Document:

Exhibit

Exhibit 10.3

MALLINCKRODT PHARMACEUTICALS
STOCK AND INCENTIVE PLAN
 
Effective as of May 18, 2017

This document constitutes part of a prospectus covering securities that have
been registered under the United States Securities Act of 1933, as amended.

MALLINCKRODT PHARMACEUTICALS STOCK AND INCENTIVE PLAN
 
EFFECTIVE AS OF MARCH 19, 2015

ARTICLE I 

PURPOSE 

1.Purpose.    The purposes of this Mallinckrodt Pharmaceuticals Stock and Incentive Plan as amended and restated (the “Plan”) are to promote the interests of Mallinckrodt public limited company (and any successor thereto) by (i) aiding in the recruitment and retention of Directors and Employees, (ii) providing incentives to Directors and Employees by means of performance-related incentives to achieve short-term and long-term performance goals, (iii) providing Directors and Employees with an opportunity to participate in the growth and financial success of the Company, and (iv) promoting the growth and success of the Company’s business by aligning the financial interests of Directors and Employees with that of the other shareholders of the Company. Toward these objectives, the Plan provides for the grant of Stock Options, Stock Appreciation Rights, Annual Performance Bonuses, Long-Term Performance Awards and Other Stock-Based Awards. 

2.Effective Date; Shareholder Approval.    The Plan is effective as of the date of shareholder approval, following the approval of the Plan on March 19, 2015 by the Company’s Board of Directors.

ARTICLE II 
DEFINITIONS 

For purposes of the Plan, the following terms have the following meanings, unless another definition is clearly indicated by particular usage and context: 

“Acquired Company” means any business, corporation or other entity acquired by the Company or any Subsidiary. 

“Acquired Grantee” means the grantee of a stock-based award of an Acquired Company and may include a current or former Director of an Acquired Company.

“Annual Performance Bonus” means an Award of cash or Shares granted under Section 4.4 of the Plan that is paid solely on account of the attainment of a specified performance target in relation to one or more Performance Measures, and is intended to qualify as “performance-based” compensation under Section 162(m) of the Code.

“Award” means any form of incentive or performance award granted under the Plan, whether singly or in combination, to a Participant by the Committee pursuant to any terms and conditions that the Committee may establish and set forth in the applicable Award Certificate. Awards granted under the Plan may consist of: 

		
	(a)
	“Stock Options” awarded pursuant to Section 4.3;

		
	(b)
	“Stock Appreciation Rights” awarded pursuant to Section 4.3;

		
	(c)
	“Annual Performance Bonuses” awarded pursuant to Section 4.4;

		
	(d)
	“Long-Term Performance Awards” awarded pursuant to Section 4.5;

		
	(e)
	“Other Stock-Based Awards” awarded pursuant to Section 4.6;

		
	(f)
	“Director Awards” awarded pursuant to Section 4.7; and

		
	(g)
	“Substitute Awards” awarded pursuant to Section 4.8. 

“Award Certificate” means the document issued, either in writing or an electronic medium, by the Committee or its designee to a Participant evidencing the grant of an Award and which contains, in the same or accompanying document, the terms and conditions applicable to such Award.

“Board” means the Board of Directors of the Company.

“Cause” means, as to any Employee who is a party to an employment agreement with the Company or any Subsidiary which contains a definition of “cause,” as set forth in such employment agreement and, if there is no applicable employment agreements, means an Employee’s or Director’s (i) substantial failure or refusal to perform duties and responsibilities of his or her job at a satisfactory level as required by the Company or Subsidiary, other than due to Disability, (ii) a material violation of any fiduciary duty or duty of loyalty owed to the Company or Subsidiary, (iii) conviction of a misdemeanor (other than a traffic offense) or felony, (iv) fraud, embezzlement or theft, (v) violation of a material Company or Subsidiary rule or policy, (vi) unauthorized disclosure of any trade secret or confidential information of the Company or Subsidiary or (vii) other egregious conduct, that has or could have a serious and detrimental impact on the Company or Subsidiary and its employees..  The Committee (or the Nominating Committee solely with respect to Director Awards), in its sole and absolute discretion, shall determine Cause.

“Change in Control” means the first to occur of any of the following events: 

		
	(a)
	any “person” (as defined in Section 13(d) and 14(d) of the Exchange Act, excluding for this purpose, (i) the Company or any Subsidiary or (ii) any employee benefit plan of the Company or any Subsidiary (or any person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan that acquires beneficial ownership of voting securities of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities of the Company representing more than 30 percent of the combined voting power of the Company's then outstanding securities; provided, however, that no Change in Control will be deemed to have occurred as a result of a change in ownership percentage resulting solely from an acquisition of securities by the Company; or

		
	(b)
	persons who, as of the Effective Date constitute the Board (the “Incumbent Directors”) cease for any reason (including without limitation, as a result of a tender offer, proxy contest, merger or similar transaction) to constitute at least a majority thereof, provided that any person becoming a Director of the Company subsequent to the Effective Date shall be considered an Incumbent Director if such person's election or nomination for election was approved by a vote of at least 50 percent of the Incumbent Directors; but provided further, that any such person whose initial assumption of office is in connection with an actual or threatened proxy contest relating to the election of members of the Board or other actual or threatened solicitation of proxies or consents by or on behalf of a “person” (as defined in Section 13(d) and 14(d) of the Exchange Act) other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation, shall not be considered an Incumbent Director; or

		
	(c)
	consummation of a reorganization, merger or consolidation or sale or other disposition of at least 80 percent by value of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, all or substantially all of the individuals and entities who were the beneficial owners of outstanding voting securities of the Company immediately prior to such Business Combination beneficially own directly or indirectly more than 50 percent of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the company resulting from such Business Combination (including, without limitation, a company which, as a result of such transaction, owns the Company or all or substantially all of the Company's assets either directly or through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the outstanding voting securities of the Company; or

		
	(d)
	approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Any payment of deferred compensation subject to Code Section 409A that is to be made under an Award other than an Annual Performance Bonus upon the occurrence of a Change in Control or any change in the timing and/or form of such payment as a direct result of a Change in Control (including payments made upon a specified date or event occurring after a Change in Control) shall not be made, or such change in timing and/or form shall not occur, unless such Change in Control is also a “change in ownership or effective control” of the Company within the meaning of Code Section 409A(a)(2)(A)(v) and applicable regulations and rulings thereunder and such payment, or such change in timing and/or form, occurs no later than two (2) years after the date of such change in ownership or effective control of the Company, in each case to the extent required to avoid the recipient of such Award from incurring tax penalties under Code Section 409A in respect of such Award.  Notwithstanding the foregoing, if the Committee takes an action pursuant to Section 5.4(b) to accelerate the payment of deferred compensation upon a Change in Control, then any accelerated payment shall occur on a date specified in the applicable Award Certificate, which date shall be no later than ninety (90) days after a “change in ownership or effective control” of the Company.  The payment of an Annual Performance Bonus that is to be accelerated 

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pursuant to Subsection 4.4(g) shall occur within thirty (30) days after a “change in ownership or effective control” of the Company within the meaning of Code Section 409A(a)(2)(A)(v).

“Change in Control Termination” means such term or concept as defined in an Award Certificate or, if such term is not defined therein, a Participant’s involuntary termination of employment that occurs during the twelve (12) month period immediately following a Change in Control.  For this purpose, a Participant’s involuntary termination of employment includes the following:

		
	(a)
	termination of the Participant’s employment by the Company for any reason other than for Cause, Disability or death;

		
	(b)
	termination of the Participant’s employment by the Participant after one of the following events, provided that the Participant’s termination of employment occurs within sixty (60) days after the occurrence of any such event:

		
	(i)
	the Company, without the Participant’s consent,  requires the Participant to relocate to a principal place of employment more than fifty (50) miles from his or her existing place of employment, which materially increases the Participant’s commuting time; or 

		
	(ii)
	the Company, without the Participant’s consent, materially reduces the Participant’s base salary, target annual bonus opportunity, or retirement, welfare, target share incentive opportunity, and other benefits taken as a whole, as in effect immediately prior to the Change in Control;

provided that an event described in (i) or (ii) above shall permit a Participant’s termination of employment to be deemed a Change in Control Termination only if (x) the Participant provides written notice to the Company specifying in reasonable detail the event upon which the Participant is basing his termination within ninety (90) days after the occurrence of such event, (y) the Company fails to cure such event within thirty (30) days after its receipt of such notice, and (z) the Participant terminates his employment within sixty (60) days after the expiration of such cure period.”

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation and Human Resources Committee of the Board or any successor committee or other committee to which the Compensation and Human Resources Committee delegates its authority under this Plan.  The Compensation and Human Resources Committee shall be comprised solely of “non-employee directors” within the meaning of Rule 16b-3(b)(3) under the Exchange Act and two or more persons who are outside directors within the meaning of Section 162(m)(4)(C)(i) of the Code and the applicable regulations.

“Company” means Mallinckrodt public limited company, a company incorporated in Ireland under registered number 522227, or any successor thereto.

“Covered Employee” means an Employee who is a “covered employee” within the meaning of Section 162(m)(3) of the Code or who is reasonably expected to be a “covered employee” at the time the Company would be entitled to claim a tax deduction in respect of an Award but for Section 162(m) of the Code.

“Deferred Stock Unit” means a Unit granted under Section 4.6 or 4.7 to acquire Shares upon Termination of Directorship or Termination of Employment, or any other permitted payment event described in the Award Certificate,  subject to any restrictions that the Committee, in its discretion, may determine.

“Director” means a member of the Board.

“Disabled” or “Disability” means, subject to Section 7.11(b)(iii), that (1) the Employee meets the requirements for disability benefits under the Social Security law then in effect and/or (2) the Employee is eligible to receive benefits under the Company’s long-term disability plan;   provided that, to the extent an Award is nonqualified deferred compensation subject to Code Section 409A and the payment of the Award occurs due to Disability, the Employee’s will be deemed Disabled under subsection (2) only if he or she has received income replacement benefits for a period of not less than three (3) months under the Company’s accident and health plan covering the Employee by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.

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“Dividend Equivalent” means an amount equal to the ordinary cash dividend or the fair market value of the share dividend that would be paid on each Share underlying an Award if the Share were duly issued and outstanding on the date on which the dividend is payable.  In no event shall Dividend Equivalents be paid with respect to Stock Options or Stock Appreciation Rights.

“Early Retirement” means, unless otherwise specified in an Award Certificate, Termination of Employment on or after a Participant has attained age 55, provided that the sum of the Participant's age (in full years) and full years of service with the Company or a Subsidiary is 60 or higher.

“Effective Date” means [shareholder approval date], unless otherwise provided herein.

“Employee” means any individual who performs services as an officer or employee of the Company or a Subsidiary.

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

“Exercise Price” means the price of a Share, as fixed by the Committee, which may be purchased under a Stock Option or with respect to which the amount of any payment pursuant to a Stock Appreciation Right is determined.

“Fair Market Value” of a Share means the closing sales price on the New York Stock Exchange of a Share on the trading day of the grant or on the date as of which the determination of Fair Market Value is being made or, if no sale is reported for such day, on the next preceding day on which a sale of Shares is reported.   Notwithstanding anything to the contrary herein, the Fair Market Value of a Share will in no event be determined to be less than par value.

“GAAP” means United States generally accepted accounting principles.

“Incentive Stock Option” means a Stock Option granted under Section 4.3 of the Plan that is intended to meet the requirements of Section 422 of the Code and any related regulations and is designated in the Award Certificate as intended to be an Incentive Stock Option.

“Long-Term Performance Award” means an Award granted under Section 4.5 of the Plan that is paid solely on account of the attainment of a specified performance target in relation to one or more Performance Measures or other performance criteria as selected in the sole discretion of the Committee.

“Nominating Committee” means the Nominating and Governance Committee of the Board.

“Nonqualified Stock Option” means any Stock Option granted under Section 4.3 of the Plan that is not an Incentive Stock Option.

“Normal Retirement” means, unless otherwise specified in an Award Certificate, Termination of Employment on or after a Participant has attained age 60, provided that the sum of the Participant's age (in full years) and full years of service with the Company or a Subsidiary is 70 or higher.

“Ordinary Shares” means the ordinary shares of the Company, $0.20 (U.S.) par value, and such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 5.3 of the Plan.

“Other Stock-Based Award” means an Award granted under Section 4.6 of the Plan and denominated in Shares.

“Participant” means a Director, Employee or Acquired Grantee who has been granted an Award under the Plan.

“Performance Cycle” means, with respect to any Award that vests based on Performance Measures, the period of 12 months or longer, as determined by the Committee in its sole discretion, over which the level of performance will be assessed.

“Performance Measure” means, with respect to any Annual Performance Bonus or Long-Term Performance Award, the business criteria selected by the Committee to measure the level of performance of the Company during a Performance Cycle.  The Committee may select as the Performance Measure any operating and maintenance expense targets or financial goals as interpreted by the Committee, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and that 

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are absolute or relative to the performance of one or more comparable companies or an index of comparable companies, and are measured during the Performance Cycle provided that (i) as to an Annual Performance Bonus or Long-Term Performance Award granted to a Covered Employee and intended to be qualified “performance-based” compensation under Section 162(m) of the Code, Performance Measures shall be limited to the criteria set forth on Appendix A, and (ii) as to an Annual Performance Bonus or Long-Term Performance Award granted to a Participant who is not a Covered Employee, Performance Measures may include, but shall not be limited to, the criteria set forth on Appendix A.

“Performance Unit” means a Long-Term Performance Award denominated in Units.

“Plan” means this Mallinckrodt Pharmaceuticals Stock and Incentive Plan, as it may be amended from time to time.

“Reporting Person” means a Director or an Employee who is subject to the reporting requirements of Section 16(a) of the Exchange Act.

“Restricted Stock” means Shares issued pursuant to Section 4.6 that are subject to any restrictions that the Committee, in its discretion, may impose.

“Restricted Unit” means a Unit granted under Section 4.5 or Section 4.6 to acquire Shares or an equivalent amount in cash, which Unit is subject to any restrictions that the Committee, in its discretion, may impose.

“Securities Act” means the United States Securities Act of 1933, as amended.

“Share” means an Ordinary Share of the Company, and “Shares” shall be construed accordingly.

“Stock Appreciation Right” means a right granted under Section 4.3 of the Plan of an amount in cash or Shares equal to any excess of the Fair Market Value of a Share as of the date on which the right is exercised over the Exercise Price.

“Stock Option” means a right granted under Section 4.3 of the Plan to purchase from the Company a stated number of Shares at a specified price. Stock Options awarded under the Plan may be in the form of Incentive Stock Options or Nonqualified Stock Options.

“Subsidiary” means (i) a subsidiary company (wherever incorporated) of the Company, as defined by Section 155 of the Companies Act 1963 of Ireland; (ii) any separately organized business unit, whether or not incorporated, of the Company; (iii) any employer that is required to be aggregated with the Company pursuant to Code Section 414 and the regulations promulgated thereunder; and (iv) any service recipient or employer that is within a controlled group of corporations as defined in Code Sections 1563(a)(1), (2) and (3) which includes the Company, where the phrase “at least 50%” is substituted in each place “at least 80%” appears, and any service recipient or employer within trades or businesses under common control as defined in Code Section 414(c) and Treas. Reg. § 1.414(c)-2, which includes the Company, where the phrase “at least 50%” is substituted in each place “at least 80%” appears, provided, however, that when the relevant determination is to be based upon legitimate business criteria (as described in Treas. Reg. § 1.409A-1(b)(5)(iii)(E) and § 1.409A-1(h)(3)), the phrase “at least 20%” shall be substituted in each place “at least 80%” appears as described above with respect to both a controlled group of corporations and trades or business under common control.

“Target Amount” means the amount of Performance Units that will be paid if the applicable Performance Measure is fully (100%) attained, as determined in the sole discretion of the Committee.

“Target Bonus” means the target Annual Performance Bonus applicable to a Reporting Person in respect of a particular year, as established by the Committee or its delegate.

“Target Vesting Percentage” means the percentage of performance-based Restricted Units or Shares of Restricted Stock that will vest if the applicable Performance Measure is fully (100%) attained, as determined in the sole discretion of by the Committee.

“Termination of Directorship” means the date of cessation of a Director’s membership on the Board for any reason, with or without Cause, as determined in the sole discretion of  the Nominating Committee, provided however that if the Director is a member of the Nominating Committee, such determination shall be made by the full Board (excluding such Director).  For purposes of any Award which is nonqualified deferred compensation subject to Code Section 409A, a Termination of Directorship shall only occur where such Termination of Directorship is a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and the applicable regulations and rulings thereunder.  For purposes of 

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determining whether a Termination of Directorship has occurred, services provided in the capacity of an employee or otherwise shall be excluded.

“Termination of Employment” means the date of cessation of an Employee’s employment relationship with the Company or a Subsidiary for any reason, with or without Cause, as determined in the sole discretion of the Company.  For purposes of any Award which is nonqualified deferred compensation subject to Code Section 409A, a Termination of Employment shall only occur where such Termination of Employment is a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and the applicable regulations and rulings thereunder.  For purposes of determining whether a Termination of Employment has occurred, services provided in the capacity of an employee or otherwise shall be excluded.

“Unit” means, for purposes of Performance Units, the potential right to an Award equal to a specified amount denominated in such form as is deemed appropriate in the discretion of the Committee and, for purposes of Restricted Units or Deferred Stock Units, the potential right to acquire one Share. 

ARTICLE III 
ADMINISTRATION 

1.Committee.    The Plan will be administered by the Committee, except as otherwise provided in Section 4.7.

2.Authority of the Committee.    The Committee or, to the extent required by applicable law, the Board will have the authority, in its sole and absolute discretion and subject to the terms of the Plan, to:

		
	(a)
	Interpret and administer the Plan and any instrument or agreement relating to the Plan;

		
	(b)
	Prescribe the rules and regulations that it deems necessary for the proper operation and administration of the Plan, and amend or rescind any existing rules or regulations relating to the Plan;

		
	(c)
	Select Employees to receive Awards under the Plan;

		
	(d)
	Determine the form of an Award, the number of Shares subject to each Award, all the terms and conditions of an Award, including, without limitation, the conditions on exercise or vesting, the designation of Stock Options as Incentive Stock Options or Nonqualified Stock Options, and the circumstances under which an Award may be settled in cash or Shares or may be cancelled, forfeited or suspended, and the terms of each Award Certificate;

		
	(e)
	Determine whether Awards will be granted singly, in combination or in tandem;

		
	(f)
	Establish and interpret Performance Measures (or, as applicable, other performance criteria) in connection with Annual Performance Bonuses and Long-Term Performance Awards, evaluate the level of performance over a Performance Cycle and certify the level of performance attained with respect to Performance Measures (or other performance criteria, as applicable);

		
	(g)
	Subject to Sections 6.1 and 7.12, waive or amend any terms, conditions, restriction or limitation on an Award, except that the prohibition on the repricing of Stock Options and Stock Appreciation Rights without shareholder approval, as described in Section 4.3(g), may not be waived;

		
	(h)
	Make any adjustments to the Plan (including but not limited to adjustment of the number of Shares available under the Plan or any Award) and any Award granted under the Plan as shall be appropriate pursuant to Section 5.3;

		
	(i)
	Determine and set forth in the applicable Award Certificate the circumstances under which Awards may be deferred and the extent to which a deferral will be credited with Dividend Equivalents and interest thereon;

		
	(j)
	In accordance with Section 7.1, determine and set forth in the applicable Award Certificate whether a Nonqualified Stock Option, Restricted Share or other Award may be transferable to family members, a family trust or a family partnership;

		
	(k)
	Establish any subplans and make any modifications to the Plan, without amending the Plan, or to Awards made hereunder (including the establishment of terms and conditions in the Award Certificate not otherwise inconsistent 

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with the terms of the Plan) that the Committee may determine to be necessary or advisable for grants made in countries outside the United States to comply with, or to achieve favorable tax treatment under, applicable foreign laws or regulations or tax policies or customs;

		
	(l)
	Appoint such agents as it shall deem appropriate for the proper administration of the Plan; and

		
	(m)
	Take any and all other actions it deems necessary or advisable for the proper operation or administration of the Plan. 

3.Effect of Determinations.    All determinations of the Committee will be final, binding and conclusive on all persons having an interest in the Plan.

4.Delegation of Authority.    The Board or, if permitted under applicable corporate law and stock exchanges, the Committee, in its discretion and consistent with applicable law, regulations and stock exchange rules, may delegate to a committee or an officer or group of officers, as it deems to be advisable, the authority to select Employees to receive an Award and to determine the number of Shares under any such Award, subject to any terms and conditions that the Board or the Committee may establish. When the Board or the Committee delegates authority pursuant to the foregoing sentence, it will limit, in its discretion, the number or value of Shares that may be subject to Awards that the delegate may grant. Only the Committee has the authority to grant and administer Awards to Covered Employees and other Reporting Persons or to delegates of the Committee, and to establish and certify Performance Measures.

5.Employment of Advisors.    The Committee may employ attorneys, consultants, accountants and other advisors, the fees and other expenses of which shall be paid by the Company, and the Committee, the Company and the officers and directors of the Company may rely upon the advice, opinions or valuations of the advisors employed. 

6.No Liability.    No member of the Committee or the Board or any person acting as a delegate thereof with respect to the Plan will be liable for any losses resulting from any action, interpretation or construction made in good faith with respect to the Plan or any Award granted under the Plan. 

ARTICLE IV 
AWARDS 

1.Eligibility.    All Participants and Employees are eligible to be designated to receive Awards granted under the Plan, except as otherwise provided in this Article IV.

2.Form of Awards.    Awards will be in the form determined by the Committee, in its discretion, and will be evidenced by an Award Certificate. Awards may be granted singly or in combination or in tandem with other Awards.

3.Stock Options and Stock Appreciation Rights.    The Committee may grant Stock Options and Stock Appreciation Rights under the Plan to those Employees whom the Committee may from time to time select, in the amounts and pursuant to the other terms and conditions that the Committee, in its discretion, may determine and set forth in the Award Certificate, subject to the provisions below:

		
	(a)
	Form.    Stock Options granted under the Plan will, at the discretion of the Committee and as set forth in the Award Certificate, be in the form of Incentive Stock Options, Nonqualified Stock Options or a combination of the two. If an Incentive Stock Option and a Nonqualified Stock Option are granted to the same Participant under the Plan at the same time, the form of each will be clearly identified, and they will be deemed to have been granted in separate grants. In no event will the exercise of one Stock Option affect the right to exercise the other Stock Option. Stock Appreciation Rights may be granted either alone or concurrently with Nonqualified Stock Options and the amount of Shares attributable to each Stock Appreciation Right shall be set forth in the applicable Award Certificate on or before the grant date.

		
	(b)
	Exercise Price.    Other than with respect to Substitute Awards described in Section 4.8, the Committee will set the Exercise Price of Stock Options or Stock Appreciation Rights granted under the Plan at a price that is equal to or greater than the Fair Market Value of a Share on the date of grant, subject to adjustment as provided in Section 5.3. The Exercise Price of Incentive Stock Options will be equal to or greater than 110 percent of the Fair Market Value of a Share as of the date of grant if the Participant receiving the Incentive Stock Options owns shares possessing more than 10 percent of the total combined voting power of all classes of shares of the Company or any subsidiary or parent corporation of the Company, as defined in Section 424 of the Code. The Exercise Price of 

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a Stock Appreciation Right granted in tandem with a Stock Option will equal the Exercise Price of the related Stock Option. The Committee will set forth the Exercise Price of a Stock Option or Stock Appreciation Right in the Award Certificate or accompanying documentation.

		
	(c)
	Term and Timing of Exercise.    Each Stock Option or Stock Appreciation Right granted under the Plan will be exercisable in whole or in part, subject to the following conditions, unless determined otherwise by the Committee:

		
	(i)
	The term of each Stock Option and Stock Appreciation Right shall be determined by the Committee and set forth in the applicable Award Certificate, but in no event shall the term thereof exceed ten (10) years from the date of its grant.  Notwithstanding the foregoing, in the event that on the last business day of the term of a Stock Option (other than an Incentive Stock Option) or Stock Appreciation Right (i) the exercise of the Award is prohibited by applicable law or (ii) Shares may not be purchased or sold by certain employees or directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Stock Option or Stock Appreciation Right shall be extended for a period of thirty (30) days following the end of the legal prohibition, black-out period or lock-up agreement.  Moreover, notwithstanding the foregoing, an Award Certificate may provide that if on the last day of the term of a Stock Option or Stock Appreciation Right the Fair Market Value of one Share exceeds the option or grant price per Share, the Participant has not exercised the Stock Option, Stock Appreciation Right or tandem Award, and the Award has not expired, the Stock Option or Stock Appreciation Right shall be deemed to have been exercised by the Participant on such day with payment made by withholding Shares otherwise issuable in connection with the exercise of the Stock Option or Stock Appreciation Right.  In such event, the Company shall deliver to the Participant the number of Shares for which the Stock Option or Stock Appreciation Right was deemed exercised, less the number of Shares required to be withheld for the payment of the total purchase price for a Stock Option and required withholding taxes for both Stock Options and Stock Appreciation Rights; provided, however, any fractional Share shall be settled in cash.

		
	(ii)
	A Stock Option or Stock Appreciation Right will become exercisable at such times and in such manner as determined by the Committee and set forth in the applicable Award Certificate.

		
	(iii)
	Unless the applicable Award Certificate provides otherwise, upon the death, Disability, Normal Retirement or a Change in Control Termination of a Participant who has outstanding Stock Options or Stock Appreciation Rights, the unvested Stock Options or Stock Appreciation Rights will fully vest. Unless the applicable Award Certificate or the remainder of this Section 4.3(c) provides otherwise, the Participant’s Stock Options and Stock Appreciation Rights will lapse, and will not thereafter be exercisable, upon the earlier of (A) their original expiration date or (B) the date that is three (3) years after the date on which the Participant dies, incurs a Disability or retires due to Normal Retirement.

		
	(iv)
	Unless the applicable Award Certificate provides otherwise, upon the Termination of Employment of a Participant for any reason other than the Participant's death, Disability, Normal Retirement or a Change in Control Termination, if the Participant’s termination qualifies as Early Retirement, a pro rata portion of the Participant’s Stock Options and Stock Appreciation Rights will vest so that the total number of vested Stock Options or Stock Appreciation Rights held by the Participant at Termination of Employment (including those that have already vested as of such date) will be equal to the total number of Stock Options or Stock Appreciation Rights originally granted to the Participant under the applicable Award multiplied by a fraction, the numerator of which is the period of time (in whole months) that have elapsed since the date of grant, and the denominator of which is the number of months set forth in the applicable Award Certificate that is required to attain full vesting.  Unless the Award Certificate provides otherwise, such Participant's Stock Options and Stock Appreciation Rights will lapse, and will not thereafter be exercisable, upon the earlier of (A) their original expiration date or (B) the date that is three (3) years after the date of Termination of Employment.

		
	(v)
	Unless the applicable Award Certificate provides otherwise, upon the Termination of Employment of a Participant that does not meet the requirements of paragraphs (iii) or (iv) above, any unvested Stock Options or Stock Appreciation Rights will be forfeited. Unless the applicable Award Certificate provides otherwise, any Stock Options or Stock Appreciation Rights that are vested as of such Termination of Employment will lapse, and will not thereafter be exercisable, upon the earlier of (A) their original expiration date or (B) the date that is ninety (90) days after the date of such Termination of Employment.

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	(vi)
	Stock Options and Stock Appreciation Rights of a deceased Participant may be exercised only by the estate of the Participant or by the person given authority to exercise the Stock Options or Stock Appreciation Rights by the Participant's will or by operation of law. If a Stock Option or Stock Appreciation Right is exercised by the executor or administrator of a deceased Participant, or by the person or persons to whom the Stock Option or Stock Appreciation Right has been transferred by the Participant's will or the applicable laws of descent and distribution, the Company will be under no obligation to deliver Shares or cash until the Company is satisfied that the person exercising the Stock Option or Stock Appreciation Right is the duly appointed executor or administrator of the deceased Participant or the person to whom the Stock Option or Stock Appreciation Right has been transferred by the Participant's will or by applicable laws of descent and distribution.

		
	(vii)
	A Stock Appreciation Right granted in tandem with a Stock Option is subject to the same terms and conditions as the related Stock Option and will be exercisable only to the extent that the related Stock Option is exercisable.  When either a Stock Option or a Stock Appreciation Right granted in tandem with each other is exercised, the tandem Stock Option or Stock Appreciation Right, as applicable, shall expire. 

		
	(d)
	Payment of Exercise Price.    The Exercise Price of a Stock Option must be paid in full when the Stock Option is exercised. Shares will be issued and delivered only upon receipt of payment. Payment of the Exercise Price may be made in cash or by certified check, bank draft, wire transfer, or postal or express money order, provided that the format is approved by the Company or a designated third-party administrator. The Committee, in its discretion may also allow payment to be made by any of the following methods, as set forth in the applicable Award Certificate:

		
	(i)
	Delivering a properly executed exercise notice to the Company or its agent, together with irrevocable instructions to a broker to deliver to the Company, within the typical settlement cycle for the sale of equity securities on the relevant trading market (or otherwise in accordance with the provisions of Regulation T issued by the Federal Reserve Board), the amount of sale proceeds with respect to the portion of the Shares to be acquired having a Fair Market Value on the date of exercise equal to the sum of the applicable portion of the Exercise Price being so paid;

		
	(ii)
	Subject to any requirements of applicable law and regulations, tendering (actually or by attestation) to the Company or its agent previously acquired Shares that have a Fair Market Value on the day prior to the date of exercise equal to the applicable portion of the Exercise Price being so paid; or

    
		
	(iii)
	Subject to any requirements of applicable law and regulations, instructing the Company to reduce the number of Shares that would otherwise be issued by such number of Shares as have in the aggregate a Fair Market Value on the date of exercise equal to the applicable portion of the Exercise Price being so paid.

		
	(e)
	Incentive Stock Options.    Incentive Stock Options granted under the Plan will be subject to the following additional conditions, limitations and restrictions:

		
	(i)
	Eligibility.    Incentive Stock Options may be granted only to Employees of the Company or a Subsidiary that is a subsidiary or parent corporation of the Company within the meaning of Code Section 424.

		
	(ii)
	Timing of Grant.    No Incentive Stock Option will be granted under the Plan after the 10-year anniversary of the date on which the Plan is adopted by the Board or, if earlier, the date on which the Plan was approved by shareholders.

		
	(iii)
	Amount of Award.    Subject to Section 5.3 of the Plan, no more than 10 million Shares may be available for grant in the form of Incentive Stock Options. The aggregate Fair Market Value (as of the date of grant) of the Shares with respect to which the Incentive Stock Options awarded to any Employee first become exercisable during any calendar year may not exceed $100,000 (U.S.). For purposes of this $100,000 (U.S.) limit, the Employee's Incentive Stock Options under this Plan and all other plans maintained by the Company and its Subsidiaries will be aggregated. To the extent any Incentive Stock Option would exceed the $100,000 (U.S.) limit, the Incentive Stock Option will afterwards be treated as a Nonqualified Stock Option to the extent required by the Code and underlying regulations and rulings.

		
	(iv)
	Timing of Exercise.    If the Committee exercises its discretion in the Award Certificate to permit an Incentive Stock Option to be exercised by a Participant more than three months after the Participant has ceased being 

-9-

an Employee (or more than 12 months if the Participant is permanently and totally disabled, within the meaning of Code Section 22(e)), the Incentive Stock Option will afterwards be treated as a Nonqualified Stock Option to the extent required by the Code and underlying regulations and rulings. For purposes of this paragraph (iv), an Employee's employment relationship will be treated as continuing intact while the Employee is on military leave, sick leave or another approved leave of absence if the period of leave does not exceed 90 days, or a longer period to the extent that the Employee's right to reemployment with the Company or a Subsidiary is guaranteed by statute or by contract. If the period of leave exceeds 90 days and the Employee's right to reemployment is not guaranteed by statute or contract, the employment relationship will be deemed to have ceased on the 91st day of the leave.

		
	(v)
	Transfer Restrictions.    In no event will the Committee permit an Incentive Stock Option to be transferred by an Employee other than by will or the laws of descent and distribution, and any Incentive Stock Option awarded under this Plan will be exercisable only by the Employee during the Employee's lifetime.

		
	(f)
	Exercise of Stock Appreciation Rights.    Upon exercise of a Participant's Stock Appreciation Rights, the Company will pay cash or Shares or a combination of cash and Shares, in the discretion of the Committee and as described in the Award Certificate. Cash payments will be equal to the excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price, for each Share for which a Stock Appreciation Right was exercised. If Shares are paid for the Stock Appreciation Right, the Participant will receive a number of whole Shares equal to the quotient of the cash payment amount divided by the Fair Market Value of a Share on the date of exercise.

		
	(g)
	No Repricing.    Except as otherwise provided in Section 5.3 or in connection with a Change in Control, in no event will the Committee decrease the Exercise Price of a Stock Option or Stock Appreciation Right after the date of grant or cancel outstanding Stock Options or Stock Appreciation Rights at a time when the exercise price therefor is less than the Fair Market Value of the Shares subject to such Award and issue cash in exchange for such cancellation or grant replacement Stock Options or Stock Appreciation Rights with a lower Exercise Price than that of the replaced Stock Options or Stock Appreciation Rights or other Awards without first obtaining the approval of the holders of a majority of the Shares who are present in person or by proxy at a meeting of the Company’s shareholders and entitled to vote. 

4.Annual Performance Bonuses.    The Committee may grant annual performance bonuses or other bonus compensation in its discretion outside the terms of this Plan.  The Committee may grant Annual Performance Bonuses, intended to qualify as “performance-based compensation” under Section 162(m) of the Code, under the Plan in the form of cash or Shares to the Reporting Persons that the Committee may from time to time select, in the amounts and pursuant to the terms and conditions that the Committee may determine and set forth in the Award Certificate, subject to the provisions below:

		
	(a)
	Section 162(m) of the Code.    The Committee may determine that Annual Performance Bonuses made to Covered Employees should be structured to be “performance-based compensation” for purposes of Section 162(m) of the Code.  If the Committee action granting such Awards or the Award Certificates so provide, this Section 4.4 shall be interpreted in a manner that satisfies the applicable requirements of Section 162(m)(4)(C) of the Code and related regulations, and the Plan shall be operated so that the Company may take a full tax deduction for Annual Performance Bonuses. If any provision of this Plan or any Annual Performance Bonus would otherwise frustrate or conflict with this intent, the provision will be interpreted and deemed amended so as to avoid this conflict.

		
	(b)
	Performance Cycles.    Annual Performance Bonuses will be awarded in connection with a twelve (12) month Performance Cycle, which will be the fiscal year of the Company.

		
	(c)
	Eligible Participants.    Within ninety (90) days after the commencement of a Performance Cycle, the Committee will determine the Reporting Persons who will be eligible to receive an Annual Performance Bonus under the Plan.  If an individual becomes a Reporting Person after this ninety (90) day period, the Committee may determine that such Reporting Person is eligible to receive a pro rata Annual Performance Bonus under the Plan.

		
	(d)
	Performance Measures; Targets; Award Criteria.

		
	(i)
	Within ninety (90) days after the commencement of the service period to which a Performance Cycle relates, the Committee will fix and establish in writing (A) the Performance Measures that will apply to that Performance Cycle; (B) the Target Bonus which may be earned by each Participant; and (C) subject to subsection (d) below, the criteria for computing the amount that will be paid with respect to each level of 

-10-

attained performance. The Committee will also set forth the minimum level of performance, based on the applicable Performance Measures, that must be attained during the Performance Cycle before any Annual Performance Bonus will be paid and the percentage of the Target Bonus that will become payable upon attainment of various levels of performance that equal or exceed the minimum required level.

		
	(ii)
	The Committee, in its discretion, may, on a case-by-case basis, reduce, but not increase, the amount otherwise payable to any Covered Employee with respect to any given Performance Cycle, provided, however, that no reduction will result in an increase in the amount payable under any Annual Performance Bonus of another Covered Employee.

		
	(e)
	Payment, Certification.    No Annual Performance Bonus will be paid to any Reporting Person until the Committee certifies in writing the level of performance attained for the Performance Cycle in relation to the applicable Performance Measures. In applying Performance Measures, the Committee (i) shall make adjustments for events listed in Section 5.3 in accordance therewith and (ii) may, in its discretion, exclude the effect of unusual or infrequently occurring items, including, but not limited to the following, as set forth in the Award Certificate or action of the Committee granting the Award: the cumulative effect of changes in the law, regulations or accounting rules, and other items, all determined in accordance with GAAP (to the extent applicable and unless specified otherwise in the Award Certificate or action of the Committee granting the Award) and identified in financial statements, notes to the financial statements or discussion and analysis of management; asset write downs; litigation or claim judgments or settlements; any reorganization and restructuring programs; acquisitions or divestitures; and foreign exchange gains and losses.; provided that the determination by the Committee that Performance Measures shall be adjusted for items in accordance with this clause (ii) shall be made no later than ninety (90) days after the commencement of any applicable Performance Cycle in respect of Annual Performance Bonuses awarded to Covered Employees.

		
	(f)
	Form of Payment.    Annual Performance Bonuses will be paid in cash, Shares or such other Awards as determined by the Committee.  All such Performance Bonuses shall be paid no later than the 15th day of the third month following the end of the calendar year (or, if later, following the end of the Company's fiscal year) in which such Performance Bonuses are no longer subject to a substantial risk of forfeiture (as determined for purposes of Section 409A of the Code), except to the extent that the Committee determines or a Participant has elected to defer payment under the terms of a duly authorized deferred compensation arrangement or Award, in which case the terms of such arrangement or Award shall govern.

		
	(g)
	Acceleration.    Each Participant who is eligible to receive an Annual Performance Bonus with respect to a Performance Cycle during which a Change of Control occurs will, except as otherwise provided below, be deemed to have achieved a level of performance, as of the date of Change in Control, that would cause all (100%) of the Participant's Target Bonus to become payable at such times and in such manner as determined in the sole discretion of the Committee.  Notwithstanding the previous sentence, if (i) a surviving entity maintains the Performance Cycle in which a Change in Control occurs, or otherwise provides for the payment of an Annual Performance Bonus based on the level of performance attained for such Performance Cycle in relation to the Performance Measures established for such Performance Cycle (including Performance Measures that were adjusted or modified as a result of the Change in Control) and (ii) the Annual Performance Bonus based on the level of performance attained for such Performance Cycle exceeds all (100%) of the Participant’s Target Bonus, then each Participant who is eligible to receive an Annual Performance Bonus with respect to such Performance Cycle shall receive an Annual Performance Bonus based on the level of performance attained for such Performance Cycle at such times and in such manner as determined in the sole discretion of the Committee, or successor to the Committee.  If a Participant’s employment is terminated before the end of the original Performance Cycle due to death, Disability, Normal Retirement, or by the Company without Cause, the Award payable to such Participant may, in the discretion of the Committee, be proportionately reduced based on the period of actual employment during the applicable Performance Cycle.  Notwithstanding the above, the time and manner of any payments made pursuant to this Section 4.4(g) shall comply with Section 4.4(e) above. 

5.Long-Term Performance Awards.    The Committee may grant long-term performance awards or other bonus compensation in its discretion outside the terms of this Plan.  The Committee may grant Long-Term Performance Awards, intended to be “performance-based compensation” under Section 162(m) of the Code, under the Plan in the form of Performance Units, Restricted Units or Restricted Stock to any Employee who the Committee may from time to time select, in the amounts and pursuant to the terms and conditions that the Committee may determine and set forth in the Award Certificate, subject to the provisions below:

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	(a)
	Section 162(m) of the Code.    The Committee may determine that Long-Term Performance Awards made to Covered Employees should be structured to be "performance-based compensation" for purposes of Section 162(m) of the Code.  If the Committee action granting such Award or the Award Certificates so provide, this Section 4.5 shall be interpreted in a manner that satisfies the applicable requirements of Section 162(m)(4)(C) of the Code and related regulations with respect to Long-Term Performance awards made to Covered Employees, and the Plan shall be operated so that the Company may take a full tax deduction for Long-Term Performance Awards. If any provision of this Plan or any Long-Term Performance Award would otherwise frustrate or conflict with this intent, the provision will be interpreted and deemed amended so as to avoid this conflict.

		
	(b)
	Performance Cycles.    Long-Term Performance Awards will be awarded in connection with a Performance Cycle, as determined by the Committee in its discretion, provided, however, that a Performance Cycle may be no shorter than twelve (12) months.

		
	(c)
	Eligible Participants.    Within ninety (90) days after the commencement of a Performance Cycle, the Committee will determine the Employees who will be eligible to receive a Long-Term Performance Award for the Performance Cycle, provided that the Committee may determine the eligibility of any Employee other than a Covered Employee after the expiration of this ninety (90) day period.

		
	(d)
	Performance Measures; Targets; Award Criteria.

		
	(i)
	Within ninety (90) days after the commencement of the service period to which a Performance Cycle relates, the Committee will fix and establish in writing (A) the Performance Measures that will apply to that Performance Cycle; (B) with respect to Performance Units, the Target Amount payable to each Participant; (C) with respect to Restricted Units and Restricted Stock, the Target Vesting Percentage for each Participant; and (D) subject to subsection (d) below, the criteria for computing the amount that will be paid or will vest with respect to each level of attained performance. The Committee will also set forth the minimum level of performance, based on the applicable Performance Measures, that must be attained during the Performance Cycle before any Long-Term Performance Award will be paid or vest, and the percentage of Performance Units that will become payable and the percentage of performance-based Restricted Units or Shares of Restricted Stock that will vest upon attainment of various levels of performance that equal or exceed the minimum required level.

		
	(ii)
	The Committee, in its discretion, may, on a case-by-case basis, reduce, but not increase, the amount of Long-Term Performance Awards otherwise payable to any Covered Employee with respect to any given Performance Cycle, provided, however, that no reduction will result in an increase in the dollar amount or number of Shares payable under any Long-Term Performance Award of another Covered Employee.

		
	(e)
	Payment, Certification.    Long-Term Performance Awards shall only be paid if the Committee certifies in writing the level of performance attained for the Performance Cycle in relation to the applicable Performance Measures. Long-Term Performance Awards awarded to Participants who are not Covered Employees will be based on the Performance Measures, or other applicable performance criteria, and payment formulas that the Committee, in its discretion, may establish for these purposes. These Performance Measures, or other performance criteria, and formulas may be the same as or different than the Performance Measures and formulas that apply to Covered Employees. In applying Performance Measures, the Committee (i) shall make adjustments for events listed in Section 5.3 in accordance therewith and (ii) may, in its discretion, exclude the effect of unusual or infrequently occurring items, including, but not limited to the following, as set forth in the Award Certificate or action of the Committee granting the Award: the cumulative effect of changes in the law, regulations or accounting rules, and other items, all determined in accordance with GAAP (to the extent applicable and unless specified otherwise in the Award Certificate or action of the Committee granting the Award) and identified in financial statements, notes to the financial statements or discussion and analysis of management; asset write downs; litigation or claim judgments or settlements; any reorganization and restructuring programs; acquisitions or divestitures; and foreign exchange gains and losses.; provided that the determination by the Committee that Performance Measures shall be adjusted for items in accordance with this clause (ii) shall be made no later than ninety (90) days after the commencement of any applicable Performance Cycle in respect of Long-Term Performance Awards awarded to Covered Employees.

		
	(f)
	Form of Payment.    Long-Term Performance Awards in the form of Performance Units may be paid in cash or full Shares, in the discretion of the Committee, and as set forth in the applicable Award Certificate. Performance-based Restricted Units and Restricted Stock will be paid in full Shares. Payment with respect to any fractional 

-12-

Share will be in cash in an amount based on the Fair Market Value of the Share as of the date the Performance Unit becomes payable.  All Long-Term Performance Awards shall be paid no later than the 15th day of the third month following the end of the calendar year (or, if later, following the end of the Company’s fiscal year) in which such Long-Term Performance Awards are no longer subject to a substantial risk of forfeiture (within the meaning of Code Section 409A), except to the extent that a Participant has elected to defer payment under the terms of a duly authorized deferred compensation arrangement, in which case the terms of such arrangement shall govern, or as otherwise provided in Section 4.5(g) below.

		
	(g)
	Dividend Equivalents.  At the discretion of the Committee and as set forth in the applicable Award Certificate, dividend equivalents may be earned on Long-Term Performance Awards denominated in Shares, but only to the extent, and shall be payable only at the same time, as the underlying Long-Term Performance Awards may become earned, vested, and payable.

		
	(h)
	Special Vesting Provisions.  Unless the applicable Award Certificate provides otherwise, upon the death, Disability, Normal Retirement or a Change in Control Termination of a Participant who has an outstanding Long-Term Performance Award, the unvested Long-Term Performance Award will fully vest and be paid as if the Participant had continued in active employment with the Company through the date such Long-Term Performance Award would have vested and been paid in the absence of such event.  Unless the applicable Award Certificate provides otherwise, upon the Termination of Employment of a Participant for any reason other than the Participant's death, Disability, Normal Retirement or a Change in Control Termination, the unvested Long-Term Performance Award will be forfeited unless the Participant qualifies for Early Retirement, in which case a pro rata portion of the Participant’s Long-Term Performance Awards will vest and be paid as if the Participant had continued in active employment with the Company through the date such Long-Term Performance Award would have vested and been paid in the absence of such event; provided that the number of Long-Term Performance Awards held by the Participant which shall vest under those circumstances shall equal the total number of Long-Term Performance Awards in which such Participant would have vested  multiplied by a fraction, the numerator of which is the period of time (in whole months) that have elapsed since the date of grant, and the denominator of which is the number of total months set forth in the applicable Award Certificate for such Performance Period. 

6.Other Stock-Based Awards.    The Committee may, from time to time, grant Awards (other than Stock Options, Stock Appreciation Rights, Annual Performance Bonuses or Long-Term Performance Awards) to any Employee who the Committee may from time to time select, which Awards consist of, or are denominated in, payable in, valued in whole or in part by reference to, or otherwise related to, Shares. These Awards may include, among other forms, Restricted Stock, Restricted Units, or Deferred Stock Units. The Committee will determine, in its discretion, the terms and conditions that will apply to Awards granted pursuant to this Section 4.6, which terms and conditions will be set forth in the applicable Award Certificate.

		
	(a)
	Vesting.    Restrictions on Other Stock-Based Awards granted under this Section 4.6 will lapse at such times and in such manner as determined by the Committee and set forth in the applicable Award Certificate. Unless the applicable Award Certificate provides otherwise, if the restrictions on Other Stock-Based Awards have not lapsed or been satisfied as of the Participant's Termination of Employment, the Shares will be forfeited by the Participant if the termination is for any reason other than the Normal Retirement, death or Disability of the Participant or a Change in Control Termination, except that the Award will vest pro rata with respect to the portion of the vesting term set forth in the applicable Award Certificate that the Participant has completed if the Participant qualified for Early Retirement. All restrictions on Other Stock-Based Awards granted pursuant to this Section 4.6 will lapse upon the Normal Retirement, death or Disability of the Participant or a Change in Control Termination.

		
	(b)
	Grant of Restricted Stock.    The Committee may grant Restricted Stock to any Employee, which Shares will be registered in the name of the Participant and held for the Participant by the Company.  The Participant will have all rights of a shareholder with respect to the Shares, including the right to vote and to receive dividends or other distributions (subject to Section 4.6(e)), except that the Shares may be subject to a vesting schedule and will be forfeited if the Participant attempts to sell, transfer, assign, pledge or otherwise encumber or dispose of the Shares before the restrictions are satisfied or lapse.

		
	(c)
	Grant of Restricted Units.    The Committee may grant Restricted Units to any Employee, which Units will be paid in cash or whole Shares or a combination of cash and Shares, in the discretion of the Committee, when the restrictions on the Units lapse and any other conditions set forth in the Award Certificate have been satisfied. For each Restricted Unit that vests, one Share will be paid or an amount in cash equal to the Fair Market Value of a Share as of the date on which the Restricted Unit vests. 

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	(d)
	Grant of Deferred Stock Units.    The Committee may grant Deferred Stock Units to any Employee, which Units will be paid in whole Shares upon the Employee's Termination of Employment if the restrictions on the Units have lapsed. One Share will be paid for each Deferred Stock Unit that becomes payable.

		
	(e)
	Dividends and Dividend Equivalents.    At the discretion of the Committee and as set forth in the applicable Award Certificate, dividends paid on Shares may be paid immediately or withheld and deferred in the Participant's account. In the event of a payment of dividends on the Ordinary Shares, the Committee may credit Restricted Units with Dividend Equivalents in accordance with terms and conditions established in the discretion of the Committee. Dividend Equivalents will be subject to such vesting terms as is determined by the Committee and may be distributed immediately or withheld and deferred in the Participant's account as determined by the Committee and set forth in the applicable Award Certificate. Deferred Stock Units may, in the discretion of the Committee and as set forth in the Award Certificate, be credited with Dividend Equivalents or additional Deferred Stock Units. The number of any Deferred Stock Units credited to a Participant’s account upon the payment of a dividend will be equal to the quotient produced by dividing the cash value of the dividend by the Fair Market Value of one Share as of the date the dividend is paid. The Committee will determine any terms and conditions on deferral of a dividend or Dividend Equivalent, including the rate of interest to be credited on deferral and whether interest will be compounded. 

7.Director Awards.

		
	(a)
	Notwithstanding anything herein to the contrary, the Nominating Committee shall have the exclusive authority to issue awards to Directors who are not also employees of the Company or any Subsidiary (Director Awards), which may consist of, but not be limited to, Stock Options, Stock Appreciation Rights, or Other Stock-Based Awards.  Each Director Award shall be governed by an Award Certificate approved by the Nominating Committee.

		
	(b)
	The Nominating Committee shall have the exclusive authority to administer Director Awards, and shall have the authority set forth in Section 3.2 and the indemnification set forth in Section 7.7, solely as such provisions apply to the Director Awards.  All determinations made by the Nominating Committee hereunder shall be final, binding and conclusive.

		
	(c)
	Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date Fair Market Value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any Director during any single fiscal year (excluding Awards made at the election of the Director in lieu of all or a portion of annual and committee cash retainers) shall not exceed $____________.

8.Substitute Awards.    The Committee may make Awards under the Plan to Acquired Grantees through the assumption of, or in substitution for, outstanding stock-based awards previously granted to such Acquired Grantees. Such assumed or substituted Awards will be subject to the terms and conditions of the original awards made by the Acquired Company, with such adjustments therein as the Committee considers appropriate to give effect to the relevant provisions of any agreement for the acquisition of the Acquired Company. Any grant of Incentive Stock Options pursuant to this Section 4.8 will be made in accordance with Section 424 of the Code and any final regulations published thereunder.

9.Limit on Individual Grants.    Subject to Sections 5.1 and 5.3, no Employee may be granted  more than six (6) million Shares over any calendar year pursuant to Awards of Stock Options, Stock Appreciation Rights and Long-Term Performance Awards in the form of performance-based Restricted Stock and Restricted Units intended to qualify as “performance-based” under Section 162(m) of the Code, except that an incentive Award of no more than ten (10) million Shares may be made pursuant to Stock Options, Stock Appreciation Rights and performance-based Restricted Stock and Restricted Units intended to qualify as “performance-based” under Section 162(m) of the Code to any person who has been hired within the calendar year as a Covered Employee. The maximum amount that may be paid in cash pursuant to Annual Performance Bonuses or Long-Term Performance Awards paid in Performance Units or settled in cash and which are intended to qualify as ”performance-based” under Section 162(m) of the Code to any one Employee is $15 million (U.S.) for any Performance Cycle of twelve (12) months. For any longer Performance Cycle, this maximum will be adjusted proportionally.

10.Termination for Cause.  Notwithstanding anything to the contrary herein and unless the applicable Award Certificate provides otherwise, if a Participant incurs a Termination of Directorship or Termination of Employment for 

-14-

Cause, then all Stock Options, Stock Appreciation Rights, Annual Performance Bonuses, Long-Term Performance Awards, Restricted Units, Restricted Stock and Other Stock-Based Awards will immediately be cancelled. The exercise of any Stock Option or Stock Appreciation Right or the payment of any Award may be delayed, in the Committee's discretion, in the event that a potential termination for Cause is pending.  Unless the applicable Award Certificate provides otherwise, if a Participant incurs a Termination of Directorship or Termination of Employment for Cause, then the Participant will be required to deliver to the Company (i) Shares (or, in the discretion of the Committee, cash) equal in value to the amount of any profit the Participant realized upon the exercise of an Option or Stock Appreciation Right during the twelve (12) month period occurring immediately prior to the Participant’s Termination of Directorship or Termination of Employment for Cause; and (ii) the number of Shares (or, in the discretion of the Committee, the cash value of Shares) the Participant received for Other Stock Based Awards (including Restricted Stock, Restricted Units and Deferred Stock Units) that vested during the period specified in (i) above.  Unless the applicable award certificate provides otherwise, if, after a Participant’s Termination of Directorship or Termination of Employment, the Committee determines in its sole discretion that while the Participant was a Company or Subsidiary employee or a Director, such Participant engaged in activity that would have been grounds for a Termination of Directorship or Termination of Employment for Cause, then the Company will immediately cancel all Stock Options, Stock Appreciation Rights, Annual Performance Bonuses, Long-Term Performance Awards, Restricted Units, Restricted Stock and Other Stock-Based Awards and the Participant will be required to deliver to the Company (A) Shares (or, in the discretion of the Committee, cash) equal in value to the amount of any profit the Participant realized upon the exercise of an Option or Stock Appreciate Right during the period that begins twelve (12) months immediately prior to the Participant’s Termination of Directorship or Termination of Employment and ends on the date of the Committee’s determination that the Participant’s conduct would have constituted grounds for a Termination of Directorship or Termination of Employment for Cause; and (B) the number of Shares (or, in the discretion of the Committee, the cash value of said shares) the Participant received for Other Stock Based Awards (including Restricted Stock, Restricted Units and Deferred Stock Units) that vested during the period specified in (A) above.

ARTICLE V 
SHARES SUBJECT TO THE PLAN; ADJUSTMENTS 

1.Shares Available.    

		
	(a)
	The Shares issuable under the Plan will be authorized but unissued Shares, and, to the extent permissible under applicable law, Shares acquired by the Company, any Subsidiary or any other person or entity designated by the Company and held as treasury shares.

		
	(b)
	Subject to the counting rules set forth in Section 5.2 and adjustment in accordance with Section 5.3, the total number of Shares with respect to which Awards may be issued under the Plan shall be 17,769,489.

		
	(c)
	Incentive Stock Options may be granted under the Plan in respect of no more than 10 million Shares.

2.Counting Rules.    

		
	(a)
	The total number of Shares with respect to which Awards may be issued under the Plan, as described in Section 5.1(b), shall be reduced by 2.2 Shares per each Share subject to an Award of Restricted Stock, Restricted Units, Deferred Stock Units, Performance Units or Other Stock-Based Awards, or as payment of an Annual Performance Bonus.

		
	(b)
	The following Shares related to Awards under the Plan will again be available for issuance under the Plan:

		
	(i)
	Shares related to Awards paid in cash; and

		
	(ii)
	Shares related to Awards that expire, are forfeited or cancelled or terminate for any other reason without issuance of Shares and any Shares of Restricted Stock that are returned to the Company upon a Participant’s Termination of Employment or, if applicable, a Director’s Termination of Directorship (including, for clarity, at a rate of 2.2 Shares per each Share related to such an Award in the form of Restricted Stock, Restricted Units, Deferred Stock Units, Performance Units or Other Stock-Based Awards, or as payment of an Annual Performance Bonus).

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	(c)
	Any Shares issued in connection with Awards that are assumed, converted or substituted as a result of the acquisition of an Acquired Company by the Company or a combination of the Company with another company shall not count against the total number of Shares set forth in Section 5.1(b).  Shares available under a stockholder approved plan of an Acquired Company (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan to individuals who were not employees or directors of the Company or a subsidiary prior to the transaction (subject to the stock exchange’s listing requirements)

 
3.Adjustments.    In the event of a change in the outstanding Shares by reason of a share split, reverse share split, share dividend or other distribution (whether in the form of cash, Shares, other securities or other property), extraordinary cash dividend, recapitalization, merger, consolidation, split-up, spin-off, reorganization, combination, repurchase or exchange of Shares or other securities or similar corporate transaction or event, the Committee shall make an appropriate adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.  Any adjustment made by the Committee under this Section 5.3 will be conclusive and binding for all purposes under the Plan.

4.Change in Control.

		
	(a)
	Acceleration.    Unless the applicable Award Certificate provides otherwise, (i) all outstanding Stock Options and Stock Appreciation Rights will become exercisable as of the effective date of a Participant’s Change in Control Termination if the Awards are not otherwise vested, and all conditions will be waived with respect to outstanding Restricted Stock and Restricted Units (other than Long-Term Performance Awards) and Deferred Stock Units and (ii) each Participant who has been granted a Long-Term Performance Award that is outstanding as of the date of such Participant’s Change in Control Termination will be deemed to have achieved a level of performance, as of the Change in Control Termination, that would cause all (100%) of the Participant's Target Amounts to become payable and all restrictions on the Participant's performance-based Restricted Units and Shares of Restricted Stock to lapse.  Unless the Committee determines otherwise in its discretion (either when an Award is granted or any time thereafter), in the event that Awards outstanding as of the date of a Change in Control that are payable in Ordinary Shares of the Company will not be substituted with comparable awards payable or redeemable in shares of publicly-traded stock after the Change in Control, each such outstanding Award (A) will become fully vested (at target, where applicable) immediately prior to the Change in Control and (B)(i) each such Award that is a Stock Option or Stock Appreciation Right with an exercise price below the Fair Market Value of the Shares subject to such Award will be settled in cash, without the Participant’s consent, for an amount equal to the amount that could have been attained upon the exercise of such Award immediately prior to the Change in Control had such Award been exercisable or payable at such time, and (ii) each such Award that is a Stock Option or Stock Appreciation Right with an exercise or grant price above the Fair Market Value of the Shares subject to such Award may be cancelled with no payment without the Participant’s consent.

		
	(b)
	Permissive Actions.  In addition to the actions described in Section 5.4(a)(A) and (B), in the event of a Change in Control, the Committee may take any one or more of the following actions with respect to any or all outstanding Awards, without the consent of Participants: (i) the Committee may determine that outstanding Stock Options and Stock Appreciation Rights shall be fully vested and exercisable and restrictions on Restricted Stock, Restricted Units, Deferred Stock Units and Other Stock-Based Awards shall lapse as of the date of the Change in Control or such other time (prior to a Participant’s Change in Control Termination) as the Committee determines; (ii) the Committee may require that a Participant surrender his or her outstanding Stock Options and Stock Appreciation Rights in exchange for one or more payments by the Company, in cash or Ordinary Shares, as determined by the Committee, in an amount equal to the amount by which the then Fair Market Value of the Shares subject to the Participant’s unexercised Stock Options and Stock Appreciation Rights exceeds the Exercise Price, if any, and on such terms as the Committee determines; (iii) after giving Participants an opportunity to exercise any outstanding Stock Options and Stock Appreciation Rights, the Committee may terminate any or all unexercised Stock Options and Stock Appreciation Rights at such time as the Committee deems appropriate; (iv) the Committee may determine that Annual Performance Bonuses and/or Long-Term Performance Awards will be paid out at their target level, in cash or Ordinary Shares as determined by the Committee; or (v) the Committee may determine that Awards that remain outstanding after the Change in Control shall be converted to similar grants of, or assumed by, the surviving corporation (or a parent or subsidiary of the surviving corporation or successor).  Such acceleration, surrender, termination, settlement, payment or conversion shall take place as of the date of the Change in Control or such other date as the Committee determines.  The Committee may specify how an Award will be treated in the event of a Change in Control either when the Award is granted or at any time thereafter. 

-16-

5.Fractional Shares.    No fractional Shares will be issued under the Plan.  Except as otherwise provided in Section 4.5(e) and unless otherwise provided by the Committee, if a Participant acquires the right to receive a fractional Share under the Plan, the Participant will receive, in lieu of the fractional Share, a cash payment equal to the Fair Market Value of such fractional share on the date of settlement of the related Award.

ARTICLE VI 
AMENDMENT AND TERMINATION 

1.Amendment.    The Plan may be amended at any time and from time to time by the Board or authorized Board committee without the approval of shareholders of the Company, except that no material revision to the terms of the Plan will be effective until the amendment is approved by the shareholders of the Company. A revision is “material” for this purpose if it materially increases the number of Shares that may be issued under the Plan (other than an increase pursuant to Section 5.3 of the Plan), expands the types of Awards available under the Plan, materially expands the class of persons eligible to receive Awards under the Plan, materially extends the term of the Plan, constitutes a repricing for which the terms of Section 4.3(g) require shareholder approval or is otherwise an amendment requiring shareholder approval pursuant to any law or the rules of any exchange on which the Company’s Ordinary Shares are listed for trading. No amendment of the Plan or any outstanding Award Certificate made without the Participant's written consent may adversely affect any right of a Participant with respect to an outstanding Award.

2.Termination.    The Plan will terminate upon the earlier of the following dates or events to occur:

		
	(a)
	The adoption of a resolution of the Board terminating the Plan; or

		
	(b)
	The day before the tenth (10th) anniversary of the approval of the Plan by the Company’s shareholders as described in Section 1.2. 

No Awards will be granted under this Plan after it has terminated. The termination of the Plan, however, will not alter or impair any of the rights or obligations of any person under any Award previously granted under the Plan without such person's consent. After the termination of the Plan, any previously granted Awards will remain in effect and will continue to be governed by the terms of the Plan and the applicable Award Certificate. 

ARTICLE VII 
GENERAL PROVISIONS 

1.Nontransferability of Awards.    No Award under the Plan will be subject in any manner to alienation, anticipation, sale, assignment, pledge, encumbrance or transfer, and no other persons will otherwise acquire any rights therein, except as provided below.

		
	(a)
	Any Award may be transferred by will or by the laws of descent or distribution.

		
	(b)
	Unless the applicable Award Certificate provides otherwise, all or any part of a Nonqualified Stock Option or Shares of Restricted Stock may be transferred to a family member without consideration.  For purposes of this subsection (b), "family member" includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Participant, including adoptive relationships, any person sharing the Participant's household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting interests.

Any transferred Award will be subject to all of the same terms and conditions as provided in the Plan and the applicable Award Certificate. The Participant or the Participant's estate will remain liable for any withholding tax that may be imposed by any federal, state or local tax authority. The Company may, in its sole discretion, disallow all or a part of any transfer of an Award pursuant to this Subsection 7.1(b) unless and until the Participant makes arrangements satisfactory to the Company for the payment of any withholding tax. The Participant must immediately notify the Company, in the form and manner required by the applicable Award Certificate or as otherwise required by the Company, of any proposed transfer of an Award pursuant to this Subsection 7.1(b). No transfer will be effective until the Company consents to the transfer.

-17-

		
	(c)
	Unless the applicable Award Certificate provides otherwise, any Nonqualified Stock Option transferred by a Participant pursuant to subsection (b) may be exercised by the transferee only to the extent that the Award would have been exercisable by the Participant had no transfer occurred. The transfer of Shares upon exercise of the Award will be conditioned on the payment of any withholding tax.

		
	(d)
	Restricted Stock may be freely transferred after the restrictions lapse or are satisfied and the Shares are delivered, provided, however, that Restricted Stock awarded to an affiliate of the Company may be transferred only pursuant to Rule 144 under the Securities Act, or pursuant to an effective registration for resale under the Securities Act. For purposes of this subsection (d), "affiliate" will have the meaning assigned to that term under Rule 144.

		
	(e)
	In no event may a Participant transfer an Incentive Stock Option other than by will or the laws of descent and distribution.

2.Withholding of Taxes.    The Committee, in its discretion, may require the satisfaction of a Participant's minimum tax withholding obligations by any of the following methods or any method as it determines to be in accordance with the laws of the jurisdiction in which the Participant resides, has domicile or performs services.

		
	(a)
	Stock Options and Stock Appreciation Rights.    As a condition to the delivery of Shares pursuant to the exercise of a Stock Option or Stock Appreciation Right, the Committee may require that the Participant, at the time of exercise, pay to the Company by cash, certified check, bank draft, wire transfer or postal or express money order an amount sufficient to satisfy any applicable tax withholding obligations. The Committee may also, in its discretion, accept payment of the minimum tax withholding obligations through any of the Exercise Price payment methods described in Section 4.3(d).

		
	(b)
	Other Awards Payable in Shares.    The Participant shall satisfy the Participant's tax withholding obligations arising in connection with the release of restrictions on Restricted Units, Restricted Stock and Other Stock-Based Awards by payment to the Company in cash or by certified check, bank draft, wire transfer or postal or express money order, provided that the format is approved by the Company or a designated third-party administrator. However, subject to any requirements of applicable law, the Company may also satisfy the Participant's minimum tax withholding obligations by other methods, including selling or withholding Shares that would otherwise be available for delivery.

		
	(c)
	Cash Awards.    The Company may satisfy a Participant's tax withholding obligation arising in connection with the payment of any Award in cash by withholding cash from such payment.

3.No Implied Rights.    The establishment and operation of the Plan, including the eligibility of a Participant to participate in the Plan, will not be construed as conferring any legal or other right upon any Director for any continuation of directorship or any Employee for the continuation of employment through the end of any Performance Cycle or other period. The Company expressly reserves the right, which may be exercised at any time and in the Company's sole discretion, to discharge any individual or treat him or her without regard to the effect that discharge might have upon him or her as a Participant in the Plan.

4.No Obligation to Exercise Awards.    The grant of a Stock Option or Stock Appreciation Right will impose no obligation upon the Participant to exercise the Award.

5.No Rights as Shareholders.    A Participant who is granted an Award under the Plan will have no rights as a shareholder of the Company with respect to the Award unless and until certificates for the Shares underlying the Award are registered in the Participant's name and (other than in the case of Restricted Stock) delivered to the Participant. The right of any Participant to receive an Award by virtue of participation in the Plan will be no greater than the right of any unsecured general creditor of the Company.

6.Indemnification of Committee.    The Company will indemnify, to the fullest extent permitted by law, each person made or threatened to be made a party to any civil or criminal action or proceeding by reason of the fact that the person, or the executor or administrator of the person's estate, is or was a member of the Committee or an authorized delegate of the Committee including, for purposes of Director Awards, the Nominating Committee.

7.No Required Segregation of Assets.    Neither the Company nor any Subsidiary will be required to segregate any assets that may at any time be represented by Awards granted pursuant to the Plan.

-18-

8.Nature of Payments.    All Awards made pursuant to the Plan are in consideration of services for the Company or a Subsidiary. Any gain realized pursuant to Awards under the Plan constitutes a special incentive payment to the Participant and will not be taken into account as compensation for purposes of any other employee benefit plan of the Company or a Subsidiary, except as the Committee otherwise provides. The adoption of the Plan will have no effect on Awards made or to be made under any other benefit plan covering an employee of the Company or a Subsidiary or any predecessor or successor of the Company or a Subsidiary.

9.Securities Law Compliance.    Awards under the Plan are intended to satisfy the requirements of Rule 16b-3 under the Exchange Act. If any provision of this Plan or any grant of an Award would otherwise frustrate or conflict with this intent, that provision will be interpreted and deemed amended so as to avoid conflict. No Participant will be entitled to a grant, exercise, transfer or payment of any Award if the grant, exercise, transfer or payment would violate the provisions of the Sarbanes-Oxley Act of 2002 or any other applicable law.

10.Coordination with Other Plans.  If this Plan provides a level of benefits with respect to Awards that differs from the level of benefits provided under the Mallinckrodt Pharmaceuticals Severance Plan for U.S. Officers and Executives, the Mallinckrodt Pharmaceuticals Change in Control Severance Plan for Certain U.S. Officers and Executives or the Mallinckrodt Pharmaceuticals Severance Plan for U.S. Employees, then the terms of the plan that provides for the more favorable benefit to the Participant shall govern

11.Section 409A Compliance.  Notwithstanding any other provision of this Plan or an applicable Award Certificate to the contrary, the provisions of this Section 7.11 shall apply to all Awards that are subject to Code Section 409A, but only with respect to the portion of such Award that is subject to Code Section 409A.  To the extent the Committee (or Nominating Committee with respect to Director Awards) determines that any Award granted under the Plan is subject to Code Section 409A, the Award Certificate evidencing such Award will incorporate the terms and conditions required by Code Section 409A.  To the extent applicable, the Plan and the Award Certificate will be interpreted in accordance with Code Section 409A and the applicable regulations and rulings thereunder.  Notwithstanding any other provision of the Plan to the contrary, in the event that the Committee (or Nominating Committee with respect to Director Awards) determines that any Award may be subject to Code Section 409A, the Committee may adopt such amendments to the Plan and/or the applicable Award Certificate or adopt policies and procedures or take any other action or actions, including an action or amendment with retroactive effect, that the Committee (or Nominating Committee with respect to Director Awards) determines is necessary or appropriate to (i) exempt the Award from the application of Code Section 409A or (ii) comply with the requirements of Code Section 409A.

		
	(a)
	Modifications to or Adjustments of Awards.  Any modifications to an Award pursuant to Subsection 3.2(g) or adjustments of an Award pursuant to Subsections 4.8 or 5.3 shall comply with the requirements of Section 409A.

		
	(b)
	Specified Employees.  Payments to any Participant who is a “specified employee” of deferred compensation that is subject to Code Section 409A(a)(2) and that becomes payable upon, or that is accelerated upon, such Participant’s Termination of Employment (as modified by Subsection 7.12(b)(iv)), shall not be made on or before the date which is six (6) months following such Participant’s Termination of Employment (or, if earlier, such Participant’s death).  A specified employee for this purpose shall be determined by the Committee or its delegate in accordance with the provisions of Code Section 409A and the regulations and rulings thereunder.

-19-

12.Section 457A Compliance.  To the extent the Committee (or Nominating Committee with respect to Director Awards) determines that any Award granted under the Plan is subject to Code Section 457A, the Award Certificate evidencing such Award will incorporate the terms and conditions required by Code Section 457A in order to avoid accelerated taxation or tax penalties to the holder thereof in respect of such Award.  To the extent applicable, the Plan and the Award Certificate will be interpreted in accordance with Code Section 457A and applicable guidance issued thereunder.  Notwithstanding any other provision of the Plan to the contrary, in the event that the Committee (or Nominating Committee with respect to Director Awards) determines that any Award may be subject to Code Section 457A, the Committee may adopt such amendments to the Plan and/or the applicable Award Certificate or adopt policies and procedures or take any other action or actions, including an action or amendment with retroactive effect, that the Committee (or Nominating Committee with respect to Director Awards) determines is necessary or appropriate to (i) exempt the Award from the application of Code Section 457A or (ii) comply with the requirements of Code Section 457A.

13.Governing Law, Severability.    The Plan and all determinations made and actions taken under the Plan will be governed by the law of Ireland and construed accordingly. If any provision of the Plan is held unlawful or otherwise invalid or unenforceable in whole or in part, the unlawfulness, invalidity or unenforceability will not affect any other parts of the Plan, which parts will remain in full force and effect.

-20-

APPENDIX A

Net sales; return on sales; revenue, net revenue, product revenue or system-wide revenue (including growth of such revenue measures); operating income (before or after taxes) or net operating income; pre- or after-tax income or loss (before or after allocation of corporate overhead and bonus); earnings or loss per share; income or loss, or net income or loss (before or after taxes); return on equity; total stockholder return; share price performance; return on assets or net assets; appreciation in and/or maintenance of the price of the Shares or any other publicly-traded securities of the Company; market share; gross profits; gross or net profit margin; gross profit growth; operating profit or net operating profit (before or after taxes); operating earnings; earnings or losses or net earnings or losses (including earnings or losses before taxes, before interest and taxes, or before interest, taxes, depreciation and amortization); return on operating revenue; economic value-added models or equivalent metrics; comparisons with various stock market indices; reductions in costs; cash flow (including operating cash flow and free cash flow) or cash flow per share (before or after dividends); return on capital (including return on total capital or return on invested capital); cash flow return on investment; cash flow return on capital; improvement in or attainment of expense levels or working capital levels, including cash, inventory and accounts receivable; general and administrative expense savings; inventory control; operating margin; profit margin; gross margin; year-end cash; cash margin; debt reduction; stockholders equity; operating efficiencies; cost reductions or savings; market share; market segment share; customer satisfaction; customer growth; employee satisfaction; productivity or productivity ratios; regulatory achievements (including submitting or filing applications or other documents with regulatory authorities or receiving approval of any such applications or other documents and passing pre-approval inspections (whether of the Company or the Company’s third-party manufacturer) and validation of manufacturing processes (whether the Company’s or the Company’s third-party manufacturer’s)); clinical achievements (including initiating clinical studies; initiating enrollment, completing enrollment or enrolling particular numbers of subjects in clinical studies; completing phases of a clinical study (including the treatment phase); or announcing or presenting preliminary or final data from clinical studies; in each case, whether on particular timelines or generally); strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property; establishing relationships with commercial entities with respect to the marketing, distribution and sale of the Company’s products (including with group purchasing organizations, distributors and other vendors); supply chain achievements (including establishing relationships with manufacturers or suppliers of component materials and manufacturers of the Company’s products); co-development, co-marketing, profit sharing, joint venture or other similar arrangements); financial ratios, including those measuring liquidity, activity, profitability or leverage; cost of capital or assets under management; financing and other capital raising transactions (including sales of the Company’s equity or debt securities; debt level year-end cash position; book value; factoring transactions; competitive market metrics; timely completion of new product roll-outs; product release schedules; timely launch of new facilities; sales or licenses of the Company’s assets, including its intellectual property, whether in a particular jurisdiction or territory or globally; or through partnering transactions); royalty income; new product innovation; product cost reduction through advanced technology; brand recognition/acceptance; produce ship targets; implementation, completion or attainment of measurable objectives with respect to research, development, manufacturing, commercialization, products or projects, production volume levels, acquisitions and divestitures, succession and hiring projects, reorganization and other corporate transactions, expansions of specific business operations and meeting divisional or project budgets; factoring transactions; and recruiting and maintaining personnel.

-21-Exhibit 4.1

 

EXECUTION VERSION

 

NEITHER THIS WARRANT NOR THE SECURITIES FOR
WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

 

NUMEREX CORP.

 

WARRANT

 

Warrant No. HC-1Dated: June 7, 2017

 

NUMEREX CORP, a Pennsylvania
corporation (the “Company”), hereby certifies that, for value received, HCP-FVF, LLC or its registered assigns
(the “Holder”), is entitled to purchase from the Company up to a total of 895,944 (subject to adjustment as
provided herein) fully paid and non-assessable shares of common stock, no par value per share (the “Common Stock”),
of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”)
at an exercise price equal to $4.14 per share (as adjusted from time to time as provided in Section 9, the “Exercise
Price”), at any time and from time to time from and after the date hereof (the “Issuance Date”) and
through and including June 7, 2027 (the “Expiration Date”), and subject to the following terms and conditions.
This Warrant (this “Warrant”) is being issued pursuant to Section 3.6 of that certain Note Purchase Agreement,
dated as of the date hereof (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “Note
Purchase Agreement”), by and among the Company, the Guarantors (as defined therein) from time to time party thereto,
the Purchasers (as defined therein) from time to time party thereto, and the Holder, as collateral agent for itself and the Purchasers
(in such capacity and together with its successors and assigns, the “Collateral Agent”).

 

1.             Definitions.
In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein shall have
the meanings set forth below:

 

(a)          “Business
Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction
of business.

 

     

     

    

 

(b)          “Change
of Control” means the occurrence of any of the following in one or a series of related transactions: (i) an acquisition
after the Issuance Date by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange
Act) of more than fifty percent (50%) of the voting rights or equity interests in the Company; (ii) a replacement of more
than fifty percent (50%) of the members of the Company’s board of directors that is not approved by those individuals who
are members of the board of directors on the Issuance Date; (iii) a merger or consolidation of the Company or a sale of all
or substantially all of the assets of the Company in one or a series of related transactions, unless following such transaction
or series of transactions, the holders of the Company’s securities prior to the first such transaction continue to hold at
least fifty percent (50%) of the voting rights and equity interests in the surviving entity or acquirer of such assets, as applicable;
(iv) a recapitalization, reorganization or other transaction involving the Company that constitutes or could result in a transfer
of more than fifty percent (50%) of the voting rights or equity interests in the Company; (v) consummation of a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the Exchange Act with respect to the Company; or (vi) the execution by the
Company or its controlling shareholders of an agreement providing for or that will result in any of the foregoing events.

 

(c)          “Closing
Date” means June 7, 2017.

 

(d)          “Closing
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on an Eligible Market or any other national securities exchange, the closing bid price per
share of Common Stock for such date (or the nearest preceding date) on the primary Eligible Market or exchange on which the Common
Stock is then listed or quoted; (b) if the Common Stock is then listed or quoted on the OTC Bulletin Board, the most recent closing
bid price per share of Common Stock so reported; (c) if prices for the Common Stock are then reported in the “Pink Sheets”
published by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of Common Stock so reported; or (d) in all other cases, the fair market value of a share of
Common Stock as mutually determined by the Company and the Holder in their sole discretion. If the Company and the Holder are unable
to so agree upon the fair market value of a share of Common Stock, then such dispute shall be resolved in accordance with the procedures
in Section 17(f).

 

(e)          “Commission”
means the U.S. Securities and Exchange Commission.

 

(f)           “Convertible
Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable
or exchangeable for Common Stock.

 

(a)          “Effective Date” means the date that a Registration Statement or Registration Statements covering the Registrable
Securities has been declared effective by the Commission.

 

(b)          “Eligible
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York Stock
Exchange, NYSE Arca or the NYSE MKT (or any successor to any of the foregoing).

 

(c)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated
thereunder.

 

    	 	2	 

     

    

 

(d)          “Excluded
Stock” means the issuance of (i) Common Stock upon the conversion of any Convertible Securities or Options outstanding
as of the Closing Date, pursuant to the terms (including price) of such Convertible Securities or Options, as applicable, as of
the Closing Date, (ii) Common Stock as a dividend on the Common Stock distributed pro rata to the holders thereof, (iii) Options
(and the issuance of Common Stock upon exercise thereof) or restricted stock of the Company to employees, officers, directors or
consultants of the Company pursuant to a stock option plan, restricted stock agreement or other incentive stock plan or pursuant
to any employee benefit plan, in each case as in effect on the Closing Date, (iv) Options (and the issuance of Common Stock upon
exercise thereof) or restricted stock of the Company to employees, officers, directors or consultants of the Company pursuant to
a stock option plan, restricted stock agreement or other incentive stock plan or pursuant to any employee benefit plan, in each
case, if not in effect on the Closing Date, as approved by the Company’s Board of Directors, in an aggregate amount not to
exceed six percent (6%) of the outstanding Common Stock on a fully diluted basis in any 12 month period and (v) the Underlying
Shares.

 

(e)          “Filing
Date” means, with respect to (i) the initial Registration Statement required to be filed pursuant to Section 11(a)(i)
of this Warrant, the ninetieth (90th) day following the Issuance Date and (ii) any additional Registration Statement
required to be filed pursuant to Section 11 of this Warrant, the ninetieth (90th) day following the date thereof.

 

(f)           “Holder
Counsel” means Proskauer Rose LLP.

 

(g)          “Losses”
means any and all damages, fines, penalties, deficiencies, liabilities, claims, losses (including loss of value), judgments, awards,
settlements, taxes, actions, obligations and costs and expenses in connection therewith (including, without limitation, interest,
court costs and fees and expenses of attorneys, accountants and other experts, or any other expenses of litigation or other Proceedings
or of any default or assessment).

 

(h)          “Options”
means any rights, warrants or options to, directly or indirectly, subscribe for or purchase Common Stock or Convertible Securities.

 

(a)          “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

(b)          “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition).

 

(c)          “Prospectus”
means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the
Prospectus including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.

 

    	 	3	 

     

    

 

(d)          “Registrable
Securities” means the Warrant Shares (including any Warrant Shares issuable pursuant to the anti-dilution provisions
hereof), together with any securities issued or issuable in exchange for the Warrant Shares or upon any stock split, dividend or
other distribution, recapitalization or similar event with respect to the foregoing.

 

(e)          “Registration
Statement” means the initial registration statement required to be filed under Section 11(a)(i) of this Warrant
and any additional registration statements contemplated by Section 11 of this Warrant, including (in each case) the Prospectus,
amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

(f)          “Required
Effectiveness Date” means with respect to (i) the initial Registration Statement required pursuant to Section 11(a)(i)
of this Warrant, the one hundred eightieth (180th) day following the Issuance Date and (ii) any additional Registration
Statement required pursuant to Section 11 of this Warrant, the 180th day following the date thereof; provided,
however, in the event the Company is notified by the Commission that the Registration Statement will not be reviewed or
is no longer subject to further review and comments, the Required Effectiveness Date as to such Registration Statement shall be
the fifth (5th) Trading Day following the date on which the Company is so notified if such date precedes the dates required
above.

 

(g)          “Rule
144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424, respectively,
promulgated by the Commission pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

(h)          “Securities
Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated
thereunder.

 

(i)          “Trading
Day” means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, or
(b) if the Common Stock is not then listed or quoted and traded on any Trading Market, then any Business Day.

 

(j)          “Trading
Market” means The NASDAQ Global Select Market or any other primary Eligible Market or national securities exchange on
which the Common Stock is then listed or quoted.

 

(k)          “Underlying
Shares” means the shares of Common Stock issued or issuable upon exercise of the Warrants, and any securities issued
or issuable in exchange for or in respect of such securities.

 

(l)          
“VWAP” means, on any particular Trading Day or for any particular period, the volume weighted average trading
price per share of Common Stock on such Trading Day or for such particular period on the Eligible Market on which the Common Stock
is then traded as reported by Bloomberg L.P., through its “Volume at Price” functions, or any successor performing
similar functions, or, if the foregoing does not apply, the average of the highest Closing Price and the lowest closing ask price
of the Common Stock on the OTC Bulletin Board or, if none of the foregoing applies, the average of the highest Closing Price and
the lowest closing ask price of the Common Stock of any of the market makers for the Common Stock as reported in the “pink
sheets” by OTC Markets Group Inc.; provided, however, that during any period the VWAP is being determined, the VWAP
shall be subject to adjustment from time to time for stock splits, stock dividends, combinations and similar events as applicable.

 

    	 	4	 

     

    

 

 

2.             Registration
of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

3.             Registration
of Transfers. This Warrant and all rights hereunder are transferable in whole or in part upon the books of the Company by the
Holder hereof; provided, however, that the transferee shall agree in writing to be bound by the terms and subject to the conditions
of this Warrant. The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender
of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified
herein. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant
(any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued
to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a Warrant.

 

4.             Exercise
and Duration of Warrants.

 

(a)          Subject
to the limitations set forth in Section 12 hereof, this Warrant shall be exercisable by the registered Holder at any time
and from time to time on or after the Issuance Date to and including the Expiration Date. At 6:30 P.M., New York City time on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value; provided that,
if the Current Market Price on the Expiration Date exceeds the Exercise Price on the Expiration Date, then this Warrant shall be
deemed to have been exercised in full (to the extent not previously exercised, and subject to the limitations set forth in Section
12 hereof) on a “cashless exercise” basis at 6:30 P.M. New York City time on the Expiration Date. Notwithstanding
anything to the contrary herein, the Expiration Date shall be extended for each day following the Effective Date that the Registration
Statement is not effective. For U.S. federal income tax purposes, each Holder and the Company shall treat any "cashless exercise"
as a reorganization under Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended, unless otherwise required by the
IRS or a court.

 

    	 	5	 

     

    

 

(b)          A
Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto (the “Exercise
Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant
Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated
in the Exercise Notice), and the date such items are delivered to the Company (as determined in accordance with the notice provisions
hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in order to
effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original
Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares. The Holder shall
deliver the original Warrant to the Company within thirty (30) days after the full exercise of this Warrant, provided, that
the Holder’s failure to so deliver the original Warrant shall not affect the validity of such exercise or any of the Company’s
obligations under this Warrant and the Company’s sole remedy for the Holder’s failure to deliver the original Warrant
shall be to obtain an affidavit of lost warrant from the Holder.

 

5.             Delivery
of Warrant Shares.

 

(a)          Subject
to Section 5(c) below and the limitations set forth in Section 12, upon exercise of this Warrant, the Company shall
promptly (but in no event later than three (3) Trading Days after the Exercise Date) credit the Holder’s balance account
with DTC for the Warrant Shares issuable upon such exercise or at the Holder’s option issue or cause to be issued and cause
to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate
for the Warrant Shares issuable upon such exercise, in either case, free of restrictive legends unless a Registration Statement
covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective and the
Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144. The Holder, or any Person so designated
by the Holder to receive Warrant Shares, shall be deemed to have become holder of record of such Warrant Shares as of the Exercise
Date. If within three (3) Trading Days after the Exercise Date, the Company shall fail to credit the Holder’s balance account
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder or at the
Holder’s option issue and deliver a certificate to the Holder and register such Warrant Shares on the Company’s share
register, then, in addition to the rights set forth in Section 5(c) below and the right to obtain specific performance, the Company
shall pay in cash to the Holder on each day after such third (3rd) Trading Day that the issuance of such Warrant Shares
is not timely effected an amount equal to one percent (1%) of the product of (A) the aggregate number of Warrant Shares not issued
to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Price of the Common Stock on the Trading
Day immediately preceding the last possible date on which the Company could have issued such Warrant Shares to the Holder without
violating Section 5(a).

 

(b)          Subject
to Section 5(c) below and the limitations set forth in Section 12 hereof, this Warrant is exercisable, either in
its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one
or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.

 

    	 	6	 

     

    

 

(c)          In
addition to any other rights available to a Holder, if the Company fails to credit the Holder’s balance account with DTC
for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder or at the Holder’s
option deliver or cause to be delivered to the Holder a certificate representing Warrant Shares by the third (3rd) Trading
Day after the Exercise Date, and if after such third (3rd) Trading Day the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated
receiving from the Company (a “Buy-In”), then the Company shall, at the option of the Holder (in its sole discretion),
either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased by the Holder (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation
to credit the Holder’s balance account with DTC for the number of Warrant Shares to which the Holder is entitled upon the
Holder’s exercise hereunder or at the Holder’s option deliver to the Holder a certificate or certificates representing
such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of
(A) such number of Warrant Shares, times (B) the Closing Price on the date such crediting of the Holder’s balance account
with DTC should have occurred hereunder or such certificate should have been delivered hereunder.

 

(d)          The
Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof
(including, but not limited to the proper exercise of this Warrant) are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Warrant Shares (other than such limitations contemplated
by this Warrant). Nothing herein shall limit the Holder’s right to pursue a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise
of the Warrant as required pursuant to the terms hereof.

 

(e)          Each
certificate for Warrant Shares shall bear a restrictive legend only if (i) there is not then an effective Registration Statement
covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder and (ii) the Warrant Shares
are not freely transferable without volume restrictions pursuant to Rule 144; provided, that, no such restrictive legend shall
be required if, in the opinion of counsel for the Holder (which opinion shall be reasonably satisfactory to counsel for the Company)
or the Company, the securities represented thereby are not, at such time, required by law to bear such legend.

 

6.             Charges,
Taxes and Expenses. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be
made without charge (other than any applicable income taxes) to the Holder for any issue or transfer tax transfer agent fee or
other incidental expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the
Company; provided, however, that the Company shall not be required to pay any tax or governmental charge that may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that
of the Holder or an affiliate thereof and the Company shall not be required to issue or deliver such certificates unless or until
the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or governmental charge
or shall have established to the satisfaction of the Company that such tax or governmental charge has been paid.

 

    	 	7	 

     

    

 

7.             Replacement
of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity,
if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and
procedures as the Company may prescribe.

 

8.             Reservation
of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise
of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable. The Company will take all such action as may be necessary to assure that such
shares of Common Stock may be issued as provided herein without violation by the Company of any applicable law or regulation, or
of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

 

9.             Certain
Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9.

 

(a)          Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after
the effective date of such subdivision or combination.

 

    	 	8	 

     

    

 

(b)          Pro
Rata Distributions. If the Company, at any time while this Warrant is outstanding, distributes to holders of Common Stock (and
not to all Holders of Warrants in respect of their ownership thereof) (i) evidences of its indebtedness, (ii) any security (other
than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase
any security, or (iv) cash or any other asset (in each case, “Distributed Property”), then in each such case
the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such
distribution shall be adjusted (effective on such record date) to equal the product of such Exercise Price times a fraction of
which the denominator shall be the average of the Closing Prices for the five (5) Trading Days immediately prior to (but not including)
such record date and of which the numerator shall be such average less the then fair market value of the Distributed Property distributed
in respect of one (1) outstanding share of Common Stock, as determined by the Company’s independent certified public accountants
that regularly examine the financial statements of the Company (an “Appraiser”). In such event, the Holder,
after receipt of the determination by the Appraiser, shall have the right to select an additional appraiser (which shall be a nationally
recognized accounting firm), in which case such fair market value shall be deemed to equal the average of the values determined
by each of the Appraiser and such appraiser. As an alternative to the foregoing adjustment to the Exercise Price, at the request
of the Holder delivered before the 90th day after such record date, the Company will deliver to such Holder, within
five (5) Trading Days after such request (or, if later, on the effective date of such distribution), the Distributed Property that
such Holder would have been entitled to receive in respect of the Warrant Shares for which this Warrant could have been exercised
immediately prior to such record date. If such Distributed Property is not delivered to a Holder pursuant to the preceding sentence,
then upon expiration of or any exercise of the Warrant that occurs after such record date, such Holder shall remain entitled to
receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable), such Distributed Property.

 

(c)          Fundamental
Transactions. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation of the
Company with or into another Person, (ii) the Company effects any sale of (y) assets responsible for 35% or more of the Company’s
revenue for the four most recently completed fiscal quarters immediately preceding such sale or (z) the sale of assets for aggregate
consideration equal to 35% or more of the Company’s equity market capitalization on the day prior to the announcement of
such sale, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders
of at least 50% of the Common Stock (excluding any shares held by the Person(s) making such tender or exchange offer) tender or
exchange their shares for other securities, cash or property, (iv) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a)
above), or (v) there is a Change of Control (in any such case, a “Fundamental Transaction”), then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property
as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior
to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon such exercise of this Warrant (the
“Alternate Consideration”). The aggregate Exercise Price for this Warrant will not be affected by any such Fundamental
Transaction, but the Company shall apportion such aggregate Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of this Warrant. The Company shall notify the Holder,
in writing, of such Fundamental Transaction at least five (5) days prior to the closing of such Fundamental Transaction (the “Fundamental
Transaction Notice”), which written notice shall describe the economic terms of the Fundamental Transaction (including
the Alternate Consideration issuable upon exercise of this Warrant). In the event of a Fundamental Transaction, the Company or
the successor or purchasing Person, as the case may be, shall execute with the Holder a written agreement providing that:

 

    	 	9	 

     

    

 

(x)          this
Warrant shall thereafter entitle the Holder to purchase the Alternate Consideration in accordance with this Section 9(c),

 

(y)          in
the case of any such successor or purchasing Person, upon such consolidation, merger, statutory exchange, combination, sale or
conveyance such successor or purchasing Person shall be jointly and severally liable with the Company for the performance of all
of the Company’s obligations under this Warrant, and

 

(z)          if
registration or qualification is required under the Exchange Act or applicable state law for the public resale by the Holder of
shares of stock and other securities so issuable upon exercise of this Warrant, such registration or qualification shall be completed
prior to such reclassification, change, consolidation, merger, statutory exchange, combination or sale.

 

If, in the case of any
Fundamental Transaction, the Alternate Consideration includes shares of stock, other securities, other property or assets of a
Person other than the Company or any such successor or purchasing Person, as the case may be, in such Fundamental Transaction,
then such written agreement shall also be executed by such other Person and shall contain such additional provisions to protect
the interests of the Holder as the Company’s board of directors shall reasonably consider necessary by reason of the foregoing.
At the Holder’s request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a New Warrant consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this
paragraph (c) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.

 

Notwithstanding the foregoing
paragraph or anything contained herein to the contrary, in the event of a Fundamental Transaction, at the request of the Holder
delivered on or before the later to occur of (y) the end of the fifth day following Holder’s receipt of the Fundamental Transaction
Notice and (z) the closing of the Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase
this Warrant from the Holder for a purchase price, payable in cash within five (5) Trading Days after such request, equal to the
sum of (1) the greater of (A) the Original Issuance Value (as such term is defined in Exhibit A) in respect of the remaining
unexercised portion of this Warrant and (B) the Black-Scholes value of the remaining unexercised portion of this Warrant on the
date of the consummation of the Fundamental Transaction, without regard to any limitations on the exercise hereof (including the
inability of the Holder to exercise the Warrant following a Fundamental Transaction) and as determined in accordance with Exhibit
A attached hereto and (2) any Distributed Property in accordance with the last sentence of Section 9(b) above.

 

    	 	10	 

     

    

 

(d)          Subsequent
Equity Sales.

 

(i)              If,

 

A.           At
any time prior to the second anniversary of the Closing Date while this Warrant is outstanding the Company or any subsidiary issues
additional shares of Common Stock, Convertible Securities or Options (collectively, “Common Stock Equivalents”)
at an effective price to the Company (net of any rebates, discounts, fees, commissions or expenses, other than customary expenses)
per share of Common Stock (the “Effective Price”) less than the Exercise Price
(as adjusted hereunder to such date), then, the Exercise Price shall be reduced to a price determined by multiplying the Exercise
Price by a fraction, the numerator of which shall be the sum of (A) the number of shares of Common Stock outstanding immediately
prior to such issuance multiplied by the Exercise Price, plus (B) the Effective Price multiplied by the number of Common Stock
Equivalents so issued, and the denominator of which shall be the product of (1) the sum of (A) the total number of shares
of Common Stock outstanding immediately prior to such issuance plus (B) the number of Common Stock Equivalents so issued multiplied
by (2) the Exercise Price.

 

B.           At
any time on or after the second anniversary of the Closing Date while this Warrant is outstanding, the Company or any subsidiary
issues any Common Stock Equivalents at an Effective Price less than the Exercise Price (as adjusted hereunder to such date), then
the Exercise Price shall be reduced to equal the Effective Price.

 

If any issuance shall require
an adjustment to the Exercise Price pursuant to the foregoing provisions of this Section 9(d), including by operation of paragraph
(A) or (B) above, then, effective at the time such adjustment is made, the number of shares of Common Stock subject to purchase
upon exercise of this Warrant shall be increased to a number determined by multiplying the number of such shares subject to purchase
immediately before such adjustment by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior
to such event and the denominator of which shall be the Exercise Price as adjusted in accordance with this Section 9(d). The provisions
of this Section 9(d), including by operation of paragraph (A) or (B) above, shall not operate to increase the Exercise Price or
reduce the number of shares of Common Stock subject to purchase upon exercise of this Warrant and shall not cause the number of
Warrant Shares issuable hereunder to be less than as provided in 9(e). For purposes of this paragraph, in connection with any issuance
of any Common Stock Equivalents, (A) the maximum number of shares of Common Stock potentially issuable at any time upon conversion,
exercise or exchange of such Common Stock Equivalents (the “Deemed Number”) shall be deemed to be outstanding
upon issuance of such Common Stock Equivalents, (B) the Effective Price applicable to such Common Stock shall equal the minimum
dollar value of consideration payable to the Company to purchase such Common Stock Equivalents and to convert, exercise or exchange
them into Common Stock (net of any rebates, discounts, fees, commissions and expenses, other than customary expenses), divided
by the Deemed Number, and (C) no further adjustment shall be made to the Exercise Price upon the actual issuance of Common Stock
upon conversion, exercise or exchange of such Common Stock Equivalents.

 

    	 	11	 

     

    

 

(ii)            If,
at any time while this Warrant is outstanding, the Company directly or indirectly issues Common Stock Equivalents with an Effective
Price or a number of underlying shares that floats or resets or otherwise varies or is subject to adjustment based (directly or
indirectly) on market prices of the Common Stock (a “Floating Price Security”), then for purposes of applying
the preceding paragraph in connection with any subsequent exercise, the Effective Price will be determined separately on each Exercise
Date and will be deemed to equal the lowest Effective Price at which any holder of such Floating Price Security is entitled to
acquire Common Stock on such Exercise Date (regardless of whether any such holder actually acquires any shares on such date).

 

(iii)           The
Company shall not issue any Common Stock Equivalents at an Effective Price less than the Exercise Price (as adjusted hereunder
to such date) unless prior to such issuance the Company shall have obtained all necessary shareholder and other approvals required
for the Exercise Price under this Warrant to be reduced to such Effective Price and for sufficient Warrant Shares to be reserved
for issuance upon exercise of this Warrant.

 

(iv)           Notwithstanding
the foregoing, no adjustment will be made under this paragraph (d) in respect of any issuances of Common Stock or Common Stock
Equivalents made pursuant to the definition of Excluded Stock.

 

(e)          Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs (a), (b) or (d) of this
Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

 

(f)          Calculations.
All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

(g)          Notice
of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including
a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise
of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon
which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the
Holder and to the Company’s transfer agent.

 

    	 	12	 

     

    

 

(h)          Notice
of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property
in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any
capital stock of the Company or any subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for a Fundamental Transaction, or (iii) authorizes the voluntary dissolution, liquidation or winding up of
the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions
of such transaction, at least twenty (20) calendar days prior to the applicable record or effective date on which a Person would
need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps
reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such
time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice
or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

 

10.           Payment
of Exercise Price. The Holder, at its election, may either pay the Exercise Price in immediately available funds, or satisfy
its obligation to pay the Exercise Price through a “cashless exercise,” in which event the Company shall issue to the
Holder the number of Warrant Shares determined as follows:

 

	 	X = Y [(A-B)/A]
	where:	 
	 	X = the number of Warrant Shares to be issued to the Holder.
	 	 
	 	Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
	 	 
	 	A = the Current Market Price (as of the date of
    such calculation) of one share of Common Stock.
	 	 
	 	B = the Exercise Price (as adjusted to the date of such calculation).

 

For purposes of this Warrant,
the “Current Market Price” of one share of the Company’s Common Stock as of a particular date shall be
determined as follows: (a) if traded on a national securities exchange (including the Nasdaq Stock Market), the Current Market
Price shall be deemed to be the arithmetic average of the VWAPs for the ten (10) consecutive Trading Days immediately preceding
the applicable date; (b) if traded over-the-counter but not on the Nasdaq Stock Market, the Current Market Price shall be deemed
to be the average of the closing bid and asked prices as of ten (10) Business Days immediately prior to the date of exercise indicated
in the Notice of Exercise; and (c) if there is no active public market, the Current Market Price shall be the fair market value
of a share of Common Stock as mutually determined by the Company and the Holder. If the Company and the Holder are unable to so
agree upon the fair market value of a share of Common Stock, then such dispute shall be resolved in accordance with the procedures
in Section 17(f).

 

    	 	13	 

     

    

 

For purposes of Rule 144
(as in effect on the Issuance Date), it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed
to have commenced, on the Issuance Date.

 

11.           Registration
Rights.

 

(a)          Resale
Registration.

 

(i)              As
promptly as reasonably possible, and in any event on or prior to the Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of all Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. If for any reason the Commission does not permit all of the Registrable Securities to be included in such Registration
Statement, then the Company shall not be obligated to include such Registrable Securities in such Registration Statement but the
Company shall prepare and file with the Commission a separate Registration Statement with respect to any such Registrable Securities
not included with the initial Registration Statement, as expeditiously as reasonably possible, but in no event later than the date
which is thirty (30) days after the date on which the Commission shall indicate as being the first date such filing may be made.
The Registration Statement shall be on Form S-3 and shall contain (except if otherwise directed by the Holder) the “Plan
of Distribution”, substantially as attached hereto as Exhibit B. In the event the Form S-3 is not available for the
registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form in accordance herewith as the Holder may consent and (ii) attempt to register the Registrable
Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared
effective by the Commission.

 

(ii)             The
Company shall use reasonable best efforts to cause the Registration Statement to be declared effective by the Commission as promptly
as reasonable possible after the filing thereof, but in any event prior to the Required Effectiveness Date, and shall use reasonable
best efforts to keep the Registration Statement continuously effective under the Securities Act until the earliest of (i) the fifth
(5th) anniversary of the Effective Date, (ii) such time as all of the Registrable Securities may be sold to the public pursuant
to Rule 144 without any volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144(c)(1), or (iii) such time as all Registrable Securities covered by such
Registration Statement have been sold publicly (the “Effectiveness Period”).

 

(iii)            The
Company shall notify the Holder in writing promptly (and in any event within one Business Day) after receiving notification from
the Commission that the Registration Statement has been declared effective.

 

    	 	14	 

     

    

 

(iv)            Except
as contemplated by section 1.7 of the Warrant to Purchase Stock, dated March 31, 2017, issued by the Company to Kenneth Rainin
Foundation, the Company shall not, prior to the Effective Date of the Registration Statement, prepare and file with the Commission
a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of
its equity securities (other than a Registration Statement on Form S-8).

 

(v)             If
the Company issues to the Holder any Common Stock pursuant to the Warrant that is not included in the initial Registration Statement,
then the Company shall file an additional Registration Statement covering such number of shares of Common Stock on or prior to
the Filing Date and shall use reasonable best efforts to cause such additional Registration Statement to become effective by the
Commission by the Required Effectiveness Date.

 

(b)          Registration
Procedures. In connection with the Company’s registration obligations hereunder, the Company shall:

 

(i)              Not
less than four (4) Trading Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement
thereto (other than any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall
furnish to the Holder and Holder Counsel copies of all such documents proposed to be filed and shall reasonably consider any comments
thereto from the Holder and Holder Counsel. The Company shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which Holder shall reasonably object.

 

(ii)             (w)
Prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the Registrable Securities; (x) cause the related Prospectus
to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (y) respond reasonably promptly, to any comments received from the Commission with respect to the Registration Statement
or any amendment thereto and as promptly as reasonably possible provide the Holder true and complete copies of all correspondence
from and to the Commission relating to the Registration Statement; provided, however, the Company will not be required to provide
copies of any correspondence that would result in the disclosure to the Holder of material and non-public information concerning
the Company unless the Holder has executed a confidentiality agreement with the Company; and (z) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered
by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holder
thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

 

    	 	15	 

     

    

 

(iii)            Notify
the Holder and Holder Counsel as promptly as reasonably possible, and (if requested by any such Person) confirm such notice in
writing no later than one Trading Day thereafter, of any of the following events: (i) the Commission notifies the Company whether
there will be a “review” of any Registration Statement; (ii) the Commission comments in writing on any Registration
Statement (in which case the Company shall deliver to the Holder a copy of such comments and of all written responses thereto;
provided, however, the Company will not be required to provide copies of any responses that would result in the disclosure
to the Holder of material and non-public information concerning the Company unless the Holder has executed a confidentiality agreement
with the Company); (iii) any Registration Statement or any post-effective amendment is declared effective; (iv) the Commission
or any other federal or state governmental authority requests any amendment or supplement to any Registration Statement or Prospectus
or requests additional information related thereto; (v) the Commission issues any stop order suspending the effectiveness of any
Registration Statement or initiates any Proceedings for that purpose; (vi) the Company receives notice of any suspension of the
qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or
threat of any Proceeding for such purpose; or (vii) the financial statements included or incorporated by reference in any Registration
Statement become ineligible for inclusion or incorporation therein or any statement made in any Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference is untrue in any material respect or any revision
to a Registration Statement, Prospectus or other document is required so that it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

 

(iv)            Use
reasonable best efforts to avoid the issuance of or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness
of any Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, as soon as practicable.

 

(v)             Furnish
or make available to the Holder and Holder Counsel, without charge, at least one conformed copy of each Registration Statement
and each amendment thereto, including financial statements (but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits, unless requested in writing by the Holder or Holder Counsel), and such other
documents, as the Holder or Holder Counsel may reasonably request, promptly after the filing of such documents with the Commission.

 

(vi)            Promptly
deliver to the Holder and Holder Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form
of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. Subject to Section 11(e), the Company
hereby consents to the use of such Prospectus and each amendment or supplement thereto by the Holder in connection with the offering
and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

 

    	 	16	 

     

    

 

(vii)           (i)
Prepare and timely file with each Trading Market an additional shares listing application covering all of the Registrable Securities;
(ii) use reasonable best efforts to cause such Registrable Securities to be approved for listing on each Trading Market as soon
as practicable thereafter; (iii) provide to the Holder evidence of such listing; and (iv) use reasonable best efforts to maintain
the listing of such Registrable Securities on each such Trading Market or another Eligible Market.

 

(viii)          Prior
to any public offering of Registrable Securities, use reasonable best efforts to register or qualify or cooperate with the Holder
and Holder Counsel in connection with the registration or qualification (or exemption from such registration or qualification)
of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United
States as the Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during
the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by a Registration Statement.

 

(ix)            Cooperate
with the Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by this Warrant,
of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names
as the Holder may request.

 

(x)             Upon
the occurrence of any event described in clause (vii) of Section 11(b)(iii) of this Warrant, as promptly as reasonably possible,
prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statement or a supplement
to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

(c)          Registration
Expenses. The Company shall pay (or reimburse the Holder for) all fees and expenses incident to the performance of or compliance
with this Section 11 by the Company, including without limitation (a) all registration and filing fees and expenses, including
without limitation those related to filings with the Commission, any Trading Market and in connection with applicable state securities
or Blue Sky laws, (b) printing expenses (including without limitation expenses of printing certificates for Registrable Securities
and of printing prospectuses requested by the Holder), (c) messenger, telephone and delivery expenses, (d) fees and disbursements
of counsel for the Company and the reasonable, actual fees and disbursements of the Holder Counsel up to $25,000, (e) fees and
expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this
Section 11, and (f) all listing fees to be paid by the Company to the Trading Market. Discounts, concessions, commissions
and similar selling expenses, if any, payable to an underwriter and specifically attributable to the sale of Registrable Securities
by the Holder will be borne by the Holder.

 

    	 	17	 

     

    

 

(d)          Indemnification.

 

(i)              Indemnification
by the Company. The Company shall indemnify and hold harmless the Holder, the officers, directors, employees and partners of
the Holder, each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
the Holder and the officers, directors, employees and partners of each such controlling person, each underwriter (including any
Holder that is deemed to be an underwriter pursuant to any SEC comments or policies), if any, and each Person who controls (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such underwriter, to the fullest extent permitted
by applicable law, from and against any and all Losses, as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment
or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the
extent, but only to the extent, that (i) such untrue statements, alleged untrue statements, omissions or alleged omissions are
based solely upon information regarding the Holder furnished in writing to the Company by the Holder expressly for use therein,
or to the extent that such information relates to the Holder or the Holder’s proposed method of distribution of Registrable
Securities contained in Exhibit B or was reviewed and expressly approved in writing by the Holder expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (ii) in the case
of an occurrence of an event of the type specified in clauses (v)-(vii) of Section 11(b)(iii) of this Warrant, the use by
the Holder of an outdated or defective Prospectus after the Company has notified the Holder in writing that the Prospectus is outdated
or defective and prior to the receipt by the Holder of the Advice contemplated in Section 11(e) of this Warrant.

 

(ii)             Indemnification
by the Holder. The Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers
and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers or employees of such controlling Persons, to the fullest extent permitted by applicable
law, from and against all Losses (as determined by a court of competent jurisdiction in a final judgment not subject to appeal
or review) arising solely out of any untrue statement of a material fact contained in the Registration Statement, any Prospectus,
or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of any omission of a material fact
required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the
extent, that (i) such untrue statement or omission is based solely upon information regarding the Holder furnished in writing to
the Company by the Holder expressly for use in such Registration Statement or Prospectus, or to the extent that such information
relates to the Holder or the Holder’s proposed method of distribution of Registrable Securities contained in Exhibit B
or such other method of distribution that was reviewed and expressly approved in writing by the Holder expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (ii) in the case
of an occurrence of an event of the type specified in clauses (v)-(vii) of Section 11(b)(iii) of this Warrant, the use by
the Holder of an outdated or defective Prospectus after the Company has notified the Holder in writing that the Prospectus is outdated
or defective and prior to the receipt by the Holder of the Advice contemplated in Section 11(e) of this Warrant. In no event
shall the liability of the Holder hereunder be greater in amount than the dollar amount of the net proceeds received by the Holder
upon the sale of the Registrable Securities giving rise to such indemnification obligation, except in the case of fraud or willful
misconduct by the Holder.

 

    	 	18	 

     

    

 

(iii)            Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Section 11, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have actually and materially prejudiced the Indemnifying Party.

 

An Indemnified
Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party
has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding or to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying
Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not
be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement
of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

    	 	19	 

     

    

 

All fees and expenses
of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred,
within ten (10) Trading Days of written notice thereof to the Indemnifying Party (provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that
such Indemnified Party is not entitled to indemnification hereunder).

 

(iv)            Contribution.
If a claim for indemnification under Section 11(d)(i) or (ii) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 11(d)(iii),
any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to
the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section
was available to such party in accordance with its terms.

 

The parties hereto
agree that it would not be just and equitable if contribution pursuant to this Section 11(d)(iv) were determined by pro
rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of this Section 11(d)(iv), the Holder shall not be required
to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by the Holder from
the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that the Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.

 

    	 	20	 

     

    

 

The indemnity and
contribution agreements contained in this Section 11 are in addition to any liability that the Indemnifying Parties may
have to the Indemnified Parties.

 

(e)          Dispositions.
The Holder agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to the Registration Statement. The Holder further agrees that, upon receipt of a
notice from the Company of the occurrence of any event of the kind described in clauses (v)-(vii) of Section 11(b)(iii),
the Holder will discontinue disposition of such Registrable Securities under the Registration Statement until the Holder’s
receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 11(b)(x),
or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may
be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.

 

(f)          No
Piggyback on Registrations. Except with the prior written consent of the Holder or as permitted by Section 11(g) below,
neither the Company nor any of its security holders may include securities of the Company in the Registration Statement other than
the Registrable Securities, and the Company shall not (i) during the Effectiveness Period enter into any agreement providing any
such right to any of its security holders to be included in the Registration Statement for the Registrable Securities or (ii) prior
to the effective date of the initial Registration Statement required pursuant to Section 11(a)(i) of this Warrant,
register securities of the Company for the account of any third party.

 

(g)          Piggy-Back
Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection
with stock option or other employee benefit plans, then the Company shall send to the Holder written notice of such determination
and if, within fifteen (15) days after receipt of such notice, the Holder shall so request in writing, the Company shall include
in such registration statement all or any part of such Registrable Securities the Holder requests to be registered, subject to
customary underwriter cutbacks applied on a pro rata basis to all holders of registration rights.

 

    	 	21	 

     

    

 

12.           Limitation
on Exercise.

 

(i)              Subject
to Section 12(ii), the number of shares of Common Stock that may be acquired by the Holder upon any exercise of this Warrant
(or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance),
the total number of shares of Common Stock then beneficially owned by the Holder and its affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange
Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such conversion) (the “Threshold Percentage”). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.

 

(ii)             Notwithstanding
the provisions of Section 12(i), the Holder shall have the right at any time and from time to time, to waive the provisions
of this Section insofar as they relate to the Threshold Percentage or to increase its Threshold Percentage (but not in excess of
9.999% (or such lower percentage if Section 16 of the Exchange Act or the rules promulgated thereunder (or any successor statute
or rules) is changed to reduce the beneficial ownership percentage threshold thereunder to a percentage less than 9.999%)) by written
instrument delivered to the Company, but any such waiver or increase will not be effective until the 61st day after such notice
is delivered to the Company.

 

13.           Fractional
Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this
Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise of this
Warrant, the number of Warrant Shares to be issued will be rounded up to the nearest whole share or right to purchase the nearest
whole share, as the case may be.

 

14.           Notices.
Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise Notice) shall be
in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading
Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by a nationally recognized overnight courier service
specifying next Business Day delivery, or (iv) upon actual receipt by the party to whom such notice is required to be given, if
by hand delivery. The address and facsimile number of a party for such notices or communications shall be as set forth in the Credit
Agreement, unless changed by such party by two (2) Trading Days’ prior notice to the other party in accordance with this
Section 14.

 

15.           Extension
of Expiration Date. At the option of the Holder, the Expiration Date may be extended for the number of Trading Days during
any period occurring after the Required Effectiveness Date in which (i) trading in the Common Stock is suspended by any Trading
Market, (ii) the Registration Statement is not effective, or (iii) the prospectus included in the Registration Statement may not
be used by the Holder for the resale of Registrable Securities thereunder.

 

    	 	22	 

     

    

 

16.           Furnishing
of Information. The Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. If the Company
is not required to file reports pursuant to such laws, it will prepare and furnish to the Holder and make publicly available in
accordance with paragraph (c) of Rule 144 such information as is required for the Holder to sell the Warrant under Rule 144. The
Company further covenants that it will take such further action as the Holder may reasonably request to satisfy the provisions
of Rule 144 applicable to the issuer of securities relating to transactions for the sale of securities pursuant to Rule 144.

 

17.           Miscellaneous.

 

(a)          The
Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking
of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Subject
to the restrictions on transfer set forth on the first page hereof and in Section 3, this Warrant may be assigned by the
Holder; provided that in no event shall the registration rights be separately assigned from the purchase rights evidenced by this
Warrant. This Warrant may not be assigned by the Company except with the prior written consent of the Holder. This Warrant shall
be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding
sentence and except as otherwise provide in Section 11, nothing in this Warrant shall be construed to give to any Person
other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant
constitutes the entire agreement of the parties with respect to the subject matter hereof. This Warrant may be amended only in
writing signed by the Company and the Holder and their successors and assigns. The restrictions set forth in Section 12
hereof may not be amended or waived.

 

(b)          The
Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor on such exercise and (ii) will
take all such action as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares on the exercise of this Warrant.

 

(c)          Governing
Law; Venue; Waiver Of Jury Trial. all questions concerning the construction, validity, enforcement and interpretation of this
warrant shall be governed by and construed and enforced in accordance with the laws of the state of new york (except for matters
governed by corporate law in the commonwealth of pennsylvania). each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the city of new york, borough of manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper. each party hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this warrant and agrees that
such service shall constitute good and sufficient service of process and notice thereof. nothing contained herein shall be deemed
to (i) limit in any way any right to serve process in any manner permitted by law or (ii) limit any provision of section 17(f).
the company hereby waives all rights to a trial by jury.

 

    	 	23	 

     

    

 

 

(d)          The
headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.

 

(e)          In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will
attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

(f)          

 

(i)              In
the case of a dispute relating to the Exercise Price, the Closing Price, the Current Market Price, the Black Scholes value or fair
market value or the arithmetic calculation of the Warrant Shares (as the case may be) (including, without limitation, a dispute
relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute
to the other party via facsimile (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances
giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such
dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise Price, Closing Price,
Current Market Price, Black Scholes value or fair market value or arithmetic calculation of the Warrant Shares (as the case may
be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as
the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select
an independent, reputable investment bank to resolve such dispute, it being acknowledged that the Black Scholes value shall be
calculated by such investment bank in a manner consistent with Exhibit A.

 

    	 	24	 

     

    

 

(ii)             The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in
accordance with this Section 17(f) and (B) written documentation supporting its position with respect to such dispute, in
each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on
which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to
in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”)
(it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation
by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer
be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment
bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation
that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by
both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled
to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other
than the Required Dispute Documentation).

 

(iii)            The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees
and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such
dispute shall be final and binding upon all parties absent manifest error.

 

    	 	25	 

     

    

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

 

	 	Numerex corp.
	 	 
	 	By:	 /s/ Kenneth L. Gayron 
	 	Name:	 Kenneth L. Gayron 
	 	Title:	 Interim Chief Executive Officer & Chief Financial
    Officer

 

    	 	26	 

     

    

 

FORM OF EXERCISE NOTICE

 

(To be executed by the Holder to exercise the
right to purchase shares of Common Stock under the foregoing Warrant)

 

To: numerex
corp

 

The undersigned is the Holder of Warrant No.
1 (the “Warrant”) issued by NUMEREX CORP., a Pennsylvania corporation (the “Company”). Capitalized
terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

 

		1.	The Warrant is currently exercisable to purchase a total
of ______________ Warrant Shares.

 

		2.	The undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the Warrant.

 

		3.	The Holder intends that payment of the Exercise Price shall
be made as (check one):

 

____    “Cash
Exercise” under Section 10

 

____    “Cashless
Exercise” under Section 10

 

		4.	If the Holder has elected a Cash Exercise, the Holder shall
pay the sum of $____________ to the Company in accordance with the terms of the Warrant.

 

		5.	Pursuant to this exercise, the Company shall deliver to
the Holder _______________ Warrant Shares in accordance with the terms of the Warrant.

 

		6.	Following this exercise, the Warrant shall be exercisable
to purchase a total of ______________ Warrant Shares.

 

[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK, 

SIGNATURE PAGE FOLLOWS]

 

     

     

    

 

IN WITNESS WHEREOF, the undersigned
has caused this Exercise Notice to be duly executed as of the date indicated below.

 

	Dated:___________, ____		Name of Holder:
	 	 	 
	 	 	(Print)	 
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 
	 	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)

 

     

     

    

 

FORM OF ASSIGNMENT

 

[To be completed and signed
only upon transfer of Warrant]

 

FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by the within Warrant
to purchase ____________ shares of Common Stock of NUMEREX CORP. to which the within Warrant relates and appoints ________________
attorney to transfer said right on the books of NUMEREX CORP. with full power of substitution in the premises.

 

	Dated:_____________,___	 	 
	 	 	 
	 	 	 
	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)	 
	 	 	 
	 	 	 
	 	Address of Transferee	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	In the presence of:	 	 
	 	 	 
	 	 	 

 

     

     

    

 

EXHIBIT A

 

The “Original Issuance Value” shall mean $2,687,833.

 

For purposes of clause (B) of Section 9(c)
of this Warrant, the “Black Scholes value” of the remaining unexercised portion of this Warrant through the
date of consummation of the Fundamental Transaction shall be determined using the Black Scholes Option Pricing Model (e.g., the
“OV” function on Bloomberg Financial Markets (“Bloomberg”)) and (i) a price per share of Common
Stock equal to the greater of (x) the arithmetic average of the VWAP of the Common Stock for each of the ten (10) consecutive Trading
Days immediately preceding the public announcement of the applicable Fundamental Transaction, (y) the arithmetic average of the
VWAP of the Common Stock for each of the ten (10) consecutive Trading Days immediately preceding the date of consummation of the
applicable Fundamental Transaction and (z) the sum of the price per share being offered in cash in the applicable Fundamental Transaction
(if any) plus the per share value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any),
(ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant
as of the date of consummation of the applicable Fundamental Transaction and (iii) an expected volatility equal to the greater
of 100% and the 100 day volatility (e.g., the HVT function on Bloomberg) determined as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction. The Holder shall have the right to verify the Black Scholes
value and ensure that the Black Scholes Pricing Model and the value of the underlying inputs (volatility, risk free rate, conversion
price, price per share, etc.) are materially similar to those generated by Bloomberg.

 

     

     

    

 

EXHIBIT B

 

Plan of Distribution

 

The selling stockholders,
which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests
in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common
stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

 

The selling stockholders
may use any one or more of the following methods when disposing of shares or interests therein:

 

		-	ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;

 

		-	block trades in which the broker-dealer will attempt to
sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

 

		-	purchases by a broker-dealer as principal and resale by
the broker-dealer for its account;

 

		-	an exchange distribution in accordance with the rules of
the applicable exchange;

 

		-	privately negotiated transactions;

 

		-	short sales;

 

		-	through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;

 

		-	broker-dealers may agree with the selling stockholders
to sell a specified number of such shares at a stipulated price per share;

 

		-	a combination of any such methods of sale; and

 

		-	any other method permitted by applicable law.

 

     

     

    

 

The selling stockholders
may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of
common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this Prospectus.

 

In connection with the
sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions
they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out
their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares
offered by this Prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this Prospectus
(as supplemented or amended to reflect such transaction).

 

The aggregate proceeds
to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents
from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents.

 

The selling stockholders
also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of
1933, provided that they meet the criteria and conform to the requirements of that rule.

 

To the extent required,
the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer
will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement
that includes this prospectus.

 

In order to comply with
the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered
or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified
for sale or an exemption from registration or qualification requirements is available and is complied with.

 

We have advised the selling
stockholders that the anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934, as amended, may apply
to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, to the extent
applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders
may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.

 

     

     

    

 

We have agreed to indemnify
the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating
to the registration of the shares offered by this prospectus.

 

We have agreed with the
selling stockholders to keep the registration statement of which this Prospectus constitutes a part effective until the earlier
of (i) the fifth anniversary of the effective date of such registration statement, (ii) such time as all of the shares of common
stock covered by the registration statement have been sold publicly or (iii) such time as all of the shares of common stock covered
by the registration statement may be sold by the selling stockholders pursuant to Rule 144 without volume limitations and without
the requirement that there be adequate current public information with regards to us.

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