Document:

Adamis Pharmaceuticals Corporation 10-Q

 

EXHIBIT 10.3

 

ADAMIS PHARMACEUTICALS CORPORATION

2009 EQUITY INCENTIVE PLAN

 

1.     GENERAL. 

 

        (a)    Successor
to Prior Plan.    The Plan is intended as the successor to the Company's 2005 Equity Incentive Plan (the
"Prior Plan"). Following the Effective Date, no additional stock awards shall be granted under the Prior
Plan. Any shares remaining available for issuance pursuant to the exercise of stock awards under the Prior Plan shall become available
for issuance pursuant to Stock Awards granted hereunder. Any shares subject to outstanding stock awards granted under the Prior
Plan that expire or terminate for any reason prior to exercise or settlement shall become available for issuance pursuant to Stock
Awards granted hereunder. On the Effective Date, all outstanding stock awards granted under the Prior Plan shall be deemed to be
stock awards granted pursuant to the Plan, but shall remain subject to the terms of the Prior Plan with respect to which they were
originally granted. All Stock Awards granted subsequent to the Effective Date shall be subject to the terms of the Plan.

 

        (b)    Eligible
Award Recipients.    The persons eligible to receive Awards are Employees, Directors and Consultants.

 

        (c)    Available
Awards.    The Plan provides for the grant of the following Awards: (i) Incentive Stock Options, (ii) Nonstatutory
Stock Options, (iii) Restricted Stock Awards, (iv) Restricted Stock Unit Awards, (v) Stock Appreciation Rights,
(vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards.

 

        (d)    General
Purpose.    The Company, by means of the Plan, seeks to secure and retain the services of the group of
persons eligible to receive Awards as set forth in Section 1(b), to provide incentives for such persons to exert maximum efforts
for the success of the Company and any Affiliate and to provide a means by which such eligible recipients may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of Stock Awards.

 

2.     ADMINISTRATION.

 

        (a)    Administration
by Board.    The Board shall administer the Plan unless and until the Board delegates administration of
the Plan to a Committee or Committees, as provided in Section 2(c).

 

        (b)    Powers
of Board.    The Board shall have the power, subject to, and within the limitations of, the express provisions
of the Plan:

 

        (i)    To
determine from time to time (A) which of the persons eligible under the Plan shall be granted Awards; (B) when and how
each Award shall be granted; (C) what type or combination of types of Award shall be granted; (D) the provisions of each
Award granted (which need not be identical), including the time or times when a person shall be permitted to receive cash or Common
Stock pursuant to a Stock Award; and (E) the number of shares of Common Stock with respect to which a Stock Award shall be
granted to each such person.

 

        (ii)   To
construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement
or in the written terms of a Performance Cash Award, in a manner and to the extent it shall deem necessary or expedient to make
the Plan or Award fully effective.

 

        (iii) To
settle all controversies regarding the Plan and Awards granted under it.

 

        (iv)  To
accelerate the time at which a Stock Award may first be exercised or the time during which an Award or any part thereof will vest
in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or
the time during which it will vest.

 

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        (v)   To
suspend or terminate the Plan at any time. Suspension or termination of the Plan shall not impair rights and obligations under
any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant.

 

        (vi)  To
amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, relating to Incentive Stock
Options and certain nonqualified deferred compensation under Section 409A of the Code and to bring the Plan and/or Stock Awards
granted under the Plan into compliance therewith, subject to the limitations, if any, of applicable law. However, except as provided
in Section 9(a) relating to Capitalization Adjustments, stockholder approval shall be required for any amendment of the Plan
that either (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially
expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing
to Participants under the Plan or materially reduces the price at which shares of Common Stock may be issued or purchased under
the Plan, (D) materially extends the term of the Plan, or (E) expands the types of Awards available for issuance under
the Plan, but in each of (A) to (E) only to the extent required by applicable law or listing requirements. Except as
provided above, rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.

 

        (vii) To
submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy
the requirements of (A) Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid to Covered Employees, (B) Section 422 of
the Code regarding Incentive Stock Options or (C) Rule 16b-3.

 

        (viii) To
approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards or stock awards granted
under the Prior Plan, including, but not limited to, amendments to provide terms more favorable to the Participant than previously
provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided
however, that the Participant's rights under any Award shall not be impaired by any such amendment unless (A) the Company
requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing,
subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected
Participant's consent if necessary to maintain the qualified status of the Award as an Incentive Stock Option or to bring the Award
into compliance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance that may be issued or amended after the Effective
Date.

 

        (ix)  Generally,
to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan or Awards.

 

        (x)   To
adopt such procedures and sub-plans as are necessary or appropriate to permit or facilitate participation in the Plan by Employees,
Directors or Consultants who are foreign nationals or employed outside the United States.

 

        (xi)  To
effect, at any time and from time to time, with the consent of any adversely affected Optionholder, (A) the reduction of the
exercise price of any outstanding Option under the Plan; (B) the cancellation of any outstanding Option under the Plan and
the grant in substitution therefor of (1) a new Option under the Plan or another equity plan of the Company covering the same
or a different number of shares of Common Stock, (2) a Restricted Stock Award (including a stock bonus), (3) a Stock
Appreciation Right, (4) Restricted Stock Unit, (5) an Other Stock Award, (6) cash and/or (7) other valuable
consideration (as determined by the Board, in its sole discretion); or (C) any other action that is treated as a repricing
under generally accepted accounting principles.

 

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        (c)    Delegation
to Committee. 

 

        (i)    General.    The
Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is
delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed
by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any
of the administrative powers the Committee is authorized to exercise (and references in the Plan to the Board shall thereafter
be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the
Committee and may, at any time, revest in the Board some or all of the powers previously delegated to the Committee, Committees,
subcommittee or subcommittees.

 

        (ii)    Section 162(m)
and Rule 16b-3 Compliance.    In the sole discretion of the Board, the Committee may consist solely
of two (2) or more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two (2) or more
Non-Employee Directors, in accordance with Rule 16b-3. In addition, the Board or the Committee, in its sole discretion, may
(A) delegate to a Committee which need not consist of Outside Directors the authority to grant Awards to eligible persons
who are either (1) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income
resulting from such Stock Award, or (2) not persons with respect to whom the Company wishes to comply with Section 162(m)
of the Code, or (B) delegate to a Committee which need not consist of Non-Employee Directors the authority to grant Stock
Awards to eligible persons who are not then subject to Section 16 of the Exchange Act.

 

        (d)    Delegation
to an Officer.    The Board may delegate to one or more Officers the authority to do one or both of the
following (i) designate Employees who are not Officers to be recipients of Options (and, to the extent permitted by applicable
law, other Stock Awards) and the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such
Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation shall specify
the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer
may not grant a Stock Award to himself or herself. Notwithstanding anything to the contrary in this Section 2(d), the Board
may not delegate to an Officer authority to determine the Fair Market Value pursuant to Section 14(v)(ii) below. The
Board may delegate to one of more officers the authority to renew and resolve disputes with respect to Awards held by Participants
who are not an officer or director of the Company or any other person whose transactions in the Company’s common stock are
subject to Section 16 of the Exchange Act.

 

        (e)    Effect
of Board's Decision.    All determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.

 

3.     SHARES SUBJECT
TO THE PLAN.

 

        (a)    Share
Reserve.    Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards shall consist of one million four hundred
eleven thousand seven hundred sixty-five (1,411,765) shares of Common Stock (the "Share Reserve"). In addition,
the number of shares of Common Stock available for issuance under Stock Awards pursuant to the Plan shall automatically increase
on January 1st of each year commencing in 2010 and ending on (and including) January 1, 2019, in an amount equal to the
lesser of (i) five percent (5%) of the total number of shares of Common Stock outstanding on December 31st of the preceding
calendar year, or (ii) a lesser number of shares of Common Stock determined by the Board before the start of a calendar year
for which an increase applies. For clarity, the limitation in this Section 3(a) is a limitation in the number of shares of
the Company's common stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting
of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted
by NASD Rule 4350(i)(1)(A)(iii) or, if applicable, NYSE Listed Company Manual Section 303A.08, or AMEX Company Guide
Section 711 and such issuance shall not reduce the number of shares.

 

        (b)    Reversion
of Shares to the Share Reserve.    If a Stock Award (i) expires or otherwise terminates without having
been exercised in full, (ii) are forfeited back to the Company because of the failure to meet a contingency or condition required
to vest such shares in the Participant or (iii) is settled in cash (i.e., the holder of the Stock Award receives cash rather
than stock), the shares not issued under such Stock Award shall remain available for issuance under the Plan, and such expiration,
termination, forfeiture or settlement shall not reduce (or otherwise offset) the number of shares of the Company's common stock
that may be issued pursuant to the Plan. Also, any shares reacquired by the Company pursuant to subsection 8(g) or as consideration
for the exercise of an Option shall again become available for issuance under the Plan.

 

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        (c)    Incentive
Stock Option Limit.    No more than 4,117,647 shares of common stock shall be issued pursuant to the exercise
of Incentive Stock Options.

 

        (d)    Section 162(m)
Limitation on Annual Grants.    Subject to the provisions of Section 9(a) relating to Capitalization
Adjustments, at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code, no Employee
shall be eligible to be granted during any calendar year Stock Awards whose value is determined by reference to an increase over
an exercise or strike price of at least one hundred percent (100%) of the Fair Market Value on the date the Stock Award is granted
covering more than five hundred thousand (500,000) shares of Common Stock.

 

        (e)    Source
of Shares.    The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
shares of Common Stock, including shares repurchased by the Company on the open market.

 

4.     ELIGIBILITY.

 

        (a)    Eligibility
for Specific Stock Awards.    Incentive Stock Options may be granted only to employees of the Company or
a parent corporation or subsidiary corporation thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock
Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.

 

        (b)    Ten
Percent Stockholders.    A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless
the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and
the Option is not exercisable after the expiration of five (5) years from the date of grant.

 

        (c)    Consultants.    A
Consultant shall be eligible for the grant of a Stock Award only if, at the time of grant, a Form S-8 Registration Statement
under the Securities Act ("Form S-8") is available to register either the offer or the sale of the
Company's securities to such Consultant because of the nature of the services that the Consultant is providing to the Company,
because the Consultant is a natural person, or because of any other rule governing the use of Form S-8.

 

5.     OPTION PROVISIONS.

 

        Each
Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall
be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued,
a separate certificate or certificates shall be issued for shares of Common Stock purchased on exercise of each type of Option.
If an Option is not specifically designated as an Incentive Stock Option, then the Option shall be a Nonstatutory Stock Option.
The provisions of separate Options need not be identical; provided, however, that each Option Agreement shall conform to
(through incorporation of provisions hereof by reference in the Option Agreement or otherwise) the substance of each of the following
provisions:

 

        (a)    Term.
Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option shall be exercisable after the expiration
of ten (10) years from the date of its grant or such shorter period specified in the Option Agreement.

 

        (b)    Exercise
Price.    Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise
price of each Option shall be not less than one hundred percent (100%) of the Fair Market Value subject to the Option on the date
the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than one hundred percent
(100%) of the Fair Market Value subject to the Option if such Option is granted pursuant to an assumption or substitution for another
option in a manner consistent with the provisions of Section 424(a) of the Code (whether or not such options are Incentive
Stock Options).

 

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        (c)    Consideration.    The
purchase price of Common Stock acquired pursuant to the exercise of an Option shall be paid, to the extent permitted by applicable
law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board
shall have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the
ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of
payment. The methods of payment permitted by this Section 5(c) are:

 

        (i)    by
cash, check, bank draft or money order payable to the Company;

 

        (ii)   pursuant
to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock
subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions
to pay the aggregate exercise price to the Company from the sales proceeds;

 

        (iii) by
delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

 

        (iv)  by
a "net exercise" arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable
upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price;
provided, however, that the Company shall accept a cash or other payment from the Participant to the extent of any remaining
balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued; provided,
further, that shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent
that (A) shares issuable upon exercise are reduced to pay the exercise price pursuant to the "net exercise", (B) shares
are delivered to the Participant as a result of such exercise, and/or (C) shares are withheld to satisfy tax withholding obligations;
or

 

        (v)   in
any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable
law.

 

        (d)    Transferability
of Options.    The Board may, in its sole discretion, impose such limitations on the transferability of
Options as the Board shall determine. In the absence of such a determination by the Board to the contrary, the following restrictions
on the transferability of Options shall apply:

 

        (i)    Restrictions
on Transfer.    An Option shall not be transferable except by will or by the laws of descent and distribution
and shall be exercisable during the lifetime of the Optionholder only by the Optionholder; provided, however, that the Board may,
in its sole discretion, permit transfer of the Option in a manner that is not prohibited by applicable tax and/or securities laws
upon the Optionholder's request.

 

        (ii)    Domestic
Relations Orders.    Notwithstanding the foregoing, an Option may be transferred pursuant to a domestic
relations order, provided, however, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory
Stock Option as a result of such transfer.

 

        (iii)    Beneficiary
Designation.    Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the
Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death
of the Optionholder, shall thereafter be entitled to exercise the Option. In the absence of such a designation, the executor or
administrator of the Optionholder's estate shall be entitled to exercise the Option.

 

        (e)    Vesting
of Options Generally.    The total number of shares of Common Stock subject to an Option may vest and therefore
become exercisable in periodic installments that may or may not be equal. The Option may be subject to such other terms and conditions
on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other
criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section 5(e)
are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.

 

        (f)    Termination
of Continuous Service.    Except as otherwise provided in the applicable Option Agreement or any other
written agreement between the Optionholder and the Company, in the event that an Optionholder's Continuous Service terminates (other
than for Cause or upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent
that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous Service) but only within
such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term
of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise
his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate.

 

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        (g)    Extension
of Termination Date.    An Optionholder's Option Agreement may provide that if the exercise of the Option
following the termination of the Optionholder's Continuous Service (other than for Cause or upon the Optionholder's death or Disability)
would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements
under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of a period of three (3) months
after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation
of such registration requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement.

 

        (h)    Disability
of Optionholder.    In the event that an Optionholder's Continuous Service terminates as a result of the
Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to
exercise such Option as of the date of termination of Continuous Service), but only within such period of time ending on the earlier
of (i) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination of Continuous Service, the Optionholder does not exercise his or her Option within the time specified herein
or in the Option Agreement (as applicable), the Option shall terminate.

 

        (i)    Death
of Optionholder.    In the event that (i) an Optionholder's Continuous Service terminates as a result
of the Optionholder's death, or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after
the termination of the Optionholder's Continuous Service for a reason other than death, then the Option may be exercised (to the
extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a person
who acquired the right to exercise the Option by bequest or inheritance or, if applicable, by a person designated as the beneficiary
of the option upon the Optionholder's death, but only within the period ending on the earlier of (A) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Option Agreement), or (B) the expiration of
the term of such Option as set forth in the Option Agreement. If, after the Optionholder's death, the Option is not exercised within
the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. If the Optionholder designates
a third party beneficiary of the Option in accordance with Section 5(d)(iii), then upon the death of the Optionholder such
designated beneficiary shall have the sole right to exercise the Option and receive the Common Stock or other consideration resulting
from an Option exercise.

 

        (j)    Termination
for Cause.    Except as explicitly provided otherwise in an Optionholder's Option Agreement or any other
written agreement between the Optionholder and the Company, in the event that an Optionholder's Continuous Service is terminated
for Cause, the Option shall terminate upon the termination date of such Optionholder's Continuous Service, and the Optionholder
shall be prohibited from exercising his or her Option from and after the time of such termination of Continuous Service.

 

        (k)    Non-Exempt
Employees.    No Option granted to an Employee that is a non-exempt employee for purposes of the Fair Labor
Standards Act shall be first exercisable for any shares of Common Stock until at least six months following the date of grant of
the Option. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with
the exercise or vesting of an Option will be exempt from his or her regular rate of pay.

 

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6.     PROVISIONS
OF STOCK AWARDS OTHER THAN OPTIONS.

 

        (a)    Restricted
Stock Awards.    Each Restricted Stock Award Agreement shall be in such form and shall contain such terms
and conditions as the Board shall deem appropriate. To the extent consistent with the Company's Bylaws, at the Board's election,
shares of Common Stock may be (x) held in book entry form subject to the Company's instructions until any restrictions relating
to the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate shall be held in such form and manner
as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Award Agreements need not be identical, provided, however, that each Restricted
Stock Award Agreement shall include (through incorporation of the provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

 

        (i)    Consideration.    A
Restricted Stock Award may be awarded in consideration for (A) past or future services actually or to be rendered to the Company
or an Affiliate, or (B) any other form of legal consideration that may be acceptable to the Board in its sole discretion and
permissible under applicable law.

 

        (ii)    Vesting.    Shares
of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with
a vesting schedule to be determined by the Board.

 

        (iii)    Termination
of Participant's Continuous Service.    In the event a Participant's Continuous Service terminates, the
Company may receive via a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant
which have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.

 

        (iv)    Transferability.    Rights
to acquire shares of Common Stock under the Restricted Stock Award Agreement shall be transferable by the Participant only upon
such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board shall determine in its sole discretion,
so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock
Award Agreement.

 

        (b)    Restricted
Stock Unit Awards.    Each Restricted Stock Unit Award Agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements
may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical,
provided, however, that each Restricted Stock Unit Award Agreement shall conform to (through incorporation of the provisions
hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

 

        (i)    Consideration.    At
the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by
the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration
that may be acceptable to the Board in its sole discretion and permissible under applicable law.

 

        (ii)    Vesting.    At
the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions or conditions to the vesting of
the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

 

        (iii)    Payment.    A
Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof
or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

 

        (iv)    Additional
Restrictions.    At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate,
may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject
to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

 

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        (v)    Dividend
Equivalents.    Dividend equivalents may be credited in respect of shares of Common Stock covered by a
Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole
discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted
Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited
by reason of such dividend equivalents will be subject to all the terms and conditions of the underlying Restricted Stock Unit
Award Agreement to which they relate.

 

        (vi)    Termination
of Participant's Continuous Service.    Except as otherwise provided in the applicable Restricted Stock
Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant's
termination of Continuous Service.

 

        (vii)    Compliance
with Section 409A of the Code.    Notwithstanding anything to the contrary set forth herein, any Restricted
Stock Unit Award granted under the Plan that is not exempt from the requirements of Section 409A of the Code shall incorporate
terms and conditions necessary to avoid the consequences of Section 409A(a)(1) of the Code. Such restrictions, if any, shall
be determined by the Board and contained in the Restricted Stock Unit Award Agreement evidencing such Restricted Stock Unit Award.
For example, such restrictions may include, without limitation, a requirement that any Common Stock that is to be issued in a year
following the year in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed pre-determined schedule.

 

        (c)    Stock
Appreciation Rights.    Each Stock Appreciation Right Agreement shall be in such form and shall contain
such terms and conditions as the Board shall deem appropriate. Stock Appreciation Rights may be granted as stand-alone Stock Awards
or in tandem with other Stock Awards. The terms and conditions of Stock Appreciation Right Agreements may change from time to time,
and the terms and conditions of separate Stock Appreciation Right Agreements need not be identical; provided, however, that
each Stock Appreciation Right Agreement shall conform to (through incorporation of the provisions hereof by reference in the Agreement
or otherwise) the substance of each of the following provisions:

 

        (i)    Term.    No
Stock Appreciation Right shall be exercisable after the expiration of ten (10) years from the date of its grant or such shorter
period specified in the Stock Appreciation Right Agreement.

 

        (ii)    Strike
Price.    Each Stock Appreciation Right will be denominated in shares of Common Stock equivalents. The
strike price of each Stock Appreciation Right shall not be less than one hundred percent (100%) of the Fair Market Value equivalents
subject to the Stock Appreciation Right on the date of grant.

 

        (iii)    Calculation
of Appreciation.    The appreciation distribution payable on the exercise of a Stock Appreciation Right
will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise
of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number of shares of Common Stock equivalents
in which the Participant is vested under such Stock Appreciation Right, and with respect to which the Participant is exercising
the Stock Appreciation Right on such date, over (B) the strike price that will be determined by the Board at the time of grant
of the Stock Appreciation Right.

 

        (iv)    Vesting.    At
the time of the grant of a Stock Appreciation Right, the Board may impose such restrictions or conditions to the vesting of such
Stock Appreciation Right as it, in its sole discretion, deems appropriate.

 

        (v)    Exercise.    To
exercise any outstanding Stock Appreciation Right, the Participant must provide written notice of exercise to the Company in compliance
with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right.

 

        (vi)    Payment.    The
appreciation distribution in respect to a Stock Appreciation Right may be paid in Common Stock, in cash, in any combination of
the two or in any other form of consideration, as determined by the Board and set forth in the Stock Appreciation Right Agreement
evidencing such Stock Appreciation Right.

 

    	8

    	 

    

 

        (vii)    Termination
of Continuous Service.    In the event that a Participant's Continuous Service terminates other than for
Cause, the Participant may exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise
such Stock Appreciation Right as of the date of termination of Continuous Service) but only within such period of time ending on
the earlier of (A) the date three (3) months following the termination of the Participant's Continuous Service (or such
longer or shorter period specified in the Stock Appreciation Right Agreement), or (B) the expiration of the term of the Stock
Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after termination of Continuous Service, the Participant
does not exercise his or her Stock Appreciation Right within the time specified herein or in the Stock Appreciation Right Agreement
(as applicable), the Stock Appreciation Right shall terminate.

 

        (viii)    Termination
for Cause.    Except as explicitly provided otherwise in an Participant's Stock Appreciation Right Agreement,
in the event that a Participant's Continuous Service is terminated for Cause, the Stock Appreciation Right shall terminate upon
the termination date of such Participant's Continuous Service, and the Participant shall be prohibited from exercising his or her
Stock Appreciation Right from and after the time of such termination of Continuous Service.

 

        (ix)    Compliance
with Section 409A of the Code.    Notwithstanding anything to the contrary set forth herein, any Stock
Appreciation Rights granted under the Plan that are not exempt from the requirements of Section 409A of the Code shall incorporate
terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. Such restrictions, if
any, shall be determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation
Right. For example, such restrictions may include, without limitation, a requirement that a Stock Appreciation Right that is to
be paid wholly or partly in cash must be exercised and paid in accordance with a fixed pre-determined schedule.

 

        (d)    Performance
Awards.    

 

        (i)    Performance
Stock Awards.    A Performance Stock Award is a Stock Award that may be granted, may vest, or may be exercised
based upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock Award may, but need not,
require the completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals
to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained
shall be conclusively determined by the Committee in its sole discretion. The maximum number of shares that may be granted to any
Participant in a calendar year attributable to Performance Stock Awards described in this Section 6(d)(i) shall not exceed
five hundred thousand (500,000) shares of Common Stock. In addition, to the extent permitted by applicable law and the applicable
Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.

 

        (ii)    Performance
Cash Awards.    A Performance Cash Award is a cash award that may be granted upon the attainment during
a Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period
of Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period,
and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the
Committee in its sole discretion. The maximum value that may be granted to any Participant in any calendar year attributable to
cash awards described in this Section 6(d)(ii) shall not exceed one million dollars ($1,000,000). The Board may provide
for or, subject to such terms and conditions as the Board may specify, may permit a Participant to elect for, the payment of any
Performance Cash Award to be deferred to a specified date or event. The Committee may specify the form of payment of Performance
Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance
Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property. In addition,
to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that Common Stock authorized
under the Plan may be used in payment of Performance Cash Awards, including additional shares in excess of the Performance Cash
Award as an inducement to hold shares of Common Stock.

 

    	9

    	 

    

 

        (e)    Other
Stock Awards.    Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based
on, Common Stock may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding
provisions of this Section 6. Subject to the provisions of the Plan, the Board shall have sole and complete authority to determine
the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock
(or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other
Stock Awards.

 

7.     COVENANTS OF
THE COMPANY.

 

        (a)    Availability
of Shares.    During the terms of the Stock Awards, the Company shall keep available at all times the number
of shares of Common Stock required to satisfy such Stock Awards.

 

        (b)    Securities
Law Compliance.    The Company shall seek to obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise
of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities
Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems
necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained.

 

        (c)    No
Obligation to Notify.    The Company shall have no duty or obligation to any holder of a Stock Award to
advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company shall have no duty or obligation
to warn or otherwise advise such holder of a pending termination or expiration of a Stock Award or a possible period in which the
Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the
holder of such Stock Award.

 

8.     MISCELLANEOUS.

 

        (a)    Use
of Proceeds from Sales of Common Stock.    Proceeds from the sale of shares of Common Stock pursuant to
Stock Awards shall constitute general funds of the Company.

 

        (b)    Corporate
Action Constituting Grant of Stock Awards.    Corporate action constituting a grant by the Company of a
Stock Award to any Participant shall be deemed completed as of the date of such corporate action, unless otherwise determined by
the Board, regardless of when the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually
received or accepted by, the Participant.

 

        (c)    Stockholder
Rights.    No Participant shall be deemed to be the holder of, or to have any of the rights of a holder
with respect to, any shares of Common Stock subject to such Stock Award unless and until (i) such Participant has validly
exercised the Stock Award pursuant to its terms and (ii) the issuance of the Common Stock pursuant to such exercise has been
entered into the books and records of the Company.

 

        (d)    No
Employment or Other Service Rights.    Nothing in the Plan, any Stock Award Agreement or other instrument
executed thereunder or in connection with any Award granted pursuant to the Plan shall confer upon any Participant any right to
continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect
the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or
without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant's agreement with the Company or an
Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions
of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

 

    	10

    	 

    

 

        (e)    Incentive
Stock Option $100,000 Limitation.    To the extent that the aggregate Fair Market Value (determined at
the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder
during any calendar year (under all plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory
Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

 

        (f)    Investment
Assurances.    The Company may require a Participant, as a condition of exercising or acquiring Common
Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant's knowledge
and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together
with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant's
own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements,
and any assurances given pursuant to such requirements, shall be inoperative if (x) the issuance of the shares upon the exercise
or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement
under the Securities Act, or (y) as to any particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of
counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate
in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common
Stock.

 

        (g)    Withholding
Obligations.    Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its sole
discretion, satisfy any federal, state or local tax withholding obligation relating to an Award by any of the following means (in
addition to the Company's right to withhold from any compensation paid to the Participant by the Company) or by a combination of
such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares
of Common Stock issued or otherwise issuable to the Participant in connection with the Award; provided, however, that no shares
of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lower amount
as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding
cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by
such other method as may be set forth in the Award Agreement.

 

        (h)    Electronic
Delivery.    Any reference herein to a "written" agreement or document shall include any agreement
or document delivered electronically or posted on the Company's intranet.

 

        (i)    Deferrals.    To
the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the
payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs
and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A
of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still
an employee. The Board is authorized to make deferrals of Stock Awards and determine when, and in what annual percentages, Participants
may receive payments, including lump sum payments, following the Participant's termination of employment or retirement, and implement
such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

 

        (j)    Compliance
with Section 409A of the Code.    To the extent that the Board determines that any Award granted under
the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and
conditions necessary to avoid the consequences described in Section 409A(a)(1) of the Code. To the extent applicable, the
Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and related Department of Treasury
guidance. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Board determines
that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance, the Board may adopt
such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (i) exempt
the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to
the Award, or (ii) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

 

    	11

    	 

    

 

9.     ADJUSTMENTS
UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.

 

        (a)    Capitalization
Adjustments.    In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately
adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the
class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c),
(iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Section 3(d) and 6(d)(i),
and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board
shall make such adjustments, and its determination shall be final, binding and conclusive.

 

        (b)    Dissolution
or Liquidation.    Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution
or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares
of Common Stock not subject to a forfeiture condition or the Company's right of repurchase) shall terminate immediately prior to
the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company's repurchase rights may
be repurchased by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided,
however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or
no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before
the dissolution or liquidation is completed but contingent on its completion.

 

        (c)    Corporate
Transaction.    The following provisions shall apply to Stock Awards in the event of a Corporate Transaction
unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any
Affiliate and the holder of the Stock Award.

 

        (i)    Stock
Awards May Be Assumed.    Except as otherwise stated in the Stock Award Agreement, in the event of a Corporate
Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation's parent company) may
assume or continue any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding
under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company
pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock
issued pursuant to Stock Awards may be assigned by the Company to the successor of the Company (or the successor's parent company,
if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose
to assume or continue only a portion of a Stock Award or substitute a similar stock award for only a portion of a Stock Award.
The terms of any assumption, continuation or substitution shall be set by the Board in accordance with the provisions of Section 2.

 

        (ii)    Stock
Awards Held by Current Participants.    Except as otherwise stated in the Stock Award Agreement, in the
event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume
or continue such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards in accordance with
subsection (i) above, then with respect to Stock Awards that have not been assumed, continued or substituted and that are
held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred
to as the "Current Participants"), the vesting of such Stock Awards (and, with respect to Options and Stock
Appreciation Rights, the time at which such Stock Awards may be exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of such Corporate Transaction as the Board shall determine
(or, if the Board shall not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate
Transaction), and such Stock Awards shall terminate if not exercised (if applicable) at or prior to the effective time of the Corporate
Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall lapse (contingent
upon the effectiveness of the Corporate Transaction).

 

    	12

    	 

    

 

        (iii)    Stock
Awards Held by Persons other than Current Participants.    Except as otherwise stated in the Stock Award
Agreement, in the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company)
does not assume or continue such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards
in accordance with subsections (i) or (ii) above, respectively, then with respect to Stock Awards that have not been
assumed, continued or substituted and that are held by persons other than Current Participants, the vesting of such Stock Awards
(and, if applicable, the time at which such Stock Award may be exercised) shall not be accelerated and such Stock Awards (other
than a Stock Award consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company's
right of repurchase) shall terminate if not exercised (if applicable) prior to the effective time of the Corporate Transaction;
provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall
not terminate and may continue to be exercised notwithstanding the Corporate Transaction.

 

        (iv)    Payment
for Stock Awards in Lieu of Exercise.    Notwithstanding the foregoing, in the event a Stock Award will
terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion,
that the holder of such Stock Award may not exercise such Stock Award but will receive a payment, in such form as may be determined
by the Board, equal in value to the excess, if any, of (A) the value of the property the holder of the Stock Award would have
received upon the exercise of the Stock Award (including, at the discretion of the Board, any unvested portion of such Stock Award),
over (B) any exercise price payable by such holder in connection with such exercise.

 

        (d)    Change
in Control.    A Stock Award may be subject to additional acceleration of vesting and exercisability upon
or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any
other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such
acceleration shall occur.

 

10.   TERMINATION OR SUSPENSION
OF THE PLAN.

 

        (a)    Plan
Term.    Unless sooner terminated by the Board pursuant to Section 2, the Plan shall automatically
terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders
of the Company, whichever is earlier. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

        (b)    No
Impairment of Rights.    Suspension or termination of the Plan shall not impair rights and obligations
under any Award granted while the Plan is in effect except with the written consent of the affected Participant.

 

11.   EFFECTIVE DATE OF PLAN.

 

        The
Plan shall become effective on the Effective Date. Prior to the Effective Date, the Prior Plan is unaffected by the Plan, and Stock
Awards shall continue to be granted from the Prior Plan. If the Plan has not been approved by the stockholders of the Company within
twelve (12) months before or after the date the Plan is adopted by the Board, the adoption of the Plan shall be null and void
and the Prior Plan shall continue unaffected by the adoption of the Plan.

 

12.   CHOICE OF LAW.

 

        The
law of the State of California shall govern all questions concerning the construction, validity and interpretation of the Plan,
without regard to such state's conflict of laws rules.

13. AUTOMATIC GRANTS TO NON-EMPLOYEE
DIRECTORS.

 

13.1 Eligibility.
Non-Employee Directors are eligible for Options granted pursuant to this Section 13. Notwithstanding the foregoing, this Section 13
does not limit the ability of the Board to grant discretionary Awards to Non-Employee Directors.

13.2 Initial
Grant. Each Non-Employee Director who has not received an option to purchase Common Stock in the twelve (12) month period
immediately preceding the Effective Date (the “Initial Twelve Month Period”) and who is or who becomes a member of
the Board on the Effective Date will automatically be granted an Option to purchase fifty thousand (50,000) Shares on the
Effective Date. Each Non-Employee Director who first becomes a member of the Board after the Effective Date will automatically
be granted an Option to purchase fifty thousand (50,000) Shares on the date such Non-Employee Director first becomes a member
of the Board. Each Option granted pursuant to this Section 13.2 shall be called an “Initial Grant.”

    	13

    	 

    

 

13.3 Succeeding
Grant. On the first business day following the annual meeting of the Company’s Stockholders, each Non-Employee Director
who is continuing in service as a member of the Board will on the first business day following such annual meeting of stockholders
automatically be granted an Option to purchase twenty thousand (20,000) Shares. Each Option granted pursuant to this Section 13.3
shall be called a “Succeeding Grant”.

 

13.4 Vesting
and Exercisability.

 

(a) Initial Grants.
Initial Grants shall vest and become exercisable as to 1/36 of the total Shares subject to the Initial Grant on each monthly anniversary
of the date of grant, such that Initial Grants are fully vested and exercisable on the third anniversary of the date of grant,
so long as the Non-Employee Director continuously remains a director, consultant or employee of the Company.

 

(b) Succeeding Grants.
Succeeding Grants shall vest and become exercisable as to 1/12 of the total Shares subject to the Succeeding Grant on each monthly
anniversary of the date of grant, such that Succeeding Grants are fully vested and exercisable on the first anniversary of the
date of grant, so long as the Non-Employee Director continuously remains a director, consultant or employee of the Company.

 

(c) Change In
Control. In the event of a Change In Control, the vesting of all Options granted to Non-Employee Directors pursuant to this
Section 13 whose service as a director has not terminated before the consummation of the Change in Control shall accelerate
and such Options will become exercisable in full immediately prior to the consummation of the Change In Control at such times and
on such conditions as the Committee determines.

 

13.5 Form of
Option Grant. Each Option granted under this Section 13 shall be a NSO and shall be evidenced by a Non-Employee Director
Stock Award Agreement in such form as the Board from time to time approve and which shall comply with and be subject to the terms
and conditions of this Plan.

 

13.6 Exercise
Price. The Exercise Price per Share of each Option granted under this Section 13 shall be the Fair Market Value of the
Share on the date the Option is granted.

 

13.7 Termination
of Option. Except as provided in Section 13.4(c) or this Section 13.7, each Option granted under this Section 13
shall expire ten (10) years after its date of grant. The date on which the Non-Employee Director ceases to be a member of
the Board, a consultant or employee of the Company shall be referred to as the “Non-Employee Director Termination Date”
for purposes of this Section 13.7. An Option may be exercised after the Non-Employee Director Termination Date only as set
forth below:

 

(a) Termination
Generally. If the Non-Employee Director ceases to be a member of the Board, consultant or employee of the Company for any reason
except death, Disability or Change In Control, each Initial Grant and Succeeding Grant, to the extent then vested pursuant to Section 13.4
above, then held by such Non-Employee Director may be exercised by the Non-Employee Director within twelve (12) months after the
Non-Employee Director Termination Date, but in no event later than the Expiration Date.

 

(b) Death.
If the Non-Employee Director ceases to be a member of the Board, consultant or employee of the Company because of his or her death,
then each Initial Grant and Succeeding Grant, to the extent then vested pursuant to Section 13.4 above, then held by such
Non-Employee Director, may be exercised by the Non-Employee Director or his or her legal representative within twelve (12) months
after the Non-Employee Director Termination Date, but in no event later than the Expiration Date.

 

(c) Disability.
If the Non-Employee Director ceases to be a member of the Board, consultant or employee of the Company because of his or her Disability,
then each Initial Grant and Succeeding Grant, to the extent then vested pursuant to Section 13.4 above, then held by such
Non-Employee Director, may be exercised by the Non-Employee Director or his or her legal representative within twelve (12) months
after the Non-Employee Director Termination Date, but in no event later than the Expiration Date.

 

    	14

    	 

    

 

(d) Change In
Control. If the Non-Employee Director ceases to be a member of the Board, consultant or employee of the Company because of
a Change In Control, then each Initial Grant and Succeeding Grant, to the extent then vested pursuant to Section 13.4 above,
then held by such Non-Employee Director, may be exercised by the Non-Employee Director or his or her legal representative within
twelve (12) months after the Non-Employee Director Termination Date, but in no event later than the Expiration Date.

 

14.    DEFINITIONS.    As
used in the Plan, the definitions contained in this Section 14 shall apply to the capitalized terms indicated below:

 

        (a)    "Affiliate"    means,
at the time of determination, any "parent" or "subsidiary" of the Company as such terms are defined in Rule 405
of the Securities Act. The Board shall have the authority to determine the time or times at which "parent" or "subsidiary"
status is determined within the foregoing definition.

 

        (b)    "Award"    means
a Stock Award or a Performance Cash Award.

 

        (c)    "Board"    means
the Board of Directors of the Company.

 

        (d)    "Capitalization
Adjustment"    means any change that is made in, or other events that occur with respect to, the
Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by
the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property
other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or
other transaction not involving the receipt of consideration by the Company). Notwithstanding the foregoing, the conversion of
any convertible securities of the Company shall not be treated as a transaction "without receipt of consideration" by
the Company.

 

        (e)    "Cause"    means
with respect to a Participant, the occurrence of any of the following events: (i) such Participant's commission of any felony
or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such
Participant's attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant's
intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed
to the Company; (iv) such Participant's unauthorized use or disclosure of the Company's confidential information or trade
secrets; or (v) such Participant's gross misconduct. The determination that a termination of the Participant's Continuous
Service is either for Cause or without Cause shall be made by the Company in its sole discretion. Any determination by the Company
that the Continuous Service of a Participant was terminated by reason of dismissal without Cause for the purposes of outstanding
Awards held by such Participant shall have no effect upon any determination of the rights or obligations of the Company or such
Participant for any other purpose.

 

        (f)    "Change
in Control"    means the occurrence, in a single transaction or in a series of related transactions,
of any one or more of the following events:

 

        (i)    any
Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company's then outstanding securities other than by virtue of a merger, consolidation
or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the Company
in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through
the issuance of equity securities or (B) solely because the level of Ownership held by any Exchange Act Person (the "Subject
Person") exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase
or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company,
and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase
or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject
Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;

 

    	15

    	 

    

 

        (ii)   there
is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after
the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto
do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of
the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more
than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation
or similar transaction, in each case in substantially the same proportions relative to each other as their Ownership of the outstanding
voting securities of the Company immediately prior to such transaction;

 

        (iii) the
stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete
dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation;

 

        (iv)  there
is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting
securities of which are Owned by stockholders of the Company in substantially the same proportions relative to each other as their
Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition;
or

 

        (v)   individuals
who, immediately following the Effective Time, are members of the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the members of the Board; (provided, however, that if the appointment or
election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of
the Incumbent Board then still in office, such new member shall, for purposes of the Plan, be considered as a member of the Incumbent
Board).

 

        Notwithstanding
the foregoing or any other provision of the Plan, the definition of Change in Control (or any analogous term) in an individual
written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect
to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term
is set forth in such an individual written agreement, the foregoing definition shall apply.

 

        The
Board may, in its sole discretion and without Participant consent, amend the definition of "Change in Control" to conform
to the definition of "Change of Control" under Section 409A of the Code and related Department of Treasury guidance,
and the foregoing definition shall be interpreted so as to only include events that constitute a change in control under Section
409A of the Code and related Department of Treasury regulations and guidance.

 

        (g)    "Code"    means
the Internal Revenue Code of 1986, as amended.

 

        (h)    "Committee"    means
a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

 

        (i)    "Common
Stock"    means the common stock of the Company.

 

        (j)    "Company"    means
Adamis Pharmaceuticals Corporation (formerly Cellegy Pharmaceuticals, Inc.), a Delaware corporation.

 

        (k)    "Consultant"    means
any person, including an advisor, who is (i)  engaged by the Company or an Affiliate to render consulting or advisory services
and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated
for such services. However, service solely as a Director, or payment of a fee for such service, shall not cause a Director to be
considered a "Consultant" for purposes of the Plan.

 

    	16

    	 

    

 

        (l)    "Continuous
Service"    means that the Participant's service with the Company or an Affiliate, whether as
an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of the Participant's service with the Company or an
Affiliate, shall not terminate a Participant's Continuous Service. For example, a change in status from an employee of the Company
to a Consultant (whether to the Company or to an Affiliate) or to a Director shall not constitute an interruption of Continuous
Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party's sole discretion,
may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party,
including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated
as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company's leave of
absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise
required by law.

 

        (m)    "Corporate
Transaction"    means the occurrence, in a single transaction or in a series of related transactions,
of any one or more of the following events:

 

        (i)    a
sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets
of the Company and its Subsidiaries;

 

        (ii)   a
sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company;

 

        (iii) the
consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

 

        (iv)  the
consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged
by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

 

        (n)    "Covered
Employee"    shall have the meaning provided in Section 162(m)(3) of the Code and the regulations
promulgated thereunder.

 

        (o)    "Director"    means
a member of the Board.

 

        (p)    "Disability"    means,
with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code.

 

        (q)    "Effective
Date"    means the date of the closing of the merger transaction contemplated by the Agreement
and Plan of Reorganization dated as of February 12, 2008, entered into by and among Cellegy Pharmaceuticals, Inc., Cellegy Holdings,
Inc., and Adamis Pharmaceuticals Corporation.

 

        (r)    "Employee"    means
any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services,
shall not cause a Director to be considered an "Employee" for purposes of the Plan.

 

        (s)    "Entity"    means
a corporation, partnership, limited liability company or other entity.

 

        (t)    "Exchange
Act"    means the Securities Exchange Act of 1934, as amended.

 

        (u)    "Exchange
Act Person"    means any natural person, Entity or "group" (within the meaning of Section 13(d)
or 14(d) of the Exchange Act), except that "Exchange Act Person" shall not include (i) the Company or any Subsidiary
of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person,
Entity or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date,
is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting
power of the Company's then outstanding securities.

 

    	17

    	 

    

 

        (v)    "Fair
Market Value"    means, as of any date, the value of the Common Stock determined as follows:

 

        (i)    If
the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share
of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination,
as reported in The Wall Street Journal or such other source as the Board deems reliable. Unless otherwise provided by the
Board, if there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the date of determination,
then the Fair Market Value shall be the closing selling price (or closing bid if no sales were reported) on the last preceding
date for which such quotation exists.

 

        (ii)   In
the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good faith and in a
manner that complies with Section 409A of the Code.

 

        (w)    "Incentive
Stock Option"    means an Option granted pursuant to Section 5 of the Plan that is intended
to be, and qualifies as, an "incentive stock option" within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

 

        (x)    "Non-Employee
Director"    means a Director who either (i) is not a current Employee or Officer of the
Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services
rendered as a Consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act ("Regulation S-K")),
does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K,
and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K;
or (ii) is otherwise considered a "non-employee director" for purposes of Rule 16b-3.

 

        (y)    "Nonstatutory
Stock Option"    means any Option granted pursuant to Section 5 of the Plan that does not
qualify as an Incentive Stock Option.

 

        (z)    "Officer"    means
a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

 

        (aa)    "Option"    means
an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

 

        (bb)    "Option
Agreement"    means a written agreement between the Company and an Optionholder evidencing the
terms and conditions of an Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.

 

        (cc)    "Optionholder"    means
a person to whom an Option is granted pursuant to the Plan or, if permitted under the terms of the Plan, such other person who
holds an outstanding Option.

 

        (dd)    "Other
Stock Award"    means an award based in whole or in part by reference to the Common Stock which
is granted pursuant to the terms and conditions of Section 6(e).

 

        (ee)    "Other
Stock Award Agreement"    means a written agreement between the Company and a holder of an Other
Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject
to the terms and conditions of the Plan.

 

        (ff)    "Outside
Director"    means a Director who either (i) is not a current employee of the Company or
an "affiliated corporation" (within the meaning of Treasury Regulations promulgated under Section 162(m) of the
Code), is not a former employee of the Company or an "affiliated corporation" who receives compensation for prior services
(other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or
an "affiliated corporation," and does not receive remuneration from the Company or an "affiliated corporation,"
either directly or indirectly, in any capacity other than as a Director, or (ii) is otherwise considered an "outside
director" for purposes of Section 162(m) of the Code.

 

    	18

    	 

    

 

        (gg)    "Own,"
"Owned," "Owner," "Ownership"    A person or Entity shall be deemed to
"Own," to have "Owned," to be the "Owner" of, or to have acquired "Ownership" of securities
if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise,
has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

 

        (hh)    "Participant"    means
a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

 

        (ii)    "Performance
Cash Award"    means an award of cash granted pursuant to the terms and conditions of Section 6(d)(ii).

 

        (jj)    "Performance
Criteria"    means the one or more criteria that the Board shall select for purposes of establishing
the Performance Goals for a Performance Period. The Performance Criteria that shall be used to establish such Performance Goals
may be based on any one of, or combination of, the following: (i) earnings per share; (ii) earnings before interest,
taxes and depreciation; (iii) earnings before interest, taxes, depreciation and amortization; (iv) total stockholder
return; (v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating margin; (viii) gross
margin; (ix) operating income; (x) net income (before or after taxes); (xi) net operating income; (xii) net
operating income after tax; (xiii) pre-tax profit; (xiv) operating cash flow; (xv) sales or revenue targets; (xvi) increases
in revenue or product revenue; (xvii) expenses and cost reduction goals; (xviii) improvement in or attainment of working
capital levels; (xix) economic value added (or an equivalent metric); (xx) market share; (xxi) cash flow; (xxii) cash
flow per share; (xxiii) share price performance; (xxiv) debt reduction; (xxv) implementation or completion of projects
or processes; (xxvi) customer satisfaction; (xxvii) completion of regulatory or development milestones; (xxviii) stockholders'
equity; and (xxix) to the extent that an Award is not intended to comply with Section 162(m) of the Code, other measures
of performance selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting corresponding
to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award. The Board
shall, in its sole discretion, define the manner of calculating the Performance Criteria it selects to use for such Performance
Period.

 

        (kk)    "Performance
Goals"    means, for a Performance Period, the one or more goals established by the Board for
the Performance Period based upon the satisfaction of the Performance Criteria. Performance Goals may be based on a Company-wide
basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or
relative to the performance of one or more comparable companies or the performance of one or more relevant indices. At the time
of the grant of any Award, the Board is authorized to determine whether, when calculating the attainment of Performance Goals for
a Performance Period: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects,
as applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the effects of changes to
generally accepted accounting standards required by the Financial Accounting Standards Board; (iv) to exclude the effects
of any statutory adjustments to corporate tax rates; and (v) to exclude the effects of any "extraordinary items"
as determined under generally accepted accounting principles. In addition, the Board retains the discretion to reduce or eliminate
the compensation or economic benefit due upon attainment of Performance Goals.

 

        (ll)    "Performance
Period"    means the period of time selected by the Board over which the attainment of one or
more Performance Goals will be measured for the purpose of determining a Participant's right to and the payment of a Stock Award
or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.

 

        (mm)    "Performance
Stock Award"    means a Stock Award granted under the terms and conditions of Section 6(d)(i).

 

        (nn)    "Plan"    means
this Adamis Pharmaceuticals, Inc. 2009 Equity Incentive Plan.

 

    	19

    	 

    

 

        (oo)    "Restricted
Stock Award"    means an award of shares of Common Stock which is granted pursuant to the terms
and conditions of Section 6(a).

 

        (pp)    "Restricted
Stock Award Agreement"    means a written agreement between the Company and a holder of a Restricted
Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement shall
be subject to the terms and conditions of the Plan.

 

        (qq)    "Restricted
Stock Unit Award"    means an unfunded right to receive shares of Common Stock at a future date
which is granted pursuant to the terms and conditions of Section 6(b).

 

        (rr)    "Restricted
Stock Unit Award Agreement"    means a written agreement between the Company and a holder of a
Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit
Award Agreement shall be subject to the terms and conditions of the Plan.

 

        (ss)    "Rule 16b-3"    means
Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

 

        (tt)    "Securities
Act"    means the Securities Act of 1933, as amended.

 

        (uu)    "Stock
Appreciation Right"    means a right to receive the appreciation on Common Stock that is granted
pursuant to the terms and conditions of Section 6(c).

 

        (vv)    "Stock
Appreciation Right Agreement"    means a written agreement between the Company and a holder of
a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right
Agreement shall be subject to the terms and conditions of the Plan.

 

        (ww)    "Stock
Award"    means any right to receive Common Stock granted under the Plan, including an Incentive
Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right,
a Performance Stock Award or any Other Stock Award.

 

        (xx)    "Stock
Award Agreement"    means a written agreement between the Company and a Participant evidencing
the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the
Plan.

 

        (yy)    "Subsidiary"    means,
with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time,
stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company
or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits
or capital contribution) of more than fifty percent (50%).

 

        (zz)    "Ten
Percent Stockholder"    means a person who Owns (or is deemed to Own pursuant to Section 424(d)
of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company
or any Affiliate.

 

    	20Adamis Pharmaceuticals Corporation 10-Q

 

EXHIBIT 10.4

  

NEITHER THIS SECURITY NOR THE SECURITIES
FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

 

ADAMIS
PHARMACEUTICALS CORPORATION

	Warrant Shares: ___________ 	Initial Exercise Date: June 26, 2013

THIS COMMON STOCK
PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _________________________ or its assigns
(the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close
of business on the five (5) year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Adamis Pharmaceuticals Corporation, a Delaware corporation (the “Company”),
up to ___________________ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock.
The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

Section 1.Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Subscription Agreement
(the “Purchase Agreement”), dated June 26, 2013, among the Company and the purchasers signatory thereto.

Section 2.Exercise.

a)                 
Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or
after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency
of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the
books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days
following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in
the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise
procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. Notwithstanding anything herein to
the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the Company), the Holder
shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company
for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises
of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect
of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant
Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date
of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Trading Day of delivery
of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions
of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.

    	

    	 

    

b)                 
Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $0.715, subject
to adjustment hereunder (the “Exercise Price”).

c)                 
Cashless Exercise. If at any time commencing 120 days after the Initial Exercise Date, there is no effective Registration
Statement registering, or no current prospectus available for the resale of the Warrant Shares by the Holder, then this Warrant
may also be exercised at the Holder’s election, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B)
(X)] by (A), where:

	(A) =	 the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;
	 	 
	(B) =	the Exercise Price of this Warrant,
as adjusted hereunder; and 
	 	 
	(X) =	the number of Warrant Shares that
would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of
a cash exercise rather than a cashless exercise.

  

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the volume weighted average price of the Common Stock on the first
such facility (or a similar organization or agency succeeding to its functions of reporting prices), or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers
of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

    	2

    	 

    

 

Notwithstanding
anything herein to the contrary, on the Termination Date, if there is no effective Registration Statement registering, or no current
prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant shall be automatically exercised via
cashless exercise pursuant to this Section 2(c).

 

d)                
Mechanics of Exercise.

                                                             
i.      Delivery of Certificates
Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Transfer Agent (“Transfer Agent”
means the transfer agent employed by the Company from time to time, for its Common Stock, warrants or other securities) to the
Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal
at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder
or (B) this Warrant is being exercised via cashless exercise and Rule 144 is available, and otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the latest of (A) the
delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required) and (C) payment of the aggregate
Exercise Price as set forth above (including by cashless exercise, if permitted) (such date, the “Warrant Share Delivery
Date”). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to
be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. The Company
understands that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss
to the Holder. As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty)
to the Holder for late issuance of Warrant Shares upon exercise of this Warrant the proportionate amount of $100 per Trading Day
(increasing to $200 per Trading Day after the tenth Trading Day) after the Warrant Share Delivery Date for each $10,000 of Exercise
Price of Warrant Shares for which this Warrant is exercised which are not timely delivered. For purposes of clarification, if the
Company is obligated to make payments of liquidated damages pursuant to this Section for only those Warrant Shares and for the
same Trading Day referenced to in this Section, then it shall not also be obligated to make payments under the Subscription Agreement
with respect to those same liquidated damages payable hereunder for the same Warrant Shares and for the same Trading Day referenced
in this Section provided that the Holder shall elect whether to receive payments pursuant to either the Subscription Agreement
or this Section. The Company shall pay any payments incurred under this Section in immediately available funds upon demand. Furthermore,
in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect
delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise
by delivery of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective
positions immediately prior to the exercise of the relevant portion of this Warrant, except that the liquidated damages described
above shall be payable through the date notice of revocation or rescission is given to the Company.

    	3

    	 

    

 

                                                                                         
ii.           
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

                                                                                       
iii.           
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the
certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will
have the right, at any time prior to issuance of such Warrant Shares, to rescind such exercise.

                                                         
iv.      Compensation for Buy-In
on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rights available to the Holder, if the Company
fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant
to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount
obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with
the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such
exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares
of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.

    	4

    	 

    

                                                                                         
v.           
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such
exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise Price or round up to the next whole share.

                                                                                       
vi.           
Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder
for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing
of any Notice of Exercise.

                                                                                     
vii.           
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.

    	5

    	 

    

e)                 
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall
not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock, hereinafter “Common Stock Equivalents”) subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. 
Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities
owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion
of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this
Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion
of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is
delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this
Warrant.

    	6

    	 

    

f)                  
Call. Provided (i) there is an effective registration statement which includes for resale all of the Registrable
Securities inclusive of all of the Warrant Shares, or (ii) all of the Warrant Shares may be sold pursuant to Rule 144 upon “cashless
exercise” pursuant to Section 2(c) without restrictions including without volume limitations or manner of sale requirements
(each a “Trigger Condition”), the Company shall have the option to “call” the exercise of any or
all of the Warrant Shares (the “Warrant Call”) from time to time in accordance with and governed by the following:

(1)Call
Notice. The Company shall exercise a Warrant Call by giving written notice of call (the “Call Notice”) to
the Holder during the period in which the Warrant Call may be exercised. The effective date of each Call Notice (the “Call
Date”) is the date on which notice is effective under the notice provision of Section 5(h) of this Warrant.

(2)Call
Period. The Company’s right to exercise a Warrant Call shall commence five (5) Trading Days after either of the Trigger
Conditions has been in effect continuously for fifteen (15) Trading Days. The Holder shall have the right to cancel the Warrant
Call up until the date the called Warrant Shares are actually delivered to the Holder (“Warrant Call Delivery Date”)
if the Trigger Condition relied upon for the Warrant Call ceases to apply. A Call Notice may not be given within thirty (30) Trading
Days prior to the Expiration Date.

    	7

    	 

    

(3)Call
Notice Spacing. A Call Notice may be given not sooner than fifteen (15) Trading Days after the Warrant Call Delivery Date of
the immediately preceding Call Notice.

(4)Exercise
Price Multiple. A Call Notice may be given by the Company only within ten (10) Trading Days after any twenty (20) consecutive
Trading Day period during which the VWAP of the Common Stock as reported for the Principal Market is not less than two hundred
and fifty percent (250%) of the Exercise Price in effective for ten (10) out of such twenty (20) consecutive Trading Day period
(“Lookback Period”).

(5)Maximum
Call Amount. The maximum amount of Warrant Shares that may be included in a Call Notice shall be reduced for the Holder to
the extent necessary so as to prevent the Holder from exceeding the Beneficial Ownership Limitation set forth in Section 2(e),
with such calculation being made as of the Call Date.

(6)Event
of Default. A Call Notice may not be given after the occurrence of an Event of Default (as defined in the Note) or an event
which with the passage of time or the giving of notice would become and Event of Default and will be automatically cancelled upon
such occurrence.

(7)Compliance
with Call Notice. The Holder shall exercise this Warrant and purchase the Called Warrant Shares and pay for same within fourteen
(14) Trading Days after the Call Date. If the Holder fails to timely pay the amount required by the Warrant Call, the Company’s
sole remedy shall be to cancel a corresponding amount of Warrant Shares.

(8)Notice
to Other Holders. Unless otherwise agreed to by the Holder of this Warrant, a Call Notice must be given to all other Warrant
Holders in proportion to the amounts of Warrant Shares which may be purchased by such Holders in accordance with the Warrants held
by each, without giving effect to the Beneficial Ownership Limitation.

Section 3.Certain
Adjustments.

a)                 
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant or pursuant to any of the other Transaction Documents), (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain
unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or re-classification.

    	8

    	 

    

b)                 
Subsequent Equity Sales. If the Company, at any time while this Warrant is outstanding, shall sell or grant any option
to purchase, or sell or grant any right to reprice, or otherwise issue (or announce any offer, sale, grant or any option to purchase
or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price
then in effect, excluding in all cases Excepted Issuances as defined in the Purchase Agreement (such lower price, the “Base
Share Price” and such issuances collectively, a “Dilutive Issuance”) (it being understood and agreed
that if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options
or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective
price per share that is less than the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise
Price on such date of the Dilutive Issuance at such effective price), then simultaneously with the consummation of each Dilutive
Issuance the Exercise Price shall be reduced and only reduced to equal the Base Share Price and the number of Warrant Shares issuable
hereunder shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in
the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment. Such adjustment shall be made whenever
such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or
issued under this Section 3(b) in respect of an Exempt Issuance. Upon the successful listing of the Company’s Common Stock
on the NASDAQ Capital Market, the NYSE-Amex or any other national exchange or trading market, any Dilutive Issuance will result
in the reduction of the Exercise Price to the Base Share Price but will not result in the increase of the number of Warrant Shares
issuable hereunder. The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance or deemed
issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance
price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant
to this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Warrant Shares
based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise.
If the Company enters into a Variable Rate Transaction, despite the prohibition thereon in the Purchase Agreement, the Company
shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at
which such securities may be converted or exercised. Notwithstanding the foregoing, the issuance of any Common Stock or Common
Stock Equivalents pursuant to the Purchase Agreement shall not be deemed a Dilutive Issuance.

    	9

    	 

    

c)                 
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in
the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase
Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent)
and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).

d)                
Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders
of Common Stock (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights or
warrants to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 3(c)), then in
each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall
be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date
less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed
applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed
or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution
is made and shall become effective immediately after the record date mentioned above.

    	10

    	 

    

e)                 
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly,
in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the
outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more
related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other
Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held
by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then,
upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, (without regard to the applicable
of Section 2(c) nor any limitation in Section 2(e) on the exercise of this Warrant) the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of
a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3
under the Exchange Act, or (3) a Fundamental Transaction involving a person or entity not traded on a national securities exchange
or trading market (with such exchange or market including, without limitation, the Nasdaq Global Select Market, the Nasdaq Global
Market, or the Nasdaq Capital Market, The New York Stock Exchange, Inc., the NYSE or Amex), the Company or any Successor Entity
(as defined below) shall, at the Holder’s option which shall be exercised as of the consummation of the Fundamental Transaction,
purchase this Warrant from the Holder by paying to the Holder concurrently with the consummation of the Fundamental Transaction
for each Warrant Share that would be issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction
(without regard to the application of Section 2(c) nor any limitation in Section 2(e) on the exercise of this Warrant), the higher
of (i) an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of the
consummation of such Fundamental Transaction, or (ii) the positive difference between the cash per share paid in such Fundamental
Transaction minus the then in effect Exercise Price. “Black Scholes Value” means the value of the unexercised
portion of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg,
L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately
following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation
shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being
offered in such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Termination Date. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the
exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock
and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation
of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the
date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein.

    	11

    	 

    

f)                  
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding
as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

g)                 
Notice to Holder.

                                                                                           
i.           
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3,
the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting
adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

                                                                                         
ii.           
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock (other than stock splits or reverse stock splits), any consolidation
or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other securities (other than stock splits or reverse stock
splits), cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, to the extent that such information constitutes material non-public information
(as determined in good faith by the Company) the Company shall follow the procedure described in Section 13 of the Subscription
Agreement and shall deliver to the Holder, at least 15 days prior to the effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that
holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure
to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice and shall not be deemed to be a material breach of this Warrant unless such failure adversely affected
Holder’s rights with respect to the Warrant. To the extent that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of the Subsidiaries, the Company shall follow the procedure described in Section
9(n) of the Subscription Agreement. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

    	12

    	 

    

Section 4.Transfer
of Warrant.

a)                 
Transferability. Subject to compliance with any applicable securities laws and the provisions of the Purchase Agreement,
this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

b)                 
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid
office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated
the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable
pursuant thereto.

c)                 
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

    	13

    	 

    

Section 5.Miscellaneous.

a)                 
No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).

b)                 
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

c)                 
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of
any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised
on the next succeeding Trading Day.

d)                
Authorized Shares.

The Company covenants
that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise
of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements
of the Principal Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued
upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by
this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously with such issue).

Except and to
the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, 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 to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

    	14

    	 

    

Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

e)                 
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant
shall be determined in accordance with the provisions of the Purchase Agreement.

f)                  
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not
registered, or unless exercised in a cashless exercise when Rule 144 is available, and the Holder does not utilize cashless exercise,
will have restrictions upon resale imposed by state and federal securities laws.

g)                 
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part
of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply
with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such
amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.

h)                 
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the
Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

i)                   
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to
any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.

    	15

    	 

    

j)                   
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k)                 
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time
of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l)                   
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the
Company and the Holder.

m)               
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

n)                 
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose,
be deemed a part of this Warrant.

 

********************

 

(Signature Page Follows)

 

    	16

    	 

    

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	 	
        ADAMIS PHARMACEUTICALS
CORPORATION 

	 	 
	 	
        By:______/s/ Dennis J. Carlo_________________

        Name: Dennis J. Carlo

        Title: Chief Executive Officer

 

    	17

    	 

    

 

NOTICE OF EXERCISE

 

To:ADAMIS
PHARMACEUTICALS CORPORATION

 

(1)  
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.

(2)  
Payment shall take the form of (check applicable box):

[ ] in lawful
money of the United States; or

[ ] [if permitted]
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c),
to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).

(3)  
Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other
name as is specified below:

_______________________________

 

(4)  
After giving effect to this Notice of Exercise, the undersigned will not have exceeded the Beneficial Ownership Limitation.

 

The Warrant Shares shall be delivered to the
following DWAC Account Number or by physical delivery of a certificate to:

 

_______________________________

 

_______________________________

 

_______________________________

 

 

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing
Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

    	

    	 

    

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

ADAMIS
PHARMACEUTICALS CORPORATION

 

 

FOR VALUE RECEIVED,
[____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

 

 

_______________________________________________________________

 

Dated: ______________,
_______

 

 

Holder’s Signature:_____________________________

 

Holder’s Address: _____________________________

 

                    _____________________________

 

 

 

Signature Guaranteed: ___________________________________________

 

 

NOTE: The signature to this Assignment Form
must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing Warrant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}]]