	  	Page 15 of 15

  

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with
respect to the omitted portions.Unassociated Document

	
  INSPIREMD, INC.

 

	
2011 UMBRELLA Option Plan

	
1.

	
NAME

This plan, as amended from time to time, shall be known as the InspireMD, Inc. 2011 UMBRELLA Option Plan (the “Plan”).

 

	
2.

	
PURPOSE

The purpose and intent of the Plan is to serve as an incentive to attract new employees, consultants and service providers and retain, in the employ of InspireMD, Inc. (the “Company”) and its subsidiaries or affiliates (together: the “Group”), persons of training, experience and ability by providing them with opportunities to purchase shares of the Company, pursuant to the Plan approved by the board of directors of the Company (the “Board”).

	 	
This Plan shall serve as an “umbrella” plan for the Company and the entire Group worldwide. Therefore, if so required, appendices may be added to the Plan for the various international –parent or subsidiaries in order to accommodate local regulations that do not correspond to the scope of the Plan - at the discretion of the Board.   Any such appendices that the Company approves for purposes of using this Plan for an international parent or subsidiary will not affect the terms of this Plan for any other country.

Options (“Options”) granted or Shares issued under this Plan shall adhere to all applicable state, federal and foreign laws, including but not limited to the Israeli Income Tax Ordinance (New Version), 1961 (“Ordinance”). Such applicable state, federal and foreign laws, including the Ordinance together with any regulations, rules, orders or procedures promulgated thereunder and, all as may be amended from time to time shall be collectively referred as the “Tax Rules”.

Attached hereto as Appendix A is the 2006 Employee Stock Option Plan designated for Sections 102 and 3(i) of the Ordinance for the purposes of any grant to Israeli employees and officers of the Group and any other service providers or control holders of the Company who are subject to the Israeli Income Tax.

Attached hereto as Appendix B is the 2011 U.S. Equity Incentive Plan Designated for the U.S. Internal Revenue Code of 1986, as amended (the “Code”) for the purposes of any grant to U.S. employees of the Group and any other service providers who are subject to the U.S. Income Tax.

The proceeds received from the issuance of Option Shares upon exercise of Options pursuant to the Plan shall be used for general corporate purposes.

	
3.

	
ADMINISTRATION

	
3.1.

	
A share option Administrator appointed and maintained by the Board for such purpose (the “Committee” or “Administrator”) shall have the power to administer the Plan. Notwithstanding the above, the Board shall automatically have a residual authority if no Committee shall be constituted or if such Committee shall cease to operate for any reason whatsoever. The Board shall appoint the members of the Administrator, and may from time to time remove members from, or add members to, the Administrator. In this Plan any reference to the term “Administrator” shall also mean the Board if no Committee is operating at that time in the Company.  Notwithstanding anything to the contrary, for purposes of the 2011 U.S. Equity Incentive Plan, to the extent necessary for any award granted thereunder to satisfy the requirements of Section 162(m) of the Code and and/or Rule 16b-3 promulgated under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), member on any such Committee shall be limited to those members of the Board who are “outside directors” under Section 162(m) of the Code and/or “non-employee directors” as defined in Rule 16b 3 promulgated under the Exchange Act.

 

  

  

  

 

	
3.2.

	
The Administrator shall select one of its members as its Chairman and shall hold its meetings at such times and places, as the chairman shall determine.  Actions at a meeting of the Administrator at which a majority of its members is present and vote for or acts reduced to or approved in writing by all of the members of the Administrator, shall be the valid acts of the Administrator. The Administrator shall make such rules and regulations for the conduct of its business as it shall deem advisable and may appoint a secretary, who shall keep records of its meetings.

 

	
3.3.

	
The Administrator shall designate participants (“Grantees”) and approve the grant of Options to the Grantees. Without derogating from the foregoing, the Administrator shall be authorized to issue on behalf of the Company shares underlying Options, which have been granted by the Administrator and duly exercised.

 

	
3.4.

	
Subject to the provisions of this Plan, the Administrator shall have full authority and discretion, from time to time and at any time, to determine the terms and conditions of respective share options agreements to be signed between the Company and each Grantee individually (“Option Agreement”) including, but not limited to: (i) the time or times and the conditions (including without limitation the accomplishment of various milestones by the Grantee) upon which the Options may vest; (ii) the equal or different exercise price of Options granted to Grantees; and (iii) the nature and duration of restrictions as to transferability. The Administrator is authorized to: (i) interpret the provisions and supervise the administration of the Plan; (ii) amend, modify and replace terms and conditions of Option Agreements, provided however, that such act in one case or for one or several Grantees, will not automatically entitle any other Grantee to the same treatment, and provided that a material adverse change in any executed Option Agreement requires the consent of the affected Grantee; (iii) convert un-vested Options from Previous Plans to Options under this Plan – subject to applicable laws; and (iv) any other matter which is necessary or desirable for, or incidental to, the administration of the Plan.

 

	
3.5.

	
The Administrator may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best.  No member of the Board or of the Administrator shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted thereunder.

 

	
3.6.

	
A member of the Board or the Administrator shall be eligible to receive Options under the Plan while serving on the Board or the Administrator, subject to the restrictions of Interested Party Transactions as may be applicable, as defined in the Israeli Companies Law 1999 (the “Companies Law”).

 

	
3.7.

	
The interpretation and construction by the Administrator of any provision of the Plan or of any Option thereunder shall be final and conclusive unless otherwise determined by the Board.

	
4.

	
RESERVED SHARES

The Company reserves 9,468,100 shares of the Company’s common stock, par value $0.0001 per share (the “Shares”) for purposes of the Plan, subject to adjustment in case of subdivision or combination of the Shares of the Company.  Such initial number may be increased from time to time by resolutions of the Board. Any Share under the Plan, in respect of which the right hereunder of a Grantee to purchase the same shall for any reason terminate, expire or otherwise cease to exist, shall again be available for grant through Options under the Plan.

 

  

2

  

 

The Board may resolve to reserve out of the abovementioned pool (as may be increased from time to time) part of the reserved pool specifically for each separate appendix.

	
5.

	
AWARD OF OPTIONS

	
5.1.

	
The Administrator in its discretion may award to Grantees Options to purchase Shares in the Company available under the Plan. Options may be granted at any time after this Plan has been approved by the Board and until the end of the term of the Plan as provided in Section 11 below. Provided however that Options granted under Section 102(b) of the Ordinance and held in trust by a trustee, approved by the Israeli Tax Authorities in accordance with the provisions of Section 102(a) of the Ordinance, shall not be granted until the lapse of 30 days following the filing of the Plan with the Israeli Tax Authorities of a request by the Company to approve the Plan. The date of grant of each Option shall be the date specified by the Administrator at the time such grant is made, subject to applicable law (the “Date of Grant”).

	
5.2.

	
The Options granted pursuant to the Plan shall be evidenced by a written Option Agreement. The Option Agreement shall state, inter alia, the number of Shares covered thereby, the dates when the Options may be exercised (subject to Section 8), the exercise price and such other terms and conditions as the Administrator in its discretion may prescribe, provided that they are consistent with this Plan.

	
5.3.

	
The grant of an Option to a Grantee hereunder, shall neither entitle such Grantee to participate, nor disqualify him/her from participating, in any other grant of options pursuant to this Plan or any other share incentive or share option plan of the Company or any of its affiliates.

	
5.4.

	
Anything in this Plan to the contrary notwithstanding, all grants of Options to Directors, officers  and Office Holders (“Nose Misra” as such term is defined in the Companies Law, as amended from time to time), shall be authorized and implemented in accordance with the provisions of the Companies Law or other applicable related party transactions laws.

	
6.

	
OPTION EXERCISE PRICE

The exercise price per Share covered by each Option Agreement (the “Exercise Price”) shall be equal to the fair market value of the Share on the date of such grant based on a reasonable valuation method determined by a qualified independent appraiser and with respect to US Grantees as is determined in Article III to Appendix B hereto. Despite the aforesaid, the Administrator may determine Exercise Price for an Israeli Grantee lower than the fair market value as aforesaid, but subject to the Israeli law as shall be amended from time to time. Each Option Agreement shall contain the exercise price determined for each Grantee. Each vested Option shall entitle the Grantee to purchase one Share at the Exercise Price, subject to the provisions of the Plan, the Option Agreement and the Tax Rules.

	
7.

	
TERM AND EXERCISE OF OPTION

	
7.1.

	
Options shall be exercisable pursuant to the terms under which they were awarded as set forth in the Option Agreement and subject to the terms and conditions of this Plan and the Tax Rules; provided, however, that only vested Options may be exercised and that in no event shall an Option be exercisable after the expiration of ten (10) years from the date such Option is granted, unless another period (either shorter or longer) is specifically provided in the Option Agreement (“Term”).

 

  

3

  

 

Unless the Administrator provides otherwise, vesting of Options granted under the Plan shall be suspended during any unpaid leave of absence.

	
7.2.

	
Unless determined otherwise by the Administrator with regard to all or any of the Grantees or the Options, the Options will be exercisable into Option Shares, as follows:

	
  

	
a.

	
1/4 of the Options shall vest and become exercisable upon the expiration of twelve (12) months after the Date of Grant thereof (the “First Vesting Date”) provided, however, that the Grantee is continuously employed or engaged by the Group from the Date of Grant until the First Vesting Date;

	
  

	
b.

	
The remaining Options shall vest and become exercisable in 12 equal potions of 1/16 of the Options Shares, each portion on the last day of each of the 3-month period, the first of which shall commence on the 1st day following First Vesting Date (the “Quarterly Vesting “) provided, however, that the Grantee is continuously employed or engaged by the Group from the Grant Date until the end of Quarterly Vesting Period.

	
7.3.

	
Unless determined otherwise by the Administrator with regard to all or any of the Grantees or the Options, In the event that in any of the following events (each a “Transaction”):

	
  

	
(a)

	
a merger or consolidation of the Company (a “Merger”) with or into any company (the “Successor Company”) resulting in the Successor Company being the surviving entity; or

	
  

	
(b)

	
an acquisition of: (i) all or substantially all of the shares or assets of the Company in one or more related transactions to another party (a “Share Sale”), or (ii) all or substantially all of the assets of the Company, in one or more related transactions to another party, in each case such acquirer of shares or assets is referred to herein as the “Acquiring Company”;

unvested Options remain outstanding under the Plan shall be treated by the Successor Company or the Acquiring Company, as the case may be, at its sole discretion. The Successor Company or the Acquiring Company shall have the right, among other alternatives, to substitute the Options (vested and/or unvested) for its own securities (the “Substitute Shares”) or to retain this Plan with no change. In the event the Successor Company or the Acquiring Company chooses to substitute the Options for Substitute Shares, appropriate equitable adjustments shall be made in the purchase price per share of the Substitute Shares, and all other terms and conditions of the Option Agreements, such as the Vesting Dates, shall remain in force, all as will be determined by the Board of Directors whose determination shall be final.

	
7.4.

	
The Administrator shall have full authority to determine any provisions regarding the acceleration of the vesting period of any Option or the cancellation of all or any portion of any outstanding restrictions with respect to any Option or Ordinary Share upon certain events or occurrences, and to include such provisions in the Option Agreement on such terms and conditions as the Administrator shall deem appropriate.

 

  

4

  

 

	
7.5.

	
Subject to any provision in the Article of Association of the Company, as amended from time to time (the “Articles”), in the event of a Share Sale or a Merger, each Optionee shall  participate in the Share Sale or the Merger and sell or exchange, as the case may be, all of his or her Option Shares and vested Options in the Company, provided, however, that each such Options Share or Option shall be sold or exchanged at a price or ratio (as the case may be) equal to that of any other share of the same class sold or exchanged under the Share Sale or the Merger (minus the applicable exercise price), in accordance with the provisions of the Company's Articles of Association, while accounting for changes in such price or ratio due to the respective terms of any such Option.

 

	
7.6.

	
With respect to Option Shares held in trust the following procedure will apply in the event of a Transaction: the Trustee (as defined below) will transfer the Option Shares held in trust and sign any document in order to effectuate the transfer of Option Shares, including share transfer deeds, provided, however, that the Trustee receives a notice from the Board, specifying that: (i) all or substantially all of the issued outstanding share capital of the Company is to be sold or exchanged, and therefore the Trustee is obligated to transfer the Option Shares held in trust; (ii) the Company is obligated to withhold at the source all taxes required to be paid upon release of the Option Shares from the trust and to provide the Trustee with evidence, satisfactory to the Trustee, that such taxes indeed have been paid; (iii) the Company is obligated to transfer the consideration for the Option Shares directly to the Optionees subject to the Transaction agreements.

	
7.7.

	
Vested Options shall be exercisable by the Grantee's signing and returning to the Company at its principal office an “Exercise Notice” in such form and substance as may be prescribed by the Administrator from time to time.  The Exercise Notice shall be accompanied by payment of the Exercise Price.

	
7.8.

	
Anything herein to the contrary notwithstanding, but without derogating from the provisions of Section 8 hereof, if any Options have not been exercised and the Shares covered thereby not paid for within the Term, such Options and the right to acquire such Shares shall terminate, all interests and rights of the Grantee in and to the same shall expire, the trust with respect to such Options, if applicable, shall expire and the Shares underlying such Options shall revert back to the Plan.

	
7.9.

	
Each payment shall be in respect of a whole number of Shares, shall be effected in cash or by a cashier's or certified check payable to the order of the Company, and shall be accompanied by a notice stating the number of Shares being paid for thereby.

	
7.10.

	
Prior to the registration of the Grantee as holder of Shares in the Company’s register of shareholders upon exercise of the Option and subject to the other provisions of the Plan, the Grantees shall have none of the rights and/or privileges of shareholders of the Company in respect of any Shares purchasable upon the exercise of Options, nor shall the Grantees be deemed to be a class of shareholders or creditors of the Company. Without prejudice to the generality of the aforesaid, Grantees shall not be entitled to participate in distribution of dividends, or in distribution of assets upon dissolution, nor be entitled to be invited to or participate and vote in General Meetings on account of Options which have not been exercised until 30 days before such distribution or meeting and subject to the other provisions of this Plan and its Appendixes.

	
7.11.

	
Without derogating from the aforesaid, in the Option Agreement, the Grantee will grant the Company's CEO or Chairman an irrevocable proxy (a “Voting Proxy”) to (i) represent the Grantee at, and to receive invitation for, all meetings of the shareholders of the Company, and to vote the Grantee's Option Shares at such meetings in the same proportion as the votes of Company's shareholders in such meetings; and/or (ii) waive all pre-emptive rights relating to the issuance by the Company of new securities, if the Grantees shall be entitled to such right. Upon the consummation of an IPO of Company shares, the Voting Proxy will be deemed cancelled and of no further effect.

 

  

5

  

 

	
7.12.

	
All Shares issued upon the exercise of Options shall be in all aspects, unless specifically otherwise stated herein, subject to and bound by the provisions of the Company's incorporation documents, as amended from time to time, and by any shareholders’ agreement to which the holders of ordinary shares of the Company are bound.

	
7.13.

	
Granting of an Option shall impose no obligation on the recipient to exercise such Option.

	
8.

	
TERMINATION OF ENGAGEMENT

	
8.1

	
If the Grantee shall cease to be employed or engaged by the Group, as the result of his resignation, then the Grantee shall have the right to exercise the Options, but only to the extent that the Options are exercisable as of the date Optionee resigns (according to the provisions of Section 7 above (Term and Exercise of Options)), within thirty (30) days as of the Termination Date, as that term is defined below.

	
8.2

	
If the Grantee shall cease to be employed or engaged by the Group, as the result of his dismissal without cause, then the Grantee shall have the right to exercise the Options, but only to the extent that the Options are exercisable on the date of Grantee's dismissal (according to the provisions of Section 7 above (Term and Exercise of Options)), within ninety (90) days after the Termination Date.

	
8.3

	
If the Grantee shall cease to be employed or engaged by the Group as the result of his disability, then the Option, to the extent that it is exercisable by him at the time he ceases to be employed or engaged by the Group, and only to the extent that the Option is exercisable as of such time as defined in Section 7 above, may be exercised by him within one (1) year, after the Termination Date.

	
8.4

	
If the Grantee shall die while employed or engaged by the Group, his estate, personal representative, or beneficiary shall have the right, subject to the provisions of Section 7 above, to exercise the Option (to the extent that the Optionee would have been entitled to do so at the time of his death) at any time within two (2) years from the date of his death.

	
8.5

	
If the Grantee shall be terminated for cause, then, all Options, (including vested Options) whether exercisable or not on the date that the Group delivers to the employee a termination notice, will expire and may not be further exercised, and the Shares covered by such Options shall revert to the Plan.

	
8.6

	
For the purpose of this Plan, “for cause” shall exist if Grantee (i) breaches any of the material terms or conditions of his employment agreement, or agreement to provide services to the Group, including, without limitation, the breach of any duty of non-disclosure or non-competition; (ii) engages in willful misconduct or acts in bad faith with respect to any company in the Group in connection with his employment or other agreement with the Group; or (iii) is convicted of a criminal offence involving moral turpitude.

	
8.7

	
For purposes of this Section 8 “Termination Date” shall mean the date on which Optionee’s employment or engagement with a any company in the Group is terminated.

	
8.8

	
The reason of termination notwithstanding, if during the period after the termination of Engagement during which the Grantee may still exercise Options, the Grantee breaches the confidentiality, non-competition, non-solicitation, non-use or assignment of intellectual property undertakings binding upon the Grantee, the Company shall have the right to effect a forfeiture of all Options (including vested Options) then outstanding, and the Shares covered by such Options shall revert to the Plan.

 

  

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9.

	
ADJUSTMENTS AND SUBSTITUTION

Upon the occurrence of any of the following events, a Grantee's rights to purchase Shares under the Plan shall be adjusted or substituted as hereinafter provided.

	
9.1.

	
In the event that the Shares of the Company are subdivided or combined into a greater or smaller number of shares, or if the Shares of the Company are exchanged for other securities of the Company, by reason of a reclassification, recapitalization, consolidation, reorganization, dividend or other distribution (whether in the form of cash, stock or other property), stock split, spin-off, combination or exchange of shares, repurchase of shares, change in corporate structure or otherwise, then each Grantee shall be entitled, upon exercise of the Options and subject to the conditions herein stated, to purchase such number of Shares or such other securities of the Company as were exchangeable for the number of Shares of the Company which such Grantee would have been entitled to purchase had the Grantee exercised the Options immediately prior to such an event, and appropriate adjustments shall be made in the Exercise Price per share to reflect such subdivision, combination or exchange.

	
9.2.

	
Subject to Section 7 above, in the event of a Transaction (defined above), while unexercised Options remain outstanding under the Plan, and the Administrator determines in good faith that adjustment to the Plan or any Option granted under the Plan is required in order to preserve the benefits or potential benefits to the Optionees the Administrator may at its sole discretion to (A) cause the Options to be substituted with the corresponding and adjusted number of options to purchase shares of the surviving entity (or an affiliated entity of the surviving entity) - of the same class and the same substitution rate as the shares received by the holders of Shares of the Company in exchange for their Shares or (B) in the event holders of the Shares received cash as consideration for their Shares in the Transaction, cause the Options to be cancelled in exchange for a cash payment equal to cash they would have received had they exercised their Options immediately prior to the Transaction, as adjusted for the payment of the appropriate exercise price. In the case of such substitution, appropriate adjustments shall be made in the quantity and exercise price to reflect such action, and all other material terms and conditions of the Option Agreements shall remain in force.

	
9.3.

	
In the event that the Company issues any of its Shares or other securities as bonus shares (stock dividend) upon or with respect to all its Shares, which are at the time subject to a right of purchase by a Grantee hereunder, each Grantee upon exercising an Option shall be entitled to receive (if he/she so elects), in addition to the exercised Shares, the appropriate number of bonus shares, on the same terms and conditions as offered to the other shareholders holding Shares of the Company, which he/she would have received had the exercise of the Options taken place prior to such issuance.

	
9.4.

	
The Administrator shall determine the specific adjustments to be made under this Section 9, and its determination shall be conclusive. The Administrator’s determination may differ from one Grantee to another, except that a determination of a specific adjustment under Section 9.1 shall be applied in the same manner to all applicable Grantees.

	
10.

	
ASSIGNABILITY AND SALE OF SHARES

	
10.1

	
Shares purchased hereunder shall not be assignable or transferable except pursuant to applicable laws and the Incorporation documents of the Company.

 

  

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10.2

	
Options may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee. This restriction applies also to Grantees which are not natural persons, unless such transfer is approved by the Administrator in writing, at its sole discretion. The terms of the Plan and the Option Agreement shall be binding upon the executors, administrators, heirs, successors and assignees of the Grantee.

	
10.3

	
The Company is relieved from any liability for the non-issuance or non-transfer or any delay in issuance or transfer of any Shares subject to Options under the Plan which results from the inability of the Company to obtain, or from any delay in obtaining, from any regulatory body having jurisdiction, all requisite authority to issue or transfer the Shares upon exercise of the Options under the Plan, if counsel for the Company deems such authority necessary for lawful issuance or transfer of any such shares.  Appropriate legends may be placed on the stock certificates evidencing shares issued upon exercise of Options to reflect such transfer restrictions.

	
11.

	
PERIOD AND AMENDMENT OF THE PLAN

	
11.1.

	
The Plan was adopted by the Board on March 28, 2011, and shall expire on March 27, 2021, unless earlier terminated in accordance with the terms of the Plan.  Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.

	
11.2.

	
The Board may, at any time and from time to time, terminate or amend the Plan in any respect.  Provided, that the Company may not alter or impair the rights of a Grantee, without his/her consent, under any Option previously granted to the Grantee.

	
12.

	
CONTINUANCE OF ENGAGEMENT

Neither the Plan nor the Option Agreement shall impose any obligation on the Company or a related company thereof, to continue with any Grantee in its employ or to continue to receive services rendered by the Grantee, and nothing in the Plan or in any Option granted pursuant thereto shall confer upon any Grantee any right to continue in the employ or in rendering services to the Company or any other entity of the Group or restrict the right of the Company or any other entity of the Group to terminate such employment or rendering of services or consulting at any time, with or without Cause.

	
13.

	
GOVERNING LAW

The Plan, the Appendixes and all instruments issued thereunder or in connection therewith, shall be governed by, and interpreted in accordance with, the laws of the State of Israel, except that with respect to tax and corporate matters or issues, the laws of the relevant state or country according any appendix to this Plan, shall apply.

	
14.

	
TAX CONSEQUENCES

Any tax consequences arising from the grant or exercise of any Option or from the payment for Shares or from sale or transfer of the Shares or from any other event or act hereunder (whether of the Grantee or of the Company or any entity within the Group), shall be borne solely by the Grantee. The Company and/or any entity within the Group shall withhold and/or deduct taxes according to all applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, to the extent legally permitted, each Grantee agrees to indemnify the Company and/or any other entity within the Group that engages the Grantee and/or the Company’s shareholders and/or directors and/or officers and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Grantee.  Except as otherwise required by law, the Company shall not be obligated to honor the exercise of any Option by or on behalf of a Grantee until all tax consequences (if any) arising from the exercise of such Options and sale of such Shares are resolved in a manner reasonably acceptable to the Company.

 

  

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The Company may, if required under any applicable law, require that an Grantee deposit with the Company, in cash, at the time of exercise, such amount as the Company deems necessary to satisfy its obligations to withhold taxes or other amounts incurred by reason of the exercise or the transfer of shares thereupon.

	
15.

	
MULTIPLE AGREEMENTS

The terms of each Option and each Option Agreement may differ from other Options granted under the Plan or other Option Agreements signed at the same time, or at any other time. The Administrator may also authorize more than one Option Agreement to a given Grantee during the term of the Plan, with different terms in each.

	
16.

	
NOTICES

Each notice relating to the Plan shall be in writing and delivered in person or by first class mail; postage prepaid, to the address as hereinafter provided.  Each notice shall be deemed to have been given on the date it is received.  Each notice to the Company shall be addressed to it at its principal offices.  Each notice to the Grantee or other person or persons then entitled to exercise an Option shall be addressed to the Grantee or such other person or persons at the Grantee's last known address.

	
17.

	
NON-EXCLUSIVITY OF THE PLAN

The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.

	
18.

	
TRANSFER OF SHARES

Any issued Option Shares shall, unless such shares are registered in accordance with the United States Securities Act – 1933 (the “Act”) or other similar acts in other countries, be sold only in accordance with exemptions under such Acts. There shall be no exercises, transfers, sales or other dispositions of issued Option Shares unless such shares are either registered or exempt from registration, provided, however, that in the event of an IPO, such exercise, transfer or other disposition will be subject to any lock up provision as agreed by the Company.

 

  

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19.

	
INVESTMENT REPRESENTATION

Each Grantee exercising any Option under the Plan acknowledges, by virtue of such exercise, that the Company has not, as of the date of the approval of this Plan by the Board of Directors, registered the shares covered thereby under the Act.  The Grantee shall sign and deliver to the Company, if requested, a separate investment representation, certificate or such other document as may be required by the Company’s counsel, to such effect; and further providing that the Grantee is acquiring the Option for investment only and not with a view to distribution, provided, however, that such Option, representation, certificate or other document may provide that the said investment restriction shall not be operative as to such Option Shares as may in the future be registered with the Securities and Exchange Commission pursuant to the Act.  Furthermore, the Company may place a legend on any share certificate delivered to the Grantee to the effect that such shares were acquired pursuant to an investment representation and without registration of the shares.

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APPENDIX A

 

 

INSPIREMD, INC.

 

 

2006 Employee Stock Option Plan

 

 

  

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APPENDIX B

 

 

INSPIREMD, INC.

 

 

 

2011 U.S. Equity Incentive Plan

 

 

Designated for the U.S. Internal Revenue Code

 

 

ARTICLE I

Purpose

 

The purpose of this U.S. Equity Incentive Plan (the “U.S. Appendix”) shall be as defined in the InspireMD, Inc. 2011 UMBRELLA Option Plan (the “Plan”), and is intended to harmonize the terms and conditions of the Plan with the Code and provide specific provisions regarding Grantees that the US Tax Rules apply to them (the “US Grantees”). Unless expressly provided in this Appendix, the provisions of the Plan shall apply to US Grantees. Capitalized terms used and not otherwise defined in this Appendix have the meanings given to them in the Plan.

With respect to any Grantee who is subject to the reporting requirements of Section 16 of the Exchange Act, the Plan and all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 promulgated under the Exchange Act.  To the extent any provision of the Plan or action by the Committee fails to so comply, such provision or action shall be deemed null and void ab initio, to the extent permitted by law and deemed advisable by the Committee.

 

ARTICLE II

Options and Shares

The Options granted and the Shares to be issued are as defined under the Plan.

Types of Options.  Options shall be granted under the Plan as Options that do not meet the requirements of Section 422 of the Code, as amended (the “Code”).  Options may be granted from time to time by the Board to all employees of the Company or of any parent or subsidiary company of the Company (as defined in Sections 424(e) and (f), respectively, of the Code), and also to all non-employee directors and consultants of the Company or any such other company.

Limitations on Options and Shares.  Notwithstanding anything to the contrary contained herein, subject to adjustment pursuant to Section 9 of the Plan, during any calendar year the maximum number of shares with respect to which Options may be granted to an officer of the Company (or any subsidiary) subject to Section 16 of the Exchange Act or a “covered employee” as defined in Section 162(m)(3) of the Code is one million (1,000,000) Shares.

 

  

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Limitations on Grantees. means any natural person, who is not an Employee, rendering bona fide services to the Company or a Subsidiary, with compensation, pursuant to a written independent contractor agreement between such person (or any entity employing such person) and the Company or a Subsidiary, provided that such services are not rendered in connection with the offer or sale of securities in a capital raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.

 

ARTICLE III

Exercise Price

The Exercise Price shall be as defined under the Plan provided that the Exercise Price shall be equal to the fair market value of the Share on the date of such grant based on a reasonable valuation method determined by a qualified independent appraiser which determination was made no more than twelve (12) months before the respective stock option grant date; provided however, that in the event that prior to the end of each such twelve (12) months period subsequent to the relevant appraisal date the Company undergoes an event which will have a material effect on the value of the Share, the Company shall carry out and receive an updated analysis from a qualified independent appraiser regarding the fair market value of the Share for any new grant. Each Option Agreement shall contain the exercise price determined for each Grantee. Each vested Option shall entitle the Grantee to purchase one Share at the Exercise Price, subject to the provisions of the Plan, the Option Agreement and the Tax Rules.

 

ARTICLE IV

Exercise of Options, Termination

The exercise and termination of any Option shall be as defined under the Plan and shall be subject to the following provisions:

Employees: Exercise of Option After Termination of Employment.  If the Grantee's employment with (a) the Company, (b) the Group or (d) a corporation (or parent or subsidiary corporation of such corporation) issuing or assuming a stock option in a transaction to which Section 424(a) of the Code applies, is terminated for any reason other than by disability (within the meaning of Section 22(e)(3) of the Code) or death, the Grantee may exercise only the rights that were available to the Grantee at the time of such termination and only within the time periods set forth under the Plan.  If the Grantee’s employment is terminated as a result of disability, such rights may be exercised only within the time periods set forth under the Plan.  Upon the death of the Grantee, his or her designated beneficiary or legal representative shall have the right, at any time within the time periods set forth under the Plan, to exercise in whole or in part any rights that were available to the Grantee at the time of death.  Notwithstanding the foregoing, no rights under this Option may be exercised after the Expiration Date.

Directors: Exercise of Option After Termination of Services as a Director.  If the Grantee ceases to be a Director and no longer serves as a consultant or an employee of the Company or the Group, the Grantee or the Grantee’s legal representative may exercise only the rights that were available to the Grantee at the time of such termination and only within the time periods set forth under the Plan. Notwithstanding the foregoing, no rights under this Option may be exercised after the Expiration Date.

 

  

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Consultants: Exercise of Option After Termination of Consulting Relationship/Services Engagement.  If the Grantee’s consulting relationship or other services engagement with the Company or the Group is terminated for any reason, the Grantee or the Grantee’s legal representative may exercise only the rights that were available to the Grantee at the time of such termination and only within the time periods set forth under the Plan. Notwithstanding the foregoing, no rights under this Option may be exercised after the Expiration Date.

 

ARTICLE V

Non-Transferability of Option Rights

Any Option granted hereunder shall be subject to the non-transferability restrictions as defined under the Plan.

Without derogating from the above, any Option shall not be transferable by the Grantee thereof otherwise than, in the case of an individual, by will or the laws of descent and distribution, and shall be exercisable, during the Grantee’s lifetime, only by the holder.  The Board may waive this restriction in any particular case, provided that the Options may be transferable only to the extent permitted by the Code.

 

ARTICLE VI

Restricted Stock

The Administrator may at it sole discretion grant Shares pursuant the Plan.

                      (a)            Terms.  The Administrator may issue Shares to employees, non-employee directors and consultants subject to forfeiture or to the Company’s right to repurchase such shares (“Restricted Stock”).  Shares of Restricted Stock may be issued without cash consideration or for such consideration as may be determined by the Administrator.  The Administrator shall determine the duration of the period of time (the “Restricted Period”) during which, the price (if any) at which, and the other conditions under which, the shares may be forfeited or repurchased by the Company and other terms and conditions of such grants.

                      (b)           Restrictions.  Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Administrator, during the Restricted Period.  Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the holder, shall contain such legend as the Administrator may require with respect to the restrictions on transfer and, if required by the Administrator, shall be deposited by the holder, together with a stock power endorsed in blank, with the Company.  At the expiration of the Restricted Period with respect to any of such shares, the Company shall deliver a certificate with respect to such shares, without a legend referring to the Plan’s restrictions on transfer, to the Grantee or, if the Grantee has died, to the Grantee’s designated beneficiary or legal representative.

                      (c)           Restricted Stock Purchase Agreement.  Each recipient of Restricted Stock shall enter into a Restricted Stock Purchase Agreement with the Company that shall specify the terms and conditions of such grant of Restricted Stock and shall contain such other terms and conditions not inconsistent with the provisions of the Plan and of this U.S. Appendix as the Administrator considers necessary or advisable to achieve the purposes of the Plan or comply with applicable tax and regulatory laws and accounting principles.  The form of such Restricted Stock Purchase Agreement may vary among Grantees.  The Restricted Stock Purchase Agreement may be amended by the Administrator in any respect, provided that the consent of the Grantee shall be required for any amendment, other than an amendment made in order to conform the Restricted Stock Purchase Agreement or the Plan or this U.S Appendix to restrictions imposed by securities or tax laws or regulations, that would materially and adversely affect the Grantee.

 

  

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ARTICLE VII

Adjustments and Substitution

 

Upon the occurrence of any Transaction the required adjustment and substitution shall be implemented as defined under the Plan provided that any such adjustment shall comply with Section 409(A) of the Internal Revenue Code.

 

ARTICLE VIII

Changes in Capitalization

In case of any change in the capitalization of the Company, the appropriate equitable adjustments shall be made as defined under the Plan. Notwithstanding the foregoing, no such adjustment shall be made or authorized to the extent that such adjustment would cause the Plan or any Option to violate Section 409A of the Code.  Such adjustments shall be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which the Company is subject.

 

ARTICLE IX

Rights of a Shareholder

 

The Grantee’s rights with respect to Shares to be acquired by the exercise of an Option shall be as defined under the Plan.

 

ARTICLE X

Compliance with the Law

The Company’s relief from any liability for the non-issuance or non-transfer or any delay in issuance or transfer of any Shares subject to Options shall be as defined under the Plan

 

Compliance with Securities Laws -  It shall be a condition to the Grantee’s right to purchase Shares that the Company may, in its discretion, require (a) that the Shares reserved for issue upon the exercise of this Option shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system on which the Company’s stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase shall be exempt from registration under that Act and the Grantee shall have made such undertakings and agreements with the Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or the Grantee, or both.  The certificates representing the shares purchased under this Option may contain such legends as counsel for the Company shall consider necessary to comply with any applicable law.

 

  

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Incorporation of Internal Revenue Code Section 409A - This Plan is intended to comply and shall be administered in a manner that is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent.  To the extent that an award, issuance, and/or payment is subject to Section 409A of the Code, it shall be awarded and/or issued or paid in a manner that will comply with Section 409A of the Code, including proposed, temporary, or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto.  Any provision of this Plan that would cause an award, issuance and/or payment to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by applicable law).

 

ARTICLE XI

Tax Consequenses and Withholding

Any tax consequences arising from the grant or exercise of any shall be borne solely by the Grantee’ as defined under the Plan.

Without derogating from the above, the Grantee shall pay to the Company, or make provision satisfactory to the Commitee for payment of, any taxes required by law to be withheld in respect of any Option or Shares no later than the date of the event creating the tax liability.  In the Administrator’s sole discretion, such tax obligations may be paid in whole or in part in Shares, including Shares retained from the exercise of the Option or from the grant of Restricted Stock creating the tax obligation, valued at the fair market value of the Shares on the date of delivery to the Company as determined in good faith by the Administrator.  The Company and any of its affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Grantee.

 

ARTICLE XII

Interpretation

The interpretation and construction of any terms or conditions of the Plan, or of this U.S. Appendix or other matters related to the Plan by the Administrator shall be final and conclusive.

In the event of any contradiction between this U.S. Appendix and the Plan the terms of the Plan shall prevail, except of tax issues including provisions in the opinion of the Administrator that related to Internal Revenue Code Section 409A.

 

 

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