The basic statement is right.
Why can't the fifth option be truthful? *rimshot*
Because, you can't answer 'Yes' or 'No' to "Do you still beat your wife?"
I have a little experience in this but it is a few years old.
(A) If you wrote it I see no problem in duel license, but make sure they understand that it is still your code.
(B) Be careful, if you write something for them under contract they own it outright.
Wasn't there something about a PASCAL programmer knowing the value of everything and the Wirth of nothing?