Document:

Exhibit 4.6

 

THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE
OF THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES
LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE ACT, OR ANY APPLICABLE STATE SECURITIES LAWS.

 

WARRANT AGREEMENT

 

To Purchase Shares of Preferred Stock of

 

EDGE THERAPEUTICS, INC.

 

Dated as of August
28 , 2014 (the “Effective Date”)

 

WHEREAS, Edge Therapeutics, Inc., a Delaware corporation, has
entered into a Loan and Security Agreement of even date herewith (the “Loan Agreement”) with Hercules Technology
Growth Capital, Inc., a Maryland corporation, in its capacity as administrative agent (the “Warrantholder”)
and the other lender parties thereto;

 

WHEREAS, the Company (as defined below) desires to grant to
Warrantholder, in consideration for, among other things, the financial accommodations provided for in the Loan Agreement, the right
to purchase shares of Preferred Stock (as defined below) pursuant to this Warrant Agreement (the “Agreement”);

 

NOW, THEREFORE, in consideration of the Warrantholder executing
and delivering the Loan Agreement and providing the financial accommodations contemplated therein, and in consideration of the
mutual covenants and agreements contained herein, the Company and Warrantholder agree as follows:

 

SECTION 1.            
GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.

 

For value received, the Company hereby grants to the Warrantholder,
and the Warrantholder is entitled, upon the terms and subject to the conditions hereinafter set forth, to subscribe for and purchase,
from the Company, an aggregate number of fully paid and non-assessable shares of the Preferred Stock equal to the quotient derived
by dividing (a) the Warrant Coverage (as defined below) by (b) the Exercise Price (defined below). The Exercise Price of such shares
is subject to adjustment as provided in Section 8.

 

The Company represents and warrants to the Warrantholder that
the Company is contemplating the authorization and issuance of a new round of its preferred stock which shall be for Series C-1
Preferred Stock of the Company.  In the event on or after the Effective Date but on or before December 31, 2014 the Company
authorizes and issues shares of the Company’s Series C-1 Preferred Stock and the aggregate net sales proceeds from such issuance
are at least $2,000,000, then this Warrant shall automatically be deemed to be initially exercisable for the Company’s Series
C-1 Preferred Stock at the Series C-1 Price (as defined below) instead of the Company’s Series C Preferred Stock.  The
Company shall provide the Warrantholder with appropriate evidence and documentation of such Series C-1 Preferred Stock issuance. 
Upon the request of the Warrantholder, within thirty (30) days of the Company’s initial issuance of its Series C-1 Preferred
Stock the Company shall execute and delivery to the Warrantholder an amendment to this Warrant or an amended and restated Warrant
reflecting such changes along with conforming changes to the Warrant to reflect the change from Series C Preferred Stock to Series
C-1 Preferred Stock and to change to the Exercise Price accordingly.  “Series C-1 Price” means the lowest
price per share for which the Company’s Series C-1 Preferred are sold or issued by the Company.  In the event that the
Company does not on or before December 31, 2014 authorize and issue shares of the Company’s Series C-1 Preferred Stock and
receive aggregate net sales proceeds from such issuance of at least $2,000,000, then this Warrant shall remain initially exercisable
for the Company’s Series C Preferred Stock at the Series C Price.

 

As used herein, the following terms shall
have the following meanings:

 

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

 

“Company” means Edge Therapeutics,
Inc., a Delaware corporation, and any successor or surviving entity that assumes the obligations of the Company under this Agreement
pursuant to Section 8(a).

 

“Charter” means the Company’s
Articles of Incorporation, Certificate of Incorporation or other constitutional document, as may be amended from time to time.

 

“Common Stock” means the Company’s
common stock, $0.00033 par value per share.

    	1

    	 

    

 

“Exercise Price”
means the Series C Price, subject to adjustment from time to time in accordance with the provisions of this Warrant; provided,
that if the Next Preferred Round Price shall be lower than the then-effective Exercise Price, then “Exercise Price”
shall mean the Next Preferred Round Price from and after the closing of the Next Preferred Round, subject to adjustment thereafter
from time to time in accordance with the provisions of this Warrant.

 

“Initial Public Offering” means
the initial underwritten public offering of the Company’s Common Stock pursuant to a registration statement under the Act,
which public offering has been declared effective by the Securities and Exchange Commission (“SEC”).

 

“Merger Event” means any reorganization,
recapitalization, consolidation or merger (or similar transaction or series of related transactions) of the Company or any Subsidiary,
sale or exchange of outstanding shares (or similar transaction or series of related transactions) of the Company or any Subsidiary
in which the holders of the Company or Subsidiary’s outstanding shares immediately before consummation of such transaction
or series of related transactions do not, immediately after consummation of such transaction or series of related transactions,
retain shares representing more than fifty percent (50%) of the voting power of the surviving entity of such transaction or series
of related transactions (or the parent of such surviving entity if such surviving entity is wholly owned by such parent), in each
case without regard to whether the Company or Subsidiary is the surviving entity, provided that none of the following shall constitute
a Merger Event: (i) any consolidation or merger effected exclusively to change the domicile of the Company, or (ii) the sale and
issuance by the Company of its equity securities to investors in a bona fide equity financing or (iii) an Initial Public Offering.

 

“Next Preferred Round” means the
first offering and sale by the Company, on or after the Effective Date, of shares of its convertible preferred stock or other senior
equity securities to one or more investors for cash for financing purposes, in a single transaction or series of related transactions
not registered under the Act, resulting in aggregate gross cash proceeds received by the Company of at least $1,000,000; provided,
that Next Preferred Round shall not include (i) any additional sales of Series C Stock by the Company, or (ii) the Company’s
Series C-1 Preferred Stock sold during the period from the Effective Date until December 31, 2014.

 

“Next Preferred Round Price” means
the lowest effective price per share for which shares of the Next Round Preferred Series are sold and issued in the Next Preferred
Round.

 

“Next Preferred Round Series” means
the series or other designation of the shares of convertible preferred stock or other senior equity security sold and issued by
the Company in the Next Preferred Round, and any other class, series or other designation of security into or for which such Next
Preferred Round Series is converted, substituted or exchanged pursuant to a reorganization, reclassification, recapitalization
or similar transaction.

 

“Preferred Stock” means Series
C Stock; provided, that if the Next Preferred Round Price shall be lower than the then-effective Exercise Price, then “Preferred
Stock” shall mean the Next Preferred Round Series from and after the closing of the Next Preferred Round; provided,
further, that, subject to provisions of Section 8(f) below, upon and after the occurrence of an event which results in the
automatic or voluntary conversion, redemption or retirement of all (but not less than all) of the outstanding shares of such Preferred
Stock pursuant to the consummation of an Initial Public Offering, then from and after the date upon which such outstanding shares
are so converted, redeemed or retired, “Preferred Stock” shall mean the Common Stock.

 

“Purchase Price” means, with respect
to any exercise of this Agreement, an amount equal to the Exercise Price as of the relevant time multiplied by the number of shares
of Preferred Stock requested to be exercised under this Agreement pursuant to such exercise.

 

“Series C Stock” means the Company’s
Series C Preferred Stock, $0.00033 par value per share, as presently constituted under the Charter, and any other class, series
or other designation of security into or for which such Series C Preferred Stock is converted, substituted or exchanged pursuant
to a reorganization, reclassification, recapitalization or similar transaction.

 

“Series C Price” means $3.85 per
share, as may be adjusted from time to time in accordance with the provisions of this Warrant.

 

“Warrant Coverage” means $500,000.00.

    	2

    	 

    

 

SECTION 2.            
TERM OF THE AGREEMENT.

 

Except as otherwise provided for herein, the term of this Agreement
and the right to purchase Preferred Stock as granted herein (the “Warrant”) shall commence on the Effective
Date and shall be exercisable for a period ending upon the later to occur of (i) ten (10) years from the Effective Date; or (ii)
if the Initial Public Offering shall be consummated on or before the tenth (10th) anniversary of the Effective Date,
five (5) years after the Initial Public Offering.

 

SECTION 3.            
EXERCISE OF THE PURCHASE RIGHTS.

 

(a)                
Exercise. The purchase rights set forth in this Agreement are exercisable by the Warrantholder, in whole or in part,
at any time, or from time to time, prior to the expiration of the term set forth in Section 2, by tendering to the Company at its
principal office a notice of exercise in the form attached hereto as Exhibit I (the “Notice of Exercise”),
duly completed and executed. Promptly upon receipt of the Notice of Exercise and the payment of the Purchase Price in accordance
with the terms set forth below, and in no event later than three (3) days thereafter, the Company shall issue to the Warrantholder
a certificate for the number of shares of Preferred Stock purchased and shall execute the acknowledgment of exercise in the form
attached hereto as Exhibit II (the “Acknowledgment of Exercise”) indicating the number of shares which
remain subject to future purchases, if any.

 

The Purchase Price may be paid at the Warrantholder’s
election either (i) by cash or check, or (ii) by surrender of all or a portion of the Warrant for shares of Preferred Stock to
be exercised under this Agreement and, if applicable, an amended Agreement representing the remaining number of shares purchasable
hereunder, as determined below (“Net Issuance”). If the Warrantholder elects the Net Issuance method, the Company
will issue Preferred Stock in accordance with the following formula:

 

X  =  Y(A-B)

A

 

	Where:	X = the number
of shares of Preferred Stock to be issued to the Warrantholder.
	 	 
	 	Y = the number of shares
of Preferred Stock requested to be exercised under this Agreement.
	 	 
	 	A = the fair market value
of one (1) share of Preferred Stock at the time of issuance of such shares of Preferred Stock.
	 	 
	 	B = the Exercise Price.

 

For purposes of the above calculation, current fair market value
of Preferred Stock shall mean with respect to each share of Preferred Stock:

 

(i)                  
if the exercise is in connection with an Initial Public Offering, and if the Company’s Registration Statement relating
to such Initial Public Offering has been declared effective by the SEC, then the fair market value per share shall be the product
of (x) the initial “Price to Public” of the Common Stock specified in the final prospectus with respect to the offering
and (y) the number of shares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise;

 

(ii)                
if the exercise is after, and not in connection with an Initial Public Offering, and:

 

(A)               
if the Common Stock is traded on a securities exchange, the fair market value shall be deemed to be the product of (x) the
prior day closing price before the day the current fair market value of the securities is being determined and (y) the number of
shares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise; or

 

(B)               
if the Common Stock is traded over-the-counter, the fair market value shall be deemed to be the product of (x) the prior
day closing bid and asked price quoted on the NASDAQ system (or similar system) before the day the current fair market value of
the securities is being determined and (y) the number of shares of Common Stock into which each share of Preferred Stock is convertible
at the time of such exercise;

 

(iii)               
if at any time the Common Stock is not listed on any securities exchange or quoted in the NASDAQ National Market or the
over-the-counter market, the current fair market value of Preferred Stock shall be determined in good faith by its Board of Directors,
unless the Company shall become subject to a Merger Event, in which case the fair market value of Preferred Stock shall be deemed
to be the per share value received by the holders of the Company’s Preferred Stock on a common equivalent basis pursuant
to such Merger Event.

 

Upon partial exercise by either cash or Net Issuance, the Company
shall promptly issue an amended Agreement representing the remaining number of shares purchasable hereunder. All other terms and
conditions of such amended Agreement shall be identical to those contained herein, including, but not limited to the Effective
Date hereof.

    	3

    	 

    

 

(b)                
Exercise Prior to Expiration. To the extent this Agreement is not previously exercised as to all Preferred Stock
subject hereto, and if the fair market value of one share of the Preferred Stock is greater than the Exercise Price then in effect,
this Agreement shall be deemed automatically exercised pursuant to Section 3(a) (even if not surrendered) immediately before its
expiration. For purposes of such automatic exercise, the fair market value of one share of the Preferred Stock upon such expiration
shall be determined pursuant to Section 3(a). To the extent this Agreement or any portion thereof is deemed automatically exercised
pursuant to this Section 3(b), the Company agrees to promptly notify the Warrantholder of the number of shares of Preferred Stock,
if any, the Warrantholder is to receive by reason of such automatic exercise.

 

SECTION 4.            
RESERVATION OF SHARES.

 

During the term of this Agreement, the Company will at all times
have authorized and reserved a sufficient number of shares of its Preferred Stock to provide for the exercise of the rights to
purchase Preferred Stock as provided for herein, and shall have authorized and reserved a sufficient number of shares of its Common
Stock to provide for the conversion of the shares of Preferred Stock issuable hereunder.

 

SECTION 5.            
NO FRACTIONAL SHARES OR SCRIP.

 

No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Agreement, but in lieu of such fractional shares the Company shall make a cash payment
therefor upon the basis of the then fair market value of one share of Preferred Stock.

 

SECTION 6.            
NO RIGHTS AS SHAREHOLDER/STOCKHOLDER.

 

This Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder/stockholder of the Company prior to the exercise of this Agreement.

 

SECTION 7.            
WARRANTHOLDER REGISTRY.

 

The Company shall maintain a registry showing the name and address
of the registered holder of this Agreement. Warrantholder’s initial address, for purposes of such registry, is set forth
below Warrantholder’s signature on this Agreement. Warrantholder may change such address by giving written notice of such
changed address to the Company.

 

SECTION 8.            
ADJUSTMENT RIGHTS.

 

The Exercise Price and the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment, as follows:

 

(a)                
Merger Event. If at any time there shall be Merger Event, then, as a part of such Merger Event, lawful provision
shall be made so that the Warrantholder shall thereafter be entitled to receive, upon exercise of this Agreement, the number of
shares of preferred stock or other securities or property (collectively, “Reference Property”) that the Warrantholder
would have received in connection with such Merger Event if Warrantholder had exercised this Agreement immediately prior to the
Merger Event. In any such case, appropriate adjustment (as determined in good faith by the Company’s Board of Directors)
shall be made in the application of the provisions of this Agreement with respect to the rights and interests of the Warrantholder
after the Merger Event to the end that the provisions of this Agreement (including adjustments of the Exercise Price and adjustments
to ensure that the provisions of this Section 8 shall thereafter be applicable, as nearly as possible, to the purchase rights under
this Agreement in relation to any Reference Property thereafter acquirable upon exercise of such purchase rights) shall continue
to be applicable in their entirety, and to the greatest extent possible. Without limiting the foregoing, in connection with any
Merger Event, upon the closing thereof, the successor or surviving entity shall assume the obligations of this Agreement;
provided that the foregoing assumption requirement shall not apply if the consideration to be paid
for or in respect of the outstanding shares of Preferred Stock in such Merger Event consists solely of cash and/or readily marketable
securities. In connection with a Merger Event and upon Warrantholder’s written election to the Company, the Company shall
cause this Warrant Agreement to be exchanged for the consideration that Warrantholder would have received if Warrantholder had
chosen to exercise its right to have shares issued pursuant to the Net Issuance provisions of this Warrant Agreement without actually
exercising such right, acquiring such shares and exchanging such shares for such consideration. The provisions of this Section
8(a) shall similarly apply to successive Merger Events.

 

(b)                
Reclassification of Shares. Except for a Merger Event subject to Section 8(a), and subject to Section 8(f), if the
Company at any time shall, by combination, reclassification, reorganization, exchange or subdivision of securities or otherwise,
change any of the securities as to which purchase rights under this Agreement exist into the same or a different number of securities
of any other class or classes, this Agreement shall thereafter represent the right to acquire such number and kind of securities
as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights
under this Agreement immediately prior to such combination, reclassification, exchange, subdivision or other change. The provisions
of this Section 8(b) shall similarly apply to successive combination, reclassification, exchange, subdivision or other change.

 

(c)                
Subdivision or Combination of Shares. If the Company at any time shall combine or subdivide its Preferred Stock,
(i) in the case of a subdivision, the Exercise Price shall be proportionately decreased and the number of shares of Preferred Stock
issuable hereunder shall be proportionately increased, or (ii) in the case of a combination, the Exercise Price shall be proportionately
increased and the number of shares of Preferred Stock issuable hereunder shall be proportionately decreased.

    	4

    	 

    

 

(d)                
Stock Dividends. If the Company at any time while this Agreement is outstanding and unexpired shall:

 

(i)                  
pay a dividend with respect to the Preferred Stock payable in Preferred Stock, then the Exercise Price shall be adjusted,
from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined
by multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (A) the numerator of
which shall be the total number of shares of Preferred Stock outstanding immediately prior to such dividend or distribution, and
(B) the denominator of which shall be the total number of shares of Preferred Stock outstanding immediately after such dividend
or distribution; or

 

(ii)                
make any other distribution with respect to Preferred Stock (or stock into which the Preferred Stock is convertible), except
any distribution specifically provided for in any other clause of this Section 8, then, in each such case, provision shall
be made by the Company such that the Warrantholder shall receive upon exercise or conversion of this Warrant a proportionate share
of any such distribution as though it were the holder of the Preferred Stock (or other stock for which the Preferred Stock is convertible)
as of the record date fixed for the determination of the stockholders of the Company entitled to receive such distribution.

 

(e)                
Antidilution Rights. Additional antidilution rights applicable to the Preferred Stock purchasable hereunder are as
set forth in the Charter and shall be applicable with respect to the Preferred Stock issuable hereunder. The Company shall promptly
provide the Warrantholder with any restatement, amendment, modification or waiver of the Charter; provided, that no such
amendment, modification or waiver shall impair or reduce the antidilution rights applicable to the Preferred Stock as of the date
hereof, without the Warrantholder’s consent, unless such amendment, modification or waiver affects the rights of Warrantholder
with respect to the Preferred Stock in the same manner as it affects all other holders of Preferred Stock. The Company shall provide
Warrantholder with prior written notice of any issuance of its stock or other equity security to occur after the Effective Date
of this Agreement (other than (i) stock issued as a dividend upon the Company’s Series C Preferred Stock or Series C-1 Preferred
Stock, and (ii) stock, options and other securities issued pursuant to any incentive equity plan of the Company), which notice
shall include (a) the price at which such stock or security is to be sold, (b) the number of shares to be issued, and (c)
such other information as necessary for Warrantholder to determine if a dilutive event has occurred. For the avoidance of doubt,
there shall be no duplicate anti-dilution adjustment pursuant to this subsection (e), the forgoing subsection (d) and the Charter.

 

(f)                 
Notice of Adjustments. If: (i) the Company shall declare any dividend or distribution upon its stock, whether in
stock, cash, property or other securities, other than stock dividends upon its Series C Preferred Stock or Series C-1 Preferred
Stock; (ii) there shall be any Merger Event; (iv) there shall be an Initial Public Offering; (iii) the Company shall sell, lease,
license or otherwise transfer all or substantially all of its assets; or (iv) there shall be any voluntary dissolution, liquidation
or winding up of the Company; then, in connection with each such event, the Company shall send to the Warrantholder: (A) at least
thirty (30) days’ prior written notice of the date on which the books of the Company shall close or a record shall be taken
for such dividend, distribution, subscription rights (specifying the date on which the holders of Preferred Stock shall be entitled
thereto) or for determining rights to vote in respect of such Merger Event, dissolution, liquidation or winding up; (B) in the
case of any such Merger Event, sale, lease, license or other transfer of all or substantially all assets, dissolution, liquidation
or winding up, at least thirty (30) days’ prior written notice of the date when the same shall take place (and specifying
the date on which the holders of Preferred Stock shall be entitled to exchange their Preferred Stock for securities or other property
deliverable upon such Merger Event, dissolution, liquidation or winding up); and (C) in the case of an Initial Public Offering,
the Company shall give the Warrantholder at least thirty (30) days’ written notice prior to the effective date thereof.

 

Each such written notice shall set forth, in reasonable detail,
(i) the event requiring the notice, and (ii) if any adjustment is required to be made, (A) the amount of such adjustment, (B) the
method by which such adjustment was calculated, (C) the adjusted Exercise Price (if the Exercise Price has been adjusted), and
(D) the number of shares subject to purchase hereunder after giving effect to such adjustment, and shall be given in accordance
with Section 12(g) below.

 

SECTION 9.            
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

 

(a)                
Reservation of Preferred Stock. The Preferred Stock issuable upon exercise of the Warrantholder’s rights has
been or, in the case of Preferred Stock issuable in the Next Round, will be duly and validly reserved and, when issued in accordance
with the provisions of this Agreement, will be validly issued, fully paid and non-assessable, and will be free of any taxes, liens,
charges or encumbrances of any nature whatsoever; provided, that the Preferred Stock issuable pursuant to this Agreement
may be subject to restrictions on transfer under state and/or federal securities laws. The Company has made available to the Warrantholder
true, correct and complete copies of its Charter and current bylaws. The issuance of certificates for shares of Preferred Stock
upon exercise of this Agreement shall be made without charge to the Warrantholder for any issuance tax in respect thereof (other
than income taxes of the Warrantholder), or other cost incurred by the Company in connection with such exercise and the related
issuance of shares of Preferred Stock; provided, that the Company shall not be required to pay any tax which may be payable
in respect of any transfer and the issuance and delivery of any certificate in a name other than that of the Warrantholder.

    	5

    	 

    

 

(b)                
Due Authority. The execution and delivery by the Company of this Agreement and the performance of all obligations
of the Company hereunder, including the issuance to Warrantholder of the right to acquire the shares of Preferred Stock and the
Common Stock into which it may be converted, have been duly authorized by all necessary corporate action on the part of the Company.
This Agreement: (1) does not violate the Company’s Charter or current bylaws; (2) does not contravene any law or governmental
rule, regulation or order applicable to it; and (3) does not and will not contravene any provision of, or constitute a default
under, any indenture, mortgage, contract or other instrument to which it is a party or by which it is bound. This Agreement constitutes
a legal, valid and binding agreement of the Company, enforceable in accordance with its terms.

 

(c)                
Consents and Approvals. No consent or approval of, giving of notice to, registration with, or taking of any other
action in respect of any state, federal or other governmental authority or agency is required with respect to the execution, delivery
and performance by the Company of its obligations under this Agreement, except for the filing of notices pursuant to Regulation
D under the Act and any filing required by applicable state securities law, which filings will be effective by the time required
thereby.

 

(d)                
Issued Securities. All issued and outstanding shares of Common Stock, Preferred Stock or any other securities of
the Company have been duly authorized and validly issued and are fully paid and nonassessable. All outstanding shares of Common
Stock, Preferred Stock and any other securities were issued in full compliance with all federal and state securities laws. In addition,
as of the date immediately preceding the date of this Agreement:

 

(i)                  
The authorized capital of the Company consists of (A) 17,500,000 shares of Common Stock, of which 2,310,000 shares are issued
and outstanding, and (B) 10,000,000 shares of Preferred Stock (including Series A, Series B, Series B-1 and Series C Preferred
Stock), of which 8,336,865 shares are issued and outstanding and are convertible into 8,336,865 shares of Common Stock at $1.00
to $3.85 per share, as applicable.

 

(ii)                
The Company has reserved 599,139 shares of Common Stock for issuance pursuant to the (i) Warrants issued in connection with
the issuance of convertible debt to the New Jersey Economic Development Authority, (ii) Warrants issued in connection with the
issuance of shares of Series B-1 Preferred Stock, and (iii) Warrants issued to the placement agent in connection with the issuance
of shares of Series C Preferred Stock.

 

(iii)               
The Company has reserved 3,347,500 shares of Common Stock for issuance under its Stock Option Plan(s), under which 3,345,948
options are outstanding. Except as provided herein, there are no other options, warrants, conversion privileges or other rights
presently outstanding to purchase or otherwise acquire any authorized but unissued shares of the Company’s capital stock
or other securities of the Company. The Company has no outstanding loans to any employee, officer or director of the Company.

 

(iv)              
In accordance with the Company’s Charter, no shareholder of the Company has preemptive rights to purchase new issuances
of the Company’s capital stock.

 

(e)                
Registration Rights. The Company agrees that the shares of Common Stock issued and issuable upon conversion of the
shares of Preferred Stock issued and issuable upon exercise of this Warrant, and, at all times (if any) when the Preferred Stock
shall be Common Stock, shall have the “Piggyback,” and S-3 registration rights pursuant to and as set forth in the
Company’s investor rights agreement or similar agreement (the “Investor Rights Agreement”) on a pari passu
basis with the holders of outstanding shares of Common Stock who are parties thereto.

 

(f)                 
Other Commitments to Register Securities. Except as set forth in this Agreement, the Company is not, pursuant to
the terms of any other agreement currently in existence, under any obligation to register under the Act any of its presently outstanding
securities or any of its securities which may hereafter be issued.

 

(g)                
Exempt Transaction. Subject to the accuracy of the Warrantholder’s representations in Section 10, the issuance
of the Preferred Stock upon exercise of this Agreement, and the issuance of the Common Stock upon conversion of the Preferred Stock,
will each constitute a transaction exempt from (i) the registration requirements of Section 5 of the Act, in reliance upon Section
4(2) thereof, and (ii) the qualification requirements of the applicable state securities laws.

 

(h)                
Compliance with Rule 144. If the Warrantholder proposes to sell Preferred Stock issuable upon the exercise of this
Agreement, or the Common Stock into which it is convertible, in compliance with Rule 144 promulgated by the SEC, then, upon Warrantholder’s
written request to the Company, the Company shall furnish to the Warrantholder, within ten days after receipt of such request,
a written statement confirming the Company’s compliance with the filing requirements of the SEC as set forth in such Rule,
as such Rule may be amended from time to time.

 

(i)                  
Information Rights. During the term of this Warrant, Warrantholder shall be entitled to the information rights contained
in Section 7.1 of the Loan Agreement, and Section 7.1 of the Loan Agreement is hereby incorporated into this Agreement by this
reference as though fully set forth herein, provided, however, that the Company shall not be required to deliver a Compliance Certificate
once all Indebtedness (as defined in the Loan Agreement) owed by the Company to Warrantholder has been repaid.

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SECTION 10.        
REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.

 

This Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:

 

(a)                
Investment Purpose. The right to acquire Preferred Stock is being acquired for investment and not with a view to
the sale or distribution of any part thereof, and the Warrantholder has no present intention of selling or engaging in any public
distribution of such rights or the Preferred Stock except pursuant to an effective registration statement or an exemption from
the registration requirements of the Act.

 

(b)                
Private Issue. The Warrantholder understands (i) that the Preferred Stock issuable upon exercise of this Agreement
is not registered under the Act or qualified under applicable state securities laws on the ground that the issuance contemplated
by this Agreement will be exempt from the registration and qualifications requirements thereof, and (ii) that the Company’s
reliance on such exemption is predicated on the representations set forth in this Section 10.

 

(c)                
Financial Risk. The Warrantholder has such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

 

(d)                
Risk of No Registration. The Warrantholder understands that if the Company does not register with the SEC pursuant
to Section 12 of the Securities Exchange Act of 1934 (the “1934 Act”), or file reports pursuant to Section 15(d)
of the 1934 Act, or if a registration statement covering the securities under the Act is not in effect when it desires to sell
(i) the rights to purchase Preferred Stock pursuant to this Agreement or (ii) the Preferred Stock issuable upon exercise of the
right to purchase, it may be required to hold such securities for an indefinite period. The Warrantholder also understands that
any sale of (A) its rights hereunder to purchase Preferred Stock or (B) Preferred Stock issued or issuable hereunder
which might be made by it in reliance upon Rule 144 under the Act may be made only in accordance with the terms and conditions
of that Rule.

 

(e)                
Accredited Investor. Warrantholder is an “accredited investor” within the meaning of the Securities and
Exchange Rule 501 of Regulation D, as presently in effect.

 

SECTION 11.        
TRANSFERS.

 

Subject to compliance with applicable federal and state securities
laws, this Agreement and all rights hereunder are transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes) upon surrender of this Agreement properly endorsed, provided, however, that (i) any successor
transferee makes the representations and covenants set forth in Section 10 and agrees in writing to be bound by the covenants,
terms and conditions of this Warrant and (ii) the Warrantholder agrees not to transfer this Agreement and any rights hereunder
to a competitor of the Company so long as there are no Events of Default under the Loan Agreement. Each taker and holder of this
Agreement, by taking or holding the same, consents and agrees that this Agreement, when endorsed in blank, shall be deemed negotiable,
and that the holder hereof, when this Agreement shall have been so endorsed and its transfer recorded on the Company’s books,
shall be treated by the Company and all other persons dealing with this Agreement as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented by this Agreement. The transfer of this Agreement shall be recorded
on the books of the Company upon receipt by the Company of a notice of transfer in the form attached hereto as Exhibit III (the
“Transfer Notice”), at its principal offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer. Until the Company receives such Transfer Notice, the Company may treat the registered
owner hereof as the owner for all purposes.

 

SECTION 12.        
MISCELLANEOUS.

 

(a)                
Effective Date. The provisions of this Agreement shall be construed and shall be given effect in all respects as
if it had been executed and delivered by the Company on the date hereof. This Agreement shall be binding upon any successors or
assigns of the Company.

 

(b)                
Remedies. In the event of any default hereunder, the non-defaulting party may proceed to protect and enforce its
rights either by suit in equity and/or by action at law, including but not limited to an action for damages as a result of any
such default, and/or an action for specific performance for any default where Warrantholder will not have an adequate remedy at
law and where damages will not be readily ascertainable. The Company expressly agrees that it shall not oppose an application by
the Warrantholder or any other person entitled to the benefit of this Agreement requiring specific performance of any or all provisions
hereof or enjoining the Company from continuing to commit any such breach of this Agreement.

 

(c)               
No Impairment of Rights. The Company will not, by amendment of its Charter or through any other means, avoid or seek
to avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the
rights of the Warrantholder against impairment. The foregoing notwithstanding, the Company shall
not have been deemed to have impaired the Warrantholder’s rights hereunder: (i) if it amends its Charter, or the holders
of the Company’s other series of preferred stock waive rights thereunder, in a manner that does not affect the Preferred
Stock differently from the effect that such amendments or waivers have generally on the rights, preferences, privileges or restrictions
of the other shares of the same class of stock, or (ii) if the Company, through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action, affects Warrantholder’s rights hereunder
in a manner that does not affect the Preferred Stock differently from the effect that such transactions have generally on the rights,
preferences, privileges or restrictions of the other shares of the same class of stock.

 

(d)                
Additional Documents. The Company, upon execution of this Agreement, shall provide the Warrantholder with certified
resolutions with respect to the representations, warranties and covenants set forth in Sections 9(a), 9(c) and 9(e). The Company
shall also supply such other documents as the Warrantholder may from time to time reasonably request.

    	7

    	 

    

 

(e)                
Attorney’s Fees. In any litigation, arbitration or court proceeding between the Company and the Warrantholder
relating hereto, the prevailing party shall be entitled to attorneys’ fees and expenses and all costs of proceedings incurred
in enforcing this Agreement. For the purposes of this Section 12(e), attorneys’ fees shall include without limitation fees
incurred in connection with the following: (i) contempt proceedings; (ii) discovery; (iii) any motion, proceeding or other activity
of any kind in connection with an insolvency proceeding; (iv) garnishment, levy, and debtor and third party examinations; and (v)
post-judgment motions and proceedings of any kind, including without limitation any activity taken to collect or enforce any judgment.

 

(f)                 
Severability. In the event any one or more of the provisions of this Agreement shall for any reason be held invalid,
illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable
provision shall be replaced by a mutually acceptable valid, legal and enforceable provision, which comes closest to the intention
of the parties underlying the invalid, illegal or unenforceable provision.

 

(g)                
Notices. Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service
of process or other communication that is required, contemplated, or permitted under this Agreement or with respect to the subject
matter hereof shall be in writing, which shall include email communication, and shall be deemed to have been validly served, given,
delivered, and received upon the earlier of: (i) the day of transmission by facsimile, email communication, or hand delivery
if transmission or delivery occurs on a business day at or before 5:00 pm in the time zone of the recipient, or, if transmission
or delivery occurs on a non-business day or after such time, the first business day thereafter, or the first business day after
deposit with an overnight express service or overnight mail delivery service; or (ii) the third calendar day after deposit
in the United States mails, with proper first class postage prepaid, and shall be addressed to the party to be notified as follows:

 

If to Warrantholder:

 

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

Legal Department

Attention: Chief Legal Officer and Manuel Henriquez

400 Hamilton Avenue, Suite 310

Palo Alto, California 94301

Facsimile: 650-473-9194

Telephone: 650-289-3060

Email:

 

With a copy to:

 

RIEMER & BRAUNSTEIN LLP

Attention: Adam W. Jacobs, Esquire

Three Center Plaza

Boston, Massachusetts 02018

Facsimile: 617-692-3513

Telephone: 617-880-3513

Email: ajacobs@riemerlaw.com

 

(i)If to the Company:

 

EDGE THERAPEUTICS, INC.

Attention: Andrew Einhorn

200 Connell Drive, Suite 1600

Berkeley Heights, New Jersey 07922

Facsimile: 908-790-1212

Telephone: 800-208-3343

Email: aeinhorn@edgetherapeutics.com

 

or to such other address as each party may designate for itself
by like notice.

    	8

    	 

    

 

(h)                
Entire Agreement; Amendments. This Agreement constitutes the entire agreement and understanding of the parties hereto
in respect of the subject matter hereof, and supersedes and replaces in their entirety any prior proposals, term sheets, letters,
negotiations or other documents or agreements, whether written or oral, with respect to the subject matter hereof (including Warrantholder’s
proposal letter dated July 21, 2014). None of the terms of this Agreement may be amended except by an instrument executed by each
of the parties hereto.

 

(i)                  
Headings. The various headings in this Agreement are inserted for convenience only and shall not affect the meaning
or interpretation of this Agreement or any provisions hereof.

 

(j)                 
No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement.
In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.

 

(k)                
No Waiver. No omission or delay by Warrantholder at any time to enforce any right or remedy reserved to it, or to
require performance of any of the terms, covenants or provisions hereof by the Company at any time designated, shall be a waiver
of any such right or remedy to which Warrantholder is entitled, nor shall it in any way affect the right of Warrantholder to enforce
such provisions thereafter.

 

(l)                  
Survival. All agreements, representations and warranties contained in this Agreement or in any document delivered
pursuant hereto shall be for the benefit of Warrantholder and shall survive the execution and delivery of this Agreement and the
expiration or other termination of this Agreement.

 

(m)              
Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the
State of New York, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

 

(n)                
Consent to Jurisdiction and Venue. All judicial proceedings arising in or under or related to this Agreement may
be brought in any state or federal court of competent jurisdiction located in the State of New York. By execution and delivery
of this Agreement, each party hereto generally and unconditionally: (a) consents to personal jurisdiction in New York County, State
of New York; (b) waives any objection as to jurisdiction or venue in New York County, State of New York; (c) agrees not to assert
any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. Service of process on any party hereto in any action arising out of or relating
to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 12(g), and shall
be deemed effective and received as set forth in Section 12(g). Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.

 

(o)                
Mutual Waiver of Jury Trial. Because disputes arising in connection with complex financial transactions are most
quickly and economically resolved by an experienced and expert person and the parties wish applicable state and federal laws to
apply (rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicable laws.
EACH OF THE COMPANY AND WARRANTHOLDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY THE COMPANY AGAINST
WARRANTHOLDER OR ITS ASSIGNEE OR BY WARRANTHOLDER OR ITS ASSIGNEE AGAINST THE COMPANY. This waiver extends to all such Claims,
including Claims that involve Persons other than the Company and Warrantholder; Claims that arise out of or are in any way connected
to the relationship between the Company and Warrantholder; and any Claims for damages, breach of contract, specific performance,
or any equitable or legal relief of any kind, arising out of this Agreement.

 

(p)                
Prejudgment Relief. In the event Claims are to be resolved by arbitration, either party may seek from a court of
competent jurisdiction identified in Section 12(n), any prejudgment order, writ or other relief and have such prejudgment order,
writ or other relief enforced to the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution
by judicial reference.

 

(q)                
Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number
of counterparts, and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original,
but all of which counterparts shall constitute but one and the same instrument.

 

[Remainder of Page Intentionally Left Blank]

 

    	9

    	 

    

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by its officers thereunto duly authorized as of the Effective Date.

 

	COMPANY:	EDGE THERAPEUTICS, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Brian A. Leuthner
	 	Name:	 Brian A. Leuthner
	 	Title:	President and Chief Executive Officer

 

 
	WARRANTHOLDER:	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	 	 	 
	 	 	 
	 	By:	 /s/ Ben Barg
	 	Name:	Ben Barg
	 	Title:	Senior Counsel

 

    	10

    	 

    

 

EXHIBIT I

 

NOTICE OF EXERCISE

 

To:EDGE THERAPEUTICS, INC.

 

		(1)	The undersigned Warrantholder hereby elects to purchase [_______] shares of the Series [__] Preferred Stock of [_________________],
pursuant to the terms of the Agreement dated the [___] day of [______, _____] (the “Agreement”) between [_________________]
and the Warrantholder, and [CASH PAYMENT: tenders herewith payment of the Purchase Price in full, together with all applicable
transfer taxes, if any.] [NET ISSUANCE: elects pursuant to Section 3(a) of the Agreement to effect a Net Issuance.]

 

		(2)	Please issue a certificate or certificates representing said shares of Series [__] Preferred Stock in the name of the undersigned
or in such other name as is specified below.

 

The representations and warranties set forth in Section 10 of
the Agreement are true and correct in all material respects as of the date of this Notice of Exercise, with the same effect as
though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.

 

	 	 	 
	 	 	(Name)
	 	 	 
	 	 	 
	 	 	(Address)

 

	WARRANTHOLDER:	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	 	 	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	Date:	 

 

    	11

    	 

    

 

EXHIBIT II

 

ACKNOWLEDGMENT OF EXERCISE

 

The undersigned [____________________________________], hereby
acknowledge receipt of the “Notice of Exercise” from Hercules Technology Growth Capital, Inc., to purchase [____] shares
of the Series [__] Preferred Stock of [_________________], pursuant to the terms of the Agreement, and further acknowledges that
[______] shares remain subject to purchase under the terms of the Agreement.

 

 

	COMPANY:	[_________________]
	 	 	 
	 	 	 
	 	By:	 
	 	Title:	 
	 	Date:	 

 

    	12

    	 

    

 

EXHIBIT III

 

TRANSFER NOTICE

 

(To transfer or assign the foregoing Agreement execute this
form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Agreement and all rights evidenced
thereby are hereby transferred and assigned to

 

	 	 
	(Please Print)	 
	whose address is	 
	 	 

 

 

	 	 	 
	 	Dated:	 
	 	Holder’s Signature:	 
	 	Holder’s Address:	 
	 	 	 

 

Signature Guaranteed:                                                                                                                                                                     

 

NOTE:  The signature to this Transfer Notice must
correspond with the name as it appears on the face of the Agreement, without alteration or enlargement or any change whatever.
Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority
to assign the foregoing Agreement.

 

1722332.4

 

 

    	13Exhibit 10.4

 

 

 

 

 

 

EDGE THERAPEUTICS, INC. 

2014 EQUITY INCENTIVE PLAN

 

 

 

 

 

 

 

Adopted by the Board of Directors __________,
2014

 

Approved by the Shareholders _______, 2014

 

 

 

    	 

    	 

    

 

 

EDGE THERAPEUTICS, INC.

 

2014 EQUITY INCENTIVE PLAN

 

Section 1.               
Purpose of the Plan. The purpose of the Edge Therapeutics, Inc. 2014 Equity Incentive Plan (the “Plan”)
is to assist the Company and its Subsidiaries in attracting and retaining valued Employees, Consultants and Non-Employee Directors
by offering them a greater stake in the Company’s success and a closer identity with it, and to encourage ownership of the
Company’s stock by such Employees, Consultants and Non-Employee Directors.

 

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

 

2.1.           
“Award” means the grant of Restricted Stock, Options, SARs, Restricted Stock Units or Other Awards under
the Plan.

 

2.2.           
“Award Agreement” means the written agreement, instrument or document evidencing an Award.

 

2.3.           
“Board” means the Board of Directors of the Company.

 

2.4.           
“Cause” means,

 

(a)               
if the applicable Participant is party to an effective employment, consulting, severance or similar agreement with the Company
or a Subsidiary, and such term is defined therein, “Cause” shall have the meaning provided in such agreement;

 

(b)              
if the applicable Participant is not a party to an effective employment, consulting, severance or similar agreement or if
no definition of “Cause” is set forth in the applicable employment, consulting, severance or similar agreement, “Cause”
shall have the meaning provided in the applicable Award Agreement;

 

(c)               
if neither (a) nor (b) applies, then “Cause” shall mean, as determined by the Committee in its sole discretion,
(i) the Participant’s willful misconduct or gross negligence in connection with the performance of the Participant’s
duties for the Company or its Subsidiaries; (ii) the Participant’s conviction of, or a plea of guilty or nolo contendere
to, a felony or a crime involving fraud or moral turpitude; (iii) the Participant’s engaging in any business that directly
or indirectly competes with the Company or its Subsidiaries; or (iv) disclosure of trade secrets, customer lists or confidential
information of the Company or its Subsidiaries to a competitor or an unauthorized person.

 

2.5.           
“Change in Control” means, unless otherwise provided in an Award Agreement:

 

(a)               
the acquisition in one or more transactions (whether by purchase, merger or otherwise) by any “Person” (as such
term is used for purposes of Section 13(d) or Section 14(d) of the Exchange Act, but excluding, for this purpose, (i) the Company
or its Subsidiaries, (ii) any employee benefit plan of the Company or its Subsidiaries, (iii) an entity owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) of “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the combined voting
power of the Company’s then outstanding voting securities (the “Voting Securities”);

 

(b)              
a change in the composition of the Board such that the individuals who as of any date constitute the Board (the “Incumbent
Board”) cease to constitute a majority of the Board at any time during the 24-month period immediately following such
date; provided, however, that if the election, or nomination for election by the Company’s shareholders, of any new director
was approved by a vote of at least a majority of the Incumbent Board, such new director shall be considered as a member of the
Incumbent Board, and provided further that any reductions in the size of the Board that are instituted voluntarily by the Incumbent
Board shall not constitute a Change in Control, and after any such reduction the “Incumbent Board” shall mean the Board
as so reduced;

 

(c)               
a complete liquidation or dissolution of the Company; or

 

(d)              
the sale of all or substantially all of the Company’s and its Subsidiaries’ assets (determined on a consolidated
basis), other than to a Person described in clauses (i), (ii) or (iii) of Section 2.5(a) above.

    	2

    	 

    

 

2.6.           
 “Code” means the Internal Revenue Code of 1986, as amended.

 

2.7.           
“Common Stock” means the common stock of the Company, par value $0.01 per share.

 

2.8.           
“Company” means Edge Therapeutics, Inc., a Delaware corporation, or any successor corporation.

 

2.9.           
“Committee” means the Compensation Committee of the Board, provided that the Committee shall at all times
have at least two members, each of whom shall be a “non-employee director” as defined in Rule 16b-3 under the Exchange
Act, an “outside director” as defined in Section 162(m) of the Code and the regulations issued thereunder and an “independent
director” under the rules of any applicable stock exchange.

 

2.10.       
“Consultant” means a natural person who provides bona fide services to the Company or its Subsidiaries
other than in connection with the offer or sale of securities in a capital-raising transaction and is not engaged in activities
that directly or indirectly promote or maintain a market for the Company’s securities.

 

2.11.       
 “Disability” means, unless otherwise provided in an Award Agreement, that the Participant is unable
to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

 

2.12.       
“Effective Date” means the date that the Plan is approved by the shareholders of the Company.

 

2.13.       
“Employee” means an officer or other employee of the Company or a Subsidiary, including a director who
is such an employee.

 

2.14.       
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

2.15.       
“Fair Market Value” means, on any given date (i) if the shares of Common Stock are then listed on a national
securities exchange, including the Nasdaq Global Select Market (“NASDAQ”), the closing sales price per share of Common
Stock on the exchange for such date, or if no sale was made on such date on the exchange, on the last preceding day on which a
sale occurred; (ii) if shares of Common Stock are not then listed on a national securities exchange but are then quoted on another
stock quotation system, the closing price for the shares of Common Stock as quoted on such quotation system on such date, or if
no sale was made on such date on such quotation system, on the last preceding day on which a sale was made; or (iii) if (i) and
(ii) do not apply, such value as the Committee in its discretion may in good faith determine in accordance with Section 409A of
the Code and the regulations thereunder (and, with respect to Incentive Stock Options, in accordance with Section 422 of the Code
and the regulations thereunder).

 

2.16.       
“Incentive Stock Option” means an Option or portion thereof intended to meet the requirements of an incentive
stock option as defined in Section 422 of the Code and designated as an Incentive Stock Option.

 

2.17.       
“Non-Employee Director” means a member of the Board who is not an Employee.

 

2.18.       
“Non-Qualified Option” means an Option or portion thereof not intended to be an Incentive Stock Option.

 

2.19.       
“Option” means a right granted under Section 6.1 of the Plan to purchase a specified number of shares
of Common Stock at a specified price. An Option may be an Incentive Stock Option or a Non-Qualified Option; provided, however,
that unless otherwise explicitly stated in an Award Agreement, each Option shall be a Non-Qualified Stock Option.

 

2.20.       
“Participant” means any Employee, Non-Employee Director or Consultant who receives an Award.

    	3

    	 

    

 

2.21.       
“Performance Goals” means any goals established by the Committee in its sole discretion, the attainment
of which is substantially uncertain at the time such goals are established. Performance Goals may be described in terms of Company-wide
objectives or objectives that are related to the performance of the individual Participant or the Subsidiary, division, department
or function within the Company or Subsidiary in which the Participant is employed. Performance Goals may be measured on an absolute
or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. To the extent
that the Award is intended to constitute “qualified performance-based compensation” within the meaning of Code Section
162(m), then such Award shall be based on the achievement of one or more of the following performance goals: specified levels of
or increases in return on capital, equity or assets; earnings measures/ratios (on a gross, net, pre-tax or post-tax basis), including
diluted earnings per share, total earnings, operating earnings, earnings growth, earnings before interest and taxes (EBIT) and
earnings before interest, taxes, depreciation and amortization (EBITDA); net economic profit (which is operating earnings minus
a charge to capital); net income; operating income; sales; sales growth; gross margin; direct margin; share price (including but
not limited to growth measures and total shareholder return); operating profit; per period or cumulative cash flow (including but
not limited to operating cash flow and free cash flow) or cash flow return on investment (which equals net cash flow divided by
total capital); inventory turns; financial return ratios; market share; balance sheet measurements such as receivable turnover;
improvement in or attainment of expense levels; improvement in or attainment of working capital levels; debt reduction; strategic
innovation, including but not limited to entering into, substantially completing, or receiving payments under, relating to, or
deriving from a joint development agreement, licensing agreement, or similar agreement; customer or employee satisfaction; individual
objectives; operating efficiency; regulatory body approvals for commercialization of products; implementation or completion of
critical projects or related milestones (including, without limitation, milestones such as clinical trial enrollment targets, commencement
of phases of clinical trials and completion of phases of clinical trials); partnering or similar transactions; and any combination
of any of the foregoing criteria. If the Committee determines that a change in the business, operations, corporate structure or
capital structure of the Company or its Subsidiaries, or the manner in which it conducts its business, or other events or circumstances
render the Performance Goals unsuitable, the Committee may modify such Performance Goals or the related minimum acceptable level
of achievement, in whole or in part, as the Committee deems appropriate and equitable (but, with respect to any Award that is intended
to constitute “qualifying performance-based compensation” (within the meaning of Code Section 162(m)),only to the extent
permitted by Code Section 162(m)).

 

2.22.       
“Performance Period” means the period selected by the Committee during which the performance of the Company,
any Subsidiary, any department of the Company or any Subsidiary, or any individual is measured for the purpose of determining the
extent to which a Performance Goal has been achieved.

 

2.23.       
“Restricted Stock” means Common Stock awarded by the Committee under Section 6.3 of the Plan.

 

2.24.       
“Restricted Stock Unit” means the right granted under Section 6.4 of the Plan to receive, on the date of settlement,
an amount equal to the Fair Market Value of one share of Common Stock. An Award of Restricted Stock Units may be settled in cash,
shares of Common Stock or any combination of the foregoing.

 

2.25.       
“Restriction Period” means the period during which Restricted Stock and Restricted Stock Units are subject
to forfeiture.

 

2.26.       
“SAR” means a stock appreciation right awarded by the Committee under Section 6.2 of the Plan.

 

2.27.       
“Securities Act” means the Securities Act of 1933, as amended.

 

2.28.       
“Subsidiary” means any corporation, partnership, joint venture or other business entity of which 50%
or more of the outstanding voting power is beneficially owned, directly or indirectly, by the Company.

 

2.29.       
“Ten Percent Shareholder” means a person who on any given date owns, either directly or indirectly (taking
into account the attribution rules contained in Section 424(d) of the Code), stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or a Subsidiary.

 

Section 3.               
Eligibility. Any Employee, Non-Employee Director or Consultant shall be eligible to be selected to receive an Award
under the Plan; provided, however, that only persons who are Employees may be granted Options which are intended to qualify as
Incentive Stock Options.

    	4

    	 

    

 

Section 4.               
Administration and Implementation of the Plan.

 

4.1.           
The Plan and all Award Agreements shall be administered by the Committee. Any action of the Committee in administering the
Plan and an Award Agreement shall be final, conclusive and binding on all persons, including the Company, its Subsidiaries, Participants,
persons claiming rights from or through Participants and shareholders of the Company.
No member of the Committee (or any person to whom the Committee has delegated authority to act under the Plan) shall be
personally liable for any action, determination, or interpretation taken or made in good faith by the Committee (or such person)
with respect to the Plan or any Awards granted hereunder, and all members of the Committee (and such persons) shall be fully indemnified
and protected by the Company in respect of any such action, determination or interpretation to the fullest extent permitted by
law.

 

4.2.           
Subject to the provisions of the Plan, the Committee shall have full and final authority in its discretion to (i) select
the Employees, Non-Employee Directors and Consultants who will receive Awards pursuant to the Plan; (ii) determine the type or
types of Awards to be granted to each Participant; (iii) determine the number of shares of Common Stock to which an Award will
relate, the terms and conditions of any Award granted under the Plan (including, but not limited to, restrictions as to vesting,
transferability or forfeiture, exercisability or settlement of an Award and waivers or accelerations thereof, and waivers of or
modifications to Performance Goals relating to an Award, based in each case on such considerations as the Committee shall determine)
and all other matters to be determined in connection with an Award; (iv) determine the exercise price or purchase price (if any)
of an Award; (v) determine whether, to what extent, and under what circumstances an Award may be cancelled, forfeited, or surrendered;
(vi) determine whether, and to certify that, Performance Goals to which an Award is subject are satisfied; (vii) correct any defect
or supply any omission or reconcile any inconsistency in the Plan, and adopt, amend and rescind such rules, regulations, guidelines,
forms of agreements and instruments relating to the Plan as it may deem necessary or advisable; (viii) construe and interpret the
Plan; and (ix) make all other determinations as it may deem necessary or advisable for the administration of the Plan; provided,
however, that the Committee shall be prohibited from effecting a repricing of any outstanding Award without shareholder approval.

 

4.3.           
To the extent permitted by applicable law, the Committee may delegate some or all of its authority with respect to the Plan
and Awards to any executive officer of the Company or any other person or persons designated by the Committee, in each case, acting
individually or as a committee, provided that the Committee may not delegate its authority hereunder to any person to make Awards
to (a) Employees who are (i) “officers” as defined in Rule 16a-1(f) under the Exchange Act, (ii) “covered employees”
within the meaning of Section 162(m) of the Code or (iii) officers or other Employees who are delegated authority by the Committee
pursuant to this Section or (b) members of the Board. Any delegation hereunder shall be subject to the restrictions and limits
that the Committee specifies at the time of such delegation or thereafter. The Committee may at any time rescind the authority
delegated to any person pursuant to this Section. Any action undertaken by any such person or persons in accordance with the Committee’s
delegation of authority pursuant to this Section shall have the same force and effect as if undertaken directly by the Committee.

 

Section 5.               
Shares of Common Stock Subject to the Plan.

 

5.1.           
Subject to adjustment as provided in Section 8 hereof, the total number of shares of Common Stock available for Awards under
the Plan as of the Effective Date shall be 2,500,000 (the “Plan Limit”); provided, however, that on January 1, 2015
and each January 1st thereafter prior to the termination of the Plan, the Plan Limit shall be increased by the lesser
of (x) 4% of the number of shares of Common Stock outstanding as of the immediately preceding December 31st and (y)
such lesser number as the Board may determine in its discretion. Up to 2,000,000 shares available for Awards under the Plan may
be issued pursuant to Incentive Stock Options, and no more than 1,250,000 shares may be awarded to any Participant in any one calendar
year. For purposes of determining the number of shares available for Awards under the Plan, each stock-settled SAR shall count
against the Plan Limit based on the number of shares underlying the exercised portion of such SAR rather than the number of shares
issued in settlement of such SAR. Any shares tendered, with the Committee’s approval, by a Participant in payment of an exercise
price for an Award or the tax liability with respect to an Award, including shares withheld from any such Award, shall not be available
for future Awards hereunder. Common Stock awarded under the Plan may be reserved or made available from the Company’s authorized
and unissued Common Stock or from Common Stock reacquired and held in the Company’s treasury. Any shares of Common Stock
issued by the Company through the assumption or substitution of outstanding grants from an acquired company shall not reduce the
shares of Common Stock available for Awards under the Plan.

 

5.2.           
If any shares subject to an Award under the Plan are forfeited or such Award otherwise terminates or is settled for any
reason whatsoever without an actual distribution of shares to the Participant, any shares counted against the number of shares
available for issuance pursuant to the Plan with respect to such Award shall, to the extent of any such forfeiture, settlement,
or termination, again be available for Awards under the Plan; provided, however, that the Committee may adopt procedures for the
counting of shares relating to any Award to ensure appropriate counting, avoid double counting, provide for adjustments in any
case in which the number of shares actually distributed differs from the number of shares previously counted in connection with
such Award, and if necessary, to comply with applicable law or regulations.

    	5

    	 

    

 

Section 6.               
Awards. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee
may impose on any Award or the settlement or exercise thereof, at the date of grant or thereafter, such additional terms and conditions,
not inconsistent with the provisions of the Plan, as the Committee shall determine, including without limitation terms requiring
forfeiture of Awards in the event of the termination of employment or other relationship with the Company or any Subsidiary by
the Participant; provided, however, that the Committee shall retain full power to accelerate or waive any such additional term
or condition as it may have previously imposed (provided that, in any case, any such action is permitted under Code Section 409A).
The right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to
such Performance Goals as may be determined by the Committee. Each Award, and the terms and conditions applicable thereto, shall
be evidenced by an Award Agreement.

 

6.1.           
Options. Options give a Participant the right to purchase a specified number of shares of Common Stock from the Company
for a specified time period at a fixed exercise price, as provided in the applicable Award Agreement. Options may be either Incentive
Stock Options or Non-Qualified Stock Options; provided that Incentive Stock Options may not be granted to Non-Employee Directors
or Consultants. The grant of Options shall be subject to the following terms and conditions:

 

(a)               
Exercise Price. The price per share at which Common Stock may be purchased upon exercise of an Option shall be determined
by the Committee and specified in the Award Agreement, but shall be not less than the Fair Market Value of a share of Common Stock
on the date of grant (or 110% of the Fair Market Value of a share of Common Stock on the date of grant in the case of an Incentive
Stock Option granted to a Ten Percent Shareholder).

 

(b)              
Term of Options. The term of an Option shall be specified in the Award Agreement, but shall in no event be greater
than ten years from the grant date (or five years from the grant date in the case of an Incentive Stock Option granted to a Ten
Percent Shareholder).

 

(c)               
Exercise of Option. Each Award Agreement with respect to an Option shall specify the time or times at which an Option
may be exercised in whole or in part and the terms and conditions applicable thereto, including (i) a vesting schedule which may
be based upon the passage of time, attainment of Performance Goals or a combination thereof, (ii) whether the exercise price for
an Option shall be paid in cash, with shares of Common Stock, with any combination of cash and shares of Common Stock, or with
other legal consideration that the Committee may deem appropriate, (iii) the methods of payment, which may include payment through
cashless and net exercise arrangements, to the extent permitted by applicable law and (iv) the methods by which, or the time or
times at which, Common Stock will be delivered or deemed to be delivered to Participants upon the exercise of such Option. Payment
of the exercise price shall in all events be made within three days after the date of exercise of an Option. With respect to any
Participant who is subject to Section 16 of the Exchange Act, such Participant may direct the Company to reduce the number of Shares
that would otherwise be deliverable upon the exercise of his or her Option having a Fair Market Value on the date of exercise equal
to the exercise price of the portion of the Option then being exercised.

 

(d)              
Termination of Employment or Other Service. Unless otherwise provided in an Award Agreement, upon a Participant’s
termination of employment or other service with the Company and its Subsidiaries, the unvested portion of such Participant’s
Options shall cease to vest and shall be forfeited and the vested portion of such Participant’s Options shall remain exercisable
by the Participant or the Participant’s beneficiary or legal representative, as the case may be, for a period of (i) 30 days
in the event of a termination by the Company or a Subsidiary without Cause, (ii) 180 days in the event of a termination due to
death or Disability and (iii) 30 days in the event of the Participant’s voluntary termination; provided, however, that in
no event shall any Option be exercisable after its stated term has expired. All of a Participant’s Options, whether or not
vested, shall be forfeited immediately upon such Participant’s termination by the Company or a Subsidiary for Cause.

 

(e)               
Incentive Stock Options. Each Participant awarded an Incentive Stock Option under the Plan shall notify the Company
in writing immediately after the date he or she makes a “disqualifying disposition” (as defined in Section 421(b) of
the Code) of any shares of Common Stock acquired pursuant to the exercise of such Incentive Stock Option. The Company may, if determined
by the Committee and in accordance with procedures established by it, retain possession of any shares acquired pursuant to the
exercise of an Incentive Stock Option as agent for the applicable Participant until the end of any period during which a disqualifying
disposition could occur, subject to complying with any instructions from such Participant as to the sale of such shares. The aggregate
Fair Market Value, determined as of the date of grant, for Awards granted under the Plan (or any other stock option plan required
to be taken into account under Section 422(d) of the Code) that are intended to be Incentive Stock Options which are first exercisable
by the Participant during any calendar year shall not exceed $100,000. To the extent an Award purporting to be an Incentive Stock
Option exceeds the limitation in the previous sentence, the portion of the Award in excess of such limit shall be a Non-Qualified
Option.  

    	6

    	 

    

 

6.2.           
Stock Appreciation Rights. An SAR shall confer on the Participant a right to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one share of Common Stock on the date of exercise over (ii) the grant price of the SAR as
determined by the Committee, but which may never be less than the Fair Market Value of one share of Common Stock on the date of
grant. The grant of SARs shall be subject to the following terms and conditions:

 

(a)               
General. Each Award Agreement with respect to an SAR shall specify the number of SARs granted, the grant price of
the SAR, the time or times at which an SAR may be exercised in whole or in part (including vesting upon the passage of time, the
attainment of Performance Goals, or a combination thereof), the method of exercise, method of settlement (in cash, Common Stock
or a combination thereof), method by which Common Stock will be delivered or deemed to be delivered to Participants (if applicable)
and any other terms and conditions of any SAR.

 

(b)              
Termination of Employment or Other Service. Unless otherwise provided in an Award Agreement, upon a
Participant’s termination of employment or other service with the Company and its Subsidiaries, the unvested portion of such
Participant’s SARs shall cease to vest and shall be forfeited and the vested portion of such Participant’s SARs shall
remain exercisable by the Participant or the Participant’s beneficiary or legal representative, as the case may be, for a
period of (i) 30 days in the event of a termination by the Company or a Subsidiary without Cause, (ii) 180 days in the event of
a termination due to death or Disability and (iii) 30 days in the event of the Participant’s voluntary termination; provided,
however, that in no event shall any SAR be exercisable after its stated term has expired. All of a Participant’s SARs, whether
or not vested, shall be forfeited immediately upon such Participant’s termination by the Company or a Subsidiary for Cause.

 

(c)               
Term. The term of an SAR shall be specified in the Award Agreement, but shall in no event be greater than ten years.

 

6.3.           
Restricted Stock. An Award of Restricted Stock is a grant by the Company of a specified number of shares of Common
Stock to the Participant, which shares are subject to forfeiture upon the happening of specified events during the Restriction
Period. Such an Award shall be subject to the following terms and conditions:

 

(a)               
General. Each Award Agreement with respect to Restricted Stock shall specify the duration of the Restriction Period
and/or each installment thereof, the conditions under which the Restricted Stock may be forfeited to the Company, and the amount,
if any, the Participant must pay to receive the Restricted Stock. Such restrictions may include a vesting schedule based upon the
passage of time, the attainment of Performance Goals or a combination thereof.

 

(b)              
Transferability. During the Restriction Period, the transferability of Restricted Stock shall be prohibited or restricted
in the manner and to the extent prescribed in the applicable Award Agreement. Such restrictions may include, without limitation,
rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Stock to a continuing substantial
risk of forfeiture in the hands of any transferee.

 

(c)               
Shareholder Rights. Unless otherwise provided in the applicable Award Agreement, during the Restriction Period the
Participant shall have all the rights of a shareholder with respect to Restricted Stock, including, without limitation, the right
to receive dividends thereon (whether in cash or shares of Common Stock) and to vote such shares of Restricted Stock; provided,
however, that dividends shall be subject to the same restrictions as the underlying Restricted Stock (unless otherwise provided
by the Committee in the Award Agreement) and cash dividends shall be held by the Company in its general assets and released to
the Participant only upon the vesting of the underlying Restricted Stock (unless otherwise provided by the Committee in the Award
Agreement).

 

(d)              
Termination of Employment or Other Service. Unless otherwise provided in the applicable Award Agreement,
upon a Participant’s termination of employment or other service with the Company and its Subsidiaries for any reason, the
unvested portion of each Award of Restricted Stock held by such Participant shall be forfeited with no compensation due the Participant.

 

(e)               
Additional Matters. Upon the Award of Restricted Stock, the Committee may direct the number of shares of Common Stock
subject to such Award be issued to the Participant or placed in a restricted stock account (including an electronic account) with
the transfer agent and in either case designating the Participant as the registered owner. The certificate(s), if any, representing
such shares shall be physically or electronically legended, as applicable, as to sale, transfer, assignment, pledge or other encumbrances
during the Restriction Period and, if issued to the Participant, returned to the Company to be held in escrow during the Restriction
Period. In all cases, the Participant shall sign a stock power endorsed in blank to the Company to be held in escrow during the
Restriction Period.

    	7

    	 

    

 

6.4.           
Restricted Stock Units. Restricted Stock Units are solely a device for the measurement and determination of the amounts
to be paid to a Participant under the Plan. Restricted Stock Units do not constitute Common Stock and shall not be treated as (or
as giving rise to) property or as a trust fund of any kind; provided, however, that the Company may establish a bookkeeping reserve
to meet its obligations hereunder or a trust or other funding vehicle that would not cause the Plan to be deemed to be funded for
tax purposes or for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended. The right of any Participant
in respect of an Award of Restricted Stock Units shall be no greater than the right of any unsecured general creditor of the Company.
 The grant of Restricted Stock Units shall be subject to the following terms and conditions:

 

(a)               
Restriction Period. Each Award Agreement with respect to Restricted Stock Units shall specify the duration of the
Restriction Period, if any, and/or each installment thereof and the conditions under which such Award may be forfeited to the Company.
Such restrictions may include a vesting schedule based upon the passage of time, the attainment of Performance Goals or a combination
thereof.

 

(b)              
Termination of Employment or Other Service. Unless otherwise provided in the applicable Award Agreement, upon
a Participant’s termination of employment or other service with the Company and its Subsidiaries for any reason, the unvested
portion of each Award of Restricted Stock Units credited to such Participant shall be forfeited with no compensation due the Participant.

 

(c)               
Settlement. Unless otherwise provided in an Award Agreement (i) an Award of Restricted Stock Units shall be settled
in shares of Common Stock, provided that any fractional Restricted Stock Units shall be settled in cash and (ii) subject to the
Participant’s continued employment or other service with the Company or a Subsidiary from the date of grant through the expiration
of the Restriction Period (or applicable portion thereof), the vested portion of an Award of Restricted Stock Units shall be settled
within 30 days after the expiration of the Restriction Period (or applicable portion thereof).

 

(d)              
Shareholder Rights. Nothing contained in the Plan shall be construed to give any Participant rights as a shareholder
with respect to an Award of Restricted Stock Units (including, without limitation, any voting, dividend or derivative or other
similar rights). Notwithstanding the foregoing, the Committee may provide in an Award Agreement that amounts equal to any dividends
declared during the Restriction Period on the shares of Common Stock represented by an Award of Restricted Stock Units will be
credited to the Participant’s account and deemed to be reinvested in additional Restricted Stock Units, such additional Restricted
Stock Units to be subject to the same forfeiture restrictions and settlement date as the Restricted Stock Units to which they relate.

 

6.5.           
Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants
any type of Award (in addition to those Awards provided in Sections 6.1, 6.2, 6.3 or 6.4 hereof) that is payable in, or valued
in whole or in part by reference to, shares of Common Stock, and that is deemed by the Committee to be consistent with the purposes
of the Plan, including, without limitation, dividend equivalents, performance shares and performance units (“Other Awards”).

 

Section 7.               
Change in Control.

 

7.1.           
General. Notwithstanding any provision in the Plan to the contrary, upon the occurrence of a Change in Control, the
Committee, in its discretion, may accelerate the vesting and, if applicable, exercisability of all outstanding Awards such that
all outstanding Awards are fully vested and, if applicable, exercisable (effective immediately prior to such Change in Control)
and may determine whether all applicable Performance Goals have been achieved and the applicable level of performance.

    	8

    	 

    

 

7.2.           
Options and SARs. Notwithstanding any provision in the Plan to the contrary, upon the occurrence of a Change in Control,
the Committee, in its discretion, may take one or more of the following actions with respect to Options and SARs that are outstanding
as of such Change in Control: (a) cancel any outstanding Options or SARs in exchange for a cash payment in an amount equal to the
excess, if any, of the Fair Market Value of the Common Stock underlying the unexercised portion of the Option or SAR as of the
date of the Change in Control over the exercise price or grant price, as the case may be, of such portion, provided that any Option
or SAR with an exercise price or grant price, as the case may be, that equals or exceeds the Fair Market Value of the Common Stock
on the date of such Change in Control shall be cancelled with no payment due the Participant; (b) terminate any Option or SAR,
effectively immediately prior to the Change in Control, provided that the Company provides the Participant an opportunity to exercise
such Award within a specified period following the Participant’s receipt of a written notice of such Change in Control and
the Company’s intention to terminate such Awards, effective immediately prior to such Change in Control; (c) terminate any
Options or SARs, the Performance Goals of which have not been satisfied as of the Change in Control, (d) require the successor
or acquiring company (or its parents or subsidiaries), following a Change in Control, to assume any outstanding Option or SAR and
to substitute such Option or SAR with awards involving the common equity securities of such company on terms and conditions necessary
to preserve the rights of Participants with respect to such Options or SARs or (e) take such other actions as the Committee believes
may be appropriate.

 

7.3.           
Restricted Stock, Restricted Stock Units and Other Awards. With respect to Restricted Stock, Restricted Stock Units
or Other Awards, the Committee generally may (a) provide in an Award that, upon the occurrence of a Change in Control, any vested
Restricted Stock, Restricted Stock Units and Other Awards shall become immediately vested and/or payable, provided that if such
Awards constitute “non-qualified deferred compensation” (within the meaning of Code Section 409A) such Change in Control
satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(v), (vi) or (vii); (b) with respect to any Restricted
Stock, Restricted Stock Units or Other Awards that do not constitute “non-qualified deferred compensation,” elect to
settle such Restricted Stock, Restricted Stock Units and Other Awards upon a Change in Control, (c) terminate any Restricted Stock,
Restricted Stock Units or Other Awards if the applicable Performance Goals were not satisfied as of the Change in Control, (d)
require the successor or acquiring company (or its parents or subsidiaries), following a Change in Control, to assume such Restricted
Stock, Restricted Stock Units and Other Awards or to substitute such Awards with awards involving the equity securities of the
acquiring or successor company on terms and conditions so as to preserve the rights of participants, or (e) to the extent permitted
by Code Section 409A, take such other actions as the Committee believes may be appropriate (including terminating such Awards for
a cash payment equal to the fair market value of the underlying shares).

 

The judgment of the Committee with respect
to any matter referred to in this Section 7 shall be conclusive and binding upon each Participant without the need for any amendment
to the Plan.

 

Section 8.               
Adjustments upon Changes in Capitalization.

 

8.1.           
In order to prevent dilution or enlargement of the rights of Participants under the Plan as a result of any stock dividend,
recapitalization, forward stock split or reverse stock split, reorganization, division, merger, consolidation, spin-off, combination,
repurchase or share exchange, extraordinary or unusual cash distribution or other similar corporate transaction or event that affects
the Common Stock, the Committee shall adjust (i) the number and kind of shares of Common Stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Common Stock issuable in respect of outstanding Awards, (iii) the
aggregate number and kind of shares of Common Stock available under the Plan (including any of the specific limitations under Section
5 hereof), and (iv) the exercise or grant price relating to any Award. Any such adjustment shall be made in an equitable manner
which reflects the effect of such transaction or event. It is provided, however, that in the case of any such transaction or event,
the Committee may make any additional adjustments to the items in (i) through (iv) above which it deems appropriate in the circumstances,
or make provision for a cash payment with respect to any outstanding Award; and it is provided, further, that no adjustment shall
be made under this Section that would cause the Plan to violate Section 422 of the Code with respect to Incentive Stock Options
or that would adversely affect the status of any Award that is “performance-based compensation” under Section 162(m)
of the Code.

    	9

    	 

    

 

8.2.           
In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in,
Awards, including any Performance Goals, in recognition of unusual or nonrecurring events (including, without limitation, events
described in Section 8.1) affecting the Company or any Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles. Notwithstanding the foregoing, all adjustments shall be made in accordance with Section 409A of the Code
and the regulations thereunder to the extent applicable, and with respect to any Award that is “performance-based compensation”
under Section 162(m) of the Code, in accordance with Section 162(m) of the Code.

 

Section 9.               
Termination and Amendment.

 

9.1.           
Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue, or terminate the Plan without the
consent of the Company’s shareholders or Participants, except that any such amendment, alteration, suspension, discontinuation,
or termination shall be subject to the approval of the Company’s shareholders if (i) such action would increase the number
of shares subject to the Plan, (ii) such action would decrease the price at which Awards may be granted, or (iii) such shareholder
approval is required by any applicable federal, state or foreign law or regulation or the rules of any stock exchange or automated
quotation system on which the Common Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine
to submit such other changes to the Plan to the Company’s shareholders for approval; provided, however, that except as provided
in Section 18, without the consent of an affected Participant, no amendment, alteration, suspension, discontinuation, or termination
of the Plan may materially and adversely affect the rights of such Participant under any outstanding Award unless such modification
is necessary to ensure a deduction under Section 162(m) of the Code or to avoid the additional tax described in Section 409A of
the Code.

 

9.2.           
The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any Award theretofore
granted and any Award Agreement relating thereto; provided, however, that except as provided in Section 18, without the consent
of an affected Participant, no such amendment, alteration, suspension, discontinuation, or termination of any Award may materially
and adversely affect the rights of such Participant under such Award unless such modification is necessary to ensure a deduction
under Section 162(m) of the Code or to avoid the additional tax described in Section 409A of the Code.

 

9.3.           
Notwithstanding anything in this Section 9 to the contrary, any Performance Goal applicable to an Award shall not be deemed
a fixed contractual term, but shall remain subject to adjustment by the Committee, in its discretion at any time in view of the
Committee’s assessment of the Company’s strategy, performance of comparable companies, and other circumstances, except
to the extent that any such adjustment to a performance condition would adversely affect the status of an Award intended to satisfy
the “qualified performance-based compensation” exception under Section 162(m) of the Code and the regulations thereunder.

 

9.4.           
Notwithstanding anything in the Plan or an Award Agreement to the contrary, no Award may be repriced, replaced or regranted
through cancellation without the approval of the shareholders of the Company, provided that nothing herein shall prevent the Committee
from taking any action provided for in Section 8.

 

Section 10.           
No Right to Award, Employment or Service. No Participant shall have any claim to be granted any Award under the Plan,
and there is no obligation that the terms of Awards be uniform or consistent among Participants. Neither the Plan nor any action
taken hereunder shall be construed as giving any Participant any right to be retained in the employ or service of the Company or
any Subsidiary. For purposes of this Plan, a transfer of employment or service between the Company and its Subsidiaries shall not
be deemed a termination of employment or service; provided, however, that individuals employed by, or otherwise providing services
to, an entity that ceases to be a Subsidiary shall be deemed to have incurred a termination of employment or service, as the case
may be, as of the date such entity ceases to be a Subsidiary unless such individual becomes an employee of, or service provider
to, the Company or another Subsidiary as of the date of such cessation.

 

Section 11.           
Taxes. Each Participant must make appropriate arrangement for the payment of any taxes relating to an Award granted
hereunder. The Company or any Subsidiary is authorized to withhold from any payment relating to an Award under the Plan, including
from a distribution of Common Stock or any payroll or other payment to a Participant, amounts of withholding and other taxes due
in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable
the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to
any Award. This authority shall include the ability to withhold or receive Common Stock or other property and to make cash payments
in respect thereof in satisfaction of a Participant’s tax obligations. Withholding of taxes in the form of shares of Common
Stock with respect to an Award shall not occur at a rate that exceeds the minimum required statutory federal and state withholding
rates.

    	10

    	 

    

 

Section 12.           
Limits on Transferability; Beneficiaries. No Award or other right or interest of a Participant under the Plan shall
be pledged, encumbered, or hypothecated to, or in favor of, or subject to any lien, obligation, or liability of such Participant
to, any party, other than the Company or any Subsidiary, or assigned or transferred by such Participant otherwise than by will
or the laws of descent and distribution, and such Awards and rights shall be exercisable during the lifetime of the Participant
only by the Participant or his or her guardian or legal representative. Notwithstanding the foregoing, the Committee may, in its
discretion, provide that Options, SARs and Restricted Stock be transferable, without consideration, to immediate family members
(i.e., children, grandchildren or spouse), to trusts for the benefit of such immediate family members and to partnerships in which
such family members are the only partners (any vesting conditions shall be unaffected by such transfer). The Committee may attach
to such transferability feature such terms and conditions as it deems advisable. In addition, a Participant may, in the manner
established by the Committee, designate a beneficiary (which may be a person or a trust) to exercise the rights of the Participant,
and to receive any distribution, with respect to any Award upon the death of the Participant. A beneficiary, guardian, legal representative
or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions
of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any
additional restrictions deemed necessary or appropriate by the Committee.

 

Section 13.           
Foreign Nationals. Without amending the Plan, Awards may be granted to Employees, Consultants and Non-Employee Directors
who are foreign nationals or are employed or providing services outside the United States or both, on such terms and conditions
different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to further the purpose
of the Plan. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, the
Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect
for any other purpose, provided that no such supplements, amendments, restatements or alternative versions shall include any provisions
that are inconsistent with the terms of the Plan, as then in effect, unless the Plan could have been amended to eliminate such
inconsistency without further approval by the stockholders of the Company.

 

Section 14.           
Securities Law Requirements.

 

14.1.       
No shares of Common Stock may be issued hereunder if the Company shall at any time determine that to do so would (i) violate
the listing requirements of an applicable securities exchange, or adversely affect the registration or qualification of the Company’s
Common Stock under any state or federal law, or (ii) require the consent or approval of any regulatory body or the satisfaction
of withholding tax or other withholding liabilities. In any of the events referred to in clause (i) or clause (ii) above, the issuance
of such shares shall be suspended and shall not be effective unless and until such withholding, listing, registration, qualifications
or approval shall have been effected or obtained free of any conditions not acceptable to the Company in its sole discretion, notwithstanding
any termination of any Award or any portion of any Award during the period when issuance has been suspended.

 

14.2.       
The Committee may require, as a condition to the issuance of shares hereunder, representations, warranties and agreements
to the effect that such shares are being purchased or acquired by the Participant for investment only and without any present intention
to sell or otherwise distribute such shares and that the Participant will not dispose of such shares in transactions which, in
the opinion of counsel to the Company, would violate the registration provisions of the Securities Act, and the rules and regulations
thereunder.

 

Section 15.           
Termination. Unless earlier terminated, the Plan shall terminate on the earlier of the 10-year anniversary of the
Effective Date or the 10-year anniversary of the date the Plan was approved by the Board, and no Awards under the Plan shall thereafter
be granted.

 

Section 16.           
Fractional Shares. The Company will not be required to issue any fractional shares of Common Stock pursuant to the
Plan. The Committee may provide for the elimination of fractions and settlement of such fractional shares of Common Stock in cash.

    	11

    	 

    

 

Section 17.           
Discretion. In exercising, or declining to exercise, any grant of authority or discretion hereunder, the Committee
may consider or ignore such factors or circumstances and may accord such weight to such factors and circumstances as the Committee
alone and in its sole judgment deems appropriate and without regard to the effect such exercise, or declining to exercise such
grant of authority or discretion, would have upon the affected Participant, any other Participant, any Employee, the Company,
any Subsidiary, any affiliate, any shareholder or any other person.

 

Section 18.           
Code Section 409A. The Plan and all Awards are intended to comply with, or be exempt from, Code Section 409A and
all regulations, guidance, compliance programs and other interpretative authority thereunder, and shall be interpreted in a manner
consistent therewith. Notwithstanding anything contained herein to the contrary, in the event any Award is subject to Code Section 409A,
the Committee may, in its sole discretion and without a Participant’s prior consent, amend the Plan and/or Award, adopt policies
and procedures, or take any other actions as deemed appropriate by the Committee to (i) exempt the Plan and/or any Award from
the application of Code Section 409A, (ii) preserve the intended tax treatment of any such Award or (iii) comply
with the requirements of Code Section 409A. Notwithstanding anything contained in the Plan or in an Award Agreement to the
contrary, neither the Company, any member of the Committee nor any Subsidiary shall have any liability or obligation to any Participant
or any other person for taxes, interest, penalties or fines (including any of the foregoing resulting from the failure of any Award
granted hereunder to comply with, or be exempt from, Code Section 409A).

 

Section 19.           
Governing Law. The validity and construction of the Plan and any Award Agreements entered into thereunder shall be
construed and enforced in accordance with the laws of the State of Delaware, but without giving effect to the conflict of laws
principles thereof.

 

Section 20.           
Recoupment. Any Award granted pursuant to the Plan shall be subject to mandatory repayment by the Participant to
the Company pursuant to the terms of any Company “clawback” or recoupment policy directly applicable to the Plan and
(i) set forth in the Participant’s Award Agreement or (ii) required by law to be applicable to the Participant.

 

Section 21.           
Effective Date. The Plan shall become effective upon the Effective Date, and no Award shall become exercisable, realizable
or vested prior to the Effective Date.

 

 

    	12

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