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Exhibit 10.1    
  

 
  RAINING DATA CORPORATION
  AMENDED 1999 STOCK OPTION PLAN
  STOCK OPTION AGREEMENT    
  

 
  NOTICE OF STOCK OPTION GRANT    
  

	Grantee's Name and Address:	 	Brian C. Bezdek

c/o Raining Data Corporation

17500 Cartwright Road

Irvine, CA 92614

        You
have been granted an option to purchase shares of Common Stock of Raining Data Corporation subject to the terms and conditions of the Stock Option Agreement ("Option Agreement") and
the Raining Data Corporation Amended 1999 Stock Option Plan, as amended from time to time (the "Plan") as follows: 

	Grant Date of Option	 	December 20, 2002
	Vesting Commencement Date	 	December 20, 2002
	Exercise Price per Share	 	$2.01
	Total Number of Shares Granted	 	56,250
	Total Exercise Price	 	$113,062.50
	Type of Option:	 	Incentive Stock Option
	Term/Expiration Date:	 	Ten Years from the Date of Grant

Vesting Schedule:  

        Subject to the Grantee being a Service Provider on the following dates and other limitations set forth in the Plan and the Option Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule: 

        (a)  Grantee
shall have no right to exercise any part of the Option at any time prior to the expiration of the one (1) year from the Vesting Commencement Date; 

        (b)  The
Option shall become exercisable with respect to Twenty-Five Percent (25%) of the Shares upon the expiration of one (1) year from the Vesting
Commencement Date; and 

        (c)  The
Option thereafter shall become exercisable with respect to an additional One Forty-Eighth (1/48th) of the Option on each monthly anniversary of the Vesting
Commencement Date; 

        (d)  Notwithstanding
the foregoing subsections (a), (b) and (c) and Section 6(a) of the Option Agreement, 100% of the Shares subject to the Option shall
immediately vest in the event that the Grantee is terminated as a result of an Involuntary Termination other than for Cause, death or Disability (each as defined in the Option Agreement) within twelve
(12) months after a Corporate Transaction (as defined in the Option Agreement); provided that the Grantee signs a general release in a commercially customary form prescribed by the Company,
which releases and discharges all known and unknown claims that the Grantee may have against the Company or persons and entities affiliated with the
Company, and a covenant not to sue or prosecute any legal action or proceeding based upon such claims; and 

        (e)  In
the event that the severance and other benefits provided for in this Option Agreement or otherwise payable to the Grantee (i) constitute "parachute payments"
within the meaning of Section 280G of the Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then Grantee's benefits under
this Option Agreement shall be either delivered in full, or delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Grantee on an after-tax basis, of the greatest
amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company and 

the Grantee otherwise agree in writing, any determination required under this subsection shall be made in writing by the Company's independent public accountants (the "Accountants"), whose
determination shall be conclusive and binding upon the Grantee and the Company for all purposes. For purposes of making the calculations required by this subsection, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code. The
Company and the Grantee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section. 

Termination Period:  

        This Option may be exercised for a period of time following the Grantee ceasing to be a Service Provider as provided for in this Option Agreement. 

Incentive Stock Option:  

        If this option is an Incentive Stock Option which provides special tax favorable tax treatment under the Internal Revenue Code, it is the obligation of the
Grantee to comply with the Internal Revenue Code requirements in order to obtain that favorable tax treatment. The Internal Revenue Code requires that stock obtained through the exercise of Incentive
Stock Options be held for two years from the date of the option grant and for one year from the date of the exercise of the option otherwise the special tax treatment can be lost and the Grantee may
have to pay taxes on the disposition of the stock as if the stock were obtained through the exercise of a Non Qualified Stock Option. Incentive Stock Option holders should consult with their tax or
financial advisors when disposing of Incentive Stock Options. 

RAINING DATA CORPORATION

AMENDED 1999 STOCK OPTION PLAN
  STOCK OPTION AGREEMENT  

        1.    Grant of Option.    Raining Data Corporation, a Delaware corporation (the "Company"), hereby grants to the
Grantee (the "Grantee") named in the Notice of Stock Option Award (the "Notice"), an option (the "Option") to purchase the Total Number of Shares of Common Stock subject to the Option (the "Shares")
set forth in the Notice, at the Exercise Price per Share set forth in the Notice (the "Exercise Price") for the term of the Option, subject to the terms and provisions of the Notice, this Stock Option
Award Agreement (the "Option Agreement") and the Company's Amended 1999 Stock Option Plan, as amended from time to time (the "Plan"), which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 

        If
designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by
the Grantee during any calendar year (under all plans of the Company or any parent or subsidiary thereof) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess
of the foregoing limitation, shall be treated as Nonincentive Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the date the Option with respect to such Shares is granted. 

        2.    Certain Definitions.    

        (a)  "Administrator" means the Board of Directors of the Company or the duly appointed committee of the Board having the power
to administer the Plan or options granted under the Plan as shall be specified by the Board and as further provided in the Plan. 

        (b)  "Applicable Laws" means the legal requirements relating to the administration of stock incentive plans, if any, under
applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign
jurisdiction applicable to options granted to residents therein. 

        (c)  "Cause" shall mean (i) gross and willful failure to perform services; (ii) conviction of, or a plea of
"guilty" or no "contest" to, a felony under the laws of the United States or any state thereof, if such felony either is work-related or materially impairs Grantee's ability to perform
services for the Company; (iii) a material breach of fiduciary duty, including fraud, embezzlement, dishonesty or any intentional action that materially injures the Company as determined in
good faith by the Company's Board of Directors; (iv) death; (v) a material breach of the Company's Employment Confidential Information, Invention Assignment, and Arbitration Agreement.
In all of the foregoing cases, the Company shall provide written notice to Grantee indicating in reasonable detail the event or circumstances that constitute Cause under this Option Agreement, and the
Company will provide the Grantee with forty-five days to cure such breach or failure prior to termination for Cause. During such 45-day cure period, the Company may place the
Grantee on an unpaid leave. 

        (d)  "Corporate Transaction" means any of the following transactions: 

        (i)    a
merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the
Company is incorporated; 

        (ii)  the
sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company's subsidiary corporations); 

        (iii)  approval
by the Company's stockholders of any plan or proposal for the complete liquidation or dissolution of the Company; 

        (iv)  any
reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger; or 

        (v)  acquisition
by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities, but
excluding any such transaction that the Administrator determines in its sole discretion shall not be a Corporate Transaction. 

        (e)  "Disability" shall mean, for purpose of the Vesting Schedule, that the Grantee physically or mentally is unable regularly
to perform Grantee's duties for a period in excess of sixty (60) consecutive days or more than ninety (90) days in any consecutive twelve (12) month period. The Company shall make
a good faith determination of whether the Grantee is physically or mentally unable to regularly perform Grantee's duties subject to its review and consideration of any physical and/or mental health
information provided to it by the Grantee. 

        (f)    "Involuntary Termination" shall mean (i) without the Grantee's express written consent, the substantial reduction
in Grantee's duties or responsibilities relative to Grantee's duties or responsibilities in effect immediately prior to such reduction; provided, however, that a reduction in duties or
responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Vice President of Company remains as such following a Corporate Transaction
and is not made the Vice President of the acquiring corporation) shall not constitute an "Involuntary Termination"; (ii) without the Grantee's express written consent, a material reduction by
the Company in Grantee's base compensation as in effect immediately prior to such reduction; (iii) without the Grantee's express written consent, a material reduction by the Company in the kind
or level of employee benefits package; (iv) without the Grantee's express written consent, the relocation of the Grantee to a facility or a location more than 50 miles from Grantee's then
present location; (v) any purported termination of the Grantee by the Company which is not effected for death or Disability or for Cause; or (vi) the failure of the Company to obtain the
assumption of this Option Agreement by any successors. 

        (g)  "Shares" shall have the same meaning as "Option Shares" and "Exercise
Price" shall have the same meaning as "Option Price" under the defined terms of the Plan. 

        (h)  "Service Provider" shall mean an Employee, Director, Consultant or advisor of the Corporate Group. 

        (i)    "Termination Date" shall mean the date on which a Service Provider ceases to be a Service Provider. 

        3.    Exercise of Option.    

        (a)    Right to Exercise.    The Option shall be exercisable during its term in accordance with the Vesting Schedule
set out in the Notice and with the applicable provisions of the Plan and this Option Agreement. The Grantee shall be subject to reasonable limitations on the number of requested exercises during any
monthly or weekly period as determined by the Administrator. In no event shall the Company issue fractional Shares. 

        (b)    Method of Exercise.    The Option shall be exercisable only by delivery of an Exercise Notice (attached as
Exhibit A) which shall state the election to exercise the Option, the whole number of Shares in respect of which the Option is being exercised, such other representations and agreements as to
the
holder's investment intent with respect to such Shares and such other provisions as may be required by the Administrator. The Exercise Notice shall be signed by the 

Grantee and shall be delivered in person, by certified mail, or by such other method as determined from time to time by the Administrator to the Company accompanied by payment of the Exercise Price.
The Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to be satisfied by use
of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 4(d), below. 

        (c)    Taxes.    No Shares will be delivered to the Grantee or other person pursuant to the exercise of the Option
until the Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of applicable income tax, employment tax, and social security tax withholding obligations,
including without limitation obligations incident to the receipt of Shares or the disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of the Option,
the Company or a member of the Corporate Group may offset or withhold (from any amount owed by the Company or a member of the Corporate Group to the Grantee) or collect from the Grantee or other
person an amount sufficient to satisfy such tax obligations and/or the withholding obligations of the Company or member of the Corporate Group. 

        4.    Method of Payment.    Payment of the Exercise Price shall be by any of the following, or a combination thereof,
at the election of the Grantee; provided however that such exercise method does not then violate any Applicable Law and, provided further, that the portion of the Exercise Price equal to the par value
of the Shares must be paid in cash or other legal consideration permitted by the Delaware General Corporation Law: 

        (a)  cash; 

        (b)  check; 

        (c)  surrender
of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require (including withholding of Shares
otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as to which the Option is
being exercised (but only to the extent that such exercise of the Option would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price); or 

        (d)  payment
through a broker-dealer sale and remittance procedure pursuant to which the Grantee (i) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (ii) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction. 

        5.    Restrictions on Exercise.    The Option may not be exercised if the issuance of the Shares subject to the Option
upon such exercise would constitute a violation of any Applicable Laws. In addition, the Option, if an Incentive Stock Option, may not be exercised until such time as the Plan has been approved by the
stockholders of the Company. 

        6.    Termination.    

        (a)  In
the event Grantee ceases to be a Service Provider, other than for death or disability, the Option shall terminate prior to the Expiration Date as set forth in the
Notice and shall be exercisable upon the earlier of (1) the expiration of ninety (90) days from the Termination Date or (2) the Expiration Date of the Option. No additional right
to exercise the Option with respect to any Shares shall vest from and after the Termination Date. 

        (b)  Death. In the event of the death of Optionee during the term of the Option, then the executors or administrators of the
estate of the Grantee or the heirs or devisees of the Grantee (as the case may be) shall have the right to exercise the Option to the extent the Grantee was entitled to do so at the time of his or her
death; provided however that the Option shall terminate and 

cease to be exercisable upon the earlier of (1) the expiration of one (1) year from the date of the death of the Grantee or (2) the Expiration Date of the Option. No additional
right to exercise the Option with respect to any Shares shall vest from and after the date of the death of the Grantee. 

        (c)  Disability. In the event of the permanent and total disability of Optionee during the term of the Option, then Optionee
shall have the right to exercise the Option to the extent Optionee was entitled to do so at the time of the termination of his or her relationship with the Company by reason of such disability;
provided however that the Option shall terminate and cease to be exercisable upon the earlier of (1) the expiration of one (1) year from the Termination Date or (2) the Expiration
Date of the Option. No additional right to exercise the Option with respect to any Shares shall vest from and after the Termination Date. 

        (d)  Corporate Group. For purposes of this Section 6, all references to the Company shall be deemed to include such
member of the Corporate Group. 

        7.    Termination on Corporate Transaction; Assumption.    In the event of a Corporate Transaction, each outstanding
Option Share shall be assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation or
entity in a Corporate Transaction refuses to assume or substitute for the Option Share, then the Grantee shall fully vest in and have the right to exercise the Option as to all of the Option Shares,
including Option Shares as to which it would not otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Corporate
Transaction, the Administrator shall notify the Grantee in writing or electronically that the Option shall be fully exercisable for a period of thirty (30) days from the date of such notice,
and the Option shall terminate upon expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the Corporate Transaction, the option confers
the right to purchase or receive, for each Share subject to the Option immediately prior to the Corporate Transaction, the consideration (whether stock, cash, or other securities or property) received
in the Corporate Transaction by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares). 

        8.    Transferability of Option.    The Option, if an Incentive Stock Option, may not be transferred in any manner
other than by will or by the laws of descent and distribution and may be exercised during the lifetime of the Grantee only by the Grantee; provided however that the Grantee may designate a beneficiary
of the Grantee's Incentive Stock Option in the event of the Grantee's death on a beneficiary designation form provided by the Administrator. The Option, if a Nonincentive Stock Option may be
transferred to any person by will and by the laws of descent and distribution. Nonincentive Stock Options also may be transferred during the lifetime of the Grantee to certain members of the immediate
family of the Grantee as provided in Section 6(e) of the Plan. The terms of the Option shall be binding upon the executors, administrators, heirs, devisees, successors and transferees of the
Grantee. 

        9.    Term of Option.    The Option may be exercised no later than the Expiration Date set forth in the Notice or such
earlier date as otherwise provided herein (the "term" of the Option). 

        10.    Tax Consequences.    Set forth below is a brief summary as of the date of this Option Agreement of some of the
federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 

        (a)    Exercise of Incentive Stock Option.    If the Option qualifies as an Incentive Stock Option, there will be no
regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be
treated as income for purposes of the alternative minimum tax for federal tax purposes and may subject the Grantee to the alternative minimum tax in the year of exercise. 

        (b)    Exercise of Incentive Stock Option Following Disability.    If the Grantee's Continuous Service terminates as a
result of Disability that is not total and permanent disability as defined in Section 22(e)(3) of the Code, to the extent permitted on the date of termination, the Grantee must exercise an
Incentive Stock Option within three (3) months of such termination for the Incentive Stock Option to be qualified as an Incentive Stock Option. 

        (c)    Exercise of Nonincentive Stock Option    On exercise of a Nonincentive Stock Option, the Grantee will be
treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price. If the Grantee is an Employee or a former employee, the Company will be required to withhold from the Grantee's compensation or collect from the Grantee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise. 

        (d)    Disposition of Shares.    In the case of a Nonincentive Stock Option, if Shares are held for more than one
year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes and subject to tax at a maximum rate of 20 percent. In
the case of an Incentive Stock Option, if Shares transferred pursuant to the Option are held for more than one year after receipt of the Shares and are disposed more than two years after the Grant
Date, any gain realized on disposition of the Shares also will be treated as capital gain for federal income tax purposes and subject to the same tax rates and holding periods that apply to Shares
acquired upon exercise of a Nonincentive Stock Option. If Shares purchased under an Incentive Stock Option are disposed of prior to the expiration of such one-year or two-year
periods, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of
(i) the Fair Market Value of the Shares on the date of exercise, or (ii) the sale price of the Shares. 

        11.    Entire Agreement: Governing Law.    The Notice, the Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject
matter hereof, and may not be modified adversely to the Grantee's interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan and this Option Agreement
(except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this Option Agreement are to be construed in
accordance with and governed by the internal laws of the State of California, United States of America (as permitted by Section 1646.5 of the California Civil Code, or any similar successor
provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and
duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the
fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. 

        12.    Headings.    The captions used in the Notice and this Option Agreement are inserted for convenience and shall
not be deemed a part of the Option for construction or interpretation. 

        13.    Dispute Resolution.    The provisions of this Section 13 shall be the exclusive means of resolving
disputes arising out of or relating to the Notice, the Plan and this Option Agreement. The Company, the Grantee, and the Grantee's assignees pursuant to Section 8 hereof (the "parties") shall
attempt in good faith to resolve any disputes arising out of or relating to the Notice, the Plan and this Option Agreement by negotiation between individuals who have authority to settle the
controversy. Negotiations shall be commenced by either party by notice of a written statement of the party's position and the name and title of the individual who will represent the party. Within
thirty (30) days of the written notification, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute.
If the dispute has not been resolved by negotiation, the parties agree that any suit, action, or proceeding arising out of or 

relating to the Notice, the Plan or this Option Agreement shall be brought in the United States District Court for the Central District of California (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a California state court in the County of Orange, California) and that the parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to
the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 13 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable. 

        14.    Notices.    All notices, requests, demands and other communications required or permitted to be given pursuant
to this Option Agreement (collectively "notices") shall be in writing and shall be delivered (i) by personal delivery, (ii) by nationally recognized overnight air courier service or
(iii) by deposit in the United States Mail, postage prepaid, registered or certified mail, return receipt requested. A notice shall be deemed to have been given on the date delivered, if
delivered personally or by overnight air courier service; or five (5) days after mailing if mailed. All notices shall be addressed if to the Company at its principal place of business in the
State of California, United States of America, to the attention of the Secretary or Chief Financial Officer of the Company; and if to the Optionee or his or her representative at the last address of
Optionee shown on the records of the Company. Either party may by written notice to the other party specify a different address to which notices shall be given, by sending notice thereof to the other
party in the foregoing manner. 

        IN
WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option
Agreement. 

	 	 	RAINING DATA CORPORATION,

a Delaware corporation
	

 	
 	

By:	

/s/  CARLTON H. BAAB      
 Title: President and CEO

        THE
GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S SERVICE (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE COMPANY TO TERMINATE GRANTEE'S SERVICE, WITH OR
WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN AGREEMENT WITH THE COMPANY TO THE CONTRARY, GRANTEE'S STATUS IS AT WILL. 

        The
Grantee acknowledges receipt of a copy of the Plan and the Stock Option Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
the Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the 

Plan and the Option Agreement. The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Notice. 

	Dated: 12/20/02	 	Signed:	/s/  BRIAN C. BEZDEK      
 Grantee

 
 

EXHIBIT A
  
    RAINING DATA CORPORATION
  AMENDED 1999 STOCK OPTION PLAN
  
    EXERCISE NOTICE    
  

Raining
Data Corporation

17500 Cartwright Road

Irvine, California 32614-5846 

Attention:
Secretary 

        1.    Exercise of Option.    Effective as of today,
                        ,
                         the undersigned (the "Grantee") hereby elects to exercise the Grantee's option to purchase
                         shares of the
Common Stock (the "Shares") of Raining Data Corporation (the "Company") under and pursuant to the Company's Amended 1999 Stock Option Plan, as amended from time to time (the "Plan") and the
[    ] Incentive [    ] Nonincentive Stock Option Award Agreement (the "Option Agreement") and Notice of Stock Option Award (the
"Notice") dated                         , 20    . Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined
meanings in this Exercise Notice. 

        2.    Representations of the Grantee.    The Grantee acknowledges that the Grantee has received, read and understood
the Notice, the Plan, and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 

        3.    Rights as Stockholder.    Until the stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 5(b) of the Plan. 

        4.    Delivery of Payment.    The Grantee herewith delivers to the Company the full Exercise Price for the Shares,
which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 4(d) of the Option
Agreement. 

        5.    Tax Consultation.    The Grantee understands that the Grantee may suffer adverse tax consequences as a result of
the Grantee's purchase or disposition of the Shares. The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for any tax advice 

        6.    Taxes.    The Grantee agrees to satisfy all applicable federal, state and local income and employment tax
withholding obligations and herewith delivers to the Company the full amount of such obligations or has made arrangements acceptable to the Company to satisfy such obligations. In the case of an
Incentive Stock Option, the Grantee also agrees, as partial consideration for the designation of the Option as an Incentive Stock Option, to notify the Company in writing within thirty
(30) days of any disposition of any shares acquired by exercise of the Option if such disposition occurs within two (2) years from the Grant Date or within one (1) year from the
date the Shares were transferred to the Grantee. If the Company is required to satisfy any federal, state or local income or employment tax withholding obligations as a result of such an early
disposition, the Grantee agrees to satisfy the amount of such withholding in a manner that the Administrator prescribes. 

        7.    Successors and Assigns.    The Company may assign any of its rights under this Exercise Notice to single or
multiple assignees, and this agreement shall inure to the benefit of the successors and 

assigns of the Company. This Exercise Notice shall be binding upon the Grantee and his or her heirs, executors, administrators, successors and assigns. 

        8.    Headings.    The captions used in this Exercise Notice are inserted for convenience and shall not be deemed a
part of this agreement for construction or interpretation. 

        9.    Dispute Resolution.    The provisions of Section 13 of the Option Agreement shall be the exclusive means
of resolving disputes arising out of or relating to this Exercise Notice. 

        10.    Governing Law; Severability.    This Exercise Notice is to be construed in accordance with and governed by the
internal laws of the State of California, United States of America (as permitted by Section 1646.5 of the California Civil Code, or any similar successor provision) without giving effect to any
choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Should any
provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced
to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. 

        11.    Notices.    All notices, requests, demands and other communications required or permitted to be given hereunder
(collectively "notices") shall be in writing and shall be delivered (i) by personal delivery, (ii) by nationally recognized overnight air courier service or (iii) by deposit in
the United States Mail, postage prepaid, registered or certified mail, return receipt requested. A notice shall be deemed to have been given on the date delivered, if delivered personally or by
overnight air courier service; or five (5) days after mailing if mailed. All notices shall be addressed if to the Company at its principal place of business in the State of California, United
States of America, to the attention of the Secretary or Chief Financial Officer of the Company; and if to the Optionee or his or her representative at the last address of Optionee shown on the records
of the Company. Either party may by written notice to the other party specify a different address to which notices shall be given, by sending notice thereof to the other party in the foregoing manner. 

        12.    Further Instruments.    The parties agree to execute such further instruments and to take such further action
as may be reasonably necessary to carry out the purposes and intent of this agreement. 

        13.    Entire Agreement.    The Notice, the Plan, and the Option Agreement are incorporated herein by reference, and
together with this Exercise Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the
Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee's interest except by means of a writing signed by the Company and the Grantee.
Nothing in the Notice, the Plan, the Option Agreement and this Exercise Notice (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the
parties. 

	Submitted by:	 	Accepted by:
	

GRANTEE:	
 	

RAINING DATA CORPORATION
	

 	
 	

 	
 	

By:	

 
	 	 	 	 	 	

	 	 	 	 	Title:	 
	
	 	 	

	(Signature)	 	 	 
	
Address:	
 	

Address:
	

    
	
 	

17500 Cartwright Road

Irvine, California 92614-5846

 
 

RAINING DATA CORPORATION
  AMENDED 1999 STOCK OPTION PLAN
  STOCK OPTION AGREEMENT    
  

 
  NOTICE OF STOCK OPTION GRANT    
  

	Grantee's Name and Address:	 	Brian C. Bezdek

c/o Raining Data Corporation

17500 Cartwright Road

Irvine, CA 92614

        You
have been granted an option to purchase shares of Common Stock of Raining Data Corporation subject to the terms and conditions of the Stock Option Agreement ("Option Agreement") and
the Raining Data Corporation Amended 1999 Stock Option Plan, as amended from time to time (the "Plan") as follows: 

	Grant Date of Option	 	December 20, 2002
	Vesting Commencement Date	 	December 20, 2002
	Exercise Price per Share	 	$2.01
	Total Number of Shares Granted	 	18,750
	Total Exercise Price	 	$37,687.50
	Type of Option:	 	Non-incentive Stock Option
	Term/Expiration Date:	 	Ten Years from the Date of Grant

Vesting Schedule:  

        Subject to the Grantee being a Service Provider on the following dates and other limitations set forth in the Plan and the Option Agreement, the Option may be
exercised, in whole or in part, in accordance with the following schedule: 

        (f)    Grantee
shall have no right to exercise any part of the Option at any time prior to the expiration of the one (1) year from the Vesting Commencement Date; 

        (g)  The
Option shall become exercisable with respect to Twenty-Five Percent (25%) of the Shares upon the expiration of one (1) year from the Vesting
Commencement Date; and 

        (h)  The
Option thereafter shall become exercisable with respect to an additional One Forty-Eighth (1/48th) of the Option on each monthly anniversary of the Vesting
Commencement Date; 

        (i)    Notwithstanding
the foregoing subsections (a), (b) and (c) and Section 6(a) of the Option Agreement, 100% of the Shares subject to the Option shall
immediately vest in the event that the Grantee is terminated as a result of an Involuntary Termination other than for Cause, death or Disability (each as defined in the Option Agreement) within twelve
(12) months after a Corporate Transaction (as defined in the Option Agreement); provided that the Grantee signs a general release in a commercially customary form prescribed by the Company,
which releases and discharges all known and unknown claims that the Grantee may have against the Company or persons and entities affiliated with the
Company, and a covenant not to sue or prosecute any legal action or proceeding based upon such claims; and 

        (j)    In
the event that the severance and other benefits provided for in this Option Agreement or otherwise payable to the Grantee (i) constitute "parachute payments"
within the meaning of Section 280G of the Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then Grantee's benefits under
this Option Agreement shall be either delivered in full, or delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Grantee on an after-tax basis, of the greatest
amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company and the Grantee otherwise agree in writing, any
determination required under this subsection shall be 

made in writing by the Company's independent public accountants (the "Accountants"), whose determination shall be conclusive and binding upon the Grantee and the Company for all purposes. For
purposes of making the calculations required by this subsection, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Section 280G and 4999 of the Code. The Company and the Grantee shall furnish to the Accountants such information and documents as the Accountants
may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by
this Section. 

Termination Period:  

        This Option may be exercised for a period of time following the Grantee ceasing to be a Service Provider as provided for in this Option Agreement. 

 
 

RAINING DATA CORPORATION
  AMENDED 1999 STOCK OPTION PLAN
  STOCK OPTION AGREEMENT    
  

        14.    Grant of Option.    Raining Data Corporation, a Delaware corporation (the "Company"), hereby grants to the
Grantee (the "Grantee") named in the Notice of Stock Option Award (the "Notice"), an option (the "Option") to purchase the Total Number of Shares of Common Stock subject to the Option (the "Shares")
set forth in the Notice, at the Exercise Price per Share set forth in the Notice (the "Exercise Price") for the term of the Option, subject to the terms and provisions of the Notice, this Stock Option
Award Agreement (the "Option Agreement") and the Company's Amended 1999 Stock Option Plan, as amended from time to time (the "Plan"), which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 

        15.    Certain Definitions.    

        (j)    "Administrator" means the Board of Directors of the Company or the duly appointed committee of the Board having the power
to administer the Plan or options granted under the Plan as shall be specified by the Board and as further provided in the Plan. 

        (k)  "Applicable Laws" means the legal requirements relating to the administration of stock incentive plans, if any, under
applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign
jurisdiction applicable to options granted to residents therein. 

        (l)    "Cause" shall mean (i) gross and willful failure to perform services; (ii) conviction of, or a plea of
"guilty" or no "contest" to, a felony under the laws of the United States or any state thereof, if such felony either is work-related or materially impairs Grantee's ability to perform
services for the Company; (iii) a material breach of fiduciary duty, including fraud, embezzlement, dishonesty or any intentional action that materially injures the Company as determined in
good faith by the Company's Board of Directors; (iv) death; (v) a material breach of the Company's Employment Confidential Information, Invention Assignment, and Arbitration Agreement.
In all of the foregoing cases, the Company shall provide written notice to Grantee indicating in reasonable detail the event or circumstances that constitute Cause under this Option Agreement, and the
Company will provide the Grantee with forty-five days to cure such breach or failure prior to termination for Cause. During such 45-day cure period, the Company may place the
Grantee on an unpaid leave. 

        (m)  "Corporate Transaction" means any of the following transactions: 

        (i)    a
merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the
Company is incorporated; 

        (ii)  the
sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company's subsidiary corporations); 

        (iii)  approval
by the Company's stockholders of any plan or proposal for the complete liquidation or dissolution of the Company; 

        (iv)  any
reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger; or 

        (v)  acquisition
by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities, but
excluding any such transaction that the Administrator determines in its sole discretion shall not be a Corporate Transaction. 

        (n)  "Disability" shall mean, for purpose of the Vesting Schedule, that the Grantee physically or mentally is unable regularly
to perform Grantee's duties for a period in excess of sixty (60) consecutive days or more than ninety (90) days in any consecutive twelve (12) month period. The Company shall make
a good faith determination of whether the Grantee is physically or mentally unable to regularly perform Grantee's duties subject to its review and consideration of any physical and/or mental health
information provided to it by the Grantee. 

        (o)  "Involuntary Termination" shall mean (i) without the Grantee's express written consent, the substantial reduction
in Grantee's duties or responsibilities relative to Grantee's duties or responsibilities in effect immediately prior to such reduction; provided, however, that a reduction in duties or
responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Vice President of Company remains as such following a Corporate Transaction
and is not made the Vice President of the acquiring corporation) shall not constitute an "Involuntary Termination"; (ii) without the Grantee's express written consent, a material reduction by
the Company in Grantee's base compensation as in effect immediately prior to such reduction; (iii) without the Grantee's express written consent, a material reduction by the Company in the kind
or level of employee benefits package; (iv) without the Grantee's express written consent, the relocation of the Grantee to a facility or a location more than 50 miles from Grantee's then
present location; (v) any purported termination of the Grantee by the Company which is not effected for death or Disability or for Cause; or (vi) the failure of the Company to obtain the
assumption of this Option Agreement by any successors. 

        (p)  "Shares" shall have the same meaning as "Option Shares" and "Exercise
Price" shall have the same meaning as "Option Price" under the defined terms of the Plan. 

        (q)  "Service Provider" shall mean an employee, director, consultant or advisor of the Corporate Group. 

        (r)  "Termination Date" shall mean the date on which a Service Provider ceases to be a Service Provider. 

        16.    Exercise of Option.    

        (a)    Right to Exercise.    The Option shall be exercisable during its term in accordance with the Vesting Schedule
set out in the Notice and with the applicable provisions of the Plan and this Option Agreement. The Grantee shall be subject to reasonable limitations on the number of 

requested exercises during any monthly or weekly period as determined by the Administrator. In no event shall the Company issue fractional Shares. 

        (b)    Method of Exercise.    The Option shall be exercisable only by delivery of an Exercise Notice (attached as
Exhibit A) which shall state the election to exercise the Option, the whole number of Shares in respect of which the Option is being exercised, such other representations and agreements as to
the holder's investment intent with respect to such Shares and such other provisions as may be required by the Administrator. The Exercise Notice shall be signed by the Grantee and shall be delivered
in person, by certified mail, or by such other method as determined from time to time by the Administrator to the Company accompanied by payment of the Exercise Price. The Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and
remittance procedure to pay the Exercise Price provided in Section 4(d), below. 

        (c)    Taxes.    No Shares will be delivered to the Grantee or other person pursuant to the exercise of the Option
until the Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of applicable income tax, employment tax, and social security tax withholding obligations,
including without limitation obligations incident to the receipt of Shares. Upon exercise of the Option, the Company or a member of the Corporate Group may offset or withhold (from any amount owed by
the Company or a member of the Corporate Group to the Grantee) or collect from the Grantee or other person an amount sufficient to satisfy such tax obligations and/or the withholding obligations of
the Company or member of the Corporate Group. 

        17.    Method of Payment.    Payment of the Exercise Price shall be by any of the following, or a combination thereof,
at the election of the Grantee; provided however that such exercise method does not then violate any Applicable Law and, provided further, that the portion of the Exercise Price equal to the par value
of the Shares must be paid in cash or other legal consideration permitted by the Delaware General Corporation Law: 

        (a)  cash;

        (b)  check;

        (c)  surrender
of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require (including withholding of Shares
otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as to which the Option is
being exercised (but only to the extent that such exercise of the Option would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price); or 

        (d)  payment
through a broker-dealer sale and remittance procedure pursuant to which the Grantee (i) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (ii) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such
brokerage firm in order to complete the sale transaction. 

        18.    Restrictions on Exercise.    The Option may not be exercised if the issuance of the Shares subject to the
Option upon such exercise would constitute a violation of any Applicable Laws. 

        19.    Termination.    

        (a)  In
the event Grantee ceases to be a Service Provider, other than for death or disability, the Option shall terminate prior to the Expiration Date as set forth in the
Notice and shall be exercisable upon the earlier of (1) the expiration of ninety (90) days from the Termination Date or 

(2) the Expiration Date of the Option. No additional right to exercise the Option with respect to any Shares shall vest from and after the Termination Date. 

        (b)    Death.    In the event of the death of Optionee during the term of the Option, then the executors or
administrators of the estate of the Grantee or the heirs or devisees of the Grantee (as the case may be) shall have the right to exercise the Option to the extent the Grantee was entitled to do so at
the time of his or her death; provided however that the Option shall terminate and cease to be exercisable upon the earlier of (1) the expiration of one (1) year from the date of the
death of the Grantee or (2) the Expiration Date of the Option. No additional right to exercise the Option with respect to any Shares shall vest from and after the date of the death of the
Grantee. 

        (c)    Disability.    In the event of the permanent and total disability of Optionee during the term of the Option,
then Optionee shall have the right to exercise the Option to the extent Optionee was entitled to do so at the time of the termination of his or her relationship with the Company by reason of such
disability; provided however that the Option shall terminate and cease to be exercisable upon the earlier of (1) the expiration of one (1) year from the Termination Date or
(2) the Expiration Date of the Option. No additional right to exercise the Option with respect to any Shares shall vest from and after the Termination Date. 

        (d)    Corporate Group.    For purposes of this Section 6, all references to the Company shall be deemed to
include such member of the Corporate Group. 

        20.    Termination on Corporate Transaction; Assumption.    In the event of a Corporate Transaction, each outstanding
Option Share shall be assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation or
entity in a Corporate Transaction refuses to assume or substitute for the Option Share, then the Grantee shall fully vest in and have the right to exercise the Option as to all of the Option Shares,
including Option Shares as to which it would not otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Corporate
Transaction, the Administrator shall notify the Grantee in writing or electronically that the Option shall be fully exercisable for a period of thirty (30) days from the date of such notice,
and the Option shall terminate upon expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the Corporate Transaction, the option confers
the right to purchase or receive, for each Share subject to the Option immediately prior to the Corporate Transaction, the consideration (whether stock, cash, or other securities or property) received
in the Corporate Transaction by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares). 

        21.    Transferability of Option.    The Option may be transferred to any person by will and by the laws of descent
and distribution. The Option also may be transferred during the lifetime of the Grantee to certain members of the immediate family of the Grantee as provided in Section 6(e) of the Plan. The
terms of the Option shall be binding upon the executors, administrators, heirs, devisees, successors and transferees of the Grantee. 

        22.    Term of Option.    The Option may be exercised no later than the Expiration Date set forth in the Notice or
such earlier date as otherwise provided herein (the "term" of the Option). 

        23.    Tax Consequences.    Set forth below is a brief summary as of the date of this Option Agreement of some of the
federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 

        (a)    Option Exercise.    On exercise of the Option, the Grantee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Grantee is an employee or a
former employee, the Company will be required to withhold from the 

Grantee's compensation or collect from the Grantee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may
refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 

        (b)    Disposition of Shares.    If Shares are held for more than one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal income tax purposes and subject to tax at a maximum rate of 20 percent. 

        24.    Entire Agreement: Governing Law.    The Notice, the Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject
matter hereof, and may not be modified adversely to the Grantee's interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan and this Option Agreement
(except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this Option Agreement are to be construed in
accordance with and governed by the internal laws of the State of California, United States of America (as permitted by Section 1646.5 of the California Civil Code, or any similar successor
provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and
duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the
fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. 

        25.    Headings.    The captions used in the Notice and this Option Agreement are inserted for convenience and shall
not be deemed a part of the Option for construction or interpretation. 

        26.    Dispute Resolution.    The provisions of this Section 13 shall be the exclusive means of resolving
disputes arising out of or relating to the Notice, the Plan and this Option Agreement. The Company, the Grantee, and the Grantee's assignees pursuant to Section 8 hereof (the "parties") shall
attempt in good faith to resolve any disputes arising out of or relating to the Notice, the Plan and this Option Agreement by negotiation between individuals who have authority to settle the
controversy. Negotiations shall be commenced by either party by notice of a written statement of the party's position and the name and title of the individual who will represent the party. Within
thirty (30) days of the written notification, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute.
If the dispute has not been resolved by negotiation, the parties agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan or this Option Agreement shall be brought
in the United States District Court for the
Central District of California (or should such court lack jurisdiction to hear such action, suit or proceeding, in a California state court in the County of Orange, California) and that the parties
shall submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action
or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this
Section 13 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or
its application valid and enforceable. 

        27.    Notices.    All notices, requests, demands and other communications required or permitted to be given pursuant
to this Option Agreement (collectively "notices") shall be in writing and shall be delivered (i) by personal delivery, (ii) by nationally recognized overnight air courier service or
(iii) by deposit in the United States Mail, postage prepaid, registered or certified mail, return receipt requested. A notice shall be deemed to have been given on the date delivered, if
delivered personally or by overnight air courier service; or five (5) days after mailing if mailed. All notices shall be addressed if to the Company at its principal place of business in the
State of California, United States of America, to the attention of the Secretary or Chief Financial Officer of the Company; and if to the 

Optionee or his or her representative at the last address of Optionee shown on the records of the Company. Either party may by written notice to the other party specify a different address to which
notices shall be given, by sending notice thereof to the other party in the foregoing manner. 

        IN
WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option
Agreement. 

	 	 	RAINING DATA CORPORATION,

a Delaware corporation
	

 	
 	

By:	

/s/  CARLTON H. BAAB      
 Title: President and CEO

        THE
GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S SERVICE (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THE OPTION
OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO
FUTURE AWARDS OR CONTINUATION OF GRANTEE'S SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE COMPANY TO TERMINATE GRANTEE'S SERVICE, WITH OR WITHOUT CAUSE, AND
WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN AGREEMENT WITH THE COMPANY TO THE CONTRARY, GRANTEE'S STATUS IS AT WILL. 

        The
Grantee acknowledges receipt of a copy of the Plan and the Stock Option Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts
the Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan and the Option Agreement. The Grantee further agrees to notify the Company upon any
change in the residence address indicated in this Notice. 

	Dated: 12/20/02	 	Signed:	/s/  BRIAN C. BEZDEK      
 Grantee

 
 

EXHIBIT A
  
    RAINING DATA CORPORATION
  AMENDED 1999 STOCK OPTION PLAN
  
    EXERCISE NOTICE    
  

Raining
Data Corporation

17500 Cartwright Road

Irvine, California 32614-5846 

Attention:
Secretary 

        28.    Exercise of Option.    Effective as of today,
                        ,
                         the undersigned (the "Grantee") hereby elects to exercise the Grantee's option to purchase
                         shares of the
Common Stock (the "Shares") of Raining Data Corporation (the "Company") under and pursuant to the Company's Amended 1999 Stock Option Plan, as amended from time to time (the "Plan") and the
[    ] Incentive [    ] Nonincentive Stock Option Award Agreement (the "Option Agreement") and Notice of Stock Option Award (the
"Notice") dated                         , 20    . Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined
meanings in this Exercise Notice. 

        29.    Representations of the Grantee.    The Grantee acknowledges that the Grantee has received, read and understood
the Notice, the Plan, and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 

        30.    Rights as Stockholder.    Until the stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 5(b) of the Plan. 

        31.    Delivery of Payment.    The Grantee herewith delivers to the Company the full Exercise Price for the Shares,
which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 4(d) of the Option
Agreement. 

        32.    Tax Consultation.    The Grantee understands that the Grantee may suffer adverse tax consequences as a result
of the Grantee's purchase or disposition of the Shares. The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for any tax advice 

        33.    Taxes.    The Grantee agrees to satisfy all applicable federal, state and local income and employment tax
withholding obligations and herewith delivers to the Company the full amount of such obligations or has made arrangements acceptable to the Company to satisfy such obligations. In the case of an
Incentive Stock Option, the Grantee also agrees, as partial consideration for the designation of the
Option as an Incentive Stock Option, to notify the Company in writing within thirty (30) days of any disposition of any shares acquired by exercise of the Option if such disposition occurs
within two (2) years from the Grant Date or within one (1) year from the date the Shares were transferred to the Grantee. If the Company is required to satisfy any federal, state or
local income or employment tax withholding obligations as a result of such an early disposition, the Grantee agrees to satisfy the amount of such withholding in a manner that the Administrator
prescribes. 

        34.    Successors and Assigns.    The Company may assign any of its rights under this Exercise Notice to single or
multiple assignees, and this agreement shall inure to the benefit of the successors and 

assigns of the Company. This Exercise Notice shall be binding upon the Grantee and his or her heirs, executors, administrators, successors and assigns. 

        35.    Headings.    The captions used in this Exercise Notice are inserted for convenience and shall not be deemed a
part of this agreement for construction or interpretation. 

        36.    Dispute Resolution.    The provisions of Section 13 of the Option Agreement shall be the exclusive means
of resolving disputes arising out of or relating to this Exercise Notice. 

        37.    Governing Law; Severability.    This Exercise Notice is to be construed in accordance with and governed by the
internal laws of the State of California, United States of America (as permitted by Section 1646.5 of the California Civil Code, or any similar successor provision) without giving effect to any
choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Should any
provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall
nevertheless remain effective and shall remain enforceable. 

        38.    Notices.    All notices, requests, demands and other communications required or permitted to be given hereunder
(collectively "notices") shall be in writing and shall be delivered (i) by personal delivery, (ii) by nationally recognized overnight air courier service or (iii) by deposit in
the United States Mail, postage prepaid, registered or certified mail, return receipt requested. A notice shall be deemed to have been given on the date delivered, if delivered personally or by
overnight air courier service; or five (5) days after mailing if mailed. All notices shall be addressed if to the Company at its principal place of business in the State of California, United
States of America, to the attention of the Secretary or Chief Financial Officer of the Company; and if to the Optionee or his or her representative at the last address of Optionee shown on the records
of the Company. Either party may by written notice to the other party specify a different address to which notices shall be given, by sending notice thereof to the other party in the foregoing manner. 

        39.    Further Instruments.    The parties agree to execute such further instruments and to take such further action
as may be reasonably necessary to carry out the purposes and intent of this agreement. 

        40.    Entire Agreement.    The Notice, the Plan, and the Option Agreement are incorporated herein by reference, and
together with this Exercise Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the
Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee's interest except by means of a writing signed by the Company and the Grantee.
Nothing in the Notice, the Plan, the Option Agreement and this Exercise Notice (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the
parties. 

	Submitted by:	 	Accepted by:
	

GRANTEE:	
 	

RAINING DATA CORPORATION
	

 	
 	

 	
 	

By:	

 
	 	 	 	 	 	

	 	 	 	 	Title:	 
	
	 	 	

	(Signature)	 	 	 
	
Address:	
 	

Address:
	

    
	
 	

17500 Cartwright Road

Irvine, California 92614-5846

QuickLinks

Exhibit 10.1

RAINING DATA CORPORATION AMENDED 1999 STOCK OPTION PLAN STOCK OPTION AGREEMENT

NOTICE OF STOCK OPTION GRANT

EXHIBIT A RAINING DATA CORPORATION AMENDED 1999 STOCK OPTION PLAN EXERCISE NOTICE

RAINING DATA CORPORATION AMENDED 1999 STOCK OPTION PLAN STOCK OPTION AGREEMENT

NOTICE OF STOCK OPTION GRANT

RAINING DATA CORPORATION AMENDED 1999 STOCK OPTION PLAN STOCK OPTION AGREEMENT

EXHIBIT A RAINING DATA CORPORATION AMENDED 1999 STOCK OPTION PLAN EXERCISE NOTICEQuickLinks
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Exhibit 4.2    
  

 
 

COMMON STOCK PURCHASE WARRANT    
  

        THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH
REGISTRATION, PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY OF SUCH
EXEMPTION.

Dated:
January 15, 2003 

 
 

AXONYX INC.    
    
    WARRANT TO PURCHASE 200,000 SHARES OF COMMON STOCK    
  

        THIS CERTIFIES THAT, for value received, AFO Advisors, LLC (the "Holder") is entitled to subscribe for and purchase 200,000 shares (as adjusted pursuant to
Section 4 hereof) of the fully paid and nonassessable Common Stock, par value $0.001 per share (the "Shares"), of Axonyx Inc., a Nevada corporation (the "Company"), at the price of $1.00
per share (the "Exercise Price") (as adjusted pursuant to Section 4 hereof), upon the terms and subject to the conditions hereinafter set forth. 

        1.    Method of Exercise; Payment.

        (a)  Cash Exercise.    The purchase rights represented by this Warrant may be exercised by the Holder, in whole or
in part, at any time or from time to time, by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A duly executed) at the principal office of the Company,
and by the payment to the Company, by certified, cashier's or other check acceptable to the Company, of an amount equal to the aggregate Exercise Price of the shares being purchased. 

        (b)  Net Issue Exercise.

        (i)    In
lieu of exercising this Warrant, the Holder may elect to receive, without the payment by the Holder of any additional consideration, shares equal to the value of this
Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to
the Holder a number of shares of the Company's Common Stock computed using the following formula: 

	 
	 	 
	 	 
	 	 
	 	 

	 	 	X	 	=	 	Y(A–B)
 A	 	 

28

 

Where:

	 
	 
	 	 
	 	 

	 	X	 	=	 	the number of shares of Common Stock to be issued to the Holder.
	

 	

Y	
 	

=	
 	

the number of shares of Common Stock purchasable under this Warrant, or if only a portion of this Warrant is being exercised, the number of shares of Common Stock represented by the portion of the Warrant being exercised.
	

 	

A	
 	

=	
 	

the fair market value of one share of the Company's Common Stock at the time the net issue exercise election is made.
	

 	

B	
 	

=	
 	

the Exercise Price (as adjusted to the date of such calculation).

        (c)  Fair Market Value.    For purposes of this Section 1, the fair market value of the Company's Common
Stock shall mean: 

        (i)    if
the Company's Common Stock is traded on a securities exchange, the average of the closing price each day over the thirty consecutive day period ending three days
before the date on which the fair market value of the securities is being determined; 

        (ii)  if
the Company's Common Stock is actively traded over-the counter, the average of the closing bid and asked prices quoted on the NASDAQ system (or similar
system) each day over the thirty consecutive day period ending three days before the date on which the fair market value of the securities is being determined; or 

        (iii)  if
at any time the Company's Common Stock is not listed on any securities exchange or quoted in the NASDAQ System or the over-the-counter
market, then as determined by the board of directors of the Company in good faith. 

        (d)  Stock Certificates.    This Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as the holder of
record of such Shares as of the close of business on such date. As soon as practicable, but in any event no later than five days after such date, the Company shall issue and deliver to the person or
persons
entitled to receive the same a certificate or certificates for the number of whole Shares issuable upon such exercise. Unless this Warrant has been fully exercised or has expired, a new Warrant
representing the Shares with respect to which this Warrant shall not have been exercised shall also be issued to the Holder within such time. 

        2.    Stock Fully Paid; Reservation of Shares.    All of the Shares issuable upon the exercise of the rights
represented by this Warrant will, upon issuance and receipt of the Exercise Price therefor, be fully paid and nonassessable, and free from all preemptive rights, taxes, liens and charges with respect
to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company shall at all times have authorized and reserved for issuance upon exercise of
the rights evidenced by this Warrant, sufficient shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 

        3.    Adjustment of Exercise Price and Number of Shares.    Subject to the provisions of Section 13 hereof, the
number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price therefor shall be subject to adjustment from time to time upon the occurrence of certain events, as
follows: 

        (a)  Reclassification, Consolidation or Merger.    In case of any reclassification or change of the Common Stock
(other than a change in par value, or as a result of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation (other than a merger with
another corporation in which the Company is a continuing corporation and 

29

 

which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the
Company, the Company or such successor or purchasing corporation, as the case may be, shall execute a new Warrant, providing that the holder of this Warrant shall have the right to exercise such new
Warrant, and procure upon such exercise and payment of the same aggregate Exercise Price, in lieu of the shares of Common Stock theretofore issuable upon exercise of this Warrant, the kind and amount
of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, sale of all or substantially all of the Company's assets or merger by a holder of
an equivalent number of shares of Common Stock. Such new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this
Section 4. The provisions of this Section 4(a), subject to Section 13 hereof, shall similarly apply to successive reclassifications, changes, consolidations, mergers, transfers
and the sale of all or substantially all of the Company's assets. 

        (b)  Stock Splits, Dividends and Combinations.    In the event that the Company shall at any time subdivide the
outstanding shares of Common Stock or shall issue a stock dividend on its outstanding shares of Common Stock the number of Shares issuable upon exercise of this Warrant immediately prior to such
subdivision or to the issuance of such stock dividend shall be proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the Company shall at any time
combine the outstanding shares of Common Stock the number of Shares issuable upon exercise of this Warrant immediately prior to such combination shall be proportionately decreased, and the Exercise
Price shall be proportionately increased, effective at the close of business on the date of such subdivision, stock dividend or combination, as the case may be. 

        4.    Notice of Adjustments.    Whenever the number of Shares purchasable hereunder or the Exercise Price thereof
shall be adjusted pursuant to Section 4 hereof, the Company shall provide notice by first class mail to the holder of this Warrant setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the number of Shares which may be purchased and the Exercise Price therefor after giving effect to
such adjustment. 

        5.    Fractional Shares.    No fractional shares of Common Stock will be issued in connection with any exercise
hereunder. In lieu of such fractional shares, the Company shall make a cash payment therefor based upon the Fair Market Value of one share of Common Stock of the Company on the date of such exercise. 

        6.    Representations of the Company.    The Company represents that all corporate actions on the part of the Company,
its officers, directors and stockholders necessary for the sale and issuance of the Shares pursuant hereto and the performance of the Company's obligations hereunder were taken prior to and are
effective as of the effective date of this Warrant. 

        7.    Representations and Warranties by the Holder.    The Holder represents and warrants to the Company as follows: 

        (a)  This
Warrant and the Shares issuable upon exercise thereof are being acquired for its own account, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended (the "Act"). Upon exercise of this Warrant, the Holder shall, if so requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the securities issuable upon exercise of this Warrant are being acquired for investment and not with a view toward distribution
or resale. 

        (b)  The
Holder understands that the Warrant and the Shares have not been registered under the Act by reason of their issuance in a transaction exempt from the registration
and prospectus 

30

 

delivery requirements of the Act pursuant to Section 4(2) thereof, and that they must be held by the Holder indefinitely, and that the Holder must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered under the Act or is exempted from such registration. 

        (c)  The
Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of this Warrant and
the Shares purchasable pursuant to the terms of this Warrant and of protecting its interests in connection therewith. 

        (d)  The
Holder is able to bear the economic risk of the purchase of the Shares pursuant to the terms of this Warrant. 

        8.    Restrictive Legend.

        The
Shares issuable upon exercise of this Warrant (unless registered under the Act) shall be stamped or imprinted with a legend in the following form: 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN
OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION. 

        9.    Restrictions Upon Transfer and Removal of Legend.

        (a)  The
Company need not register a transfer of Shares bearing the restrictive legend set forth in Section 9 hereof, unless the conditions specified in such legend
are satisfied. The Company may also instruct its transfer agent not to register the transfer of the Shares, unless one of the conditions specified in the legend referred to in Section 9 hereof
is satisfied. 

        (b)  Notwithstanding
the provisions of Section 9(a) above, no opinion of counsel or "no-action" letter shall be necessary for a transfer without
consideration by any holder (i) to an affiliate of the holder, (ii) if such holder is a partnership, to a partner or retired partner of such partnership who retires after the date hereof
or to the estate of any such partner or retired partner, (iii) if such holder is a corporation, to a stockholder of such corporation, or to any other corporation under common control, direct or
indirect, with such holder, (iv) if such holder is a limited liability company, to a member or retired member of such limited liability company who retires after the date hereof or to the
estate of any such member or retired member, or (v) by gift, will or intestate succession of any individual holder to his spouse or siblings, or to the lineal descendants or ancestors of such
holder or his spouse, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if such transferee were the original holder hereunder. 

        10.  Rights of Stockholders.    No holder of this Warrant shall be entitled, as a Warrant holder, to vote or receive
dividends or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein
be construed to confer upon the holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par 

31

 

value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and
the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

        11.  Registration Rights.    All Shares issuable upon exercise of this Warrant shall be deemed to be "Registrable
Securities" or such other definition of securities entitled to registration rights. The Company shall use commercially reasonable efforts to file, within forty five (45) days after the issuance
date of this Warrant, for the benefit of the holder of the Registrable Securities (the "Holder") a registration statement on Form S-3 (or if Form S-3 is not then
available, on such form of registration statement that is then available to effect a registration of all Registrable Securities, subject to consent of the Holder) for purposes of registering under the
Securities Act all the Registrable Securities for resale by, and for the account of, the Holder as selling stockholders thereunder (the "Registration Statement"). The Company shall use its
commercially reasonable efforts to cause the Registration Statement to become effective as promptly as possible and, if any stop order shall be issued by the SEC in connection therewith, to obtain the
removal of such order. The Company shall use its commercially reasonable efforts to keep such Registration Statement effective until the earlier of (i) the date when all of the Registrable
Securities registered thereunder shall have been sold, (ii) such time as all the Registrable Securities held by the Holders (and any affiliate of the Holder with whom such Holder must aggregate
its sales under Rule 144) can be sold pursuant to Rule 144(k), and (iii) the second anniversary of the date on which the Registration Statement is declared effective. 

        12.  Expiration of Warrant.    This Warrant shall expire and shall no longer be exercisable at 5:00 p.m., New
York local time, on the date that is five (5) years after the date of issuance of this Warrant as set forth on the first page of this Warrant. 

        13.  Notices, Etc.    Any request, consent, notice or other communication required or permitted under this Warrant
shall be in writing and shall be deemed duly given and received when delivered personally or transmitted by facsimile, or one business day after being deposited for next-day delivery with
a nationally recognized overnight delivery service, or three days after being deposited as first class mail with the United States Postal Services, all charges or postage prepaid, and properly
addressed to the party to receive the same. Any party may, at any time, by providing ten days' advance written notice to the other party hereto, designate any other address in substitution of the an
address established pursuant to the foregoing. The Company's and the Holder's notice address shall be as set forth on the Purchase Agreement or as may have been subsequently furnished by the Company
or the Holder, as the case may be, to the other in writing. 

        14.  Governing Law; Headings.    This Warrant is being delivered in the State of New York and shall be construed and
enforced in accordance with and governed by the laws of such State. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. 

        15.  Amendment; Waiver.    Any term of this Warrant may be amended, and the observance of any term of this Warrant
may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder. 

        16.  Severability.    If one or more provisions of this Warrant are held to be unenforceable under applicable law,
such provision(s) shall be replaced with a provision that accomplishes, to the extent possible, the original business purpose of such provision in a valid and enforceable manner, and the balance of
the Warrant shall be interpreted as if such provision were so modified and shall be enforceable in accordance with its terms. 

        17.  No Impairment.    The Company will not, by amendment of its certificate of incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of 

32

 

the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder of this Warrant against impairment. Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock issuable
upon the exercise of this Warrant above the amount payable therefor upon such exercise, and (b) will take all such action as may be necessary or appropriate in order that the Company may
validly issue fully paid and non-assessable Shares upon exercise of this Warrant. 

        18.  Attorneys' Fees.    In the event any party is required to engage the services of any attorneys for the purpose
of enforcing this Warrant, or any provision thereof, the prevailing party shall be entitled to recover its reasonable expenses and costs in enforcing this Warrant, including attorneys' fees. 

        19.  Loss or Mutilation.    Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership
and the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to it, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will execute and deliver in lieu thereof a new Warrant of like tenor. 

        20.  Taxes.    The Company shall pay all taxes and other governmental charges that may be imposed in respect of the
issue or delivery of any Shares. 

33

 

        IN
WITNESS WHEREOF, this Warrant has been executed as of the date first written above by an authorized officer of the Company and the Warrant Holder. 

	 	 	AXONYX INC.
	

 	
 	
By:	

/s/  MARVIN S. HAUSMAN, M.D.      
 Marvin S. Hausman, M.D.
 President & CEO

           

	 	 	WARRANT HOLDER
	

 	
 	
By:	

/s/  AMY FACTOR      
 Amy Factor
 Principal, AFO Advisors, LLC

34

QuickLinks

Exhibit 4.2

COMMON STOCK PURCHASE WARRANT

AXONYX INC. WARRANT TO PURCHASE 200,000 SHARES OF COMMON STOCK

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