Document:

FORM OF
WARRANT

    

    THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.

    

    DERYCZ
SCIENTIFIC, INC.

    

    Warrant
To Purchase Common Stock

    

    Warrant
No.: ______

    

    Number of
Shares: _________

    

    Date of
Issuance:

    

    Derycz
Scientific, Inc., a Nevada corporation (the “Company”), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, _________________________ (“Holder”), the
registered holder hereof or its permitted assigns, is entitled, subject to the
terms set forth below, to purchase from the Company upon surrender of this
Warrant, at any time or times on or after the date hereof, but not after 11:59
P.M. Pacific Time on the Expiration Date (as defined herein) __________
(_,_____,____) fully paid and nonassessable shares of Common Stock (as defined
herein) of the Company (the “Warrant Shares”) at
the exercise price per share provided in Section 1(a) below or as subsequently
adjusted.

    

    Section
1.  This Warrant is
the common stock purchase warrant (the “Warrant”) issued
pursuant to Section 2(e) of Warrant No___ issued by the Company on December 4,
2006 (the "Prior
Warrant").  The Prior Warrant was one of a series of identical
warrants issued by the Company on December 4, 2006 pursuant to a Subscription
Agreement between the Company and the purchasers thereunder.

    

    (a)          
Definitions.  The
following words and terms as used in this Warrant shall have the following
meanings:

    

    (ii)           
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks
in the City of Los Angeles are authorized or required by law to remain
closed.

    

    

    (iii)          
“Closing Bid
Price” means the closing bid price of Common Stock as quoted on the
Principal Market (as reported by Bloomberg Financial Markets (“Bloomberg”) through
its “Volume at Price” function).

    

    (iv)         
“Common Stock”
means (i) the Company’s common stock, par value $0.001 per share, and (ii) any
capital stock into which such Common Stock shall have been changed or any
capital stock resulting from a reclassification of such Common
Stock.

    
      
         

      

      
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    (vi)          “Expiration Date”
means November 17, 2013 or, if such
date falls on a Saturday, Sunday or other day on which banks are required or
authorized to be closed in the City of Los Angeles or the State of California or
on which trading does not take place on the Principal Exchange or automated
quotation system on which the Common Stock is traded (a “Holiday”), the next
date that is not a Holiday.

    

    (vii)         “Issuance Date” means
the date hereof.

    

     (x)          
“Person” means
an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.

    (xi)           
“Principal
Market” means the New York Stock Exchange, the American Stock Exchange,
the Nasdaq National Market, the NasdaqSmallCap Market, whichever is at the time
the principal trading exchange or market for such security, or the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg or, if no bid or sale information is reported for such
security by Bloomberg, then the average of the bid prices of each of the market
makers for such security as reported in the “pink sheets” by the National
Quotation Bureau, Inc.

    

    (xii)         
“Securities
Act” means the Securities Act of 1933, as amended.

    

    (xiii)       
 “Warrant”
means this Warrant and all purchase warrants issued in exchange, transfer or
replacement thereof.

    

    (xiv)        “Warrant Exercise
Price” shall be $2.00
per share or as subsequently adjusted as provided in Section 8
hereof.

    

    (xv)         “Warrant Shares” means
the shares of Common Stock issuable at any time upon exercise of this Warrant or
any replacement warrant.

    

    (b)           
Other Definitional Provisions.

    

    (i)           
Except as otherwise specified herein, all references herein (A) to the Company
shall be deemed to include the Company’s successors and (B) to any applicable
law defined or referred to herein shall be deemed references to such applicable
law as the same may have been or may be amended or supplemented from time to
time.

    

    (ii)           When
used in this Warrant, the words “herein”, “hereof”, and “hereunder” and words of similar import,
shall refer to this Warrant as a whole and not to any provision of this Warrant,
and the words “Section”, “Schedule”, and “Exhibit” shall refer
to Sections of, and Schedules and Exhibits to, this Warrant unless otherwise
specified.

    

    (iii)          Whenever
the context so requires, the neuter gender includes the masculine or feminine,
and the singular number includes the plural, and vice versa.

    

    Section
2.     
Exercise of
Warrant.

    

    (a)           
Subject to the terms and conditions hereof, this Warrant may be exercised by the
holder hereof then registered on the books of the Company, pro rata as
hereinafter provided, at any time on any Business Day on or after the opening of
business on such Business Day, commencing with the first day after the date
hereof, and prior to 11:59 P.M. Pacific Time on the Expiration
Date

    
      
         

      

      
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    (i)           
by delivery of a written notice, in the form of the subscription notice attached
as Exhibit A
hereto (the “Exercise
Notice”), of such holder’s election to exercise this Warrant, which
notice shall specify the number of Warrant Shares to be purchased, payment to
the Company of an amount equal to the Warrant Exercise Price(s) applicable to
the Warrant Shares being purchased, multiplied by the number ofWarrant Shares
(at the applicable Warrant Exercise Price) as to which this Warrant is being
exercised (plus any applicable issue or transfer taxes) (the “Aggregate Exercise
Price”) in cash or wire transfer of immediately available funds and the
surrender of this Warrant (or an indemnification undertaking with respect to
this Warrant in the case of its loss, theft or destruction) to a common carrier
for overnight delivery to the Company as soon as practicable following such date
(“Cash Basis”)
or (ii) on a “cashless” basis if, at the time of exercise, the Warrant Shares
have not been subject to an effective registration statement for a 45
consecutive day period, by delivering an Exercise Notice and in lieu of making
payment of the Aggregate Exercise Price in cash or wire transfer, elect instead
to receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (the “Cashless
Exercise”):

    

    Net
Number = (A x B) - (A
x C)

                                                          B

    

    For
purposes of the foregoing formula:

    

    A = the
total number of Warrant Shares with respect to which this Warrant is then being
exercised.

    

    B = the
Closing Bid Price of the Common Stock on the date of exercise of the
Warrant.

    

    C = the
Warrant Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.

    

    In the
event of any exercise of the rights represented by this Warrant in compliance
with this Section 2, the Company shall on or before the fifth (5th) Business Day
following the date of receipt of the Exercise Notice, the Aggregate Exercise
Price and this Warrant (or an indemnification undertaking with respect to this
Warrant in the case of its loss, theft or destruction) and the receipt of the
representations of the holder specified in Section 6 hereof, if requested by the
Company (the “Exercise
Delivery Documents”), and if the Common Stock is DTC eligible, credit
such aggregate number of shares of Common Stock to which the holder shall be
entitled to the holder’s or its designee’s balance account with The Depository
Trust Company; provided, however, if the holder who submitted the Exercise
Notice requested physical delivery of any or all of the Warrant Shares, or, if
the Common Stock is not DTC eligible  then the Company shall, on or
before the fifth (5th)
Business Day following receipt of the Exercise Delivery Documents, issue and
surrender to a common carrier for overnight delivery to the address specified in
the Exercise Notice, a certificate, registered in the name of the holder, forthe
number of shares of Common Stock to which the holder shall be entitled pursuant
to such request.  Upon delivery of the Exercise Notice and Aggregate
Exercise Price referred to in clause (i) or (ii) above the holder of this
Warrant shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been
exercised.  In the case of a dispute as to the determination of the
Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation of
the Warrant Shares, the Company shall promptly issue to the holder the number of
Warrant Shares that is not disputed and shall submit the disputed determinations
or arithmetic calculations to the holder via facsimile within one (1) Business
Day of receipt of the holder’s Exercise Notice.

    

    (b)           
If the holder and the Company are unable to agree upon the determination of the
Warrant Exercise Price or arithmetic calculation of the Warrant Shares within
one (1) day of such disputed determination or arithmetic calculation being
submitted to the holder, then the Company shall immediately submit via facsimile
(i) the disputed determination of the Warrant Exercise Price or the Closing Bid
Price to an independent, reputable investment banking firm or (ii) the disputed
arithmetic calculation of the Warrant Shares to its independent, outside
accountant. The Company shall cause the investment banking firm or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than forty-eight
(48) hours from the time it receives the disputed determinations or
calculations. Such investment banking firm’s or accountant’s determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error.

    

    (c)           
Unless the rights represented by this Warrant shall have expired or shall have
been fully exercised, the Company shall, as soon as practicable and in no event
later than five (5) Business Days after anyexercise and at its own expense,
issue a new Warrant identical in all respects to this Warrant exercised except
it shall represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant exercised, less the number
of Warrant Shares with respect to which such Warrant is
exercised.

    
      
         

      

      
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    (d)           
No fractional Warrant Shares are to be issued upon any pro rata exercise of this
Warrant, but rather the number of Warrant Shares issued upon such exercise of
this Warrant shall be rounded up or down to the nearest whole
number.

    

    Section
3. 
 Covenants as to
Common Stock.  The Company hereby covenants and agrees as
follows:

    

    (a)           
This Warrant is, and any purchasewarrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.

    

    (b)           All
Warrant Shares which may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.

    

    (c)           During
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have authorized and reserved at least one hundred
percent (100%) of the number of shares of Common Stock needed to provide for the
exercise of the rights then represented by this Warrant and the par value of
said shares will at all times be less than or equal to the applicable Warrant
Exercise Price. If at any time the Company does not have a sufficient number of
shares of Common Stock authorized and available, then the Company shall call and
hold a special meeting of its stockholders within sixty (60) days of that time
for the sole purpose of increasing the number of authorized shares of Common
Stock.

    

    (d)            
On or before March 1, 2012, the Company shall use its best efforts to file one
or more registration statement(s) under the Securities Act (each a "Registration
Statement") with the Securities and Exchange Commission (the "SEC") for the
purpose of registering (i) the Warrant Shares issuable from time to time upon
the exercise of this Warrant , and (ii) shares of Common Stock owned by the
Holder that were obtained upon exercise of this Warrant or the Prior Warrant in
each case on a Cash Basis prior to the filing of the Registration
Statement.  The Company shall use its best efforts to obtain the
effectiveness of the Registration Statement as soon as practicable after the
filing of the Registration Statement and to maintain the effectiveness of the
Registration Statement untilthe Expiration Date. In the Company's sole
discretion, the registration of the Warrant Shares and Common Stock contemplated
by this Section 3(d) may be undertaken by the Company by including the Warrant
Shares and Common Stock in any other registration statement under the Securities
Act (other than a registration statement on Forms S-4 and S-8) filed by the
Company with the SEC after the date hereof.  The Holder shall have no
right to demand or require that the Company file a Registration Statement prior
to March 1, 2012 or include any Warrant Shares or shares of Common Stock on any
other registration statement that the Company may file prior to March 1, 2012
that is not filed for the sole purpose of registering the Warrant Shares or
shares of Common Stock owned by the Holder.In addition, in the event the Warrant
Shares or shares of Common Stock owned by Holder are initially registered under
a registration statement filed for the purpose of  registering shares
of Common Stock of the Company in an underwritten offering, the Warrant Shares
or shares of Common Stock held by the Holder to be included in such registration
statement will be subject to cut back from the registration statement in the
sole discretion of the lead underwriter of such offering and the
Company.

    

    (e)           The
Company will not, by amendment of its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it
hereunder, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the holder of this Warrant in order to protect the
exercise privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. The Company
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Warrant Exercise Price then in effect,
and will take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

    
      
         

      

      
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    (f)           
This Warrant will be binding upon any entity succeeding to the Company by
merger, consolidation or acquisition of all or substantially all of the
Company’s assets.

    

    Section
4.    Taxes.  The
Company shall pay any and all transfer or documentary taxes, except any
applicable withholding taxes, which may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant.

    

    Section
5.    Warrant Holder Not Deemed a
Stockholder.  Except as otherwise specifically provided herein,
no holder, as such, of this Warrant shall be entitled to vote or receive
dividends or be deemed the holder of shares of capital stock of the Company for
any purpose, nor shall anything contained in this Warrant be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any corporate action
(whether ay reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the holder of this Warrant of the Warrant Shares which he or she is then
entitled to receive upon the due exercise of this Warrant.  In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on such holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the
Company.  Notwithstanding this Section 5, the Company will provide the
holder of this Warrant with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the
giving thereof to the stockholders.

    

    Section
6.    Representations of
Holder.  The holder of this Warrant, by the acceptance hereof,
represents that it is acquiring this Warrant and the Warrant Shares for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution of this Warrant or the Warrant
Shares, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, the holder
does not agree to hold this Warrant or any of the Warrant Shares for any minimum
or other specific term and reserves the right to dispose of this Warrant and the
Warrant Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act.

    

    Section
7.     Ownership and
Transfer.  The Company shall maintain at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each
transferee.  The Company may treat the person in whose name any
Warrant is registered on the register as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary, but in all events
recognizing any transfers made in accordance with the terms of this
Warrant.

    

    Section
8.  Adjustment of Warrant
Exercise Price and Number of Shares.  The Warrant Exercise
Price and the number of shares of Common Stock issuable upon exercise of this
Warrant shall be adjusted from time to time as follows:

    

    (a)           
Adjustment of Warrant
Exercise Price upon Subdivision or Combination of Common
Stock.  If the Company at any time after the date of issuance
of this Warrant subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, any Warrant Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced and the number of
shares of Common Stock obtainable upon exercise of this Warrant will be
proportionately increased.  If the Company at any time after the date
of issuance of this Warrant combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of Warrant
Shares issuable upon exercise of this Warrant will be proportionately
decreased.  Any adjustment under this Section 8(a) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

    
      
         

      

      
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    (b)           
Notices.

    

    (i)           
Immediately upon any adjustment of the Warrant Exercise Price, the Company will
give written notice thereof to the holder of this Warrant, setting forth in
reasonable detail, and certifying, the calculation of such
adjustment.

    

    (ii)           
The Company will give written notice to the holder of this Warrant at least ten
(10) days prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the Common Stock,
(B) with respect to any pro rata subscription offer to holders of Common Stock
or (C) for determining rights to vote with respect to any Organic Change (as
defined below), dissolution or liquidation, provided that such information shall
be made known to the public prior to or in conjunction with such notice being
provided to such holder.

    

    (iii)           
The Company will also give written notice to the holder of this Warrant at least
ten (10) days prior to the date on which any Organic Change, dissolution or
liquidation will take place, provided that such information shall be made known
to the public prior to or in conjunction with such notice being provided to such
holder.

    

    Section
9.         Purchase Rights;
Reorganization, Reclassification, Consolidation, Merger or
Sale.

    

    (a)           
In addition to any adjustments pursuant to Section 8 above, if at any time the
Company grants, issues or sells any options, convertible securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Stock (the “Purchase Rights”),
then the holder of this Warrant will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which such
holder could have acquired if such holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant immediately
before the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights.

    

    (b)           
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company’s assets to another Person or
other transaction in each case which is effected in such a way that holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock is referred to herein as an “Organic
Change.”  Prior to the consummation of any (i) sale of all or
substantially all of the Company’s assets to an acquiring Person or (ii) any
other Organic Change following which the Company is not a surviving entity, the
Company will secure from the Person purchasing such assets or the successor
resulting from such Organic Change (in each case, the “Acquiring Entity”) a
written agreement  to deliver to the Holder  in exchange for
the Warrant, a security of the Acquiring Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant and
satisfactory to the Holder(including an adjusted warrant exercise price equal to
the value for the Common Stock reflected by the terms of such consolidation,
merger or sale, and exercisable for a corresponding number of shares of Common
Stock acquirable and receivable upon exercise of the Warrant without regard to
any limitations on exercise, if the value so reflected is less than any
Applicable Warrant Exercise Price immediately prior to such consolidation,
merger or sale).  Prior to the consummation of any other Organic
Change, the Company shall make appropriate provision (in form and substance
satisfactory to the Holders of this Warrant)  to insure
that  the Holder of this Warrant will thereafter have the right to
acquire and receive in lieu of or in addition to (as the case may be) the
Warrant Shares immediately theretofore issuable and receivable upon the exercise
of the Holder’s Warrant (without regard to any limitations on exercise), such
shares of stock, securities or assets that would have been issued or payable in
such Organic Change with respect to or in exchange for the number of Warrant
Shares which would have been issuable and receivable upon the exercise of such
the Holder's  Warrant as of the date of such Organic Change (without
taking into account any limitations or restrictions on the exercisability of
this Warrant).  This Section 9 shall not apply to acquisitions of
other businesses by the Company.

    
      
         

      

      
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    Section
10.      Lost, Stolen, Mutilated or
Destroyed Warrant.  If this Warrant is lost, stolen, mutilated
or destroyed, the Company shall promptly, on receipt of an indemnification
undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen,
mutilated or destroyed.

    

    Section
11.    Notice.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Warrant must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of receipt is
received by the sending party transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same.  The
addresses and facsimile numbers for such communications shall be:

     

    
      
        
          	
                  If
      to the Company, to:

                	
                  Derycz
      Scientific, Inc.

                
	 
      	
                  1524
      Cloverfield Boulevard, Suite E

                
	 
      	
                  Santa
      Monica, California 90404

                
	 
      	
                  Attention:  Peter
      Derycz

                

        

      

    

    

    
      
        
          	
                  With
      a copy to:

                	
                  Law
      Office of Jennifer A. Post

                
	 
      	
                   9320
      Wilshire Boulevard, Suite 306

                
	 
      	
                   Beverly
      Hills, California 90212

                
	 
      	
                   Attention:  Jennifer
      A. Post, Esq.

                
	 
      	 
      
	 
      	 
      

        

      

    

    

    If to a
holder of this Warrant, to it at the address and facsimile number set forth on
Exhibit C
hereto, with copies to such holder’s representatives as set forth on Exhibit C, or at such
other address and facsimile as shall be delivered to the Company upon the
issuance or transfer of this Warrant.  Each party shall provide five
days’ prior written notice to the other party of any change in address or
facsimile number.  Written confirmation of receipt (A) given by the
recipient of such notice, consent, facsimile, waiver or other communication, (or
(B) provided by a nationally recognized overnight delivery service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

    

    Section
12.     Date.  The
date of this Warrant is set forth on page 1 hereof.  This Warrant, in
all events, shall be wholly void and of no effect after the close of business on
the Expiration Date.

     

    Section
13.    Amendment and
Waiver.  Except as otherwise provided herein, the provisions of
this  Warrant may be amended and 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 has obtained the written consent of the Holder of this
Warrant.

    

    Section
14.         Descriptive Headings;
Governing Law.  The descriptive headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.  The corporate laws of the
State of Nevada shall govern all issues concerning the relative rights of the
Company and its stockholders.  All other questions concerning the
construction, validity, enforcement andinterpretation of this Warrant shall be
governed by the internal laws of the State of California, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of California or any other jurisdictions) that would cause the application of
the laws of any jurisdictions other than the State of
California.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Los Angeles,
for the adjudication of any dispute hereunder or in connection herewith or
therewith, or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Warrant and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.

    
      
         

      

      
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    Section
15.        Waiver of Jury
Trial.  AS A
MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.

    

    Section
16.       
Company’s Right to
Redeem Warrant.  Upon the effectiveness of the Registration
Statement registering the Warrant Shares, this Warrant or any unexercised
portion thereof may be redeemed by the Company upon ten (10) days prior written
notice (the "Redemption Notice") to the Holder (the "Notice Period"), at a
redemption price of $0.01 per Warrant Share (the "Redemption Price"), provided that each of the
following conditions are satisfied:

    

    (a)           The
Closing Bid Price for the Company's Common Stock (or the closing sale price, in
the event no bid information is available on the Principal Market) shall be
greater than $2.00 per share (the "Trigger Price") for a minimum of ten (10)
trading days during a twenty five (25) consecutive trading day period preceding
the date of the Redemption Notice, provided however that such
Trigger Price shall be subject to proportional adjustment for any stock split,
stock dividend, recapitalization or other corporate event that alters the price
of the Company's Common Stock;

    

    (b)           The
Registration Statement shall have been continuously effective during the Notice
Period; and

    

    (c)           The
Holder shall fail to exercise the Warrant in full during the Notice Period,
provided that the
conditions of (a) and (b) have been satisfied.

    

    In the
event that all of the foregoing conditions have been satisfied, the Company
shall tender the Redemption Price in full, in cash, to the Holder by check or
wire transfer, on the first business day that is not a Holiday immediately
succeeding the end of the Notice Period and Holder shall promptly submit the
original Warrant to the Company. Upon receipt of the Redemption Price by Holder,
at the Company's discretion either (i) ownership of the Warrant shall be
transferred on the books and records of the Company to reflect the Company as
the record owner thereof, or (ii) the Warrant shall be deemed cancelled and of
no further force or effect.

    

    IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed as of the date first set forth
above.

    

    
      
        
          
            
              
                	
                        DERYCZ
      SCIENTIFIC, INC.

                      	 
	 
      	 
      	 
	
                        By:

                      	
                          

                      	 
	 
      	
                        Name:
      Peter Derycz

                      	 
	 
      	
                        Title:   President
      and Chief Executive
Officer

                      

              

            

          

        

      

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    EXHIBIT
A TO WARRANT

    EXERCISE
NOTICE

    

    TO
BE EXECUTEDBY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT DERYCZ
SCIENTIFIC, INC.

    

    The
undersigned holder hereby exercises the right to purchase ______________ of the
shares of Common Stock (“Warrant Shares”) of
Derycz Scientific, Inc. (the “Company”), evidenced
by the attached Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.

    

    Specify
Method of exercise by check mark:

    

    1.
___     Cash Exercise

    

    (a)           
Payment of Warrant
Exercise Price. The holder shall pay the Aggregate Exercise Price of
$______________ to the Company in accordance with the terms of the
Warrant.

    

    (b)           
Delivery of Warrant
Shares.  The Company shall deliver to the holder _________ Warrant
Shares in accordance with the terms of the Warrant.

    

    2.
___     Cashless Exercise

    

                           (a)           
Payment of Warrant
Exercise Price.  In lieu of making payment of the Aggregate
Exercise Price, the holder elects to receive upon such exercise the Net Number
of shares of Common Stock determined in accordance with the terms of the
Warrant.

    

    (b)          
Delivery of Warrant
Shares.  The Company shall deliver to the holder _________ Warrant
Shares in accordance with the terms of the Warrant.

    

    Date:
_______________ , ______

    

    Name of
Registered Holder

    

    By:

    Name:

    Title:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    EXHIBIT
B TO WARRANT

    FORM OF WARRANT
POWER

    

    FOR VALUE RECEIVED, the
undersigned does hereby assign and transfer to ________________, Federal
Identification No. __________, a warrant to purchase ____________ shares of the
capital stock of Derycz Scientific, Inc. represented by warrant certificate no.
_____, standing in the name of the undersigned on the books of said
corporation.  The undersigned does hereby irrevocably constitute and
appoint ______________, attorney to transfer the warrants of said corporation,
with full power of substitution in the premises.

    

    
      
        	
                Dated:

              	 
      
	 
      	 
      
	 
      	
                By:

              
	 
      	
                Name:

              
	 
      	
                Title:

              
	 
      	 
      

      

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    EXHIBIT C TO
WARRANT

    

    HOLDER’S
ADDRESS

    
      
         

      

      
        3Exhibit
10.22

    

    SALARY
CONTINUATION AND NON-COMPETITION AGREEMENT

    

    THIS SALARY CONTINUATION AND
NON-COMPETITION AGREEMENT (the “Agreement”) dated and effective as of October 1,
2010, is made and entered into by and between IEC ELECTRONICS CORP (“IEC”) and
JEFFREY T. SCHLARBAUM (“Executive”).

    

    WITNESSETH
:

    

    WHEREAS, Executive has been an employee
and officer of IEC since May 2004 and currently serves as Executive Vice
President and President of IEC Contract Manufacturing; and

    

    WHEREAS, the Board of Directors
(“Board”) of IEC has elected Executive as President of IEC, effective on October
1, 2010; and

    

    WHEREAS, as President, Executive will
report to the Chief Executive Officer (“CEO”), and shall perform such duties and
exercise such powers as may be delegated from time to time by the CEO or the
Board, including, but not limited to, the responsibility for the sales and
profits of each of IEC’s business units, current or future; and

    

    WHEREAS, in recognition of such
promotion, the Board has awarded Executive 10,000 shares of restricted stock
effective on October 1, 2010; and

    

    WHEREAS, the Board has determined that
it is in the best interests of IEC and its shareholders to provide Executive
with certain salary continuation payments upon the circumstances described below
in order to provide Executive with enhanced financial security to assure the
continued loyalty, cooperation and services of Executive; and

    

    WHEREAS,
the Board has conditioned Executive’s new title and responsibilities, his award
of restricted shares and the payment of salary continuation to him under certain
circumstances, on Executive’s execution of this Agreement and Executive’s
compliance with the covenants set forth in Section 3 of this Agreement;
and

    

    WHEREAS,
Executive acknowledges the receipt of such good and valuable consideration for
his compliance with the covenants set forth in Section 3 of this
Agreement.

    

    NOW, THERFORE, in consideration of the
mutual promises, benefits and covenants herein contained, the parties agree as
follows:

    

    1.           Employment
at Will

    

    IEC and Executive acknowledge and agree
that Executive’s continued employment is “at will” and that their employment
relationship may be terminated by either party at any time, for any reason, with
or without cause.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    Nothing contained in this Agreement
shall: (a) confer on Executive any right to continue in the employ of IEC; (b)
constitute any contract or agreement of employment; or (c) interfere in any way
with the at-will nature of Executive’s employment with IEC.

    

    2.           Salary
Continuation

    

    2.1           If
Executive’s employment is terminated (i) by IEC without “Cause” (as defined
below); or (ii) following a Change in Control (as defined below) and without
Cause or for Good Reason (as defined below), IEC agrees to provide Executive
with salary continuation for a period of twelve (12) months at the rate in
effect immediately prior to the date of termination.  All withholding
taxes and other deductions that IEC is required by law to make from wage
payments to employees will be made from such salary continuation
payments.  If Executive’s employment terminates as a result of death
or Disability, such termination shall not be considered a termination without
“Cause” that will enable Executive to receive any salary continuation
payment.

    

    2.2           Notwithstanding
Section 2.1, Executive shall not be entitled to receive salary continuation
payments (a) if he voluntarily terminates his employment with IEC except for
Good Reason following a Change in Control; (b) if his employment terminates by
reason of his death or Disability; or (c) if he is terminated by IEC for
Cause.

    

    2.3           Executive
acknowledges and understands that IEC’s obligation to make the salary
continuation payments in Section 2.1is conditioned upon each of the
following:  (i) Executive’s continued compliance with his obligations
under Section 3 of this Agreement; and (ii) Executive’s execution, delivery and
non-revocation of a valid and enforceable general release of claims (the
“Release”) in form and substance satisfactory to IEC, which must be delivered to
IEC within ten (10) business days after termination.  In the event
that Executive breaches any of the covenants set forth in Section 3 of this
Agreement, Executive will immediately return to IEC any portion of the salary
continuation payments that have been paid to Executive pursuant to this
Section.  Subject to Section 2.4, the salary continuation payments
will commence to be paid to Executive as soon as practicable following the
effectiveness of the Release.

    

    2.4           Section 409A Specified
Employee  If Executive is a “specified employee” for purposes
of Section 409A of the United States Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations thereunder, to the extent required to comply
with Section 409A of the Code, any salary continuation payments required to be
made pursuant to Section 2.1 which are subject to Section 409A of the Code shall
not commence until one day after the day which is six (6) months from the date
of termination, with the first payment equaling six (6) months of salary
continuation.

    

    2.5           Definitions      For
purposes of this Agreement, the following terms shall have the following
meanings:

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    

    2.5.1       
“Cause” shall mean any of the following: Executive’s (i) substantial and
material failure, or refusal to perform his assigned duties which is not cured
within ten (10) days of Executive receiving written notice of such failure,
provided that that a failure to meet the business plan of IEC alone, or good
faith errors in judgment made by the Executive shall not constitute grounds for
termination of the Executive for Cause; (ii) willful misconduct or gross
negligence in the performance of his employment duties; (iii) continuing failure
or refusal to observe material policies generally applicable to officers or
employees of IEC unless such failure is capable of being cured and is cured
within ten (10) days of Executive receiving written notice of such failure; (iv)
failure to cooperate with any internal investigation of IEC; (v) commission of
any act of fraud, theft, embezzlement or financial dishonesty with respect to
IEC; (vi)  conviction of any felony, or an indictment for a crime
which is of such impropriety or magnitude that it substantially adversely
affects the business or  the reputation of IEC; (vii) material
violation of the provisions of this Agreement unless such violation is capable
of being cured and is cured within ten (10) days of Executive receiving written
notice of such violation; or (viii) refusal to follow any legal and proper
directive of the Board or Chief Executive Officer which is not cured within ten
(10) days of Executive receiving written notice.

    

    2.5.2                 “Change
in Control” shall mean (a) the date of the acquisition by any “person” (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), excluding IEC  or any of its
subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of 25% or more of  the combined voting power of
IEC’s then outstanding voting securities (the “Voting Securities”); or (b) the
date the individuals who constitute the board as of the effective date of this
Agreement (the “Incumbent Board”) cease for any reason to constitute at least
two-thirds of the members of the board, provided that any person becoming a
director subsequent to the effective date of this Agreement whose election, or
nomination for election by IEC’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board (other
than any individual whose nomination for election to the board was not endorsed
by IEC’s management prior to, or at the time of, such individual’s initial
nomination for election ) shall be, for the purposes of this Agreement,
considered as though such person were a member of the Incumbent Board; or (c)
the date of consummation of a merger, consolidation, recapitalization,
reorganization, sale or disposition of all or a substantial portion of IEC’s
assets or the issuance of shares of stock of IEC in connection with the
acquisition of the stock or assets of another entity; provided, however, that a
Change in Control shall not occur under this clause (c) if consummation of the
transaction would result in at least 51% of the total voting power represented
by the Voting Securities of IEC (or, if not IEC, the entity that succeeds to all
or substantially all of IEC’s business) outstanding immediately after such
transaction being beneficially owned (within the meaning of Rule 13d-3
promulgated pursuant to the Exchange Act) by at least 51% of the holders of
outstanding Voting Securities of IEC immediately prior to the transaction, with
the voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or (d) the date
IEC files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form or report of item therein) that a
change in control of IEC has or may have occurred, or will or may occur in the
future, pursuant to any then existing contract or transaction.

    

    Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any person acquires beneficial ownership of more than 25% of Voting Securities
as a result of the acquisition of Voting Securities by IEC which reduces the
number of Voting Securities outstanding; provided that if after such acquisition
by IEC such person becomes the beneficial owner of additional Voting Securities
that increases the percentage of outstanding Voting Securities beneficially
owned by such person, a Change in Control shall then occur.

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    

    2.5.3                 “Good
Reason” shall mean the occurrence of any of the following events within the
two-year period following a Change in Control without the Executive’s express
written consent:  (i) a material and adverse change in Executive’s
position, authority, duties or responsibilities; (ii) a reduction in Executive’s
base salary; (iii) a failure to provide Executive with a package of fringe
benefits that, though one or more elements may vary from those in effect
immediately prior thereto, is substantially comparable to such fringe benefits;
or (iv) a relocation of Executive’s principal place of employment by more than
fifty (50) miles.

    

    2.5.4                 “Disability”
shall mean Executive is entitled to receive long-term disability benefits under
the long-term disability plan of IEC in which Executive participates, or, if
there is no such plan, Executive’s inability, due to physical or mental ill
health, to perform the essential functions of Executive’s job, with or without a
reasonable accommodation, for 180 days during any 365-day period, irrespective
of whether such days are consecutive.

    

    3.           Restrictive
Covenants

     

    The parties acknowledge that references
to IEC in this Section 3 shall be deemed to be references to IEC and its
affiliates and subsidiaries.

    

    3.1           Unauthorized
Disclosure        Executive
agrees and understands that in his capacity as an executive officer of IEC,
Executive has been and will be exposed to and has and will receive information
relating to the confidential affairs of IEC, including, without limitation,
technical information, intellectual property, business and marketing plans,
strategies, customer information, software, other information concerning the
products, promotions, development, financing, expansion plans, business policies
and practices of IEC and other forms of information considered by IEC to be
confidential or in the nature of trade secrets (including, without limitation,
ideas, research and development, know-how, formulas, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information and business and marketing plans and proposals) (collectively, the
“Confidential Information”).  Executive agrees that at all times
during Executive’s employment with IEC and thereafter, (i) Executive shall not
disclose such Confidential Information, either directly or indirectly, to any
individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof (each a “Person”) other than
in connection with Executive’s employment with IEC without IEC’s prior written
consent and shall not use or attempt to use any such information in any manner
other than in connection with his employment with IEC, unless required by law to
disclose such information, in which case Executive shall provide IEC with
written notice of such requirement as far in advance of such anticipated
disclosure as possible; (ii) Executive shall not delete, encrypt, password,
protect or retain electronic files containing Confidential Information, or IEC
materials (including emails and attachments) and (iii) Executive shall not take
any other action that impairs, restricts, limits or impedes IEC’s ability to
have full access and to use its Confidential Information.  This
confidentiality covenant has no temporal, geographical or territorial
restriction.  Upon termination of Executive’s employment with IEC,
Executive shall promptly supply to IEC all property, keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data and any other tangible
product or document which has been produced by, received by or otherwise
submitted to Executive during Executive’s employment with IEC, and any copies
thereof in his (or capable of being reduced to his) possession.  At
the end of Executive’s employment, Executive also agrees not to make IEC
materials and data difficult to access.  Specifically, Executive
agrees (i) not to delete or alter any IEC documents, or destroy or throw away
materials; (ii) not to password protect or encrypt or reformat IEC documents;
(iii) not to download IEC information or forward electronic files from the IEC
computer systems to any other location; (iv) not access the IEC computer system,
email system or voicemail system, including by remote access; and (v) not to
solicit the assistance of any IEC employee or contractor to assist Executive in
connection with such actions.

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    

    3.2           Non-Competition  By
and in consideration of IEC’s entering into this Agreement and in further
consideration of (i) Executive’s promotion to President of IEC; (ii) Executive’s
award of restricted shares; (iii) IEC’s agreement to pay salary continuation as
set forth in Section 2; and (iv) Executive’s exposure to the Confidential
Information of IEC, Executive agrees that he shall not, during his continuation
of employment with IEC and for a period of eighteen (18) months thereafter (the
“Restriction Period”), directly or indirectly, perform similar employment
functions for or on behalf of  any Restricted Enterprise (as defined
below); provided that in no event shall ownership of one percent (1%) or less of
the outstanding securities of any class of any issuer whose securities are
registered under the Securities Exchange Act of 1934, as amended, standing
alone, be prohibited by this Section 3.2, so long as Executive does not have, or
exercise, any rights to manage or operate the business of such issuer other than
rights as a stockholder thereof.  For purposes of this paragraph,
“Restricted Enterprise” shall mean any Person that is actively engaged in any
geographic area in any business which is either (i) in competition with the
business of IEC; or (ii) proposed to be conducted by IEC in IEC’s business plan
as in effect at that time.  During the Restriction Period, upon
request of IEC, Executive shall notify IEC of Executive’s then current
employment status.  Notwithstanding the foregoing, that it shall not
be a violation of this Agreement for Executive to serve on the boards of
directors of other companies which do not compete with IEC, with the Board’s
prior written consent, which shall not be unreasonably withheld.

    

    3.3           Non-Solicitation of
Employees  Executive acknowledges that the relationship between
IEC and its employees are valuable assets of IEC.  During Executive’s
employment and during the Restriction Period, Executive agrees that Executive
will not directly or indirectly contact, induce or solicit (or assist any Person
to contact, induce or solicit) for employment any person who is, or within
twelve (12) months prior to the date of such solicitation was, an employee of
IEC.

    

    3.4           Non-Solicitation of IEC
Customers   Executive acknowledges that the relationship
between IEC and its customers are valuable assets of IEC and that IEC has a
legitimate interest in protecting the customer base it has created and
maintained at its financial expense.  During Executive’s employment,
and during the Restriction Period (other than in connection with carrying out
his responsibilities for IEC), Executive agrees that he will not directly or
indirectly contact, induce or solicit (or assist any Person to contact, induce
or solicit) any customer or client of IEC (or prospective customer or client of
IEC with whom IEC is negotiating or preparing a proposal for products or
services) to terminate its business relationship or otherwise cease doing
business in whole or in part with IEC, or directly or indirectly interfere with
(or assist any Person to interfere with) any material relationship between IEC
and any of its or their customers or clients so as to cause harm to
IEC.

    

    3.5           Extension of Restriction
Period    Executive acknowledges and agrees that the
Restriction Period shall be tolled for any period during which Executive is in
breach of any of Sections 3.2, 3.3 or 3.4 hereof.

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    

    3.6           Proprietary
Rights  Executive shall disclose promptly to IEC any and all
inventions, discoveries, and improvements (whether or not patentable or
registrable under copyright or similar statutes), and all patentable or
copyrightable works, initiated, conceived, discovered, reduced to practice, or
made by him, either alone or in conjunction with others, during Executive’s
employment with IEC and related to the business or activities of IEC (the
“Developments”).  Except to the extent any rights in any Developments
constitute a work made for hire under the U.S. Copyright Act, 17 U.S.C. § 101
et seq. that are owned
ab initio by IEC,
Executive assigns all of his right, title and interest in all Developments
(including all intellectual property rights therein) to IEC or its nominee
without further compensation, including all rights or benefits therefor,
including without limitation the right to sue and recover for past and future
infringement.  Executive acknowledges that any rights in any
Developments constituting a work made for hire under the U.S. Copyright Act, 17
U.S.C § 101 et seq. are owned upon creation by IEC as Executive’s
employer.  Whenever requested to do so by IEC, Executive shall execute
any and all applications, assignments or other instruments which IEC shall deem
necessary to apply for and obtain trademarks, patents or copyrights of the
United States or any foreign country or otherwise protect the interests of IEC
therein.  These obligations shall continue beyond the end of
Executive’s employment with IEC with respect to inventions, discoveries,
improvements or copyrightable works initiated, conceived or made by Executive
while employed by IEC, and shall be binding upon Executive’s employers, assigns,
executors, administrators and other legal representatives.  In
connection with his execution of this Agreement, Executive has informed IEC in
writing of any interest in any inventions or intellectual property rights that
he holds as of the date hereof as set forth on Exhibit A hereto (the
“Existing Inventions”).  Notwithstanding anything to the contrary
herein, the Developments shall not include any Existing
Inventions.  If IEC is unable for any reason, after reasonable effort,
to obtain Executive’s signature on any document needed in connection with the
actions described in this Section 3.6, Executive hereby irrevocably designates
and appoints IEC and its duly authorized officers and agents as Executive’s
agent and attorney in fact to act for and on Executive’s behalf to execute,
verify and file any such documents and to do all other lawfully permitted acts
to further the purposes of this Section 3.6 with the same legal force and effect
as if executed by Executive.

    

    3.7           Remedies      Executive
agrees that any breach of the terms of this Section 3 would result in
irreparable injury and damage to IEC for which IEC would have no adequate remedy
at law; Executive therefore also agrees that in the event of said breach or any
threat of breach, IEC shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by Executive and/or any and all Persons acting for and/or with
Executive, without having to prove damages, in addition to any other remedies to
which IEC may be entitled at law or in equity, including, without limitation,
the obligation of Executive to return any salary continuation payments made by
IEC to IEC.  The terms of this paragraph shall not prevent IEC from
pursuing any other available remedies for any breach or threatened breach
hereof, including, without limitation, the recovery of damages from
Executive.  Executive and IEC further agree that the provisions of the
covenants contained in this Section 3 are reasonable and necessary to protect
the business of IEC because of Executive’s access to Confidential Information
and his material participation in the operation of such business.

    

    3.8           Litigation
Support  Executive agrees to make himself reasonably available
in the event IEC needs him to participate in any litigation involving
IEC.  Executive shall be entitled to full reimbursement of all
reasonable expenses incurred during such litigation support, upon presentation
of appropriate documentation to IEC in accordance with IEC’s standard
reimbursement policies and procedures.

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

    

    4.           Miscellaneous

    

    4.1           Amendments and Waivers     This
Agreement and any of the provisions hereof may be amended, waived (either
generally or in a particular instance and either retroactively or
prospectively), modified or supplemented, in whole or in part, only by written
agreement signed by the parties hereto; provided that, the observance of any
provision of this Agreement may be waived in writing by the party that will lose
the benefit of such provision as a result of such waiver.  The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach, except as otherwise explicitly
provided for in such waiver.  Except as otherwise expressly provided
herein, no failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder, or otherwise available in
respect hereof at law or in equity, shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

    

    4.2           Notices   Unless
otherwise provided herein, all notices, requests, demands, claims and other
communications provided for under the terms of this Agreement shall be in
writing.  Any notice, request, demand, claim or other communication
hereunder shall be sent by (i) personal delivery (including receipted courier
service) or overnight delivery service; (ii) facsimile during normal business
hours, with confirmation of receipt, to the number indicated,
(iii) reputable commercial overnight delivery service courier; or (iv)
registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below:

    
      	
               
      

            	
              If to
      IEC:

            	
              IEC
      Electronics Corp.

            

    

    
      	 	
               
      

            	
              105
      North Street

            

    

    
      	 	
               
      

            	
              Newark,
      New York 14513

            

    

     

    
      	 	
               
      

            	
              ATTENTION:  W.
      Barry Gilbert, Chairman of the Board and
  CEO

            

    

    

    If to
Executive:     to his home address as set forth
in IEC's personnel records.

    

    All such notices, requests, consents
and other communications shall be deemed to have been given when
received.  Either party may change its facsimile number or its address
to which notices, requests, demands, claims and other communications hereunder
are to be delivered by giving the other parties hereto notice in the manner then
set forth.

    

    4.3           Governing
Law   This Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be
governed by, the laws of the State of New York, without giving effect to the
conflicts of law principles thereof.

     

    4.4           Severability       Whenever
possible, each provision or portion of any provision of this Agreement,
including those contained in Section 3 hereof, will be interpreted in such
manner as to be effective and valid under applicable law but the invalidity or
unenforceability of any provision or portion of any provision of this Agreement
in any jurisdiction shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision or portion of any
provision, in any other jurisdiction.

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    4.5           Entire Agreement        This
Agreement constitutes the entire agreement between the parties hereto, and
supersedes all prior representations, agreements and understandings (including
any prior course of dealings), both written and oral, between the parties hereto
with respect to the subject matter hereof.

     

    4.6           Counterparts     This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument.

     

    4.7           Binding
Effect  This Agreement shall inure to the benefit of, and be
binding on, the successors of each of the parties, including, without
limitation, Executive’s heirs and the personal representatives of Executive’s
estate and any successor to all or substantially all of the business and/or
assets of IEC.

     

    4.8           Section 4.09A
Compliance    This Agreement is intended to comply
with Section 409A of the Code (to the extent applicable) and, to the extent it
would not adversely impact IEC, IEC agrees to interpret, apply and administer
this Agreement in the least restrictive manner necessary to comply with such
requirements and without resulting in any diminution in the value of payment or
benefits to Executive.

     

    4.9           Advice of
Counsel    Executive acknowledges that Executive has
had the opportunity to fully review this Agreement, and if Executive so chooses,
to consult with counsel, and is fully aware of Executive’s rights and
obligations under this Agreement.

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	
                                    IEC
      ELECTRONICS CORP.

                                  
	 
      	 
      
	 
      	
                                    By:
      /s/ W. Barry Gilbert

                                  
	 
      	
                                    Name:

                                  	
                                    W.
      Barry Gilbert

                                  
	 
      	
                                    Title:

                                  	
                                    Chairman
      of the Board and

                                  
	 
      	 
      	
                                    Chief
      Executive Officer

                                  
	 
      	 
      	 
      
	 	 	      
                                    /s/
      Jeffrey T. Schlarbaum

                                  
	 	 	      
                                    Jeffrey
      T.
Schlarbaum

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    Exhibit
A

    

    Existing
Inventions

    

    None

    
      
         

      

      
        - 9
-

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