Document:

scl-ex101_2015063012.htm

 

Exhibit 10.1

 

STEPAN COMPANY
MANAGEMENT INCENTIVE PLAN 
(As Amended and Restated Effective January 1, 2015)

SECTION 1

General

1.1History and Effective Date.  STEPAN COMPANY, a Delaware corporation (the “Company”), has previously established an incentive compensation plan known as the STEPAN COMPANY MANAGEMENT INCENTIVE PLAN (the “Plan”).  The Plan was previously amended and restated effective as of January 1, 1992, January 1, 2005 and again as of January 1, 2010.  The following provisions constitute a further amendment and restatement and continuation of the Plan, as heretofore amended, which amended and restated Plan is adopted effective January 1, 2015, subject to approval of the Plan by shareholders of the Company required by Section 8 hereof.

The Plan is intended to comply with the requirements of Sections 409A(a)(2) through (4) of the Internal Revenue Code of 1986, as amended (the “Code”), and any applicable regulations or other generally applicable official guidance issued thereunder, and shall be interpreted for all purposes in accordance with this intent.

Payments pursuant to Section 2.3 of the Plan are intended to qualify under the performance-based compensation exemption of Section 162(m)(4)(C) of the Code.

1.2Purpose.  The Plan is designed to assist the Company in attracting and retaining qualified persons in executive and other managerial positions and to provide them an additional incentive to contribute to the success of the Company.

1.3Administration.  The authority to control and manage the operation and administration of the Plan shall be vested in a committee (the “Committee”) which shall be the Compensation and Development Committee of the Board of Directors of the Company (the “Board of Directors”), or such other committee of the Board of Directors as the Board of Directors may from time to time determine.  The Committee, to the extent awards under the Plan are intended to be exempt from Section 162(m) of the Code, shall be comprised solely of two or more persons, each of whom shall qualify as an “outside director” for purposes of Section 162(m)(4) of the Code and to the extent required to comply with Rule 16b-3 under Section 16(b) of the Securities Exchange Act of 1934, as amended, shall be comprised solely of two or more persons, each of whom shall qualify as a “non-employee director” for purposes of said Rule 16b-3.  Except as otherwise expressly provided herein, the Committee shall have the full authority to interpret and construe the provisions of the Plan, to remedy ambiguities, inconsistencies or omissions of whatever kind, to prescribe, amend and rescind such rules and regulations as, in its opinion, may be necessary or appropriate for the proper and efficient administration of the Plan, and to determine conclusively all questions arising under the Plan, including questions of fact.  It is intended that the Committee shall have the maximum authority and discretion allowed by law 

 

 

with respect to any and all of its duties and responsibilities relating to the Plan.  Any interpretation of the Plan, and any decision on any matter within the discretion of the Committee affecting the Plan that is made by the Committee in good faith, shall be final and binding on all persons.

1.4Applicable Law.  The Plan shall be construed and administered in accordance with the laws of the State of Illinois, without regard to its choice of law provisions, to the extent that they are not preempted by the laws of the United States of America.

1.5Gender and Number.  Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural, and words in the plural shall include the singular.

1.6Notices.  Any notice or document required to be given to or filed with the Committee under the Plan will be properly filed if delivered or mailed by registered mail, postage prepaid, to the Committee, in care of the Company at its principal executive offices.

SECTION 2

Participation and Awards

2.1Participation.  The individuals who shall be eligible to receive an Award (as described in Section 2.2 or Section 2.3) for any calendar year shall be those executive, managerial and key employees of the Company, including its subsidiaries, selected by the Committee or its designee, subject to Section 2.3, at any time during such year.  Notwithstanding the foregoing, an individual must be in the employ of the Company or an Affiliate (as defined in Section 6.5) on December 31 of a calendar year to receive an Award for such year, except that this provision shall not prevent a Participant whose employment with the Company or its Affiliates terminates during a calendar year because of his death, disability, or retirement from being eligible, within the discretion of the Committee, for the earned Award to which the Participant would otherwise be entitled prorated based on his actual period of employment during such year.  An individual shall be considered a Participant in the Plan upon his or her designation by the Committee or, where applicable, its designee.

2.2Awards.  Subject to Section 2.3 hereof, the amount of an incentive award (the “Award”) for any calendar year shall be determined by the Committee and shall be based upon the performance of the Company or a subsidiary, the performance of the Participant’s department (if relevant), and/or the performance of the Participant; provided, however, that the amount of an Award to any Participant for any calendar year shall not exceed 200 percent of the amount of the actual base salary payable to the Participant by the Company and its subsidiaries for the calendar year for which the Award is made, exclusive of the Award or any other form of executive compensation, stock option or other fringe benefit (“Base Salary”).  An Award to a Participant for any calendar year shall be paid to or on behalf of the Participant, in cash, as soon as practicable (and in any event by no later than March 15) after the close of the calendar year for which the Award is made except to the extent that a Deferral Request (as described in Section 3.1) is in effect with respect to such year.  For purposes of the Plan, an Award is 

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considered made or granted for the calendar year with respect to which the services entitling the Participant to the Award are performed.

2.3Awards for Certain Designated Participants.  Awards granted under the Plan for any calendar year to Participants who are Covered Employees for such calendar year shall be subject to the provisions of pre-established performance goals (“Performance Goals”) as set forth in this Section 2.3.  Eligibility for participation in the Plan of Covered Employees for Awards for a calendar year shall be limited to those executive, managerial and key employees of the Company, including its subsidiaries, selected by the Committee.  Notwithstanding any other provision of this Section 2, the Committee shall not have the discretion to modify the terms of Awards to such Participants except as specifically set forth in this Section 2.3.  For purposes of the Plan, “Covered Employee” means, for any calendar year, a Participant designated by the Committee prior to the grant of an Award for such year who is or may be a “covered employee” within the meaning of Section 162(m)(3) of the Code for the year in which such Award would be payable and for whom the Committee intends amounts payable with respect to such Award to qualify under the performance-based compensation exemption of Section 162(m)(4)(C) of the Code.  Earned Awards under this Section 2.3 are intended to satisfy the performance-based compensation exemption under Code Section 162(m)(4)(C) and the related regulations.

(a)Award Opportunities.  On or before the 90th day of any calendar year, and in any event before twenty-five percent (25%) or more of the calendar year has elapsed, the Committee shall establish in writing the Awards and the specific Performance Goals for the calendar year, upon the attainment of which will be conditioned the payment of such Awards (“Covered Employee Incentive Awards”) to Participants who may be Covered Employees for such calendar year.  A Covered Employee Incentive Award shall be based upon a percentage of the Participant’s Base Salary designated by the Committee at the time the Award is granted, which percentage need not be the same for each Participant (the “Target Incentive Award”).  The extent, if any, to which a Covered Employee Incentive Award will be payable will be based solely upon the degree of achievement of pre-established Performance Goals over the specified calendar year, provided, however, that the Committee may, in its sole discretion, reduce or eliminate the amount which would otherwise be payable with respect to a calendar year.

(b)Performance Goals.  The Performance Goals established by the Committee at the time a Covered Employee Incentive Award is granted will be based on one or more of the following relating to the Company, one or more of its subsidiaries, or one or more business or functional units thereof: earnings per share, market share, stock price, sales, costs, capital expenditures, revenue, net operating income, net income, corporate net income, net income per share, cash flow, corporate free cash flow, retained earnings, earnings before interest and taxes (“EBIT”), earnings before interest, taxes, depreciation and amortization (“EBITDA”), return on equity, return on capital, return on invested capital, corporate return on invested capital, return on assets, return on total assets employed, total shareholder return, shareholder value analysis, results of customer satisfaction surveys, aggregate product price and other product price measures, safety record, operating and maintenance cost management, operating earnings, operating earnings per share, environmental standards or compliance, economic value added, margins, and measures of employee satisfaction or engagement; provided, that all Performance Goals shall be objective performance goals satisfying the requirements for “performance-based compensation” within the meaning of Section 162(m)(4) of the Code.  At the time of establishing 

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a Performance Goal, the Committee shall specify the manner in which the Performance Goal shall be calculated.  In so doing, the Committee may exclude the impact of certain specified events from the calculation of the Performance Goal.  For example, if the Performance Goal were earnings per share, the Committee could, at the time this Performance Goal was established, specify that earnings per share are to be calculated without regard to any subsequent change in accounting standards required by the Financial Accounting Standards Board.  Such Performance Goals also may be based on the attainment of specified levels of performance of the Company and/or one or more subsidiaries, and/or one or more business or functional units thereof, under one or more of the measures described above relative to the performance of other corporations or indices.

(c)Payment of an Earned Covered Employee Incentive Award.  At the time the Covered Employee Incentive Award is granted, the Committee shall prescribe in writing a formula to determine the percentage of the Target Incentive Award (which may exceed 100%) which may be payable based upon the degree of attainment of the Performance Goals during the calendar year.  If the minimum level of achievement of the Performance Goals established by the Committee is not met, no payment will be made to a Participant who is a Covered Employee.  To the extent that the minimum level of achievement of the Performance Goals are satisfied or surpassed, and upon written certification by the Committee that the Performance Goals have been satisfied to a particular extent and any other material terms and conditions of the Covered Employee Incentive Awards have been satisfied, payment of an earned Covered Employee Incentive Award shall be made, in cash, as soon as practicable (and in any event by no later than March 15) after the close of the calendar year for which the Award is granted, or deferred in accordance with the Participant’s election under Section 3, unless the Committee determines, in its sole discretion, to reduce or eliminate the payment to be made.

(d)Maximum Payable.  The maximum amount of a Covered Employee Incentive Award payable to a Covered Employee under this Plan for any calendar year pursuant to this Section 2.3 shall be $2,000,000 or, if less, 200 percent of the Participant’s Base Salary.

SECTION 3

Deferred Awards Elections

3.1Deferral Requests.

(a)Generally.  Subject to the terms and conditions of the Plan, a Participant may elect to defer the payment of all or any portion of an Award, including a Covered Employee Incentive Award, granted to him under the Plan for any calendar year by submitting a request (a “Deferral Request”) with the Committee or its designee in such form as it may require.  Such Deferral Request must be filed with and accepted by the Committee or its designee by no later than June 30 of the calendar year for which such Award is made, and may be made only by Participants who have performed services for the Company continuously from the later of January 1 of the calendar year for which the Award is made or the date the Committee establishes the Performance Goals for the Award.  A Participant’s Deferral Request for any calendar year shall designate the amount of the Award that shall be deferred and shall become irrevocable as of midnight on June 30 of the calendar year for which the Award is made.

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(b)Newly Eligible Participants.  A Participant who is selected by the Committee or its designee to be a Participant during a calendar year (a “Newly Eligible Participant”) shall also be entitled to file a Deferral Request with respect to a pro‐rata portion of the Award.

(i)Such a Deferral Request must be submitted to and accepted by the Committee or its designee within 30 days after the date on which the Newly Eligible Participant is initially selected by the Committee or its designee to be a Participant during such year.  If the Deferral Request is not submitted and accepted within 30 days, the Newly Eligible Participant shall not be permitted to make a Deferral Request under this Section 3.1(b) with respect to any portion of the Award for such year.  A Deferral Request submitted by a Newly Eligible Participant shall designate the amount of the Award that shall be deferred and shall become irrevocable as of midnight on the 30th day following the date on which the Newly Eligible Participant is initially selected by the Committee or its designee to be a Participant.

(ii)The amount of the Award that may be deferred pursuant to the Deferral Request by a Newly Eligible Participant shall not be greater than the amount of the Newly Eligible Participant’s Award that is earned after the date on which the Newly Eligible Participant files his or her Deferral Request.  The amount of the Newly Eligible Participant’s Award that may be deferred shall be equal to the total amount of the Award for the year multiplied by a fraction, the numerator of which shall equal the number of days from the time the Newly Eligible Participant files the Deferral Request until December 31 of such year, and the denominator of which shall equal the total number of days during the performance period in respect of which the Award is paid.

(iii)A Participant will be considered a Newly Eligible Participant even if the Participant had previously been eligible to participate in the Plan if:

(A)The Participant received all amounts previously credited to the Participant’s Company Stock Account and General Investment Account and before such receipt, had ceased to be eligible to participate in the Plan; or

(B)The Participant has been ineligible to participate in the Plan for at least 24 months when the Participant is again selected to be a Participant during the calendar year.

3.2Allocation of Deferred Awards.  A Participant shall designate, on his or her Deferral Request for a calendar year, the allocation of his or her Award between the Participant’s Company Stock Account and the General Investment Account.

3.3Distribution Elections.  A Participant shall designate, in accordance with Section 5, the manner in which the Participant’s Award that has been deferred in accordance with Section 3.1, as adjusted for subsequent earnings, losses and other charges and credits, shall be distributed to or for the benefit of the Participant.

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SECTION 4

Deferred Awards:  Accounts

4.1Deferred Accounts.  Subject to the terms and conditions of the Plan, an Award for any calendar year that is deferred in accordance with Section 3.1 shall be credited, as elected by the Participant in the Deferral Request applicable to such Award, to the Company Stock Account or to the General Investment Account maintained on the Company’s books for the Participant as described in subsections (a) and (b) below.  Effective for deferrals of Awards made for calendar year 2007 and thereafter, a Participant’s election to allocate all or a portion of his or her Award to the Company Stock Account shall be irrevocable and shall be credited to the Participant’s Special Company Stock Account, established as a subaccount of the Company Stock Account, in accordance with the method for crediting Share Units and Dividend Equivalents to the Company Stock Account described in Section 4.1(a).  A Participant’s Account may be divided into two or more other subaccounts as the Company determines necessary or desirable for the administration of the Plan, and shall be divided into subaccounts to reflect the portion of the Account that is attributable to Awards made for calendar years prior to 2005 and to reflect the portion of the Account attributable to Awards made for 2005 and subsequent years.  A Participant shall be 100% vested in his or her Account(s) at all times.

(a)Company Stock Account.  As of the date an earned Award is declared by the Committee, the Participant shall be credited with the number of share units (and fractions thererof) (“Share Units”) equal to the number of shares (and fractional shares calculated to the nearest one-thousandth (.001) of a share) (“Shares”) of the Company’s common stock that the amount of the Award would purchase based on the closing market price of such stock on the New York Stock Exchange on the day the contributions are allocated for the declared Award .  No less frequently than once in every calendar year the Committee or its designee shall, for each dividend payment date declared with respect to the Company’s common stock since the last such determination:

(i)determine the amount of the dividends that would have been paid by the Company on the number of Shares of the Company’s common stock equal to the number of Share Units credited to the Participant on the record date for such dividend (“Dividend Equivalents”); and

(ii)credit the Participant’s Company Stock Account with the number of Share Units equal to the number of Shares of the Company’s common stock that the Dividend Equivalents attributable to such dividend payment date would have purchased based on the closing price of the Company’s common stock on the New York Stock Exchange on such dividend payment date.

Notwithstanding the foregoing provisions of this paragraph (a), in no event shall Shares of the Company’s common stock be earmarked for a Participant’s Account or set aside for the benefit of the Participant by reason of the crediting of Share Units under this paragraph (a).

 

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(b)General Investment Account.

(i)The amount of each Award deferred to the Participant’s General Investment Account shall be deemed to be invested on the date the Award is declared by the Committee in an investment fund(s) (which may include contracts of insurance) selected by the Participant with the consent of the Company or its designee in the Deferral Request applicable to such Award.  The earnings and losses deemed to be attributable to the investment of a Participant’s General Investment Account for any calendar year shall be the earnings and losses that would have been yielded if the Participant’s General Investment Account had been invested in the investment selected by the Participant for the year.  Notwithstanding the foregoing, any such investment fund(s) made available under the Plan must qualify as a predetermined actual investment within the meaning of Treasury Reg. §31.3121(v)(2)-1(d)(2) or, for any calendar year, reflect a reasonable rate of interest (determined in accordance with Treasury Reg. §31.3121(v)(2)-1(d)(2)(i)(C)).

(ii)A Participant may elect to change the selection of his or her General Investment Account investment fund selections, which change shall be effective as of the close of business each day (a “GIA Transfer Date”).  Any change by a Participant in his or her investment fund selections shall be submitted in writing or electronically with the Committee or its designee as specified by the Committee or its designee and shall apply prospectively as of the GIA Transfer Date to all amounts credited to the Participant’s General Investment Account.  In the case of a Participant who fails to make an investment election and who has not yet made an investment election, the Participant’s Account will be invested in the Fidelity Freedom Fund with a target retirement date closest to the year in which the Participant will turn age 65, or other Investment Fund established by the Committee for such purpose. Notwithstanding the foregoing provisions of this subsection, nothing in the Plan shall be construed to require the Company to segregate or invest any assets to reflect the Participant’s investment fund selections.

(c)Effective Date Credited Amounts.  The amounts credited to a Participant’s Company Stock Account (including the Special Company Stock Account established as a sub-account thereunder) and General Investment Account, if any, on January 1, 2015 shall be equal to the amount credited to such Accounts, respectively, as of December 31, 2014 under the terms of the Plan as in effect on that date.

(d)Amounts Credited to Special Company Stock Account.  The amount credited to the Participant’s Special Company Stock Account from time to time, including any Dividend Equivalents thereon, shall be held in the Special Company Stock Account until distributed to the Participant in shares of the Company’s common stock in accordance with Section 5.

 

 

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4.2Transfers from the Company Stock Account to the General Investment Account for Pre 2007 Deferrals.

 

(a)Application.  This Section 4.2 shall only apply to the portion of a Participant’s Company Stock Account that is attributable to deferrals of Awards made for calendar years prior to the 2007 calendar year, including Dividend Equivalents thereon (“Pre 2007 Balance”) reduced by the portion of the Participant’s Company Stock Account Pre 2007 Balance that the Participant elected to transfer to the Special Company Stock Account effective December 31, 2006 under the terms of the Plan as then in effect.

 

(b)Transfers.  Subject to the limitations of Section 4.2(a) and the Company’s Insider Trading Policy as in effect from time to time, a Participant may elect that all or a portion (in increments of one percent) of the balance of his or her Company Stock Account (including any Dividend Equivalents accrued but not yet converted into Share Units as of such date) be transferred to his or her General Investment Account.  Such transfer shall be effective as of the date the Participant elects such transfer if the election is requested before 4:00 p.m. Eastern Standard Time or as of the next business day following the date of the election if such transfer is requested on or after 4:00 p.m. Eastern Standard Time (the “Transfer Effective Date”).  For purposes of this Section 4.2(b), the value of a Share Unit credited to a Participant’s Company Stock Account as of any Transfer Effective Date shall be equal to the closing price of one share of the Company’s common stock on the New York Stock Exchange as of the close of business on the Transfer Effective Date.  Any election under this Section 4.2(b) shall be irrevocable and shall be filed with the Committee or its designee under rules prescribed by the Committee.

 

SECTION 5

Deferred Awards:  Payment

 

5.1Distributions of Awards Earned Prior to 2005.

(a)The portion of a Participant’s Account that is attributable to deferrals of Awards made for calendar years prior to the 2005 calendar year shall be distributed to or for the benefit of the Participant in 10 substantially equal installments commencing in February of the first calendar year following the year in which the Participant has separated from service (as defined in Section 5.11 below).

(b)Notwithstanding the method of distribution specified in Section 5.1(a), the Committee may alter the commencement date and period of distribution for the portion of a Participant’s Account that is attributable to deferrals of Awards made for calendar years prior to the 2005 calendar year with respect to any Participant if the Committee determines, in its sole discretion, that such change is in the best interest of the Participant after taking into account the Participant’s particular needs and circumstances.

(c)Notwithstanding anything in the Plan to the contrary, the Board of Directors may, in its sole discretion, upon recommendation of the Committee, accelerate the distribution, in whole or in part, of the portion of a Participant’s Account under the Plan that is attributable to deferrals of Awards made for calendar years prior to 2005, including a payment 

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made following the death of the Participant pursuant to Section 5.5, if it determines that such acceleration is in the best interest of the Company or Participant.

5.2Distribution of Awards Earned in 2005 and 2006.

(a)The portion of a Participant’s Account that is attributable to deferrals of Awards made for the 2005 and 2006 calendar years and that is payable on or after January 1, 2007 shall be distributed to or for the benefit of the Participant in accordance with the method of payment elected by the Participant for the Award made for the 2007 calendar year or, if the Participant did not defer or earn an Award for the 2007 calendar year, as the Participant irrevocably elected on or before December 31, 2006 from among methods of payment provided by Section 5.3.  Payment shall be made (in the case of a single lump sum) or commence (in the case of installments) in February of the first calendar year following the year in which the Participant has separated from service (as defined in Section 5.11 below).

(b)In the absence of a Participant’s election pursuant to Section 5.2(a), the portion of a Participant’s Account that is attributable to deferrals of Awards made for the 2005 and 2006 calendar years shall be distributed to or for the benefit of the Participant in 10 substantially equal installments as provided in Section 5.3 commencing in February of the first calendar following the year in which the Participant has separated from service (as defined in Section 5.11 below).

(c)It is intended that the elections provided by Sections 5.2(a) qualify as Code Section 409A transition elections pursuant to published IRS guidance.

(d)All amounts distributed pursuant to this Section 5.2 shall be subject to the special delay rule for Specified Employees set forth in Section 5.4 and to Section 6.6.

5.3Distribution Elections for Awards Earned for 2007 and Subsequent Years.  A Participant may elect the method of payment for the portion of the Participant’s Account attributable to deferrals of Awards made for the 2007 calendar year and subsequent years from among the following:

(a)3, 5 or 10 substantially equal annual installments; or

(b)A single lump sum.

Payment shall be made (in the case of a single lump sum) or commence (in the case of installments) in February of the first calendar year following the year in which the Participant has separated from service (as defined in Section 5.11 below), provided, that with respect to Awards earned for 2016 and subsequent calendar years, payment shall be made (in the case of a single lump sum) or commence (in the case of installments) in February of the first calendar year following the year in which the Participant has separated from service (as defined in Section 5.11 below), or March 1 of the year following the Performance Period, if later.  The amount of each installment payment hereunder shall be calculated by dividing the balance credited to the Participant’s Account(s) to which the election applies at the time of each such payment by the number of remaining installments (including the current installment).  Installment payments shall be made in the month of February as specified above and in anniversaries thereof (and, for 

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purposes of Section 409A of the Code, each such installment payment shall be a separate payment and not one of a series of payments treated as a single payment).

A Participant’s initial distribution election shall be made, as directed by the Committee or its designee, no later than the date specified in Section 3.1 as the date on which a Participant’s Deferral Election shall be due, and shall apply to all Awards that are deferred for future calendar years, if any, until the Participant is entitled to make a new distribution election, as provided below.

A Participant shall be entitled to make a new distribution election each year to be applicable to Awards deferred for future calendar years.  A new distribution election shall be made by filing such election with the Committee or its designee on such form as it shall prescribe.  

A Participant shall be deemed to have elected to have the portion of his or her Account attributable to his or her Awards for which no elections have been made distributed in the form of 10 substantially equal annual installments.

All amounts distributed pursuant to this Section 5.3 shall be subject to the special delay rule for Specified Employees set forth in Section 5.4 and to Section 6.6.

5.4Delay for Specified Employees.  This Section 5.4 shall only apply to distributions that are attributable to deferrals of Awards made for in 2005 and subsequent years.  Notwithstanding anything in the Plan to the contrary, no payment to the extent attributable to such Awards shall be made to any Participant who is a Specified Employee as of the date of such Participant’s separation from service (as defined in Section 5.11) until the earlier of (i) the date that is the first day of the seventh month after the date of the Participant’s separation from service, or (ii) the date of the Participant’s death.  Any payment that would otherwise have been made during this period shall instead be aggregated and paid to the Participant (or, in the case of the Participant’s death, his or her beneficiary) in the form of a single lump sum upon the earlier of the dates specified in the preceding sentence.  “Specified Employee” for purposes of this Section 5.4 means, during the 12-month period beginning on April 1st of 2005 or of any subsequent calendar year, an employee of the Company or its Affiliates who met the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations promulgated thereunder and without regard to Code Section 416(i)(5)) for being a "key employee" at any time during the 12-month period ending on the December 31st immediately preceding such April 1st.  Notwithstanding the foregoing, a Participant who otherwise would be a Specified Employee under the preceding sentence shall not be a Specified Employee for purposes of the Plan unless, as of the date of the Participant's separation from service, stock of the Company or an Affiliate is publicly traded on an established securities market or otherwise.

5.5Death.

(a)In the event that a Participant dies before full payment of all amounts payable to him or her under the Plan have been made, the balance of such amounts shall be paid to the beneficiary or beneficiaries designated by the Participant in a writing filed with the 

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Committee or its designee prior to his or her death, or, if no designation has been made or the designated beneficiary predeceases the Participant, to the estate of the Participant.

(b)Amounts payable in accordance with this Section 5.5 that are attributable to deferrals of Awards made for calendar year 2005 and subsequent years shall be paid, subject to Section 6.6, in February of the first calendar year following the Participant’s death in the form of a single lump sum.

(c)Amounts payable in accordance with this Section 5.5 that are attributable to deferrals of Awards made for years prior to the 2005 calendar year shall be paid at the same time and in the same form as which such payments would have been made to the Participant if he or she had lived or as otherwise provided by the Committee and subject to Section 5.1(c).

(d)A Participant may change his or her beneficiary designation from time to time and any beneficiary designation form shall be effective only when the signed form is filed with the Committee or its designee while the Participant is alive and will cancel all beneficiary designation forms signed earlier.

5.6Permitted Delays in Payment.  Payment of a Participant’s Account attributable to deferrals of Awards made for the 2005 calendar year and subsequent years will be delayed under any of the circumstances specified in Sections 5.6(a) through (b) below or as provided in Section 6.6.

(a)Payments that would violate Applicable Law.  Payment of a Participant’s Account will be delayed where the Committee reasonably anticipates that the making of the payment would violate Federal securities laws or other applicable law; provided that such payment will be made at the earliest date at which the Committee reasonably anticipates that the making of the payment would not cause such violation.  For purposes of this subsection (a), the making of a payment that would cause inclusion in the Participant’s gross income or the application of any penalty or other provision of the Code is not treated as a violation of applicable law.

(b)Other Payments.  The Committee shall be permitted to delay a payment of a Participant’s Account upon such other events and conditions as may be prescribed under Code Section 409A and any regulations or other generally applicable official guidance issued thereunder.

5.7Assets to be Distributed.

(a)Except as provided in Sections 5.7(b) and 5.7(c), all amounts credited to a Participant under the Plan shall be paid in cash.  Any cash payment under this Section 5.7 from a Participant’s Company Stock Account shall be equal to the number of Share Units credited to the applicable Account to be distributed multiplied by the closing price of the Company’s common stock on the New York Stock Exchange on the last trading day prior to the date as of which payment is made.

(b)Distributions of amounts credited to a Participant’s Company Stock Account (excluding however, amounts credited to the Participant’s Special Company Stock 

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Account that are attributable to (i) deferrals of Awards made for the 2007 calendar year and subsequent years (including Dividend Equivalents thereon), and (ii) amounts credited to the Participant’s Special Company Stock Account pursuant to the special election made under the Plan effective as of December 31, 2006 (including Dividend Equivalents thereon)), may, at the election of the Participant, be paid in the form of cash or Shares of the Company’s common stock equal to the number of Share Units to be distributed.

(c)Distribution of amounts credited to the Participant’s Special Company Stock Account that are attributable to (i) deferrals of Awards made for the 2007 calendar year and subsequent years (including Dividend Equivalents thereon), and (ii) amounts credited to the Participant’s Special Company Stock Account pursuant to the special election made under the Plan effective as of December 31, 2006 (including Dividend Equivalents thereon) shall be paid to the Participant in Shares of the Company’s common stock equal to the number of Share Units to be distributed.

(d)Shares of the Company’s common stock distributed under this Section 5.7 shall be made available from treasury shares or shares of the Company’s common stock acquired by the Company, including shares purchased in the open market.  The obligation of the Company to deliver any shares of Company common stock shall be subject to all applicable laws, rules and regulations including all applicable federal and state securities laws, and the applicable requirements of any securities exchanges or similar entity, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.

5.8No Acceleration of Payment.  Notwithstanding anything in the Plan to the contrary, the distribution of any portion of Participants’ Accounts under the Plan attributable to deferrals of Awards made for the 2005 calendar year and subsequent years may not be accelerated, whether at the election of a Participant or at the discretion of the Committee or otherwise, except as may be specifically permitted under Code Section 409A and any regulations or generally applicable official guidance issued thereunder.

5.9Claims Procedures.  If a Participant or Participant’s beneficiary (“Claimant”) files a claim for benefits under Section 5 of this Plan, the Committee or its designee shall notify the Claimant within 45 days of allowance or denial of the claim, unless the Claimant receives written notice from the Committee or its designee prior to the end of the 45-day period stating that special circumstances require an extension (of up to 45 additional days) of the time for decision.  The notice of the decision of the Committee or its designee shall be in writing sent by mail to Claimant’s last known address, and if a denial of the claim, shall contain the following information:  (a) the specific reasons for the denial; (b) specific reference to pertinent provisions of the Plan on which the denial is based; and (c) if applicable, a description of any additional information or material necessary to perfect the claim, an explanation of why such information or material is necessary, and an explanation of the claims review procedure and the time limits applicable, including a statement of the Claimant’s rights to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) following an adverse determination on review.  A Claimant is entitled to request a review of any denial of his/her claim by the Committee.  The request for review must be submitted within 60 days of mailing of notice of the denial.  Absent a request for review within the 60-day period, the 

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claim shall be deemed to be conclusively denied.  The Claimant or his or her representatives shall be provided, upon written request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits, and shall be entitled to submit issues and comments orally and in writing.  The Committee shall render a review decision in writing within 60 days after receipt of a request for a review, provided that, in special circumstances the Committee may extend the time for decision by not more than 60 days upon written notice to the Claimant.  The Claimant shall receive written notice of the Committee’s review decision, together with specific reasons for the decision and reference to the pertinent provisions of the Plan, a statement that the claimant or his or her authorized representative shall have reasonable access to, and be entitled to receive, upon request and free of charge, copies of all documents, records and other information relevant to the Claimant’s claim, and a statement describing the Claimant’s right to bring an action under Section 502(a) of ERISA.

5.10Withholding.  The Company shall have the right to deduct from all amounts paid pursuant to the Plan any taxes required by law to be withheld with respect to such amounts.  Notwithstanding any other provision of the Plan, the Company does not guarantee any particular tax result for any Participant or beneficiary with respect to participation in or payments under the Plan, and each Participant or beneficiary shall be responsible for any taxes imposed on the Participant or beneficiary with respect to such participation or payments under the Plan.

5.11Separation of Service.  “Separated from service” and variations thereof for purposes of this Section 5 and all other sections of the Plan means (i) with respect to the portion of a Participant’s Account that is attributable to deferrals of Awards made for calendar years prior to 2005, that the Participant has retired or otherwise terminated employment with the Company for any reason other than death and (ii) with respect to the portion of a Participant’s Account that is attributable to deferrals of Awards made for 2005 and subsequent years, a “separation from service” within the meaning of Code Section 409A and the regulations issued thereunder, including a termination of employment with the Company and all its Affiliates due to retirement or any other reason, but excluding termination of employment due to death.  For purposes of applying the definition of “separation from service” under Section 409A, if the Participant is on a bona fide leave of absence due to any medically determinable physical or medical impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment, a separation from service shall be deemed to occur after the expiration of 29 months of sick leave unless the Participant retains the right to reemployment under an applicable statute or by contract.

SECTION 6

Miscellaneous

6.1Change in Capitalization.  In the event of a stock dividend, stock split, issuance of additional shares, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change affecting the Company’s common stock (“Corporate Change”), the number of Share Units that have been credited to Participants under the Plan shall be 

A-13

 

 

automatically adjusted by the Committee to preserve each Participant’s proportionate interest immediately prior to such Corporate Change.

6.2Nontransferability, Nonassignability.  The interest of a Participant under the Plan is not subject to the claims of his creditors, and may not be voluntarily or involuntarily assigned, transferred, alienated, pledged or encumbered.

6.3Plan Not Contract of Employment.  The Plan does not constitute a contract of employment, and participation in the Plan will not give any Participant the right to be retained in the employ of the Company or any Affiliate, nor any right or claim to any benefit under the Plan unless such right or claim has specifically accrued under the terms of the Plan.  The crediting of Share Units does not constitute the award of stock, and shall not be construed to give a Participant any rights as a shareholder of the Company.

6.4Source of Benefits.

(a)The Company is entitled, but not obligated, to establish a grantor trust or similar funding mechanism to fund the Company’s obligations under this Plan; provided, however, that any funds contained therein will remain subject to the claims of the Company’s general creditors.  The funding mechanism will constitute an unfunded arrangement.  The Deferred Awards portions of the Plan are maintained primarily to provide deferred compensation benefits for a select group of “management or highly-compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA, and therefore, exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.

(b)The Company’s obligation under this Plan will be merely that of an unfunded and unsecured promise of the Company to pay benefits in the future.  All Awards (and any corresponding assets held in a trust established for this Plan), and any payment to be made pursuant to this Plan, will be subject to the claims of the general creditors of the Company, including judgment creditors and bankruptcy creditors.  Neither any Participant, nor his or her beneficiaries, nor his or her heirs, successors or assigns, will have any secured interest in or claim on any property or assets of the Company (or of any trust).  The rights of a Participant or his or her beneficiaries to his or her Company Stock Account or General Investment Account and to an Award (and to any assets held in trust) will be no greater than the rights of an unsecured creditor of the Company.

6.5Affiliate.  For purposes of the Plan, the term “Affiliate” means any corporation, partnership, joint venture, trust, association or other business enterprise which is a member of the same controlled group of corporations, trades or businesses as the Company within the meaning of Code Section 414(b) or (c); provided, however, that except for purposes of the term “Affiliate” when used in the definition of Specified Employee, in applying Code Section 1563(a)(1), (2), and (3) in determining a controlled group of corporations under Code Section 414(b), the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Code Section 1563(a)(1), (2), and (3), and in applying Treasury Reg. §1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Treasury Reg. §1.414(c)-2.

A-14

 

 

6.6Timing of Payments.  Notwithstanding any provision of the Plan to the contrary, a distribution of a Participant’s Account attributable to deferrals of Awards made for 2005 and subsequent years to be made as of a specified date or in a specified period in Section 5 shall be made on the date or in the period specified or as soon as administratively practicable thereafter, but in no event shall any portion of the distribution be made later than the last day of the same calendar year in which such date or period occurs.  Until paid, any such amount otherwise distributable from a Participant’s Account shall continue to be adjusted under Section 4 to reflect investment returns.  In addition, if calculation of the amount of a payment is not administratively practicable due to events beyond the control of the Participant or his or her beneficiary, or if making of a payment would jeopardize the ability of the Company to continue as a going concern, a payment will be treated as made on the specified date or in the specified period for purposes of the Plan if the payment is made during the first calendar year in which the calculation of the amount of the payment is administratively practicable or in which the making of the payment would not have such effect on the Company, as the case may be.

6.7Section 409A of the Code.  It is intended that the Plan (including any amendments thereto) comply with the provisions of Section 409A of the Code so as to prevent the inclusion in gross income of any amounts accrued hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise be actually distributed or made available to Participants.  The Plan shall be interpreted, construed and administered in a manner that will comply with Section 409A of the Code, including final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto.

6.8Insider Trading Policy.  All elections made under the Plan by a Participant shall, to the extent applicable, be subject to the terms of the Company’s Insider Trading Policy as in effect from time to time.

SECTION 7

Amendment and Termination

7.1Amendment and Termination.  The Board of Directors may from time to time amend the Plan in such respects as it deems advisable and may terminate the Plan at any time; provided, however, that no such amendment or termination shall adversely affect any right or obligation with respect to any Award theretofore made under the Plan or cause any amount deferred pursuant to the Plan to be included in gross income or subject to additional tax and interest under Code Section 409A(a)(1); and provided further, that no amendment shall be made without stockholder approval if such approval is necessary to comply with law, regulatory requirements or the rules of any exchange or automated quotation system upon which the Shares are listed or quoted.

SECTION 8

Stockholder Approval

8.1Stockholder approval.  The Plan as amended and restated herein shall be effective January 1, 2015, subject to the approval of the amended and restated Plan by stockholders of the 

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Company at its 2015 annual meeting by the affirmative vote of a majority of the shares of stock of the Company present in person or represented by proxy at the meeting and entitled to vote.  

In WITNESS WHEREOF, Stepan Company has signed this Plan this 24th day of February, 2015.

			
	
 
	
Stepan Company

	
 
	
 

	
 
	
 

	
 
	
By:
	
/s/ F. Quinn Stepan, Jr.

	
 
	
Title:
	
President and Chief Executive Officer

 

A-16Exhibit 4.1

 

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR, SUBJECT TO SECTION 11 HEREOF, 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 Common Stock of

 

IMMUNE PHARMACEUTICALS INC.

 

Dated as of July __, 2015 (the “Effective
Date”)

 

WHEREAS, Immune Pharmaceuticals Inc., a Delaware
corporation (the “Company”), has entered into a Loan and Security Agreement of even date herewith (as amended
and in effect from time to time, the “Loan Agreement”) with Hercules Technology Growth Capital, Inc., a Maryland
corporation (the “Warrantholder”), in its capacity as administrative agent, and the lender parties thereto;

 

WHEREAS, pursuant to the Loan Agreement and
as additional consideration to the Warrantholder for, among other things, its agreements in the Loan Agreement, the Company has
agreed to issue to the Warrantholder this Warrant Agreement, evidencing the right to purchase shares of the Company’s Common
Stock (this “Warrant”, “Warrant Agreement”, or this “Agreement”);

 

NOW, THEREFORE, in consideration of the Warrantholder
having executed and delivered the Loan Agreement and provided 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 COMMON STOCK. 

 

(a)          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, up to the number of fully paid and non-assessable
shares of Common Stock (as defined below) as determined pursuant to Section 1(b) below, at a purchase price per share equal to
the Exercise Price (as defined below). The number and Exercise Price of such shares are subject to adjustment as provided in Section
8. As used herein, the following terms shall have the following meanings:

 

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

 

“Charter” means
the Company’s Certificate of Incorporation and By-Laws, as may be amended and in effect from time to time.

 

    	 

    	 

    

 

“Common Stock”
means the Company’s common stock, $0.0001 par value per share, as presently constituted under the Charter, and any class
and/or series of Company capital stock for or into which such common stock may be converted or exchanged in a reorganization, recapitalization
or similar transaction.

 

“Exercise
Price” means $1.70, or, if lower, the effective price of any financing occurring within six months after the
Effective Date, subject to adjustment from time to time in accordance with the provisions of this Warrant.

 

“Liquid Sale” means
the closing of a Merger Event in which the consideration received by the Company and/or its stockholders, as applicable, consists
solely of cash and/or Marketable Securities.

 

“Marketable Securities”
in connection with a Merger Event means securities meeting all of the following requirements: (i) the issuer thereof is then subject
to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and is then current in its filing of all required reports and other information under the Act and the Exchange
Act; (ii) the class and series of shares or other security of the issuer that would be received by the Warrantholder in connection
with the Merger Event were the Warrantholder to exercise this Warrant on or prior to the closing thereof is then traded on a national
securities exchange or over-the-counter market, and (iii) following the closing of such Merger Event, Warrantholder would not be
restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Warrantholder
in such Merger Event were Warrantholder to exercise this Warrant in full on or prior to the closing of such Merger Event, except
to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y)
does not extend beyond six (6) months from the closing of such Merger Event.

 

“Merger Event”
means any of the following: (i) a sale, lease or other transfer of all or substantially all assets of the Company, (ii) any merger
or consolidation involving the Company in which the Company is not the surviving entity or in which the outstanding shares of the
Company’s capital stock are otherwise converted into or exchanged for shares of capital stock or other securities or property
of another entity and in which the holders of a majority of the outstanding shares of capital stock of the Company immediately
prior to such merger or consolidation do not hold a majority of the surviving entity or other entity immediately following such
merger or consolidation, or (iii) any sale by holders of the outstanding voting equity securities of the Company in a single transaction
or series of related transactions of shares constituting a majority of the outstanding combined voting power of the Company.

 

"Purchase Price"
means, with respect to any exercise of this Warrant, an amount equal to the then-effective Exercise Price multiplied by the number
of shares of Common Stock as to which this Warrant is then exercised.

 

(b)          Number
of Shares.         This Warrant shall be exercisable for 214,853
shares of Common Stock; provided, however, that if the Company receives any borrowings in connection with the Tranche
B Term Loan Advance (as defined in the Loan Agreement) from the lender parties under the Loan Agreement subject, this Warrant
automatically and without further action on the part of any party or other person be deemed exercisable for 279,412 shares of
Common Stock, in each case subject to adjustment from time to time in accordance with the provisions of this Warrant.

 

    	2

    	 

    

 

SECTION 2.    TERM
OF THE AGREEMENT. 

 

The term of this Agreement and the right to purchase
Common Stock as granted herein shall commence on the Effective Date and, subject to Section 8(a) below, shall be exercisable for
a period ending upon the fifth (5th) anniversary of the Effective Date (“Expiration Date”).

 

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 business (3) days thereafter, the Company shall issue to the Warrantholder a
certificate for the number of shares of Common 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 under this Warrant, 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 Common Stock to be
exercised under this Agreement and, if applicable, an amended Agreement setting forth the remaining number of shares purchasable
hereunder, as determined below (“Net Issuance”). If the Warrantholder elects the Net Issuance method, the Company
will issue shares of Common Stock in accordance with the following formula:

 

X = Y(A-B)

                                           A

 

	Where:	X =       the number of shares of Common Stock to be issued to the Warrantholder.
	 	 
	 	Y =       the number of shares of Common Stock requested to be exercised under this Agreement.
	 	 
	 	A =       the then-current fair market value of one (1) share of Common Stock at the time of exercise.
	 	 
	 	B =       the then-effective Exercise Price.

 

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

 

(i)          at
all times when the Common Stock shall be traded on a national securities exchange, inter-dealer quotation system or over-the-counter
bulletin board service, the average of the closing prices over a five (5) day period ending three days before the day the current
fair market value of the securities is being determined;

 

(ii)         if
the exercise is in connection with a Merger Event, the fair market value of a share of Common Stock shall be deemed to be the per
share value received by the holders of the outstanding shares of Common Stock pursuant to such Merger Event as determined in accordance
with the definitive transaction documents executed among the parties in connection therewith; or

 

    	3

    	 

    

 

(iii)        in
cases other than as described in the foregoing clauses (i) and (ii), the current fair market value of a share of Common Stock shall
be determined in good faith by the Company’s Board of Directors.

 

Upon partial exercise by either cash or upon request
by the Warrantholder and surrender of all or a portion of this Warrant, Net Issuance, prior to the Expiration Date or earlier termination
hereof, the Company shall as soon as commercially practicable issue an amended Agreement representing the remaining number of shares
purchasable hereunder. All other terms and conditions of such amended Agreement, mutatis mutandis, shall be identical to
those contained herein, including, but not limited to the Effective Date hereof.

 

(b)          Exercise
Prior to Expiration. To the extent this Warrant is not previously exercised as to all shares subject hereto as of the
Expiration Date, and if the then-current fair market value of one share of Common Stock is greater than the Exercise Price
then in effect, or, in the case of a Liquid Sale, where the value per share of Common Stock (as determined as of the closing
of such Liquid Sale in accordance with the definitive agreements executed by the parties in connection with such Merger
Event) to be paid to the holders thereof is greater than the Exercise Price then in effect,this Agreement shall be deemed
automatically exercised on a Net Issuance basis pursuant to Section 3(a) (even if not surrendered) as of the Expiration Date.
For purposes of such automatic exercise, the fair market value of one share of Common Stock upon such expiration shall be
determined pursuant to Section 3(a). To the extent this Warrant or any portion hereof is deemed automatically exercised
pursuant to this Section 3(b), the Company agrees as soon as commercially practicable to notify the Warrantholder of the
number of shares of Common Stock, if any, the Warrantholder is to receive by reason of such automatic exercise, and to issue
a certificate to Warrantholder evidencing such shares.

 

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 Common Stock to provide for the exercise of
the rights to purchase Common Stock as provided for herein.

 

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 Exercise Price then in effect.

 

SECTION 6.    NO
RIGHTS AS STOCKHOLDER.

 

Without limitation of any provision hereof, Warrantholder
agrees that this Agreement does not entitle the Warrantholder to any voting rights or other rights as a stockholder of the Company
prior to the exercise of any of the purchase rights set forth in 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 in Section 12(h) below. Warrantholder may change such address by giving written notice of such changed address to
the Company.

 

    	4

    	 

    

  

SECTION 8.    ADJUSTMENT
RIGHTS. 

 

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

 

(a)          Merger
Event. In connection with a Merger Event that is a Liquid Sale, this Warrant shall, on and after the closing thereof, automatically
and without further action on the part of any party or other person, represent the right to receive the consideration payable on
or in respect of all shares of Common Stock that are issuable hereunder as of immediately prior to the closing of such Merger Event
less the Purchase Price for all such shares of Common Stock (such consideration to include both the consideration payable at the
closing of such Merger Event and all deferred consideration payable thereafter, if any, including, but not limited to, payments
of amounts deposited at such closing into escrow and payments in the nature of earn-outs, milestone payments or other performance-based
payments), and such Merger Event consideration shall be paid to Warrantholder as and when it is paid to the holders of the outstanding
shares of Common Stock. To the extent that the consideration to be received by the Warrantholder at the closing of such Merger
Event that is a Liquid Sale is less than the Purchase Price, this Warrant shall automatically terminate as of the closing of such
Merger Event. In connection with a Merger Event that is not a Liquid Sale, the Company shall cause the successor or surviving entity
to assume this Warrant and the obligations of the Company hereunder on the closing thereof, and thereafter this Warrant shall be
exercisable for the same number and type of securities or other property as the Warrantholder would have received in consideration
for the shares of Common Stock issuable hereunder had it exercised this Warrant in full as of immediately prior to such closing,
at an aggregate Exercise Price no greater than the aggregate Exercise Price in effect as of immediately prior to such closing,
and subject to further adjustment from time to time in accordance with the provisions of this Warrant. The provisions of this Section
8(a) shall similarly apply to successive Merger Events.

 

(b)          Reclassification
of Shares. Except for Merger Events subject to Section 8(a), if the Company at any time shall, by combination, reclassification,
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 of securities, 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 Common Stock, (i) in the case of a subdivision,
the Exercise Price shall be proportionately decreased and the number of shares for which this Warrant is exercisable shall be proportionately
increased, or (ii) in the case of a combination, the Exercise Price shall be proportionately increased and the number of shares
for which this Warrant is exercisable shall be proportionately decreased.

 

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

 

    	5

    	 

    

 

(i)          pay
a dividend with respect to the outstanding shares of Common Stock payable in additional shares of Common Stock, then the Exercise
Price shall be adjusted, 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 Common Stock outstanding immediately
prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution, and the number of shares of Common Stock for which this Warrant is exercisable
shall be proportionately increased; or

 

(ii)         make
any other dividend or distribution on or with respect to Common Stock, except any dividend or distribution (A) in cash, or (B)
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 of this Warrant a proportionate share of any such distribution as though
it were the holder of the Common Stock as of the record date fixed for the determination of the stockholders of the Company entitled
to receive such distribution.

 

(e)         Notice of Certain Events. If: (i) the
Company shall declare any dividend or distribution upon its outstanding Common Stock, payable in stock, cash, property or other
securities (provided that Warrantholder in its capacity as lender under the Loan Agreement consents to such dividend); (ii) the
Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or
other rights; (iii) there shall be any Merger Event; 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 give the Warrantholder notice thereof at the same time
and in the same manner as it gives notice thereof to the holders of outstanding Common Stock.

 

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

 

(a)          Reservation
of Common Stock. The Company covenants and agrees that all shares of Common Stock, if any, that may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and non-assessable.
The Company further covenants and agrees that the Company will, at all times during the term hereof, have authorized and reserved,
free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented
by this Warrant. If at any time during the term hereof the number of authorized but unissued shares of Common Stock shall not be
sufficient to permit exercise of this Warrant in full, the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes.

 

(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 Common Stock, 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 material law or governmental rule, regulation or order applicable to it; and (3) except as
could not reasonably be expected to have a Material Adverse Effect (as defined in the Loan Agreement), 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, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors’ rights generally (including, without limitation, fraudulent conveyance laws) and by general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

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(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)          [Intentionally
Omitted].

 

(e)          [Intentionally
Omitted].

 

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

 

(g)          [Intentionally Omitted].

 

(h)          Information
Rights. At all times (if any) prior to the earlier to occur of (x) the date on which all shares of Common Stock issued on exercise
of this Warrant have been sold, or (y) the expiration or earlier termination of this Warrant, when the Company shall not be required
to file reports pursuant to Section 13 or 15(d) of the Exchange Act or shall not have timely filed all such required reports, Warrantholder
shall be entitled to the information rights contained in Section 7.1(b) – (f) of the Loan Agreement, and in any such event
Section 7.1(b) – (f) 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. All information provided by the Company
to Warrantholder pursuant to this Section 9(h) shall constitute Confidential Information, as defined in the Loan Agreement, so
long as it satisfies the requirements of Section 11.12 thereunder.

 

(i)          Rule
144 Compliance.       The Company shall, at all times prior to the earlier
to occur of (x) the date of sale or other disposition by Warrantholder of this Warrant or all shares of Common Stock issued on
exercise of this Warrant, or (y) the expiration or earlier termination of this Warrant if the Warrant has not been exercised in
full or in part on such date, use all commercially reasonable efforts to timely file all reports required under the 1934 Act and
otherwise timely take all actions necessary to permit the Warrantholder to sell or otherwise dispose of this Warrant and the shares
of Common Stock issued on exercise hereof pursuant to Rule 144 promulgated under the Act as amended and in effect from time to
time, provided that the foregoing shall not apply in the event of a Merger Event following which the successor or surviving entity
is not subject to the reporting requirements of the 1934 Act. If the Warrantholder proposes to sell Common Stock issuable upon
the exercise of this Agreement in compliance with Rule 144, then, upon Warrantholder’s written request to the Company, the
Company shall furnish to the Warrantholder, within five (5) business days after receipt of such request, a written statement confirming
the Company’s compliance with the filing and other requirements of such Rule.

 

    	7

    	 

    

  

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. This Warrant and the shares issued on exercise hereof will be acquired for investment and not with a view to the sale
or distribution of any part thereof in violation of applicable federal and state securities laws, and the Warrantholder has no
present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)          Private
Issue. The Warrantholder understands (i) that the Common Stock issuable upon exercise of this Agreement is not, as of the Effective
Date, registered under the Act or qualified under applicable state securities laws, and (ii) that the Company's reliance on exemption
from such registration 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)          Accredited
Investor. Warrantholder is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated under
the Act, as presently in effect (“Regulation D”).

 

(e)          No
Short Sales.       Warrantholder has not at any time on or prior to the Effective Date engaged in any short sales or equivalent transactions
in the Common Stock. Warrantholder agrees that at all times from and after the Effective Date and on or before the expiration
or earlier termination of this Warrant, it shall not engage in any short sales or equivalent transactions in the Common Stock.

 

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. 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. Notwithstanding anything herein or in any legend to the contrary, the Company shall not require
an opinion of counsel in connection with any sale, assignment or other transfer by Warrantholder of this Warrant (or any portion
hereof or any interest herein) or of any shares of Common Stock issued upon any exercise hereof to an affiliate (as defined in
Regulation D) of Warrantholder, provided that such affiliate is an “accredited investor” as defined in Regulation D.

 

    	8

    	 

    

  

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.

 

(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.

 

(d)          Additional
Documents. The Company agrees to supply such other documents as the Warrantholder may from time to time reasonably request.

 

(e)          Attorneys’
Fees. In any litigation, arbitration or court proceeding between the Company and the Warrantholder relating hereto, the prevailing
party shall be entitled to reasonable attorneys’ fees and expenses and all reasonable 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,
and shall be deemed to have been validly served, given, delivered, and received upon the earlier of: (a) personal delivery
to the party to be notified, (b) when sent by confirmed telex, electronic transmission or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt, and shall be addressed to the party to be notified
as follows:

 

    	9

    	 

    

 

If to Warrantholder:

 

Hercules Technology
GROWTH CAPITAL, INC.

Legal Department

Attention: Chief Legal Officer

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Facsimile: 650-473-9194

Telephone: 650-289-3060

Email: legal@htgc.com

 

If to the Company:

 

IMMUNE PHARMACEUTICALS INC.

Attention: Chief Financial Officer

430 East 29th Street, Suite 940

New York, NY 10016

Facsimile: 917-398-1915

Telephone: 646-440-9310

Email: Gad.berdugo@immunepharma.com

 

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

 

Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C.

Attention:
Jeffrey P. Schultz, Esq.

666 Third Avenue

New York, NY 10013

Facsimile: 212-983-3115

Telephone: 212-692-6732

Email: JPSchultz@Mintz.com

 

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

 

(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. 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)          Advice
of Counsel. Each of the parties represents to each other party hereto that it has discussed (or had an opportunity to discuss)
with its counsel this Agreement and, specifically, the provisions of Sections 12(n), 12(o), 12(p), 12(q) and 12(r).

 

(k)          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.

 

    	10

    	 

    

  

(l)          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 Warrantholder 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 during the term of this Agreement.

 

(m)          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.

 

(n)          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.

 

(o)          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 Manhattan, State of New York; (b) waives
any objection as to jurisdiction or venue in Manhattan, 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.

 

(p)          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 arising under or in connection with this Warrant 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 RELATING TO THIS WARRANT.
This waiver extends to all such Claims, including Claims that involve persons or entities other 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.

 

(q)          Arbitration.
If the Mutual Waiver of Jury Trial set forth in Section 12(p) is ineffective or unenforceable, the parties agree that all Claims
shall be submitted to binding arbitration in accordance with the commercial arbitration rules of JAMS (the “Rules”),
such arbitration to occur before one arbitrator, which arbitrator shall be a retired New York state judge or a retired Federal
court judge. Such proceeding shall be conducted in Manhattan, State of New York, with New York rules of evidence and discovery
applicable to such arbitration. The decision of the arbitrator shall be binding on the parties, and shall be final and nonappealable
to the maximum extent permitted by law. Any judgment rendered by the arbitrator may be entered in a court of competent jurisdiction
and enforced by the prevailing party as a final judgment of such court.

 

    	11

    	 

    

  

(r)          Pre-arbitration
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(o), 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 binding
arbitration.

 

(s)          Counterparts.
This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts (including
by facsimile or electronic delivery (PDF), 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.

 

(t)          Specific
Performance. The parties hereto hereby declare that it is impossible to measure in money the damages which will accrue to Warrantholder
by reason of the Company’s failure to perform any of the obligations under this Agreement and agree that the terms of this
Agreement shall be specifically enforceable by Warrantholder. If Warrantholder institutes any action or proceeding to specifically
enforce the provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense
therein that Warrantholder has an adequate remedy at law, and such person shall not offer in any such action or proceeding the
claim or defense that such remedy at law exists.

 

(u)          Lost,
Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. Any such
new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.

 

(v)         Legends.
To the extent required by applicable laws, this Warrant and the shares of Common Stock issuable hereunder (and the securities issuable,
directly or indirectly, upon conversion of such shares of Common Stock, if any) may be imprinted with a restricted securities legend
in substantially the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR PURSUANT TO RULE 144 OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

[Remainder of Page Intentionally Left Blank]

 

    	12

    	 

    

  

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

 

	COMPANY:	 	IMMUNE PHARMACEUTICALS INC.
	 	 	 	 
	 	 	By:	 
	 	 	Name:	Gad Berdugo
	 	 	Title:	Chief Financial Officer-Executive VP
	 	 	 	Finance and Administration, Secretary
	 	 	 	 
	WARRANTHOLDER: 	 	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
	 	 	 	 
	 	 	By:	 
	 	 	Name:	Ben Bang
	 	 	Title:	Associate General Counsel

 

    	13

    	 

    

 

EXHIBIT
I

 

NOTICE
OF EXERCISE

 

		To:	IMMUNE PHARMACEUTICALS
INC.

 

		(1)	The undersigned Warrantholder hereby elects to purchase
[_______] shares of the Common Stock of [_________________], pursuant to the terms of the Agreement dated the [___] day of July,
2015 (the "Agreement") between [_________________] and the Warrantholder, and 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 Common Stock in the name of the undersigned or in such other name as is specified below.

 

	 	 
	 	(Name)
	 	 
	 	 
	 	(Address)

 

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

 

    	14

    	 

    

 

EXHIBIT
II

 

		1.	ACKNOWLEDGMENT OF EXERCISE

 

The undersigned [____________________________________] of Immune
Pharmaceuticals Inc., hereby acknowledges receipt of the "Notice of Exercise" from Hercules Technology Growth Capital,
Inc. to purchase [____] shares of the Common Stock of Immune Pharmaceuticals Inc., pursuant to the terms of the Agreement, and
further acknowledges that [______] shares remain subject to purchase under the terms of the Agreement.

 

	COMPANY:	 	IMMUNE PHARMACEUTICALS INC.
	 	 	 	 
	 	 	By:	          
	 	 	 	 
	 	 	Title:	 
	 	 	 	 
	 	 	Date:	 

 

    	15

    	 

    

  

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.

 

    	16

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