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Exhibit 10.2    
    

 
 

AMENDMENT TO THE
  KINTERA, INC.
  2000 STOCK OPTION PLAN    
    

        This Amendment to the Kintera, Inc. 2000 Stock Option Plan (the "Plan") is effective as of September 26, 2003. 

        Section
4.1 of the plan shall be amended to state in its entirety as follows: 

        "4.1  Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of
Stock that may be issued under the plan shall be six million one hundred twenty-eight thousand (6,128,000) and shall consist of authorized but unissued or reacquired shares of Stock or any combination
thereof. If an outstanding Option for any reason expires or is terminated or canceled or if shares of Stock are acquired upon the exercise of an Option subject to a Company repurchase option and are
repurchased by the Company at the Optionee's exercise price, the shares of Stock allocable to the unexercised portion of such Option or such repurchased shares of Stock shall again be available for
issuance under the Plan. However, except as adjusted pursuant to Section 4.2, in no event shall more than six million one hundred twenty-eight thousand (6,128,000) shares of Stock be available
for issuance pursuant to the exercise of Incentive Stock Options (the "ISO Share Issuance Limit"). Notwithstanding the foregoing, at any such time as
the offer and sale of securities pursuant to the Plan is subject to compliance with Section 260.140.45 of Title 10 of the California Code of Regulations
("Section 260.140.5"), the total number of shares of Stock issuable upon the exercise of all outstanding Options (together with options
outstanding under any other stock option plan of the Company) and the total number of shares provided for under any stock bonus or similar plan of the Company shall not exceed thirty percent (30%) (or
such other higher percentage limitation as may be approved by the stockholders of the Company pursuant to Section 260.140.45) of the then outstanding shares of the Company as calculated in
accordance with the conditions and exclusions of Section 260.140.45." 

        IN
WITNESS OF THE FOREGOING, the undersigned Secretary of Kintera, Inc., a Delaware corporation (the "Corporation"), certifies that the
foregoing amendment to the Kintera 2000 Stock Option Plan was duly adopted by the Board of Directors of the Company on September 26, 2003 and approved by the stockholders of the Corporation on
October 30, 2003. 

	 	 	 
	 	 	/s/  ALLEN B. GRUBER      
 Allen B. Gruber, M.D.

Secretary

  

 
 

KINTERA, INC.
  2000 STOCK OPTION PLAN    
    

        1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.    

        1.1    Establishment.    The Kintera, Inc. 2000 Stock Option Plan (the  "Plan") is hereby established effective as of October 16, 2000. 

        1.2    Purpose.    The purpose of the Plan is to advance the interests of the Participating
Company Group and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute
to the growth and profitability of the Participating Company Group. 

        1.3    Term of Plan.    The Plan shall continue in effect until the earlier of its termination
by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and the agreements
evidencing Options granted under the Plan have lapsed. However, all Options shall be granted, if at all, within ten (10) years from the earlier of the date the Plan is adopted by the Board or
the date the Plan is duly approved by the stockholders of the Company. 

        2.    DEFINITIONS AND CONSTRUCTION.    

        2.1    Definitions.    Whenever used herein, the following terms shall have their respective
meanings set forth below: 

        (a)   "Board" means the Board of Directors of the Company. If one or more
Committees have been appointed by the Board to administer the Plan, "Board" also means such
Committee(s). 

        (b)   "Code" means the Internal Revenue Code of 1986, as amended, and any
applicable regulations promulgated thereunder. 

        (c)   "Committee" means the Compensation Committee or other committee of the
Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all
of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed
by law. 

        (d)   "Company" means Kintera, Inc., a Delaware corporation, or any
successor corporation thereto. 

        (e)   "Consultant" means a person engaged under a written contract with the
Company that was executed by the Company's Chief Executive Officer or Chief Financial Officer to provide consulting or advisory services (other than as an Employee or a Director) to a Participating
Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to
such person pursuant to the Plan in reliance on either the exemption from registration provided by Rule 701 under the Securities Act or, if the Company is required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act, registration on a Form S-8 Registration Statement under the Securities Act. 

        (f)    "Director" means a member of the Board or of the board of directors of
any other Participating Company. 

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        (g)   "Disability" means the inability of the Optionee, in the opinion of a
qualified physician acceptable to the Company, to perform the major duties of the Optionee's position with the Participating Company Group because of the sickness or injury of the Optionee. 

        (h)   "Employee" means any person treated as an employee (including an Officer
or a Director who is also treated as an employee) in the records of Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of
Section 422 of the Code; provided, however, that neither service as a Director nor payment of a director's fee shall be sufficient to constitute employment for purposes of the Plan. The Company
shall exercise its discretion as to whether an individual has become or has ceased to be an Employee and the effective date of such individual's employment or termination of employment, as the case
may be. For purposes of an individual's rights, if any, under the Plan as of the time of the Company's determination, all such
determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination. 

        (i)    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (j)    "Fair Market Value" means, as of any date, the value of a share of Stock
or other property as determined by the Board, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following: 

          (i)  If,
on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing
price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or
such other national or regional securities exchange or market system constituting the primary market for the Stock, as reported in The Wall Street Journal  or such other source as the Company deems
reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the
date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the
Board, in its discretion. 

         (ii)  If,
on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be as
determined by the Board in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse. 

        (k)   "Incentive Stock Option" means an Option intended to be (as set forth in
the Option Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code. 

        (l)    "Insider" means an Officer, a Director of the Company or other person
whose transactions in Stock are subject to Section 16 of the Exchange Act. 

        (m)  "Nonstatutory Stock Option" means an Option not intended to be (as set
forth in the Option Agreement) or which does not qualify as an Incentive Stock Option. 

        (n)   "Officer" means any person designated by the Board as an officer of the
Company. 

        (o)   "Option" means a right to purchase Stock pursuant to the terms and
conditions of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option. 

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        (p)   "Option Agreement" means a written agreement between the Company and an
Optionee setting forth the terms, conditions and restriction of the Option granted to the Optionee and any shares acquired upon the exercise thereof. An Option Agreement may consist of a form of
"Notice of Grant of Stock Option" and a form of "Stock Option Agreement" incorporated therein by reference, or such other form or forms as the Board may approve from time to time. 

        (q)   "Optionee" means a person who has been granted one or more Options. 

        (r)   "Parent Corporation" means any present or future "parent corporation" of
the Company, as defined in Section 424(e) of the Code. 

        (s)   "Participating Company" means the Company or any Parent Corporation or
Subsidiary Corporation. 

        (t)    "Participating Company Group" means, at any point in time, all
corporations collectively which are then Participating Companies. 

        (u)   "Rule 16b-3" means Rule 16b-3 under
the Exchange Act, as amended from time to time, or any successor rule or regulation. 

        (v)   "Securities Act" means the Securities Act of 1933, as amended. 

        (w)  "Service" means an Optionee's employment or service with the
Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. An Optionee's Service shall not be deemed to have terminated merely because of a change in the capacity
in which the Optionee renders Service to the Participating Company Group or a change in the Participating Company for which the Optionee renders such Service, provided that there is no interruption or
termination of the Optionee's Service. Furthermore, an Optionee's Service with the Participating Company Group shall not be deemed to have terminated if the Optionee takes any military leave, sick
leave, or other bona fide leave of absence approved in advance in writing by the Company; provided, however, that if any such leave exceeds ninety (90) days, on the ninety-first (91st) day of
such leave the Optionee's Service shall
be deemed to have terminated unless the Optionee's right to return to Service with the Participating Company Group is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise
designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Optionee's Option Agreement. The Optionee's Service shall
be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a Participating Company. Subject to the
foregoing, the Company, in its discretion, shall determine whether the Optionee's Service has terminated and the effective date of such termination. 

        (x)   "Stock" means the common stock of the Company, as adjusted from time to
time in accordance with Section 4.2. 

        (y)   "Subsidiary Corporation" means any present or future "subsidiary
corporation" of the Company, as defined in Section 424(f) of the Code. 

        (z)   "Ten Percent Owner Optionee" means an Optionee who, at the time an Option
is granted to the Optionee, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning of
Section 422(b)(6) of the Code. 

        2.2    Construction.    Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise 

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indicated
by the context, the singular shall include the plural and the plural shall include the singular. Use of the term "or" is not intended to be exclusive, unless the context clearly requires
otherwise. 

        3.    ADMINISTRATION.    

        3.1    Administration by the Board.    The Plan shall be administered by the Board. All
questions of interpretation of the Plan or of any Option shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan or such
Option. 

        3.2    Authority of Officers.    Any Officer shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority
with respect to such matter, right, obligation, determination or election. 

        3.3    Powers of the Board.    In addition to any other powers set forth in the Plan and
subject to the provisions of the Plan, the Board shall have the full and final power and authority, in its discretion: 

        (a)   to
determine the persons to whom, and the time or times at which, Options shall be granted and the number of shares of Stock to be subject to each Option; 

        (b)   to
designate Options as Incentive Stock Options or Nonstatutory Stock Options; 

        (c)   to
determine the Fair Market Value of shares of Stock or other property; 

        (d)   to
determine the terms, conditions and restrictions applicable to each Option (which need not be identical) and any shares acquired upon the exercise thereof, including,
without limitation, (i) the exercise price of the Option, (ii) the method of payment for shares purchased upon the exercise of the Option, (iii) the method for satisfaction of any
tax withholding obligation arising in connection with the Option or such shares, including by the withholding obligation arising in connection with the Option or such shares, including by the
withholding or delivery of shares of stock, (iv) the timing, terms and conditions of the exercisability of the Option or the vesting of any shares acquired upon the exercise thereof,
(v) the time of the expiration of the Option, (vi) the effect of the Optionee's termination of Service with the Participating Company Group on any of the foregoing, and (vii) all
other terms, conditions and restrictions applicable to the Option or such shares not inconsistent with the terms of the Plan; 

        (e)   to
approve one or more forms of Option Agreement; 

        (f)    to
amend, modify, extend, cancel or renew any Option or to waive any restrictions or conditions applicable to any Option or any shares acquired upon the exercise
thereof; 

        (g)   to
accelerate, continue, extend or defer the exercisability of any Option or the vesting of any shares acquired upon the exercise thereof, including with respect to the
period following an Optionee's termination of Service with the Participating Company Group; 

        (h)   to
prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without
limitation, as the Board deems necessary or desirable to comply with the laws of, or to accommodate the tax policy or custom of, foreign jurisdictions whose citizens may be granted Options; and 

        (i)    to
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Option Agreement and to make all other determinations and take such other
actions 

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with
respect to the Plan or any Option as the Board may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law. 

        3.4    Administration with Respect to Insiders.    With respect to participation by Insiders
in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the
requirements, if any, of Rule 16b-3. 

        3.5    Indemnification.    In addition to such other rights of indemnification as they may
have as members of the Board or officers or employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act
for the Board or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection
with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matter as to which it shall be adjudged in such action, suit or proceeding that such person is
liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. 

        4.    SHARES SUBJECT TO PLAN.    

        4.1    Maximum Number of Shares Issuable.    Subject to adjustment as provided in
Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be One Million Six Hundred Twenty-Eight Thousand (1,628,000) and shall consist of authorized
but unissued or reacquired shares of Stock or any combination thereof. If an outstanding Option for any reason expires or is terminated or canceled or if shares of Stock are acquired upon the exercise
of an Option subject to a Company repurchase option and are repurchased by the Company at the Optionee's exercise price, the shares of Stock allocable to the unexercised portion of such Option or such
repurchased shares of Stock shall again be available for issuance under the Plan. However, except as adjusted pursuant to Section 4.2, in no event shall more than One Million Six Hundred
Twenty-Eight Thousand (1,628,000) shares of Stock be available for issuance pursuant to the exercise of Incentive Stock Options (the "ISO Share Issuance
Limit"). Notwithstanding the foregoing, at any such time as the offer and sale of securities pursuant to the Plan is subject to compliance with
Section 260.140.45 of Title 10 of the California Code of Regulations
("Section 260.140.45"), the total number of shares of Stock issuable
upon the exercise of all outstanding Options (together with options outstanding under any other stock option plan of the Company) and the total number of shares provided for under any stock bonus or
similar plan of the Company shall not exceed thirty percent (30%) (or such other higher percentage limitation as may be approved by the stockholders of the Company pursuant to
Section 260.140.45) of the then outstanding shares of the Company as calculated in accordance with the conditions and exclusions of Section 260.140.45. 

        4.2    Adjustments for Changes in Capital Structure.    In the event of any stock dividend,
stock split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number and
class of shares subject to the Plan and to any outstanding Options, in the ISO Share Issuance Limit set forth in Section 4.1, and in the exercise price per share of any outstanding Options. If
a majority of the shares which are of the same class as the shares that are subject to outstanding 

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Options
are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event, as defined in Section 8.1) shares of another corporation (the  "New
Shares"), the Board may unilaterally amend the outstanding Options to provide that such Options are
exercisable for New Shares. In the event of any such amendment, the number of shares subject to, and the exercise price per share of, the outstanding Options shall be adjusted in a fair and equitable
manner as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the
nearest whole number, and in no event may the exercise price of any Option be decreased to an amount less than the par value, if any, of the stock subject to the Option. The adjustments determined by
the Board pursuant to this Section 4.2 shall be final, binding and conclusive. 

        5.    ELIGIBILITY AND OPTION LIMITATIONS.    

        5.1    Persons Eligible for Options.    Options may be granted only to Employees, Consultants,
and Directors. For purposes of the foregoing sentence, "Employees," "Consultants" and "Directors" shall include prospective Employees, prospective Consultants and prospective Directors to whom Options
are granted in connection with written offers of an employment or other service relationship with the Participating Company Group. Eligible persons may be granted more than one (1) Option.
However, eligibility in accordance with this Section shall not entitle any person to be granted an Option, or, having been granted an Option, to be granted an additional Option. 

        5.2    Option Grant Restrictions.    Any person who is not an Employee on the effective date
of the grant of an Option to such person may be granted only a Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective Employee upon the condition that such person become an
Employee shall be deemed granted effective on the date such person commences Service with a Participating Company, with an exercise price determined as of such date in accordance with
Section 6.1. 

        5.3    Fair Market Value Limitation.    To the extent that options designated as Incentive
Stock Options (granted under all stock option plans of the Participating Company Group, including the Plan) become exercisable by an Optionee for the first time during any calendar year for stock
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portions of such options which exceed such amount shall be treated as Nonstatutory Stock Options. For purposes of
this Section 5.3, options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of
the time the option with respect to such stock is granted. If the Code in amended to provide for a different limitation from that set forth in this Section 5.3, such different limitation shall
be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in
part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 5.3, the Optionee may designate which portion of such Option the Optionee is exercising. In
the absence of such designation, the Optionee shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be
issued upon the exercise of the Option. 

        6.    TERMS AND CONDITIONS OF OPTIONS.    

        Options
shall be evidenced by Option Agreements specifying the number of shares of Stock covered thereby, in such form as the Board shall from time to time establish. No Option or
purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed 

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Option
Agreement. Option Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 

        6.1    Exercise Price.    The exercise price for each Option shall be established in the
discretion of the Board; provided, however, that (a) the exercise price per share for an Incentive Stock Option shall be not less than the Fair Market Value of a share of Stock on the effective
date of grant of the Option, (b) the exercise price per share for a Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of a share of
Stock on the effective date of grant of the Option, and (c) no Option granted to a Ten Percent Owner Optionee shall have an exercise price per share less than one hundred ten percent (110%) of
the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may
be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner qualifying
under the provisions of Section 424(a) of the Code. 

        6.2    Exercisability and Term of Options.    Options shall be exercisable at such time or
times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Board and set forth in the Option Agreement evidencing
such Option; provided,
however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to
a Ten Percent Owner Optionee shall be exercisable after the expiration of five (5) years after the effective date of grant of such Option, (c) no Option granted to a prospective
Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such person commences Service with a Participating Company, and (d) with the exception
of an Option granted to an Officer, a Director or a Consultant, no Option shall become exercisable at a rate less than twenty percent (20%) per year over a period of five (5) years from the
effective date of grant of such Option, subject to the Optionee's continued Service. Subject to the foregoing, unless otherwise specified by the Board in the grant of an Option, any Option granted
hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions. 

        6.3    Payment of Exercise Price.    

        (a)   Forms of consideration Authorized.    Except as otherwise provided below, payment of the exercise price for the
number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Optionee having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice together with irrevocable instructions to a
broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a  "Cashless
Exercise"), (iv) provided that the Optionee is an Employee (unless otherwise not
prohibited by law, including, without limitation, any regulation promulgated by the Board of Governors of the Federal Reserve System) and in the Company's sole discretion at the time the Option is
exercised, by delivery of the Optionee's promissory note in a form approved by the Company for the aggregate exercise price, provided that, if the Company is incorporated in the State of Delaware, the
Optionee shall pay in cash that portion of the aggregate exercise price not less than the par value of the shares being acquired, (v) by such other consideration as may be approved by the Board
from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Board may at any time or from time to time, by approval of or by amendment to the 

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standard
forms of Option Agreement described in Section 7, or by other means, grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise
price or which otherwise restrict one or more forms of consideration. 

        (b)   Limitations on Forms of Consideration.

          (i)  Tender of Stock.    Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the
redemption of the Company's stock. Unless otherwise provided by the Board, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such
shares either have been owned by the Optionee for more than six (6) months (and not used for another Option exercise by attestation during such period) or were not acquired, directly or
indirectly, from the Company. 

         (ii)  Cashless Exercise.    The Company reserves, at any and all times, the right, in the Company's sole and
absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. 

        (iii)  Payment by Promissory Note.    No promissory note shall be permitted if the exercise of an Option using a
promissory note would be a violation of any law. Any permitted promissory note shall be on such terms as the Board shall determine. The Board shall have the authority to permit or require the Optionee
to secure any promissory note used to exercise an Option with the shares of Stock acquired upon the exercise of the Option or with other collateral acceptable to the Company. Unless otherwise provided
by the Board, if the Company at any time is subject to the regulations promulgated by the Board of Governors of the Federal Reserve System or any other governmental entity affecting the extension of
credit in connection with the Company's securities, any promissory note shall comply with such applicable regulations, and the Optionee shall pay the unpaid principal and accrued interest, if any, to
the extent necessary to comply with such applicable regulations. 

        6.4    Tax Withholding.    The Company shall have the right, but not the obligation, to deduct
from the shares of Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the
Company, equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to such Option or the shares
acquired upon the exercise thereof. Alternatively or in addition, in its discretion, the Company shall have the right to require the Optionee, through payroll withholding, cash payment or otherwise,
including by means of a Cashless Exercise, to make adequate provision for any such tax withholding obligations of the Participating Company Group arising in connection with the Option or the shares
acquired upon the exercise thereof. The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the
applicable minimum statutory withholding rates. The Company shall have no obligation to deliver shares of Stock or to release shares of Stock from an escrow established pursuant to the Option
Agreement until the Participating Company Group's tax withholding obligations have been satisfied by the Optionee. 

        6.5    Repurchase Rights.    Shares issued under the Plan may be subject to a right of first
refusal, one or more repurchase options, or other conditions and restrictions as determined by the Board in its discretion at the time the Option is granted. The Company shall have the right to assign
at any time any right of first refusal or repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company. Upon 

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request
by the Company, each Optionee shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any
and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. 

        6.6    Effect of Termination of Service.    

        (a)   Option Exercisability.    Subject to earlier termination of the Option as otherwise provided herein and unless
otherwise provided by the Board in the grant of an Option and set forth in the Option Agreement, an Option shall be exercisable after an Optionee's termination of Service only during the applicable
time period determined in accordance with this Section 6.6 and thereafter shall terminate: 

          (i)  Disability.    If the Optionee's Service terminates because of the Disability of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee (or the Optionee's guardian or legal representative) at any time prior
to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee's Service terminated, but in any event
no later than the date of expiration of the Option's term as set forth in the Option Agreement evidencing such Option (the "Option Expiration
Date"). 

         (ii)  Death.    If the Optionee's Service terminates because of the death of the Optionee, the Option, to the extent
unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee's legal representative or other person who acquired the right to exercise the
Option by reason of the Optionee's death at any time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date
on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date. The Optionee's Service shall be deemed to have terminated on account of death if the Optionee
dies within three (3) months (or such longer period of time as determined by the Board, in its discretion) after the Optionee's termination of Service. 

        (iii)  Termination After Change in Control.    The Board may, in its discretion, provide in any Option Agreement
that if the Optionee's Service ceases as a result of "Termination After Change in Control" (as defined in such Option Agreement) within two years of the consummation of the Change in Control (as
defined below in Section 8.1(b)), then (1) the Option, to the extent unexercised on the date on which the Optionee's Service terminated, may be exercised by the Optionee (or the
Optionee's guardian or legal representative) at any time prior to the expiration of six (6) months (or such longer period of time as determined by the Board, in its discretion) after the date
on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date, and (2) the Unvested Shares shall fully and automatically vest and the Unvested Share
Repurchase Option shall terminate upon such event. Notwithstanding the foregoing, if the Company and the other party to the transaction constituting a Change in Control agree to treat such transaction
as a "pooling-of-interests" for accounting purposes and it is determined that the provisions or operation of this Section 6.6(a)(iii) would preclude treatment of
such transaction as a "pooling-of-interests" and provided further that in the absence of the preceding sentence such transaction would be treated as a
"pooling-of-interests," then this Section 6.6(a)(iii) shall be without force or effect, and the vesting and exercisability of the Option shall be determined under
any other applicable provision of the Plan or the Option Agreement evidencing such Option. 

9

 

        (iv)  Other Termination of Service.    If the Optionee's Service terminates for any reason, except Disability or
death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee's Service terminated, may be exercised by the Optionee at any time prior to the
expiration of three (3) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee's Service terminated, but in any event no later
than the Option Expiration Date. 

        (b)   Extension if Exercise Prevented by Law.    Notwithstanding the foregoing, if the exercise of an Option within
the applicable time periods set forth in Section 6.6(a) is prevented by the provisions of Section 10 below, the Option shall remain exercisable until three (3) months (or such
longer period of time as determined by the Board, in its discretion) after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option
Expiration Date. 

        (c)   Extension if Optionee Subject to Section 16(b).    Notwithstanding the foregoing, if a sale within the
applicable time periods set forth in Section 6.6(a) of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the
Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such
suit, (ii) the one hundred and ninetieth (190th) day after the Optionee's termination of Service, or (iii) the Option Expiration Date. 

        6.7    Transferability of Options.    During the lifetime of the Optionee, an Option shall be
exercisable only by the Optionee or the Optionee's guardian or legal representative. No Option shall be assignable or
transferable by the Optionee, except by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Board, in its discretion, and set forth in the
Option Agreement evidencing such Option, a Nonstatutory Stock Option shall be assignable or transferable subject to the applicable limitations, if any, described in Section 260.140.41 of Title
10 of the California Code of Regulations, Rule 701 under the Securities Act, and the General Instructions to Form S-8 Registration Statement under the Securities Act. 

        7.    STANDARD FORMS OF OPTION AGREEMENT.    

        7.1    Option Agreement.    Unless otherwise provided by the Board at the time the Option is
granted, an Option shall comply with and be subject to the terms and conditions set forth in the form of Option Agreement approved by the Board concurrently with its adoption of the Plan and as
amended from time to time. 

        7.2    Authority to Vary Terms.    The Board shall have the authority from time to time to
vary the terms of any standard form of Option Agreement described in this Section 7 either in connection with the grant or amendment of an individual Option or in connection with the
authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Option Agreement are not inconsistent with
the terms of the Plan. 

        8.    CHANGE IN CONTROL.    

        8.1    Definitions.    

        (a)   An
"Ownership Change Event" shall be deemed to have occurred if any of
the following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty
percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the 

10

 

Company
is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company. 

        (b)   A  "Change in Control" shall mean an Ownership Change
Event or a series of
related Ownership Change Events (collectively, a "Transaction") wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company's voting stock immediately before
the
Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a
Transaction described in Section 8.1(a)(iii), the corporation or other business entity to which the assets of the Company were transferred (the  "Transferee"), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the
case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive. 

        8.2    Effect of Change in Control on Options.    In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the "Acquiring
Corporation"), may, without the consent of any Optionee, either assume the Company's rights and obligations under outstanding Options or substitute for
outstanding Options substantially equivalent options for the Acquiring Corporation's stock. In the event that the Acquiring Corporation elects to assume the outstanding Options, and the Change of
Control is consummated, then the vesting of the Unvested Shares shall be accelerated by one year as set forth in the Option Agreement. In the event the Acquiring Corporation elects not to assume or
substitute for outstanding Options in connection with a Change in Control, the vesting of each such outstanding Option and any shares acquired upon the exercise thereof held by Optionees whose Service
has not terminated prior to such date shall be accelerated, effective as of the date ten (10) days prior to the date of the Change in Control, to such extent, if any, as shall have been
determined by the Board, in its discretion, and set forth in the Option Agreement evidencing such Option. The vesting of any Option thereof that was permissible solely by reason of this
Section 8.2 and the provisions of such Option Agreement shall be conditioned upon the consummation of the Change in Control. Any Options which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change
in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to
such shares shall continue to be subject to all applicable provisions of the Option Agreement evidencing such Option except as otherwise provided in such Option Agreement. Furthermore, notwithstanding
the foregoing, if the corporation the stock of which is subject to the outstanding Options immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a
Change in Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is
held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of
Section 1504(b) of the Code, the outstanding Options shall not terminate unless the Board otherwise provides in its discretion. 

11

 

        9.    PROVISION OF INFORMATION.    

        At
least annually, copies of the Company's balance sheet and income statement for the just completed fiscal year shall be made available to each Optionee and purchaser of shares of Stock
upon the exercise of an Option. The Company shall not be required to provide such information to key employees whose duties in connection with the Company assure them access to equivalent information.
Furthermore, the Company shall deliver to each Optionee such disclosures as are required in accordance with Rule 701 under the Securities Act. 

        10.    COMPLIANCE WITH SECURITIES LAW.    

        The
grant of Options and the issuance of shares of Stock upon exercise of Options shall be subject to compliance with all applicable requirements of federal, state and foreign law with
respect to such securities. Options may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or
other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Option may be exercised unless (a) a registration
statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (b) in the opinion of legal
counsel of the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.
The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company's legal counsel to be necessary to the lawful issuance and sale of any
shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to
the exercise of any Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by the Company. 

        11.    TERMINATION OR AMENDMENT OF PLAN.    

        The
Board may terminate or amend the Plan at any time. However, subject to changes in applicable law, regulations or rules that would permit otherwise, without the approval of the
Company's stockholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of
Section 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the
Company's stockholders under any applicable law, regulation or rule. No termination or amendment of the Plan shall affect any then outstanding Option unless expressly provided by the Board. In any
event, no termination or amendment of the Plan may adversely affect any then outstanding Option without the consent of the Optionee, unless such termination or amendment is required to enable an
Option designated as an Incentive Stock Option to qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule. 

        12.    STOCKHOLDER APPROVAL.    

        The
Plan or any increase in the maximum aggregate number of shares of Stock issuable thereunder as provided in Section 4.1 (the  "Authorized Shares") shall be approved by the stockholders of the Company within
twelve (12) months of the date of adoption thereof by the Board. Option granted prior to stockholder approval of the Plan or in excess of the Authorized Shares previously approved by the
stockholders shall become exercisable no earlier than the date of stockholder approval of the Plan or such increase in the Authorized Shares, as the case may be. 

12

 

        IN
WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing sets forth the Kintera, Inc. 2000 Stock Option Plan as duly adopted by the Board on
October 16, 2000. 

	

 	
 	

/s/ ALLEN B. GRUBER
 Allen B. Gruber, Secretary

13

 
 

KINTERA, INC.
  NOTICE OF GRANT OF
  IMMEDIATELY EXERCISABLE
  STOCK OPTION    
    

                                (the "Optionee") has been granted an immediately
exercisable stock option (the "Option") to purchase certain shares of Stock of Kintera, Inc.
pursuant to the Kintera, Inc. 2000 Stock Option Plan (the "Plan"), as follows: 

	Date of Option Grant:	 	 	 	 	 
	 	 	 	
	 	 
	
Number of Option Shares:	
 	
 	

 	
 	

 
	 	 	 	
	 	 
	
Exercise Price:	
 	
$	

                        per share
	
Initial Exercise Date:	
 	
 	

Later of Date of Option Grant or Service commencement date.
	
Initial Vesting Date:	
 	
 	

 	
 	

 
	 	 	 	
	 	 
	
Option Expiration Date:	
 	
 	

The date ten (10) years after the Date of Option Grant.
	
Tax Status of Option:	
 	
 	

                        Stock Option. (Enter "Incentive" or "Nonstatutory." If blank, this Option will be a Nonstatutory Stock
Option.)
	
Vested Shares:    Except as provided in the Stock Option Agreement, the number of Vested Shares (disregarding any resulting fractional share) as of any date is determined
by multiplying the Number of Option Shares by the "Vested Ratio" determined as of such date as follows:

	 
	 	 
	 	Vested Ratio

	a.	 	Initially, all shares of stock shall be Unvested Shares	 	0
	b.	 	On Initial Vesting Date, provided Optionee's Service has not terminated prior to such date	 	1/4
	Plus:	 	1/1,460
	c.	 	For each full day of the Optionee's continuous Services from Initial Vesting Date until the Vested Ratio equals 1/1, an additional	 	 

        By
their signatures below, the Company and the Optionee agree that the Option is governed by this Notice and by the provisions of the Plan and the Stock Option Agreement, both of which
are attached to and made a part of this document. The Optionee acknowledges receipt of copies of the Plan and the Stock Option Agreement, represents that the Optionee has read and is familiar with
their provisions, and hereby accepts the Option subject to all of their terms and conditions. 

	

KINTERA, INC.	
 	

OPTIONEE
	

By:	

 	
 	

 	
 	

 
	 	
	 	
 Signature
	

Its:	

 	
 	

 	
 	

 
	 	
	 	
 Date
	

Address	
 	

9605 Scranton Road, Suite 240

San Diego, CA 92121	
 	

    
 Address
	

 	

 	
 	

 	
 	

  

	

ATTACHMENTS:	
 	

2000 Stock Option Plan, as amended to the Date of Option Grant; Stock Option Agreement and Exercise Notice

  

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 

THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933. 

 
 
 

KINTERA, INC.
  STOCK OPTION AGREEMENT
  (Immediately Exercisable)    
    

        Kintera, Inc. has granted to the individual (the  "Optionee") named in
the Notice of Grant of Immediately Exercisable Stock
Option (the "Notice") to which this Stock Option Agreement (the  "Option Agreement") is attached an option (the  "Option") to purchase
certain shares of Stock upon the terms and conditions set forth in the Notice and
this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Kintera, Inc. 2000 Stock Option Plan (the  "Plan"), as amended to the Date of Option Grant, the provisions of which are incorporated herein by
reference. By signing the Notice, the Optionee: (a) represents that the Optionee has received copies of, and has read and is familiar with the terms and conditions of, the Notice, the Plan and
this Option Agreement, (b) accepts the Option subject to all of the terms and conditions of the Notice, the Plan and this Option Agreement, and (c) agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any questions arising under the Notice, the Plan or this Option Agreement. 

        1.    DEFINITIONS AND CONSTRUCTION.    

        1.1    Definitions.    Unless otherwise defined herein, capitalized terms shall have the
meanings assigned to such terms in the Notice or the Plan. 

        1.2    Construction.    Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term "or" is not intended to be exclusive, unless the context clearly requires otherwise. 

        2.    TAX CONSEQUENCES.    

        2.1    Tax Status of Option.    This Option is intended to have the tax status designated in
the Notice. 

        (a)    Incentive Stock Option.    If the Notice so designates, this Option is intended to be
an Incentive Stock Option within the meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Optionee should consult with
the Optionee's own tax advisor regarding the tax effects of this Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not
limited to, holding period requirements. (NOTE TO OPTIONEE: If 

1

 

the
Option is exercised more than three (3) months after the date on which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in
Section 22(e)(3) of the Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the extent required by Section 422 of the Code.) 

        (b)    Nonstatutory Stock Option.    If the Notice so designates, this Option is intended to
be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code. 

        2.2    ISO Fair Market Value Limitation.    If the Notice designates
this Option as an Incentive Stock Option, then to the extent that the Option (together with all Incentive Stock Options granted to the Optionee under all stock option plans of
the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than One Hundred Thousand Dollars
($100,000), the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as Incentive Stock Options
are taken into account in the order in which they were granted, and the Fair Market Value of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended
to provide for a different limitation from that set forth in this Section 2.2, such different limitation shall be deemed incorporated herein effective as of the date
required or permitted by such amendment to the Code. If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in
this Section 2.2, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such designation, the Optionee shall be deemed to have exercised the
Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. (NOTE TO OPTIONEE: If the aggregate Exercise
Price of the Option (that is, the Exercise Price multiplied by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to
the Plan or any other stock option plan of the Participating Company Group) is greater than $100,000, you should contact the Chief Financial Officer of the Company to ascertain whether the entire
Option qualifies as an Incentive Stock Option.) 

        2.3    Election Under Section 83(b) of the code.    If the Optionee exercises this
Option to purchase shares of Stock that are both nontransferable and subject to a substantial risk of forfeiture, the Optionee understands that the Optionee should consult with the Optionee's tax
advisor regarding the advisability of filing with the Internal Revenue Service an election under Section 83(b) of the Code, which must be filed no later than thirty (30) days after the
date on which the Optionee exercises the Option. Shares acquired upon exercise of the Option are nontransferable and subject to a substantial risk of forfeiture if, for example, (a) they are
unvested and are subject to a right of the Company to repurchase such shares at the Optionee's original purchase price if the Optionee's Service terminates, (b) the Optionee is an Insider and,
under certain circumstances, exercises the Option within six (6) months of the Date of Option Grant (if a class of equity security of the Company is registered under Section 12 of the
Exchange Act), or (c) the Optionee is subject to a restriction on transfer to comply with "Pooling-of-Interests Accounting" rules. Failure to file an election under
Section 83(b), if appropriate, may result in adverse tax consequences to the Optionee. The Optionee acknowledges that the Optionee has been advised to consult with a tax advisor prior to the
exercise of the Option regarding the tax consequences to the Optionee of the exercise of the Option. AN ELECTION UNDER SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON WHICH THE OPTIONEE
PURCHASES SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE OPTIONEE ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE OPTIONEE'S SOLE RESPONSIBILITY, EVEN IF THE OPTIONEE REQUESTS THE 

2

 

COMPANY
OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF. 

        3.    ADMINISTRATION.    

        All
questions of interpretation concerning this Option Agreement shall be determined by the Board. All determinations by the Board shall be final and binding upon all persons having an
interest in the Option. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is
allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election. 

        4.    EXERCISE OF THE OPTION.    

        4.1    Right to Exercise.    

        (a)    In General.    Except as otherwise herein, the Option shall be exercisable on and after
the Initial Exercise Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the Number of Option Shares less the number of shares previously
acquired upon exercise of the Option, subject to the Company's repurchase rights set forth in Section 11 and Section 12. 

        (b)    ISO Exercise Limitation.    If this Option is designated as an
Incentive Stock Option in the Notice. then notwithstanding the provisions of Section 4.1(a) and except as provided in Section 4.1(c), the aggregate Fair Market
Value of the shares of Stock with respect to which the Optionee may exercise the Option for the first time during any calendar year, when added to the aggregate Fair Market Value of the shares subject
to any other options designated as Incentive Stock Options granted to the Optionee under all stock option plans of the Participating Company Group prior to the Date of Option Grant with respect to
which such options are exercisable for the first time during the same calendar year, shall not exceed One Hundred Thousand Dollars ($100,000). For purposes of the preceding sentence, options
designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of shares of stock shall be determined as of the time the option
with respect to such shares is granted. Such limitation on exercise shall be referred to in this Option Agreement as the "ISO Exercise
Limitation." If Section 422 of the Code is amended to provide for a different limitation from that set forth in this Section 4.1(b), the
ISO Exercise Limitation shall be deemed amended effective as of the date required or permitted by such amendment to the Code. The ISO Exercise Limitation shall terminate upon the earlier of
(i) the Optionee's termination of Service, (ii) the day immediately prior to the effective date of a Change in Control in which the Option is not assumed or substituted for by the
Acquiring Corporation as provided in Section 8, or (iii) the day ten (10) days prior to the Option Expiration Date. Upon such termination of the ISO Exercise Limitation, the
Option shall be deemed a Nonstatutory Stock Option to the extent of the number of shares subject to the Option which would otherwise exceed the ISO Exercise Limitation. 

        (c)    Exception to ISO Exercise Limitation.    Notwithstanding any other provision of this
Option Agreement, if compliance with the ISO Exercise Limitation as set forth in Section 4.1(b) will result in the exercisability of any Vested Shares being delayed more than thirty
(30) days beyond the date such shares become Vested Shares (the "Vesting Date"), the Option shall
be deemed to be two (2) options. The first option shall be for the maximum portion of the Number of Option Shares that can comply with the ISO Exercise Limitation without causing the Option to
be unexercisable in the aggregate as to Vested Shares on the Vesting Date for such shares. The second option, which shall not be treated as an Incentive Stock Option as described in
section 422(b) of the Code, shall be for the balance of the 

3

 

Number
of Option Shares; that is, those such shares which, on the respective Vesting Date for such shares, would be unexercisable if included in the first option and thereby made subject to the ISO
Excercise Limitation. Shares treated as subject to the second option shall be excercisable on the same terms and at the same time as set forth in this Option Agreement; provided, however, that
(i) Section 4.1(b) shall not apply to the second option and (ii) each such share shall become a Vested Share on the Vesting date; however, such share must first be allocated to
the second option pursuant to the preceding sentence. Unless the Optionee specifically elects to the contrary in the Optionee's written notice of exercise, the first option shall be deemed to be
exercised first to the maximum possible extent and then the second option shall be deemed to be exercised. 

        4.2    Method of Exercise.    Exercise of the Option shall be by written notice to the Company
which must state the election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee's
investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person,
by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Chief Financial Officer of the Company, or
other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 6, accompanied by (i) full payment of the aggregate
Exercise Price for the number of shares of Stock being purchased and (ii) an executed copy, if required herein, of the then current form of escrow agreement referenced below. The Option shall
be deemed to be exercised upon receipt by the Company of such written notice, the aggregate Exercise Price, and, if required by the Company, such executed agreement. 

        4.3    Payment of Exercise Price.    

        (a)    Forms of Consideration Authorized.    Except as otherwise provided below, payment of
the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the
Company, or attestation to the ownership, of whole shares of Stock owned by the Optionee having a Fair Market Value not less than the aggregate Exercise Price, (iii) by means of a Cashless
Exercise, as defined in Section 4.3(b), or (iv) by any combination of the foregoing. 

        (b)    Limitations on Forms of Consideration.    

        (i)    Tender of Stock.    Notwithstanding the foregoing, the Option may not be exercised by
tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company's stock. The Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been
owned by the Optionee for more than six (6) months (and not used for another option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company. 

        (ii)    Cashless Exercise.    A "Cashless
Exercise" means the delivery of a properly executed notice together with irrevocable instructions to a broker in a form acceptable to the Company
providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or
procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of
the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company's sole 

4

 

and
absolute discretion, to decline to approve or terminate any such program or procedure. 

        4.4    Tax Withholding.    At the time the Option is exercised, in whole or in part, or at any
time thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating
Company Group, if any, which arise in connection with the Option, including, without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the
transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation providing for the imputation of interest, or (iv) the
lapsing of any restriction with respect to any shares acquired upon exercise of the Option. The Option is not exercisable unless the tax withholding obligations of the Participating Company Group are
satisfied. Accordingly, the Company shall have no obligation to deliver shares of Stock or to release shares of Stock from an escrow established pursuant to this Option Agreement until the tax
withholding obligations of the Participating Company Group have been satisfied by the Optionee. 

        4.5    Certificate Registration.    Except in the event the Exercise Price is paid by means of
a Cashless Exercise, the certificate for the shares as to which the Option is exercised shall be registered in the name of the Optionee, or, if applicable, in the names of the heirs of the Optionee. 

        4.6    Restrictions on Grant of the Option and Issuance of Shares.    The grant of the Option
and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The
Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company,
the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS
VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company's legal counsel to be necessary to the lawful issuance and sale
of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.
As a condition to the exercise of the Option, the Company may require the Optionee to satisfy and qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 

        4.7    Fractional Shares.    The Company shall not be required to issue fractional shares upon
the exercise of the Option. 

        5.    NONTRANSFERABILITY OF THE OPTION.    

        The
Option may be exercised during the lifetime of the Optionee only by the Optionee or the Optionee's guardian or legal representative and may not be assigned or transferred in any
manner 

5

 

except
by will or by the laws of descent and distribution. Following the death of the Optionee, the Option, to the extent provided in Section 7, may be exercised by the Optionee's legal
representative or by any person empowered to do so under the deceased Optionee's will or under the then applicable laws of descent and distribution. 

        6.    TERMINATION OF THE OPTION.    

        The
Option shall terminate and may no longer be exercised after the first to occur of (a) the Option Expiration Date, (b) the last date for exercising the Option following
termination of the Optionee's Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8. 

        7.    EFFECT OF TERMINATION OF SERVICE.    

        7.1    Option Exercisability.    

        (a)    Disability.    If the Optionee's Service terminates because of the Disability of the
Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee (or the Optionee's guardian or legal
representative) at any time prior to the expiration of twelve (12) months after the date on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date. 

        (b)    Death.    If the Optionee's Service terminates because of the death of the Optionee,
the Option, to the extent unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee's legal representative or other person who acquired the
right to exercise the Option by reason of the Optionee's death at any time prior to the expiration of twelve (12) months after the date on which the Optionee's Service terminated, but in any
event no later than the Option Expiration Date. The Optionee's Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee's
termination of Service. 

        (c)    Termination After Change in Control.    If the Optionee's Service ceases as a result of
Termination After Change in Control (as defined in 7.5(a) below), (i) the Option, to the extent unexercised and exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee (or the Optionee's guardian or legal representative) at any time prior to the expiration of six (6) months after the date on which the Optionee's Service terminated,
but in any event no later than the Option Expiration Date, and (ii) the Option shall become immediately vested and exercisable in full and the Vested Ratio shall be deemed to be
1/1 as of the date on which the Optionee's Service terminated. Notwithstanding the foregoing, if the Company and the other party to the transaction constituting a Change in Control
agree to treat such transaction as a "pooling-of-interests" for accounting purposes and it is determined that the provisions or operation of this Section 7.1(c) would
preclude treatment of such transaction as a "Pooling-of-interests" and provided further that in the absence of the preceding sentence such transaction would be treated as a
"pooling-of-interests," then this Section 7.1(c) shall be without force or effect, and the vesting and exercisability of the Option shall be determined under any other
applicable provision of the Option Agreement. 

        (d)    Other Termination of Service.    If the Optionee's Service terminates for any reason,
except Disability, death or Termination After Change in Control, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee's Service terminated, may be
exercised by the Optionee at any time prior to the expiration of three (3) months (or such other longer period of time as determined by the Board, in its discretion) 

6

 

after
the date on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date. 

        7.2    Additional Limitations on Option Exercise.    Notwithstanding the provisions of
Section 7.1, the Option may not be exercised after the Optionee's termination of Service to the extent that the shares to be acquired upon exercise of the Option would be subject to the
Unvested Share Repurchase Option as provided in Section 11. 

        7.3    Extension if Exercise Prevented by Law.    Notwithstanding the foregoing, if the
exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until three
(3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date. 

        7.4    Extension if Optionee Subject to Section 16(b).    Notwithstanding the
foregoing, if a sale within the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b)
of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no
longer by subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Optionee's termination of Service, or (iii) the Option Expiration Date. 

        7.5    Certain Definitions.    

        (a)   "Termination After Change in Control" shall mean either of the following
events occurring within twenty-four (24) months after a Change in Control: 

          (i)  termination
by the Participating Company Group of the Optionee's Service with the Participating Company Group for any reason other than for Cause (as defined in 7.5(b)
below); or 

         (ii)  the
Optionee's resignation for Good Reason (as defined in 7.5(c) below from all capacities in which the Optionee is then rendering Service to the Participating Company
Group within a reasonable period of time following the event constituting Good Reason. 

Notwithstanding
any provision herein to the contrary, Termination After Change in Control shall not include any termination of the Optionee's Service with the Participating Company Group which
(1) is for Cause (as defined below); (2) is a result of the Optionee's death or disability; (3) is a result of the Optionee's voluntary termination of Service other than for Good
Reason; or (4) occurs prior to the effectiveness of a Change in Control. 

        (b)   "Cause" shall mean any of the following: (i) the Optionee's theft,
dishonesty, or falsification of any Participating Company documents or records; (ii) the Optionee's improper use or disclosure of a Participating Company's confidential or proprietary
information; (iii) any action by the Optionee which has a detrimental effect on a Participating Company's reputation or business; (iv) the Optionee's failure or inability to perform
adequately any reasonable assigned duties as determined by a Participating Company; (v) any violation by the Optionee of any material agreement between the Optionee and a Participating Company,
which breach is not cured pursuant to the terms of such agreement or any breach of any material statutory duty to a Participating Company; or (vi) the Optionee's conviction (including any plea
of guilty or nolo contendere) of any felony or crime involving moral turpitude or dishonesty. 

7

 

        (c)   "Good Reason" shall mean any one or more of the following: 

          (i)  without
the Optionee's express written consent, the relocation of the principal place of the Optionee's Service to a location that is more than fifty (50) miles
from the Optionee's principal place of Service immediately prior to the date of the Change in Control; 

         (ii)  any
failure by the Participating Company Group to pay, or any reduction by the Participating Company Group of the Optionee's base salary in effect immediately prior to
the date of the Change in Control; or 

        (iii)  any
failure by the Participating Company Group to (1) continue to provide to the Optionee a package of welfare benefit plans, including, but not limited to, the
Participating Company Group's life, disability, health, dental, medical, savings, profit sharing and retirement plans, that, taken as a whole, provide substantially similar benefits to those to which
the Optionee was entitled immediately prior to the Change in Control (except that the Optionee's contributions may be increased to the extent of any cost increases imposed by third parties) or
(2) provide the Optionee with all other fringe benefits (or
their equivalent) from time to time in effect for the benefit of any employee of the Participating Company Group. 

        8.    CHANGE IN CONTROL.    

        8.1    Definitions.    

        (a)   An
"Ownership Change Event" shall be deemed to have occurred if any of
the following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty
percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the
assets of the Company; or (iv) a liquidation or dissolution of the Company. 

        (b)   A
"Change in Control" shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, a "Transaction") wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company's voting stock immediately before
the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a
Transaction described in Section 8.1(a)(iii), the corporation or other business entity to which the assets of the Company were transferred (the  "Transferee"), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the
case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive. 

        8.2    Effect of Change in Control on Option.    

        (a)   In
the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the  "Acquiring
Corporation"), may, without the consent of the Optionee, either assume the Company's rights
and obligations under the Option or substitute for the Option a substantially equivalent option for the Acquiring Corporation's stock. In the event of such assumption or 

8

 

substitution,
the vesting schedule set forth in the Notice shall accelerate by one full year. The vesting schedule shall be adjusted as follows: 

          (i)  if
the Change of Control occurs prior to the Initial Vesting Date, the Initial Vesting Date shall remain unchanged; however, thereafter the daily vesting shall be
adjusted so that the remaining 75% of the Stock shall vest daily in 730 equal increments for the two-year period immediately following the Initial Vesting Date, provided that the Optionee
provides continuous Service to the Acquiring Corporation or any Participating Company, and the Vested Ratio shall be calculated accordingly; 

         (ii)  if
the Change of Control occurs on or after the Initial Vesting Date, all Option Shares vested as of the date of the Change of Control shall remain Vested Shares and,
in lieu of the daily vesting schedule that would otherwise be applicable, all shares that were not vested at the time of the Change of Control will vest daily in equal increments from the date of the
Change of Control through the date two years after the Initial Vesting Date, provided that the Optionee provides continuous Service to the Acquiring Corporation or any Participating Company, and the
Vested Ratio shall be calculated accordingly. Notwithstanding the foregoing, if the Change of Control occurs after the third anniversary of the Initial Vesting Date, then all remaining Option Shares
that had not yet vested shall vest at the time of the Change of Control. 

        (b)   In
the event the Acquiring Corporation elects not to assume the Company's rights and obligations under the Option or substitute for the Option in connection with the
Change in Control, and provided that the Optionee's Service has not terminated prior to such date, the Vested Ratio shall be deemed to be 1/1 and all shares acquired upon exercise of
the Option shall be Vested Shares for purposes of Section 11 as of the date ten (10) days prior to the date of the Change in Control. Any vesting of the Option that was permissible
solely by reason of this Section 8.2 shall be conditioned upon the consummation of the Change in Control. The Option shall terminate and cease to be outstanding effective as of the date of the
Change in Control to the extent that the Option is neither assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change
in Control. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to
such shares shall continue to be subject to all applicable provisions of this Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing, if the corporation the
stock of which is subject to the Option immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Change in Control is the surviving or continuing
corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other
corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code without
regard to the provisions of Section 1504(b) of the Code, the Option shall not terminate unless the Board otherwise provides in its discretion. 

        9.    ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.    

        In
the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number, Exercise Price and class of shares of stock subject to the Option. If a majority of the shares which are of the same class as the shares that are
subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the  "New
Shares"), the Board may unilaterally amend the Option to provide that the Option is exercisable for
New Shares. In the event of any such amendment, the 

9

 

Number
of Option Shares and the Exercise Price shall be adjusted in a fair and equitable manner, as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share
resulting from an adjustment pursuant to this Section 9 shall be rounded down to the nearest whole number, and in no event may the Exercise Price be decreased to an amount less than the par
value, if any, of the stock subject to the Option. The adjustments determined by the Board pursuant to this Section 9 shall be final, binding and conclusive. 

        10.    RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.    

        The
Optionee shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option
has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions
or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 9. If the Optionee is an Employee, the Optionee understands and
acknowledges that, except as otherwise provided in a separate, written employment agreement, if any, between a Participating Company and the Optionee, the Optionee's employment is "at will" and is for
no specified term. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Optionee's Service as an Employee or Consultant, as the case may be, at any time. 

        11.    UNVESTED SHARE REPURCHASE OPTION.    

        11.1    Grant of Unvested Share Repurchase Option.    In the event the Optionee's Service with
the Participating Company Group is terminated for any reason or no reason, with or without cause, or, if
the Optionee, the Optionee's legal representative, or other holder of shares acquired upon exercise of the Option attempts to sell, exchange, transfer, pledge, or otherwise dispose of (other than
pursuant to an Ownership Change Event) any Unvested Shares, as defined in Section 11.2 below, the Company shall have the right to repurchase the Unvested Shares under the terms and subject to
the conditions set forth in this Section 11 (the "Unvested Share Repurchase Option"). 

        11.2    Unvested Shares Defined.    The  "Unvested Shares" shall mean,
on any given date, the number of shares of Stock acquired upon exercise of
the Option which exceed the Vested Shares determined as of such date. 

        11.3    Exercise of Unvested Share Repurchase Option.    The Company's Unvested Share
Repurchase option shall be deemed automatically exercised by the Company, to the extent permitted by law, during the sixty (60) day period following (a) the date of the termination of
the Optionee's Service (or exercise of the Option, if later) or (b) the date the Company received notice of the attempted disposition of Unvested Shares (the "Exercise Period"). The Company
shall be deemed to have repurchased the Unvested Shares, unless the Company delivers written notice to the Optionee prior to the expiration of the Exercise Period expressly waiving its Unvested Share
Repurchase Option. 

        11.4    Payment for Shares and Return of Shares to Company.    The purchase price per share
being repurchased by the Company shall be an amount equal to the Optionee's original cost per share, as adjusted pursuant to Section 9 and this Section 11.4 (the  "Repurchase
Price"). For purposes of the foregoing, cancellation of any purchase money indebtedness of
the Optionee to any Participating Company for the shares shall be treated as payment to the Optionee in cash to the extent of the unpaid principal and any accrued interest canceled. The shares being
repurchased shall be delivered to the Company by the Optionee at the same time as the delivery of the Repurchase Price to the Optionee. If the Company fails to pay timely the Repurchase Price, the
exercise of the Unvested Shares Repurchase Option shall remain in full force and effect; however, 

10

 

the
Repurchase Price payable by the Company shall be increased by 20% and interest on such aggregate amount shall accrue at the rate of 10% per annum until the Repurchase Price is paid. 

        11.5    Assignment of Unvested Share Repurchase Option.    The Company shall have the right to
assign the Unvested Share Repurchase Option at any time, whether or not such option is then exercisable, to one or more persons as may be selected by the Company. 

        11.6    Ownership Change Event.    Upon the occurrence of an Ownership Change Event, any and
all new, substituted or additional securities or other property to which the Optionee is entitled by reason of the Optionee's ownership of Unvested Shares shall be immediately subject to the Unvested
Share Repurchase Option and included in the terms "Stock" and "Unvested Shares" for all purposes of the Unvested Share Repurchase Option with the same force and effect as the Unvested Shares
immediately
prior to the Ownership Change Event. While the aggregate Repurchase Price shall remain the same after such Ownership Change Event, the Repurchase Price per Unvested Share upon exercise of the Unvested
Share Repurchase Option following such Ownership Change Event shall be adjusted as appropriate. For purposes of determining the Vested Shares following an Ownership Change Event, credited Service
shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after
the Ownership Change Event. 

        12.    RIGHT OF FIRST REFUSAL.    

        12.1    Grant of Right of First Refusal.    Except as provided in Section 12.7 below,
in the event the Optionee, the Optionee's legal representative, or other holder of shares acquired upon exercise of the Option proposes to sell, exchange, transfer, pledge, or otherwise dispose of any
Vested Shares (the "Transfer Shares") to any person or entity, including, without limitation, any
stockholder of a Participating Company, the Company shall have the right to repurchase the Transfer Shares under the terms and subject to the conditions set forth in this Section 12 (the  "Right of First Refusal"). 

        12.2    Notice of Proposed Transfer.    Prior to any proposed transfer of the Transfer Shares,
the Optionee shall deliver written notice (the "Transfer Notice") to the Company describing fully the
proposed transfer, including the number of Transfer Shares, the name and address of the proposed transferee (the "Proposed
Transferee") and, if the transfer is voluntary, the proposed transfer price, and containing such information necessary to show the bona fide nature of
the proposed transfer. In the event of a bona fide gift or involuntary transfer, the proposed transfer price shall be deemed to be the Fair Market Value of the Transfer Shares, as determined by the
Board in good faith. If the Optionee proposes to transfer any Transfer Shares to more than one Proposed Transferee, the Optionee shall provide a separate Transfer Notice for the proposed transfer to
each Proposed Transferee. The Transfer Notice shall be signed by both the Optionee and the Proposed Transferee and must constitute a binding commitment of the Optionee and the Proposed Transferee for
the transfer of the Transfer Shares to the Proposed Transferee subject only to the Right of First Refusal. 

        12.3    Bona Fide Transfer.    If the Company determines that the information provided by the
Optionee in the Transfer Notice is insufficient to establish the bona fide nature of a proposed voluntary transfer, the Company shall give the Optionee written notice of the Optionee's failure to
comply with the procedure described in this Section 12, and the Optionee shall have no right to transfer the Transfer Shares without first complying with the procedure described in this
Section 12. The Optionee shall not be permitted to transfer the Transfer Shares if the proposed transfer is not bona fide. 

        12.4    Exercise of Right of First Refusal.    If the Company determines the proposed transfer
to be bona fide, the Company shall have the right to purchase all, but not less than all, of the 

11

 

Transfer
Shares (except as the Company and the Optionee otherwise agree) at the purchase price and on the terms set forth in the Transfer Notice by delivery to the Optionee of a notice of exercise of
the Right of First Refusal within thirty (30) days after the date the Transfer Notice is delivered to the Company. The Company's exercise or failure to exercise the Right of First Refusal with
respect to any proposed transfer described in a Transfer Notice shall not affect the Company's right to exercise the Right of First Refusal with respect to any proposed transfer described in any other
Transfer Notice, whether or not such other Transfer Notice is issued by the Optionee or issued by a person other than the Optionee with respect to a proposed transfer to the same Proposed Transferee.
If the Company exercises the Right of First Refusal, the Company and the Optionee shall thereupon consummate the sale of the Transfer Shares to the Company on the terms set forth in the Transfer
Notice within ninety (90) days after the date the Transfer Notice is delivered to the Company (unless a longer period is offered by the Proposed Transferee); provided, however, that in the
event the Transfer Notice provides for the payment for the Transfer Shares other than in cash, the Company shall have the option of paying for the Transfer Shares by the present value cash equivalent
of the consideration described in the Transfer Notices as reasonably determined by the Company. For purposes of the foregoing, cancellation of any indebtedness of the Optionee to any Participating
Company shall be treated as payment to the Optionee in cash to the extent of the unpaid principal and any accrued interest canceled. 

        12.5    Failure to Exercise Right of First Refusal.    If the Company fails to exercise the
right of First Refusal in full (or to such lesser extent as the Company and the Optionee otherwise agree) within the period specified in Section 12.4 above, the Optionee may conclude a transfer
to the Proposed Transferee of the Transfer Shares on the terms and conditions described in the Transfer Notice, provided such transfer occurs not later than ninety (90) days following delivery
to the Company of the Transfer Notice. The Company shall have the right to demand further assurances from the Optionee and the Proposed Transferee (in a form satisfactory to the Company) that the
transfer of the Transfer Shares was actually carried out on the terms and conditions described in the Transfer Notice. No Transfer Shares shall be transferred on the books of the Company until the
Company has received such assurances, if so demanded, and has approved the proposed transfer as bona fide. Any proposed transfer on terms and conditions different from those described in the Transfer
Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of First Refusal and shall require compliance by the Optionee with the procedure described in
this Section 12. 

        12.6    Transferees of Transfer Shares.    All transferees of the Transfer Shares or any
interest therein, other than the Company, shall be required as a condition of such transfer to agree in writing (in a form satisfactory to the Company) that such transferee shall receive and hold such
Transfer Shares or interest therein subject to all of the terms and conditions of this Option Agreement, including this Section 12 providing for the Right of First Refusal with respect to any
subsequent transfer. Any sale or transfer of any shares acquired upon exercise of the Option shall be void unless the provisions of this Section 12 are met. 

        12.7    Transfers Not Subject to Right of First Refusal.    The Right of First Refusal shall
not apply to any transfer or exchange of the shares acquired upon exercise of the Option if such transfer or exchange is in connection with an Ownership Change Event. If the consideration received
pursuant to such transfer or exchange consists of stock of a Participating Company, such consideration shall remain subject to the Right of First Refusal unless the provisions of Section 12.9
below result in a termination of the Right of First Refusal. 

        12.8    Assignment of Right of First Refusal.    The Company shall have the right to assign
the Right of First Refusal at any time, whether or not there has been an attempted transfer, to one or more persons as may be selected by the Company. 

12

 

        12.9    Early Termination of Right of First Refusal.    The other provisions of this Option
Agreement notwithstanding, the Right of First Refusal shall terminate and be of no further force and effect upon (a) the occurrence of a Change in Control, unless the Acquiring Corporation
assumes the Company's rights and obligations under the Option or substitutes a substantially equivalent option for the Acquiring Corporation's stock for the Option, or (b) the existence of a
public market for the class of shares subject to the Right of First Refusal. A "public market" shall be
deemed to exist if (i) such stock is listed on a national securities exchange (as that term is used in the Exchange Act) or (ii) such stock is traded on the
over-the-counter market and prices therefor are published daily on business days in a recognized financial journal. 

        13.    ESCROW.    

        13.1    Establishment of Escrow.    To ensure that shares subject to the Unvested Share
Repurchase Option will be available for repurchase, the Company may require the Optionee to deposit the certificate evidencing the shares which the Optionee purchases upon exercise of the Option with
an agent designated by the Company (including the Secretary of the Company), under the terms and conditions of an escrow agreement approved by the Company. If the Company does not require such deposit
as a condition of exercise of the Option, the Company reserves the right at any time to require the Optionee to so deposit the certificate in escrow. Upon the occurrence of an Ownership Change Event
or a change, as described in Section 9, in the character or amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of this Option Agreement,
any and all new, substituted or additional securities or other property to which the Optionee is entitled by reason of the Optionee's ownership of shares of Stock acquired upon exercise of the Option
that remain, following such Ownership Change Event or change described in Section 9, subject to the Unvested Share Repurchase Option shall be immediately subject to the escrow to the same
extent as such shares of Stock immediately before such event. The Company shall bear the expenses of the escrow. 

        13.2    Delivery of Shares to Optionee.    As soon as practicable after the expiration of the
Unvested Share Repurchase Option, but not more frequently than twice each calendar year, the escrow agent shall deliver to the Optionee the shares and any other property no longer subject to such
restriction. 

        13.3    Notices and Payments.    In the event the shares and any other property held in escrow
are subject to the Company's exercise of the Unvested Share Repurchase Option or the Right of First Refusal, the notices required to be given to the Optionee shall be given to the escrow agent, and
any payment required to be given to the Optionee shall be given to the escrow agent. Within thirty (30) days after payment by the Company, the escrow agent shall deliver the shares and any
other property which the Company has purchased to the Company and shall deliver the payment received from the Company to the Optionee. 

        14.    STOCK DISTRIBUTIONS SUBJECT TO OPTION AGREEMENT.    

        If,
from time to time, there is any stock dividend, stock split or other change, as described in Section 9, in the character or amount of any of the outstanding stock of the
corporation the stock of which is subject to the provision of this Option Agreement, then in such event any and all new, substituted or additional securities to which the Optionee is entitled by
reason of the Optionee's ownership of the shares acquired upon exercise of the Option shall be immediately subject to the Unvested Share Repurchase Option and the Right of First Refusal with the same
force and effect as the shares subject to the Unvested Share Repurchase Option and the Right of First Refusal immediately before such event. 

13

 

        15.    NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.    

        The
Optionee shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Option Agreement. In addition, if the
Notice designates this Option as an Incentive Stock Option, the Optionee shall (a) promptly notify the Chief Financial Officer of the Company if the Optionee disposes of
any of the shares acquired pursuant to the Option within one (1) year after the date the Optionee exercises all or part of the Option or within two (2) years after the Date of Option
Grant and (b) provide the Company with a description of the circumstances of such disposition. Until such time as the Optionee disposes of such shares in a manner consistent with the provisions
of this Option Agreement, unless otherwise expressly authorized by the Company, the Optionee shall hold all shares acquired pursuant to the Option in the Optionee's name (and not in the name of any
nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after Date of Option Grant. At any time during the
one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer
agent for the Company's stock to notify the Company of any such transfers. The obligation of the
Optionee to notify the Company of any such transfers shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence. 

        16.    LEGENDS.    

        The
Company may at any time place legends referencing the Unvested Share Repurchase Option, the Right of First Refusal, and any applicable federal, state or foreign securities law
restrictions on all certificates representing shares of stock subject to the provisions of this Option Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any
and all certificates representing shares acquired pursuant to the Option in the possession of the Optionee in order to carry out the provisions of this Section. Unless otherwise specified by the
Company, legends placed on such certificates may include, but shall not be limited to, the following: 

        16.1     "THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT." 

        16.2     "THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN UNVESTED SHARE REPURCHASE OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET FORTH IN AN
AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION." 

        16.3     "THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET FORTH IN AN
AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION." 

        16.4.     "THE
SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED
IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("1SO"). IN ORDER TO OBTAIN THE PREFERENTIAL TAX 

14

 

TREATMENT
AFFORDED TO ISOs, THE SHARES SHOULD NOT BE TRANSFERRED PRIOR TO [INSERT DISQUALIFYING DISPOSITION DATE HERE]. SHOULD
THE REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED
HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED
ABOVE." 

        17.    MARKET STAND-OFF.    

        In
connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the
company's initial public offering of equity securities, the Optionee shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other
contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any
Stock without the prior written consent of the Company and its underwriters. Such restriction (the "Market Stand-Off") shall be in effect for such period of time following the date of the
final prospectus for the offering as may be requested by the Company or such underwriters. In no event, however, shall such period exceed 270 days for any underwritten public offering. The
Market Stand-Off restrictions set forth in this paragraph, in regards to any particular offering, shall in any event terminate, as to all underwritten public offerings by the Company so
requested by the Company or underwriters, 540 days after the date of the final prospectus for the Company's initial public offering. In the event of the declaration of a stock dividend, a
spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company's outstanding securities without receipt of consideration, any
new, substituted or additional securities which are by reason of such transaction distributed with respect to any stock subject to the Market Stand-Off, or into which such stock thereby
becomes convertible, shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may impose stop-transfer
instructions with respect to the stock until the end of the applicable stand-off period for such offering. The Company will do all that is necessary to remove by expiration of the
applicable stand-off period such stop-transfer instructions and all appropriate legends on stock certificates. The Company's underwriters shall be beneficiaries of the
agreement set forth in this Section 17. This Section 17 shall not apply to any shares of the stock registered in the public offering of the Company under the Securities Act nor to any
transferee of the shares of the stock purchased from the Optionee thereafter. 

        18.    RESTRICTIONS ON TRANSFER OF SHARES.    

        No
shares acquired upon exercise of the Option may be sold, exchanged, transferred (including, without limitation, any transfer to a nominee or agent of the Optionee), assigned, pledged,
hypothecated or otherwise disposed of, including by operation of law, in any manner which violates any of the provisions of this Option Agreement and, except pursuant to an Ownership Change Event,
until the date on which such shares become Vested Shares, and any such attempted disposition shall be void. The Company shall not be required (a) to transfer on its books any shares which will
have been transferred in violation of any of the provisions set forth in this Option Agreement or (b) to treat as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares will have been so transferred. 

        19.    MISCELLANEOUS PROVISIONS.    

        19.1    Binding Effect.    Subject to the restrictions on transfer set forth herein, this
Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 

15

 

        19.2    Termination or Amendment.    The Board may terminate or amend the Plan or the Option
at any time; provided, however, that except as provided in Section 8.2 in connection with a Change in Control, no such termination or amendment may adversely affect the Option or any
unexercised portion hereof without the consent of the Optionee unless such termination or amendment is necessary to comply with any applicable law or government regulation or is required to enable the
Option, if designated an Incentive Stock Option in the Notice, to qualify as an Incentive Stock Option. No amendment or addition to this Option Agreement shall be effective unless in writing. 

        19.3    Notices.    Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party's signature or at such other address as
such party may designate in writing from time to time to the other party. 

        19.4    Integrated Agreement.    The Notice, this Option Agreement and the Plan constitute the
entire understanding and agreement of the Optionee and the Participating Company Group with respect to the subject matter contained herein or therein and supersedes any prior agreements, offer
letters, understandings, restrictions, representations, or warranties among the Optionee and the Participating
Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Notice and the
Option Agreement shall survive any exercise of the Option and shall remain in full force and effect. 

        19.5    Applicable Law.    This Option Agreement shall be governed by the laws of the State of
California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California. 

        19.6    Counterparts.    The Notice may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. 

16

  

	o Incentive Stock Option

o Nonstatutory Stock Option	 	Optionee:	 	    

	 	 	 	 	Date:	    

STOCK OPTION EXERCISE NOTICE

(IMMEDIATELY EXERCISABLE)  

Kintera, Inc.

Attention: Chief Financial Officer

9605 Scranton Road, Suite 240

San Diego, CA 92121 

Ladies
and Gentlemen: 

        1.    Option.    I was granted an option (the
"Option") to purchase shares of the common stock (the "Shares") of Kintera, Inc. (the
"Company") pursuant to the Company's 2000 Stock Option Plan (the "Plan"), my Notice of Grant of Stock
Option (the "Notice") and my Stock Option Agreement (the "Option Agreement") as follows: 

	Grant Number:	 	    

	

Date of Option Grant:	
 	

    

	

Number of Option Shares:	
 	

    

	

Exercise Price per Share:	
 	

$

        2.    Exercise of Option.    I hereby elect to exercise the Option to purchase the following
number of Shares: 

	Vested Shares:	 	    

	

Unvested Shares:	
 	

    

	

Total Shares Purchased:	
 	

    

	

Total Exercise Price (Total Shares X Price per Share)	
 	

$

        3.    Payments.    I enclose payment in full of the total exercise price for the Shares in the
following form(s), as authorized by my Option Agreement: 

	o Cash:	 	$

	

o Check:	
 	

$

	

o Tender of Company Stock:	
 	

Contact Plan Administrator

        4.    Tax Withholding.    I authorize payroll withholding and otherwise will make adequate
provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in 

1

 

connection
with the Option. If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my withholding taxes, if any, as follows: 

(Contact Plan Administrator for amount of tax due.)

	o Cash:	 	$

	

o Check:	
 	

$

        5.    Optionee Information.    

	My address is:	 	    

	

 	
 	

    

	

My Social Security Number is:	
 	

    

        6.    Notice of Disqualifying Disposition.    If the Option is an Incentive Stock Option, I
agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part of the Option or within two
(2) years of the Date of Option Grant. 

        7.    Binding Effect.    I agree that the Shares are being acquired in accordance with and
subject to the terms, provisions and conditions of the Option Agreement, including the Unvested Share Repurchase Option and the Right of First Refusal set forth therein, to all of which I hereby
expressly assent. This Agreement shall inure to the benefit of and be binding upon the my heirs, executors, administrators, successors and assigns. If required by the Company, I agree to deposit the
certificate(s) evidencing the Shares, along with a blank stock assignment separate from certificate executed by me, with an escrow agent designated by the Company, to be held pursuant to the Company's
standard Joint Escrow Instructions. 

        8.    Transfer.    I understand and acknowledge that the Shares have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and that consequently the Shares must be held indefinitely unless
they are subsequently registered under the Securities Act, an exemption from such registration is available, or they are sold in accordance with Rule 144 or Rule 701 under the Securities
Act. I further understand and acknowledge that the Company is under no obligation to register the Shares. I understand that the certificate or certificates evidencing the Shares will be imprinted with
legends which prohibit the transfer of the Shares unless they are registered or such registration is not required in the opinion of legal counsel satisfactory of the Company. 

        I
am aware that Rule 144 under the Securities Act, which permits limited public resale of securities acquired in a nonpublic offering, is not currently available with respect to
the Shares and, in any event, is available only if certain conditions are satisfied. I understand that any sale of the Shares that might be made in reliance upon Rule 144 may only be made in
limited amounts in accordance with the terms and conditions of such rule and that a copy of Rule 144 will be delivered to me upon request. 

        9.    Election Under Section 83(b) of the Code.    I understand and acknowledge that if
I am exercising the Option to purchase Unvested Shares (i.e., shares that remain subject to the Company's Unvested Share Repurchase Option), that I should consult with my tax advisor regarding the
advisability of filing with the Internal Revenue Service an election under Section 83(b) of the Code, which must be filed no later than thirty (30) days after the date on which I
exercise the Option. I acknowledge that I have been advised to consult with a tax advisor prior to the exercise of the Option regarding the tax consequences to me of exercising the Option. AN ELECTION
UNDER SECTION 83(b) MUST BE 

2

 

FILED
WITHIN 30 DAYS AFTER THE DATE ON WHICH I PURCHASE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. I ACKNOWLEDGE THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS MY SOLE RESPONSIBILITY, EVEN
IF I REQUEST THE COMPANY OR ITS REPRESENTATIVES TO FILE SUCH ELECTION ON MY BEHALF. 

        I
understand that I am purchasing the Shares pursuant to the terms of the Plan, the Notice and my Option Agreement, copies of which I have received and carefully read and understand. 

	 	 	 	Very truly yours,
	

 	

 	
 	

    
 (Signature)
	

Receipt of the above is hereby acknowledged.
	

Kintera, Inc.
	

By:	

    
	
 	

 
	

Title:	

    
	
 	

 
	

Dated:	

    
	
 	

 

3

QuickLinks

Exhibit 10.2

AMENDMENT TO THE KINTERA, INC. 2000 STOCK OPTION PLAN

KINTERA, INC. 2000 STOCK OPTION PLAN

KINTERA, INC. NOTICE OF GRANT OF IMMEDIATELY EXERCISABLE STOCK OPTION

KINTERA, INC. STOCK OPTION AGREEMENTQuickLinks
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EXHIBIT 4.1  

 
 

AMENDING AGREEMENT NO. 3 AND CONSENT    
    

        THIS AMENDING AGREEMENT NO. 3 AND CONSENT (this "Agreement") is made as of
November 14, 2003 among Capital Environmental Resource Inc./Ressources Environnementales Capital Inc. (the "Borrower"), various financial
institutions, as lenders (the "Lenders") and Bank of America, N.A. (Canada Branch) ("BofA"), as Administrative Agent
(the "Administrative Agent"). 

RECITALS:  

	A.
	Reference
is made to the credit agreement dated as of June 27, 2002 among the Borrower, the Lenders, the Administrative Agent and Canadian Imperial Bank of Commerce
("CIBC") as managing agent (the "Managing Agent"), as amended pursuant to amending agreement no. 1 dated as of July 31, 2002
among the Borrower, certain of the Lenders, the Administrative Agent, the Managing Agent and The Toronto-Dominion Bank as syndication agent (the "Syndication Agent"), and
as further amended pursuant to amending agreement no. 2 dated as of May 1, 2003 among the Borrower, certain of the Lenders and the Administrative Agent (as amended, the
"Credit Agreement"). Capitalized terms used but not otherwise defined herein have the meanings given to them in the Credit Agreement.

	B.
	The
Borrower has requested certain amendments to the Credit Agreement and the Administrative Agent and the Lenders party hereto have agreed to such amendments, as more fully set forth
herein.

	C.
	Pursuant
to Section 2.1.1 of the Credit Agreement, BofA has agreed to increase its commitment to the Borrower pursuant to the terms of the Credit Agreement. As a result, the
amount of the combined Commitments will be increased to Cdn.$131,000,000. The Administrative Agent has requested certain amendments to the Credit Agreement in order to reflect these increased
commitments, and certain other amendments incidental thereto, and the Borrower and the Lenders have agreed to such amendments, as more fully set forth herein.

	D.
	The
Borrower has also requested the consent of the Administrative Agent and the Lenders of its acquisition of certain assets owned by Allied Waste Industries, Inc.
("Allied") and certain of its affiliates (collectively, together with Allied, the "Sellers") pursuant to an asset purchase agreement (the
"Allied Asset Purchase Agreement") between Waste Services, Inc. ("Waste Services"), certain of its affiliates (collectively, together
with Waste Services, the "Allied Buyers"), the Borrower, the Sellers and the issuance by Waste Services of Subordinated Debt in connection therewith (which Subordinated
Debt shall be guaranteed by the Borrower and certain of its Subsidiaries). 

        NOW THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

	1.
	Confirmation of Increase in Commitments.    Effective as of the Effective Date (as defined in
Section 6), but subject to the terms and conditions hereof, BofA increases its Commitment by Cdn.$15,000,000, for a total Commitment of Cdn.$49,000,000, on the terms and conditions set forth in
the Credit Agreement. As a result of this Commitment increase, the combined Commitments are now Cdn.$131,000,000 and the Aggregate Borrowing Commitments are now US$88,000,000, respectively. For
greater certainty, this increase in the Commitments shall not take the form of a term loan. On the Effective Date, the Administrative Agent and the Lenders shall make all such payments as are
necessary to ensure that, on such date, each Lender shall have advanced its Pro Rata Share of each outstanding Loan. This increase is made pursuant to Section 2.1.1 of the Credit
Agreement.

	2.
	Amendments to Credit Agreement.    Subject to Section 6 of this Agreement, effective as of
the Effective Date: 

        (a)   Section 1.1
of the Credit Agreement is hereby amended to add the following definitions in the correct alphabetical sequence: 

"Allied
Acquisition means the acquisition by the Allied Buyers of the assets, and the assumption by the Allied Buyers of certain of the liabilities, of Allied Waste
Industries, Inc. and certain of its affiliates as more specifically set out in the Allied Asset Purchase Agreement and all of the general and limited partnership 

 

interests
of Jones Road Landfill and Recycling, Ltd. for aggregate consideration, including deposits, not in excess of US$120,000,000, plus working capital adjustments made in accordance with
the terms of the Allied Asset Purchase Agreement." 

"Allied
Asset Purchase Agreement means the asset purchase agreement between Waste Services, Inc., certain of its affiliates, the Borrower, Allied Waste
Industries, Inc. and certain of its affiliates." 

"Allied
Buyers" means Waste Services, Inc. and certain of its Affiliates, each party to the Allied Asset Purchase Agreement. 

"Allied
Subordinated Debt means Subordinated Debt in the maximum principal amount of US$110,000,000 issued by Waste Services, Inc.(and any guarantees thereof by the
Borrower and its Subsidiaries) for the purpose of completing the Allied Acquisition, and for no other purpose." 

        (b)   The
definition of "Aggregate Borrowing Commitment" in Section 1.1 of the Credit Agreement is hereby amended to read as follows: 

"Aggregate
Borrowing Commitment means US$88,000,000, as such amount may be increased or reduced pursuant to the terms and conditions hereof (including
Sections 2.1.6 and 2.8)." 

        (c)   Section 1.1
of the Credit Agreement is hereby amended to add the following definition in the correct alphabetical sequence: 

"Canadian
Dollar Equivalent means, at any time, as to any amount denominated in US Dollars, the equivalent amount in Canadian Dollars as determined by the
Administrative Agent at such time on the basis of the Spot Rate for the purchase of Canadian Dollars with such US Dollars." 

        (d)   The
definition of "Capital Expenditures" in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 

"Capital
Expenditures means, for any period, all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the Borrower and its Subsidiaries during such period, but excluding (a) up to US$14,000,000 of any capital expenditures made in connection with the Omni Acquisition or in connection
with the development of the Omni Landfill Site up to and including (but not after) the date upon which the Omni Landfill Site becomes operational, (b) expenditures made in connection with the
replacement or restoration of assets during such period, provided a copy of the purchase order evidencing the replacement or restoration of such asset or similar evidence is provided to the
Administrative Agent within 90 days of the loss or damage of such asset and such assets are replaced or restored within 360 days of the loss or damage of such asset, and to the extent
financed (i) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored, or (ii) with awards of compensation
arising from the taking by expropriation, eminent domain or condemnation of the assets being replaced, (c) up to the Canadian Dollar Equivalent of US$7,000,000 of capital expenditures made in
connection with the development of the landfill and transfer station owned by Cactus Waste Systems LLC, provided such capital expenditures are funded solely from issuances of equity by the
Borrower to any Person that is not a Subsidiary and (d) up to the Canadian Dollar Equivalent of US$500,000 of capital expenditures made in connection with the acquisition of the assets of Dell
Waste Systems, Inc., D'Andrea Industries, Inc. and ABC Disposal, LLC completed in any of the second, third or fourth Fiscal Quarters of 2003, provided such capital expenditures
are funded solely from issuances of equity by the Borrower to any Person that is not a Subsidiary." 

        (e)   The
definition of "EBITDA" in Section 1.1 of the Credit Agreement is amended and restated in its entirety to read as follows: 

"EBITDA
means, with respect to any Computation Period and for any Person, Consolidated Net Income of such Person (excluding interest income, investment income, foreign
exchange gains and foreign exchange losses) for such period, before deducting Interest Expense, taxes, depreciation and amortization, adjusted to include the permitted adjustments set out in
Schedule 1.1C for the periods following September 30, 2002." 

2

 

        (f)    The
definition of "Fixed Charge Coverage Ratio" in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 

"Fixed
Charge Coverage Ratio means, as of the last day of any Fiscal Quarter, the ratio of (a) EBITDA for the Computation Period ended on that date minus Capital
Expenditures made by the Borrower and its Subsidiaries during such Computation Period, to (b) the sum of (i) cash Interest Expense of the Borrower and its Subsidiaries payable for such
Computation Period, plus (ii) the aggregate of all scheduled principal payments on Funded Debt payable by the Borrower and its Subsidiaries during such Computation Period, plus (iii) the
aggregate of all cash taxes payable by the Borrower and its Subsidiaries during such Computation Period; provided that, (A) for the Computation Period ending June 30, 2002, Capital
Expenditures made by the Borrower and its Subsidiaries during such Computation Period shall be deemed to
be Cdn.$4,800,000, and (B) for the Fiscal Quarter ending June 30, 2002, the Fixed Charge Coverage Ratio shall be measured based on a three month period ending June 30, 2002; for
the Fiscal Quarter ending September 30, 2002, the Fixed Charge Coverage Ratio shall be measured based on a six month period ending September 30, 2002; and for the Fiscal Quarter ending
December 31, 2002, the Fixed Charge Coverage Ratio shall be measured based on a nine month period ending December 31, 2002, and (C) notwithstanding paragraph (a) above, no
deduction shall be made in respect of Capital Expenditures in an aggregate amount of up to Cdn.$12,100,000 in the calendar year ending December 31, 2003 or up to Cdn.$8,000,000 in any other
12-month period, to the extent such Capital Expenditures are in respect of new Municipal Services Contracts in respect of which the Administrative Agent has reviewed and approved the
applicable documentation. For greater certainty, for any Fiscal Quarter following December 31, 2002, the Fixed Charge Coverage Ratio will be measured based on the applicable Computation
Period." 

        (g)   If
all of the Lenders approve this Agreement, the definition of "Funded Debt" in Section 1.1 of the Credit Agreement is amended and restated as follows: 

"Funded
Debt means all Debt of the Borrower and its Subsidiaries, excluding (i) obligations of the Borrower or any Subsidiary in respect of any performance bonds,
(ii) the obligations of the Borrower or any Subsidiary in respect of undrawn letters of credit supporting any performance bond, (iii) the obligations of the Borrower or any Subsidiary in
respect of undrawn letters of credit supporting post-closure obligations, (iv) the obligations of the Borrower or any Subsidiary in respect of undrawn letters of credit supporting
Municipal Service Contracts, (v) liabilities under Hedging Agreements, (vi) Debt of the Borrower to Wholly-Owned Subsidiaries and Debt of Subsidiaries to the Borrower or to other
Wholly-Owned Subsidiaries, (vii) contingent obligations in respect of the WSI Acquisition and (viii) royalty payments due by the Borrower or a Subsidiary to municipalities or other
persons or entities under that certain Royalty Agreement (the "Omni Royalty Agreement") dated as of May 1, 2003, without giving effect to any amendments thereto,
entered into in connection with the Omni Acquisition; provided, however, that for the purpose of calculating "Funded Debt", if consolidated cash on hand of the Borrower as at the most recent Fiscal
Quarter end exceeds the Canadian Dollar Equivalent of US$2,000,000, there shall be deducted from the amount of Funded Debt determined in accordance with the foregoing, an amount equal to consolidated
cash on hand of the Borrower as at the most recent Fiscal Quarter end, less the Canadian Dollar Equivalent of US$2,000,000." 

        If
less than all of the Lenders approve this Agreement, but this Agreement is nevertheless approved by the Required Lenders, the definition of "Funded Debt" in Section 1.1 of the
Credit Agreement is amended and restated as follows: 

"Funded
Debt means all Debt of the Borrower and its Subsidiaries, excluding (i) obligations of the Borrower or any Subsidiary in respect of any performance bonds,
(ii) the obligations of the Borrower or any Subsidiary in respect of undrawn letters of credit supporting any performance bond, (iii) the obligations of the Borrower or any Subsidiary in
respect of undrawn letters of credit supporting post-closure obligations, (iv) the obligations of the Borrower or any Subsidiary in respect of undrawn letters of credit supporting
Municipal Service Contracts, (v) liabilities under Hedging Agreements, (vi) Debt of the Borrower to Wholly-Owned Subsidiaries and Debt of Subsidiaries to the Borrower or to other
Wholly-Owned Subsidiaries, (vii) contingent obligations in respect of the WSI Acquisition and (viii) royalty payments due by the Borrower or a Subsidiary to municipalities or other
persons or entities under that certain Royalty 

3

 

Agreement
(the "Omni Royalty Agreement") dated as of May 1, 2003, without giving effect to any amendments thereto, entered into in connection with the Omni
Acquisition; provided, however, that for the purpose of calculating "Funded Debt" for all purposes in this Agreement other than for the purposes of calculating the Applicable Margins, if consolidated
cash on hand of the Borrower as at the most recent Fiscal Quarter end exceeds the Canadian Dollar Equivalent of US$2,000,000, there shall be deducted from the amount of Funded Debt determined in
accordance with the foregoing, an amount equal to consolidated cash on hand of the Borrower as at the most recent Fiscal Quarter end, less the Canadian Dollar Equivalent of US$2,000,000." 

        (h)   The
definition of "Subordinated Debt" in Section 1.1 of the Credit Agreement is amended to delete the two references to "the Borrower" and replace them with
references to "the Borrower or any of its Subsidiaries". 

        (i)    The
definition of "L/C Commitment" in Section 1.1 of the Credit Agreement is amended to delete the reference to "Cdn $25,000,000" appearing therein and to replace
it with "Cdn $35,000,000". 

        (j)    Section 2.1.1
is amended to delete the reference to "Cdn.$2,000,000" and replace it with "Cdn.$1,000,000". 

        (k)   Section 7.5(b)
of the Credit Agreement is amended and restated in its entirety to read as follows: 

"(b)
the audited consolidated financial statements of the Borrower and its Subsidiaries as at December 31, 2002, which, upon the filing of the Form 20-F/A Amendment
No. 1, shall have been prepared in conformity with GAAP and present fairly the financial condition of the Borrower and its Subsidiaries as at the date of such statements and the results of
operations for the period then ended." 

        (l)    Section 8.6.2
of the Credit Agreement is amended and restated in its entirety to read as follows: 

"8.6.2
Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio at the end of any Computation Period ending during the periods described below to be less
than the applicable ratio set forth below: 

	Computation Periods Ending:
 
	 	Fixed Coverage Ratio
	 
	September 30, 2003-June 30, 2004	 	1.00 : 1.00	 
	July 1, 2004-September 30, 2004	 	1.10 : 1.00	 
	October 1, 2004-December 31, 2004	 	1.15 : 1.00	 
	January 1, 2005 and thereafter	 	1.25 : 1.00	"

        (m)  Section 8.6.3
is amended and restated in its entirety to read as follows: 

"8.6.3
Leverage Ratio. Not permit the Leverage Ratio at any time during any Computation Period ending during the periods described below to exceed the applicable ratio set
forth below: 

	Computation Periods Ending:
 
	 	Maximum Leverage Ratio

	March 31, 2003	 	3.50 : 1.00
	April 1, 2003-September 29, 2003	 	3.35 : 1.00
	September 30, 2003-March 31, 2004	 	3.00 : 1.00
	April 1, 2004-September 30, 2004	 	2.75 : 1.00
	October 1, 2004 and thereafter	 	2.50 : 1.00

provided
that, if after the Closing Date, the Borrower or any of its Subsidiaries incurs any Subordinated Debt, then, in lieu of the foregoing maximum Leverage Ratio, from
and after the date on which such Subordinated Debt is incurred, the Borrower shall not permit the Leverage Ratio and the Senior Leverage 

4

 

Ratio
at any time during any Computation Period ending during the periods described below to exceed the applicable ratios set forth below: 

	Computation Periods Ending:
 
	 	Maximum Leverage Ratio

	December 31, 2003-March 31, 2005	 	4.50 : 1.00
	April 1, 2005 and thereafter	 	4.25 : 1.00

	Computation Periods Ending:
 
	 	Maximum Senior Leverage Ratio

	December 31, 2003-March 31, 2005	 	2.50 : 1.00
	April 1, 2005 and thereafter	 	2.25 : 1.00

        (n)   Section 8.6.4
of the Credit Agreement is amended and restated in its entirety to read as follows: 

"8.6.4
Pro Forma Adjusted EBITDA. Maintain Pro Forma Adjusted EBITDA of the Borrower and the Subsidiaries for each Computation Period ending during the
periods described below at a level which is not less than the amount set forth opposite such Computation Period in the table below: 

	Computation Periods Ending:
 
	 	Minimum Pro Forma Adjusted EBITDA

	September 30, 2003-March 31, 2004	 	Cdn.$24,500,000
	April 1, 2004-June 30, 2004	 	Cdn.$25,500,000
	July 1, 2004-September 30, 2004	 	Cdn.$26,500,000
	October 1, 2004-December 31, 2004	 	Cdn.$27,500,000
	January 1, 2005 and thereafter	 	Cdn. $32,000,000

If,
after the Closing Date, the Borrower or any of its Subsidiaries completes an Acquisition, the minimum Pro Forma Adjusted EBITDA levels set forth above will be increased by an amount equal
to 85% of trailing 12-month consolidated EBITDA of the Person which is the subject of such Acquisition. Any such adjustment will be determined by the Administrative Agent, based upon the
unaudited financial statements of the Person which is the subject of such Acquisition for the preceding four Fiscal Quarters. No reduction will be made in respect of any Acquisition of any Person
having negative EBITDA." 

        (o)   Section 8.6.5
of the Credit Agreement is deleted in its entirety. 

        (p)   Schedule 1.1A
of the Credit Agreement is amended to read as set out in Schedule A attached to this Agreement. 

        (q)   If
all of the Lenders approve this Agreement, Schedule 1.1B of the Credit Agreement is amended to read as set out in Schedule B attached to this Agreement.
If less than all of the Lenders approve this Agreement, but this Agreement is nevertheless approved by the Required Lenders, Schedule 1.1B will not be amended, and such Schedule will read as it
did prior to the Effective Date. 

        (r)   If
all of the Lenders approve this Agreement, Schedule 1.1C of the Credit Agreement is amended to read as set out in Schedule C attached to this Agreement.
If less than all of the Lenders approve this Agreement, but this Agreement is nevertheless approved by the Required Lenders, Schedule 1.1C of the Credit Agreement is amended to read as set out
in Schedule C attached to this Agreement for all purposes other than for the purpose of calculating the Applicable Margins, but Schedule 1.1C of the Credit Agreement, as it existed as at
the Effective Date, will continue to apply for the purpose of calculating the Applicable Margins. 

        (s)   Section 8.1.1
of the Credit Agreement is amended to delete the reference to "PricewaterhouseCoopers LLP" appearing therein and replace it with "BDO
Dunwoody LLP". 

	3.
	Consent to Change of Auditor.    The Administrative Agent and the Lenders hereby consent to the
change in auditor of the Borrower from PricewaterhouseCoopers LLP to BDO Dunwoody LLP. 

5

 
	4.
	Waivers and Consents.    In reliance on the representations and warranties, covenants and
agreements set forth in this Agreement, the Administrative Agent and the Lenders hereby consent to (i) the completion of the transactions by the Borrower and/or its Subsidiaries as set forth in
subsection (a) of this Section 4, subject to the satisfaction of the conditions in Sections 8.11 (d)(i), (ii), (iii), (v) and (vi) of the Credit Agreement (it being
understood that the environmental review required by Section 8.11(d)(vi) will be provided on or before December 15, 2003) and the conditions contained in Section 6 of this
Agreement, (ii) the issuance of the Subordinated Debt as more particularly described in subsection (b) of this Section 4, subject to the conditions contained in Section 6
of this Agreement, and (iii) the following waivers requested by the Borrower as set forth in subsections (c) and (d) of this Section 4 of this Agreement: 

        (a)   The
Allied Acquisition, on the terms and conditions set forth in and pursuant to the Allied Asset Purchase Agreement in the form provided to the Administrative Agent and
the assumption by the Allied Buyers of certain liabilities (as more particularly described in the Allied Asset Purchase Agreement, provided
that (i) no Unmatured Event of Default or Event of Default has then occurred or is continuing or would arise immediately after giving effect to the Allied
Acquisition, (ii) the Borrower and its Subsidiaries shall have complied with Section 6 hereof, and (iii) the Allied Acquisition is financed, as to at least US$100,000,000 of the
purchase price therefor, with the proceeds of the Allied Subordinated Debt. 

        (b)   The
issuance of the Allied Subordinated Debt, provided that (i) no material terms applicable to such Debt (including the covenants and events of default thereof)
are materially less favourable to the Borrower and its Affiliates or the Lenders than the terms that are applicable under the Credit Agreement, (ii) the covenants contained therein are less
restrictive than the covenants contained in the Credit Agreement, (iii) such Debt shall mature at least six months beyond the Termination Date, (iv) such Debt is unsecured and
subordinated in right of payment to the prior payment of the Obligations, (v) such Debt accrues interest at a rate no higher than 12% per annum, provided that such Debt may accrue interest at a
rate of up to 14% per annum if any interest accruing thereunder in excess of 12% per annum is not paid in cash, but is added to principal, and (vi) such Debt is otherwise on terms and
conditions satisfactory to the Administrative Agent and the Required Lenders. 

        (c)   The
waiver of compliance with Section 8.7 of the Credit Agreement only to the extent necessary to permit the Borrower and/or its Subsidiaries to issue the Allied
Subordinated Debt. 

        (d)   The
waiver of compliance with the requirement to deliver the documents and certificates pursuant to Sections 8.1.2 and 8.1.3 of the Credit Agreement by
November 14, 2003; provided that the Borrower has fully complied with Sections 8.1.2 and 8.1.3 by no later than 5p.m. (Toronto time) on
November 18, 2003. 

	5.
	Representations and Warranties.    The Borrower represents and warrants to the Administrative
Agent and each Lender that, as of the Effective Date: 

        (a)   This
Agreement has been duly authorized, executed and delivered by the Borrower and duly acknowledged by each Loan Party other than the Borrower, and the Credit
Agreement, as amended hereby, constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. 

        (b)   The
representations and warranties of the Borrower and each other Loan Party set forth in each Loan Document, as amended hereby, are true and correct on and as of the
Effective Date (except where such representation or warranty expressly relates to a different date). 

        (c)   The
Borrower and each other Loan Party are in full compliance with their respective covenants in each Loan Document, as amended hereby, and no Event of Default or
Unmatured Event of Default has occurred and is continuing or will result from the effectiveness of this Agreement, the Allied Acquisition or the issuance of the Allied Subordinated Debt. 

        (d)   No
event or circumstance has occurred since December 31, 2002 that has resulted or could reasonably be expected to result in a Material Adverse Effect. 

	6.
	Condition to Effectiveness.    This Agreement shall become effective on the date (the
"Effective Date") that the Administrative Agent shall have received (a) this Agreement, duly executed by the Borrower and the Required Lenders, and duly
acknowledged by each Loan Party other than the Borrower, along with the fees 

6

 

payable
to BofA and CIBC pursuant to Section 11 hereof, and (b) for the account of each Lender that executes and delivers to the Administrative Agent or its counsel its signature page
hereto by 6:30 p.m. (Toronto Time) on November 13, 2003, an amendment fee equal to 0.50% of such Lender's Commitment (as it was prior to the Effective Date). In addition, the
Administrative Agent shall have received (i) as a condition to the effectiveness of the consent hereunder to the Allied Acquisition, fully executed copies of the Allied Asset Purchase Agreement
in form and substance satisfactory to the Administrative Agent and all other material documents, instruments and agreements related to the Allied Acquisition, including all amendments and
modifications thereto (whether characterized as an amendment, modification, waiver, consent or similar document) (collectively, together with the Allied Asset Purchase Agreement, the
"Allied Acquisition Documents"), certified in each case by the Borrower to be true and correct and all in form and substance satisfactory to the Administrative Agent and
its counsel, and (ii) as a condition to the effectiveness of the consent hereunder to the issuance of the Allied Subordinated Debt, fully executed copies of the applicable subordinated debt,
certified in each case by the Borrower to be true and correct and in each case in form and substance satisfactory to the Administrative Agent. 

	7.
	Covenants of the Borrower    The Borrower shall, and shall cause each Subsidiary, where
applicable, to: 

        (a)   deliver
executed security documents requested by the Administrative Agent (including without limitation first priority mortgages on the relevant parcels of land), the
other documents contemplated by Sections 8.11 and 8.25 of the Credit Agreement and any other instruments and documents requested by, and in form and substance satisfactory to, the
Administrative Agent, in order to create in favour of the Administrative Agent, as agent for the Lenders, first priority Liens over the assets purchased pursuant to the Allied Acquisition, by no later
than 60 days after the date of the completion of the Allied Acquisition; 

        (b)   take
all actions necessary to enable the Administrative Agent (or its agent) to register all the security documents and other relevant instruments and documents referred
to in the foregoing Section 7(a) in all offices in which, in the opinion of the Administrative Agent or its counsel, registration is necessary or of advantage to perfect and protect the
priority of the Liens intended to be created thereby; and 

        (c)   unless
and until the Allied Acquisition is completed, not request or make any Borrowings under the Credit Agreement in excess of Cdn.$116,000,000 other than for purposes
of the Allied Acquisition. 

	8.
	Credit Agreement in Effect.    This Agreement shall constitute a Loan Document and a breach of
any term hereof shall constitute an Event of Default under the Credit Agreement. Except as specifically stated herein, this Agreement shall not constitute (a) a modification or alteration of
the terms, conditions or covenants of any other Loan Document, or (b) a waiver, release or limitation upon the exercise by the Administrative Agent or the Lenders of any of their rights, legal
or equitable, thereunder. The Credit Agreement shall continue in full force and effect in accordance with the provisions thereof and all Loan Documents issued or granted in connection therewith are
hereby ratified and confirmed and shall continue in full force and effect. Each of the Administrative Agent and the Lenders reserves any and all rights and remedies which such Person has had, has or
may have had under the Loan Documents. After this Agreement becomes effective as provided herein, any reference to the Credit Agreement shall refer to the Credit Agreement as amended hereby.

	9.
	Applicable Law.    This Agreement shall be construed in accordance with and governed by the laws
of Ontario.

	10.
	Counterparts.    This Agreement may be executed in any number of counterparts, each of which
shall be an original but all of which, when taken together, shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile shall be effective
as delivery of a manually executed counterpart of this Agreement.

	11.
	Upfront Fee.    The Borrower agrees to pay to the Administrative Agent, for the account of BofA
a fee (for BofA) in an amount equal to Cdn.$150,000, being an amount equal to 1.00% of the amount by which such Lender's Commitment will increase on the Effective Date.

	12.
	Expenses.    The Borrower agrees to reimburse the Administrative Agent and the Lenders for their
out-of-pocket expenses in connection with this Agreement, including the legal fees and disbursements of 

7

 

Blake,
Cassels & Graydon LLP and Sidley Austin Brown & Wood, counsel for the Administrative Agent and the Lenders. 

	13.
	Nondisclosure.    The Administrative Agent and the Lenders recognize and acknowledge that
information of the Borrower or any of its Subsidiaries that has been provided to them by the Borrower or any of its Subsidiaries or the Administrative Agent in connection with this Amendment,
including the Amendment and information as to financial statements, is "confidential" and subject to the provisions of Section 11.10 of the Credit Agreement. 

8

 

        IN WITNESS WHEREOF, the parties hereto have caused this Amending Agreement to be duly executed by their respective authorized officers as
of the day and year first above written. 

	 
	 	 

	CAPITAL ENVIRONMENTAL RESOURCE INC./RESSOURCES ENVIRONNEMENTALES CAPITAL INC.	 	BANK OF AMERICA, N.A. (Canada Branch), as Administrative Agent

	

By: Name:

Title:	

/s/  THOMAS E. DURKIN III      
 Thomas E. Durkin III

Executive Vice President,

General Counsel and Secretary	
 	

By:

Name:

Title:	

/s/  MELINA SALÉS DE ANDRAOC      
 Melina Salés De Andraoc

Assistant Vice President
	

By: Name:

Title:	

/s/  RONALD L. RUBIN      
 Ronald L. Rubin

Executive Vice President,

Chief Financial Officer	
 	

 	

 

	 
	 	 

	
BANK OF AMERICA, N.A. (Canada Branch), as a Lender	
 	

CANADIAN IMPERIAL BANK OF COMMERCE, as a Lender

	

By:

Name:

Title:	

/s/  MELINA SALÉS DE ANDRAOC      
 Melina Salés De Andraoc

Assistant Vice President	
 	

By: Name:

Title:	

/s/  ROBERT MCCALLAN      
 Robert McCallan

Manager, Commercial Credit

	 
	 	 

	
THE BANK OF NOVA SCOTIA, as a Lender	
 	
THE TORONTO-DOMINION BANK, as a Lender

	

By: Name:

Title:	

/s/  P. ARMSTRONG      
 P. Armstrong

Vice President	
 	

By: Name:

Title:	

/s/  ROHAN APPADURAI      
 Rohan Appadurai

Vice President & Director

9

 
 
 

Acknowledgement  
    

        Each of the undersigned acknowledges and approves the foregoing Amending Agreement and agrees that each Loan Document to which it is a party is hereby ratified
and confirmed and remains in full force and effect. 

	 	 	RAM-PAK COMPACTION SYSTEMS LTD. WASTE SERVICES, INC. OMNI WASTE OF OCSEOLA COUNTY LLC CACTUS WASTE SYSTEMS, LLC WASTE SERVICES OF ARIZONA, INC.
	

 	
 	
By:	

/s/  THOMAS E. DURKIN III      
 Authorized Officer of each of the above

10

QuickLinks

AMENDING AGREEMENT NO. 3 AND CONSENT

Acknowledgement

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