Document:

EX-10.1

   

   

  Exhibit 10.1

  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS SUCH INFORMATION AS PRIVATE AND CONFIDENTIAL.

   

   

  AMENDMENT NO. 3 TO LICENSE AND SUPPLY AGREEMENT

  THIS AMENDMENT NO. 3 TO LICENSE AND SUPPLY AGREEMENT (this “Amendment No. 3”) is made as of July 1, 2022 by and between Societal CDMO Gainesville, LLC (f/k/a Recro Gainesville LLC) (as successor to Alkermes Pharma Ireland Limited) (“Societal”) and Lannett Company, Inc. (as successor to Kremers Urban Pharmaceuticals, Inc.) (“Lannett”).

  Background

  WHEREAS, Societal and Lannett are parties to that certain License and Supply Agreement, effective as of January 1, 2014, as amended in September 2018, as amended by Amendment No.1 to License and Supply Agreement, effective as of September 6, 2018 and as further amendment by Amendment No. 2 to License and Supply Agreement, effective as of November 5, 2020 (as amended, the “Agreement”); and

  WHEREAS, the parties now desire to enter into this Amendment No. 3 to set forth certain changes to and modifications of the terms and conditions contained in the Agreement.

  Agreement

  NOW, THEREFORE, in consideration of the mutual agreement of the parties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and agreed, and intending to be legally bound hereby, the parties agree as follows:

  1.Incorporation of Background; Capitalized Terms.  The “Background” provision set forth above, together with the defined terms therein, are incorporated herein by reference. Capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Agreement. All references to “Recro” or “Alkermes” in the Agreement shall be references to Societal and all references to “KU” in the Agreement shall be references to “Lannett”.

  2.SECTION 2.4 MARKETING EFFORTS.

  a.The following two sentences are inserted at the end of Section 2.4(b) of the Agreement as the final sentences of such subsection:

  “Notwithstanding the foregoing, Lannett shall not discontinue any Product without Societal’s prior written consent. Without imitation of this Section 2.4(b), the parties acknowledge and agree that Lannett shall resume marketing the Branded V Product in accordance with its obligations under this Section 2.4 and otherwise under the Agreement notwithstanding any prior decision on the part of Lannett to discontinue the marketing thereof unless otherwise expressly agreed by Societal.”

  b.The following new subsection (d) is inserted at the end of Section 2.4 of the Agreement:

  “(d)	Without limitation of the foregoing, Lannett shall use commercially reasonable efforts to carry out the activities set forth on Schedule 2.4(d) to this Agreement.”

  c.Schedule 2.4(d) attached to this Amendment No. 3 as Exhibit A is incorporated as a new Schedule 2.4(d) to the Agreement.

   

  

  3.SECTION 2.5 JOINT MARKETING COMMITTEE. The following sentences are inserted at the end of Section 2.5 of the Agreement as the final sentences thereof:

  “Without limitation of the foregoing, representatives of the Joint Marketing Committee (including the individuals who hold the positions of Vice President of Business Development and Head of Sales & Marketing or equivalent position(s) with Lannett and Senior Vice President, Operations and Vice President of Supply Chain or equivalent position(s) with Societal) shall meet by teleconference or other means as agreed by the parties (i) on a monthly basis to discuss market dynamics and any actions to be taken by the parties or changes to the marketing and promotional plan with respect to the Products and (ii) on a quarterly basis to discuss the financial performance of the Products and review the monthly, quarterly and annual revenue forecasts for commercializing the Products.”

  4.SECTION 2.7 DEVELOPMENT OPTION.

  a.The following language is added at the end of Section 2 as a new Section 2.7 of the Agreement:

  2.7	Development Option.

  (a)	Lannett hereby grants to Societal the option to select [***] of the products set forth on Schedule 2.7(a) (each, an “Option Product”) for Development and Commercialization (as such terms shall be defined in the Development Agreement (as defined below) to be entered into by the parties) by Societal and Lannett. In each instance where Societal exercises its right to designate an Option Product for Development, Societal and Lannett shall negotiate in good faith the terms of one or more appropriate agreement(s) with respect to the  parties’ Development and Commercialization of such Option Product, including commercial terms with respect to rights and responsibilities for maintaining applicable regulatory approvals, Development, manufacturing and commercializing such Option Product and all related Development and post-Development matters (each such agreement, a “Development Agreement”) in accordance with the terms set forth in Section 2.7(b).

  The parties recognize that execution of a Development Agreement is contingent upon costs and fees for Development and manufacturing services by Societal being consistent with prevailing rates offered by similarly situated vendors; provided, that if Lannett asserts that amounts quoted by Societal in connection with any such Development Agreement are higher than any such prevailing rates, Lannett shall provide evidence reasonably satisfactory to Societal of such prevailing rates offered by similarly situated vendors and shall negotiate in good faith with Lannett with respect to the same.

  (b)	The Development Agreement for any Option Product that is selected by Societal to be Developed and Commercialized pursuant to Section 2.7(a) shall provide for the following terms:

  (i)	Lannett shall order and purchase such Option Product exclusively from Societal and Societal shall agree to supply such Option Product exclusively to Lannett for an initial term of [***] at a supply price equal to [***] (the “Option Product Supply Price”);

  (ii)	in addition to the Option Product Supply Price, Societal shall be entitled to a share of the profits generated by Lannett with respect to such Option Product equal to [***] for such Option Product; and

  2

   

  

  (iii)	(A)	[***]; and

  (B)	[***].

  For clarification, the [***] are not guaranteed payments, and will only be paid if successfully achieved on or before the agreed upon dates.

  b.Schedule 2.7(a) attached to this Amendment No. 3 as Exhibit B is incorporated as a new Schedule 2.7(a) to the Agreement.

  5.SECTION 2.8 [***].

  a.The following language is added at the end of Section 2 as a new Section 2.8 of the Agreement:

  “At any time after [***], if the aggregate amount payable to Societal in respect of its applicable share of the Generic VPM Operating Profits, the Branded V Operating Profits and the Branded VPM Operating Profits pursuant to Schedule 3.1 is less than (i) [***] in any [***].

  [***].”

  6.SECTION 3.2  INVOICE AND PAYMENT. Section 3.2 of the Agreement is deleted in its entirety and replaced with the following language:

   

  “Upon delivery of any Product shipment or otherwise when any payment is due Societal pursuant to the terms of Schedule 3.1 of this Agreement, Societal shall be entitled to submit invoices therefor to Lannett, and Lannett agrees to remit payment within [***] from receipt of invoice.”

  7.SECTION 8.2 RESPONSIBILITY FOR NDAs. Section 8.2(d) of the Agreement is hereby amended by adding the following language at the end of Section 8.2(d) as the final sentence thereof:

  “Without limitation of Lannett’s reimbursement obligations pursuant to this Section 8.2(d), Lannett and Societal shall cooperate with each other for purposes of seeking an exemption from the payment of PDUFA program fees with respect to the applicable Product, to the extent such exemption is available for such Product under applicable law.”

  8.SECTION 10 TERMINATION. Section 10.1 of the Agreement is deleted in its entirety and replaced with the following language:

  “10.1   Termination. The term of this Agreement shall begin upon the Effective Date and, unless sooner terminated as hereinafter provided, shall end on December 31, 2024. This Agreement may be renewed for successive two (2)-year terms by mutual agreement of the parties in writing. Notwithstanding the foregoing, this Agreement may be terminated as follows:

  (a)	Termination for Insolvency. If either Lannett or Societal (i) makes a general assignment for the benefit of creditors or becomes insolvent; (ii) files an insolvency petition in bankruptcy; (iii) petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets; (iv) commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors; or (v) becomes a party to any proceeding or action of the type described above in (iii) or (iv) and such proceeding or action remains undismissed or unstayed for a period of more than 60 days, then the other party may by written notice terminate this Agreement in its entirety with immediate effect.

  (b)	Termination for Default.

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  (i)	Lannett and Societal each shall have the right to terminate this Agreement for default upon the other’s failure to comply in any material respect with the terms and conditions of this Agreement. At least thirty (30) days prior to any such termination for default (or fifteen (15) days in the case of a default upon the other’s failure to comply in any material aspect with the terms and conditions of this Agreement.  At least thirty (30) days prior to any such termination for default (or fifteen (15) days in the case of a default arising from a party’s failure to pay any amounts when due to the other party under this Agreement) (such thirty (30) or fifteen (15) day period, as applicable, the “Cure Period”), the party seeking to so terminate shall give the other written notice of its intention to terminate this Agreement in accordance with the provisions of this Section 10.1(b), which notice shall set forth the default(s) which form the basis for such termination. If the defaulting party fails to correct such default(s) within the applicable Cure Period, or if the same cannot reasonably be corrected or remedied within the applicable Cure Period, then if the defaulting party has not commenced curing said default(s) within said Cure Period and be diligently pursuing completion of same, then such party immediately may terminate this Agreement.

  (ii)	This Section 10.1(b) shall not be exclusive and shall not be in lieu of any other remedies available to a party hereto for any default hereunder on the part of the other party.

  (c)	Termination for Change of Control. Either Lannett or Societal shall have the right to terminate this Agreement effective immediately upon the consummation of (i) any merger or consolidation of either party with or into another entity or any other corporate reorganization, if fifty percent (50%) or more of  immediately after such merger, consolidation or other reorganization is owned by persons who were not stockholders of either party immediately prior to such merger, consolidation or other reorganization, (ii) the sale, transfer or other disposition of all or substantially all of either party’s assets or (iii) any transaction as a result of which any persons or group is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Company representing at least fifty percent (50%) of the total voting power of either party’s outstanding voting securities.

  (d)	Continuing Obligations. Termination of this Agreement for any reason shall not relieve the parties of any obligation accruing prior thereto with respect to the Products and any ongoing obligations hereunder with respect to the remaining Products and shall be without prejudice to the rights and remedies of either party with respect to any antecedent breach of the provisions of this Agreement. Without limiting the generality of the foregoing, no termination of this Agreement, whether by lapse of time or otherwise, shall serve to terminate the obligations of the parties hereto under Sections 8.4, 8.5, 8.6, 8.8, 8.15, Section 9, Section 10.1(b), 10.1(e), 10.1(f) and Section 11 hereof, and such obligations shall survive any such termination.

  (e)	Net Sales Allowances after the Termination Date. In reference to returns or other Net Sales allowances which arise after the termination of this Agreement in respect of any Product supplied and sold under this Agreement prior to such termination, the parties agree that Lannett shall not be entitled to seek any reimbursement, Net Sales deductions or other form of compensation from Societal.

  (f)	Transition after Termination. Following a termination of this Agreement pursuant to this Section 10.1, the parties shall promptly meet to negotiate in good faith and establish a wind-down plan (the “Wind-Down Plan”) to transition any and all marketing and promotional activities being conducted by Lannett under this Agreement to Societal or a third party designated by Societal and Lannett and Societal shall use commercially reasonable efforts to carry out the activities set forth in the Wind-Down Plan and any other actions reasonably requested by Societal to facilitate the termination of this Agreement and the transition of the marketing and promotion of the Products to Societal or such third party in a commercially reasonable manner.”

  9.SCHEDULE 3.1 PRODUCT PRICING AND PAYMENT TERMS.  Schedule 3.1 of the Agreement (Product Pricing and Payment Terms) is hereby amended as follows:

  a.Section 1 of Schedule 3.1 of the Agreement is hereby amended as follows:

  All references to [***] set forth in (A) the definition of “Supply Price for Branded Product” and (B) Section 3(b)(i), Section 4(b)(i) and Section 4(b)(ii) are deleted and replaced with references to [***].

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  b.Section 5(a) to Schedule 3.1 of the Agreement (Product Pricing and Payment Terms) is deleted in its entirety and replaced with the following language:

  “(a)	(i)	Each invoice submitted to Lannett upon delivery of an order of Generic VPM Product shall reflect a price per unit equal to those set forth on Exhibit C to Amendment No. 3, however the price per unit shall not exceed [***].

  (ii)	In addition, (A) in every Quarter in which every Branded Product in all dosage strengths is sold by Lannett, Lannett shall pay Societal [***] and (B) in every Quarter where Lannett does not sell each dosage strength of each Branded Product, Lannett shall pay Societal [***].”

  c.Section 5(b) to Schedule 3.1 of the Agreement (Product Pricing and Payment Terms) is deleted in its entirety.

  10.SECTION 11.2 NOTICES. All notices or other communications required or permitted to be given pursuant to the Agreement if to Societal, as follows:

  Societal CDMO, Inc.

  1 E. Uwchlan Ave., Suite 112 

  Exton, PA

  Attention: Scott Rizzo 

  Email: scott.rizzo@societalcdmo.com

  11.Inconsistencies; Disputes. To the extent of any inconsistency between the Agreement and this Amendment No. 3, the terms and conditions of this Amendment No. 3 shall prevail.

  12.No Other Amendments. All provisions of the Agreement not expressly amended by this Amendment No. 3 shall remain in full force and effect, and are ratified and confirmed.

  13.Counterparts. This Amendment No. 3 may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. An electronic or faxed signed copy of this Amendment No. 3 shall have the same force and effect as an original signed copy.

  [signature page follows]

   

  5

   

  

  IN WITNESS WHEREOF, Societal, Lannett and Lannett have duly executed this Amendment No. 3 as of the date first written above.

   

  SOCIETAL CDMO GAINESVILLE, LLC

  By:  /s/ Scott Rizzo

  Name: Scott Rizzo 

  Title: Senior Vice President, Operations

   

   

   

  LANNETT COMPANY, INC.

  By:  /s/ Michael Block

  Name: Michael Block

  Title: Vice President of Business Development

   

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  EXHIBIT A

  Schedule 2.4(d) 
Marketing Activities

  Lannett shall undertake email marketing communications promoting the Products and such other activities as may be agreed among the parties in connection with the monthly marketing meetings of the Joint Marketing Committee as set forth in Section 2.5 of the Agreement. Additionally, Lannett shall proactively keep current with all relevant data regarding the financial performance of the Products, including sales and margin performance, and use commercially reasonable efforts to sell the Products that other companies in similar market conditions and business circumstances would reasonably deploy.

   

   

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  EXHIBIT B

  Schedule 2.7(a) 
Option Products

   

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  EXHIBIT C

  Verapamil PM (Generic) Pricing

  						
	 
	Per [***] Capsules

	Verapamil PM Generic
	2020
	2021
	Jul-22
	Jul-23
	Jul-24

	[***]
	[***]
	[***]
	[***]
	[***]
	[***]

	[***]
	[***]
	[***]
	[***]
	[***]
	[***]

	[***]
	[***]
	[***]
	[***]
	[***]
	[***]

   

  9Exhibit 4.1

 

WORKHORSE GROUP INC.

2017 INCENTIVE STOCK PLAN

 

 

 

This WORKHORSE GROUP INC.
2017 Incentive Stock Plan (the “Plan”) is designed to retain directors, executives, selected employees and consultants
and reward them for making major contributions to the success of the Company. These objectives are accomplished by making long-term incentive
awards under the Plan thereby providing Participants with a proprietary interest in the growth and performance of the Company.

 

	1.	Definitions.

 

		(a)	“Board” - The Board of Directors of the Company.

 

		(b)	“Cause” means (a) embezzlement or misappropriation of funds; (b)
conviction of, or entry of a plea of nolo contendre to, a felony involving moral turpitude; (c) commission of material acts of
dishonesty, fraud, or deceit; (d) breach of any material provisions of any employment agreement, confidentiality agreement or invention
assignment agreement; (e) habitual or willful neglect of duties; (f) breach of fiduciary duty; or (g) material violation of any other
duty whether imposed by law or the Board.

 

		(c)	“Code” - The Internal Revenue Code of 1986, as amended from time to time.

 

		(d)	“Committee” - The Compensation Committee of the Company’s Board,
or such other committee of the Board that is designated by the Board to administer the Plan, composed of not less than two members of
the Board who are disinterested persons, as contemplated by Rule 16b-3 (“Rule 16b-3”) promulgated under the Securities
Exchange Act of 1934, as amended (the “ Exchange Act”).

 

		(e)	“Company” - WORKHORSE GROUP INC. and its subsidiaries including subsidiaries of subsidiaries.

 

		(f)	“Exchange Act” - The Securities Exchange Act of 1934, as amended from time to time.

 

		(g)	“Fair Market Value” - The fair market value of the Company’s issued and outstanding Stock
as determined in good faith by the Board or Committee.

 

		(h)	“Grant” - The grant of any form of stock option, stock award, or
stock purchase offer, whether granted singly, in combination or in tandem, to a Participant pursuant to such terms, conditions and limitations
as the Committee may establish in order to fulfill the objectives of the Plan.

 

		(i)	“Grant Agreement” - An agreement between the Company and a Participant that sets forth
the terms, conditions and limitations applicable to a Grant.

 

    1

     

    

 

		(j)	“Option” - Either an Incentive Stock Option, in accordance with Section 422 of Code,
or a Nonstatutory Option, to purchase the Company’s Stock that may be awarded to a Participant under the Plan. A Participant who receives
an award of an Option shall be referred to as an “Optionee.”

 

		(k)	“Participant” - A director, officer, employee or consultant of the Company to whom an Award has been made under the
Plan.

 

		(l)	“Restricted Stock Purchase Offer” - A Grant of the right to purchase a specified number of shares of Stock pursuant
to a written agreement issued under the Plan.

 

		(m)	“Securities Act” - The Securities Act of 1933, as amended from time to time.

 

		(n)	“Stock” - Authorized and issued or unissued shares of common stock of the Company.

 

		(o)	“Stock Award” - A Grant made under the Plan in stock, denominated in units of stock or
denominated in some other method reflecting an increase in value of stock or some other security of the Company, for which the Participant
is not obligated to pay additional consideration.

 

	2.	Administration. The Plan shall be administered by the Board, provided however, that the Board may delegate
such administration to the Committee. Subject to the provisions of the Plan, the Board and/or the Committee shall have authority to (a)
grant, in its discretion, Incentive Stock Options in accordance with Section 422 of the Code, or Nonstatutory Options, Stock Awards or
Restricted Stock Purchase Offers; (b) determine in good faith the fair market value of the Stock covered by any Grant; (c) determine which
eligible persons shall receive Grants and the number of shares, restrictions, terms and conditions (including performance terms and conditions
or market criteria) to be included in such Grants; (d) construe and interpret the Plan; (e) promulgate, amend and rescind rules and regulations
relating to its administration, and correct defects, omissions and inconsistencies in the Plan or any Grant; (f) consistent with the Plan
and with the consent of the Participant, as appropriate, amend any outstanding Grant or amend the exercise date or dates thereof; (g)
determine the duration and purpose of leaves of absence which may be granted to Participants without constituting termination of their
employment for the purpose of the Plan or any Grant; and (h) make all other determinations necessary or advisable for the Plan’s administration.
The interpretation and construction by the Board of any provisions of the Plan or selection of Participants shall be conclusive and final.
No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or
any Grant made thereunder.

 

	3.	Eligibility; Cancellation.

 

		(a)	General: The persons who shall be eligible to receive Grants shall be directors, officers, employees
or consultants to the Company. The term consultant shall mean any person, other than an employee, who is engaged by the Company to render
services and is compensated for such services. An Optionee may hold more than one Option. Any issuance of a Grant to an officer or director
of the Company subsequent to the first registration of any of the securities of the Company under the Exchange Act shall comply with the
requirements of Rule 16b-3.

 

    2

     

    

 

		(b)	Incentive Stock Options: Incentive Stock Options may only be issued to employees of the Company.
Incentive Stock Options may be granted to officers or directors, provided they are also employees of the Company. Payment of a director’s
fee shall not be sufficient to constitute employment by the Company.

 

The Company shall not grant an Incentive Stock Option under
the Plan to any employee if such Grant would result in such employee holding the right to exercise for the first time in any one calendar
year, under all Incentive Stock Options granted under the Plan or any other plan maintained by the Company, with respect to shares of
Stock having an aggregate fair market value, determined as of the date of the Option is granted, in excess of $100,000. Should it be determined
that an Incentive Stock Option granted under the Plan exceeds such maximum for any reason other than a failure in good faith to value
the Stock subject to such option, the excess portion of such option shall be considered a Nonstatutory Option. To the extent the employee
holds two (2) or more such Options which become exercisable for the first time in the same calendar year, the foregoing limitation on
the exercisability of such Option as Incentive Stock Options under the Federal tax laws shall be applied on the basis of the order in
which such Options are granted. If, for any reason, an entire Option does not qualify as an Incentive Stock Option by reason of exceeding
such maximum, such Option shall be considered a Nonstatutory Option.

 

		(c)	Nonstatutory Option: The provisions of the foregoing Section 3(b) shall not apply to any Option designated as a “Nonstatutory
Option” or which sets forth the intention of the parties that the Option be a Nonstatutory Option.

 

		(d)	Stock Awards and Restricted Stock Purchase Offers: The provisions of this Section 3(b) shall not apply to any Stock Award or
Restricted Stock Purchase Offer under the Plan.

 

		(e)	Cancellation and Rescission of Grants. Unless an agreement with a directors, officers, employees
or consultants specifies otherwise, the Board or Committee, as applicable, may cancel any unexpired, unpaid, or deferred Grants at any
time if the Optionee or Participant is not in compliance with all other applicable provisions of its agreement pertaining to the Grant
and/or the Plan.

 

Upon exercise, payment or delivery
pursuant to a Grant, the Optionee or Participant shall certify on a form acceptable to the Board that he or she is in compliance with
the terms and conditions of the Plan. Failure to comply with all of the provisions of this Section 3(e) prior to, or during the six months
after, any exercise, payment or delivery pursuant to a Grant shall cause such exercise, payment or delivery to be rescinded. The Company
shall notify the Optionee or Participant in writing of any such rescission within two years after such exercise, payment or delivery.
Within ten days after receiving such a notice from the Company, the Optionee or Participant shall pay to the Company the amount of any
gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to a Grant. Such payment shall be
made either in cash or by returning to the Company the number of shares of Stock that the Optionee or Participant received in connection
with the rescinded exercise, payment or delivery.

 

	4.	Stock.

 

		(a)	Authorized Stock: Stock subject to Grants may be either unissued or reacquired Stock.

 

		(b)	Number of Shares: Subject to adjustment as provided in Section 5(i) of the Plan, the total number
of shares of Stock which may be purchased or granted directly by Options, Stock Awards or Restricted Stock Purchase Offers, or purchased
indirectly through exercise of Options granted under the Plan shall not exceed 5,000,000. If any Grant shall for any reason terminate
or expire, any shares allocated thereto but remaining unpurchased upon such expiration or termination shall again be available for Grants
with respect thereto under the Plan as though no Grant had previously occurred with respect to such shares. Any shares of Stock issued
pursuant to a Grant and repurchased pursuant to the terms thereof shall be available for future Grants as though not previously covered
by a Grant.

 

		(c)	Reservation of Shares: The Company shall reserve and keep available at all times during the term
of the Plan such number of shares as shall be sufficient to satisfy the requirements of the Plan. If, after reasonable efforts, which
efforts shall not include the registration of the Plan or Grants under the Securities Act, the Company is unable to obtain authority from
any applicable regulatory body, which authorization is deemed necessary by legal counsel for the Company for the lawful issuance of shares
hereunder, the Company shall be relieved of any liability with respect to its failure to issue and sell the shares for which such requisite
authority was so deemed necessary unless and until such authority is obtained.

 

		(d)	Application of Funds: The proceeds received by the Company from the sale of Stock pursuant to the exercise of Options or rights
under Stock Purchase Agreements will be used for general corporate purposes.

 

		(e)	No Obligation to Exercise: The issuance of a Grant shall impose no obligation upon the Participant to exercise any rights under
such Grant.

 

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	5.	Terms and Conditions of Options. Options granted hereunder shall be evidenced by agreements between the
Company and the respective Optionees, in such form and substance as the Board or Committee shall from time to time approve. Option agreements
need not be identical, and in each case may include such provisions as the Board or Committee may determine, but all such agreements shall
be subject to and limited by the following terms and conditions:

 

		(a)	Number of Shares: Each Option shall state the number of shares to which it pertains.

 

		(b)	Exercise Price: Each Option shall state the exercise price, which shall be determined as follows:

 

		(i)	Any Incentive Stock Option granted to a person who at the time the Option is granted owns (or is deemed
to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power or value
of all classes of stock of the Company (“Ten Percent Holder”) shall have an exercise price of no less than 110% of the
Fair Market Value of the Stock as of the date of grant; and

 

		(ii)	Incentive Stock Options granted to a person who at the time the Option is granted is not a Ten Percent Holder and Nonstatutory Options
shall have an exercise price of no less than 100% of the Fair Market Value of the Stock as of the date of grant.

 

For the purposes of this Section 5(b),
Fair Market Value, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, means,
as of any given date: (i) if the common stock is listed on a national securities exchange, the closing price of the common stock in the
principal trading market for the common stock on such date, as reported by the exchange (or on the last preceding trading date if such
security was not traded on such date); (ii) if the common stock is not listed on a national securities exchange, but is traded in the
over-the -counter market, the average of the bid and asked prices on such date, as reported by the OTC Bulletin Board or the OTC Markets
Inc. or similar publisher of such quotations; and (iii) if the fair market value of the common stock cannot be determined pursuant to
clause (i) or (ii) above or if there is no or limited trading volume or limited liquidity in the common stock as determined by the Board
in its sole discretion, the Fair Market Value shall be determined by the Board, which determination shall be conclusive and binding.

 

		(c)	Medium and Time of Payment: The exercise price shall become immediately due upon exercise of the
Option and shall be paid in cash or check made payable to the Company. Should the Company’s outstanding Stock be registered under Section
12(g) of the Exchange Act at the time the Option is exercised, then the exercise price may also be paid as follows:

 

		(i)	in shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Company’s earnings for financial
reporting purposes and valued at Fair Market Value on the exercise date, or

 

		(ii)	through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide
irrevocable written instructions (a) to a Company designated brokerage firm to effect the immediate sale of the purchased shares and remit
to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Company
by reason of such purchase and (b) to the Company to deliver the purchased shares directly to such brokerage firm in order to complete
the sale transaction.

 

At the discretion of the Board, exercisable either at
the time of Option grant or of Option exercise, the exercise price may also be paid (i) by
Optionee’s delivery of a promissory note in form and substance satisfactory to the Company and permissible under applicable
securities rules and bearing interest at a rate determined by the Board in its sole discretion, but in no event less than the
minimum rate of interest required to avoid the imputation of compensation income to the Optionee under the Federal tax laws, or (ii)
in such other form of consideration permitted by the State of Nevada corporations law as may be acceptable to the Board.

 

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		(d)	Term and Exercise of Options: Any Option granted to an employee of the Company
shall become exercisable over a period of no longer than five (5) years and no less than twenty percent (20%) of the shares covered thereby
shall become exercisable annually unless the Board determines otherwise. No Option shall be exercisable, in whole or in part, prior to
one (1) year from the date it is granted unless the Board shall specifically determine otherwise, as provided herein. In no event shall
any Option be exercisable after the expiration of ten (10) years from the date it is granted, and no Incentive Stock Option granted to
a Ten Percent Holder shall, by its terms, be exercisable after the expiration of five (5) years from the date of the Option. Unless otherwise
specified by the Board or the Committee in the resolution authorizing such Option, the date of grant of an Option shall be deemed to be
the date upon which the Board or the Committee authorizes the granting of such Option.

 

Each Option shall be exercisable to
the nearest whole share, in installments or otherwise, as the respective Option agreements may provide. During the lifetime of an Optionee,
the Option shall be exercisable only by the Optionee and shall not be assignable or transferable by the Optionee, and no other person
shall acquire any rights therein. To the extent not exercised, installments (if more than one) shall accumulate, but shall be exercisable,
in whole or in part, only during the period for exercise as stated in the Option agreement, whether or not other installments are then
exercisable.

 

		(e)	Termination of Status as Employee, Consultant or Director: If Optionee’s status
as an employee shall terminate for any reason other than Optionee’s disability or death, then Optionee (or if the Optionee shall die after
such termination, but prior to exercise, Optionee’s personal representative or the person entitled to succeed to the Option) shall have
the right to exercise the portions of any of Optionee’s Incentive Stock Options which were exercisable as of the date of such termination,
in whole or in part, not less than 30 days nor more than three (3) months after such termination (or, in the event of “termination
for Cause”, the Option shall automatically terminate as of the termination of employment as to all shares covered by the Option).

 

With respect to
Nonstatutory Options granted to employees, directors or consultants, the Board may specify such period for exercise, not less than 30
days (except that in the case of “termination for Cause ” or removal of a director, the Option shall automatically terminate
as of the termination of employment or services as to shares covered by the Option, following termination of employment or services as
the Board deems reasonable and appropriate. The Option may be exercised only with respect to installments that the Optionee could have
exercised at the date of termination of employment or services. Nothing contained herein or in any Option granted pursuant hereto shall
be construed to affect or restrict in any way the right of the Company to terminate the employment or services of an Optionee with or
without cause.

 

In the event the
terms contained in this Section 5(e) conflict with that of an employment agreement entered between the Company and an Optionee, then the
terms of the employment agreement shall govern.

 

		(f)	Disability of Optionee: If an Optionee is disabled (within the meaning of Section
22(e)(3) of the Code) at the time of termination, the three (3) month period set forth in Section 5(e) shall be a period, as determined
by the Board and set forth in the Option, of not less than six months nor more than one year after such termination.

 

		(g)	Death of Optionee: If an Optionee dies while employed by, engaged as a consultant
to, or serving as a Director of the Company, the portion of such Optionee’s Option which was exercisable at the date of death may be exercised,
in whole or in part, by the estate of the decedent or by a person succeeding to the right to exercise such Option at any time within (i)
a period, as determined by the Board and set forth in the Option, of not less than six (6) months nor more than one (1) year after Optionee’s
death, which period shall not be more, in the case of a Nonstatutory Option, than the period for exercise following termination of employment
or services, or (ii) during the remaining term of the Option, whichever is the lesser. The Option may be so exercised only with respect
to installments exercisable at the time of Optionee’s death and not previously exercised by the Optionee.

 

    5

     

    

 

		(h)	Nontransferability of Option: No Option shall be transferable by the Optionee, except by will or by the laws of descent and
distribution.

 

		(i)	Recapitalization: Subject to any required action of shareholders, the number
of shares of Stock covered by each outstanding Option, and the exercise price per share thereof set forth in each such Option, shall be
proportionately adjusted for any increase or decrease in the number of issued shares of Stock of the Company resulting from a stock split,
stock dividend, combination, subdivision or reclassification of shares, or the payment of a stock dividend, or any other increase or decrease
in the number of such shares affected without receipt of consideration by the Company; provided, however, the conversion of any convertible
securities of the Company shall not be deemed to have been ” effected without receipt of consideration ” by the Company.

 

In the event
of a proposed dissolution or liquidation of the Company, a merger or consolidation in which the Company is not the surviving entity, or
a sale of all or substantially all of the assets or capital stock of the Company (collectively, a “Reorganization”),
unless otherwise provided by the Board, this Option shall terminate immediately prior to such date as is determined by the Board, which
date shall be no later than the consummation of such Reorganization. In such event, if the entity which shall be the surviving entity
does not tender to Optionee an offer, for which it has no obligation to do so, to substitute for any unexercised Option a stock option
or capital stock of such surviving of such surviving entity, as applicable, which on an equitable basis shall provide the Optionee with
substantially the same economic benefit as such unexercised Option, then the Board may grant to such Optionee, in its sole and absolute
discretion and without obligation, the right for a period commencing thirty (30) days prior to and ending immediately prior to the date
determined by the Board pursuant hereto for termination of the Option or during the remaining term of the Option, whichever is the lesser,
to exercise any unexpired Option or Options without regard to the installment provisions of Paragraph 6(d) of the Plan; provided, that
any such right granted shall be granted to all Optionees not receiving an offer to receive substitute options on a consistent basis, and
provided further, that any such exercise shall be subject to the consummation of such Reorganization.

 

Subject to any
required action of shareholders, if the Company shall be the surviving entity in any merger or consolidation, each outstanding Option
thereafter shall pertain to and apply to the securities to which a holder of shares of Stock equal to the shares subject to the Option
would have been entitled by reason of such merger or consolidation.

 

In the event
of a change in the Stock of the Company as presently constituted, which is limited to a change of all of its authorized shares without
par value into the same number of shares with a par value, the shares resulting from any such change shall be deemed to be the Stock within
the meaning of the Plan.

 

To the extent
that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive.

 

Except as expressly
provided in this Section 5(i), the Optionee shall have no rights by reason of any subdivision or consolidation of shares of stock of any
class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, and the number
or price of shares of Stock subject to any Option shall not be affected by, and no adjustment shall be made by reason of, any dissolution,
liquidation, merger, consolidation or sale of assets or capital stock, or any issue by the Company of shares of stock of any class or
securities convertible into shares of stock of any class.

 

    6

     

    

 

The Grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to make any adjustments, reclassifications, reorganizations
or changes in its capital or business structure or to merge, consolidate, dissolve, or liquidate or to sell or transfer all or any part
of its business or assets.

 

		(j)	Rights as a Shareholder: An Optionee shall have no rights as a shareholder with respect to any
shares covered by an Option until the effective date of the issuance of the shares following exercise of such Option by Optionee. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 5(i) hereof.

 

		(k)	Modification, Acceleration, Extension, and Renewal of Options: Subject to the terms and conditions
and within the limitations of the Plan, the Board may modify an Option, or, once an Option is exercisable, accelerate the rate at which
it may be exercised, and may extend or renew outstanding Options granted under the Plan or accept the surrender of outstanding Options
(to the extent not theretofore exercised) and authorize the granting of new Options in substitution for such Options, provided such action
is permissible under Section 422 of the Code and applicable state securities rules. Notwithstanding the provisions of this Section 5(k),
however, no modification of an Option shall, without the consent of the Optionee, alter to the Optionee’s detriment or impair any rights
or obligations under any Option theretofore granted under the Plan.

 

		(l)	Exercise Before Exercise Date: At the discretion of the Board, the Option may, but need not, include
a provision whereby the Optionee may elect to exercise all or any portion of the Option prior to the stated exercise date of the Option
or any installment thereof. Any shares so purchased prior to the stated exercise date shall be subject to repurchase by the Company upon
termination of Optionee’s employment as contemplated by Section 5(n) hereof prior to the exercise date stated in the Option and such other
restrictions and conditions as the Board or Committee may deem advisable.

 

		(m)	Other Provisions: The Option agreements authorized under the Plan shall contain such other
                                                                 provisions, including, without limitation, restrictions upon the exercise of the Options, as the Board or the Committee shall deem
                                                                 advisable. Shares shall not be issued pursuant to the exercise of an Option, if the exercise of such Option or the issuance of
                                                                 shares thereunder would violate, in the opinion of legal counsel for the Company, the provisions of any applicable law or the rules
                                                                 or regulations of any applicable governmental or administrative agency or body, such as the Code, the Securities Act, the Exchange
                                                                 Act, applicable state securities rules, Nevada corporation law, and the rules promulgated under the foregoing or the rules and
                                                                 regulations of any exchange upon which the shares of the Company are listed. Without limiting the generality of the foregoing, the
                                                                 exercise of each Option shall be subject to the condition that if at any time the Company shall determine that (i) the satisfaction
                                                                 of withholding tax or other similar liabilities, or (ii) the listing, registration or qualification of any shares covered by such
                                                                 exercise upon any securities exchange or under any state or federal law, or (iii)
the consent or approval of any regulatory body, or (iv) the perfection of any exemption from any such withholding, listing, registration,
qualification, consent or approval is necessary or desirable in connection with such exercise or the issuance of shares thereunder, then
in any such event, such exercise shall not be effective unless such withholding, listing registration, qualification, consent, approval
or exemption shall have been effected, obtained or perfected free of any conditions not acceptable to the Company.

 

		(n)	Repurchase Agreement: The Board may, in its discretion, require as a condition to the Grant of
an Option hereunder, that an Optionee execute an agreement with the Company, pursuant to forms which shall be approved by the Board of
Directors from time to time (“Repurchase Agreement”), (i) restricting the Optionee’s right to transfer shares purchased
under such Option without first offering such shares to the Company or another shareholder of the Company upon the same terms and conditions
as provided therein; and (ii) providing that upon termination of Optionee’s employment with the Company, for any reason, the Company (or
another shareholder of the Company, as provided in the Repurchase Agreement) shall have the right at its discretion (or the discretion
of such other shareholders) to purchase and/or redeem all such shares owned by the Optionee on the date of termination of his or her employment
at a price equal to: (A) the fair value of such shares as of such date of termination; or (B) if such repurchase right lapses at 20% of
the number of shares per year, the original purchase price of such shares, and upon terms of payment permissible under applicable state
securities rules; provided that in the case of Options or Stock Awards granted to officers, directors, consultants or affiliates of the
Company, such repurchase provisions may be subject to additional or greater restrictions as determined by the Board or Committee.

 

    7

     

    
 

	6.	Stock Awards and Restricted Stock Purchase Offers.

 

		(a)	Types of Grants.

 

		(i)	Stock Award. All or part of any Stock Award under the Plan may be subject to conditions established
by the Board or the Committee, and set forth in the Stock Award Agreement, which may include, but are not limited to, continuous service
with the Company, achievement of specific business objectives, increases in specified indices, attaining growth rates and other comparable
measurements of Company performance. Such Awards may be based on Fair Market Value or other specified valuation. All Stock Awards will
be made pursuant to the execution of a Stock Award Agreement pursuant to forms which shall be approved by the Board of Directors from
time to time.

 

		(ii)	Restricted Stock Purchase Offer. A Grant of a Restricted Stock Purchase Offer under the Plan shall
be subject to such (i) vesting contingencies related to the Participant’s continued association with the Company for a specified time
and (ii) other specified conditions as the Board or Committee shall determine, in their sole discretion, consistent with the provisions
of the Plan. All Restricted Stock Purchase Offers shall be made pursuant to a Restricted Stock Purchase Offer pursuant to forms which
shall be approved by the Board of Directors from time to time.

 

		(b)	Conditions and Restrictions. Shares of Stock which Participants may receive as a Stock Award under
a Stock Award Agreement or Restricted Stock Purchase Offer under a Restricted Stock Purchase Offer may include such restrictions as the
Board or Committee, as applicable, shall determine, including restrictions on transfer, repurchase rights, right of first refusal, and
forfeiture provisions. When transfer of Stock is so restricted or subject to forfeiture provisions it is referred to as “Restricted
Stock”. Further, with Board or Committee approval, Stock Awards or Restricted Stock Purchase Offers may be deferred, either in
the form of installments or a future lump sum distribution. The Board or Committee may permit selected Participants to elect to defer
distributions of Stock Awards or Restricted Stock Purchase Offers in accordance with procedures established by the Board or Committee
to assure that such deferrals comply with applicable requirements of the Code including, at the choice of Participants, the capability
to make further deferrals for distribution after retirement. Any deferred distribution, whether elected by the Participant or specified
by the Stock Award Agreement, Restricted Stock Purchase Offers or by the Board or Committee, may require the payment be forfeited in accordance
with the provisions of Section 6(c). Dividends or dividend equivalent rights may be extended to and made part of any Stock Award or Restricted
Stock Purchase Offers denominated in Stock or units of Stock, subject to such terms, conditions and restrictions as the Board or Committee
may establish.

 

		(c)	Intentionally left blank.

 

		(d)	Nonassignability.

 

		(i)	Except pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii), no Grant or any other benefit under the Plan shall
be assignable or transferable, or payable to or exercisable by, anyone other than the Participant to whom it was granted.

 

		(ii)	Where a Participant terminates employment and retains a Grant pursuant to Section 6(e)(ii) in order to
assume a position with a governmental, charitable or educational institution, the Board or Committee, in its discretion and to the extent
permitted by law, may authorize a third party (including but not limited to the trustee of a “blind” trust), acceptable to the
applicable governmental or institutional authorities, the Participant and the Board or Committee, to act on behalf of the Participant
with regard to such Awards.

 

    8

     

    

 

		(e)	Termination of Employment. If the employment or service to the Company of a Participant terminates,
other than pursuant to any of the following provisions under this Section 6(e), all unexercised, deferred and unpaid Stock Awards or Restricted
Stock Purchase Offers shall be cancelled immediately, unless the Stock Award Agreement or Restricted Stock Purchase Offer provides otherwise:

 

		(i)	Retirement Under a Company Retirement Plan. When a Participant’s employment terminates as a result
of retirement in accordance with the terms of a Company retirement plan, the Board or Committee may permit Stock Awards or Restricted
Stock Purchase Offers to continue in effect beyond the date of retirement in accordance with the applicable Grant Agreement and the exercisability
and vesting of any such Grants may be accelerated.

 

		(ii)	Rights in the Best Interests of the Company. When a Participant resigns from the Company and, in
the judgment of the Board or Committee, the acceleration and/or continuation of outstanding Stock Awards or Restricted Stock Purchase
Offers would be in the best interests of the Company, the Board or Committee may (i) authorize, where appropriate, the acceleration and/or
continuation of all or any part of Grants issued prior to such termination and (ii) permit the exercise, vesting and payment of such Grants
for such period as may be set forth in the applicable Grant Agreement, subject to earlier cancellation pursuant to Section 9 or at such
time as the Board or Committee shall deem the continuation of all or any part of the Participant’s Grants are not in the Company’s best
interest.

 

		(iii)	Death or Disability of a Participant.

 

		(1)	In the event of a Participant’s death, the Participant’s estate or beneficiaries shall have a period up
to the expiration date specified in the Grant Agreement within which to receive or exercise any outstanding Grant held by the Participant
under such terms as may be specified in the applicable Grant Agreement. Rights to any such outstanding Grants shall pass by will or the
laws of descent and distribution in the following order: (a) to beneficiaries so designated by the Participant; if none, then (b) to a
legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction.
Grants so passing shall be made at such times and in such manner as if the Participant were living.

 

		(2)	In the event a Participant is deemed by the Board or Committee to be unable to perform his or her usual
duties by reason of mental disorder or medical condition which does not result from facts which would be grounds for termination for cause,
Grants and rights to any such Grants may be paid to or exercised by the Participant, if legally competent, or a committee or other legally
designated guardian or representative if the Participant is legally incompetent by virtue of such disability.

 

		(3)	After the death or disability of a Participant, the Board or Committee may in its sole discretion at any
time (1) terminate restrictions in Grant Agreements; (2) accelerate any or all installments and rights; and (3) instruct the Company to
pay the total of any accelerated payments in a lump sum to the Participant, the Participant’s estate, beneficiaries or representative;
notwithstanding that, in the absence of such termination of restrictions or acceleration of payments, any or all of the payments due under
the Grant might ultimately have become payable to other beneficiaries.

 

		(4)	In the event of uncertainty as to interpretation of or controversies concerning this Section 6, the determinations of the Board or
Committee, as applicable, shall be binding and conclusive.

 

	7.	Investment Intent. All Grants under the Plan are intended to be exempt from registration under the Securities
Act provided by Rule 701 thereunder. Unless and until the granting of Options or sale and issuance of Stock subject to the Plan are registered
under the Securities Act or shall be exempt pursuant to the rules promulgated thereunder, each Grant under the Plan shall provide that
the purchases or other acquisitions of Stock thereunder shall be for investment purposes and not with a view to, or for resale in connection
with, any distribution thereof. Further, unless the issuance and sale of the Stock have been registered under the Securities Act, each
Grant shall provide that no shares shall be purchased upon the exercise of the rights under such Grant unless and until (i) all then applicable
requirements of state and federal laws and regulatory agencies shall have been fully complied with to the satisfaction of the Company
and its counsel, and (ii) if requested to do so by the Company, the person exercising the rights under the Grant shall (i) give written
assurances as to knowledge and experience of such person (or a representative employed by such person) in financial and business matters
and the ability of such person (or representative) to evaluate the merits and risks of exercising the Option, and (ii) execute and deliver
to the Company a letter of investment intent and/or such other form related to applicable exemptions from registration, all in such form
and substance as the Company may require. If shares are issued upon exercise of any rights under a Grant without registration under the
Securities Act, subsequent registration of such shares shall relieve the purchaser thereof of any investment restrictions or representations
made upon the exercise of such rights.

 

    9

     

    

 

	8.	Amendment, Modification, Suspension or Discontinuance of the Plan. The Board may,
insofar as permitted by law, from time to time, with respect to any shares at the time not subject to outstanding Grants, suspend or terminate
the Plan or revise or amend it in any respect whatsoever, except that without the approval of the shareholders of the Company, no such
revision or amendment shall (i) increase the number of shares subject to the Plan, (ii) decrease the price at which Grants may be granted,
(iii) materially increase the benefits to Participants, or (iv) change the class of persons eligible to receive Grants under the Plan;
provided, however, no such action shall alter or impair the rights and obligations under any Option, or Stock Award, or Restricted Stock
Purchase Offer outstanding as of the date thereof without the written consent of the Participant thereunder. No Grant may be issued while
the Plan is suspended or after it is terminated, but the rights and obligations under any Grant issued while the Plan is in effect shall
not be impaired by suspension or termination of the Plan.

 

In the event of any change in the outstanding
Stock by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization, merger, or similar event,
the Board or the Committee may adjust proportionally (a) the number of shares of Stock (i) reserved under the Plan, (ii) available for
Incentive Stock Options and Nonstatutory Options and (iii) covered by outstanding Stock Awards or Restricted Stock Purchase Offers; (b)
the Stock prices related to outstanding Grants; and (c) the appropriate Fair Market Value and other price determinations for such Grants.
In the event of any other change affecting the Stock or any distribution (other than normal cash dividends) to holders of Stock, such
adjustments as may be deemed equitable by the Board or the Committee, including adjustments to avoid fractional shares, shall be made
to give proper effect to such event. In the event of a corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board or the Committee shall be authorized to issue or assume stock options, whether or not in a transaction
to which Section 424(a) of the Code applies, and other Grants by means of substitution of new Grant Agreements for previously issued Grants
or an assumption of previously issued Grants.

 

	9.	Tax Withholding. The Company shall have the right to deduct applicable taxes from
any Grant payment and withhold, at the time of delivery or exercise of Options, Stock Awards or Restricted Stock Purchase Offers or vesting
of shares under such Grants, an appropriate number of shares for payment of taxes required by law or to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. If Stock is used to satisfy tax withholding,
such stock shall be valued based on the Fair Market Value when the tax withholding is required to be made.

 

	10.	Intentionally Left Blank.

 

	11.	Notice. Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the chief financial officer or to the chief executive officer of the Company, and shall become effective when
it is received by the office of the chief personnel officer or the chief executive officer.

 

	12.	Indemnification of Board. In addition to such other rights or indemnifications as
they may have as directors or otherwise, and to the extent allowed by applicable law, the members of the Board and the Committee shall
be indemnified by the Company against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection
with the defense of any claim, action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may
be a party by reason of any action taken, or failure to act, under or in connection with the Plan or any Grant granted thereunder, and
against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such claim, action, suit or proceeding, except in any case in relation
to matters as to which it shall be adjudged in such claim, action, suit or proceeding that such Board or Committee member is liable for
negligence or misconduct in the performance of his or her duties; provided that within sixty (60) days after institution of any such action,
suit or Board proceeding the member involved shall offer the Company, in writing, the opportunity, at its own expense, to handle and defend
the same.

 

	13.	Governing Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not
otherwise governed by the Code or the securities laws of the United States, shall be governed by the law of the State of Nevada and construed
accordingly.

 

	14.	Effective and Termination Dates. The Plan shall become effective on the date it is approved by the holders
of a majority of the shares of Stock then outstanding. The Plan shall terminate ten years later, subject to earlier termination by the
Board pursuant to Section 8.

 

 

10

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