Document:

Exhibit 10.3

 

THIS SECURED PROMISSORY NOTE (THIS “NOTE”)
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE
SECURITIES LAWS. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

SYSOREX, INC.

 

SECURED PROMISSORY NOTE

 

	$3,000,000.00	Issue Date: December 31, 2018

 

Sysorex, Inc., a Nevada
corporation (the “Company”), for value received, hereby promises to pay to Inpixon, a Nevada corporation,
or its registered assigns (the “Holder”), up to an aggregate sum of Three Million Dollars ($3,000,000.00)
or such other lesser amount as shall then equal the outstanding principal amount hereof (the “Principal Amount”),
to be borrowed and disbursed in increments and identified on Schedule I attached hereto (each such borrowed amount referred
to as the “Loan Amount”) plus all accrued unpaid interest, as set forth below, on the earlier to occur
of (i) December 31, 2020 or (ii) when declared due and payable by the Holder upon the occurrence of an Event of Default (as defined
below) (the “Maturity Date”). In addition, the Company agrees to pay $20,000.00 to the Holder to cover
the Holder’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of this Note, all of which amounts are included in the initial Loan Amount of this Note and is fully earned
and payable as of the date hereof. Upon each disbursement under this Note, the Holder shall deliver an amended Schedule I
setting forth the Disbursement Date and the then outstanding Loan Amount due to the Holder. The Company may continue to advance
funds under this Note up to the Principal Amount through the Maturity Date. This Note is issued as of the Issue Date set forth
above, pursuant to the terms of that certain Note Purchase Agreement, dated as of December 31, 2018 (the “Agreement”),
by and between the Company and the Holder. The Company may borrow repay and borrow hereunder, as needed, for a total outstanding
balance, exclusive of any unpaid accrued interest, not to exceed the Principal Amount at any one time.

 

The following is a
statement of the rights of the Holder of this Note and the conditions to which this Note is subject, and to which the Holder hereof,
by the acceptance of this Note, agrees:

 

1.
Definitions. Any capitalized term not otherwise defined herein shall have the meaning set forth in the Agreement.
As used in this Note, the following terms, unless the context otherwise requires, shall have the following meanings:

 

(i) “Company”
shall also include any corporation that, to the extent permitted by this Note, succeeds to, or assumes the obligations of, the
Company under this Note.

 

(ii) “Holder”,
when the context refers to a holder of this Note, shall mean any person who shall at the time be the registered holder of this
Note.

 

2.
Payments. All payments for amounts due under this Note shall be made by wire transfer of immediately available funds,
in lawful tender of the United States, to an account designated in writing by the Holder, and all payments in cash shall be applied
first to the Interest Amount (as defined below) and thereafter to the Loan Amount, subject to any such further conditions as set
forth in Section 14 hereto.

 

     

     

    

 

3.
Interest. Interest on the Loan Amount will accrue beginning as of the Disbursement Date set forth on Schedule
1 hereto with respect to any portion of the Loan Amount, at the rate of ten percent (10%) per annum (the “Interest
Rate”). All accrued unpaid interest (the “Interest Amount”) shall be due and payable to
the Holder on the Maturity Date. Upon the occurrence of an Event of Default (as defined below), interest shall accrue on the outstanding
Loan Amount of this Note at the lesser of the rate of eighteen percent (18%) per annum or the maximum rate permitted by applicable
law. All interest calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve (12) thirty
(30) day months, shall compound daily and shall be payable in accordance with the terms of this Note. Interest payments shall
be payable in cash.

 

4.
Events of Default. If any of the events specified in this Section 4 shall occur (herein individually referred to
as an “Event of Default”), the Holder of this Note may, provided such condition exists, declare the entire
Loan Amount and Interest Amount hereon immediately due and payable, by written notice to the Company:

 

(i) Any failure
by the Company to pay any of the Loan Amount or Interest Amount on this Note when due hereunder, and such failure continues for
ten (10) days after written notice to the Company thereof; or

 

(ii) The
institution by the Company of proceedings to adjudicate the Company as bankrupt or insolvent, or the consent by the Company to
the institution of such proceedings; the filing by the Company of a petition, answer or consent seeking reorganization or release
under the federal Bankruptcy Act or any other applicable federal or state law, or the consent by the Company to the filing of any
such petition; the appointment of a receiver, liquidator, assignee, trustee or other similar official of the Company, or of any
substantial part of its property; or the making of an assignment by the Company for the benefit of creditors, or the taking of
any corporate action by the Company in furtherance of any such action; or

 

(iii) The
commencement of an action against the Company seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
relief under any present or future statute, law or regulation; unless, (a) within sixty (60) days after such commencement,
the action has been resolved in favor of the Company, or all orders or proceedings thereunder affecting the operations or the business
of the Company have been stayed; provided, however, that the stay of any such order or proceeding has not thereafter been
set aside, or (b) within sixty (60) days after the appointment of any trustee, receiver or liquidator of the Company or of all
or any substantial part of the properties of the Company, without the consent or acquiescence of the Company thereto, such appointment
is vacated.

 

5.
Prepayment. This Note may be prepaid by the Company at any time without penalty or premium.

 

6.
Assignment. Subject to the restrictions on transfer described in Section 8 below, the rights and obligations of the
Company and the Holder of this Note shall be binding upon, and benefit the successors and assigns of, the parties hereto.

 

7.
Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of both
the Company and the Holder.

 

    2

     

    

 

8.
Transfer of This Note. With respect to any offer, sale or other disposition of this Note, the Holder shall give written
notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such Holder’s
counsel, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under
any federal or state law then in effect). Upon receiving such written notice and opinion, if so requested, the Company, as soon
as practicable, shall notify such Holder that such Holder may sell or otherwise dispose of this Note, all in accordance with the
terms of the notice delivered to the Company. Any Note thus transferred shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with the Act unless, in the opinion of counsel for the Company, such legend is not
required. The Company may issue stop-transfer instructions to the Company’s transfer agent in connection with any such restrictions.

 

9.
Secured Note.

 

9.1 Except with respect
to the security interest granted in connection with that certain Loan and Security Agreement, dated as of December 21, 2018, with
Payplant LLC as agent for Payplant Alternatives Fund LLC (“Payplant Liens”) and Permitted Liens (as defined
below), this Note shall constitute a security agreement for all purposes under applicable law. The Company hereby grants to the
Holder, subject to any and all Payplant Liens and Permitted Liens now or hereafter existing with respect to same, a continuing
first priority security interest in all assets of the Company whether now owned or hereafter acquired, including all proceeds therefrom
(collectively, the “Collateral”) to secure the payment of this Note and all other loans and advances
(including all renewals, modifications and extensions thereof) and all obligations of any and every kind and nature of the Company
to the Holder, whether arising prior to, under or after this Note, however incurred or evidenced, plus all interest, reasonable
costs, reasonable expenses and reasonable attorneys’ fees, which may be made or incurred by the Holder in the disbursement,
administration, and collection of such amounts, and in the protection, maintenance, and liquidation of the Collateral. Except for
Payplant Liens, Permitted Liens, whether or not now or hereafter existing, the Company shall not sell, assign, transfer, pledge
or otherwise dispose of or encumber any Collateral to any third party while this Note is in effect without the prior written consent
of the Holder in its sole discretion.

 

9.2 The Company shall
execute and deliver to the Holder, concurrently with the Company’s execution of this Note and at any time or times hereafter
at the request of the Holder, all financing statements, assignments, affidavits, reports, notices, schedules of accounts, letters
of authority and all other documents that the Holder may reasonably request, in form satisfactory to the Holder, to perfect and
maintain perfected the Holder’s security interests in the Collateral. In addition, the Company irrevocably authorizes the
Holder, its agents, attorneys, and representatives, to file financing statements and amendments thereto at the Company’s
expense, necessary to establish and maintain the Holder’s perfected security interest in the Collateral. In order to fully
consummate all of the transactions contemplated hereunder, the Company shall make appropriate entries on its books and records
disclosing the Holder’s security interests in the Collateral. Immediately upon full satisfaction of this Note, including
payment of the outstanding Loan Amount and reasonable fees and expenses due to the Company hereunder and pursuant to the Agreement
(collectively, the “Liabilities”), without further notice from the Company, the Company may terminate
any financing statements, assignments, affidavits, reports, notices, schedules of accounts, letters of authority and all other
documents used to perfect and maintain perfected the Holder’s security interests in the Collateral.

 

    3

     

    

 

9.3 For purposes of
this Agreement, “Permitted Liens” means:

 

9.3.1 purchase money
security interests to secure purchase money indebtedness of the Company, so long as such security interests arise or are created
(A) in the ordinary course of business and consistent with past practices and (B) substantially contemporaneously with the purchase
or acquisition by the Company of the respective property or assets to which such security interests relate and the incurrence of
the respective purchase money indebtedness which such security interests secure, secure only the respective purchase money indebtedness
so incurred by the Company to enable the Company to so purchase or acquire such property or assets, and no other indebtedness,
and encumber only the respective property or assets so purchased or acquired, and no other property or assets of the Company;

 

9.3.2 any liens arising
in connection with capital leases or equipment financing arrangements of the Company;

 

9.3.3 liens acquired
with liabilities assumed by the Company in connection with acquisitions of existing businesses, business divisions, or assets,
in whole or in part after the date hereof;

 

9.3.4 carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, processor’s, landlord’s liens or other
like liens arising in the ordinary course of business that are not overdue for a period of more than thirty (30) days or which
are being contested in good faith by appropriate proceedings;

 

9.3.5 liens arising in
connection with worker’s compensation, unemployment insurance, old age pensions and social security benefits and similar
statutory obligations (excluding liens arising under ERISA), provided that no enforcement proceedings in respect of such liens
are pending and provisions have been made for the payment of such liens on the books of such person as may be required by generally
accepted accounting principles; and

 

9.3.6 liens incurred
in the ordinary course of business to secure the performance of statutory obligations arising in connection with progress payments
or advance payments due under contracts with the United States government or any agency thereof entered into in the ordinary course
of business and (ii) liens incurred or deposits made in the ordinary course of business to secure the performance of statutory
obligations, bids, leases, fee and expense arrangements with trustees and fiscal agents, trade contracts, surety and appeal bonds,
performance bonds and other similar obligations (exclusive of obligations incurred in connection with the borrowing of money, any
lease-purchase arrangements or the payment of the deferred purchase price of property), provided, that in each case full provision
for the payment of all such obligations.

 

    4

     

    

 

10.
Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall
conclusively be deemed to have been duly given if personally delivered or if faxed with confirmation of receipt by telephone or
if mailed by registered or certified mail, postage prepaid, at the respective addresses of the parties set forth below, and shall
be deemed to have been received when delivered. Any party hereto may, by notice thereof, change its address for any such future
notices as may be required or permitted hereunder.

 

		Holder:	Inpixon

 

2479 E. Bayshore Road, Suite 195

Palo Alto, CA 94303

Attn: Wendy Loundermon

 

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

 

Mitchell Silberberg & Knupp
LLP

437 Madison Avenue, 25th Floor

New York, NY 10022

Attn: Melanie Figueroa, Esq.

 

		Company:	Sysorex, Inc.

 

13880 Dulles Corner Lane, Suite
175

Herndon, VA 02171

Attn: Zaman Khan

 

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

 

Adams Corporate Law, Inc.

1851 E 1st St, Suite
900

Santa Ana, CA 92705-4066

Attn: Addison K. Adams, Esq.

 

11.
No Stockholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other
person the right to vote or consent or to receive notice as a stockholder in respect of any meeting of stockholders for the election
of directors of the Company or any other matters or rights whatsoever as a stockholder of the Company, and no dividends or interest
shall be payable or accrued in respect of this Note or the interests represented hereby.

 

12.
Usury. This Note is hereby expressly limited so that in no event whatsoever, whether by reason of acceleration of
maturity of the loan evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Holder hereunder for the
loan, use, forbearance or detention of money exceed that which is permissible under applicable law. If at any time the performance
of any provision of this Note or of any other agreement or instrument entered into in connection with this Note involves a payment
exceeding the limit of the interest that may be validly charged for the loan, use, forbearance or detention of money under applicable
law, then automatically and retroactively, ipso facto, the obligation to be performed shall be reduced to such limit, it being
the specific intent of the Company and the Holder that all payments under this Note are to be credited first toward the payment
of interest, but not in excess of the lesser of (i) the agreed upon Interest Rate as set forth herein or (ii) that which is permitted
by law; and payments shall thereafter be credited toward the reduction of the outstanding Loan Amount.

 

The provisions of this Section 12 shall
under no circumstances be superseded or waived and shall control every other provision of this Note and all other agreements and
instruments entered into between the Company and the Holder in connection with this Note.

 

13.
Governing Law. In all respects, including all matters of construction, validity and performance, this Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to principles thereof
relating to conflicts or choice of law.

 

14.
Heading; References. All headings used herein are used for convenience only and shall not be used to construe or
interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

 

15.
Waiver. The Company hereby waives default, demand for payment, notice, presentment, protest and notice of nonpayment
or dishonor and all other notices or demands relating to this instrument.

 

[Signature Page Follows]

 

    5

     

    

 

IN WITNESS WHEREOF, the Company has
caused this Note to be issued as of the date first written above.

 

	 	COMPANY:
	 	 
	 	SYSOREX, INC.
	 	a Nevada corporation
	 	 	 
	 	By: 	/s/ Zaman Khan
	 	Name:	Zaman Khan
	 	Title:	Chief Executive Officer

 

	HOLDER:
	 
	INPIXON
	a Nevada corporation
	 	 	 
	By: 	/s/ Wendy Loundermon	 
	Name: 	Wendy Loundermon	 
	Title:	VP of Finance	 

 

		Address:	2479 E. Bayshore Road, Suite 195
	 	 	Palo Alto, CA 94303

 

[Signature Page to Sysorex, Inc. –
Secured Promissory Note (Inpixon)]

 

     

     

    

 

Schedule 1

 

Loan Disbursements and Outstanding Loan
Amount

as of December 31, 20181

  

	Disbursement
    Date	 	Amount	 
	 	 	 		 
	 	 	 	 	 
	 	 	 	 	 
	Current
    outstanding Loan Amount as of _____, 2018	 	$	      	 

 

 

1 To be provided and amended
from time to time.Exhibit 4.6

 

[INFORMAL ENGLISH TRANSLATION]

 

Itamar Medical Ltd.

 

("the Company")

 

Compensation policy (English Translation)

 

As approved by the Company's Compensation
Committee on January 18, 2016;

 

by the Company Board of Directors
on January 21, 2016;

 

by the Company’s Compensation
Committee on March 7, 2016;

 

and by Company’s shareholders
at the General Meeting held on March 16, 2016

 

Definitions and terms used in this compensation policy shall
have the meaning associated with them in the Corporate Act, 1999 (hereinafter: "the Corporate Act"), unless otherwise
defined in the compensation policy.

 

		1.	General

 

On December 12, 2012, Amendment 20 to the Corporate
Act became effective (hereinafter: "the Amendment"), which governs the structure of compensation of officers at
public companies and at debenture companies, and specifies a special process for approval there of. In conformity with the Amendment,
the Company's Compensation Committee and Board of Directors have adopted this compensation policy.

 

The considerations applied by the Company's Compensation
Committee (hereinafter: "the Compensation Committee") and the Company Board of Directors in adopting this policy
are: promoting the Company's best interests, its work plan and policy in view of the current year as well as from a long-term perspective
considering, inter alia, the Company's risk management policy, aligning the interest of officers with thosose of Company
shareholders, size and nature of its operations and - with regard to terms of office and employment which include variable components
- the officer's contribution to achieving of the Company's objectives, maximizing its earnings and its valuation, all from the
long-term perspective and in accordance with the officer's role.

 

The compensation policy was compiled with attention
to the nature of the Company, being a Company engaged in research and development, sales and marketing of medical instruments,
with attention to the Company's current scope of operations, to the Company being included in the BioMed Index of the Tel Aviv
Stock Exchange Ltd. (hereinafter: "the Stock Exchange") and with due attention to the Company's strategy of increasing
its business scope in line with the Company's business and strategic plans.

 

     

     

    

 

The principles of the compensation policy were specified
after internal discussions by the Compensation Committee and the by the Company Board of Directors, in consultation with external
advisors. Policy principles were designed to achieve compensation of Company officers, which would ensure that officer compensation
is aligned with the Company's best interests and its overall organizational strategy, with due consideration to the Company's risk
management policy, and would concurrently result in a sense of identification of Company officers with the Company and its operations,
would increase officer satisfaction and motivation and would preserve officers in the Company's service for a long time.

 

The compensation guidelines are based on targets
and benchmarks derived, inter alia, from various Company plans – as determined by the Board of Directors from time
to time.

 

Compensation policy components would refer to each
of the following:

 

		A.	Fixed components: Salary, social benefits (such
as: beneficial retirement arrangement, disability insurance, study fund, paid leave, sick leave and vacation pay) and other benefits
(such as: company car, cell phone, laptop computer, internet connection, attending professional seminars, professional litterature,
professional liability insurance, including gross-up of the benefit value for tax purposes) and may include a signing bonus and
relocation bonus as well as payments upon retirement (bonus, payment, compensation or any other benefit offered to an officer
with regard to their departure from the Company).

 

		B.	Variable components: Various bonuses including, inter alia, annual bonus, special bonus etc.

 

		C.	Equity-based variable components: Options, shares, restricted shares, restricted share units etc. allocated in conjunction
with equity-based compensation programs adopted and/or to be adopted by the Company.

 

		D.	Insurance, waiver and indemnification: Board members' and officers' liability insurance (in the normal course of business
as well as for non-recurring events (run-off)), waiver of officers' liability, in advance and in retrospect, and provision of commitment
to indemnify officers in advance and in retrospect.

 

    	 	2	 

     

    

 

Provisions of this compensation policy apply
to Company officers, as defined in the Corporate Act.

 

The compensation policy, although worded in the
masculine for convenience, applies equally to both men and women.

 

Note that whenever this compensation policy refers
to (gross) annual pay / base salary, the actual total cost to the Company would also include payment of social and other benefits
as required by law.

 

Note that this policy foes not confer any rights
on Company officers and Company officers shall not have any vested right due merely to adoption of this compensation policy, to
receive any of the compensation components listed in the compensation policy. The compensation components to which officers would
be eligible are only those individually approved for each officer by the qualified Company organs.

 

		2.	Principles for setting compensation

 

		2.1.	The Company's Compensation Committee and Board of Directors,
when reviewing and approving the terms of office and employment of an officer (including an update to pay of an incumbent officer),
shall refer, inter alia, to the following matters as applicable to the officer:

 

		2.1.1.	The officer's education, qualifications, expertise, professional experience and achievements.

 

		2.1.2.	The officer's roles and responsibilities and their expected contribution to achievement of Company targets.

 

		2.1.3.	Previous pay agreements for the officer.

 

		2.1.4.	Employment terms of similar officers at the Company.

 

		2.1.5.	If needed, at the discretion of the Compensation Committee, a comparison would be conducted with acceptable pay in the relevant
market for similar positions with other companies.

 

    	 	3	 

     

    

 

		3.	Ratio of fixed component to variable component

 

The ratio of maximum annual cost
of fixed components to maximum annual cost of variable components for Company officers, as set forth in this compensation policy,
is as follows:

 

	 	 	Fixed component as
 percentage of total
 compensation (%)	 	 	Variable component
 (bonus and equity) as
 percentage of total
 compensation (%)	 
	Executive Chairman of Board of Directors	 	 	47%-100	%	 	 	0%-53	%
	External and independent Board members	 	 	18%-100	%	 	 	0%-82	%
	Board members other than Executive Chairman of the Board or external / independent Board members	 	 	18%-100	%	 	 	0%-82	%
	CEO	 	 	100%-32	%	 	 	0%-68	%
	Other officer (other than Board member or CEO)	 	 	31%-100	%	 	 	0%-69	%

 

		4.	Fixed component

 

		4.1.	Base salary

 

		4.1.1.	Chairman of the Board of Directors

 

		4.1.1.1.	Total annual compensation for services of the Executive
Chairman of the Board of Directors (gross) payable to the Executive Chairman of the Board of Directors with respect to providing
services to the Company, would be determined by the Compensation Committee, the Company Board of Directors and the General Meeting
of Company shareholders - not to exceed USD 150,000 (at the current exchange rate as it may be from time to time) for a full-time
position. In case of joint office of two Executive Chairmen of the Board of Directors, the aggregate annual compensation (gross)
for services provided by both Executive Chairmen of the Board of Directors shall not exceed the aforementioned amount.

 

    	 	4	 

     

    

 

		4.1.1.2.	The Company may also award
the Executive Chairman of the Board of Directors securities at a fair value as listed in section  ‎6.3
below.

 

		4.1.1.3.	The Company's Compensation
Committee and Board of Directors may approve and submit for approval by the General Meeting of Company shareholders, an annual
update of the total compensation payable to the Executive Chairman of the Board of Directors with respect to providing services
to the Company, provided that such pay increase would not exceed five percent (5%) of the amount set forth in section 
‎4.1.1.1 above, during the entire
term of this compensation policy.

 

		4.1.1.4.	In addition, a Chairman of the Board of Directors (executive
or non-executive) would be eligible for reimbbursement of reasonable expenses incurred in the course of their office, against
presentation of receipts, as customary at the Company.

 

		4.1.2.	Board members (other than Executive Chairman of the
Board of Directors)

 

		4.1.2.1.	Compensation of external Board members and independent
Board members of the Company would be relative or annual compensation and compensation per meeting (including in cases of written
resolution or telephone call) as well as expense reimbursement in accordance with provisions of regulations set forth in Corporate
Regulations (Rules for compensation and expense reimbursement for external board members), 2000 (hereinafter: "the External
Board Member Compensation Regulations"), as they may be from time to time.

 

    	 	5	 

     

    

 

		4.1.2.2.	The Company may also award securities to external Board members and to independent Board members,
in conformity with the External Board Member Compensation Regulations at a fair value as set forth in section  ‎6.3
below. 

 

		4.1.2.3.	The Company may pay special compensation to expert Board members, which would be relative or annual compensation and compensation
per meeting (including in cases of written resolution or telephone call) as well as expense reimbursement in accordance with provisions
set forth in the External Board Member Compensation Regulations, as they may be from time to time.

 

		4.1.2.4.	Compensation payable to Board members other than external Board members, independent Board members
and/or Executive Chairman of the Board of Directors (annual compensation and compensation per meeting) shall not exceed the amount
allowed by the External Board Member Compensation Regulations, as they may be from time to time. The Company may also award such
Board members securities at a fair value as listed in section  ‎6.3
below. Total compensation payable to each such Board member (including variable components) shall not exceed the compensation actually
paid to external Board members[1].

 

		4.1.2.5.	Furthermore, Company Board members would be eligible for reimbbursement of reasonable expenses incurred in the course of their
office, against presentation of receipts, as customary at the Company.

 

 

 

		1	If
compensation payable to external Board members is not identical, including if one of the external Board members is eligible to
additional pay for being an expert external Board member, then then compensation payable to an ordinary Board member may be equal
to the higher compensation.

 

    	 	6	 

     

    

 

		4.1.3.	Company CEO

 

		4.1.3.1.	Total annual (gross) pay for the Company CEO would be determined by the Compensation Committee, the Company Board of Directors
and the General Meeting of Company shareholders - not to exceed USD 270,000 (at the current exchange rate as it may be from time
to time) for a full-time position.

 

		4.1.3.2.	The Company's Compensation Committee and Board of Directors
may approve and submit for approval by the General Meeting of Company shareholders, subject to statutory provisions, an annual
update of the total annual pay of the Company CEO, provided that such pay increase would not exceed twenty percent (20%) of the
amount set forth in this section above, during the entire term of this compensation policy.

 

		4.1.3.3.	When setting the pay of the Company CEO, members of the
Company's Compensation Committee and Board of Directors may take into consideration, inter alia, the pay of CEOs of other
public companies similar to the Company in size and nature (hereinafter: "the Comparison Companies") as well
as the Company's financial performance and contribution of the CEO to the Company.

 

		4.1.3.4.	Furthermore, the Company CEO would be eligible for reimbursement
of reasonable expenses incurred in the course of their office, against presentation of receipts, as customary at the Company.

 

		4.1.4.	Officers 

 

		4.1.4.1.	Total annual (gross) pay for each Company officer would
be determined by the Company's Compensation Committee and Board of Directors, not to exceed NIS 562,000 for a full-time position.

 

		4.1.4.2.	The Company's Compensation Committee and Board of Directors
may approve an annual update of the total annual pay of Company officers, provided that such pay increase would not exceed twenty
percent (20%) of the amount set forth in this section above, during the entire term of this compensation policy.

 

    	 	7	 

     

    

 

		4.1.4.3.	When setting pay for Company officers, memebers of the
Company's Compensation Committee and Board of Directors may take into consideration, inter alia, the pay of officers in
similar positions at the Comparison Companies as well as the Company's financial performance and the officer's contribution to
the Company.

 

		4.1.4.4.	Furthermore, Company officers would be eligible for reimbbursement
of reasonable expenses incurred in the course of their office, against presentation of receipts, as customary at the Company.

 

		4.2.	Social and other benefits

 

		4.2.1.	The Company may award to officers, other than Board members,
social and other benefits as listed below, to be determined by comparison to generally accepted market terms for officers in similar
positions and in conformity with Company policy, such as: (a) Beneficial retirement arrangement (including optional arrangement
pursuant to Section 14 of the Severance Pay Act, 1963); (b) Disability insurance; (c) Medical insurance; (d) Contributions to
a study fund; (e) Paid leave; (f) Vacation pay; (g) Sick pay; (h) Company car.

 

		4.2.2.	The Company may also award to officers and Board member
other benefits, such as: Cell phone, laptop computer, internet connection etc.

 

		4.3.	Signing bonus and relocation bonus

 

		4.3.1.	The Company may, under circumstances to be classified by
the Company's Compensation Committee and Board of Directors as extraordinary circumstances whereby recruiting said officer is
highly important to the Company, offer the officer a signing bonus or relocation bonus - all subject to obtaining the required
statutory approvals.

 

    	 	8	 

     

    

 

		4.3.2.	The total signing bonus may not exceed 12 months' base
salary as determined for the relevant officer. The Company may determine, upon the award date of the signing bonus at the discretion
of the Compensation Committee and the Board of Directors, that the officer would be required to reimburse the Company for the
signing bonus awarded, in whole or in part, should they fail to complete a minimum term in office with the Company.

 

		4.3.3.	A relocation bonus would be awarded in case where the officer
was relocated to another country for their work with the Company. The total relocation bonus would be calculated based on actual
expenses incurred by the officer with respect to their relocation and against presentation of receipts, but not to exceed USD
90,000 for the Company CEO and USD 50,000 for an officer other than the CEO - which may be payable in cash or in share-based compensation,
at the discretion of the Company's Compensation Committee and Board of Directors.

 

		4.4.	Severance pay

 

In case of termination of employment (other than
in case of termination of an officer for cause, which the Compensation Committee and Board of Directors consider that gives the
Company the right to terminate the officer without payment of severance pay as required by law), the officer would be eligible
to receive severance pay by law or - alternatively - equal to the amount of payments contributed on behalf thereof with respect
to severance pay, to a provident fund, pension fund etc. - in conformity with provisions of section 14 of the Severance Pay Act,
1963, all subject to the Company's discretion and as specified in their employment contract. Notwithstanding the foregoing, the
Company may stipulate in the officer's employment contract (whether upon signing the employment contract or upon revising it) severance
pay in an amount which exceeds the amount payable by law to the officer.

 

		4.5.	Notice period

 

		4.5.1.	The Company may give the Company CEO a notice period of
up to six (6) months. The Company may give a Company officer other than the Company CEO a notice period of up to four (4) months.
The Company may waive employment of the officer during the notice period, in whole or in part, provided that the Company would
pay all amounts payable to the officer pursuant to their employment contract. Alternatively, the Company may terminate the officer
without a notice period, provided that the Company would pay the officer, upon termination thereof, an amount not less than the
payment due, in lieu of the notice period.

 

    	 	9	 

     

    

 

		4.5.2.	The Compensation Committee and the Board of Directors may
confirm that the officer would be entitled to bonus payments, in cash or in equity, with respect to the notice period and that
the notice period would count for vesting of any equity-based compensation awarded there to.

 

		4.5.3.	The notice period for each officer would be stipulated
in their employment contract (whether upon signing the employment contract or upon revising it).

 

		5.	Variable component – bonus, special bonus and
commissions

 

		5.1.	Targets for annual bonus for a Company officer (including
Company CEO, excluding Board members)

 

The Company may award to an officer (including Company
CEO, excluding Board members) an annual bonus, to be calculated pro-rata to their achievement of various targets and benchmarks,
in whole or in part, as follows:

 

		5.1.1.	Company targets – Company benchmarks are economic
benchmarks of Company performance, as follows: (a) Company share price or Company market cap on the stock exchange where traded;
(b) Revenues from Company sales; (c) Operating income/loss2;
(d) Revenues from sales of any Company product; (e) Revenues from sales of Company products, in whole or in part, in a specific
market / territory; (f) Gross earnings/loss; (g) Net earnings/loss; (h) EBITDA. The weighting of Company target(s) selected would
range between 0% - 100%. Targets (b) thorugh (h) above would be calculated based on the Company's audited consolidated financial
statements.

 

 

 

		2	For review of the aforementioned criteria, operating income
/ loss would be taken into account net of depreciation and amortization, changes in provision for doubtful debt and bad debt,
expenses with respect to share-based payment and the effect of non-recurring events.

 

    	 	10	 

     

    

 

		5.1.2.	Individual targets – Benchmarks to be set for each officer, other than the CEO, in conformity with their position
and the Company's work plan: Achievement of development targets; reduction of manufacturing cost; improvement of product quality
as measured by the number of malfunctions; improvement of financial benchmarks at organizational unit level, such as sales and
profitability; achievement of targets for customer installation backlog; penetration of new markets; achievement of sales mix;
cash balances; collection; achievement of expense targets; achievement of financing targets; signing distribution deals; implementation
of distribution deals; customer satisfaction benchmark; employee satisfaction benchmark; target for employee turnover rate; regulatory
filing and approval according to plan; clinical trials and patient recruiting for clinical trials; achievmenet of number of new
product launches; capital raised (for relevant organizational units); reduction of inventory volume and shorter inventory turnover;
publication of clinical articles according to plan; introduction of Company products into guidelines; achievement of success targets
for customer training and marketing events; achievement of delivery targets; and milestones for obtaining insurance coverage approval.
The weighting of individual target(s) selected would range between 0% - 100%.

 

		5.1.3.	Supervisor evaluation – Performance evaluation by the Company Board of Directors (for the CEO) or by the Company
CEO (for all other officers). This evaluation should refer, inter alia, to non-financial criteria, to the officer's long-term
contribution and to their long-term performance. The weighting assigned to this category is up to 20%.

 

The Compensation Committee and the Board of Directors
shall set the number and composition of targets and the weighting for each target within the same category (for example: If 2 individual
targets are selected, the Board of Directors would set the weighting for each of them, provided that their total weighting may
not exceed 100%) and may set eligibility for compensation to be contingent on achievement of only one target - which may all be
of the same type.

 

    	 	11	 

     

    

 

Details of targets in each measurement category and
the weighting of each measurement category would be adjusted individually for each officer, based on seniority and the organizational
unit managed / assigned to.

 

		5.2.	Date of setting criteria

 

For officers other than the Company CEO, the weighting
of each of the different measurement categories would be set every year in advance, subject to approval by the CEO and the Compensation
Committee. For the Company CEO, the weighting of each of the different measurement categories would be set at least once every
year in advance by the Company Board of Directors, subject to approval by the Compensation Committee. Notwithstanding the foregoing,
such weighting may be set for several years in advance, subject to the relevant organ being authorized to amend the weightings,
if needed, at the start of each calendar year.

 

		5.3.	Maximum annual bonus – The maximum annual bonus amount may not exceed nine (9) monthly base salaries (in cost-to-company
terms) for the Company CEO, six (6) monthly base salaries (in cost-to-company terms) for each other officer (other than a Board
member or CEO) resident in Israel.

 

		5.4.	Payment of the annual bonus – The annual bonus may be paid, in whole or in part, in cash or in share-based compensation
(such as shares, restricted shares, option warrants etc.), at the discretion of the Company's Compensation Committee and Board
of Directors.

 

		5.5.	The annual bonus is payable soon after the Company has final data with regard to the relevant criteria and as for criteria
based on the financial statements – after publication of the Company's audited annual financial statements.

 

		5.6.	Calculation of cash bonus upon termination of employment – In case of termination of the officer's employment
by the Company due to termination of the officer during a calendar year (provided this is not termination for cause): The terminated
officer would be eligible to the pro-rata share of the annual bonus only with respect to achievement of criteria based on the financial
statements, to be calculated according to the following: (a) The period in that calendar year during which the officer served in
their office with the Company; (b) The rate of achievement of the criteria by the Company; (c) The weighting assigned to each criteria.

 

    	 	12	 

     

    

 

		5.7.	In case of termination of the officer's employment by the Company due to resignation of the officer during a calendar year
(provided this is not resignation under circumstances which would have constituted termination for cause had the officer been terminated
by the Company): The officer resigning would be eligible to the annual bonus for a given calendar year, only for achievement of
criteria based on the financial statements and only if they serve as officer of the Company through March 31 of the following year,
with the bonus amount calculated as set forth in sections 5.4 thru 5.6 above.

 

		5.8.	For calculation of equity-based bonus upon termination of employment, see section ‎6.11 below.

 

		5.9.	Special bonus 

 

		5.9.1.	In addition to the annual bonus, the Company may award each officer a special bonus for officer performance which is not measurable
or for outstanding, exceptional contribution by the officer - such as with regard to closing an outstanding transaction in its
size or achievement represented. The special bonus would be awarded to an officer, other than the CEO, based on a recommendation
by the CEO and subject to approval by the Compensation Committee and Board of Directors. As for the Company CEO, a special bonus
may be awarded to them based on recommendations by the Board of Directors and subject to approval by the Compensation Committee,
Board of Directors and General Meeting of Company shareholders.

 

		5.9.2.	A special bonus may only be paid to an officer once per year. The special bonus amount may not exceed three (3) monthly base
salaries (in cost-to-company terms) for each Company officer3.

 

 

 

		3	According to Section 5.1.3 above, 20% of the total annual
bonus to officers of the Company may be granted based on supervisor’s evaluation (the “Annual Bonus Discretionary
Compnent”), while the total annual bonus shall not exceed 6 monthly salaries (or 9 monthly salaries, for Company’s
CEO), in cost-to-company terms. It is clarified that the Annual Bonus Discretionary Component and the Special Bonus paid to any
officer for the same calendar year shall not exceed, in total, three (3) monthly salaries, in cost-to-company terms, per each
of the Company’s officers.

 

    	 	13	 

     

    

  

		5.9.3.	The special bonus may be paid, in whole or in part, in cash or in share-based compensation (such as shares, restricted shares,
option warrants etc.), at the discretion of the Company's Compensation Committee and Board of Directors.

 

		5.10.	Commissions 

 

		5.10.1.	In addition to the annual bonus and to the special bonus, the Company may pay commissions to officers involved in sales, marketing
and business development - in conformity with Company procedures, as approved by the Company's Compensation Committee and Board
of Directors.

 

		5.10.2.	The amount of commissions awarded to such officer would be calculated as percentage of total Company sales revenues or sales
revenues for any Company product or sales revenues for Company products, in whole or in part, in a specific market / territory,
to be specified in advance in each calendar year for the subsequent year, by the Company's Compensation Committee and Board of
Directors. In any case, total commissions awarded to any officer may not exceed NIS 700,000 per year.

 

		5.11.	Discretion with regard to bonus reduction

 

The Company's Compensation Committee and Board of
Directors may, in exceptional cases and at their discretion, reduce or cancel a bonus or commissions awarded to an officer.

 

		6.	Equity-based variable component

 

		6.1.	General

 

The Company may adopt from time to time plans for
award of options exerciseable into Company shares, plans for award of shares, restricted shares and/or restricted share units etc.
to officers, in order to provide incentive for Company officers to achieve the targets of the annual work plan, or any other target
to be specified by the Company's Compensation Committee and Board of Directors (including target share price or market cap for
the Company on the stock exchange where Company shares are traded) as well as from a long-term Company policy viewpoint - all in
conformity with terms and conditions set forth in this compensation policy below.

 

 

 

Special Bonus paid to any officer
for the same calendar year shall not exceed, in total, three (3) monthly salaries, in cost-to-company terms, per each of the Company’s
officers.

 

    	 	14	 

     

    

  

The Company may award options, shares, restricted
shares and/or restricted share units (in this Section 6: "Securities"), pursuant to employee compensation plans
to be adopted in future or previously adopted by the Company for officers from time to time, based on the education, skills, expertise,
professional experience, position, roles and responsibilities and contribution to the Company of the relevant officer.

 

		6.2.	Award dates of Securities – The securities would be awarded from time to time, at the discretion of the Company
Board of Directors or a Board committee duly authorized and in line with recommendations made by the Compensation Committee, but
no more than twice annually per officer.

 

		6.3.	Fair value – The fair value of securities awarded to each officer as of the award date, in annualized terms, may
not exceed eighteen (18) monthly salaries (in terms of cost) for the Company CEO or six (6) monthly salaries (in terms of cost)
for any officer other than a Board member or CEO4.
Note that the aforementioned fair value caps exclude any annual bonus or special bonus payable by way of equity-based compensation,
which would be subject to the caps listed in sections 5.3 and 5.9 above, respectively.

 

The fair value of securities to be awarded to each
Board member as of the award date, in annualized terms, may not exceed NIS 300,000. Securities may be awarded to Board members
once per year at most.

 

		6.4.	Exercise price – Subject to vesting of options, the option exercise price shall be as follows:

 

		6.4.1.	For service options, which vesting is subject to passage of time (not target based): the exercise price shall not be lower
than the average Company share price on the stock exchange over the thirty (30) trading days preceding the award approval date
by the Company Board of Directors plus 5%.

 

 

 

		4	For the purpose of section 6.3, the fair value of securities
as of the award date, in annualized terms, will be calculated as the result of dividing the economic value to be used for financial
reporting by the number of years for vesting (which differs from recording of accounting expenses, which may differ due to a different
attribution of the economic value over the years).

 

    	 	15	 

     

    

  

		6.4.2.	For options with target based vesting terms: the exercise price shall not be lower than the average Company share price on
the stock exchange over the thirty (30) trading days preceding the award approval date by the Company Board of Directors.

 

Note that unless otherwise specified by the Compensation
Committee and Board of Directors and subject to applicable law (including the Companies Law and the Tel-Aviv Stock Exchange Bylaws),
the exercise price for restricted shares and restricted share units is zero.

 

		6.5.	Eligibility – The Company may award Securities to officers, which would vest after a specified period of time
and subject to continued employment by the Company; the Company may also award Securities to officers, which would vest subject
to achievement of targets and/or milestones and/or upon occurrence of a pre-specified event and subject to continued employment
(or service provision) with the Company and/or with an affiliated company. Notwithstanding the generality of the foregoing, such
targets may include a target share price or market cap for the Company on the stock exchange where Company shares are traded.

 

		6.6.	The vesting period of the Securities shall be as determined by the Company on the award date, but in any case (other than as
stated in section 6.7 below), the vesting period of the first lot of Securities awarded on each award date shall be at least one
year after the award date or after the employment start date of the officer by the Company, as determined by the Company Board
of Directors.

 

		6.7.	Accelerated vesting of Securities

 

The Compensation Committee and
the Board of Directors may specify that upon occurrence of an Acceleration Event (as defined below), or due to termination of the
contract for reason of death or disability, vesting of the Securities awarded to the officer, in whole or in part, would be accelerated
- including with regard to Securities awarded prior to approval of this compensation policy.

 

    	 	16	 

     

    

  

“Acceleration Event”
means one or more of the following events, while the Company shall have the sole discretion to define, with respect to each grant
of Securities, which of the following events shall be deemed an Acceleration Event with respect to the same grant (as long as such
definition includes at least one of the following events): (a) change of control in the Company (as such term is defined in the
securities Law, 1968); (b) sale of all or substantially all of the Company’s assets; (c) the grant of a worldwide exclusive
license to all, or substantially all, of Company’s intellectual property; (d) merger following which the shareholders of
the Company immediately prior to the merger hold less than 50% (or a lower share, as may be determined by the Company’s compensation
committee or the Company’s board of directors) of the outstanding share capital and the voting rights in the entity surviving
the merger; (e) US IPO.

 

		6.8.	Exercise period – The Company may award Securities which may be exercised within a period not to exceed ten (10)
years from the award date (if not previously expired), all as set forth in the allotment plan. Within up to 10 years from the award
date, all un-exercised Securities shall expire.

 

		6.9.	Adjustments - The Securities would be subject to customary price adjustments, including adjustments for dividends, bonus
shares, changes to share capital (split / reverse split etc.), rights issuance and corporate re-structuring (such as: merger /
spin-off etc.)

 

		6.10.	Exercise at benefit value – Subject to obtaining a pre-ruling from the Tax Authority, as needed, the Company's
Compensation Committee and Board of Directors may stipulate in the award of Securities that they would be exercised at their inherent
benefit value ("cash-less exercise").

 

		6.11.	Termination of employment – Upon adopting a plan to award Company Securities, the plan shall refer to conditions
in case of termination of employment of the officer by the Company, including in case of termination by the Company or due to death
or disability of the officer.

 

		6.12.	Maximum dilution rate – the cumulative quantity of Securities granted to company’s employees during the
term commencing upon the approval of this Compensation Policy and ending upon the approval of a new compensation policy (the “Relevant
Term”) shall not exceed 15% of the issued and outstanding share capital of the Company, on a fully diluted basis. If,
at the time of calculation of the maximum dilution rate, there are Securities that already exercised to shares of the Company,
then, with regard to such Securities that were exercised by way of cashless exercise (pursuant to Section 6.10 above), only the
number of the exercise shares actually issued as a result of such cashless exercise will be taken into account in this calculation
(not the number of such convertible Securities prior to their exercise).

 

    	 	17	 

     

    

  

		6.13.	The Company's Compensation Committee and Board of Directors have considered the optional setting of a cap on exercise value
of equity-based variable components and have resolved not to set such a cap in the compensation policy.

 

		7.	Engagement as contractor or through management company

 

The Company may engage the officer as an independent
contractor rather than as a salaried employee. In such case, all caps listed in this document would be converted into terms of
cost to the employer for review whether employment terms of such officer copmly with guidelines in this compensation policy - which
would apply to them, mutatis mutandis. In such case, the term "employment contract" used in this policy should
be read as "service provision agreement" or "consulting agreement", as the case may be.

 

		8.	Work overseas

 

Notwithstanding provisions of this compensation policy,
the pay cap for officers residing outside Israel for the purpose of discharging their office overseas, would be in conformity with
acceptable pay for similar officers in the Company or for officers in other public companies similar in size and nature to the
Company, who reside in the same country.

 

		9.	Insurance, waiver and indemnification

 

		9.1.	The Company may award officers liability insurance (including run-off insurance policies), waiver and indemnification commitment,
as customary at the Company, all subject to provisions of the Corporate Act and of Company Bylaws.

 

		9.2.	Notwithstanding the generality of the foregoing, the Company may, at any time during the term of this compensation policy,
obtain a Board member and officer liability insurance policy (including controlling shareholders), as may serve the Company from
time to time, may extend and/or renew such existing insurance policy and/or may contract a new insurance policy upon the renewal
date or during the insurance period, with the same insurer or with another insurer in Israel or overseas, at terms such as listed
below, to cover liability of Board members and/or officers - provided that such contracting would be based on key terms as listed
below and be approved by the Company's Compensation Committee and Board of Directors.

 

    	 	18	 

     

    

  

		9.2.1.	The maximum insurance coverage in the insurance policy shall not exceed USD 50 million er claim and on aggregate for the insurance
period;

 

		9.2.2.	The maximum annual insurance premium shall not exceed USD 100,000;

 

		9.2.3.	The Company's Compensation Committee and Board of Directors shall approve annually the Company's
contracting of a new insurance policy in compliance with the terms and conditions set forth in sections  ‎9.2.1
and  ‎9.2.2 above;

 

		9.2.4.	The insurance policy shall cover claims filed against the Company itself (as distince from claims filed against Board members
and/or officers thereof) concerning violation of securities laws in Israel, at least (entity coverage for securities claims) and
payment arrangements shall be specified for insurance payouts, whereby the rights of Board members and/or officers to be indemnified
by the insurance in conformity with the insurance policy precedes those of the Company;

 

		9.2.5.	The insurance policy shall also cover the liability of Board members and officers considered to be controlling shareholders
of the Company or relatives thereof, from time to time, provided that terms of their coverage shall not exceed those of all other
Board members or officers of the Group.

 

		10.	Reimbursement of amounts paid to officers

 

In case where the Company's audited, consolidated
financial statements for any year should be revised so that the bonus amount payable to the officer for that year, had it been
calculated based on the revised data, would have resulted in a different bonus amount payable to the officer, the Company would
pay to the officer, or the officer would reimburse the Company, as the case may be, the difference between the bonus amount paid
and the bonus amount payable due to said revision, provided that no more than three (3) years have elapsed since the award of the
bonus to be reimbursed. Payment or reimbursement of amounts, as the case may be, including installments, payment dates, linkage
etc. would be specified by the Company's Compensation Committee and Board of Directors.

 

    	 	19	 

     

    

  

		11.	Term of the compensation policy

 

The compensation policy would be effective for a
3-year term starting on the approval date of the compensation policy by the General Meeting of Company shareholders.

 

		12.	Ratio of cost of terms of office and employment of
officers and those of other Company employees

 

		12.1.	The Company's Compensation Committee and Board of Directors
have reviewed the ratios of the terms of office and employment of officers and the cost of payroll5
of all other Company employees and of contractors hired by the Company6,
in particular the ratios to the average and median payroll of said employees, as of the approval date of this compensation policy
and have determined that these ratios should not impact labor relations at the Company, with reference, inter alia, to
how the Company operates, its size and the responsibility and job complexity of the various Company officers.

 

		12.2.	Below is the actual ratio as of the approval date of this compensation policy.

 

	Position	 	Ratio to average pay	 	Ratio to median pay
	Executive Chairman of Board of Directors(1)	 	
        Option 1 – 1.4

        Option 2 – 1.9
	 	
        Option 1 – 2.8

        Option 2 – 4.5

	Board members other than Executive Chairman of the Board or external / independent Board members7	 	-	 	-
	CEO	 	
        Option 1 – 13

        Option 2 – 15
	 	
        Option 1 – 25

        Option 2 – 32

	Other officer (other than Board member or CEO)	 	
        Option 1 – 4 – 5

        Option 2 – 4 – 6
	 	
        Option 1 – 8 – 11

        Option 2 – 9 – 14

 

 

 

		5	"Cost of payroll" – as defined in Addendum I to the
Corporate Act.

 

		6	Calculation of the aforementioned ratio only includes employees
of Itamar Medical Ltd.

 

		7	As of the approval date of this compensation policy, the
Company remunerates external Board members, independent Board members and the Executive Chairman of the Board of Directors.

 

    	 	20	 

     

    

  

		(1)	Assuming the current office of a Co-Chairman of the
Board of Directors represents a full-time position and assuming that securities awarded to them are similar to those for external
and independent Board members.

 

		(2)	In each of the categories in the table above, Option
1 is assuming 70% of maximum variable compensation and Option 2 is assuming the maximum variable compensation. For Board members,
Option 1 was calculated based on total compensation in 2015 and Option 2 includes option-based compensation.

 

		(3)	For ratio calculation, the numerator uses the officer
pay based on Option 1 or 2 - and the denominator uses payroll cost for all employees in 2015, except for officers (for which Option
1 or 2 is used as well); the denominator does not include the officer in question, nor does it include Board member compensation.

 

		(4)	Compensation for the Company CEO does not include
a stock option component with respect to relocation.

 

		(5)	The monthly payroll cost for option-based compensation
is calculated using the base salary plus social benefits.

 

		(6)	The data for this calculation is based on payroll
cost for 2015.

 

		(7)	The VP, Sales is eligible for both sales commissions
and bonuses.

 

		(8)	The calculation does
not include paid leave.

 

    	 	21	 

     

    

 

		13.	Miscellaneous

 

		13.1.	This document shall not confer any right on officers to whom this compensation policy applies, nor on any other third party,
to receive any compensation whatsoever.

 

		13.2.	Note, for the sake of clarification, that the content of this policy does not detract from provisions of the Corporate Act
and/or Company Bylaws with regard to the manner of approval of contracting between the Company and any officer with regard to their
terms of employment or office, and the provisions of this policy do not detract from any mandatory reporting with regard to officer
compensation pursuant to the Securities Act, 1968 and regulations based there upon.

 

		13.3.	The Company's Compensation Committee and Board of Directors shall specify the benchmarks composing the variable compensation
targets, based on the recommendation by Company management.

 

		13.4.	As part of the approval process of each annual plan, with its various components, by the Board of Directors, changes to Company
objectives, market conditions, the Company's position etc. would be reviewed annually. Consequently, and to the extent relevant,
the targets, benchmarks and compensation targets for each plan would be reviewed annually, and their actual application would be
subject to change based on decisions made by the Board of Directors from time to time.

 

		13.5.	The Board of Directors may, after approving a specific annual compensation plan, decide that no compensation would be paid
in conformity with this plan, and may order cancellation or suspension of the plan, in whole or in part, for reasons deemed appropriate
by the Board of Directors and due to considerations regarding the Company's best interest.

 

		13.6.	The Board of Directors would review from time to time the compensation policy and the need to revise it in case of any material
change in circumstances prevailing upon setting said policy, or for any other reasons.

 

		13.7.	If, after the approval date of this policy, provisions of the Corporate Act and/or regulations based there upon should be revised,
so as to be more lenient compared to provisions of this compensation policy, then such lenient provisions shall be considered to
be automatically adopted into the compensation policy (with no need for any further approval, including approval by the General
Meeting of shareholders) and these provisions shall prevail over the provisions of the compensation policy on the same matter.

 

*         *         *         *         *

 

    	 	22

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