7. RIGHTS PRIOR TO EXERCISE OF OPTION; LIMITATIONS AFTER PURCHASE OF SHARES
7.1. Subject to the provisions of Section 7.2 below, the Optionee shall not have any of the rights or privileges of a stockholder of the Corporation in respect of any Shares purchasable upon the exercise of any Option unless and until, following exercise and discharge by the Optionee of all its obligations in connection therewith (including the payment of applicable aggregate Purchase Price for the Shares issued upon exercise of the Options and any applicable taxes), the Optionee is registered as holder of such Shares in the Corporation’s register of stockholders and in case of Options and Shares held by the Trustee, subject always to the provisions of Section 20 of the Plan.
7.2. No Option granted hereunder, whether fully paid or not, may be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.
7.3. Any such action made directly or indirectly, for an immediate validation or for a future one, shall be void.
7.4. As long as the Shares are held by the Trustee in favor of the Optionee, all rights the latter possesses over the Shares shall be personal, and may not be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution.
7.5. The Shares issued to the Optionee shall be subject to such restrictions as required by any applicable securities law or the Corporation (including any lock up undertaking).
7.6. Until registered in the name of the Optionee, Shares eligible for voting shall be voted by an irrevocable proxy a copy of which is attached hereto as Exhibit B. Those empowered under the Proxy shall be indemnified and held harmless by the Corporation against any cost or expense (including counsel fees) reasonably incurred by him/her, or any liability (including any sum paid in settlement of a claim with the approval of the Corporation) arising out of any act or omission to act in connection with the voting of such proxy unless arising out of such person’s own fraud, bad faith or gross negligence, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the person(s) may have as a director, officer or otherwise under the Corporation’s Certificate of Incorporation, any agreement, any vote of stockholders or directors, insurance policy or otherwise.
7.7. The Optionee acknowledges that its right to sell Shares may be subject to some representations or undertakings on its part as well as other limitations, as set forth by the Corporation or, in the event the Corporation’s shares are registered for trading in any public market, by the Corporation or its underwriters. In any such events, the Optionee will unconditionally agree to any such limitations as well as to make such representations, and perform such undertakings.
7.8. The Optionee shall not dispose of any Shares in transactions which violate, in the opinion of the Corporation, any applicable laws, rules and regulations.
7.9. The Optionee agrees that the Corporation shall have the authority to endorse upon the certificate or certificates representing the Shares such legends referring to any applicable representations and undertakings of the Optionee as well as other applicable limitations and restrictions as it may deem appropriate.
7.10. The Optionee agrees that he or she will not effect any sale or other disposition of Shares underlying the options granted to the Optionee under this Agreement, unless upon such sale or other disposition of Shares and after giving effect to the number of Shares so sold, the Optionee will retain, in the aggregate, a number of shares of common stock of the Corporation, including shares underlying outstanding stock options (provided that, as of the date of such sale, such options have an exercise price that is lower than the market price of the common stock on the date of sale), that have an aggregate market value, based on the market price of the Corporation’s common stock on the date of sale or other disposition, equal to not less than the annual base salary of the Optionee. The restrictions set forth in this Section 7.10 shall terminate automatically, and cease to have any force or effect upon the earlier of a Change of Control or a Corporate Transaction, and the eighth anniversary of the Date of Grant. The restrictions set forth in this Section 7.10 shall also terminate automatically, and cease to have any force or effect upon; if the Optionee ceases to perform Continuous Services.
8. SHARES SUBJECT TO PLEDGE
Unless otherwise prohibited by law and notwithstanding anything to the contrary, if at the time at which any of the Options granted hereunder is exercised, Optionee is indebted to the Corporation (or any Related Entity) for any reason, then any Shares to be issued upon such exercise shall automatically be pledged against Optionee’s outstanding indebtedness, as deemed appropriate by the Administrator.
9. GOVERNMENT REGULATIONS
The Plan, the grant and exercise of Options hereunder, and the obligation of the Corporation to sell and deliver Shares under such Options, shall be subject to all applicable laws, rules and regulations, whether of the State of Israel or of the United States or any other state having jurisdiction over the Corporation and the Optionee, including without limitation, the U.S. Securities Act of 1933 and the Israeli Securities Law and or any applicable securities law, and to such approvals by any governmental agencies or national securities exchanges as may be required.