Document:

Exhibit

EXHIBIT 10.6
REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the “Agreement”) is made and entered into as of this March 25, 2016, by and between Sphere 3D Corp., an Ontario corporation (the “Company”) and MacFarlane Family Ventures, LLC, a Delaware limited liability (“MacFarlane”), with respect to the Warrants and Warrant Shares issued pursuant to that certain Warrant Exchange Agreement dated as of March 25, 2016, by and between the Company and MacFarlane (the “Exchange Agreement”). Capitalized terms used herein have the respective meanings ascribed thereto in the Exchange Agreement unless otherwise defined herein.
The parties hereby agree as follows:
1.    Certain Definitions.
As used in this Agreement, the following terms shall have the following meanings:
“Common Shares” means the Company’s common shares, no par value, and any securities into which such shares may hereinafter be reclassified.
“Holder” means MacFarlane, and any Affiliate or permitted transferee of any MacFarlane who is a subsequent holder of any Warrants or Registrable Securities. 
“Prospectus” means (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (ii) any “free writing prospectus” as defined in Rule 405 under the 1933 Act.
“Register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.
“Registrable Securities” means (i) the Warrant Shares and (ii) any other securities issued or issuable with respect to or in exchange for Registrable Securities, whether by merger, charter amendment or otherwise; provided, that a security shall cease to be a Registrable Security upon (a) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (b) such security becoming eligible for sale in the United States without restriction by the holder thereof pursuant to Rule 144 without the Company being in compliance with the reporting requirements set forth under Rule 144(d)(1)(i).
“Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Registrable Securities in the United States pursuant to 

the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.
“SEC” means the U.S. Securities and Exchange Commission.
“Warrants” means the warrants to purchase Common Shares issued to the Holder pursuant to the Exchange Agreement.
“Warrant Shares” means the Common Shares issuable upon the exercise of the Warrants issued to the Holder pursuant to the Exchange Agreement.
“1933 Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“1934 Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
2.    Registration.
(a)        Registration Statements.
(i)    Promptly following the closing of the issuance of the securities contemplated by the Exchange Agreement (the “Closing Date”) but no later than twenty days (20) days after the Closing Date (the “Filing Deadline”), the Company shall prepare and file with the SEC one Registration Statement on Form F-3 (or, if Form F-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities), covering the resale of the Registrable Securities in the United States.  Subject to any SEC comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that no Holder shall be named as an “underwriter” in the Registration Statement without the Holder’s prior written consent. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional Common Shares resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities.   Such Registration Statement shall not include any Common Shares or other securities for the account of any other holder without the prior written consent of Holder, except as required by any agreement entered into by the Company prior to the date of this Agreement. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Holders and their counsel prior to its filing or other submission.  If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to each Holder, as liquidated damages and not as a penalty, in an amount equal to 2.0% of the product of the Exercise Price (as defined in the Warrants) and the number of Warrant Shares for each 30-day 

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period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement is filed with respect to the Registrable Securities.  Such payments shall constitute the Holders’ exclusive monetary remedy for such events, but shall not affect the right of the Holders to seek injunctive relief.  Such payments shall be made to each Holder in cash no later than three (3) Business Days after the end of each such 30-day period.
(ii)    Additional Registrable Securities.  Upon the written demand of any Holder and upon any change in the Exercise Price (as defined in the applicable Warrant) such that additional Common Shares become issuable upon exercise of the Warrants (the “Additional Shares”), the Company shall prepare and file with the SEC one or more Registration Statements on Form F-3 or amend the Registration Statement filed pursuant to clause (i) above, if such Registration Statement has not previously been declared effective (or, if Form F-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Additional Shares) covering the resale of the Additional Shares, but only to the extent the Additional Shares are not at the time covered by an effective Registration Statement.  Subject to any SEC comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit A; provided, however, that no Holder shall be named as an “underwriter” in the Registration Statement without the Holder’s prior written consent.  Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional Common Shares resulting from stock splits, stock dividends or similar transactions with respect to the Additional Shares.  Such Registration Statement shall not include any Common Shares or other securities for the account of any other holder without the prior written consent of Holder, except as required by any agreement entered into by the Company prior to the date of this Agreement. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Holders and their counsel prior to its filing or other submission.  If a Registration Statement covering the Additional Shares is required to be filed under this Section 2(a)(ii) and is not filed with the SEC within ten (10) Business Days of the request of any Holder or upon the occurrence of any of the events specified in this Section 2(a)(ii) (the “Additional Shares Filing Deadline”), the Company will make pro rata payments to each Holder, as liquidated damages and not as a penalty, in an amount equal to 2.0% of the product of the Exercise Price (as defined in the Warrants) and the number of Warrant Shares for each 30-day period or pro rata for any portion thereof following the Additional Shares Filing Deadline for which no Registration Statement is filed with respect to the Additional Shares.  Such payments shall constitute the Holders’ exclusive monetary remedy for such events, but shall not affect the right of the Holders to seek injunctive relief.  Such payments shall be made to each Holder in cash no later than three (3) Business Days after the end of each such 30-day period.
(b)        Expenses.  The Company will pay all expenses associated with each registration, including filing and printing fees, the Company’s counsel and accounting fees and 

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expenses, costs associated with clearing the Registrable Securities for sale under applicable United States federal and state securities laws, listing fees, reasonable incurred fees and expenses of one counsel to the Holders in connection with clearing the Registrable Securities for sale under applicable United States federal and state securities laws, and the Holders’ other reasonable incurred expenses in connection with the registration, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.
(c)        Effectiveness.
(i)    The Company shall use commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable.  The Company shall notify the Holders by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Holders with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.  If (A)(x) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall have informed the Company that no review of the Registration Statement will be made or that the SEC has no further comments on the Registration Statement or (ii) ninety (90) days after the Registration Statement is first filed with the SEC or (y) a Registration Statement covering Additional Shares is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall have informed the Company that no review of the Registration Statement will be made or that the SEC has no further comments on the Registration Statement or (ii) the one hundred twentieth (120th) day after the Additional Shares Filing Deadline, or (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including, without limitation, by reason of a stop order, or the Company’s failure to update the Registration Statement), but excluding any Allowed Delay (as defined below) or the inability of any Holder to sell the Registrable Securities covered thereby due to market conditions, then the Company will make pro rata payments to each Holder, as liquidated damages and not as a penalty, in an amount equal to 2.0% of the product of the Exercise Price (as defined in the Warrants) and the number of Warrant Shares for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the “Blackout Period”).  Such payments shall constitute the Holders’ exclusive monetary remedy for such events, but shall not affect the right of the Holders to seek injunctive relief.  The amounts payable as liquidated damages pursuant to this paragraph shall be paid monthly within three (3) Business Days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period.  Such payments shall be made to each Holder in cash.

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(ii)    For not more than twenty (20) consecutive days or for a total of not more than forty-five (45) days in any twelve (12) month period, the Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section in the event that the Company determines in good faith that such suspension is necessary to (A) delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the affected Registration Statement or the related Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (a) notify each Holder in writing of the commencement of and the reasons for an Allowed Delay, but shall not (without the prior written consent of a Holder) disclose to such Holder any material non-public information giving rise to an Allowed Delay, (b) advise the Holders in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate the Allowed Delay as promptly as practicable.
(d)        Rule 415; Cutback  If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a Registration Statement is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the 1933 Act or requires any Holder to be named as an “underwriter”, the Company shall use its commercially reasonable efforts to persuade the SEC that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that none of the Holders is an “underwriter”.  The Holders shall have the right to have their counsel participate in any meetings or discussions with the SEC regarding the SEC’s position and to comment or have their counsel comment on any written submission made to the SEC with respect thereto.  No such written submission shall be made to the SEC to which the Holders’ counsel reasonably objects.  In the event that, despite the Company’s commercially reasonable best efforts and compliance with the terms of this Section 2(d), the SEC refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable Securities (the “Cut Back Shares”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the Company shall not agree to name any Holder  as an “underwriter” in such Registration Statement without the prior written consent of such Holder (and that the Company shall not be required to do so even if such Holder consents to be named as an underwriter).  Any cut-back imposed on the Holders pursuant to this Section 2(d) shall be allocated among the Holders on a pro rata basis, unless the SEC Restrictions otherwise require or provide or the Holders otherwise agree.  No liquidated damages shall accrue as to any Cut Back Shares until such date as the Company is able 

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to effect the registration of such Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of such Cut Back Shares), subject to the following sentence.  From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this Section 2 (including the liquidated damages provisions) shall again be applicable to such Cut Back Shares; provided, however, that (i) the Filing Deadline and the Additional Shares Filing Deadline, as applicable, for the Registration Statement including such Cut Back Shares shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the date by which the Company is required to obtain effectiveness with respect to such Cut Back Shares under Section 2(c) shall be the ninetieth (90th) day immediately after the Restriction Termination Date.
3.    Company Obligations.  
The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:
(a)        use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement as amended from time to time, have been sold, and (ii) the date on which all Registrable Securities covered by such Registration Statement may be sold without restriction pursuant to Rule 144 without the Company being in compliance with the reporting requirements set forth under Rule 144(d)(1)(i) (the “Effectiveness Period”) and advise the Holders in writing when the Effectiveness Period has expired;
(b)        prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Registrable Securities covered thereby;
(c)        provide copies to and permit counsel designated by the Holders to review each Registration Statement and all amendments and supplements thereto no fewer than five (5) days prior to their filing with the SEC and not file any document to which such counsel reasonably objects;
(d)        furnish to the Holders and their legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary 

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prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holder that are covered by the related Registration Statement;
(e)        use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment;
(f)        prior to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with the Holders and their counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the U.S. state securities or blue sky laws of such jurisdictions requested by the Holders and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 3(f), or (iii) file a general consent to service of process in any such jurisdiction; 
(g)        use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;
(h)        immediately notify the Holders, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and

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(i)        otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the 1933 Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the 1933 Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, but not later than the Availability Date (as defined below), an earnings statement covering a period of at least twelve (12) months, beginning after the effective date of each Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for the purpose of this subsection 3(i), “Availability Date” means the 45th day following the end of the fourth fiscal quarter that includes the effective date of such Registration Statement, except that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “Availability Date” means the ninetieth (90th) day after the end of such fourth fiscal quarter).
(j)        With a view to making available to the Holders the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Holders to sell Common Shares to the public without registration, the Company covenants and agrees to:  (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be sold without restriction by the holders thereof pursuant to Rule 144 or any other rule of similar effect or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii) furnish to each Holder upon request, as long as such Holder owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most recent Annual Report on Form 40-F, and (C) such other information as may be reasonably requested in order to avail such Holder of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration.

4.    Due Diligence Review; Information.  The Company shall make available, during normal business hours and upon prior written notice, for inspection and review by the Holders, advisors to and representatives of the Holders (who may or may not be affiliated with the Holders and who are reasonably acceptable to the Company), all financial and other records, all SEC Filings (as defined in the Exchange Agreement) and other filings with the SEC, and all other corporate documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, 

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to supply all such information reasonably requested by the Holders or any such representative, advisor or underwriter in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Holders and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement.
Notwithstanding the foregoing, the Company shall not disclose or provide any access to material nonpublic information to the Holders, or to advisors to or representatives of the Holders, in connection with the registration of the Registrable Securities unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Holders, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic information for review and any Holder wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto. 
5.    Obligations of the Holders.
(a)        Each Holder shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.  At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Holder of the information the Company requires from such Holder if such Holder elects to have any of the Registrable Securities included in the Registration Statement.  A Holder shall provide such information to the Company at least two (2) Business Days prior to the first anticipated filing date of such Registration Statement if such Holder elects to have any of the Registrable Securities included in the Registration Statement.
(b)        Each Holder, by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Holder has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.
(c)        Each Holder agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such Holder will immediately discontinue disposition 

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of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Holder is advised by the Company that such dispositions may again be made.
6.    Indemnification.
(a)        Indemnification by the Company.  The Company will indemnify and hold harmless each Holder and its officers, directors, members, employees and agents, successors and assigns, and each other person, if any, who controls such Holder within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement or omission or alleged omission of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission to state in a Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the 1933 Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on a Holder’s behalf and will reimburse such Holder, and each such officer, director or member and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Holder or any such controlling person in writing specifically for use in such Registration Statement, Prospectus or Blue Sky Application or any amendment or supplement thereto. 
(b)        Indemnification by the Holders.  Each Holder agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, shareholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement, a Prospectus or a preliminary Prospectus or a Blue Sky Application or amendment or supplement thereto or necessary to make 

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the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto, provided, however, that such Holder will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by Company to such Holder in writing in connection with such Registration Statement, Prospectus or Blue Sky Application or any amendment or supplement thereto.  In no event shall the liability of a Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 6 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.
(c)        Conduct of Indemnification Proceedings.  Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.  No indemnifying party will be liable to any indemnified party under this Agreement for any settlement by such indemnified party effected without the 

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indemnifying party’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed.
(d)        Contribution.  If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations.  No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation.  In no event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 6 and the amount of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
7.    Miscellaneous.
(a)        Amendments and Waivers.  This Agreement may be amended only by a writing signed by the Company and the Holders.  The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act, of the Holders.
(b)        Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by electronic mail, telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (a) receipt of such notice by the recipient or (b) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:
If to the Company:

Sphere 3D Corp.
9112 Spectrum Center Boulevard

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San Diego, California 92123
Attention:     Kurt Kalbfleisch, Chief Financial Officer
Fax:         (858) 495-4267

With a copy (which shall not constitute notice) to:

O’Melveny & Myers LLP
2756 Sand Hill Road
Menlo Park, California 94025
Attention:     Warren T. Lazarow, Esq.
Paul L. Sieben, Esq.
Fax:         (650) 473-2601
            
If to the Holders:
                
 
                to the addresses set forth on the signature pages hereto. 

With a copy (which shall not constitute notice) to:

If prior to May 1, 2016
Paul Hastings LLP
75 E. 55th Street
New York, NY 10022
Attention:    Scott Saks, Esq.

If on or following May 1, 2016
Paul Hastings LLP
200 Park Avenue
New York, NY 10166
Attention:    Scott Saks, Esq.

(c)        Assignments and Transfers by Holders.  The provisions of this Agreement shall be binding upon and inure to the benefit of the Holders and their respective successors and assigns.  A Holder may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Holder to such person, provided that such Holder complies with all laws applicable thereto and provides written notice of assignment to the Company promptly after such assignment is effected.

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(d)        Assignments and Transfers by the Company.  This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Holders, provided, however, that in the event that the Company is a party to a merger, amalgamation, consolidation, share exchange or similar business combination transaction in which the Common Shares is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed to include the securities received by the Holders in connection with such transaction unless such securities are otherwise freely tradable by the Holders after giving effect to such transaction.
(e)        Benefits of the Agreement.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(f)        Counterparts; Faxes.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may also be executed via facsimile, which shall be deemed an original.
(g)        Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
(h)        Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provisions hereof prohibited or unenforceable in any respect.
(i)        Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

-14-

(j)        Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
(k)        Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York applicable to agreements made and to be performed entirely within the State of New York.  Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  TO THE EXTENT ALLOWABLE UNDER APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
[Signature page follows.]
        

-15-

IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

The Company:                SPHERE 3D CORP.

By:_/s/ Kurt Kalbfleisch________
Name: Kurt Kalbfleisch
Title:    Chief Financial Officer

The Holder:                MACFARLANE FAMILY VENTURES, LLC

By: Victor B. MacFarlane__________
Name: Victor B. MacFarlane
Title:    Manager

Address for Notice:

Exhibit A

Plan of Distribution

We are registering the common shares issuable upon exercise of the warrants to permit the resale of the common shares by the selling shareholders.  We will not receive any of the proceeds from the sale by the selling shareholders of the common shares.  We will bear all fees and expenses incident to our obligation to register the common shares.
    
The selling shareholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling common shares or interests in common shares received after the date of this prospectus from a selling shareholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their common shares or interests in common shares on any stock exchange, market or trading facility on which the shares are traded or in private transactions.  These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

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

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

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

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

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

		
	•
	privately negotiated transactions;

		
	•
	short sales effected after the date the registration statement of which this prospectus is a part is declared effective by the SEC;

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

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

		
	•
	a combination of any such methods of sale; and

		
	•
	any other method permitted by applicable law.

-18-

If the selling shareholders effect such transactions by selling common shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the common shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved).  The selling shareholders may, from time to time, pledge or grant a security interest in some or all of the common shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the common shares, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus.  The selling shareholders also may transfer the common shares in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

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

The aggregate proceeds to the selling shareholders from the sale of the common shares offered by them will be the aggregate purchase price of the common shares less aggregate discounts or commissions, if any.  Each of the selling shareholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common shares to be made directly or through agents.  We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise price of the warrants.

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

The selling shareholders and any underwriters, broker-dealers or agents that participate in the sale of the common shares or interests therein may be, “underwriters” within the meaning of Section 2(11) of the Securities Act.  Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities 

-19-

Act.  Selling shareholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.  

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

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

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

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

We have agreed with the selling shareholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which the shares may be sold without restriction pursuant to Rule 144 of the Securities Act without the Company being in compliance with the reporting requirements set forth under Rule 144(d)(1)(i).

 

-20-Exhibit 10.01

 

 

AETHLON MEDICAL, INC.

 

AMENDED 2010 STOCK INCENTIVE PLAN

 

(Adopted August 2, 2010 and amended

effective July 5, 2012 and _________,
2016

 

 

		1.	PURPOSE.

 

The purpose of this Plan is to provide incentives
to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the
Company, and its Parent and Subsidiaries (if any), by offering them an opportunity to participate in the Company’s future
performance through awards of Options, the right to purchase Common Stock and Stock Bonuses. Capitalized terms not defined in the
text are defined in Section 2.

 

		2.	DEFINITIONS.

 

As used in this Plan, the following terms
will have the following meanings:

 

“AWARD” means
any award under this Plan, including any Option, Stock Award or Stock Bonus.

 

“AWARD AGREEMENT”
means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms
and conditions of the Award.

 

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

 

“CAUSE” means
any cause, as defined by applicable law, for the termination of a Participant’s employment with the Company or a Parent or
Subsidiary of the Company.

 

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

 

“COMPANY” means
Aethlon Medical, Inc., a Nevada corporation, or any successor corporation thereto.

 

“COMMITTEE” means
that committee appointed by the Board to administer and interpret the Plan as more particularly described in Section 5 of the Plan;
provided, however, that the term Committee will refer to the Board during such times as no Committee has been appointed
by the Board.

 

“DISABILITY” means
a disability, whether temporary or permanent, partial or total, as determined by the Committee.

 

“EXCHANGE ACT”
means the Securities Exchange Act of 1934, as amended.

 

“EXERCISE PRICE”
means the price at which a holder of an Option may purchase the Shares issuable upon exercise of the Option.

 

“FAIR MARKET VALUE”
means, as of any date, the value of a share of the Company’s Common Stock determined as follows:

 

(a)if such Common Stock is
publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal
national securities exchange on which the Common Stock is listed or admitted to trading;

 

    	 	1	 

     

    

 

(b)if such Common Stock is
quoted on the NASDAQ Global Market or the NASDAQ Capital Market, its closing price on the NASDAQ Global Market or the NASDAQ Capital
Market, as applicable, on the date of determination;

 

(c)if neither
of the foregoing is applicable, by the Committee in good faith.

 

“INSIDER” means
an officer or director of the Company or any other person whose transactions in the Company’s Common Stock are subject to
Section 16 of the Exchange Act.

 

“OPTION” means
an award of an option to purchase Shares pursuant to Section 6.

 

“PARENT” means
any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations
other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

 

“PARTICIPANT”
means a person who receives an Award under this Plan.

 

“PERFORMANCE FACTORS”
means the factors selected by the Committee, in its sole and absolute discretion, from among the following measures to determine
whether the performance goals applicable to Awards have been satisfied:

 

(a)Net revenue and/or net
revenue growth;

 

(b)Earnings before income
taxes and amortization and/or earnings before income taxes and amortization growth;

 

(c)Operating income and/or
operating income growth;

 

(d)Net income and/or net income
growth;

 

(e)Earnings per share and/or
earnings per share growth;

 

(f)Total stockholder return
and/or total stockholder return growth;

 

(g)Return on equity;

 

(h)Operating cash flow return
on income;

 

(i)Adjusted operating cash
flow return on income;

 

(j)Economic value added; and

 

(k)Individual business objectives.

 

“PERFORMANCE PERIOD”
means the period of service determined by the Committee, not to exceed five years, during which years of service or performance
is to be measured for Stock Awards or Stock Bonuses, if such Awards are restricted.

 

“PLAN” means this
Aethlon Medical, Inc. Amended 2010 Stock Incentive Plan, as amended from time to time.

 

“PURCHASE PRICE”
means the price at which the Participant who receives a Stock Award may purchase the Shares.

 

“SEC” means the
Securities and Exchange Commission.

 

    	 	2	 

     

    

 

“SECURITIES ACT”
means the Securities Act of 1933, as amended.

 

“SHARES” means
shares of the Company’s Common Stock reserved for issuance under this Plan, as adjusted pursuant to Sections 3 and 20, and
any successor security.

 

“STOCK AWARD”
means an award of Shares pursuant to Section 7.

 

“STOCK BONUS”
means an award of Shares, or cash in lieu of Shares, pursuant to Section 8.

 

“SUBSIDIARY” means
any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

 

“TERMINATION”
or “TERMINATED” means, for purposes of this Plan with respect to a Participant, that the Participant
has for any reason ceased to provide services as an employee, officer, director, consultant, independent contractor or advisor
to the Company or a Parent or Subsidiary of the Company. An employee will not be deemed to have ceased to provide services in the
case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Company, provided that such leave
is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute
or unless provided otherwise pursuant to a formal policy adopted from time to time by the Company and issued and promulgated to
employees in writing. In the case of any employee on an approved leave of absence, the Committee may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the Company or a Parent or Subsidiary as it may deem appropriate,
except that in no event may an Option be exercised after the expiration of the term set forth in the Option agreement. The Committee
will have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the “Termination Date”).

 

		3.	SHARES SUBJECT TO THE PLAN.

 

3.1Number of Shares
Available. Subject to Sections 3.2 and 20, the total aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan shall be 3,170,000 Shares and will include Shares that are subject to: (a) issuance upon exercise of an Option
but cease to be subject to such Option for any reason other than exercise of such Option; (b) an Award granted hereunder but forfeited
or repurchased by the Company at the original issue price; and (c) an Award that otherwise terminates without Shares being issued.
The original number of Shares available under this Plan was 70,000, which was increased by 100,000 shares on July 5, 2012 and by
3,000,000 shares on __________, 2016 by approval of the Board. At all times the Company shall reserve and keep available a sufficient
number of Shares as shall be required to satisfy the requirements of all outstanding Options granted under this Plan and all other
outstanding but unvested Awards granted under this Plan.

 

3.2Adjustment of Shares. In the
event that the number of outstanding shares is changed by a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then
(a) the number of Shares reserved for issuance under this Plan, (b) the Exercise Prices of and number of Shares subject to outstanding
Options, and (c) the number of Shares subject to other outstanding Awards will be proportionately adjusted, subject to any required
action by the Board or the stockholders of the Company and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued but will either be replaced by a cash payment equal to the Fair Market Value of such fraction
of a Share or will be rounded up to the nearest whole Share, as determined by the Committee.

 

		4.	ELIGIBILITY.

 

ISOs (as defined in Section
6 below) may be granted only to employees (including officers and directors who are also employees) of the Company or of a Parent
or Subsidiary of the Company. All other Awards may be granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent or Subsidiary of the Company, provided such consultants, independent contractors and
advisors render bona-fide services not in connection with the offer and sale of securities in a capital-raising transaction or
promotion of the Company’s securities. A person may be granted more than one Award under this Plan.

 

    	 	3	 

     

    

 

		5.	ADMINISTRATION.

 

5.1Committee.

 

(a)The Plan shall be administered
and interpreted by a committee consisting of two (2) or more members of the Board. At the Board’s discretion, or if necessary
in order to comply with Rule 16b-3 under the Exchange Act (“Rule 16b-3”) or Section 162(m) of the Code (“Section
162(m)”), the Committee, in the Board’s discretion, shall be comprised solely of “non-employee directors”
within the meaning of Rule 16b-3 or “outside directors” within the meaning of Section 162(m).

 

(b)Members of the Committee
may resign at any time by delivering written notice to the Board. The Board shall fill vacancies in the Committee. The Committee
shall act by a majority of its members in office. The Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.

 

(c)If the Board, in its discretion,
does not appoint a Committee, the Board itself will administer and interpret the Plan and take such other actions as the Committee
is authorized to take hereunder; provided that the Board may take such actions hereunder in the same manner as the Board may take
other actions under the Articles of Incorporation and bylaws of the Company generally.

 

5.2Committee Authority. Without
limitation, the Committee will have the authority to:

 

(a)construe
and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;

 

(b)prescribe, amend and rescind
rules and regulations relating to this Plan or any Award;

 

(c)select persons to receive
Awards;

 

(d)determine the form and
terms of Awards;

 

(e)determine the number of
Shares or other consideration subject to Awards;

 

(f)determine
whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;

 

(g)grant waivers of Plan or
Award conditions;

 

(h)determine the vesting,
exercisability and payment of Awards;

 

(i)correct any defect, supply
any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;

 

(j)determine whether an Award
has been earned; and

 

(k)make all other determinations
necessary or advisable for the administration of this Plan.

 

5.3Committee Discretion. Any
determination made by the Committee with respect to any Award will be made at the time of grant of the Award or, unless in contravention
of any express term of this Plan or the Award, at any later time, and such determination will be final and binding on the Company
and on all persons having an interest in the Award under this Plan. The Committee may delegate to one or more officers of the Company
the authority to grant an Award under this Plan to Participants who are not Insiders of the Company. No member of the Committee
shall be personally liable for any action taken or decision made in good faith relating to this Plan, and all members of the Committee
shall be fully protected and indemnified to the fullest extent permitted under applicable law by the Company in respect to any
such action, determination, or interpretation.

 

    	 	4	 

     

    

 

		6.	OPTIONS.

 

The Committee may grant
Options to eligible persons and will determine whether such Options will be Incentive Stock Options within the meaning of the Code
(“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option, subject
to the following:

 

6.1Form of Option Grant. Each
Option granted under this Plan will be evidenced by an Award Agreement that will expressly identify the Option as an ISO or an
NQSO (hereinafter referred to as the “Stock Option Agreement”), and will be in such form and contain such provisions
(which need not be the same for each Participant) as the Committee may from time to time approve, and that will comply with and
be subject to the terms and conditions of this Plan.

 

6.2Date of Grant. The date of
grant of an Option will be the date on which the Committee makes the determination to grant such Option, unless otherwise specified
by the Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time
after the granting of the Option.

 

6.3Exercise Period. Options may
be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement governing
such Option; provided, however, that no Option will be exercisable after the expiration of ten (10) years from the date the Option
is granted; and provided further that no ISO granted to a person who directly or by attribution owns more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the Company (“Ten
Percent Stockholder”) will be exercisable after the expiration of five (5) years from the date the ISO is granted. The Committee
also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number
of Shares or percentage of Shares as the Committee determines, provided, however, that in all events a Participant will be entitled
to exercise an Option at the rate of at least 20% per year over five (5) years from the date of grant, subject to reasonable conditions
such as continued employment; and further provided that an Option granted to a Participant who is an officer or director may become
fully exercisable, subject to reasonable conditions such as continued employment, at any time or during any period established
by the Company.

 

6.4Exercise Price. The Exercise
Price of an Option will be determined by the Committee when the Option is granted and may be not less than 85% of the Fair Market
Value of the Shares on the date of grant; provided that: (a) the Exercise Price of an ISO will be not less than 100% of the Fair
Market Value of the Shares on the date of grant; and (b) the Exercise Price of any Option granted to a Ten Percent Stockholder
will not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be
made in accordance with Section 11 of this Plan.

 

6.5Method of Exercise. Options
may be exercised only by delivery to the Company of a written stock option exercise agreement (the “Exercise Agreement”)
in a form approved by the Committee, (which need not be the same for each Participant), stating the number of Shares being purchased,
the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such representations and agreements
regarding the Participant’s investment intent and access to information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the
number of Shares being purchased.

 

    	 	5	 

     

    

 

6.6Termination. Notwithstanding
the exercise periods set forth in the Stock Option Agreement, exercise of an Option will always be subject to the following:

 

(a)If the Participant’s
service is Terminated for any reason except death or Disability, then the Participant may exercise such Participant’s Options
only to the extent that such Options would have been exercisable upon the Termination Date no later than six (6) months after the
Termination Date (or such longer time period not exceeding five (5) years as may be determined by the Committee, with any exercise
beyond three (3) months after the Termination Date deemed to be an NQSO). Notwithstanding the foregoing, in the event the terminating
Participant is a director of the Company, and such director has served on the Board of Directors for a term of not less than twenty
four (24) consecutive months immediately prior to the date of such termination, then such terminating Participant's Options shall
not be subject to the early termination provisions of this paragraph 6.6(a).

 

(b)If the Participant’s
service is Terminated because of the Participant’s death or Disability (or the Participant dies within three (3) months after
a Termination other than for Cause or because of Participant’s Disability), then the Participant’s Options may be exercised
only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised
by the Participant (or the Participant’s legal representative) no later than twelve (12) months after the Termination Date
(or such longer time period not exceeding five (5) years as may be determined by the Committee, with any such exercise beyond (i)
three (3) months after the Termination Date when the Termination is for any reason other than the Participant’s death or
Disability, or (ii) twelve (12) months after the Termination Date when the Termination is for Participant’s death or Disability,
deemed to be an NQSO). Notwithstanding the foregoing, in the event the terminating Participant was a director of the Company on
the date of such termination event under this Section 6.6(b), and such director had served on the Board of Directors for a term
of not less than twenty four (24) consecutive months immediately prior to the date of such termination, then such terminating Participant's
Options shall not be subject to the early termination provisions of this paragraph 6.6(b).

 

(c)Notwithstanding the provisions
in paragraph 6.6(a) above, if the Participant’s service is Terminated for Cause, neither the Participant, the Participant’s
estate nor such other person who may then hold the Option shall be entitled to exercise any Option with respect to any Shares whatsoever,
after Termination, whether or not after Termination the Participant may receive payment from the Company or a Subsidiary for vacation
pay, for services rendered prior to Termination, for services rendered for the day on which Termination occurs, for salary in lieu
of notice, or for any other benefits. For the purpose of this paragraph, Termination shall be deemed to occur on the date when
the Company dispatches notice or advice to the Participant that his service is Terminated.

 

6.7Limitations on Exercise. The
Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent the Participant from exercising the Option for the full number of Shares for which it is then exercisable.

 

6.8Limitations on ISOs. The aggregate
Fair Market Value (determined as of the date of grant) of Shares with respect to which ISOs are exercisable for the first time
by a Participant during any calendar year (under this Plan or under any other incentive stock option plan of the Company or Parent
or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of Shares on the date of grant with respect to
which ISOs are exercisable for the first time by a Participant during any calendar year exceeds $100,000, then the Options for
the first $100,000 worth of Shares to become exercisable in such calendar year will be ISOs and the Options for the amount in excess
of $100,000 that become exercisable in that calendar year will be NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date of this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit will be automatically incorporated herein and will apply to any Options granted
after the effective date of such amendment.

 

6.9Modification, Extension or Renewal.
The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefor,
provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s rights
under any Option previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated
in accordance with Section 424(h) of the Code. The Committee may reduce the Exercise Price of outstanding Options without the consent
of Participants affected by a written notice to them; provided, however, that the Exercise Price may not be reduced below the minimum
Exercise Price that would be permitted under Section 6.4 of this Plan for Options granted on the date the action is taken to reduce
the Exercise Price.

 

    	 	6	 

     

    

 

6.10No Disqualification. Notwithstanding
any other provision in this Plan, no term of this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion
or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code or, without the
consent of the Participant affected, to disqualify any ISO under Section 422 of the Code.

 

		7.	STOCK AWARD.

 

A Stock Award is an offer by the Company
to sell to an eligible person Shares that may or may not be subject to restrictions. The Committee will determine to whom an offer
will be made, the number of Shares the person may purchase, the price to be paid (the “Purchase Price”), the restrictions
to which the Shares will be subject, if any, and all other terms and conditions of the Stock Award, subject to the following:

 

7.1Form of Stock Award. All purchases
under a Stock Award made pursuant to this Plan will be evidenced by an Award Agreement (the “Stock Purchase Agreement”)
that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and
will comply with and be subject to the terms and conditions of this Plan. The offer of a Stock Award will be accepted by the Participant’s
execution and delivery of the Stock Purchase Agreement and payment for the Shares to the Company in accordance with the Stock Purchase
Agreement.

 

7.2Purchase Price. The Purchase
Price of Shares sold pursuant to a Stock Award will be determined by the Committee on the date the Stock Award is granted and may
not be less than 85% of the Fair Market Value of the Shares on the grant date, except in the case of a sale to a Ten Percent Stockholder,
in which case the Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase Price must be made in accordance
with Section 11 of this Plan.

 

7.3Terms of Stock Awards. Stock
Awards may be subject to such restrictions as the Committee may impose. These restrictions may be based upon completion of a specified
number of years of service with the Company or Parent or Subsidiary of the Company or upon completion of the performance goals
as set out in advance in the Participant’s individual Stock Purchase Agreement. Stock Awards may vary from Participant to
Participant and between groups of Participants. Prior to the grant of a Stock Award subject to restrictions, the Committee shall:
(a) determine the nature, length and starting date of any Performance Period for the Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the number of Shares that may be awarded to the Participant.
Prior to the transfer of any Stock Award, the Committee shall determine the extent to which such Stock Award has been earned. Performance
Periods may overlap and Participants may participate simultaneously with respect to Stock Awards that are subject to different
Performance Periods and have different performance goals and other criteria.

 

7.4Termination During Performance
Period. If a Participant is Terminated during a Performance Period for any reason, then such Participant will be entitled to
payment (whether in Shares, cash or otherwise) with respect to the Stock Award only to the extent earned as of the date of Termination
in accordance with the Stock Purchase Agreement, unless the Committee determines otherwise.

 

		8.	STOCK BONUSES.

 

8.1Awards of Stock Bonuses. A
Stock Bonus is an award of Shares for extraordinary services rendered to the Company or any Parent or Subsidiary of the Company,
which award may or may not be subject to restrictions. A Stock Bonus will be awarded pursuant to an Award Agreement (the “Stock
Bonus Agreement”) that will be in such form (which need not be the same for each Participant) as the Committee will from
time to time approve, and will comply with and be subject to the terms and conditions of this Plan. A Stock Bonus may be awarded
upon satisfaction of such performance goals as are set out in advance in the Participant’s individual Award Agreement (the
“Performance Stock Bonus Agreement”) that will be in such form (which need not be the same for each Participant) as
the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. Stock
Bonuses may vary from Participant to Participant and between groups of Participants, and may be based upon the achievement of the
Company, Parent or Subsidiary and/or individual performance factors or upon such other criteria as the Committee may determine.

 

    	 	7	 

     

    

 

8.2Terms of Stock Bonuses. The
Committee will determine the number of Shares to be awarded to the Participant. Stock Bonuses may be subject to such restrictions
as the Committee may impose. These restrictions may be based upon completion of a specified number of years of service with the
Company or Parent or Subsidiary of the Company or upon completion of the performance goals as set out in advance in the Participant’s
individual Performance Stock Bonus Agreement. If the Stock Bonus is being earned upon the satisfaction of performance goals pursuant
to a Performance Stock Bonus Agreement, then the Committee will: (a) determine the nature, length and starting date of any Performance
Period for each Stock Bonus; (b) select from among the Performance Factors to be used to measure the performance, if any; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to the payment of any Stock Bonus, the Committee shall
determine the extent to which such Stock Bonuses have been earned. Performance Periods may overlap and Participants may participate
simultaneously with respect to Stock Bonuses that are subject to different Performance Periods and different performance goals
and other criteria. The number of Shares may be fixed or may vary in accordance with such performance goals and criteria as may
be determined by the Committee. The Committee may adjust the performance goals applicable to the Stock Bonuses to take into account
changes in law and accounting or tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect
the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.

 

8.3Form of Payment. The earned
portion of a Stock Bonus may be paid to the Participant by the Company either currently or on a deferred basis, with such interest
or dividend equivalent, if any, as the Committee may determine. Payment of an interest or dividend equivalent (if any) may be made
in the form of cash or whole Shares or a combination thereof, either in a lump sum payment or in installments, all as the Committee
will determine.

 

		9.	STOCK APPRECIATION RIGHTS AND OTHER AWARDS.

 

9.1Stock Appreciation Rights.
A Stock Appreciation Right (“SAR”) is a right to receive a payment, in cash and/or Common Stock of the Company, equal
to the excess of (i) the Fair Market Value of a specified number of Shares on the date of exercise (or such amount less than such
Fair Market Value as the Committee may determine at any time during a specified period prior to the date of exercise) over (ii)
the Fair Market Value of the specified number of Shares on the date the SAR was granted. The Committee may award SARs subject to
such terms and conditions, not inconsistent with the provisions of this Plan, as the Committee may determine from time to time.
The Committee shall determine, in its sole discretion, whether payment of an SAR will be made in cash, Common Stock of the Company,
other property or any combination thereof. SARS granted hereunder will have a maximum term of ten (10) years.

 

9.2Other Awards. The Committee
may grant other awards under this Plan, including stock units, phantom stock, dividend equivalents, similar securities with a value
derived from the value of or related to the Common Stock of the Company and/or returns thereon, or any combination thereof.

 

		10.	DEFERRALS AND SETTLEMENTS.

 

The Committee may require or permit participants
to elect to defer the issuance of Shares or the settlement of Awards in cash under such rules and procedures as it may establish
under this Plan. The Committee also may provide that deferred settlements include the payment or crediting of interest or other
earnings on the deferral amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominated
in Shares.

 

		11.	PAYMENT FOR SHARE PURCHASES.

 

Payment for Shares purchased pursuant to
this Plan may be made in cash (by check) or, where expressly approved for the Participant by the Committee and where permitted
by law:

 

(a)by cancellation of indebtedness
of the Company to the Participant;

 

    	 	8	 

     

    

 

(b)by surrender of shares
that either: (1) have been owned by the Participant for more than six (6) months and have been paid for within the meaning of SEC
Rule 144; or (2) were obtained by the Participant in the public market;

 

(c)by waiver of compensation
due or accrued to the Participant for services rendered;

 

(d)with respect only to purchases
upon exercise of an Option, and provided that a public market for the Company’s stock exists:

 

(1)through
a “same day sale” commitment from the Participant and a broker-dealer that is a member of the Financial Industry Regulatory
Authority (a “FINRA Dealer”) whereby the Participant irrevocably elects to exercise the Option and to sell a portion
of the Shares so purchased to pay for the Exercise Price, and whereby the FINRA Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company; or

 

(2)through
a “margin” commitment from the Participant and a FINRA Dealer whereby the Participant irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the FINRA Dealer in a margin account as security for a loan from the FINRA
Dealer in the amount of the Exercise Price, and whereby the FINRA Dealer irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or

 

(e)by any combination of the
foregoing.

 

		12.	WITHHOLDING TAXES.

 

12.1Withholding
Generally. Whenever Shares are to be issued in satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior
to the delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments in satisfaction of Awards
are to be made in cash, such payment will be net of an amount sufficient to satisfy federal, state, and local withholding tax requirements.

 

12.2Stock Withholding.
When, under applicable tax laws, a participant incurs tax liability in connection with the exercise or vesting of any Award that
is subject to tax withholding and the Participant is obligated to pay the Company the amount required to be withheld, the Committee
may allow the Participant to satisfy the minimum withholding tax obligation by electing to have the Company withhold from the Shares
to be issued that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined on
the date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares withheld for
this purpose will be made in accordance with the requirements established by the Committee and will be in writing in a form acceptable
to the Committee.

 

		13.	PRIVILEGES OF STOCK OWNERSHIP.

 

13.1Voting and Dividends. No
Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Participant.
After Shares are issued to the Participant, the Participant will be a stockholder and will have all the rights of a stockholder
with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect
to such Shares; provided that, if such Shares are issued pursuant to a Stock Award with restrictions, then any new, additional
or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend,
stock split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as
the Stock Award; provided, further, that the Participant will have no right to retain such stock dividends or stock distributions
with respect to Shares that are repurchased at the Participant’s Purchase Price or Exercise Price pursuant to Section 17.

 

13.2Financial Statements. The
Company will provide financial statements to each Participant prior to such Participant’s purchase of Shares under this Plan,
and to each Participant annually during the period such Participant has Awards outstanding; provided, however, the Company will
not be required to provide such financial statements to Participants whose services in connection with the Company assure them
access to equivalent information.

 

    	 	9	 

     

    

 

		14.	NON-TRANSFERABILITY.

 

Awards of Shares granted
under this Plan, and any interest therein, will not be transferable or assignable by the Participant, and may not be made subject
to execution, attachment or similar process, other than by will or by the laws of descent and distribution. Awards of Options granted
under this Plan, and any interest therein, will not be transferable or assignable by the Participant, and may not be made subject
to execution, attachment or similar process, other than by will or by the laws of descent and distribution, by instrument to an
inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor, or by gift
to “immediate family” as that term is defined in 17 C.F.R. 240.16a-1(e). During the lifetime of the Participant, an
Award will be exercisable only by the Participant. During the lifetime of the Participant, any elections with respect to an Award
may be made only by the Participant unless otherwise determined by the Committee and set forth in the Award Agreement with respect
to Awards that are not ISOs.

 

		15.	CERTIFICATES.

 

All certificates for Shares or other securities
delivered under this Plan will be subject to such stop transfer orders, legends and other restrictions as the Committee may deem
necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted.

 

		16.	ESCROW; PLEDGE OF SHARES.

 

To enforce any restrictions on a Participant’s
Shares, the Committee may require the Participant to deposit all certificates representing Shares, together with stock powers or
other instruments of transfer approved by the Committee appropriately endorsed in blank, with the Company or an agent designated
by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates.

 

		17.	EXCHANGE AND BUYOUT OF AWARDS.

 

The Committee, at any time or from time
to time, may authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender
and cancellation of any or all outstanding Awards. The Committee, at any time, may buy from a Participant an Award previously granted
with payment in cash, Shares or other consideration, based on such terms and conditions as the Committee and the Participant may
agree.

 

		18.	SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.

 

An Award will not be effective
unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted,
as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any
other provision in this Plan, the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior
to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion
of any registration or other qualification of such Shares under any state or federal law or ruling of any governmental body that
the Company determines to be necessary or advisable. The Company will be under no obligation to register the Shares with the SEC
or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange
or automated quotation system, and the Company will have no liability for any inability or failure to do so.

 

    	 	10	 

     

    

 

		19.	NO OBLIGATION TO EMPLOY.

 

Nothing in this Plan or
any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate Participant’s employment or other relationship at
any time, with or without cause.

 

		20.	CORPORATE TRANSACTIONS.

 

20.1Assumption
or Replacement of Awards by Successor. In the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly owned subsidiary, a reincorporation
of the Company in a different jurisdiction, or another transaction in which there is no substantial change in the stockholders
of the Company or their relative stock holdings and the Awards granted under this Plan are assumed, converted or replaced by the
successor corporation, which assumption will be binding on all Participants), (c) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges,
or that owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity
interest in the Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition, sale, or transfer
of more than 50% of the outstanding shares or the Company by tender offer or similar transaction, any or all outstanding Awards
may be assumed, converted or replaced by the successor corporation (if any), which assumption, conversion or replacement will be
binding on all Participants. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to stockholders (after taking into account the existing provisions of the
Awards). The successor corporation may also issue, in place of outstanding Shares of the Company held by the Participant, substantially
similar shares or other property subject to repurchase restrictions no less favorable to the Participant. In the event such successor
corporation (if any) refuses to assume or substitute Awards, as provided above, pursuant to a transaction described in this Subsection
20.1, (i) the vesting of any or all Awards granted pursuant to this Plan will accelerate upon a transaction described in this Section
20 and (ii) any or all Options granted pursuant to this Plan will become exercisable in full prior to the consummation of such
event at such time and on such conditions as the Committee determines. If such Options are not exercised prior to the consummation
of the corporate transaction, they shall terminate at such time as determined by the Committee.

 

20.2Other Treatment
of Awards. Subject to any greater rights granted to Participants under the foregoing provisions of this Section 20, in the
event of the occurrence of any transaction described in Section 20.1, any outstanding Awards will be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.

 

20.3Assumption
of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or otherwise, by either: (a) granting an Award under this
Plan in substitution of such other company’s award; or (b) assuming such award as if it had been granted under this Plan
if the terms of such assumed award could be applied to an Award granted under this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if
the other company had applied the rules of this Plan to such grant. In the event the Company assumes an award granted by another
company, the terms and conditions of such award will remain unchanged (except that the exercise price and the number and nature
of Shares issuable upon exercise of any such option will be adjusted appropriately pursuant to Section 424(a) of the Code). In
the event the Company elects to grant a new Option rather than assuming an existing option, such new Option may be granted with
a similarly adjusted Exercise Price.

 

    	 	11	 

     

    

 

		21.	ADOPTION AND STOCKHOLDER APPROVAL.

 

This Plan will become effective on the date
on which it is adopted by the Board (the “Effective Date”). Upon the Effective Date, the Committee may grant Awards
pursuant to this Plan. The Company intends to seek stockholder approval of the Plan within twelve (12) months after the date this
Plan is adopted by the Board; provided, however, if the Company fails to obtain stockholder approval of the Plan during such 12-month
period, pursuant to Section 422 of the Code, any Option granted as an ISO at any time under the Plan will not qualify as an ISO
within the meaning of the Code and will be deemed to be an NQSO.

 

		22.	TERM OF PLAN/GOVERNING LAW.

 

Unless earlier terminated as provided herein,
this Plan will terminate ten (10) years from the date this Plan is adopted by the Board or, if earlier, the date of stockholder
approval. This Plan and all agreements thereunder shall be governed by and construed in accordance with the laws of the State of
California.

 

		23.	AMENDMENT OR TERMINATION OF PLAN.

 

The Board, at any time, may terminate or
amend this Plan in any respect, including without limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Board will not, without the approval of the stockholders of the Company, amend
this Plan in any manner that requires such stockholder approval.

 

		24.	NONEXCLUSIVITY OF THE PLAN.

 

Neither the adoption of
this Plan by the Board, the submission of this Plan to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements
as it may deem desirable, including, without limitation, the granting of stock options and bonuses otherwise than under this Plan,
and such arrangements may be either generally applicable or applicable only in specific cases.

 

		25.	ACTION BY COMMITTEE.

 

Any action permitted or required to be taken
by the Committee or any decision or determination permitted or required to be made by the Committee pursuant to this Plan shall
be taken or made in the Committee’s sole and absolute discretion.

 

 

 

 

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