Document:

Exhibit

CANADA GOOSE HOLDINGS INC. 
EMPLOYEE SHARE PURCHASE PLAN
1.Purpose
This Plan is intended to provide employees of the Corporation and other Participating Entities with an opportunity to acquire a proprietary interest in the Corporation through the purchase of Subordinate Voting Shares. The Corporation, by means of this Plan, seeks to retain the services of such eligible employees, to secure and retain the services of new employees and to provide incentives for such persons to exert maximum effort for the success of the Corporation.
2.Definitions
“Administrative Agent” means the financial services firm or other agent designated by the Corporation to maintain ESPP Accounts on behalf of Participants who have purchased Subordinate Voting Shares under the Plan;
“Affiliate” has the meaning attributed thereto in National Instrument 45-106 – Prospectus Exemptions;
“Blackout Period” means a period of time when, pursuant to any policies of the Corporation (including the Corporation’s insider trading policy), any securities of the Corporation may not be traded by certain persons designated by the Corporation;
“Board” means the board of directors of the Corporation;
“Business Day” means a day other than a Saturday, Sunday or statutory holiday, when banks are generally open for business in Toronto, Ontario and New York, New York, for the transaction of banking business;
“Compensation” means the base salary or base hourly wages for non-overtime work paid to an Eligible Employee by a Participating Entity as compensation for services to a Participating Entity, before deduction for any contributions made by the Eligible Employee to any tax-qualified or nonqualified deferred compensation plan or contributions for any health or welfare benefit programs;
“Corporate Transaction” means a sale or conveyance of all or substantially all of the property and assets of the Corporation or any merger, consolidation, amalgamation, combination, plan of arrangement or offer to acquire all of the outstanding Subordinate Voting Shares or other similar transaction;
“Corporation” means Canada Goose Holdings Inc. and its respective successors and assigns, and any reference in the Plan to action by the Corporation means action by or under the authority of the Board or any person or committee that has been designated for the purpose by the Board;
“Eligible Employee” means an Employee who is customarily employed for at least twenty-five (25) hours per week and more than five (5) months in any calendar year. Notwithstanding the foregoing, the Board may exclude from participation in the Plan or in any Offering Period Employees who are participating in another equity-based incentive program, Employees who have been employed by any 

Participating Entity for less than six (6) months, “officers” of any Participating Entity and Employees whose principal duties consist of supervising the work of other Employees. The Board may from time to time establish different eligibility standards for Employees;
“Employee” means any person who renders services to a Participating Entity as an employee pursuant to an employment relationship with such employer. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on military leave, sick leave or other leave of absence approved by a Participating Entity. Where the period of leave exceeds three (3) months, and the individual’s right to re-employment is not guaranteed by statute or contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three-month period;
“Enrollment Form” means an agreement pursuant to which an Eligible Employee may elect to enroll in the Plan, to authorize a new level of payroll deductions, or to stop payroll deductions and withdraw from an Offering Period;
“ESPP Account” means an account into which Subordinate Voting Shares purchased with the accumulated Participant’s Contribution and the applicable Employer Contribution at the end of an Offering Period are held on behalf of a Participant;
“Fair Market Value” means, as of any date, (i) the closing price of the Subordinate Voting Shares on the TSX, in relation to Participants whose Compensation is paid in Canadian dollars, (ii) the closing price of the Subordinate Voting Shares on the NYSE, in relation to Participants whose Compensation is paid in U.S. dollars or any other foreign currency, or (iii) if the Subordinate Voting Shares are not listed on such stock exchanges, the value as is determined solely by the Board, acting in good faith;
“Multiple Voting Share” means a multiple voting share in the capital of the Corporation; “NYSE” means the New York Stock Exchange;
“Offering Date” means the first Trading Day of each Offering Period as designated by the Board;
“Offering Period” means the period of time Participants’ Contributions are accumulated for the purchase of Subordinate Voting Shares under this Plan on the Purchase Date. Pursuant to Section 9, the Board may change the duration of future Offering Periods and/or the start and end dates of future Offering Periods;
“Participant” means an Eligible Employee who is actively participating in the Plan;
“Participating Entity” means the Corporation and any Affiliate of the Corporation which is designated by the Board from time to time in its sole discretion;
“Plan” means this Canada Goose Holdings Inc. Employee Share Purchase Plan, as set forth herein, and as amended from time to time;
“Purchase Date” means the last Trading Day of each Offering Period;
“Share Compensation Arrangement” means any stock option, stock option plan, employee stock purchase plan or any other compensation or incentive mechanism of the Corporation involving the issuance or potential issuance of Subordinate Voting Shares, including a share purchase from treasury 

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which is financially assisted by the Corporation by way of a loan, guarantee or otherwise, including this Plan;
“Stock Exchange” means the TSX or the NYSE or, if the Subordinate Voting Shares are not listed or posted for trading on any of such stock exchanges at a particular date, any other stock exchange on which the majority of the trading volume and value of the Subordinate Voting Shares are listed or posted for trading;
“Subordinate Voting Share” means a subordinate voting share in the capital of the Corporation;
“Tax Act” means the Income Tax Act (Canada) and its regulations thereunder, as amended from time to time;
“Termination Date” means the earlier of: (i) the date specified in the written notice of termination or resignation of a Participant; and (ii) the last day worked by the Participant, provided such date shall not be prior to the last day of any minimum statutory notice period, if applicable;
“Trading Day” means any day on which each of the TSX and NYSE is open for trading;
“Treasury Regulations” means the tax regulations promulgated by the United States Internal Revenue Service under the United States Internal Revenue Code of 1986, as amended; and
“TSX” means the Toronto Stock Exchange.
3. Interpretation
		
	3.1
	Whenever the Board is to exercise discretion or authority in the administration of the terms and conditions of this Plan, the term “discretion” or “authority” means the sole and absolute discretion of the Board.

		
	3.2
	The division of this Plan into Articles, Sections and other subdivisions and the insertion of headings are for convenient reference only and do not affect the interpretation of this Plan. As used herein, the expressions “Article”, “Section” and other subdivision followed by a number, mean and refer to the specified Article, Section or other subdivision of this Plan, respectively.

		
	3.3
	In this Plan, words importing the singular shall include the plural, and vice versa and words importing any gender include any other gender.

		
	3.4
	The words “including”, “includes” and “include” and any derivatives of such words mean “including (or includes or include) without limitation”.

		
	3.5
	Unless otherwise specified, all references to money amounts are to Canadian currency.

		
	3.6
	For purposes of this Plan, the legal representatives of a Participant shall only include the administrator, the executor or the liquidator of the Participant’s estate or will.

		
	3.7
	If any action may be taken within, or any right or obligation is to expire at the end of, a period of days under this Plan, then the first day of the period is not counted, but the day of its expiry is counted.

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4. Administration
		
	4.1
	This Plan will be administered by the Board and the Board has complete authority, in its discretion, to interpret the provisions of this Plan. Nothing contained herein shall prevent the Board from adopting other or additional Share Compensation Arrangements or other compensation arrangements, subject to any required approval. In administering and interpreting the Plan, the Board may adopt, amend and rescind administrative guidelines and other rules and regulations relating to this Plan and make all other determinations and take all other actions necessary or advisable for the implementation and administration of this Plan, including adopting sub-plans applicable to particular Participating Entities or locations, which the Board determines, in its discretion, are necessary or advisable. The Board’s determinations and actions within its authority under this Plan are final, conclusive and binding on the Corporation, its Affiliates and all other persons, including all Participants, Eligible Employees and their respective legal representatives and beneficiaries.

		
	4.2
	The Corporation shall pay all expenses incurred in the administration of the Plan except for brokerage fees or expenses associated with the sale or transfer of Subordinate Voting Shares by a Participant, which fees and expenses shall be borne by such Participant.

		
	4.3
	In any case where the strict application of any provision of the Plan may cause hardship to a Participant, the Board may in its sole discretion waive or partially waive such strict application, on such terms as it deems appropriate, provided that such a waiver shall not constitute a general waiver of such provision.

5.Delegation to Committee
To the extent permitted by applicable law, the Board may, from time to time, delegate to any committee of the Board or to an officer or officers of the Corporation all or any of the powers conferred on the Board under the Plan. In such event, references to the Board mean and include such committee or such officer or officers and such committee or each such officer will exercise the powers delegated to it by the Board in the manner and on the terms authorized by the Board. Any decisions made or actions taken by such committee or by any such officer or officers arising out of or in connection with the administration or interpretation of this Plan within its authority under this Plan, are final, conclusive and binding on the Participating Entities and all other persons, including all Participants, Eligible Employees and their respective personal representatives and beneficiaries. Any such delegation by the Board may be revoked at any time by the Board at its sole discretion.
6.Liability
No member of the Board or any person acting pursuant to authority delegated by the Board hereunder shall be liable for any action or determination in connection with the Plan made or taken in good faith, and each member of the Board and each such person shall be entitled to indemnification by the Corporation with respect to any such action or determination. For greater clarity, this indemnification is in addition to any rights of indemnification a member of the Board may have as director of the Corporation or otherwise.

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7.Allotment or Issuance of Shares
The Plan shall not in any way fetter, limit, obligate, restrict or constrain the Board with regard to the allotment or issuance of any Subordinate Voting Shares or any other securities of the Corporation (including Multiple Voting Shares) other than as specifically provided for in the Plan.
8.Eligibility
Unless otherwise determined by the Board in a manner that is consistent with this Plan, any individual who is an Eligible Employee as of the first day of the enrollment period designated by the Board for a particular Offering Period shall be eligible to participate in such Offering Period.
9.Offering Periods.
The Plan shall be implemented by a series of Offering Periods. The initial Offering Period shall be as determined by the Board. Thereafter, each Offering Period shall be three (3) months in duration, with new Offering Periods commencing on June 30, September 30, December 31 and March 31 of each year (or such other times as determined by the Board). The Board shall have the authority to change the duration, frequency, start and end dates of Offering Periods.
		
	10.
	Assets of the Plan

The Participants’ Contributions and the Employer Contribution, if any, shall be remitted to the Administrative Agent as soon as may be required by the Administrative Agent prior to the Purchase Date. Such contributions, all Subordinate Voting Shares purchased with such contributions, such portion of the cash from the contributions which could not be used to purchase Subordinate Voting Shares, together with all income therefrom from the date of receipt by the Administrative Agent, shall constitute the assets of the Plan and shall be held, invested, managed, administered and dealt with by the Administrative Agent pursuant to the terms of the Plan.
11.Allocation to Participants
The Administrative Agent shall maintain a separate ESPP Account for each Participant and shall credit to the ESPP Account of a Participant, in addition to the Subordinate Voting Shares purchased under this Plan, the applicable Employer Contribution made with respect to such Participant as well as such Participant’s Contribution, and such portion of the cash from the contributions which could not be used to purchase Subordinate Voting Shares. The Administrative Agent shall allocate to each Participant all income received, capital gains realized and capital losses sustained on such Participant’s ESPP Account at such time or times as the Administrative Agent may determine but in any event, within ninety (90) days after the end of the Offering Period in which they are received, realized or sustained.

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	12.
	Participation

		
	12.1
	Enrollment; Payroll Deductions 

		
	(a)
	Participation. An Eligible Employee may elect to participate in the Plan in an Offering Period by properly completing and submitting to the Corporation an Enrollment Form not later than 5 Business Days following the first day of such Offering Period. Such Enrollment Form shall be submitted in accordance with the enrollment procedures established by the Board from time to time in its sole discretion.

		
	(b)
	No Effect on Employment. Participation in the Plan is entirely voluntary and any decision not to participate in an Offering Period shall not affect an Employee’s employment with any Participating Entity. Notwithstanding any express or implied term of this Plan to the contrary, the participation of an Eligible Employee in an Offering Period shall in no way be construed as a guarantee of employment by any Participating Entity, and shall not impose upon such Participating Entity any obligation to retain the Participant in its employ in any capacity. Nothing contained in this Plan shall interfere in any way with the rights of the relevant Participating Entity in connection with the employment, retention or termination of any such Participant. The loss of existing or potential profit in Subordinate Voting Shares granted under this Plan shall not constitute an element of damages in the event of termination of a Participant’s employment or service in any office or otherwise.

		
	(c)
	Deduction. By submitting an Enrollment Form, the Eligible Employee authorizes payroll deductions from his or her Compensation in an amount equal to at least one percent (1%), but not more than ten percent (10%) of his or her Compensation on a gross basis on each pay day occurring during an Offering Period (or such other maximum percentage as the Board may establish from time to time before an Offering Period begins); provided, however, that in no event shall a Participant’s payroll deductions in any calendar year exceed $15,000 (or such lower amount as determined from time to time by the Board) (the “Participant’s Contribution”). The Participant’s Contribution shall commence on the first payroll date following the Offering Date and end on the last payroll date on or before the Purchase Date. The Corporation shall maintain records of all Participant’s Contributions but shall have no obligation to pay interest on Participant’s Contributions or to hold such amounts in a trust or in any segregated account. Unless expressly permitted by the Board, a Participant may not make any separate contributions or payments to the Plan and/or any retroactive contribution to the Plan.

		
	12.2
	Currency Exchange Rates. In the case of Participants whose salary is paid in a currency other than Canadian or U.S. dollars, the necessary conversions to Canadian or U.S. dollars, as applicable for the purpose of any acquisition or sale of Subordinate Voting Shares in connection with the Plan shall be made at the end of the Offering Period on the basis of the exchange rates obtained by the relevant Participating Entities or the Administrative Agent at the time of each conversion.

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	12.3
	Employer Contributions. With the approval of the Board, a Participating Entity may provide a Participant with cash contributions to purchase Subordinate Voting Shares (the “Employer Contribution”). Such Employer Contribution shall be combined with the Participant’s Contributions and shall be used to purchase Subordinate Voting Shares on the Purchase Date. Such Employer Contribution shall not exceed 50% of the Participant’s Contribution during each Offering Period.

		
	12.4
	Election Changes. A Participant may decrease or increase his or her rate of Participant’s Contribution for any current Offering Period by submitting a new Enrollment Form authorizing the new rate of Participant’s Contribution not later than five (5) Business Days following the first day of such Offering Period (or within such other timeframe as determined from time to time by the Board), provided that such a modification may be made only once during an Offering Period. Any change made after such time will not become effective until the next Offering Period. Notwithstanding the foregoing, to the extent necessary to comply with any applicable limits on the amount of Participant’s Contribution, a Participant’s rate of Participant’s Contribution may be decreased by the Corporation to as low as 0% at any time during an Offering Period.

		
	12.5
	Automatic Re-enrollment. The deduction rate selected in the Enrollment Form shall remain in effect for subsequent Offering Periods unless the Participant (i) submits a new Enrollment Form authorizing a new level of Participant’s Contribution in accordance with Section 12.4, (ii) withdraws from the Plan in accordance with Section 15, or (iii) terminates employment or otherwise becomes ineligible to participate in the Plan.

		
	12.6
	Blackout Periods. Notwithstanding any other provision of the Plan, if a Blackout Period is in effect, (i) an Eligible Employee subject to the Blackout Period may not enroll until after the end of the Blackout Period, and (ii) a Participant subject to the Blackout Period may not make changes to authorized Participant’s Contribution, or voluntarily withdraw from the Plan until after the end of the Blackout Period.

13.Grant of Right.
On each Offering Date, each Participant in the applicable Offering Period shall be granted a right to purchase, on the Purchase Date, a number of Subordinate Voting Shares determined by dividing the accumulated Participant’s Contribution and any applicable Employer Contribution during the Offering Period by the applicable Fair Market Value.
14.Exercise of Right/Purchase of Shares.
		
	14.1
	A Participant’s right to purchase Subordinate Voting Shares will be exercised automatically on the Purchase Date of each Offering Period. The Participant’s Contribution and any applicable Employer Contribution during the Offering Period will be used to purchase, at their Fair Market Value, the maximum number of whole Subordinate Voting Shares that can be purchased with the amounts in the Participant’s notional account. No fractional Subordinate Voting Shares may be purchased. However, the Participant’s ESPP Account will be credited 

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with notional fractional Subordinate Voting Shares which will be aggregated with other notional fractional Subordinate Voting Shares credited from other Purchase Dates and any resulting whole Subordinate Voting Shares from such aggregation will be delivered to the Participant, subject to earlier withdrawal by the Participant in accordance with Section 15 or termination of employment in accordance with Section 16.
		
	14.2
	If prior to a Purchase Date the Corporation determines that all or a portion of the Subordinate Voting Shares to which a Participant is entitled shall be issued from treasury, then:

		
	(a)
	the Corporation shall in writing advise the Corporation’s registrar and transfer agent and the Administrative Agent of such determination and the price therefor, showing the number of Subordinate Voting Shares that shall be issued to such Participant;

		
	(b)
	the Administrative Agent shall forward from such Participant’s ESPP Account to the Corporation on or before the Purchase Date, a cash amount equal to the applicable purchase price including any fees, and, subject to Section 12.2, the Corporation shall issue to such Participant from treasury the applicable number of Subordinate Voting Shares as determined by dividing the aggregate cash amount so transferred from the Participant’s ESPP Account by the Fair Market Value; and

		
	(c)
	such Subordinate Voting Shares shall be issued as fully paid and non-assessable Subordinate Voting Shares in the capital of the Corporation.

		
	14.3
	The Administrative Agent shall allocate all Subordinate Voting Shares issued or purchased on behalf of a Participant to such Participant’s ESPP Account, immediately following the Purchase Date, pending distribution to such Participant. All Subordinate Voting Shares so allocated to the Participant’s ESPP Account shall be registered in the name of the Administrative Agent or its nominee or held in book-entry form for the benefit of the Participant. The Participant for whose account such Subordinate Voting Shares are held by the Administrative Agent shall be entitled to all rights of ownership incidental thereto, including the right to receive dividends and other distributions payable in respect of the Subordinate Voting Shares and to receive notice of, attend and vote at meetings of shareholders of the Corporation.

		
	14.4
	Any dividend or other income or distribution received on the Subordinate Voting Shares paid with respect to the Subordinate Voting Shares held in an ESPP Account, if any, shall be automatically reinvested in Subordinate Voting Shares from time to time in accordance with the provisions of this Plan. The Board shall have the right at any time or from time to time upon notice to Participants to change the default dividend reinvestment policy.

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15. Withdrawal
		
	15.1
	Withdrawal Procedure. A Participant may withdraw from an Offering Period by submitting to the Corporation a revised Enrollment Form indicating his or her election to withdraw at least thirty (30) Business Days (or within such other timeframe as determined from time to time by the Board) before the Purchase Date. The accumulated Participant’s Contribution (that has not been used to purchase Subordinate Voting Shares) shall be paid or delivered, as applicable, to the Participant promptly following receipt of the Participant’s Enrollment Form indicating his or her election to withdraw and the Participant’s rights under this Plan shall be automatically terminated. If a Participant withdraws from an Offering Period, no additional Participant’s Contribution will be made during any succeeding Offering Period, unless the Participant re-enrolls in accordance with Section 12.1 of the Plan.

		
	15.2
	Effect on Succeeding Offering Periods. A Participant’s election to withdraw from an Offering Period will not have any effect upon his or her eligibility to participate in succeeding Offering Periods that commence following the completion of the Offering Period from which the Participant withdraws.

16. Termination of Employment; Change in Employment Status
		
	16.1
	Upon termination of a Participant’s employment with a Participating Entity for any reason, including death, disability, resignation or retirement, or a change in the Participant’s employment status following which the Participant is no longer an Eligible Employee, which in any case occurs at least five (5) Business Days before the Purchase Date, the Participant will be deemed to have withdrawn from the Plan as of the Termination Date and the Participant’s Contribution (that has not been used to purchase Subordinate Voting Shares) shall be returned to the Participant, or in the case of the Participant’s death, to the person(s) entitled to such amounts under Section 24, and the Participant’s 16.2 rights under this Plan shall be automatically terminated as of the Termination Date. If the Participant’s Termination Date occurs within five (5) Business Days before a Purchase Date, the accumulated Participant’s Contribution and any applicable Employer Contribution shall be used to purchase Subordinate Voting Shares on the Purchase Date.

		
	16.2
	A Participant whose participation in the Plan has terminated as provided in Section 16.1 or his or her executors or administrators, as the case may be, may elect to deal with the Subordinate Voting Shares in such Participant’s ESPP Account by completing a notice in the form prescribed by the Corporation and filing it with the Administrative Agent within ninety (90) days after termination of the Participant’s participation in the Plan requesting that:

		
	(a)
	share certificates for all of the whole Subordinate Voting Shares in the Participant’s ESPP Account be issued in his or her name or as directed, in which case the Administrative Agent shall make the necessary arrangements for the issuance and delivery of the appropriate certificates representing the Subordinate Voting Shares as soon as practicable following receipt of any such notice, and the Participant or his or her executors or administrators, as the case may be, will be responsible for paying any 

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applicable fees in connection therewith (by deduction from their personal account prior to issuance of the share certificates); or
		
	(b)
	all of the Subordinate Voting Shares in the Participant’s ESPP Account be sold and the proceeds distributed to him or her or as directed, in which case the Administrative Agent shall sell all such Subordinate Voting Shares as directed and forward the proceeds (net of any brokerage commissions and sales administration fees) to such Participant or as otherwise directed, or to his or her executors or administrators, as the case may be, as soon as practicable following receipt of any such notice.

		
	16.3
	If no notice is filed pursuant to Section 16.2 within ninety (90) days after the termination of a Participant’s participation in the Plan, the Participant or his or her executors or administrators, as the case may be, shall be deemed to have elected to request that the whole Subordinate Voting Shares in the Participant’s ESPP Account be sold and the proceeds distributed to him or her or as directed, in which case the Administrative Agent shall sell all such Subordinate Voting Shares as directed and forward proceeds (net of any brokerage commissions and sales administration fees) to such Participant or as otherwise directed, or his to or her executors or administrators, as the case may be, as soon as practicable following the end of such period.

		
	16.4
	The Participant or his or her executors or administrators, as the case may be, shall be responsible for ensuring compliance with the provisions of applicable securities laws and applicable tax laws in respect of the tax consequences resulting from any transfer or sale or Subordinate Voting Shares pursuant to Section 16.

		
	16.5
	In all instances contemplated by this Section 16, the Participant shall receive the cash equivalent of any fractional Subordinate Voting Share credited to his or her ESPP Account.

17.Termination for Inactivity
Where a Participant has not made a Participant’s Contribution in the previous twenty-four (24) months, the Corporation may direct the Administrative Agent to terminate that Participant’s participation in the Plan.
18.Leave of Absence
If a Participant ceases to be an Eligible Employee as a result of an approved leave of absence, the Participant’s participation in the Plan shall continue, and accordingly, the Participant shall remit payment for the purchase of Subordinate Voting Shares as contemplated in Section 12.1, unless such Participant has updated his or her Participant’s Contribution by completing and delivering to the Corporation a new Enrollment Form in accordance with Section 12.4, stating that he or she wishes that his or her Participant’s Contribution to the Plan be suspended during the period of such absence, in which case such suspension shall apply until the Participant returns to active status and the Participant shall remain eligible for any applicable Employer Contribution earned prior to such suspension.

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19.Shares Reserved for Plan
		
	19.1
	Number of Shares. A total of 500,000 Subordinate Voting Shares have been reserved as authorized for issuance under the Plan. The Subordinate Voting Shares purchased under the Plan may be Subordinate Voting Shares issued from treasury or Subordinate Voting Shares acquired on the open market. Subordinate Voting Shares purchased on the open market will be deemed to have been issued pursuant to the plan for the purpose of the share reserve set forth in this Section 19.1.

		
	19.2
	Over-Subscribed Offerings. The number of Subordinate Voting Shares which a Participant may purchase during an Offering Period may be reduced if the offering is over-subscribed. No right granted under the Plan shall permit a Participant to purchase Subordinate Voting Shares which, if added together with the total number of Subordinate Voting Shares purchased by all other Participants in such offering would exceed the total number of Subordinate Voting Shares remaining available under the Plan. If the Board determines that, on a particular Purchase Date, the number of Subordinate Voting Shares with respect to which rights are to be exercised exceeds the number of Subordinate Voting Shares then available under the Plan, the Corporation shall make a pro rata allocation of the Subordinate Voting Shares remaining available for purchase in as uniform a manner as practicable and as the Board determines to be equitable.

20. Participation Limits
		
	20.1
	The grant of rights under the Plan is subject to the following limitations:

		
	(a)
	No more than 10% of the Corporation’s outstanding Subordinate Voting Shares and Multiple Voting Shares (calculated on a non-diluted basis) may be issued under the Plan or pursuant to any other Share Compensation Arrangements of the Corporation in any one (1) year period.

		
	(b)
	No more than 5% of the Corporation’s outstanding Subordinate Voting Shares and Multiple Voting Shares (calculated on a non-diluted basis) may be issued under the Plan or pursuant to any other Share Compensation Arrangements of the Corporation to any one Participant.

21. Transferability
		
	21.1
	No Participant’s Contribution credited to a Participant, nor any rights to receive Subordinate Voting Shares hereunder may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 24 hereof) by the Participant. Any attempt to assign, transfer, pledge or otherwise dispose of such rights or amounts shall be without effect.

		
	21.2
	All of the Subordinate Voting Shares purchased by the Administrative Agent on behalf of a Participant pursuant to the provisions hereof shall be subject to a one-year contractual hold 

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from the date such Subordinate Voting Shares are acquired by the Administrative Agent on behalf of the Participant.
22. Application of Funds
All Participant’s Contributions received or held by the Corporation under the Plan may be used by the Corporation for any corporate purpose to the extent permitted by applicable law, and the Corporation shall not be required to segregate such Participant’s Contribution or Employer Contribution.

23.Statements
A statement of account shall be issued by the Administrative Agent to each Participant as soon as is practical following the end of each Offering Period. The statement of account shall indicate for the relevant Offering Period the number of Subordinate Voting Shares allocated to the Participant’s ESPP Account (including all whole and fractional shares), the number of Subordinate Voting Shares withdrawn from the ESPP Account, all cash dividends received in respect of the Subordinate Voting Shares held on the Participant’s ESPP Account, if any, and the amount of any lump sum Participant’s Contribution received by the Administrative Agent.
24.Designation of Beneficiary
A Participant may file, on forms supplied by the Board, a written designation of beneficiary who is to receive any Subordinate Voting Shares and cash in respect of any fractional Subordinate Voting Shares, if any, from the Participant’s ESPP Account under the Plan in the event of such Participant’s death. In addition, a Participant may file a written designation of beneficiary who is to receive any cash withheld through Participant’s Contributions in the event of the Participant’s death prior to the Purchase Date of an Offering Period.
25.Adjustments Upon Changes in Capitalization: Dissolution or Liquidation; Corporate Transactions
		
	25.1
	Adjustments. In the event that any special dividend or other special distribution (whether in the form of cash, securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares, or other change in the Corporation’s structure affecting the Subordinate Voting Shares occurs, then in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Board shall conclusively determine the appropriate equitable adjustments, if any, to be made under the Plan, including adjustments to the number of Subordinate Voting Shares which have been authorized for issuance under the Plan.

		
	25.2
	Dissolution or Liquidation. Unless otherwise determined by the Board, in the event of a proposed dissolution or liquidation of the Corporation, any Offering Period then in progress will be shortened by setting a new Purchase Date and the Offering Period will end 

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immediately prior to the proposed dissolution or liquidation. The new Purchase Date will be before the date of the Corporation’s proposed dissolution or liquidation. Before the new Purchase Date, the Board will provide each Participant with written notice, which may be electronic, of the new Purchase Date and that the Participant’s right will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering Period in accordance with Section 15.
		
	25.3
	Corporate Transaction. In the event of a Corporate Transaction, each outstanding right will be assumed or an equivalent right substituted by the successor corporation or a parent or subsidiary of such successor corporation. If the successor corporation refuses to assume or substitute the right, the Offering Period with respect to which the right relates will be shortened by setting a new Purchase Date on which the Offering Period will end. The new Purchase Date will occur before the date of the Corporate Transaction. Prior to the new Purchase Date, the Board will provide each Participant with written notice, which may be electronic, of the new Purchase Date and that the Participant’s right will be exercised automatically on such date, unless before such time, the Participant has withdrawn from the Offering Period in accordance with Section 15.

26. General Provisions
		
	26.1
	Rights As Shareholder. A Participant will become a shareholder with respect to the Subordinate Voting Shares that are purchased pursuant to rights granted under the Plan when the Subordinate Voting Shares are transferred to such Participant’s ESPP Account. A Participant will have no rights as a shareholder with respect to Subordinate Voting Shares for which an election to participate in an Offering Period has been made until such Participant becomes a shareholder as provided above.

		
	26.2
	Successors and Assigns. The Plan shall be binding on the Corporation and its successors and assigns. Rights and obligations under this Plan may be assigned by the Corporation to a successor in the business of the Corporation, any corporation resulting from any amalgamation, reorganization combination, merger or arrangement of the Corporation, or any corporation acquiring all or substantially all of the assets or business of the Corporation.

		
	26.3
	Rights of Corporation. The provisions contained in this Plan and any rights available hereunder shall not affect in any way the right of the Corporation or its shareholders or Affiliates to take any action, including any change in the Corporation’s capital structure or its business, or any acquisition, disposition, amalgamation, combination, merger or consolidation, or the creation or issuance of any bonds, debentures, shares or other securities of the Corporation or of an Affiliate thereof or the determination of the rights and conditions attaching thereto, or the dissolution or liquidation of the Corporation or of any of its Affiliates or any sale or transfer of all or any part of their respective assets or businesses, whether or not any such corporate action or proceeding would have an adverse effect on this Plan or any rights hereunder.

		
	26.4
	Market Fluctuations. No amount will be paid to, or in respect of, a Participant under this Plan (including any Subordinate Voting Shares that have not been issued), to compensate for a 

13

downward fluctuation in the price of the Subordinate Voting Shares, nor will any other form of benefit be conferred upon, or in respect of, a Participant for such purpose. The Corporation and Administrative Agent make no representations or warranties to the Participants with respect to this Plan or the Subordinate Voting Shares whatsoever. In seeking the benefits of participation in this Plan, a Participant agrees to exclusively accept all risks associated with a decline in the Fair Market Value of the Subordinate Voting Shares and all other risks associated with the rights hereunder. Neither the Corporation, any other Participating Entities or the Administrative Agent shall be liable to any Participant for any loss resulting from a decline in the Fair Market Value of any Subordinate Voting Share purchased by a Participant pursuant to the Plan, any change in the market price of the Subordinate Voting Shares between the time of the Participant’s Contribution or the Employer Contribution and the time a purchase of Subordinate Voting Shares using such contributions takes place, as well as any change in the market price of the Subordinate Voting Shares between the time any dividends are paid in respect of the Subordinate Voting Shares, if any, and the time a purchase of Subordinate Voting Shares using such dividends takes place.
		
	26.5
	Compliance With Law. The obligations of the Corporation under the Plan are subject to compliance with all applicable laws and regulations. Subordinate Voting Shares shall not be issued with respect to any right granted under the Plan unless the issuance and delivery of the Subordinate Voting Shares pursuant thereto shall comply with all applicable laws and the requirements of any Stock Exchange upon which the Subordinate Voting Shares may then be listed. The Corporation shall have no obligation to issue any Subordinate Voting Shares pursuant to this Plan unless upon official notice of issuance such Subordinate Voting Shares shall have been duly listed with a Stock Exchange. If Subordinate Voting Shares cannot be issued to a Participant due to legal or regulatory restrictions, the obligation of the Corporation to issue such Subordinate Voting Shares shall terminate.

		
	26.6
	Registration. No Subordinate Voting Shares shall be issued or sold hereunder, where such grant, issue, or sale would require registration of the Plan or of the Subordinate Voting Shares under the securities laws of any foreign jurisdiction (other than Canada and the United States) or the filing of any prospectus for the qualification of same thereunder, and any purported issue or sale of Subordinate Voting Shares hereunder in violation of this provision shall be void.

		
	26.7
	Quotation of Shares. So long as the Subordinate Voting Shares are listed on one or more Stock Exchanges, the Corporation must apply to such Stock Exchange or Stock Exchanges for the listing or quotation, as applicable, of the Subordinate Voting Shares purchased under the Plan, however, the Corporation cannot guarantee that such Subordinate Voting Shares will be listed or quoted on any Stock Exchange.

		
	26.8
	Effective Date. The Plan shall become effective on March 13, 2017 (the “Effective Date”).

		
	26.9
	Amendment or Termination. Subject to the final sentence of this Section 26.9, the Board may amend, suspend or terminate the Plan, or any portion thereof, at any time, subject to those provisions of applicable law (including the applicable rules, regulations and policies of any Stock Exchange) that require the approval of shareholders of the Corporation or any 

14

governmental or regulatory body. The Board may, from time to time, in its absolute discretion and without seeking shareholder approval, make the following amendments (i) any amendment necessary to comply with applicable law or the requirements of the TSX, the NYSE or any other regulatory body; (ii) any amendment of a “housekeeping” nature, including to clarify the meaning of an existing provision of the Plan, correct or supplement any provision of the Plan that is inconsistent with any other provision of the Plan, correct any grammatical or typographical errors or amend the definitions in the Plan; (iii) any amendment regarding the administration of the Plan; (iv) any amendment to add an insider participation limit; and (v) any other amendment that does not require the approval of the shareholders of the Corporation as provided for under the following sentence. Notwithstanding the foregoing, the Board shall be required to obtain shareholder approval to make the following amendments:
		
	(a)
	any amendment increasing the number of Subordinate Voting Shares reserved for issuance under the Plan;

		
	(b)
	any amendment lowering the purchase price payable for Subordinate Voting Shares under the Plan;

		
	(c)
	any amendment increasing the Employer Contribution;

		
	(d)
	any amendment amending the provisions of this Section 26.9;

		
	(e)
	any amendment extending eligibility to participate in the Plan to non-Employees; or

		
	(f)
	any amendment that is required to be approved by shareholders under applicable laws, regulations or Stock Exchange rules.

Except as expressly set forth in the Plan, no action of the Board may adversely alter or impair the rights that have accrued to a Participant on or prior to the date of amendment, suspension or termination without the consent of the affected Participant.
		
	26.10
	Governing Law. This Plan shall be governed by and construed and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

		
	26.11
	Withholding. To satisfy any applicable income and/or payroll tax withholding requirement (including with respect to the Employer Contribution), the Corporation may withhold such income and/or payroll taxes from the Participant’s Compensation. Each Participating Entity is authorized to deduct or withhold from any amount payable or credited hereunder such taxes and other amounts as it may be required by applicable law to deduct or withhold and to remit the amounts deducted or withheld to the applicable governmental authority as required by applicable law. If the Participating Entity is required under applicable law to deduct or withhold and remit to the applicable government authority an amount on account of tax in respect of any amount paid hereunder and there is insufficient cash paid hereunder from which to make the required deduction or withholding, the Participant shall: (a) pay to the Participating Entity sufficient cash as is reasonably determined by the Participating Entity to be the amount necessary to permit the required remittance; (b) authorize Participating Entity, on behalf of the Participant, to sell in the market on such terms and at such time or times as the 

15

Participating Entity determines, a portion of the Subordinate Voting Shares issued hereunder to realize cash proceeds to be used to satisfy the required tax remittance; or (c) make other arrangements acceptable to the Participating Entity to fund the required tax remittance, including authorizing additional tax withholding from other sources of compensation.
		
	26.12
	Unfunded and Unsecured Plan. Participants (and their legal representatives) shall have no legal or equitable right, claim, or interest in any specific property or asset of any Participating Entity. No asset of any Participating Entity shall be held in any way as collateral security for the fulfillment of the obligations of the Participating Entities under this Plan. Unless otherwise determined by the Board, this Plan shall be unfunded. To the extent any Participant or his or her estate holds any rights by virtue of a grant of Subordinate Voting Shares under this Plan, such rights (unless otherwise determined by the Board) shall be no greater than the rights of an unsecured creditor of the Corporation.

		
	26.13
	Other Employee Benefits. The amount of any compensation deemed to be received by a Participant as a result of participating in the Plan will not constitute compensation with respect to which any other employee benefits of that Participant are determined including benefits under any bonus, pension, profit-sharing, insurance or salary continuation plan, except as otherwise specifically determined by the Board in writing.

		
	26.14
	Tax Consequences. It is the responsibility of the Participant to complete and file any tax returns and pay all taxes that may be required under Canadian, U.S. or other tax laws within the periods specified in those laws as a result of the Participant’s participation in the Plan. No Participating Entity shall be held responsible for any tax consequences to a Participant as a result of the Participant’s participation in the Plan. For the avoidance of doubt, the Plan is not intended to qualify as an “employee stock purchase plan” within the meaning of Section 1.423-2(a) of the Treasury Regulations.

		
	26.15
	Severability. If any provision of the Plan shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, and the Plan shall be construed as if such invalid or unenforceable provision were omitted.

***

16Exhibit

COMMON STOCK PURCHASE WARRANT 
SOLENO THERAPEUTICS, INC.  
Warrant Shares:  [*]    Issue Date: December [   ], 2017
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [_____] (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth herein, at any time until the earlier of 5:00 p.m., New York time on (i) December [__], 2020 NTD: To be three years from issuance date.; and (ii) 30 days following the Phase 3 Date (the “Expiration Date”) but not thereafter, to subscribe for and purchase from Soleno Therapeutics, Inc., a Delaware corporation (the “Company”), up to [*] shares (the “Warrant Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”).    The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

		
	Section 1.
	Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Warrant Agency Agreement between the Company and American Stock Transfer & Trust Company, LLC (the “Warrant Agent”), dated as of December [__], 2017 (the “Warrant Agency Agreement”).  The following additional terms shall have the following meanings: 

a)“Trading Day” shall mean any day on which the Common Stock is traded on the Trading Market.  
b)“Trading Market” shall mean the principal securities exchange or securities market, including an over-the-counter market, on which the Common Stock is then traded in the United States.
  
Section 2.Exercise.  This Warrant may be exercised by the Holder only if a registration statement registering the issuance of the Warrant Shares under the Securities Act of 1933, as amended (the “Securities Act”), is effective and available for the issuance of the Warrant Shares.  
a)Exercise of Warrant.  Subject to the foregoing limitation on exercise, the purchase rights represented by this Warrant may be exercised, in whole or in part, at any time or times on or before the Expiration Date by delivery (whether via facsimile or otherwise) to the Company (or the Warrant Agent or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company or the Warrant Agent) of a duly executed copy of the Notice of Exercise form annexed hereto and by payment to the Warrant Agent of an amount equal to the aggregate Exercise Price of the Warrant Shares thereby purchased by wire transfer.  No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required.  The Holder shall not be required to physically surrender this Warrant to the Company or the Warrant Agent until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case the Holder shall surrender this Warrant to the Company or the Warrant Agent for cancellation within three (3) Trading Days after the date the final Notice of Exercise is delivered to the Company or the Warrant Agent.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company or the Warrant Agent shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, 

the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.  
b)Exercise Price.  The exercise price per share of Common Stock under this Warrant shall be $2.00, subject to adjustment as provided herein (the “Exercise Price”). There shall be no net-exercise or cashless exercise of this Warrant.
c)Mechanics of Exercise.  
i.Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted by the Warrant Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company (“DTC”) through its Deposit/Withdrawal at Custodian (“DWAC”) system if the Company is then a participant in such system and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the receipt by the Warrant Agent of the Notice of Exercise (provided that payment of the Exercise Price has then been received by the Warrant Agent) (such date, the “Warrant Share Delivery Date”).  This Warrant shall be deemed to have been exercised upon proper delivery of the Notice of Exercise and payment of the Exercise Price.  The Warrant Shares shall be deemed to have been issued, and the Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised.  
ii.Delivery of New Warrant Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall (or shall direct the Warrant Agent to), at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.  
iii.Rescission Rights.  If the Company fails to cause the Warrant Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.  
iv.No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall (or shall direct the Warrant Agent to), at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round (up or down) to the nearest whole share.  
v.Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company or the Warrant Agent may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  
vi.Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant pursuant to the terms hereof.  
d)Holder’s Exercise Limitations.  Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable by the Holder hereof to the extent (but only to the extent) that the Holder or any of its Affiliates would beneficially own in excess of 19.99% of the number 

of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant (the “Maximum Percentage”).   Notwithstanding the  forgoing, this 2(d) shall not be applicable to Vivo Ventures or its Affiliates. For purposes of this Section 2(d), the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of Warrant Shares which are subject to the Notice of Exercise with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) exercise of the remaining, unexercised portion of this Warrant and beneficially owned by the Holder or any of its Affiliates, and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Holder or any of its Affiliates that are subject to a limitation on conversion or exercise similar to the limitation contained herein.  To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its Affiliates) and of which such securities shall be exercisable (as among all such securities owned by the Holder) shall, subject to such Maximum Percentage limitation, be determined by the Holder, and the Company shall have no responsibility for determining the accuracy of the Holder’s determination.  No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability.  For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation.  The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.  The holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of holders of a majority of its outstanding Common Stock.  For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation, pursuant to this Warrant.
  
Section 3.Certain Adjustments.  
a)Stock Dividends and Splits.  If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company (collectively with the actions described in (i), (ii), (iii) and (iv), a “Share Reorganization”), then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a 

subdivision, combination or re-classification, but if the Company shall legally abandon any such dividend, distribution, subdivision, combination or reclassification prior to effecting such action, no adjustment shall be made pursuant to this Section 3(a) in respect of such action.  
b)Pro Rata Distributions.  If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than a Share Reorganization, then, in each such case, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP (as defined below) determined as of the record date, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith; provided that in no event shall the Exercise Price be: (1) increased as a result of the application of this Section 3(b); or (ii) decreased below $1.72.  Simultaneously with any adjustment to the Exercise Price pursuant to this Section 3(b), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).  In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock.  Such adjustments shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above, but if the Company shall legally abandon any such distribution prior to effecting such distribution, no adjustments shall be made pursuant to this Section 3(b) in respect of such action.  
For purposes of this Section 3(b), “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time), (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc.  (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.  
c)Fundamental Transaction.  If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or 

recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (a “Change of Control”)(each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 2(d) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (together, the “Alternate Consideration”), if any, receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(d) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  Any such payment of such amount of such Alternative Consideration shall be made in the same form of consideration (whether securities, cash or property) as is given to the holders of Common Stock in such Fundamental Transaction, and if multiple forms of consideration are given, the consideration shall be paid to the Holder in the same proportion as such consideration is paid to the holders of Common Stock.  The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3(c) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent Fundamental Transaction.  
d)Fundamental Transaction Redemption by the Holder. Notwithstanding the provisions of Section 3(c) above, at the written request of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Change of Control, (y) the consummation of any Change of Control and (z) the Holder first becoming aware of any Change of Control, through the date that is twenty (20) days after the public disclosure of the consummation of such Change of Control by the Company pursuant to a Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”), the Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value. For purposes of this provision,  “Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request pursuant to this Section 3(d), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement of the Change in Control (or the consummation of the Change in Control, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(d)  and (2) the sum of the price per share being offered in cash in the Change in Control (if any) plus the value of the non-cash consideration being offered in the Change in Control (if any), (ii) a strike price equal to the Exercise Price in effect on the date 

of the Holder’s request pursuant to this Section 3(d), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section  3(d) and (2) the remaining term of this Warrant as of the date of consummation of the Change in Control or as of the date of the Holder’s request pursuant to this Section 3(d)  if such request is prior to the date of the consummation of the Change in Control, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately after the date of public announcement of the Change in Control.
e)Calculations.  All calculations under this Section 3 shall be made to the nearest cent or rounded down  to the nearest whole share, as the case may be.  For purposes of this Section 3, any calculation of the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall not include treasury shares, if any.  Notwithstanding anything to the contrary in this Section 3, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided however, that any adjustments which by reason of the immediately preceding sentence are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  In any case in which this Section 3 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, if Holder exercises this Warrant after such record date, the Company may elect to defer, until the occurrence of such event, the issuance of the shares of Common Stock and other capital stock of the Company in excess of the shares of Common Stock and other capital stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that in such case the Company or the Warrant Agent shall deliver to the Holder a due bill or other appropriate instrument evidencing the Holder’s right to receive such additional shares and/or other capital securities upon the occurrence of the event requiring such adjustment.  
f)Par Value.  Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced below the par value of the Company’s Common Stock. 

Section 4.Phase 3 Date.
For purposes of this Warrant, the “Phase 3 Date” shall mean the date on which results from the DCCR Trial is first publicly announced in a press release issued by the Company, provided that: (i) such results from the DCCR Trial has a two sided p-value of <0.05 for the primary endpoint of the DCCR Trial; and (ii) any available significant adverse event data shall also be publically disclosed concurrent to the public release of the topline efficacy data. “DCCR Trial” means the Company’s Phase III pivotal clinical trial using DCCR for the treatment of Prader-Willi syndrome.

		
	Section 5.
	Transfer of Warrant.  

a)Transferability.  Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or the Warrant Agent (or other designated agent), together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.  

b)New Warrants.  Subject to and in accordance with Section 6 the Warrant Agency Agreement, this Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company or the Warrant Agent (or other designated agent), together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver (or cause the Warrant Agent to deliver) a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.  All Warrants issued on transfers or exchanges shall be dated the initial issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.  
c)Warrant Register.  Unless the Holder requests a physical copy of this Warrant (the “Warrant Certificate”), this Warrant shall be issuable in book entry form (the “Book-Entry Warrant Certificate”) and shall initially be represented by one or more Book-Entry Warrant Certificates deposited with The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.  Ownership of beneficial interests in this Warrant shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) DTC or its nominee for each Book-Entry Warrant Certificate or (ii) institutions that have accounts with DTC (the “Warrant Register”).  If DTC subsequently ceases to make its book-entry settlement system available for this Warrant, the Company may instruct the Warrant Agent regarding other arrangements for book-entry settlement.  In the event that this Warrant is not eligible for, or it is no longer necessary to have this Warrant available in, book-entry form, the Warrant Agent shall provide written instructions to DTC to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate. In the event that this Warrant is not eligible for, or it is no longer necessary to have this Warrant available in, book-entry form, or if the Holder has otherwise requested a Warrant Certificate rather than a Book-Entry Warrant Certificate, the Company shall deliver or shall cause the Warrant Agent to deliver to the Holder a physical certificate in the form of this Warrant and the Company or the Warrant Agent shall, thereafter, register this Warrant, upon records to be maintained by the Company for that purpose, in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.  

Section 6.Miscellaneous.  
a)No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(c)(i).  
b)Loss, Theft, Destruction or Mutilation of Warrant.  The Company covenants that upon receipt by the Company or the Warrant Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver (or cause the Warrant Agent to deliver) a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.  
c)Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.  
d)Authorized Shares.  The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant (without regard to any limitations on exercise contained herein).  The Company further covenants 

that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).  
e)No Impairment.  Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.  
f)Governing Law.  This Warrant shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflicts of law principles thereof.  
g)Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.  
h)Notices.  
i.Notice Procedures.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Warrant Agency Agreement.  
ii.Adjustment to Exercise Price.  Whenever the Exercise Price or number of Warrant Shares is adjusted pursuant to any provision of Section 3, the Company shall (or cause the Warrant Agent to) promptly provide the Holder a notice setting forth the Exercise Price and number of Warrant Shares after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  
iii.Notice of Certain Events.  The Company shall (or shall cause the Warrant Agent to) promptly provide the Holder a notice of occurrence of the Phase 3 Date, which notice may be satisfied by issuance of a public press release by the Company containing such requisite information.  

iv.Notice to Allow Exercise by the Holder.  On or prior to the Expiration Date, if (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register, at least ten (10) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.  
i)Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.  
j)Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.  
k)Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of the Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.  
l)Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.  
m)Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.  

n)Confidentiality.  The Holder agrees to keep confidential any proprietary information relating to the Company delivered by the Company or the Warrant Agent hereunder; provided that nothing herein shall prevent the Holder from disclosing such information: (i) to any holder of Warrants or Warrant Shares, (ii) to any Affiliate of any holder of Warrants or Warrant Shares or any actual or potential transferee of the rights or obligations hereunder that agrees to be bound by this Section 5(m), (iii) upon order, subpoena, or other process of any court or administrative agency or otherwise required by law, (iv) upon the request or demand of any regulatory agency or authority having jurisdiction over such party, (v) which has been publicly disclosed without breach of any obligation to the Company, (vi) which has been obtained from any Person that is not a party hereto or an Affiliate of any such party without any breach of any obligation to the Company, (vii) in connection with the exercise of any remedy, or the resolution of any dispute hereunder, (viii) to the legal counsel or certified public accountants for any holder of Warrants or Warrant Shares, or (ix) as otherwise expressly contemplated by this Warrant.  Notwithstanding the foregoing, the Company shall not provide material, non-public information or confidential or proprietary information to the Holder without such Holder’s written consent.  
o)Dispute Resolution.  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder.  If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile (i) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (ii) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant.  The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations.  Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.  The expenses of the investment bank and accountant will be borne by the Company unless the investment bank or accountant determines that the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares by the Holder was incorrect, in which case the expenses of the investment bank and accountant will be borne by the Holder.  
p)Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.  
******************** 
(Signature Pages Follow) 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.  
SOLENO THERAPEUTICS, INC.
By:         
Name:
Title:
COUNTERSIGNED: 
AMERICAN STOCK TRANSFER & TRUST COMPANY, 
LLC, as Warrant Agent 
By:         
Name:
Title:
 

NOTICE OF EXERCISE 
TO: SOLENO THERAPEUTICS, INC.  
(1) The undersigned hereby elects to purchase             Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.  
(2) Payment shall take the form of lawful money of the United States 
(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below: 
    
The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to: 
    
    
    
[SIGNATURE OF HOLDER] 
Name of Investing Entity:     
Signature of Authorized Signatory of Investing Entity:     
Name of Authorized Signatory:     
Title of Authorized Signatory:     
Date:     

ASSIGNMENT FORM 
(To assign the foregoing warrant, execute 
this form and supply required information.  
Do not use this form to exercise the warrant.) 
FOR VALUE RECEIVED, [            ] all of or [            ] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to 
 whose address is
 
 
Dated: __________________, ____
Holder’s Signature:         
Holder’s Address:         
        
NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever.

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