Document:

ESCROW AGREEMENT

 

This Escrow Agreement
(this “Escrow Agreement”), dated as of June 18, 2014, is entered into by and among Great American Group, Inc.,
a Delaware corporation (“Parent”), Bryant Riley (“Seller”) and Continental Stock Transfer
& Trust Company, Inc., as escrow agent (“Escrow Agent”). All capitalized terms used but not defined herein
shall have the meanings assigned such terms in the Acquisition Agreement (as defined below).

 

Background

 

WHEREAS, Parent has
agreed to acquire B. Riley and Co. Inc., a Delaware corporation (“BRC”), B. Riley & Co. Holdings, LLC, a
Delaware limited liability company (“BRH”), and Riley Investment Management LLC, a Delaware limited liability
company (“RIM”), from Seller pursuant to that certain Acquisition Agreement, dated as of May 19, 2014, by and
among Parent, Darwin Merger Sub I, Inc., B. Riley Capital Markets, LLC, BRC, BRH, RIM, and Seller (as amended, the “Acquisition
Agreement”);

 

WHEREAS, pursuant to
the terms of the Acquisition Agreement, Seller has agreed to place the Escrow Shares (as defined in Section 2 hereto) into escrow
(the “Escrow Fund”) to be held by Escrow Agent in accordance with the terms hereof, to be released upon the
occurrence or non-occurrence of certain events, as set forth herein; and

 

WHEREAS, Escrow Agent
has agreed to act as escrow agent pursuant to the terms and conditions of this Escrow Agreement.

 

Agreement

 

NOW, THEREFORE, in
consideration of the mutual promises of the parties and the terms and conditions hereof, the parties hereby agree as follows:

 

1.
Appointment of Escrow Agent. Seller and Parent hereby appoint Escrow Agent to act as escrow agent in accordance with the
terms and conditions set forth in this Escrow Agreement, and Escrow Agent hereby accepts such appointment and agrees to act
in accordance with such terms and conditions.

 

2.
Establishment of Escrow. Parent and Seller hereby direct Escrow Agent, in its capacity as Parent’s transfer
agent, to deliver, or cause to be delivered, to Escrow Agent at the First Closing a stock certificate registered in the name
of Seller evidencing 628,272 shares (the “Escrow Shares”) of Parent’s common stock (“Parent
Common Stock”) to be held by Escrow Agent and released in accordance with the terms and conditions of this
Escrow Agreement.

 

3. Escrow
Shares. At or prior to the First Closing, Seller agrees to deliver to Escrow Agent stock powers or such other signed
instrument of transfer acceptable to Escrow Agent, in its capacity as Parent’s transfer agent, to enable the transfer
of such Escrow Shares in accordance with this Escrow Agreement. Seller hereby agrees that the certificate(s) representing the
Escrow Shares will bear legends in the form attached hereto as Exhibit A. Seller further agrees that Seller’s
obligation to transfer the Escrow Shares to Parent as provided herein is absolute and irrevocable during the term of this
Escrow Agreement.

 

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4. Release
of Escrow Shares.  Escrow Agent shall hold the Escrow Shares pursuant to the terms of this Escrow Agreement until their
release in accordance with the following:

 

a. Working
Capital Adjustment. In the event that the Closing Net Working Capital is determined in accordance with the provisions of
Section 1.6 of the Acquisition Agreement to be less than the Estimated Closing Net Working Capital, Parent and Seller shall
jointly execute and deliver to Escrow Agent a written notice instructing Escrow Agent to, and upon receipt of such notice
Escrow Agent promptly shall, release to Parent from the Escrow Fund an amount equal to such deficiency (or such lesser amount
as may remain in the Escrow Fund) in the form of shares of Parent Common Stock (valued at the Parent Share Price).

 

b. Indemnification
Claims.

 

i. Resolution
of Contested Amount Prior to Expiration Date. If Parent and Seller agree on the resolution of a Contested Amount pursuant to
Section 8.6(b) of the Acquisition Agreement for which Seller is obligated to a Parent Indemnitee(s), Parent and Seller shall
jointly execute and deliver to Escrow Agent a written notice instructing Escrow Agent to, and upon receipt of such notice Escrow
Agent promptly shall, release to Parent from the Escrow Fund such amount agreed upon (or such lesser amount as may remain in the
Escrow Fund) in the form of shares of Parent Common Stock (valued at the Parent Share Price).

 

ii. Failure to
Respond. In the event of a failure to respond governed by Section 8.6(c) of the Acquisition Agreement, with respect to
the Losses set forth in a subject Indemnification Claim with respect to which Seller is obligated to a Parent Indemnitee(s),
Parent and Seller shall jointly execute and deliver to Escrow Agent a written notice instructing Escrow Agent to, and upon
receipt of such notice Escrow Agent promptly shall, release to Parent from the Escrow Fund such amount (or such lesser amount
as may remain in the Escrow Fund) in the form of shares of Parent Common Stock (valued at the Parent Share Price).

 

c. Expiration
Date. If the Aggregate Escrow Balance exceeds the Aggregate Pending Claim Amount as of the Expiration Date, then Parent
and Seller shall within five (5) Business Days of the Expiration Date jointly execute and deliver to Escrow Agent a written
notice instructing Escrow Agent to, and upon receipt of such notice Escrow Agent promptly shall, release from the Escrow Fund
to Seller shares of Parent Common Stock (valued at the Parent Share Price) held in the Escrow Fund with an aggregate value
equal to the amount by which the Aggregate Escrow Balance as of the Expiration Date exceeds the Aggregate Pending Claim
Amount.

 

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d. Release
Following Expiration Date.

 

i. Following the
Expiration Date, if Parent and Seller agree on the resolution of an Unresolved Escrow Claim, in addition to the instructions provided
for in Section 4.b.i above, Parent and Seller shall jointly execute and deliver to Escrow Agent, within five (5) Business Days
after reaching such agreement, a written notice instructing Escrow Agent to, and upon receipt of such notice Escrow Agent promptly
shall, release from the Escrow Fund to Seller shares of Parent Common Stock (valued at the Parent Share Price) with an aggregate
value equal to the amount by which the aggregate amount remaining in the Escrow Fund as of the date of resolution of such Unresolved
Escrow Claim exceeds the aggregate amount of the Contested Amounts associated with all other remaining Unresolved Escrow Claims,
if any.

 

ii. Following
the Expiration Date, if a final, nonappealable judgment or order issued by a court of competent jurisdiction in the United
States of America (a “Final Decision”) provides that any or all of the Escrow Fund is to be delivered to
Seller or Parent, the Escrow Agent shall deliver to Seller or Parent, as applicable, the amount to be delivered pursuant to
such Final Decision within five (5) Business Days following receipt of such Final Decision.

 

e. Legends upon
Release. Following the release of any Escrow Shares to Seller pursuant to the terms hereof, the Escrow Legend set forth on
Exhibit A shall be removed from any certificates evidencing such shares, but such certificates shall continue to bear the
Securities Act Legend set forth on Exhibit A. The Securities Act Legend shall be removable for any certificate upon request
and Parent shall issue or cause to be issued a certificate without such legend or any other legend (except for any customary “affiliates”
legend if the holder is an Affiliate of Parent) to the holder of the applicable Escrow Shares or issue or cause to be issued to
such holder by electronic delivery at the applicable balance account at The Depository Trust Company (“DTC”) as provided
in this Section 4(e), if such shares are (i) sold pursuant to an effective registration statement covering the resale of such shares
(and while such registration statement is effective) and the holder thereof has delivered a signed and completed Certificate of
Subsequent Sale in substantially the form of Exhibit B attached hereto with respect to such shares, (ii) sold or transferred
in compliance with Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended,
as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange
Commission having substantially the same effect as such Rule (“Rule 144”), including without limitation in compliance
with the current public information requirements of Rule 144 if applicable to Parent at the time of such sale or transfer, and
the holder and its broker have delivered customary documents reasonably requested by Parent’s transfer agent and/or counsel
to Parent in connection with such sale or transfer, or (iii) eligible for sale under Rule 144 without the requirement that Parent
be in compliance with the current public information requirements of Rule 144 and without other restriction and counsel to Parent
has provided written confirmation of such eligibility to Parent’s transfer agent (and Parent shall so direct its counsel
to provide such confirmation). Any fees (with respect to the transfer agent, counsel to Parent or otherwise) associated with the
removal of such legend shall be borne by Parent. Following such time as a legend is no longer required for any such shares, Parent
will no later than three (3) trading days following the delivery by holder to Parent or its transfer agent (with concurrent notice
and delivery of copies to Parent) of a legended certificate representing such shares (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, and together with such other customary documents
as the transfer agent and/or counsel to Parent shall reasonably request), deliver or cause to be delivered to the transferee of
such holder or such holder, as applicable, a certificate representing such shares that is free from all restrictive and other legends.
Parent may not make any notation on its records or give instructions to the transfer agent that enlarge the restrictions on transfer
set forth in this Section 4. Certificates for shares subject to legend removal hereunder may be transmitted by the transfer agent
to the holder by crediting the account of the holder’s prime broker with DTC.

 

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5. Rights of
Seller in Escrow Shares. 

 

a. Voting Rights
as a Stockholder. Seller shall retain all of its rights as a stockholder of Parent with respect to each Escrow Share
during the period of time in which such Escrow Share remains in the Escrow Fund (with respect to each Escrow Share, as
applicable, the “Escrow Period”), including, without limitation, the right to vote such Escrow Share.

 

b. Cash
Dividends and Other Distributions in Respect of the Escrow Shares. During the Escrow Period, all dividends payable in
cash or other non-cash property (other than as provided in Section 5.c below) with respect to each Escrow Share shall be paid
to Seller.

 

c. Stock
Distributions. So long as any of the Escrow Shares are held by Escrow Agent under this Escrow Agreement, all stock
dividends and distributions paid or made in respect of the Escrow Shares held by Escrow Agent (including all such dividends
and distributions made in connection with any recapitalization, reclassification, split, combination or exchange of shares)
shall be held by Escrow Agent as Escrow Shares. All such shares shall be issued in the name of Seller, shall bear the legend
in the form attached hereto as Exhibit A, and shall be endorsed in blank for transfer and deposited with Escrow Agent
as Escrow Shares hereunder.

 

d. Restrictions
on Transfer. During the Escrow Period, no direct or indirect sale, pledge, transfer, gift, grant of a security interest
or other disposition or encumbrance of any kind, whether voluntary or involuntary, may be made of, or with respect to, any
Escrow Share in any manner whatsoever without the prior written consent of Parent other than in accordance with the terms of
this Escrow Agreement. Any permitted transferee of any Escrow Share must, as a condition to such transfer, agree to be bound
by the terms and conditions of this Escrow Agreement.

 

6.
Duration. This Escrow Agreement shall terminate on the distribution of all the Escrow Shares.

 

7.
Interpleader. Should any controversy arise among the parties hereto with respect to this Escrow Agreement or with respect
to the right to receive the Escrow Shares, Escrow Agent shall have the right to consult counsel and/or to institute an
appropriate interpleader action to determine the rights of the parties. Escrow Agent is also hereby authorized to institute
an appropriate interpleader action upon receipt of a written letter of direction executed by the parties so directing Escrow
Agent.

 

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8.
Exculpation and Indemnification of Escrow Agent. 

 

a. Reliance.
Escrow Agent is not a party to, and is not bound by or, except as provided herein, charged with notice of any agreement out
of which the Escrow Fund may arise. Escrow Agent acts under this Escrow Agreement as a depositary only and, except as
expressly set forth herein, is not responsible or liable in any manner whatsoever for the sufficiency, correctness,
genuineness or validity of the subject matter of the Escrow Fund, or any part thereof, or for the form or execution of any
notice given by any other party hereunder, or for the identity or authority of any person executing any such notice. Escrow
Agent will have no duties or responsibilities other than those expressly set forth herein. Escrow Agent will be under no
liability to anyone by reason of any failure on the part of any party hereto (other than Escrow Agent) or any maker, endorser
or other signatory of any document to perform such person’s or entity’s obligations hereunder or under any such
document. Except as set forth in this Escrow Agreement and instructions to Escrow Agent pursuant to the terms of this Escrow
Agreement, Escrow Agent will not be obligated to recognize any agreement between or among any or all of the persons or
entities referred to herein, notwithstanding its knowledge thereof.

 

b. Liability.
Escrow Agent will not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted,
in each case in good faith, absent gross negligence, willful misconduct or fraud. Escrow Agent may rely conclusively on, and
will be protected in acting upon, any order, notice, demand, certificate, or opinion or advice of counsel (including counsel
chosen by Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein
contained) which is reasonably believed by Escrow Agent to be genuine and to be signed or presented by the proper person or
persons. The duties and responsibilities of Escrow Agent hereunder shall be determined solely by the express provisions of
this Escrow Agreement and no other or further duties or responsibilities shall be implied, including, but not limited to, any
obligation under or imposed by any laws of the State of New York upon fiduciaries. Notwithstanding anything herein to the
contrary, Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful
misconduct or fraud.

 

c. Indemnification.
Parent and Seller each hereby agree to indemnify and hold harmless Escrow Agent and its principals, partners, agents,
employees and affiliates from and against any expenses, including reasonable attorneys’ fees and disbursements, damages
or losses suffered by Escrow Agent in connection with any claim or demand, which, in any way, directly or indirectly, arises
out of or relates to this Escrow Agreement or the services of Escrow Agent hereunder, other than any expenses,
attorneys’ fees and disbursements, damages or losses arising out of or relating to Escrow Agent’s willful
misconduct, gross negligence or fraud. Any such indemnification shall be payable 50% by Parent and 50% by Seller. Promptly
after the receipt by Escrow Agent of notice of any such demand or claim or the commencement of any action, suit or proceeding
relating to such demand or claim, Escrow Agent shall notify Parent and Seller in writing. For the purposes hereof, the terms
“expense” and “loss” will include all amounts paid or payable to satisfy any such claim or demand, or
in settlement of any such claim, demand, action, suit or proceeding settled with the express written consent of the parties
hereto, and all reasonable costs and expenses, including, but not limited to, reasonable attorneys’ fees and
disbursements, paid or incurred in investigating or defending against any such claim, demand, action, suit or proceeding. The
provisions of this Section 8 shall survive the termination of this Escrow Agreement.

 

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9.
Compensation of Escrow Agent. Escrow Agent shall be entitled to compensation for its services as stated in the fee
schedule attached hereto as Exhibit C, which compensation shall be paid 50% by Parent and 50% by Seller. The fee
agreed upon for the services rendered hereunder is intended as full compensation for Escrow Agent’s services as
contemplated by this Escrow Agreement; provided, however, that in the event that Escrow Agent renders any
material service not contemplated in this Escrow Agreement, or there is any assignment of interest in the subject matter of
this Escrow Agreement, or any material modification hereof, or if any material controversy arises hereunder, or Escrow Agent
is made a party to any litigation pertaining to this Escrow Agreement, or the subject matter hereof, then Escrow Agent shall
be reasonably compensated 50% by Parent and 50% by Seller for such extraordinary services and reimbursed for all reasonable
costs and expenses, including reasonable attorney’s fees, occasioned by any delay, controversy, litigation or event,
and the same shall be recoverable 50% from Parent and 50% from Seller. Prior to incurring any costs and/or expenses in
connection with the foregoing sentence, Escrow Agent shall be required to provide written notice to Parent and Seller of such
costs and/or expenses and the relevancy thereof and Escrow Agent shall not be permitted to incur any such costs and/or
expenses prior to receiving written approval from Parent and Seller, which approval shall not be unreasonably withheld.

 

10.
Resignation or Removal of Escrow Agent.

 

a. Resignation.
At any time, upon thirty (30) days’ written notice to Parent and Seller, Escrow Agent may resign and be discharged from
its duties as Escrow Agent hereunder. Such resignation shall be effective at such time as Escrow Agent turns over to a
successor escrow agent jointly appointed by Parent and Seller the Escrow Shares held hereunder, which Escrow Agent shall do
promptly upon presentation of a document executed by Parent and Seller appointing the new escrow agent and evidencing its
acceptance thereof. If, by the end of the 30-day period following the giving of notice of resignation by Escrow Agent, Parent
and Seller shall have failed to appoint a successor escrow agent, Escrow Agent may petition any court of competent
jurisdiction for the appointment of a successor escrow agent or other appropriate relief; and any such resulting appointment
shall be binding upon all of the parties hereto.

 

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b. Removal.
Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested jointly in writing by Parent
and Seller at any time, provided, however, that such resignation shall become effective only upon acceptance of appointment by
a successor escrow agent as provided in Section 10.a.

 

11. Records;
Information Reporting and Withholding.

 

a. Records.
Escrow Agent shall maintain accurate records of all transactions hereunder. Promptly after the termination of this Escrow Agreement
or as may reasonably be requested by the parties hereto from time to time before such termination, Escrow Agent shall provide the
parties hereto, as the case may be, with a complete copy of such records, certified by Escrow Agent to be a complete and accurate
account of all such transactions. The authorized representatives of each of the parties hereto shall have access to such books
and records at all reasonable times during normal business hours upon reasonable notice to Escrow Agent and at the requesting party’s
expense.

 

b. Information
Reporting and Withholding. Escrow Agent shall prepare and file with the appropriate governmental authority and provide to
Seller, as applicable, any tax reporting forms and information required to be prepared, filed and provided by Escrow Agent.
Parent and Seller shall provide such information as Escrow Agent reasonably requests in connection with the foregoing. Escrow
Agent shall be entitled (but not obligated) to deduct and withhold from the amounts otherwise payable pursuant to this Escrow
Agreement such amounts as Escrow Agent shall determine in good faith it is required to deduct and withhold with respect to
the making of such payment under applicable law. To the extent amounts are so withheld by Escrow Agent, such withheld amounts
shall be treated for all purposes of this Escrow Agreement as having been paid to the payee with respect to which such amount
was withheld.

 

12.
Fractional Shares. No shares of Parent Common Stock representing fractional shares shall be issued in connection
herewith. In lieu of any such fractional shares (after aggregating all fractional shares of Parent Common Stock to be
received by Seller at such time): (a) Escrow Agent shall release to Parent from the Escrow Fund one share of Parent Common
Stock and (b) Parent shall pay to Seller an amount in cash (rounded to the nearest whole cent) equal to the product obtained
by multiplying (i) the fractional share interest to which Seller would otherwise be entitled at such time by (ii) the
Parent Share Price.

 

13. Tax
Treatment. For tax purposes, the Escrow Shares, and any distributions paid thereon, shall be treated as owned by Seller
from and after the First Closing Date, unless and until released to Parent pursuant to this Escrow Agreement.

 

14. Further
Actions. The parties covenant and agree to execute such documents, agreements and instruments of transfer (including
stock powers and assignment documents) and to take such actions as may be reasonable requested by another party to this
Escrow Agreement to consummate the transactions contemplated hereby.

 

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15.
Notice. All notices, communications and instructions required or desired to be given under this Escrow Agreement must be
in writing and shall be deemed to be duly given if sent by registered or certified mail, return receipt requested, or
overnight courier, to the addresses listed on the signature page hereto.

 

16. Execution
in Counterparts. This Escrow Agreement may be executed in counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. The exchange of copies of this Escrow Agreement and of signature
pages by email or facsimile transmission shall constitute effective execution and delivery of this Escrow Agreement as to the parties
and may be used in lieu of the original Escrow Agreement for all purposes. Signatures of the parties transmitted by email or facsimile
shall be deemed to be their original signatures for all purposes.

 

17.
Assignment. This Escrow Agreement and the rights and obligations hereunder of any of the parties hereto may not be
assigned without the prior written consent of Escrow Agent, Parent and Seller. Subject to the foregoing, this Escrow
Agreement will be binding upon and inure to the benefit of each of the parties hereto and their respective successors and
permitted assigns. No other person will acquire or have any rights under, or by virtue of, this Escrow Agreement. No portion
of the Escrow Shares shall be subject to interference or control by any creditor of any party hereto, or be subject to being
taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any such party hereto
prior to the disbursement thereof to such party hereto in accordance with the provisions of this Escrow Agreement.

 

18.
Amendment. This Escrow Agreement may be amended or modified only in writing signed by Escrow Agent, Parent and
Seller.

 

19.
Applicable Law. This Escrow Agreement shall be governed by and construed in accordance with the laws of the State of New
York without giving effect to the principles of conflicts of laws thereof.

 

20. Entire
Agreement. This Escrow Agreement and the other agreements referred to in this Escrow Agreement constitute the entire
agreement and supersede all prior agreements and understandings, both written and oral, among or between any of the parties
with respect to the subject matter hereof and thereof. Notwithstanding the foregoing, in the event of a conflict between any
term of this Escrow Agreement and the Acquisition Agreement, Parent and Seller agree that as between such parties the terms
of the Acquisition Agreement shall govern and to promptly give written instructions to Escrow Agent as may be needed in order
to effect any necessary conforming changes to this Escrow Agreement.

 

21.
Headings. The headings contained in this Escrow Agreement are for convenience of reference only and shall not affect the
construction of this Escrow Agreement.

 

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22.
Attorneys’ Fees. If any action at law or in equity, including an action for declaratory relief, is brought to
enforce or interpret the provisions of this Escrow Agreement, the prevailing party shall be entitled to recover reasonable
attorneys’ fees from the other party, which fees may be set by the court in the trial of such action or may be enforced
in a separate action brought for that purpose, and which fees shall be in addition to any other relief that may be
awarded.

 

23.
Authorized Signers. Parent and Seller will execute and deliver Exhibit D-1 and Exhibit D-2,
respectively, to this Escrow Agreement concurrent with the execution hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF,
the parties have duly executed this Escrow Agreement as of the date first set forth above.

 

	 	PARENT:	 
	 	 	 	 
	 	Great American Group, Inc.	 
	 	 	 	 
	 	By: 	/s/ Phillip J. Ahn	 
	 	Name:	Phillip J. Ahn	 
	 	Title: 	Chief Financial Officer and	 
	 	 	Chief Operating Officer	 
	 	 	 	 
	 	Address:	Great American Group, Inc.	 
	 	 	21860 Burbank Blvd.	 
	 	 	Suite 300 South	 
	 	 	Woodland Hills, CA 91367	 
	 	 	Attention: Chief Executive Officer	 
	 	 	 	 
	 	With a copy to (which shall not constitute notice):	 
	 	 	 	 
	 	 	Morrison & Foerster LLP	 
	 	 	12531 High Bluff Drive, Suite 100	 
	 	 	San Diego, CA 92130	 
	 	 	Attention: Scott M. Stanton	 

 

 

[Signature
Page to Escrow Agreement]

 

    	 

    	 

    

  

	 	SELLER:	 
	 	 	 	 
	 	Bryant Riley	 
	 	 	 
	 	By: 	/s/ Bryant Riley	 
	 	Name:	Bryant Riley	 
	 	 	 	 
	 	Address: 	Bryant R. Riley	 
	 	 	c/o B. Riley & Co., LLC	 
	 	 	11100 Santa Monica Blvd.	 
	 	 	Suite 800	 
	 	 	Los Angeles, CA 90025	 
	 	 	 	 
	 	with a copy to (which shall not constitute notice):	 
	 	 	 	 
	 	 	Sullivan & Cromwell LLP	 
	 	 	1888 Century Park East	 
	 	 	Los Angeles, CA 90067	 
	 	 	Attention: Patrick S. Brown	 

 

 

[Signature
Page to Escrow Agreement]

 

    	 

    	 

    

 

	 	ESCROW AGENT:	 
	 	 	 
	 	Continental Stock Transfer & Trust 

Company, Inc.	 
	 	 	 
	 	By: 	/s/ Kevin Jennings	 
	 	Name:	Kevin Jennings	 
	 	Title: 	Vice President	 
	 	 	 	 
	 	Address: 	Continental Stock Transfer	 
	 	 	17 Battery Place	 
	 	 	New York, NY 10004	 

 

 

[Signature
Page to Escrow Agreement]

 

    	 

    	 

    

 

Exhibit A

 

LEGENDS

 

ESCROW LEGEND

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN AN ESCROW AGREEMENT DATED JUNE 18, 2014 (AS AMENDED, THE “AGREEMENT”)
AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE ESCROW PERIOD (AS DEFINED IN THE
AGREEMENT).

 

SECURITIES ACT LEGEND

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO GREAT AMERICAN GROUP, INC.

 

    	 

    	 

    

 

Exhibit
B

form of CERTIFICATE OF SUBSEQUENT SALE

 

	To:	
        Great American Group, Inc.

        21860 Burbank Boulevard, Suite 300 South

        Woodland Hills, California 91367

        Telephone No.: (818) 884-3737

        Facsimile No.: (818) 884-2976

        Attention: Chief Executive Officer

         
	
        Continental Stock Transfer and Trust Company

        Transfer Agent and Registrar

        [_________]

        [_________]

        Attention: [_________]

         

         

	Copy to:	
        Morrison & Foerster LLP

        12531 High Bluff Drive, Suite 100

        San Diego, California 92130

        Telephone No.: (858) 720-5100

        Facsimile No.: (858) 523-5941

        Attention: Scott M. Stanton

         
	 

 

The undersigned, the
selling stockholder or an officer or other duly authorized person of the selling stockholder, hereby certifies that [insert
name of selling stockholder, as it appears on the applicable stock certificate] _____________________________ has sold [insert
number of shares sold] _____________________ shares of the Common Stock of Great American Group, Inc., a Delaware corporation
(the “Company”), and that such shares were sold on [insert date of sale] __________________ in
accordance with the registration statement on Form S-1 with file number [insert file number of effective registration statement]
__________________, including without limitation the “Plan of Distribution” set forth in such registration statement,
and that such selling stockholder has delivered a current prospectus in connection with such sale, provided, however, that
if Rule 172 under the Securities Act of 1933, as amended, is then in effect, such selling stockholder has confirmed that a current
prospectus is deemed to be delivered in connection with such sale. The undersigned selling stockholder is familiar with the requirements
of the Securities Act of 1933, as amended, and agrees that, in connection with the matters described herein, the Company, its transfer
agent and their respective counsels are relying on the statements made herein. Such respective legal counsels may rely on such
statements as if this letter were addressed to them. The undersigned selling stockholder understands that any certificates or book
entry positions for the balance of shares of the Company’s Common Stock registered for resale pursuant to the registration
statement named herein and not sold in the transaction described above shall continue to bear any such restrictive legend(s) as
currently appear on such certificates or book entry positions.

 

	Name of selling stockholder:	 
	 	 
	Name of individual representing selling stockholder	 
	 (if an institution): 	 
	 	 
	Title of individual representing selling	 
	stockholder (if an institution): 	 
	 	 
	Signature: 	 

 

    	 

    	 

    

 

 

Exhibit C

 

ESCROW AGENT FEES

 

Initial Fee:  $2,500 (for acceptance
and review of all documents)

Recurring Fee:  $400 per month

 

    	 

    	 

    

 

Exhibit D-1

 

Certificate
as to Authorized Signatures

 

Account
Name:

 

Account
Number:

 

Until further written notice from Parent,
the specimen signatures shown below are the specimen signatures of the individuals who have been designated as authorized representatives
of Parent and are authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of Parent.

 

If
from Parent:

 

	 	Name	 	Title	 	Signature
	 	 	 	 	 	 
	1.	Andrew Gumaer	 	Chief Executive Officer 

& Chairman	 	/s/ Andrew Gumaer
	 	 	 	 	 	 
	2.	Phillip J. Ahn	 	Chief Financial Officer 

& Chief Operating Officer	 	/s/ Phillip J. Ahn
	 	 	 	 	 	 
	3.	Mark P. Naughton	 	Senior Vice President 

& General Counsel	 	/s/ Mark P. Naughton
	 	 	 	 	 	 
	4.	Howard E. Weitzman	 	Senior Vice President &

 Chief Accounting Officer	 	/s/ Howard E. Weitzman

 

 

    	 

    	 

    

 

Exhibit D-2

 

Certificate
as to Authorized Signatures

 

Account
Name:

 

Account
Number:

Until further written notice from Seller,
the specimen signatures shown below are the specimen signatures of the individuals who have been designated as authorized representatives
of Seller and are authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of Seller.

 

	 	Name	 	Title	 	Signature
	 	 	 	 	 	 
	1.	Bryant Riley	 	N/A	 	/s/ Bryant RileyEXHIBIT
10.1

 

CARTESIAN, INC.

 

1998 EQUITY INCENTIVE PLAN

(amended and restated June 18, 2014)

 

The Management Network Group, Inc. (n/k/a
Cartesian, Inc.), originally established the The Management Network Group, Inc. 1998 Equity Incentive Plan, effective April 30,
1998 and The Management Network Group, Inc. 1998 Consultant Equity Incentive Plan, effective April 30, 1998. The Management
Network Group, Inc. amended and restated these two plan into one plan effective as of September 7, 1999. Effective June 8, 2009
(the "Effective Date"), The Management Network Group, Inc. amended and restated the Plan. Effective May 27, 2010 (the
"Amendment Date"), The Management Network Group, Inc. hereby further amends the Plan.

 

1.          Purposes of the Plan.
The purposes of this 1998 Equity Incentive Plan are:

 

		·	to attract and retain the best available personnel for positions of substantial responsibility,

 

		·	to provide additional incentive to Employees, Directors and Consultants, and

 

		·	to promote the success of the Company's business.

 

Options granted under the Plan may be Incentive
Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock Purchase Rights may
also be granted under the Plan.

 

2.          Definitions.
As used herein, the following definitions shall apply:

 

(a)           "Administrator"
means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan.

 

(b)           "Applicable
Laws" means the requirements relating to the administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted
and the applicable laws of any foreign country or jurisdiction where Options or Stock Purchase Rights are, or will be, granted
under the Plan.

 

(c)           "Award"
means an Option, Restricted Stock or Restricted Stock Units.

 

(d)           "Board"
means the Board of Directors of the Company.

 

    	 

    	 

    

 

(e)           "Cause"
means (i) any willful material violation by the Holder of any law or regulation applicable to the business of the Company
or a Parent or Subsidiary of the Company, the Holder’s conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, any willful perpetration by the Holder of a common law fraud, (ii) the Holder’s commission of an act of personal
dishonesty which involves personal profit in connection with the Company or any other entity having a business relationship with
the Company, (iii) any material breach by the Holder of any provision of any agreement or understanding between the Company,
or any Parent or Subsidiary of the Company, and the Holder regarding the terms of the Holder’s service as a Service Provider,
including without limitation, the willful and continued failure or refusal of the Holder to perform the material duties required
of such Holder as a Service Provider, other than as a result of having a Disability, or a breach of any applicable invention assignment
and confidentiality agreement or similar agreement between the Company and the Holder, (iv) Holder’s disregard of the
policies of the Company or any Parent or Subsidiary of the Company so as to cause loss, damage or injury to the property, reputation
or employees of the Company or a Parent or Subsidiary of the Company, or (v) any other misconduct by the Holder which is materially
injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or a Parent
of Subsidiary of the Company.

 

(f)            "Code"
means the Internal Revenue Code of 1986, as amended.

 

(g)           "Committee"
means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan.

 

(h)           "Common
Stock" means the common stock of the Company.

 

(i)            "Company"
means Cartesian, Inc. (f/k/a The Management Network Group, Inc.), a Delaware corporation.

 

(j)            "Consultant"
means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.

 

(k)           "Director"
means a member of the Board.

 

(l)            "Disability"
means total and permanent disability as defined in Section 22(e)(3) of the Code.

 

(m)          "Employee"
means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st day
of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director's fee by the
Company shall be sufficient to constitute "employment" by the Company.

 

    	-2-

    	 

    

  

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

 

(o)           "Fair
Market Value" means, as of any date, the value of Common Stock determined as follows:

 

(i)          If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq
Global Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported)
as quoted on such exchange or system for the market trading day of the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

 

(ii)         If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock for the market trading
day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 

(iii)        In
the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.

 

(p)           "Holder"
means a Service Provider who is in possession of an Award.

 

(q)           "Incentive
Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.

 

(r)            "Nonstatutory
Stock Option" means an Option not intended to qualify as an Incentive Stock Option.

 

(s)           "Notice
of Grant" means a written or electronic notice evidencing certain terms and conditions of an individual Award grant. The
Notice of Grant is part of the related Award Agreement.

 

(t)            "Officer"
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

 

(u)           "Option"
means a stock option granted pursuant to the Plan.

 

(v)           "Option
Agreement" means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the Plan.

 

    	-3-

    	 

    

  

(w)          "Option
Exchange Program" means a program whereby outstanding Options are surrendered in exchange for Options with a lower exercise
price.

 

(x)           "Optioned Stock"
means the Common Stock subject to an Option or Stock Purchase Right.

 

(y)           "Optionee"
means the holder of an outstanding Option or Stock Purchase Right granted under the Plan.

 

(z)           "Parent"
means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

(aa)         "Plan"
means this 1998 Equity Incentive Plan, as amended and restated.

 

(bb)        "Performance
Award" means any Award that will be issued or granted, or become vested or payable, as the case may be, upon the achievement
of certain performance goals (as described in Section 15) to a Holder pursuant to Section 15.

 

(cc)         "Prior
Plan" means the 2000 Supplemental Stock Plan.

 

(dd)        "Restricted
Stock" means shares of Common Stock either granted or acquired pursuant to a grant of Stock Purchase Rights under Section 11
of the Plan.

 

(ee)         "Restricted
Stock Purchase Agreement" means a written agreement between the Company and the Holder evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions
of the Plan and the Notice of Grant.

 

(ff)          "Restricted
Stock Unit" means an Award granted under Section 11 evidencing the Holder's right to receive a Share (or cash payment
equal to the Fair Market Value of a Share) at some future date.

 

(gg)        "Rule
16b-3" means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

 

(hh)        "Section
16(b) " means Section 16(b) of the Exchange Act.

 

(ii)           "Service
Provider" means an Employee, Director or Consultant.

 

(jj)           "Share"
means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.

 

(kk)         "Stock
Purchase Right" means the right to purchase Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice
of Grant.

 

    	-4-

    	 

    

  

(ll)           "Subsidiary"
means a "subsidiary corporation", whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

3.          Stock Subject to the Plan.
Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares which may be granted, optioned and
sold under the Plan is 2,305,659 (which includes the Prior Plan Shares as provided below). The Shares may be authorized, but unissued,
or reacquired Common Stock.

 

From and after the Amendment Date, 291,321
Shares previously available for issuance under the Prior Plan shall be available for issuance pursuant to the Plan (the "Prior
Plan Shares"). From and after the Amendment Date, all outstanding awards granted under the Prior Plan shall remain subject
to the terms of the Prior Plan. All Awards granted under this Plan on or after the Amendment Date will be subject to the terms
of this Plan.

 

Any Shares that are subject to an Award
under this Plan that are not used because the terms and conditions for the Award are not met, including any Shares subject to an
Award that expires, is forfeited, or becomes unexercisable without having been exercised in full, or is surrendered pursuant to
an Option Exchange Program, shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan, whether upon grant of Restricted Stock or exercise of an Option
or Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that
if Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available
for future grant under the Plan.

 

4.          Administration of the Plan.

 

(a)          Procedure.

 

(i)          Multiple
Administrative Bodies. The Plan may be administered by different Committees with respect to different groups of Service Providers.

 

(ii)         Section
162(m). To the extent that the Administrator determines it to be desirable to qualify Options granted hereunder as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more
"outside directors" within the meaning of Section 162(m) of the Code.

 

(iii)        Rule
16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.

 

(iv)        Other
Administration. Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee,
which committee shall be constituted to satisfy Applicable Laws.

 

    	-5-

    	 

    

 

(b)          Powers of the Administrator.
Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to
such Committee, the Administrator shall have the authority, in its discretion:

 

(i)          to
determine the Fair Market Value;

 

(ii)         to
select the Service Providers to whom Awards may be granted hereunder;

 

(iii)        to
determine the number of shares of Common Stock to be covered by each Award granted hereunder;

 

(iv)        to
approve forms of agreement for use under the Plan;

 

(v)         to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Restricted Stock, Restricted Stock Unit, Option or Stock Purchase Right or the shares of
Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

(vi)        to
reduce the exercise price of any Option or Stock Purchase Right to the then current Fair Market Value if the Fair Market Value
of the Common Stock covered by such Option or Stock Purchase Right shall have declined since the date the Option or Stock Purchase
Right was granted;

 

(vii)       to
institute an Option Exchange Program;

 

(viii)      to
construe and interpret the terms of the Plan and awards granted pursuant to the Plan;

 

(ix)         to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under foreign tax laws;

 

(x)          to
modify or amend each Award (subject to Section 16(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the Plan;

 

(xi)         to
allow Holders to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon
the exercise of an Option or Stock Purchase Right or upon the vesting of Restricted Stock or Restricted Stock Units that number
of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by a Holder to have Shares
withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable;

 

    	-6-

    	 

    

  

(xii)        to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted
by the Administrator;

 

(xiii)       to
make all other determinations deemed necessary or advisable for administering the Plan.

 

(c)          Effect of Administrator's Decision.
The Administrator's decisions, determinations and interpretations shall be final and binding on all Holders.

 

5.          Eligibility.
Nonstatutory Stock Options, Stock Purchase Rights, Restricted Stock and Restricted Stock Units may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.

 

6.          Limitations.

 

(a)          Each
Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares
shall be determined as of the time the Option with respect to such Shares is granted.

 

(b)          Neither
the Plan nor any Award shall confer upon an Holder any right with respect to continuing the Holder's relationship as a Service
Provider with the Company, nor shall they interfere in any way with the Holder's right or the Company's right to terminate such
relationship at any time, with or without cause.

 

(c)          The
following limitations shall apply to grants of Options:

 

(i)          The
maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options is 1,400,000.

 

(ii)         No
Service Provider shall be granted, in any fiscal year of the Company, Options to purchase more than 200,000 Shares.

 

(iii)        In
connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional 100,000 Shares
which shall not count against the limit set forth in subsection (i) above.

 

    	-7-

    	 

    

  

(iv)        The
foregoing limitations shall be adjusted proportionately in connection with any change in the Company's capitalization as described
in Section 13.

 

(v)         If
an Option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the limits set forth in subsections (ii) and (iii) above.
For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option
and the grant of a new Option.

 

(d)          The
maximum number of Shares with respect to which an Award or Awards may be granted to any Holder in any one taxable year of the Company
shall not exceed 400,000 Shares (increased proportionately, in the event of any stock split or stock dividend with respect to the
Shares).

 

7.          Term of Plan.
Subject to Section 19 of the Plan, the Plan shall become effective upon its adoption by the Board. It shall continue in effect
until the 10th Anniversary of the Effective Date unless terminated earlier under Section 16 of the Plan.

 

8.          Term
of Option. The term of each Option shall be stated in the Option Agreement. In the case of an Incentive Stock Option, the term
shall be ten (10) years from the date of grant or such shorter term as may be provided in the Option Agreement. Moreover,
in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may
be provided in the Option Agreement.

 

9.          Option
Exercise Price and Consideration.

 

(a)          Exercise
Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

 

(i)          In
the case of an Incentive Stock Option

 

(A)         granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of grant.

 

(B)         granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.

 

    	-8-

    	 

    

 

(ii)         In
the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator. In the case of
a Nonstatutory Stock Option intended to qualify as "performance-based compensation" within the meaning of Section 162(m)
of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(iii)        Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the
date of grant pursuant to a merger or other corporate transaction.

 

(b)          Waiting
Period and Exercise Dates. At the time an Option is granted, the Administrator shall fix the period within which the Option
may be exercised and shall determine any conditions which must be satisfied before the Option may be exercised.

 

(c)          Form
of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option, including
the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration
at the time of grant. Such consideration may consist entirely of:

 

(i)          cash;

 

(ii)         check;

 

(iii)        promissory
note;

 

(iv)        other
Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than
six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised;

 

(v)         consideration
received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;

 

(vi)        for
any Nonstatutory Stock Option, by a "net exercise" arrangement pursuant to which the Company will not require a payment
of the Option exercise price but will reduce the number of Shares upon the exercise by the largest number of whole shares that
has a Fair Market Value on the date of exercise that does not exceed the aggregate Option exercise price.

 

(vii)       any
combination of the foregoing methods of payment; or

 

(viii)      such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

 

    	-9-

    	 

    

 

10.         Exercise of Option.

 

(a)          Procedure for Exercise;
Rights as a Shareholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times
and under such conditions as determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence. An Option may not be exercised
for a fraction of a Share.

 

An Option shall be deemed exercised when
the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled
to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist
of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name
of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder
shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.

 

Exercising an Option in any manner shall
decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number
of Shares as to which the Option is exercised.

 

(b)          Termination of
Relationship as a Service Provider. If an Optionee ceases to be a Service Provider for any reason other than the Optionee’s
death, Disability or termination of service for Cause (but not in the event of an Optionee’s change of status from Employee
to Consultant (in which case an Employee’s Incentive Stock Option shall automatically convert to a Nonstatutory Stock Option
on the ninety-first (91st) day following such change of status) or from Consultant to Employee), such Optionee may,
but only within such period of time as is determined by the Administrator, of at least thirty (30) days, with such determination
in the case of an Incentive Stock Option not exceeding three (3) months after the date of such termination (but in no event later
than the expiration date of the term of such Option as set forth in the Option Agreement), exercise his or her Option to the extent
that Optionee was entitled to exercise it at the date of such termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

 

(c)          Disability
of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the Optionee may, but
only within twelve (12) months from the date of such termination (or within such longer time period, not exceeding five (5) years,
after the termination date as may be determined by the Administrator, with any exercise beyond twelve (12) months after the termination
date, deemed to be a Nonstatutory Stock Option) (and in no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise his or her Option the extent the Option is vested on the date of termination. If, on the
date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

 

    	-10-

    	 

    

  

(d)          Death of Optionee.
If an Optionee dies while a Service Provider (or the Optionee dies within three (3) months after a termination other than for Cause),
the Option may be exercised at any time within twelve (12) months following the date of death (or within such longer time period,
not exceeding five (5) years after the termination date as may be determined by the Administrator) (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement), by the Optionee's estate or by a person who acquires
the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death.
If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion
of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee's
estate or, if none, by the person(s) entitled to exercise the Option under the Optionee's will or the laws of descent or distribution.
If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

 

(e)          Termination
for Cause. If the Optionee is terminated for Cause, then Optionee’s Option shall expire on such Optionee’s termination
date or such later time and on such conditions as are determined by the Administrator.

 

(f)          Buyout
Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted
based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer
is made.

 

11.         Restricted
Stock, Restricted Stock Units and Stock Purchase Rights.

 

(a)          Restricted
Stock Awards. Coincident with or following designation for participation in the Plan and subject to the terms and provisions
of the Plan, the Administrator, at any time and from time to time, may grant Restricted Stock to any Service Provider in such amounts
as the Administrator shall determine.

 

(b)          Restricted
Stock Unit Awards. Coincident with or following designation for participation in the Plan and subject to the terms and provisions
of the Plan, the Administrator may grant a Service Provider Restricted Stock Units, in connection with or separate from a grant
of Restricted Stock. Upon the vesting of Restricted Stock Units, the Holder shall be entitled to receive the full value of the
Restricted Stock Units payable in either Shares or cash.

 

(c)          Rights
to Purchase and Option to Repurchase.

 

    	-11-

    	 

    

  

(i)          Stock
Purchase Rights may be granted either alone, in addition to, or in tandem with other Awards granted under the Plan and/or cash
awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing or electronically, by means of a Notice of Grant, of the terms, conditions and restrictions
related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator, and which may contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Administrator in its sole discretion.

 

(ii)         Unless
the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable
upon the voluntary or involuntary termination of the purchaser's service with the Company for any reason (including death or Disability).
The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid
by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall
lapse at a rate determined by the Administrator.

 

(d)          Restrictions.
A Holder's right to retain Shares of Restricted Stock or be paid with respect to Restricted Stock Units shall be subject to such
restrictions, including but not limited to, him or her continuing to perform as a Service Provider for a restriction period specified
by the Committee, or the attainment of specified performance goals and objectives, as may be established by the Committee with
respect to such Award. All grants of Restricted Stock and Restricted Stock Units shall be subject to a minimum one-year vesting
period. The Committee may in its sole discretion require different periods of service or different performance goals and objectives
with respect to (i) different Holders, (ii) different Restricted Stock or Restricted Stock Unit Awards, or (iii) separate, designated
portions of the Shares constituting a Restricted Stock Award. Any grant of Restricted Stock or Restricted Stock Units shall contain
terms such that the Award is either exempt from Code section 409A or complies with such section.

 

(e)          Privileges
of a Stockholder, Transferability. Unless otherwise provided in the Award Agreement, a Participant shall have all voting, dividend,
liquidation and other rights with respect to Shares of Restricted Stock, provided however that any dividends paid on Shares of
Restricted Stock prior to such Shares becoming vested shall be held in escrow by the Company and subject to the same restrictions
on transferability and forfeitability as the underlying Shares of Restricted Stock. Any voting, dividend, liquidation or other
rights shall accrue to the benefit of a Holder only with respect to Shares of Restricted Stock held by, or for the benefit of,
the Holder on the record date of any such dividend or voting date. A Participant's right to sell, encumber or otherwise transfer
such Restricted Stock shall, in addition to the restrictions otherwise provided for in the Award Agreement, be subject to the limitations
of Section 12 hereof. The Committee may determine that a Holder of Restricted Stock Units is entitled to receive dividend equivalent
payments on such units. If the Committee determines that Restricted Stock Units shall receive dividend equivalent payments, such
feature will be specified in the applicable Award Agreement. Restricted Stock Units shall not have any voting rights.

 

    	-12-

    	 

    

  

(f)          Enforcement
of Restrictions. The Committee may in its sole discretion require one or more of the following methods of enforcing the restrictions
referred to in Sections 11(d) and 11(e):

 

(i)          placing
a legend on the stock certificates, or the Restricted Stock Unit Award Agreement, as applicable, referring to restrictions;

 

(ii)         requiring
the Holder to keep the stock certificates, duly endorsed, in the custody of the Company while the restrictions remain in effect;

 

(iii)        requiring
that the stock certificates, duly endorsed, be held in the custody of a third party nominee selected by the Company who will hold
such Shares of Restricted Stock on behalf of the Holder while the restrictions remain in effect; or

 

(iv)        inserting
a provision into the Restricted Stock Award Agreement prohibiting assignment of such Award Agreement until the terms and conditions
or restrictions contained therein have been satisfied or released, as applicable.

 

(g)          Termination
of Service, Death, Disability, etc. Except as otherwise provided in an Award Agreement, in the event of the death or Disability
of a Participant, all service period and other restrictions applicable to Restricted Stock Awards then held by him or her shall
lapse, and such Awards shall become fully nonforfeitable. Subject to Section 13 and except as otherwise provided in an Award Agreement,
in the event a Participant ceases to be a Service Provider for any other reason, any Restricted Stock Awards as to which the service
period or other vesting conditions have not been satisfied shall be forfeited.

 

(h)          Rights
as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent
of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock
Purchase Right is exercised, except as provided in Section 13 of the Plan.

 

12.         Non-Transferability of Awards.
Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the
Holder, only by the Holder. If the Administrator makes an Award transferable, such Award shall contain such additional terms and
conditions as the Administrator deems appropriate.

 

    	-13-

    	 

    

 

13.         Adjustments Upon Changes in Capitalization,
Dissolution, Merger or Asset Sale.

 

(a)          Changes
in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Award, and the number of shares of Common Stock which have been authorized for issuance under the Plan
but as to which no shares of Common Stock have yet been issued or which have been returned to the Plan upon cancellation or expiration
of an Award, as well as the price per share of Common Stock covered by each such outstanding Award, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment
shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock
subject to an Award.

 

(b)          Dissolution,
Liquidation, Merger or Asset Sale. Subject to the third sentence of this Section 13(b), in the event of the proposed dissolution
or liquidation of the Company or a merger of the Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Award shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. Notwithstanding the foregoing, in the event that a Holder ceases
to be a Service Provider for any reason other than Cause or voluntary resignation within six (6) months of the consummation of
a transaction described in this Section 13(b) pursuant to which outstanding Options and Stock Purchase Rights are assumed or substituted
as provided above, the vesting and exercisability of each outstanding Award shall be automatically accelerated as to 50% of the
unvested Shares of Optional Stock subject to the Award on the date of such Holder’s termination. Notwithstanding the foregoing,
(i) in the event that the successor corporation refuses to assume or substitute for the Award, and (ii) in the case of
an Award granted to a Service Provider who is a Consultant at the time such Award is granted, the Holder shall fully vest in and
have the right to exercise the Award as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested
or exercisable. If an Award becomes fully vested and exercisable in accordance with the foregoing sentence, the Administrator shall
notify the Holder in writing or electronically that the Option or Stock Purchase Right shall be fully vested and exercisable for
a period of fifteen (15) days from the date of such notice, and the Award shall terminate upon the expiration of such period. For
the purposes of this Section, the Award shall be considered assumed if, following the dissolution, liquidation, merger or sale
of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Award
immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received
in the dissolution, liquidation, merger or sale of assets by holders of Common Stock for each Share held on the effective date
of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such consideration received in the dissolution, liquidation, merger
or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each Share of Optioned
Stock subject to the Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the dissolution, liquidation, merger or sale of assets.

 

    	-14-

    	 

    

  

(c)          Other
Treatment of Options and Stock Purchase Rights. Subject to any greater rights granted to Optionees under the foregoing provisions
of this Section 13, in the event of the occurrence of any transaction described in Section 13 hereof, any outstanding Options and
Stock Purchase Rights will be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation
or sale of assets.

 

14.         Date
of Grant. The date of grant of an Award shall be, for all purposes, the date on which the Administrator makes the determination
granting such Award, or such other later date as is determined by the Administrator. Notice of the determination shall be provided
to each Holder within a reasonable time after the date of such grant.

 

15.         Performance
Awards.

 

(a)          Any
Award granted under the Plan may be subject to the terms and conditions set forth in this Section
15. If an Award is subject to this Section 15, then the lapsing of restrictions thereon and the distribution of cash, Shares or
other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals
established by the Committee, which shall be based on the attainment of one or any combination of the following: 

 

(i)          Earnings
(either in the aggregate or on a per-Share basis) including earnings per share, earnings before interest, earnings before interest
and taxes, earnings before interest, taxes and depreciation or earnings before interest, taxes, depreciation and amortization and
in the case of any of the foregoing, such goal may be adjusted to further exclude items in order to measure achievement of specific
performance goals, including any one or more of the following: stock-based compensation expense;
income or losses from discontinued operations; gain on cancellation of debt; debt extinguishment and related costs; restructuring,
separation and/or integration charges and costs; reorganization and/or recapitalization charges and costs; impairment charges;
gain or loss related to investments or the sale of assets; extraordinary gains or losses; the cumulative effect of accounting changes;
acquisitions or divestitures; foreign exchange impacts; any unusual, nonrecurring gain or loss; sales and use tax settlement; and
gain on non-monetary transactions; 

 

(ii)         Operating
Profit (either in the aggregate or on a per Share basis);

 

(iii)        Operating
income (either in the aggregate or on a per Share basis);

 

(iv)        Net
income or loss (either in the aggregate or on a per-Share basis);

 

(v)         Net
earnings on either a LIFO or FIFO basis (either in the aggregate or on a per Share basis);

 

    	-15-

    	 

    

  

(vi)        Cash
flow provided by operations, either in the aggregate or on a per-Share basis;

 

(vii)       Free
cash flow (either in the aggregate on a per-Share basis);

 

(viii)      Reductions
in expense levels, determined either on a Corporation-wide basis or in respect of any one or more business units;

 

(ix)         Operating
and maintenance cost management and employee productivity;

 

(x)          Stockholder
returns (including return on assets, investments, equity, or gross sales);

 

(xi)         Return
measures (including return on assets, equity, or sales);

 

(xii)        Where
applicable, growth or rate of growth of any of the above listed business criteria;

 

(xiii)       Share
price (including attainment of a specified per-Share price during the Incentive Period; growth measures and total stockholder return
or attainment by the Shares of a specified price for a specified period of time);

 

(xiv)      Accomplishment
of mergers, acquisitions, dispositions, public offerings or similar extraordinary business transactions;

 

(xv)       Strategic
business criteria, consisting of one or more objectives based on meeting specified revenue, market share, market penetration, geographic
business expansion goals, objectively identified project milestones, production volume levels, cost targets, and goals relating
to acquisitions or divestitures; and/or

 

(xvi)      Achievement
of business or operational goals such as market share and/or business development;

 

provided that applicable incentive goals
may be applied on a pre- or post-tax basis; and provided further that the Committee may, when the applicable incentive goals are
established, provide that the formula for such goals may include or exclude items to measure specific objectives, including any
one or more of the following: stock-based compensation expense; income or losses from discontinued operations; gain on cancellation
of debt; debt extinguishment and related costs; restructuring, separation and/or integration charges and costs; reorganization
and/or recapitalization charges and costs; impairment charges; gain or loss related to investments or the sale of assets; extraordinary
gains or losses; the cumulative effect of accounting changes; acquisitions or divestitures; foreign exchange impacts; any unusual,
nonrecurring gain or loss; sales and use tax settlement; and gain on non-monetary transactions. As established by the Committee,
the incentive goals may include, without limitation, GAAP and non-GAAP financial measures. Such performance goals shall be set
by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, section 162(m) of the
Code and the regulations thereunder. Notwithstanding anything in the Plan to the contrary, the Administrator may elect to grant
performance-based awards that are not subject to the conditions of this Section 15 and that are not intended to qualify as performance-based
compensation under Section 162(m).

 

    	-16-

    	 

    

 

(b)          Notwithstanding
any provision of the Plan other than Section 13, with respect to any Performance Award, the Committee may not adjust upwards the
amount payable pursuant to such Award, nor may it waive the achievement of the applicable performance goals except in the case
of the death or disability of the Participant.

 

(c)          The
Committee shall have the power to impose such other restrictions on Performance Awards subject
to this Section 15 as it may deem necessary or appropriate to insure that such Performance Awards satisfy all requirements for
"performance-based compensation" within the meaning of section 162(m)(4)(B) of the Code or any successor thereto.

 

16.         Amendment and Termination of the Plan.

 

(a)          Amendment
and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

 

(b)          Shareholder
Approval. The Company shall obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

 

(c)          Effect of Amendment or Termination.
No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Holder, unless mutually agreed otherwise
between the Holder and the Administrator, which agreement must be in writing and signed by the Holder and the Company. Termination
of the Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

 

17.         Conditions Upon Issuance of Shares.

 

(a)          Legal
Compliance. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance.

 

(b)          Investment
Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent
and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

 

18.         Inability
to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company
of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained.

 

    	-17-

    	 

    

 

19.         Reservation of Shares.
The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan.

 

20.         Shareholder
Approval. The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months after the date
the Plan is adopted. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws.

 

    	-18-

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