Document:

EX-10.24

 Exhibit 10.24 

SENTI BIOSCIENCES, INC. 

2022 INDUCEMENT PLAN 

ADOPTED BY THE BOARD OF DIRECTORS:
AUGUST 5, 2022 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 1.
	 	GENERAL	  	 	1	 
			
	 2.
	 	SHARES SUBJECT TO THE PLAN	  	 	1	 
			
	 3.
	 	ELIGIBILITY AND LIMITATIONS	  	 	2	 
			
	 4.
	 	OPTIONS AND STOCK APPRECIATION RIGHTS	  	 	2	 
			
	 5.
	 	AWARDS OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS	  	 	5	 
			
	 6.
	 	ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS	  	 	7	 
			
	 7.
	 	ADMINISTRATION	  	 	9	 
			
	 8.
	 	TAX WITHHOLDING	  	 	11	 
			
	 9.
	 	MISCELLANEOUS	  	 	12	 
			
	 10.
	 	COVENANTS OF THE COMPANY	  	 	15	 
			
	 11.
	 	ADDITIONAL RULES FOR AWARDS SUBJECT TO SECTION 409A	  	 	15	 
			
	 12.
	 	SEVERABILITY	  	 	18	 
			
	 13.
	 	TERMINATION OF THE PLAN	  	 	18	 
			
	 14.
	 	DEFINITIONS	  	 	19	 

  
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	1.	 GENERAL. 

(a) Plan Purpose. The Company, by means of the Plan, seeks to induce highly-qualified prospective officers and employees who are
not currently employed by the Company or any Affiliate to accept employment and provide them with a proprietary interest in the Company. The Company intends that the Plan be reserved for persons to whom the Company may issue securities without
stockholder approval as an inducement pursuant to Rule 5635(c)(4) of the Marketplace Rules of the NASDAQ Stock Market, Inc. 
 (b)
Available Awards. The Plan provides for the grant of the following Awards: (i) Nonstatutory Stock Options; (ii) Stock Appreciation Rights; (iii) Restricted Stock Awards; (iv) RSU Awards; (v) Performance Awards; and
(vi) Other Awards. 
 (c) Adoption Date. The Plan will come into existence and become effective on the Adoption Date.

  

	2.	 SHARES SUBJECT TO THE PLAN.

 (a) Share Reserve. Subject to adjustment in accordance with Section 2(b) and any adjustments as
necessary to implement any Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed two million (2,000,000) shares. 

(b) Share Reserve Operation. 

(i) Limit Applies to Common Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares
of Common Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy its obligations to issue
shares pursuant to such Awards. Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, NYSE American Company Guide
Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan. 

(ii) Actions that Do Not Constitute Issuance of Common Stock and Do Not Reduce Share Reserve. The following actions do not
result in an issuance of shares under the Plan and accordingly do not reduce the number of shares subject to the Share Reserve and available for issuance under the Plan: (1) the expiration or termination of any portion of an Award without the
shares covered by such portion of the Award having been issued; (2) the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than Common Stock); (3) the withholding of shares that would otherwise be
issued by the Company to satisfy the exercise, strike or purchase price of an Award; or (4) the withholding of shares that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection with an Award. 

(iii) Reversion of Previously Issued Shares of Common Stock to Share Reserve. The following shares of Common Stock previously
issued pursuant to an Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become available for issuance under the Plan: (1) any shares that are forfeited back to or repurchased by
the Company because of a failure to meet a contingency or condition required for the vesting of such shares; (2) any shares that are reacquired by the Company to satisfy the exercise, strike or purchase price of an Award; and (3) any
shares that are reacquired by the Company to satisfy a tax withholding obligation in connection with an Award. 

  
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	3.	 ELIGIBILITY AND LIMITATIONS. 

(a) Eligible Award Recipients. Subject to the terms of the Plan, grantees under the Plan will be such Employees of the Company
and its Affiliates to whom the Company may issue securities without stockholder approval in accordance with Rule 5635(c)(4) of the Marketplace Rules of the NASDAQ Stock Market, Inc. as selected from time to time by the Board or Compensation
Committee. 
 (b) Limitations on Nonstatutory Stock Options and SARs. Nonstatutory Stock Options and SARs may not be granted
to Employees who are providing Continuous Service only to any “parent” of the Company (as such term is defined in Rule 405) unless the stock underlying such Award is treated as “service recipient stock” under
Section 409A, because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards otherwise comply with the distribution requirements of Section 409A. 

 

	4.	 OPTIONS AND STOCK APPRECIATION
RIGHTS. 

 Each Option and SAR will have such terms and conditions as determined by the Board. Each
Option will be designated in writing as a Nonstatutory Stock Option at the time of grant. The shares purchased upon exercise of each type of Option will be accounted for separately. Each SAR will be denominated in shares of Common Stock equivalents.
The terms and conditions of separate Options and SARs need not be identical; provided, however, that each Option Agreement and SAR Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement or otherwise)
to the substance of each of the following provisions: 
 (a) Term. No Option or SAR will be exercisable after the expiration
of ten years from the date of grant of such Award or such shorter period specified in the Award Agreement. 
 (b) Exercise or
Strike Price. The exercise or strike price of each Option or SAR will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike
price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a
manner consistent with the provisions of Sections 409A of the Code. 
 (c) Exercise Procedure and Payment of Exercise Price for
Options. In order to exercise an Option, the Participant must provide notice of exercise to the Plan Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided by the Company. The Board has 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 exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods of payment to the extent set forth in the Option Agreement: 

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

(ii) pursuant to a “cashless exercise” program developed under Regulation T as promulgated by the Federal Reserve Board that,
prior to the issuance of the Common 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 exercise price to the Company from the sales proceeds; 

  
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 (iii) by delivery to the Company (either by actual delivery or attestation) of shares
of Common Stock that are already owned by the Participant free and clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) at
the time of exercise the Common Stock is publicly traded, (2) any remaining balance of the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery would not
violate any Applicable Law or agreement restricting the redemption of the Common Stock, (4) any certificated shares are endorsed or accompanied by an executed assignment separate from certificate, and (5) such shares have been held by the
Participant for any minimum period necessary to avoid adverse accounting treatment as a result of such delivery; 
 (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 on the date of exercise that does not exceed
the exercise price, provided that (1) such shares used to pay the exercise price will not be exercisable thereafter and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant in cash
or other permitted form of payment; or 
 (v) in any other form of consideration that may be acceptable to the Board and permissible
under Applicable Law. 
 (d) Exercise Procedure and Payment of Appreciation Distribution for SARs. In order to exercise
any SAR, the Participant must provide notice of exercise to the Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant upon the exercise of a SAR will not be greater than an amount equal to
the excess of (i) the aggregate Fair Market Value on the date of exercise of a number of shares of Common Stock equal to the number of Common Stock equivalents that are vested and being exercised under such SAR, over (ii) the strike price
of such SAR. Such appreciation distribution may be paid to the Participant in the form of Common Stock or cash (or any combination of Common Stock and cash) or in any other form of payment, as determined by the Board and specified in the SAR
Agreement. 
 (e) Transferability. Options and SARs may not be transferred to third party financial institutions for value.
The Board may impose such additional limitations on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability of Options and SARs will apply,
provided that except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration: 
 (i)
Restrictions on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable during the lifetime of the Participant only by the Participant; provided, however, that
the Board may permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request, including to a trust if the Participant is considered to be the sole beneficial owner of
such trust (as determined under Section 671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required by the Company.

 (ii) Domestic Relations Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a
format acceptable to the Company and subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to a domestic relations order. 

  
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 (f) Vesting. The Board may impose such restrictions on or conditions to the
vesting and/or exercisability of an Option or SAR as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Options and SARs will
cease upon termination of the Participant’s Continuous Service. 
 (g) Termination of Continuous Service for Cause.
Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Options and
SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination
of Continuous Service and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award. 

(h) Post-Termination Exercise Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to
Section 4(i), if a Participant’s Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Option or SAR to the extent vested, but only within the following period of time or, if applicable,
such other period of time provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as
set forth in Section 4(a)): 
 (i) three months following the date of such termination if such termination is a termination
without Cause (other than any termination due to the Participant’s Disability or death); 
 (ii) 12 months following the date of
such termination if such termination is due to the Participant’s Disability; 
 (iii) 18 months following the date of such
termination if such termination is due to the Participant’s death; or 
 (iv) 18 months following the date of the
Participant’s death if such death occurs following the date of such termination but during the period such Award is otherwise exercisable (as provided in (i) or (ii) above). 

Following the date of such termination, to the extent the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or,
if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right, title or interest in the terminated Award, the shares of Common Stock
subject to the terminated Award, or any consideration in respect of the terminated Award. 
 (i) Restrictions on Exercise;
Extension of Exercisability. A Participant may not exercise an Option or SAR at any time that the issuance of shares of Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other
written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason other than for Cause and, at any time during the last thirty days of the applicable Post-Termination
Exercise Period: (i) the exercise of the Participant’s Option or SAR would be prohibited solely because the issuance of shares of Common Stock upon such exercise would violate Applicable 

  
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Law, or (ii) the immediate sale of any shares of Common Stock issued upon such exercise would violate the Company’s Trading Policy, then the applicable Post-Termination Exercise Period
will be extended to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the
foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions); provided, however, that in no event may such Award be exercised after the expiration of
its maximum term (as set forth in Section 4(a)). 
 (j) Non-Exempt
Employees. No Option or SAR, whether or not vested, granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first exercisable
for any shares of Common Stock until at least six months following the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the Worker Economic Opportunity Act, any vested portion of such Award may be
exercised earlier than six months following the date of grant of such Award in the event of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted,
(iii) a Change in Control, or (iv) such Participant’s retirement (as such term may be defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Company’s then
current employment policies and guidelines). This Section 4(j) is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR
will be exempt from their regular rate of pay. 
 (k) Whole Shares. Options and SARs may be exercised only with respect to
whole shares of Common Stock or their equivalents. 
  

	5.	 AWARDS OTHER THAN OPTIONS AND
STOCK APPRECIATION RIGHTS. 

 (a) Restricted Stock Awards and
RSU Awards. Each Restricted Stock Award and RSU Award will have such terms and conditions as determined by the Board; provided, however, that each Restricted Stock Award Agreement and RSU Award Agreement will conform (through incorporation of
the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions: 
 (i) Form of
Award. 
 (1) RSAs. To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common
Stock subject to a Restricted Stock Award may be (A) held in book entry form subject to the Company’s instructions until such shares become vested or any other restrictions lapse, or (B) evidenced by a certificate, which certificate
will be held in such form and manner as determined by the Board. Unless otherwise determined by the Board, a Participant will have voting and other rights as a stockholder of the Company with respect to any shares subject to a Restricted Stock
Award. 
 (2) RSUs. An RSU Award represents a Participant’s right to be issued on a future date the number of shares of
Common Stock that is equal to the number of restricted stock units subject to the RSU Award. As a holder of an RSU Award, a Participant is an unsecured creditor of the Company with respect to the Company’s unfunded obligation, if any, to issue
shares of Common Stock in settlement of such Award and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between
a Participant and the Company or an Affiliate or any other person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any RSU Award (unless and until shares are actually issued in settlement of a
vested RSU Award). 

  
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 (ii) Consideration. 

(1) RSA. A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order payable
to the Company, or (B) any other form of consideration (including future services) as the Board may determine and permissible under Applicable Law. 

(2) RSU. Unless otherwise determined by the Board at the time of grant, an RSU Award will be granted in consideration for the
Participant’s services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the Company (other than such services) with respect to the grant or vesting of the RSU Award, or the issuance of any
shares of Common Stock pursuant to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in a form other than the Participant’s services to the Company or an Affiliate) upon the
issuance of any shares of Common Stock in settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under Applicable Law. 

(iii) Vesting. The Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award or RSU Award
as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the
Participant’s Continuous Service. 
 (iv) Termination of Continuous Service. Except as otherwise provided in the Award
Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, (1) the Company may receive through a forfeiture condition or a repurchase right
any or all of the shares of Common Stock held by the Participant under their Restricted Stock Award that have not vested as of the date of such termination as set forth in the Restricted Stock Award Agreement and (2) any portion of their RSU
Award that has not vested will be forfeited upon such termination and the Participant will have no further right, title or interest in the RSU Award, the shares of Common Stock issuable pursuant to the RSU Award, or any consideration in respect of
the RSU Award. 
 (v) Dividends and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as
applicable, with respect to any shares of Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award Agreement. 

(vi) Settlement of RSU Awards. An RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination
thereof) or in any other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board may determine to impose such restrictions or conditions that delay such delivery to a date following the
vesting of the RSU Award. 
 (b) Performance Awards. With respect to any Performance Award, the length of any Performance
Period, the Performance Goals to be achieved during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance Goals have been attained will be determined by the Board. 

  
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 (c) Other Awards. Other forms of Awards valued in whole or in part by
reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the time of grant, subject to compliance
with Section 409A) may be granted either alone or in addition to Awards provided for under Section 4 and the preceding provisions of this Section 5. Subject to the provisions of the Plan, the Board will have sole and complete
discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and
conditions of such Other Awards. 
  

	6.	 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 shares of Common Stock subject to the Plan and the maximum number of shares by which the Share Reserve may annually increase pursuant to Section 2(a); and (ii) the class(es) and number
of securities and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. Notwithstanding the foregoing, no
fractional shares or rights for fractional shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine an appropriate equivalent benefit, if any, for any fractional shares or rights to
fractional shares that might be created by the adjustments referred to in the preceding provisions of this Section 6. 
 (b)
Dissolution or Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common
Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase
rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Continuous Service; provided, however, that the Board may determine to cause some or all
Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such 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 will apply to Awards in the event of a Corporate
Transaction, except as set forth in Section 11, unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by
the Board (as reflected in written Board action) at the time of grant of an Award. 
 (i) Awards May Be Assumed. In the event
of a Corporate Transaction, any surviving or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute similar awards for 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 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 or acquiring corporation
(or its applicable parent) may choose to assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose to assume or continue the Awards held by some, but not all Participants. The terms of
any assumption, continuation or substitution will be set by the Board. 

  
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 (ii) Awards Held by Current Participants. In the event of a Corporate
Transaction in which the surviving or acquiring corporation (or its parent company) does not assume or continue outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to 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
Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness
of the Corporate Transaction) that the Board determines (or, if the Board does not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction). Awards so accelerated will 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 Awards will lapse (contingent upon the effectiveness of the Corporate
Transaction). With respect to the vesting of Performance Awards that (a) will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and (b) have multiple vesting levels depending on the level of
performance, unless otherwise provided in the Award Agreement or unless otherwise provided by the Board, the vesting of such Performance Awards will accelerate at 100% of the target level upon the occurrence of a Corporate Transaction in which the
Awards are not assumed, continued or substituted for in accordance with Section 6(c)(i). With respect to the vesting of cash-settled Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii),
such cash payment will be made no later than 30 days following the occurrence of the Corporate Transaction or such later date as required by Section 409A of the Code. 

(iii) Awards Held by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving or
acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are
held by persons other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company
with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction. 
 (iv)
Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an 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 Award may not exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of (1) the value of the property the Participant would
have received upon the exercise of the Award (including, at the discretion of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection with such exercise. In the event there is no such
excess, the Award may be terminated without consideration. 
 (d) Appointment of Stockholder Representative. As a condition to
the receipt of an Award under this Plan, a Participant will be deemed to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for
the appointment of a stockholder representative that is authorized to act on the Participant’s behalf with respect to any escrow, indemnities and any contingent consideration. 

  
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 (e) No Restriction on Right to Undertake Transactions. The grant of any Award
under the Plan and the issuance of shares pursuant to any Award does not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, rights or options to purchase stock or of bonds, debentures, preferred or prior preference stocks
whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets
or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 
  

	7.	 ADMINISTRATION. 

(a) Administration by Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan
to a Committee or Committees, as provided in subsection (c) below. 
 (b) Powers of Board. The Board will have the power,
subject to, and within the limitations of, the express provisions of the Plan: 
 (i) To determine from time to time (1) which
of the persons eligible under the Plan will be granted Awards; (2) when and how each Award will be granted; (3) what type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need not be
identical), including the time or times when a person will be permitted to receive an issuance of Common Stock or other payment pursuant to an Award; (5) the number of shares of Common Stock or cash equivalent with respect to which an Award
will be granted to each such person; (6) the Fair Market Value applicable to an Award; and (7) the terms of any Performance Award that is not valued in whole or in part by reference to, or otherwise based on, the Common Stock, including
the amount of cash payment or other property that may be earned and the timing of payment. 
 (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 Award Agreement, in a
manner and to the extent it deems 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 an Award may first be exercised
or the time during which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest. 

(v) To prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to 30 days prior to the consummation
of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock
or the share price of the Common Stock including any Corporate Transaction, for reasons of administrative convenience. 
 (vi) To
suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant. 

  
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 (vii) To amend the Plan in any respect the Board deems necessary or advisable;
provided, however, that stockholder approval will be required for any amendment to the extent required by Applicable Law. Except as provided above, rights under any Award granted before amendment of the Plan will not be Materially 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. 

(viii) To submit any amendment to the Plan for stockholder approval. 

(ix) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, 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, a
Participant’s rights under any Award will not be Materially Impaired by any such amendment unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing. 

(x) 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. 
 (xi) To adopt such procedures and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan by, or take advantage of specific tax treatment for Awards granted to, Employees who are foreign nationals or employed
outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement to ensure or facilitate compliance with the laws of the relevant foreign jurisdiction). 

(xii) To effect, at any time and from time to time, subject to stockholder approval and subject to the consent of any Participant whose
Award is Materially Impaired by such action, (1) the reduction of the exercise price (or strike price) of any outstanding Option or SAR; (2) the cancellation of any outstanding Option or SAR and the grant in substitution therefor of
(A) a new Option, SAR, Restricted Stock Award, RSU Award or Other Award, under the Plan or another equity plan of the Company, covering the same or a different number of shares of Common Stock, (B) cash and/or (C) other valuable
consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted accounting principles. 

(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 will 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 another Committee or a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will 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. Each Committee may retain the authority to concurrently administer the Plan with Committee or subcommittee to which it
has delegated its authority hereunder and may, at any time, revest in such Committee some or all of the powers previously delegated. The Board may retain the authority to concurrently administer the Plan with any Committee and may, at any time,
revest in the Board some or all of the powers previously delegated. 

  
 10 

 (ii) Rule 16b-3 Compliance. To the
extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that is available under Rule 16b-3 of the Exchange Act, the Award will be granted by the Board or a
Committee that consists solely of two or more Non-Employee Directors, as determined under Rule 16b-3(b)(3) of the Exchange Act and thereafter any action establishing or
modifying the terms of the Award will be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption to remain available. 

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

(e) Delegation to an Officer. To the extent permitted by Rule 5635(c)(4) of the Marketplace Rules of the NASDAQ Stock Market,
Inc., the Board or any Committee 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 SARs (and, to the extent permitted by Applicable
Law, other types of Awards) and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such Awards granted to such Employees; provided, however, that the
resolutions or charter adopted by the Board or any Committee evidencing such delegation will specify the total number of shares of Common Stock that may be subject to the Awards granted by such Officer and that such Officer may not grant an Award to
himself or herself. Any such Awards will be granted on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in the resolutions approving the delegation authority.
Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) the authority to determine the Fair Market Value. 

 

	8.	 TAX WITHHOLDING 

(a) Withholding Authorization. As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding
from payroll and any other amounts payable to such Participant, and otherwise agrees to make adequate provision for (including), any sums required to satisfy any U.S. federal, state, local and/or foreign tax or social insurance contribution
withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise, vesting or settlement of such Award, as applicable. Accordingly, a Participant may not be able to exercise an Award even though the Award is
vested, and the Company shall have no obligation to issue shares of Common Stock subject to an Award, unless and until such obligations are satisfied. 

(b) Satisfaction of Withholding Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its
sole discretion, satisfy any U.S. federal, state, local and/or foreign tax or social insurance withholding obligation relating to an Award by any of the following means 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; (iii) withholding cash from an Award settled in cash; (iv) withholding
payment from any amounts otherwise payable to the Participant; (v) by allowing a Participant to effectuate a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; or
(vi) by such other method as may be set forth in the Award Agreement. 

  
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 (c) No Obligation to Notify or Minimize Taxes; No Liability to Claims. Except
as required by Applicable Law the Company has no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has no duty or obligation to warn or otherwise advise such
holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award and will not be
liable to any holder of an Award for any adverse tax consequences to such holder in connection with an Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or any of
its Officers, Directors, Employees or Affiliates related to tax liabilities arising from such Award or other Company compensation and (ii) acknowledges that such Participant was advised to consult with their own personal tax, financial and
other legal advisors regarding the tax consequences of the Award and has either done so or knowingly and voluntarily declined to do so. Additionally, each Participant acknowledges any Option or SAR granted under the Plan is exempt from
Section 409A only if the exercise or strike price is at least equal to the “fair market value” of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of
compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each Participant agrees not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in
the event that the Internal Revenue Service asserts that such exercise price or strike price is less than the “fair market value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service. 

(d) Withholding Indemnification. As a condition to accepting an Award under the Plan, in the event that the amount of the
Company’s and/or its Affiliate’s withholding obligation in connection with such Award was greater than the amount actually withheld by the Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its
Affiliates harmless from any failure by the Company and/or its Affiliates to withhold the proper amount. 
  

	9.	 MISCELLANEOUS. 

(a) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock,
including shares repurchased by the Company on the open market or otherwise. 
 (b) Use of Proceeds from Sales of Common Stock.
Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute general funds of the Company. 
 (c)
Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will 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 Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes)
documenting the corporate action approving the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the
Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents. 

(d) Stockholder Rights. No Participant will 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 Award unless and until (i) such Participant has satisfied all requirements for exercise of the Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to
such Award is reflected in the records of the Company. 

  
 12 

 (e) No Employment or Other Service Rights. Nothing in the Plan, any Award
Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the
Award was granted or affect the right of the Company or an Affiliate to terminate at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award the employment of an Employee with or without notice
and with or without cause. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or
nature of future positions, future work assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit has specifically accrued under
the terms of the Award Agreement and/or Plan. 
 (f) Change in Time Commitment. In the event a Participant’s regular
level of time commitment in the performance of their services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a
full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board may determine, to the extent permitted by Applicable Law, to (i) make a corresponding reduction
in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the
vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended. 

(g) Execution of Additional Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute
any additional documents or instruments necessary or desirable, as determined in the Plan Administrator’s sole discretion, to carry out the purposes or intent of the Award, or facilitate compliance with securities and/or other regulatory
requirements, in each case at the Plan Administrator’s request. 
 (h) Electronic Delivery and Participation. Any
reference herein or in an Award Agreement to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the
Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award the Participant consents to receive documents by electronic delivery and to participate in the Plan
through any on-line electronic system established and maintained by the Plan Administrator or another third party selected by the Plan Administrator. The form of delivery of any Common Stock (e.g., a stock
certificate or electronic entry evidencing such shares) shall be determined by the Company. 
 (i) Clawback/Recovery. All
Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s
securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law and any clawback policy that the Company otherwise adopts, to the extent applicable and permissible under
Applicable Law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of
previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right to voluntarily terminate
employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company. 

  
 13 

 (j) Securities Law Compliance. A Participant will not be issued any shares in
respect of an Award unless either (i) the shares are registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Each Award also must
comply with other Applicable Law governing the Award, and a Participant will not receive such shares if the Company determines that such receipt would not be in material compliance with Applicable Law. 

(k) Transfer or Assignment of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement,
Awards granted under the Plan may not be transferred or assigned by the Participant. After the vested shares subject to an Award have been issued, or in the case of Restricted Stock and similar awards, after the issued shares have vested, the holder
of such shares is free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein, the terms of the Trading Policy and Applicable Law. 

(l) Effect on Other Employee Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or
settlement, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan
otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans. 

(m) 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 also establish programs and procedures for deferral elections to be made by Participants. Deferrals will be made
in accordance with the requirements of Section 409A. 
 (n) Section 409A. Unless otherwise expressly provided for in an
Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent not so exempt, in compliance with
the requirements of Section 409A. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions
necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement.
Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred
compensation” under Section 409A is a “specified employee” for purposes of Section 409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A
without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the date of such Participant’s “separation from service” or, if earlier, the date of the
Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid
thereafter on the original schedule. 

  
 14 

 (o) Choice of Law. This Plan and any controversy arising out of or
relating to this Plan shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of
Delaware. 
  

	10.	 COVENANTS OF THE COMPANY.

 The Company will seek to obtain from each regulatory commission or agency, as may be deemed to be necessary, having
jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register under
the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the
authority that counsel for the Company deems necessary or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise or vesting
of such Awards unless and until such authority is obtained. A Participant is not eligible for the grant of an Award or the subsequent issuance of Common Stock pursuant to the Award if such grant or issuance would be in violation of any Applicable
Law. 
  

	11.	 ADDITIONAL RULES FOR AWARDS
SUBJECT TO SECTION 409A. 

 (a) Application. Unless the
provisions of this Section of the Plan are expressly superseded by the provisions in the form of Award Agreement, the provisions of this Section 11 shall apply and shall supersede anything to the contrary set forth in the Award Agreement for a Non-Exempt Award. 
 (b) Non-Exempt Awards Subject to Non-Exempt Severance Arrangements. To the extent a Non-Exempt Award is subject to Section 409A due to application of a
Non-Exempt Severance Arrangement, the following provisions of this subsection (b) apply. 

(i) If the Non-Exempt Award vests in the ordinary course during the Participant’s
Continuous Service in accordance with the vesting schedule set forth in the Award Agreement, and does not accelerate vesting under the terms of a Non-Exempt Severance Arrangement, in no event will the shares
be issued in respect of such Non-Exempt Award any later than the later of: (i) December 31st of the calendar year that includes the applicable vesting
date, or (ii) the 60th day that follows the applicable vesting date. 
 (ii)
If vesting of the Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with the Participant’s Separation from Service,
and such vesting acceleration provisions were in effect as of the date of grant of the Non-Exempt Award and, therefore, are part of the terms of such Non-Exempt Award as
of the date of grant, then the shares will be earlier issued in settlement of such Non-Exempt Award upon the Participant’s Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than the 60th day that follows the date of the Participant’s Separation from Service. However, if at
the time the shares would otherwise be issued the Participant is subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such
shares shall not be issued before the date that is six months following the date of such Participant’s Separation from Service, or, if earlier, the date of the Participant’s death that occurs within such six month period. 

  
 15 

 (iii) If vesting of a Non-Exempt Award
accelerates under the terms of a Non-Exempt Severance Arrangement in connection with a Participant’s Separation from Service, and such vesting acceleration provisions were not in effect as of the date of
grant of the Non-Exempt Award and, therefore, are not a part of the terms of such Non-Exempt Award on the date of grant, then such acceleration of vesting of the Non-Exempt Award shall not accelerate the issuance date of the shares, but the shares shall instead be issued on the same schedule as set forth in the Grant Notice as if they had vested in the ordinary course during
the Participant’s Continuous Service, notwithstanding the vesting acceleration of the Non-Exempt Award. Such issuance schedule is intended to satisfy the requirements of payment on a specified date or
pursuant to a fixed schedule, as provided under Treasury Regulations Section 1.409A-3(a)(4). 

(c) Treatment of Non-Exempt Awards Upon a Corporate Transaction for Employees. The
provisions of this subsection (c) shall apply and shall supersede anything to the contrary set forth in the Plan with respect to the permitted treatment of any Non-Exempt Award in connection with a
Corporate Transaction if the Participant was an Employee upon the applicable date of grant of the Non-Exempt Award. 

(i) Vested Non-Exempt Awards. The following provisions shall apply to any Vested Non-Exempt Award in connection with a Corporate Transaction: 
 (1) If the Corporate Transaction
is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute the Vested Non-Exempt Award. Upon the Section 409A Change in Control the settlement of the
Vested Non-Exempt Award will automatically be accelerated and the shares will be immediately issued in respect of the Vested Non-Exempt Award. Alternatively, the Company
may instead provide that the Participant will receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change in Control. 

(2) If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume,
continue or substitute each Vested Non-Exempt Award. The shares to be issued in respect of the Vested Non-Exempt Award shall be issued to the Participant by the
Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may
instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of the Fair Market Value of the shares
made on the date of the Corporate Transaction. 
 (ii) Unvested Non-Exempt Awards. The
following provisions shall apply to any Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to subsection (e) of this Section. 

(1) In the event of a Corporate Transaction, the Acquiring Entity shall assume, continue or substitute any Unvested Non-Exempt Award. Unless otherwise determined by the Board, any Unvested Non-Exempt Award will remain subject to the same vesting and forfeiture restrictions that were
applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of any Unvested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule
that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each
applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value of the shares made on the date of the Corporate Transaction.

  
 16 

 (2) If the Acquiring Entity will not assume, substitute or continue any Unvested Non-Exempt Award in connection with a Corporate Transaction, then such Award shall automatically terminate and be forfeited upon the Corporate Transaction with no consideration payable to any Participant in respect
of such forfeited Unvested Non-Exempt Award. Notwithstanding the foregoing, to the extent permitted and in compliance with the requirements of Section 409A, the Board may in its discretion determine to
elect to accelerate the vesting and settlement of the Unvested Non-Exempt Award upon the Corporate Transaction, or instead substitute a cash payment equal to the Fair Market Value of such shares that would
otherwise be issued to the Participant, as further provided in subsection (e)(ii) below. In the absence of such discretionary election by the Board, any Unvested Non-Exempt Award shall be forfeited without
payment of any consideration to the affected Participants if the Acquiring Entity will not assume, substitute or continue the Unvested Non-Exempt Awards in connection with the Corporate Transaction. 

(3) The foregoing treatment shall apply with respect to all Unvested Non-Exempt Awards upon
any Corporate Transaction, and regardless of whether or not such Corporate Transaction is also a Section 409A Change in Control. 

(d) If the RSU Award is a Non-Exempt Award, then the provisions in this Section 11(d)
shall apply and supersede anything to the contrary that may be set forth in the Plan or the Award Agreement with respect to the permitted treatment of such Non-Exempt Award: 

(i) Any exercise by the Board of discretion to accelerate the vesting of a Non-Exempt Award
shall not result in any acceleration of the scheduled issuance dates for the shares in respect of the Non-Exempt Award unless earlier issuance of the shares upon the applicable vesting dates would be in
compliance with the requirements of Section 409A. 
 (ii) The Company explicitly reserves the right to earlier settle any Non-Exempt Award to the extent permitted and in compliance with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations
Section 1.409A-3(j)(4)(ix). 
 (iii) To the extent the terms of any Non-Exempt Award provide that it will be settled upon a Change in Control or Corporate Transaction, to the extent it is required for compliance with the requirements of Section 409A, the Change in Control or
Corporate Transaction event triggering settlement must also constitute a Section 409A Change in Control. To the extent the terms of a Non-Exempt Award provides that it will be settled upon a termination
of employment or termination of Continuous Service, to the extent it is required for compliance with the requirements of Section 409A, the termination event triggering settlement must also constitute a Separation From Service. However, if at
the time the shares would otherwise be issued to a Participant in connection with a “separation from service” such Participant is subject to the distribution limitations contained in Section 409A applicable to “specified
employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that is six months following the date of the Participant’s Separation From Service, or, if earlier, the date of the
Participant’s death that occurs within such six month period. 
 (iv) The provisions in this subsection (e) for delivery of
the shares in respect of the settlement of an RSU Award that is a Non-Exempt Award are intended to comply with the requirements of Section 409A so that the delivery of the shares to the Participant in
respect of such Non-Exempt Award will not trigger the additional tax imposed under Section 409A, and any ambiguities herein will be so interpreted. 

  
 17 

	12.	 SEVERABILITY. 

If all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid
shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid. 

 

	13.	 TERMINATION OF THE PLAN.

 The Board may suspend or terminate the Plan at any time. 

  
 18 

	14.	 DEFINITIONS. 

As used in the Plan, the following definitions apply to the capitalized terms indicated below: 

(a) “Acquiring Entity” means the surviving or acquiring corporation (or its parent company) in connection with
a Corporate Transaction. 
 (b) “Adoption Date” means the date the Plan is first approved by the Board. 

(c) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the
Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition. 

(d) “Applicable Law” means any applicable securities, federal, state, foreign, material local or municipal or
other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq Stock Market, New York Stock Exchange, or the Financial Industry Regulatory Authority). 

(e) “Award” means any right to receive Common Stock, cash or other property granted under the Plan (including a
Nonstatutory Stock Option, a Restricted Stock Award, an RSU Award, a SAR, a Performance Award or any Other Award). 
 (f)
“Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the
written summary of the general terms and conditions applicable to the Award and which is provided to a Participant along with the Grant Notice. 

(g) “Board” means the Board of Directors of the Company (or its designee). Any decision or determination made
by the Board shall be a decision or determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be final and binding on all Participants. 

(h) “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 Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend,
dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction,
as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be
treated as a Capitalization Adjustment. 
 (i) “Cause” has the meaning ascribed to such term in
any written agreement between a Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) the Participant’s
dishonest statements or acts with respect to the Company or any Affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business; (ii) the Participant’s
commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, 

  
 19 

 
dishonesty or fraud; (iii) the Participant’s failure to perform the Participant’s assigned duties and responsibilities to the reasonable satisfaction of the Company which failure
continues, in the reasonable judgment of the Company, after written notice given to the Participant by the Company; (iv) the Participant’s gross negligence, willful misconduct or insubordination with respect to the Company or any Affiliate
of the Company; or (v) the Participant’s material violation of any provision of any agreement(s) between the Participant and the Company relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions. The
determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Board with respect to Participants who are executive officers of the Company and by the Company’s Chief
Executive Officer with respect to Participants who are not executive officers of the Company. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards
held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose. 

(j) “Change in Control” or “Change of Control” means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the following events; provided, however, to the extent necessary to avoid adverse personal income tax consequences to the Participant in connection with an Award, also
constitutes a Section 409A Change in Control: 
 (i) any Exchange Act Person becomes the Owner, directly or indirectly, of
securities of the Company representing more than 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 directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any
other Exchange Act Person that acquires the Company’s securities 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
(C) 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; 
 (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 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or
(B) more than 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 as their Ownership of the outstanding
voting securities of the Company immediately prior to such transaction; 
 (iii) 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 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such sale, lease, license or other disposition; or 

  
 20 

 (iv) individuals who, on the date the Plan is adopted by the Board, 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 this Plan, be considered as a member of the Incumbent Board. 

Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets,
merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) 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. 
 (k) “Code” means the Internal Revenue Code of 1986, as
amended, including any applicable regulations and guidance thereunder. 
 (l) “Committee” means the
Compensation Committee and any other committee of one or more Directors to whom authority has been delegated by the Board or Compensation Committee in accordance with the Plan. 

(m) “Common Stock” means, as of the Closing Date, the Class A Common Stock, par value $0.0001 per share,
of the Company. 
 (n) “Company” means Senti Biosciences, Inc., a Delaware corporation. 

(o) “Compensation Committee” means the Compensation Committee of the Board. 

(p) “Continuous Service” means that the Participant’s service with the Company or an Affiliate 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 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, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering
services ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from
an Employee of the Company to a consultant of an Affiliate or to a director will 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 will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or
(ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an 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. In addition, to the extent required for exemption from or compliance with
Section 409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined
under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder). 

  
 21 

 (q) “Corporate Transaction” means the consummation, 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, of the consolidated assets of the Company and its Subsidiaries; 

(ii) a sale or other disposition of at least 50% of the outstanding securities of the Company; 

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

(iv) 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. 
 Notwithstanding the foregoing or any other provision of this Plan, (A) the term Corporate Transaction shall not include a
sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Corporate Transaction (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 Corporate Transaction or any analogous term is set forth in such an
individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified deferred compensation that becomes payable on account of the Corporate Transaction, the transaction or event described in clause (i),
(ii), (iii), or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the Code. 

(r) “Director” means a member of the Board. 

(s) “determine” or “determined” means as determined by the Board or the
Committee (or its designee) in its sole discretion. 
 (t) “Disability” means, with respect to a Participant,
such Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances. 

(u) “Employee” means any person (i) not previously an employee or director of the Company or an Affiliate,
or (ii) following a bona fide period of non-employment, determined on a case-by-case basis. 

(v) “Employer” means the Company or the Affiliate of the Company that employs the Participant. 

  
 22 

 (w) “Entity” means a corporation, partnership, limited
liability company or other entity. 
 (x) “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder. 
 (y) “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” will 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 a registered public 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 Adoption Date, is the Owner, directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s then outstanding securities. 
 (z)
“Fair Market Value” means, as of any date, unless otherwise determined by the Board, the value of the Common Stock (as determined on a per share or aggregate basis, as applicable) 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 will be
the closing sales price for such stock 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 a source the Board deems reliable. 

(ii) If there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the
closing selling price on the last preceding date for which such quotation exists. 
 (iii) In the absence of such markets for the
Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code. 

(aa) “Governmental Body” means any: (i) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or other government; (iii) governmental or regulatory body, or quasi-governmental body of any nature (including
any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance
of doubt, any Tax authority) or other body exercising similar powers or authority; or (iv) self-regulatory organization (including the Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory Authority). 

(bb) “Grant Notice” means the notice provided to a Participant that he or she has been granted an Award under
the Plan and which includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common Stock subject to the Award or potential cash payment right, (if any), the vesting schedule for the Award (if any)
and other key terms applicable to the Award. 

  
 23 

 (cc) “Materially Impair” means any amendment to
the terms of the Award that materially adversely affects the Participant’s rights under the Award. A Participant’s rights under an Award will not be deemed to have been Materially Impaired by any such amendment if the Board, in its sole
discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participant’s rights
under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option or SAR that may be exercised; (ii) to maintain the qualified status of the Award as an Incentive Stock Option under
Section 422 of the Code; (iii) to change the terms of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code;
(iv) to clarify the manner of exemption from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A; or (v) to comply with other Applicable Laws. 

(dd) “Non-Exempt Award” means any Award that is subject
to, and not exempt from, Section 409A, including as the result of (i) a deferral of the issuance of the shares subject to the Award which is elected by the Participant or imposed by the Company, or (ii) the terms of any Non-Exempt Severance Agreement. 
 (ee)
“Non-Exempt Severance Arrangement” means a severance arrangement or other agreement between the Participant and the Company that provides for acceleration of vesting of an Award and
issuance of the shares in respect of such Award upon the Participant’s termination of employment or separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (and without regard to any alternative definition
thereunder) (“Separation from Service”) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations
Section 1.409A-1(b)(4), 1.409A-1(b)(9) or otherwise. 

(ff) “Nonstatutory Stock Option” means any option granted pursuant to Section 4 of the Plan that does not
qualify as an incentive stock option. 
 (gg) “Officer” means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act. 
 (hh) “Option” means a Nonstatutory Stock Option
to purchase shares of Common Stock granted pursuant to the Plan. 
 (ii) “Option Agreement” means a written
agreement between the Company and the Optionholder evidencing the terms and conditions of the Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary of the general terms and
conditions applicable to the Option and which is provided to a Participant along with the Grant Notice. Each Option Agreement will be subject to the terms and conditions of the Plan. 

(jj) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Option. 
 (kk) “Other 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 5(c). 
 (ll)
“Other Award Agreement” means a written agreement between the Company and a holder of an Other Award evidencing the terms and conditions of an Other Award grant. Each Other Award Agreement will be subject to the
terms and conditions of the Plan. 

  
 24 

 (mm) “Own,”
“Owned,” “Owner,” “Ownership” means that a person or Entity will 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. 
 (nn) “Participant” means an
Employee to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award. 

(oo) “Performance Award” means an Award that may vest or may be exercised or a cash award that may vest or
become earned and paid contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted under the terms and conditions of Section 5(b) pursuant to such terms as are approved by the Board. In addition,
to the extent permitted by Applicable Law and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of Performance Awards. Performance Awards that are settled in cash or other
property are not required to be valued in whole or in part by reference to, or otherwise based on, the Common Stock. 
 (pp)
“Performance Criteria” means one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such
Performance Goals may be based on any one of, or combination of, the following as determined by the Board: earnings (including earnings per share and net earnings); earnings before interest, taxes and depreciation; earnings before interest, taxes,
depreciation and amortization; total stockholder return; return on equity or average stockholder’s equity; return on assets, investment, or capital employed; stock price; margin (including gross margin); income (before or after taxes);
operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or
attainment of working capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance; debt reduction; customer satisfaction; stockholders’ equity; capital expenditures; debt
levels; operating profit or net operating profit; workforce diversity; growth of net income or operating income; billings; financing; regulatory milestones; stockholder liquidity; corporate governance and compliance; intellectual property; personnel
matters; progress of internal research; progress of partnered programs; partner satisfaction; budget management; partner or collaborator achievements; internal controls, including those related to the Sarbanes-Oxley Act of 2002; investor relations,
analysts and communication; implementation or completion of projects or processes; employee retention; number of users, including unique users; strategic partnerships or transactions (including in-licensing
and out-licensing of intellectual property); establishing relationships with respect to the marketing, distribution and sale of the Company’s products; supply chain achievements; co-development, co-marketing, profit sharing, joint venture or other similar arrangements; individual performance goals; corporate development and planning goals; and other
measures of performance selected by the Board or Committee whether or not listed herein. 
 (qq) “Performance
Goals” means, for a Performance Period, one or more goals established by the Board for the Performance Period based upon 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. Unless specified otherwise by the Board
(i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method
of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to
generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items 

  
 25 

 
that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or
joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in
the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of
shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans;
(10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment
charges that are required to be recorded under generally accepted accounting principles. In addition, the Board may establish or provide for other adjustment items in the Award Agreement at the time the Award is granted or in such other document
setting for the Performance Goals at the time the Performance Goals are established. In addition, the Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the
manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Award
Agreement or the written terms of a Performance Cash Award. 
 (rr) “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 vesting or exercise of an Award. Performance Periods may be of varying and
overlapping duration, at the sole discretion of the Board. 
 (ss) “Plan” means this Senti Biosciences, Inc.
2022 Inducement Plan, as amended from time to time. 
 (tt) “Plan Administrator” means the person, persons,
and/or third-party administrator designated by the Company to administer the day to day operations of the Plan and the Company’s other equity incentive programs. 

(uu) “Post-Termination Exercise Period” means the period following termination of a Participant’s
Continuous Service within which an Option or SAR is exercisable, as specified in Section 4(h). 
 (vv)
“Prospectus” means the document containing the Plan information specified in Section 10(a) of the Securities Act. 

(ww) “Restricted Stock Award” or “RSA” means an Award of shares of Common Stock which
is granted pursuant to the terms and conditions of Section 5(a). 
 (xx) “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. The Restricted Stock Award Agreement includes the Grant Notice for
the Restricted Stock Award and the agreement containing the written summary of the general terms and conditions applicable to the Restricted Stock Award and which is provided to a Participant along with the Grant Notice. Each Restricted Stock Award
Agreement will be subject to the terms and conditions of the Plan. 

  
 26 

 (yy) “RSU Award” or “RSU”
means an Award of restricted stock units representing the right to receive an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a). 

(zz) “RSU Award Agreement” means a written agreement between the Company and a holder of an RSU
Award evidencing the terms and conditions of an RSU Award grant. The RSU Award Agreement includes the Grant Notice for the RSU Award and the agreement containing the written summary of the general terms and conditions applicable to the RSU Award and
which is provided to a Participant along with the Grant Notice. Each RSU Award Agreement will be subject to the terms and conditions of this Plan. 

(aaa) “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. 

(bbb) “Rule 405” means Rule 405 promulgated under the Securities Act. 

(ccc) “Section 409A” means Section 409A of the Code and the regulations
and other guidance thereunder. 
 (ddd) “Section 409A Change in Control”
means a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). 
 (eee)
“Securities Act” means the Securities Act of 1933, as amended. 
 (fff) “Share
Reserve” means the number of shares available for issuance under the Plan as set forth in Section 2(a). 
 (ggg)
“Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 4. 

(hhh) “SAR Agreement” means a written agreement between the Company and a holder of a SAR evidencing the terms
and conditions of a SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written summary of the general terms and conditions applicable to the SAR and which is provided to a Participant along with the
Grant Notice. Each SAR Agreement will be subject to the terms and conditions of the Plan. 
 (iii)
“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 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 will 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 50%. 

(jjj) “Trading Policy” means the Company’s policy permitting certain individuals to sell Company shares
only during certain “window” periods and/or otherwise restricts the ability of certain individuals to transfer or encumber Company shares, as in effect from time to time. 

  
 27 

 (kkk) “Unvested Non-Exempt
Award” means the portion of any Non-Exempt Award that had not vested in accordance with its terms upon or prior to the date of any Corporate Transaction. 

(lll) “Vested Non-Exempt Award” means the portion of any Non-Exempt Award that had vested in accordance with its terms upon or prior to the date of a Corporate Transaction. 

  
 28 

 SENTI BIOSCIENCES, INC. 

STOCK OPTION GRANT NOTICE 

(2022 INDUCEMENT PLAN) 
 Senti Biosciences,
Inc. (the “Company”), pursuant to its 2022 Inducement Plan (the “Plan”), has granted to you (“Optionholder”) an option to purchase the number of shares of the Common Stock set
forth below (the “Option”). Your Option is subject to all of the terms and conditions as set forth herein and in the Plan and the Stock Option Agreement, all of which are attached hereto and incorporated herein in their
entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Stock Option Agreement shall have the meanings set forth in the Plan or the Stock Option Agreement, as applicable. 

 

					
		 	Optionholder:	 	  

		 	Date of Grant:	 	  

		 	Vesting Commencement Date:	 	  

		 	Number of Shares of Common Stock	 	
		 	Subject to Option:	 	  

		 	Exercise Price (Per Share):	 	  

		 	Total Exercise Price:	 	  

		 	Expiration Date:	 	  

  

			
	Type of Grant:	 	Nonstatutory Stock Option
		
	Vesting Schedule:	 	[25 percent of the Shares shall vest and become exercisable on the first anniversary of the Vesting Commencement Date; provided that the Participant maintains Continuous Service with the Company as an employee at such time.
Thereafter, the remaining 75 percent of the Shares shall vest and become exercisable in 36 equal monthly installments following the first anniversary of the Vesting Commencement Date, provided the Participant maintains Continuous Service with
the Company as an employee on each vesting date. Notwithstanding anything in the Agreement to the contrary, in the case of a Corporate Transaction, this Stock Option and the Shares shall be treated as provided in Section 6(c) of the
Plan.]
		
	Optionholder Acknowledgements:	 	By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:

  

	 	•	 	 The Option is governed by this Stock Option Grant Notice (the “Grant Notice”), and the
provisions of the Plan and the Stock Option Agreement, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice and the Stock Option Agreement (together, the “Option Agreement”)
may not be modified, amended or revised except in a writing signed by you and a duly authorized officer of the Company. 

  

	 	•	 	 You consent to receive this Grant Notice, the Stock Option Agreement, the Plan, the Prospectus and any other
Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

  

	 	•	 	 You have read and are familiar with the provisions of this Grant Notice, the Plan, the Stock Option Agreement,
and the Prospectus. In the event of any conflict between the provisions in this Grant Notice, the Option Agreement, or the Prospectus and the terms of the Plan, the terms of the Plan shall control. 

	 	•	 	 The Option Agreement sets forth the entire understanding between you and the Company regarding the acquisition of
Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of other equity awards previously granted to you and any written employment agreement, offer letter, severance
agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this Option. 

 

	 	•	 	 Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying
with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for
all purposes. 

							
	SENTI BIOSCIENCES, INC.	  	OPTIONHOLDER:
			
	By:	 	  
	  	  

	Signature	  	Signature
	Title:	 	  
	  	Date:	  	  

	Date:	 	  
	  	

 SENTI BIOSCIENCES, INC. 

2022 INDUCEMENT PLAN 

STOCK OPTION AGREEMENT 

As reflected by your Stock Option Grant Notice (“Grant Notice”) Senti Biosciences, Inc. (the
“Company”) has granted you an option under its 2022 Inducement Plan (the “Plan”) to purchase a number of shares of Common Stock at the exercise price indicated in your Grant Notice (the
“Option”). Capitalized terms not explicitly defined in this Agreement but defined in the Grant Notice or the Plan shall have the meanings set forth in the Grant Notice or Plan, as applicable. This Option has been granted as
an inducement pursuant to Rule 5635(c)(4) of the Marketplace Rules of NASDAQ Stock Market, Inc. The Option is not intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended. The terms
of your Option as specified in the Grant Notice and this Stock Option Agreement constitute your Option Agreement. 
 The general terms and
conditions applicable to your Option are as follows: 
 1. GOVERNING PLAN DOCUMENT. Your Option is subject to all the provisions of
the Plan. Your Option is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the Option Agreement and the
provisions of the Plan, the provisions of the Plan shall control. 
 2. EXERCISE. 

(a) You may generally exercise the vested portion of your Option for whole shares of Common Stock at any time during its term by
delivery of payment of the exercise price and applicable withholding taxes and other required documentation to the Plan Administrator in accordance with the exercise procedures established by the Plan Administrator, which may include an electronic
submission. Please review the Plan, which may restrict or prohibit your ability to exercise your Option during certain periods. 
 (b)
To the extent permitted by Applicable Law, you may pay your Option exercise price as follows: 
 (i) cash, check, bank draft or
money order; 
 (ii) subject to Company and/or Committee consent at the time of exercise, pursuant to a “cashless
exercise” program as further described in the Plan if at the time of exercise the Common Stock is publicly traded; 
 (iii)
subject to Company and/or Committee consent at the time of exercise, by delivery of previously owned shares of Common Stock as further described in the Plan; or 

(iv) subject to Company and/or Committee consent at the time of exercise, by a “net exercise” arrangement as further
described in the Plan. 
 3. TERM. You may not exercise your Option before the commencement of its term or after its term expires.
The term of your Option commences on the Date of Grant and expires upon the earliest of the following: 
 (a) immediately upon the
termination of your Continuous Service for Cause; 

  
 1. 

 (b) three months after the termination of your Continuous Service for any reason
other than Cause, Disability or death; 
 (c) 12 months after the termination of your Continuous Service due to your Disability; 

(d) 18 months after your death if your death occurs during your Continuous Service; 

(e) immediately upon a Corporate Transaction if the Board has determined that the Option will terminate in connection with a Corporate
Transaction; or 
 (f) the Expiration Date indicated in your Grant Notice. 

Notwithstanding the foregoing, if your death occurs during the period provided in Section 3(b) or 3(c) above, the term of your Option
shall not expire until the earlier of (i) 18 months after your death, (ii) upon any termination of the Option in connection with a Corporate Transaction, or (iii) the Expiration Date indicated in your Grant Notice. Additionally, the
Post-Termination Exercise Period of your Option may be extended as provided in the Plan. 
 4. WITHHOLDING OBLIGATIONS. 

(a) Regardless of any action taken by the Company or, if different, the Affiliate to which you provide Continuous Service (the
“Service Recipient”) with respect to any income tax, social insurance, payroll tax, fringe benefits tax, payment on account, or other tax-related items associated with the grant,
vesting or exercise of the Option or sale of the underlying Common Stock or other tax-related items related to your participation in the Plan and legally applicable to you (the “Tax
Liability”), you hereby acknowledge and agree that the Tax Liability is your ultimate responsibility and may exceed the amount, if any, actually withheld by the Company or the Service Recipient. You further acknowledge that the Company
and the Service Recipient (i) make no representations or undertakings regarding any Tax Liability in connection with any aspect of this Option, including, but not limited to, the grant, vesting or exercise of the Option, the issuance of Common
Stock pursuant to such exercise, the subsequent sale of shares of Common Stock, and the payment of any dividends on the shares; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the
Option to reduce or eliminate your Tax Liability or achieve a particular tax result. Further, if you are subject to Tax Liability in more than one jurisdiction, you acknowledge that the Company and/or the Service Recipient (or former service
recipient, as applicable) may be required to withhold or account for Tax Liability in more than one jurisdiction. 
 (b) Prior to any
relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to the Company and/or the Service Recipient to satisfy all Tax Liability. As further provided in Section 8 of the Plan, you hereby
authorize the Company and any applicable Service Recipient to satisfy any applicable withholding obligations with regard to the Tax Liability by one or a combination of the following methods: (i) causing you to pay any portion of the Tax
Liability in cash or cash equivalent in a form acceptable to the Company; (ii) withholding from any compensation otherwise payable to you by the Company or the Service Recipient; (iii) withholding from the proceeds of the sale of shares of
Common Stock issued upon exercise of the Option (including by means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company, or by means
of the Company acting as your agent to sell sufficient shares of Common Stock for the proceeds to settle such withholding requirements, on your behalf pursuant to this authorization without further consent); (iv) withholding shares of Common Stock
otherwise issuable to you upon the exercise of the Option, provided that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if 

  
 2. 

 
applicable, such share withholding procedure will be subject to the express prior approval of the Board or the Company’s Compensation Committee; and/or (v) any other method determined
by the Company to be in compliance with Applicable Law. Furthermore, you agree to pay the Company or the Service Recipient any amount the Company or the Service Recipient may be required to withhold, collect or pay as a result of your participation
in the Plan or that cannot be satisfied by the means previously described. In the event it is determined that the amount of the Tax Liability was greater than the amount withheld by the Company or the Service Recipient, you agree to indemnify and
hold the Company and/or the Service Recipient (as applicable) harmless from any failure by the Company or the applicable Service Recipient to withhold the proper amount. 

(c) The Company may withhold or account for your Tax Liability by considering statutory withholding amounts or other withholding rates
applicable in your jurisdiction(s), including (i) maximum applicable rates in your jurisdiction(s), in which case you may receive a refund of any over- withheld amount in cash (whether from applicable tax authorities or the Company) and you
will have no entitlement to the equivalent amount in Common Stock or (ii) minimum or such other applicable rates in your jurisdiction(s), in which case you may be solely responsible for paying any additional Tax Liability to the applicable tax
authorities or to the Company and/or the Service Recipient. If the Tax Liability withholding obligation is satisfied by withholding shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common
Stock subject to the exercised portion of the Option, notwithstanding that a number of the shares of Common Stock is held back solely for the purpose of paying such Tax Liability. 

(d) You acknowledge that you may not be able to exercise your Option even though the Option is vested, and that the Company shall have
no obligation to issue shares of Common Stock, in each case, unless and until you have fully satisfied any applicable Tax Liability, as determined by the Company. Unless any withholding obligation for the Tax Liability is satisfied, the Company
shall have no obligation to deliver to you any Common Stock in respect of the Option. 
 5. TRANSFERABILITY. Except as otherwise
provided in the Plan, your Option is not transferable, except by will or by the applicable laws of descent and distribution, and is exercisable during your life only by you. 

6. CORPORATE TRANSACTION. Your Option is subject to the terms of any agreement governing a Corporate Transaction involving the Company,
including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration. 

7. NO LIABILITY FOR TAXES. As a condition to accepting the Option, you hereby (a) agree to not make any claim against the Company,
or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the Option or other Company compensation and (b) acknowledge that you were advised to consult with your own personal tax, financial and other
legal advisors regarding the tax consequences of the Option and have either done so or knowingly and voluntarily declined to do so. Additionally, you acknowledge that the Option is exempt from Section 409A only if the exercise price is at least
equal to the “fair market value” of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Option. Additionally, as a condition
to accepting the Option, you agree not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise is less than the “fair market
value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service. 

  
 3. 

 8. OBLIGATIONS; RECOUPMENT. You hereby acknowledge that the grant of your Option is
additional consideration for any obligations (whether during or after employment) that you have to the Company not to compete, not to solicit its customers, clients or employees, not to disclose or misuse confidential information or similar
obligations. Accordingly, if the Company reasonably determines that you breached such obligations, in addition to any other available remedy, the Company may, to the extent permitted by Applicable Law, recoup any income realized by you with respect
to the exercise of your Option within two years of such breach. In addition, to the extent permitted by Applicable Law, this right to recoupment by the Company applies in the event that your employment is terminated for Cause or if the Company
reasonably determines that circumstances existed that it could have terminated your employment for Cause. 
 9. SEVERABILITY. If any
part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful
or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest
extent possible while remaining lawful and valid. 
 10. INDEBTEDNESS TO THE COMPANY. In the event that you have any loans, draws,
advances or any other indebtedness owing to the Company at the time of exercise of all or a portion of the Option, the Company may deduct and not deliver that number of shares of Common Stock with a Fair Market Value subject to the Option equal to
such indebtedness to satisfy all or a portion of such indebtedness, to the extent permitted by law and in a manner consistent with Section 409A of the Code, if applicable. 

11. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule
428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy. 

12. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your Option, including a summary
of the applicable federal income tax consequences please see the Prospectus. 
 * * * * 

  
 4. 

 SENTI BIOSCIENCES, INC. 

RSU AWARD GRANT NOTICE 

(2022 INDUCEMENT PLAN) 

Senti Biosciences, Inc. (the “Company”) has awarded to you (the “Participant”) the number of restricted stock
units specified and on the terms set forth below as an inducement pursuant to Rule 5635(c)(4) of the Marketplace Rules of NASDAQ Stock Market, Inc. and in consideration of your future services (the “RSU Award”). Your RSU
Award is subject to all of the terms and conditions as set forth herein and in the Company’s 2022 Inducement Plan (the “Plan”) and the Award Agreement (the “Agreement”), which are incorporated
herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Agreement shall have the meanings set forth in the Plan or the Agreement. 

 

			
	Participant:	 	  

		
	Date of Grant:	 	  

		
	Vesting Commencement Date:	 	  

		
	Number of Restricted Stock Units:	 	  

  

			
	Vesting Schedule:	  	[25 percent of the Restricted Stock Units shall vest on the first anniversary of the Vesting Commencement Date; provided that the Participant maintains Continuous Service with the Company as an employee at such time.
Thereafter, the remaining 75 percent of the Restricted Stock Units shall vest in 12 equal quarterly installments following the first anniversary of the Vesting Commencement Date, provided the Participant maintains Continuous Service with the
Company as an employee on each vesting date. Notwithstanding anything in the Agreement to the contrary, in the case of a Corporate Transaction, this RSU Award and the Restricted Stock Units shall be treated as provided in Section 6(c) of the
Plan]
		
		  	Notwithstanding the foregoing, vesting shall terminate upon the Participant’s termination of employment.
		
	Issuance Schedule:	  	One share of Common Stock will be issued for each Restricted Stock Unit which vests at the time set forth in Section 5 of the Agreement.
		
	Participant Acknowledgements:	  	By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:

  

	 	•	 	 The RSU Award is governed by this RSU Award Grant Notice (the “Grant Notice”), and the
provisions of the Plan and the Agreement, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice and the Agreement (together, the “RSU Award Agreement”) may not be modified,
amended or revised except in a writing signed by you and a duly authorized officer of the Company. 

  

	 	•	 	 You have read and are familiar with the provisions of the Plan, the RSU Award Agreement and the Prospectus. In
the event of any conflict between the provisions in the RSU Award Agreement, or the Prospectus and the terms of the Plan, the terms of the Plan shall control. 

	 	•	 	 The RSU Award Agreement sets forth the entire understanding between you and the Company regarding the acquisition
of Common Stock and supersedes all prior oral and written agreements, promises and/or representations on that subject with the exception of: (i) other equity awards previously granted to you, and (ii) any written employment agreement,
offer letter, severance agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this RSU Award. 

							
	SENTI BIOSCIENCES, INC.	  	PARTICIPANT:
			
	By:	 	  
	  	  

	Signature	  	Signature
	Title:	 	  
	  	Date:	  	  

	Date:	 	  
	  	

 SENTI BIOSCIENCES, INC. 

2022 INDUCEMENT PLAN 

AWARD AGREEMENT (RSU AWARD) 

As reflected by your Restricted Stock Unit Grant Notice (“Grant Notice”), Senti Biosciences, Inc. (the
“Company”) has granted you a RSU Award under its 2022 Inducement Plan (the “Plan”) for the number of restricted stock units as indicated in your Grant Notice (the “RSU Award”).
The terms of your RSU Award as specified in this Award Agreement for your RSU Award (the “Agreement”) and the Grant Notice constitute your “RSU Award Agreement”. This RSU Award has been granted as an
inducement pursuant to Rule 5635(c)(4) of the Marketplace Rules of NASDAQ Stock Market, Inc. Defined terms not explicitly defined in this Agreement but defined in the Grant Notice or the Plan shall have the same definitions as in the Grant Notice or
Plan, as applicable. 
 The general terms applicable to your RSU Award are as follows: 

1. GOVERNING PLAN DOCUMENT. Your RSU Award is subject to all the
provisions of the Plan. Your RSU Award is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the RSU Award
Agreement and the provisions of the Plan, the provisions of the Plan shall control. 
 2. GRANT OF
THE RSU AWARD. This RSU Award represents your right to be issued on a future date the number of shares of the Company’s Common Stock that is equal to the number of restricted stock units
indicated in the Grant Notice subject to your satisfaction of the vesting conditions set forth therein (the “Restricted Stock Units”). Any additional Restricted Stock Units that become subject to the RSU Award pursuant to
Capitalization Adjustments as set forth in the Plan and the provisions of Section 3 below, if any, shall be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time and manner
of delivery as applicable to the other Restricted Stock Units covered by your RSU Award. 
 3.
DIVIDENDS. You shall receive no benefit or adjustment to your RSU Award with respect to any cash dividend, stock dividend or other distribution that does not result from a Capitalization Adjustment as provided in
the Plan; provided, however, that this sentence shall not apply with respect to any shares of Common Stock that are delivered to you in connection with your RSU Award after such shares have been delivered to you. 

4. WITHHOLDING OBLIGATIONS. 

(a) Regardless of any action taken by the Company or, if different, the Affiliate to which you provide Continuous Service (the
“Service Recipient”) with respect to any income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items associated with the grant or
vesting of the RSU Award or sale of the underlying Common Stock or other tax-related items related to your participation in the Plan and legally applicable to you (the “Tax Liability”),
you hereby acknowledge and agree that the Tax Liability is your ultimate responsibility and may exceed the amount, if any, actually withheld by the Company or the Service Recipient. You further acknowledge that the Company and the Service Recipient
(i) make no representations or undertakings regarding any Tax Liability in connection with any aspect of this RSU Award, including, but not limited to, the grant or vesting of the RSU Award, the issuance of Common Stock pursuant to such
vesting, the subsequent sale of shares of Common Stock, and the payment of any dividends on the Common Stock; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSU Award to reduce or
eliminate your Tax Liability or achieve a particular tax result. Further, if you are subject to Tax Liability in more than one jurisdiction, you acknowledge that the Company and/or the Service Recipient (or former service recipient, as applicable)
may be required to withhold or account for Tax Liability in more than one jurisdiction. 

  
 1. 

 (b) Prior to any relevant taxable or tax withholding event, as applicable, you agree
to make adequate arrangements satisfactory to the Company and/or the Service Recipient to satisfy all Tax Liability. As further provided in Section 8 of the Plan, you hereby authorize the Company and any applicable Service Recipient to satisfy
any applicable withholding obligations with regard to the Tax Liability by any of the following means or by a combination of such means: (i) causing you to pay any portion of the Tax Liability in cash or cash equivalent in a form acceptable to
the Company; (ii) withholding from any compensation otherwise payable to you by the Company or the Service Recipient; (iii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in
connection with the Award; provided, however, that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the express prior
approval of the Board or the Company’s Compensation Committee; (iv) permitting or requiring you to enter into a “same day sale” commitment, if applicable, with a broker-dealer that is a member of the Financial Industry Regulatory
Authority (a “FINRA Dealer”), pursuant to this authorization and without further consent, whereby you irrevocably elect to sell a portion of the shares of Common Stock to be delivered in connection with your Restricted Stock
Units to satisfy the Tax Liability and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Tax Liability directly to the Company or the Service Recipient; and/or (v) any other method determined by the
Company to be in compliance with Applicable Law. Furthermore, you agree to pay the Company or the Service Recipient any amount the Company or the Service Recipient may be required to withhold, collect, or pay as a result of your participation in the
Plan or that cannot be satisfied by the means previously described. In the event it is determined that the amount of the Tax Liability was greater than the amount withheld by the Company and/or the Service Recipient (as applicable), you agree to
indemnify and hold the Company and/or the Service Recipient (as applicable) harmless from any failure by the Company or the applicable Service Recipient to withhold the proper amount. 

(c) The Company may withhold or account for your Tax Liability by considering statutory withholding amounts or other withholding rates
applicable in your jurisdiction(s), including (i) maximum applicable rates in your jurisdiction(s), in which case you may receive a refund of any over- withheld amount in cash (whether from applicable tax authorities or the Company) and you
will have no entitlement to the equivalent amount in Common Stock or (ii) minimum or such other applicable rates in your jurisdiction(s), in which case you may be solely responsible for paying any additional Tax Liability to the applicable tax
authorities or to the Company and/or the Service Recipient. If the Tax Liability withholding obligation is satisfied by withholding shares of Common Stock, for tax purposes, you are deemed to have been issued the full number of shares of Common
Stock subject to the vested portion of the RSU Award, notwithstanding that a number of the shares of Common Stock is held back solely for the purpose of paying such Tax Liability. 

(d) You acknowledge that you may not participate in the Plan and the Company shall have no obligation to deliver shares of Common Stock
until you have fully satisfied the Tax Liability, as determined by the Company. Unless any withholding obligation for the Tax Liability is satisfied, the Company shall have no obligation to deliver to you any Common Stock in respect of the RSU
Award. 

  
 2. 

 5. DATE OF ISSUANCE. 

(a) The issuance of shares in respect of the Restricted Stock Units is intended to comply with U.S. Treasury Regulations Section 1.409A-3(a) and will be construed and administered in such a manner. Subject to the satisfaction of the Tax Liability withholding obligation, if any, in the event one or more Restricted Stock Units
vests, the Company shall issue to you one (1) share of Common Stock for each vested Restricted Stock Unit. Each issuance date determined by this paragraph is referred to as an “Original Issuance Date.” 

(b) If the Original Issuance Date falls on a date that is not a business day, delivery shall instead occur on the next following
business day. In addition, if a Tax Liability withholding obligation applies, if: 
 (i) the Original Issuance Date does not occur
(1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you are otherwise permitted to
sell shares of Common Stock on an established stock exchange or stock market (including but not limited to under a previously established written trading plan that meets the requirements of Rule 10b5-1 under
the Exchange Act and was entered into in compliance with the Company’s policies (a “10b5-1 Arrangement”)), and 

(ii) the Company decides, prior to the Original Issuance Date, (A) not to satisfy the Tax Liability withholding obligation by
withholding shares of Common Stock from the shares otherwise due, on the Original Issuance Date, to you under this Award, (B) not to permit you to enter into a “same day sale” commitment with a broker-dealer (including but not limited
to a commitment under a 10b5-1 Arrangement) or (C) not to permit you to pay your Tax Liability in cash, then the shares that would otherwise be issued to you on the Original Issuance Date will not
be delivered on such Original Issuance Date and will instead be delivered on the first business day when you are not prohibited from selling shares of the Common Stock in the open public market, but in no event later than December 31 of the
calendar year in which the Original Issuance Date occurs (that is, the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with U.S. Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Award are no longer
subject to a “substantial risk of forfeiture” within the meaning of U.S. Treasury Regulations Section 1.409A-1(d). 

6. TRANSFERABILITY. Except as otherwise provided in the Plan, your RSU Award is not transferable,
except by will or by the applicable laws of descent and distribution 
 7. CORPORATE
TRANSACTION. Your RSU Award is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder
representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration. 

8. NO LIABILITY FOR TAXES. As a condition to
accepting the RSU Award, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the RSU Award or other Company compensation and
(b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the RSU Award and have either done so or knowingly and voluntarily declined to do so. 

  
 3. 

 9. SEVERABILITY. If any part of this Agreement
or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this
Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful
and valid. 
 10. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right
to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy. 

11. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable
to your RSU Award, including a summary of the applicable federal income tax consequences please see the Prospectus. 

  
 4.Exhibit 4.1

 

 

 

RIGHTS AGREEMENT

 

INNOVATIVE
SOLUTIONS AND SUPPORT, Inc.

 

and

 

BROADRIDGE
CORPORATE ISSUER SOLUTIONS, INC.,

 

as Rights Agent

 

Dated as of September 12, 2022

 

 

 

     

     

    

 

Table of Contents

 

Page

 

	Section 1.	Certain Definitions	1
	 	 	 
	Section 2.	Appointment of Rights Agent	11
	 	 	 
	Section 3.	Issuance of Right Certificates	11
	 	 	 
	Section 4.	Form of Right Certificates	14
	 	 	 
	Section 5.	Countersignature and Registration	15
	 	 	 
	Section 6.	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights	16
	 	 	 
	Section 7.	Exercise of Rights, Purchase Price; Expiration Date of Rights	17
	 	 	 
	Section 8.	Cancellation and Destruction of Right Certificates	19
	 	 	 
	Section 9.	Availability of Shares of Series B Preferred Stock	19
	 	 	 
	Section 10.	Series B Preferred Stock Record Date	21
	 	 	 
	Section 11.	Adjustment of Purchase Price, Number of Shares and Number of Rights	21
	 	 	 
	Section 12.	Certificate of Adjusted Purchase Price or Number of Shares	28
	 	 	 
	Section 13.	Consolidation, Merger or Sale or Transfer of Assets or Earnings Power	28
	 	 	 
	Section 14.	Fractional Rights and Fractional Shares	31
	 	 	 
	Section 15.	Rights of Action	32
	 	 	 
	Section 16.	Agreement of Right Holders	33
	 	 	 
	Section 17.	Right Certificate Holder Not Deemed a Stockholder	33
	 	 	 
	Section 18.	Concerning the Rights Agent	34
	 	 	 
	Section 19.	Merger or Consolidation or Change of Name of Rights Agent	34
	 	 	 
	Section 20.	Duties of Rights Agent	35
	 	 	 
	Section 21.	Change of Rights Agent	38
	 	 	 
	Section 22.	Issuance of New Right Certificates	38
	 	 	 
	Section 23.	Redemption and Termination	39
	 	 	 
	Section 24.	Exchange	41
	 	 	 
	Section 25.	Notice of Proposed Actions	43
	 	 	 
	Section 26.	Notices	44
	 	 	 
	Section 27.	Supplements and Amendments	45
	 	 	 
	Section 28.	Successors	46
	 	 	 
	Section 29.	Benefits of this Rights Agreement	46

 

    i

     

    

 

	Section 30.	Determinations and Actions by the Board of Directors	46
	 	 	 
	Section 31.	Severability	46
	 	 	 
	Section 32.	Governing Law; Forum Selection; Waiver of Jury Trial	46
	 	 	 
	Section 33.	Counterparts	47
	 	 	 
	Section 34.	Descriptive Headings; Interpretation	47
	 	 	 
	Section 35.	Force Majeure	47

 

EXHIBITS

 

Exhibit A – Form of Statement of Terms

 

Exhibit B – Form of Right Certificate

 

Exhibit C – Form of Summary of Rights

 

    ii

     

    

 

RIGHTS AGREEMENT

 

Rights
Agreement, dated as of September 12, 2022 (as amended, supplemented or otherwise modified from time to time, the “Rights
Agreement”) between Innovative Solutions and Support, Inc., a Pennsylvania
corporation (the “Company”), and Broadridge Corporate Issuer Solutions, Inc. (the “Rights Agent”).

 

W I T N E S S E T H

 

WHEREAS, by vote of the Board of Directors, on September 11,
2022 (the “Rights Declaration Date”), the Board of Directors authorized and declared a dividend distribution of
one right (a “Right”) for each share of Common Stock (as defined below) outstanding as of the Close of Business (as
defined below) on September 27, 2022 (the “Record Date”), other than shares of such Common Stock held in the Company’s
treasury on such date, and has authorized the issuance of one Right, in respect of each share of Common Stock issued between the Record
Date (whether originally issued or issued from the Company’s treasury) and the Distribution Date (as defined below), each Right
representing the right to purchase one one-thousandth (subject to adjustment) of a share of Series B Preferred Stock (as defined
below), having the rights, powers and preferences set forth in the form of Certificate Designations attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth; and

 

WHEREAS, the Company desires to appoint the Rights
Agent to act as provided herein, and the Rights Agent is willing to so act.

 

NOW THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the Company and the Rights Agent hereby agree as follows:

 

Section 1.            Certain
Definitions. For purposes of this Rights Agreement, the following terms have the meanings indicated:

 

(a)            “Acquiring
Person” means any Person (as defined below) (other than an Exempt Person) who or which, alone or together with all Affiliates
and Associates of such Person, on or after the date of this Rights Agreement shall be the Beneficial Owner (as defined below) of 15% or
more of the shares of Common Stock then outstanding, but shall not include:

 

(i)             the
Company, any Subsidiary of the Company, any employee benefit plan or compensation arrangement of the Company or any Subsidiary of the
Company, or any entity holding securities of the Company to the extent organized, appointed or established by the Company or any Subsidiary
of the Company for or pursuant to the terms of any such employee benefit plan or compensation arrangement; or

 

    

     

    

 

(ii)            any
Person who or which (A) the Board of Directors determines has become a Person who would otherwise be an Acquiring Person inadvertently,
without a plan or intention to acquire, change or influence control of the Company (including (1) because such Person was unaware
it beneficially owned 15% of the Common Stock outstanding or (2) such Person was aware of the extent of its Beneficial Ownership
of Common Stock but had no actual knowledge of the consequences of becoming such a Beneficial Owner under this Rights Agreement), or (B) has
reported or is required to report Beneficial Ownership of 15% or more of the Common Stock (but less than 20%) on Schedule 13G under the
Exchange Act (or any comparable or successor report) or on Schedule 13D under the Exchange Act (or any comparable or successor report)
which Schedule 13D does not state any intention to or reserve the right to control or influence the management or policies of the Company
or engage in any of the actions specified in Item 4 of such schedule (other than the disposition of the Common Stock) (such Person, a
 “Schedule 13 Investor”); provided, that, in each case, such Person, individually or together with the Affiliates
and Associates of such Person, promptly (in the judgment of the Board of Directors) divests or promptly (in the judgment of the Board
of Directors) enters into, and delivers to the Company, an irrevocable commitment promptly to divest, and thereafter promptly (in the
judgment of the Board of Directors) divests (without exercising or retaining any power, including voting, with respect to such securities),
sufficient securities of the Company or, in the case solely of Derivative Common Stock, such Person shall (x) terminate the subject
derivative transaction or transactions or otherwise dispose of the subject derivative security or securities and (y) establish to
the satisfaction of the Board of Directors that such Derivative Common Stock is no longer beneficially owned with any intention of obtaining,
changing or influencing the control of the Company, so that such Person would not otherwise be an “Acquiring Person.” If any
Person may avoid being an “Acquiring Person” by divesting securities or Derivative Common Stock of the Company as described
in the preceding sentence, then such Person shall not be considered to have become an “Acquiring Person” until the date that
the Board of Directors determines that such divestiture has not occurred as promptly as practicable; provided that any such determinations
or judgments by the Board of Directors shall be made in its sole discretion and shall be final and binding.

 

Notwithstanding the foregoing, or anything else contained
in this Rights Agreement, no Person shall become an “Acquiring Person” as the result of:

 

(i)             being
the Beneficial Owner (such Person, an “Excepted Person”) of that number of shares of Common Stock which such Excepted
Person beneficially owns prior to the first public announcement of the adoption of this Rights Agreement or into which any such shares
or securities may be converted; provided, however, that if any Excepted Person shall, after the date hereof, become the
Beneficial Owner of any additional shares of Common Stock representing at least one percent (1%) or more of the outstanding Common Stock
(not including any stock dividend, rights dividend, stock split or similar transaction effected by the Company in which all holders of
Common Stock are treated equally, in each case not caused, directly or indirectly, by such Person), that Excepted Person shall be deemed
to be an Acquiring Person and all shares of Common Stock shall be counted for purposes of determining whether the Excepted Person is an
Acquiring Person; provided, further, that such Excepted Person shall cease to be an Excepted Person immediately at such
time as such Person ceases to be the Beneficial Owner of more than 15% (or 20%, in the case of a Schedule 13 Investor who is not deemed
to be an Acquiring Person by operation of the provisions of Section 1(a)(ii)) of the Common Stock then outstanding; or

 

    2

     

    

 

(ii)            an
acquisition of the Common Stock by the Company which, by reducing the amount of Common Stock outstanding, increases the Beneficial Ownership
of Common Stock by such Person to 15% or more of the outstanding Common Stock; provided, however, that if a Person becomes
the Beneficial Owner of 15% or more of the outstanding shares of Common Stock by reason of purchases by the Company and shall, after such
purchases by the Company, become the Beneficial Owner of any additional shares of Common Stock, then such Person shall be deemed to be
an Acquiring Person.

 

(b)            “Action
of the Board of Directors” means the approval by action of the Board of Directors.

 

(c)            “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as defined below).

 

(d)            “Authorized
Officer” shall have the meaning set forth in Section 20(b) hereof.

 

(e)            A
Person shall be deemed the “Beneficial Owner” of, shall be deemed to have “Beneficial Ownership”
of and shall be deemed to “beneficially own” any securities:

 

(i)             which
such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly as determined pursuant to
Rule 13d-3 and 13d-5 of the General Rules and Regulations under the Exchange Act, as in effect on the date hereof;

 

(ii)            which
such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has (A) the right or the obligation to
acquire (whether such right is exercisable immediately or only after the passage of time or occurrence of conditions, and whether or not
within the control of such Person) pursuant to any plan, agreement, arrangement or understanding (written or oral, but in each case, other
than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities),
or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise, provided,
however, that a Person shall not be deemed the “Beneficial Owner” of, or to beneficially own, or to have Beneficial
Ownership of, (1) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for payment or exchange thereunder or cease to be subject to withdrawal
by the tendering security holder, or (2) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering
Event; or (B) the right to vote pursuant to any agreement, arrangement or understanding (written or oral, but in each case, other
than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities),
provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to beneficially own, or to
have Beneficial Ownership of, any security under this clause (B) if the agreement, arrangement or understanding (written or oral)
to vote such security (1) arises solely from a revocable proxy or consent given in response to a public proxy or consent solicitation
made generally to all holders of Common Stock pursuant to, and in accordance with, the applicable rules and regulations under the
Exchange Act and (2) the Beneficial Ownership of such security is not also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report);

 

    3

     

    

 

(iii)           which
are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding (written or oral, but in each case, other than customary agreements with and
between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent as described in clause (B) of subparagraph (ii) of this paragraph
(e)) or disposing of any securities of the Company, or with which such Person is Acting in Concert; or

 

(iv)           which
are the subject of, or the reference securities for, or that underlie, any Derivative Interest of such Person or any of such Person’s
Affiliates or Associates, with the number of shares of Common Stock deemed beneficially owned being (1) the number of shares of Common
Stock that are synthetically owned as a result of such Derivative Interest, and (2) the notional or other number of shares of Common
Stock specified in the documentation evidencing the Derivative Interest as being subject to be acquired upon the exercise or settlement
of the Derivative Interest or as the basis upon which the value or settlement amount of such Derivative Interest is to be calculated in
whole or in part or, if no such number of shares of Common Stock is specified in such documentation, as determined by the Board of Directors
in its sole discretion to be the number of shares of Common Stock to which the Derivative Interest relates.

 

For purposes of this definition of Beneficial Ownership,
a Person shall be deemed to be “Acting in Concert” with another Person if such Person knowingly acts (whether or not
pursuant to an express agreement, arrangement or understanding) in concert with such other Person in, or towards a common goal relating
to, changing or influencing the control of the Company or in connection with or as a participant in any transaction having that purpose
or effect, in parallel with such other Person where at least one additional factor supports a determination by the Board of Directors
that such Person intended to act in concert or in parallel with the other Person, which such additional factor may include, without limitation,
exchanging information, attending meetings, conducting discussions or making or soliciting invitations to act in concert or in parallel.
A Person who or which is Acting in Concert with another Person shall also be deemed to be Acting in Concert with any third party who is
also Acting in Concert with such other Person.

 

Notwithstanding the foregoing, nothing contained
in this definition shall cause a Person to be deemed the “Beneficial Owner” of, or to “beneficially own,” or to
have “Beneficial Ownership” of, any securities (A) if the Person is ordinarily engaged in the business as an underwriter
of securities and has acquired such securities in a bona fide firm commitment underwriting pursuant to an underwriting agreement with
the Company until the expiration of forty (40) calendar days after the date of such acquisition, (B) if such Person is a “clearing
agency” (as defined in Section 3(a)(23) of the Exchange Act) and has acquired such securities solely as a result of such status
or (C) solely by virtue of any actions taken by such Person as an officer or director of the Company in such capacity.

 

    4

     

    

 

Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, (1) the phrase “then outstanding,” when used with reference to a Person’s Beneficial
Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder, and (2) for
purposes of determining Beneficial Ownership of securities under this Rights Agreement, officers and directors of the Company solely by
reason of their status as such shall not constitute or be considered together as a group (notwithstanding that they may be Associates
of one another or may be deemed to constitute a group for purposes of Section 13(d) of the Exchange Act) and shall not be deemed
to own shares owned by another officer or director of the Company.

 

(f)             “Board
of Directors” means the board of directors of the Company as constituted from time to time.

 

(g)            “Board
Evaluation Period” shall have the meaning set forth in Section 23(b) hereof.

 

(h)            “Business
Day” means any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York, or the
State in which the principal office of the Rights Agent is located, are authorized or obligated by law or executive order to close.

 

(i)             “Close
of Business” on any given date means 5:00 p.m., New York, New York time, on such date; provided, however, that
if such date is not a Business Day it means 5:00 p.m., New York, New York time, on the next succeeding Business Day.

 

(j)             “Common
Stock” when used with reference to the Company shall mean the common stock, par value $0.001 per share, of the Company. “Common
Stock” when used with reference to any Person other than the Company shall mean the capital stock (or, in the case of an unincorporated
entity, the equivalent equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such first-mentioned Person.

 

(k)            “common
stock equivalent” shall have the meaning set forth in Section 11(c) hereof.

 

(l)             “Derivative
Common Stock” shall mean Common Stock that is deemed beneficially owned by an Acquiring Person solely as a result of the application
of clause (iv) of the definition of “Beneficial Owner” and “Beneficial Ownership” set forth herein.

 

    5

     

    

 

(m)            “Derivative
Interest” shall mean any derivative securities (as defined in Rule 16a-1 of the General Rules and Regulations under
the Exchange Act) with an exercise or conversion privilege or a settlement payment or mechanism at a price related to, or with a value
derived in whole or in part from the value (or change in value) of, any class or series of shares of the Company, including, but not limited
to, a long convertible security, a long call option and a short put option position, in each case, regardless of whether (x) such
interest conveys any voting rights in such security to any Person or any of such Person’s Affiliates or Associates, (y) such
interest is required to be, or is capable of being, settled through delivery of securities of the Company or through the delivery of cash
or other property, or otherwise or (z) any other transactions exist to hedge the economic effect of such interest; provided
that, for the purposes of the definition of Derivative Interest, the term “derivative security” shall also include any security
or instrument that would not otherwise constitute a “derivative security” as a result of any feature that would make any conversion,
exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening
of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible
or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination.
A Derivative Interest shall not include any interest, right, option or security set forth in Rule 16a-1(c)(1)-(5) or (7) of
the General Rules and Regulations under the Exchange Act.

 

(n)            “Distribution
Date” shall have the meaning set forth in Section 3 hereof.

 

(o)            “equivalent
preferred stock” shall have the meaning set forth in Section 11(d) hereof.

 

(p)            “Excepted
Person” shall have the meaning set forth in Section 1(a) hereof.

 

(q)            “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(r)             “Exchange
Ratio” shall have the meaning set forth in Section 24 hereof.

 

(s)            “Exempt
Person” shall mean any Person determined by the Board of Directors to be exempt from this Rights Agreement, which determination
shall be made in the sole and absolute discretion of the Board of Directors; provided, that such determination is made, and no
Person shall qualify as an Exempt Person unless such determination is made, prior to such time as any Person becomes an Acquiring Person;
provided, further, that any Person will cease to be an Exempt Person by the Board of Directors making a contrary determination
with respect to such Person regardless of the reason therefor.

 

(t)             “Exemption
Date” shall have the meaning set forth in Section 23(b) hereof.

 

(u)            “Expiration
Date” shall have the meaning set forth in Section 7(a) hereof.

 

(v)            “Final
Expiration Date” means the Close of Business on September 12, 2023.

 

(w)            “Nasdaq”
means The Nasdaq Stock Market LLC.

 

(x)            “Number
of Adjustment Shares” shall have the meaning set forth in Section 11(b) hereof.

 

    6

     

    

 

(y)            “Outside
Meeting Date” shall have the meaning set forth in Section 23(b) hereof.

 

(z)            “Person”
means any individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall include any successor
(by merger or otherwise) of such entity.

 

(aa)          “Preferred
Stock” means the Series B Preferred Stock.

 

(bb)          “Principal
Party” shall have the meaning set forth in Section 13(b) hereof.

 

(cc)          “Prior
Written Approval of the Company” means prior express written consent of the Company to the actions in question, executed on
behalf of the Company by a duly authorized officer of the Company following express Action of the Board of Directors.

 

(dd)          “Purchase
Price” shall have the meaning set forth in Section 7(b) hereof.

 

(ee)          “Qualifying
Offer” shall mean an offer to satisfy each of the following requirements to the extent applicable to the type of offer specified:

 

(i)             a
fully financed, all cash tender offer for all of the outstanding Common Stock, or an exchange offer offering shares of common stock of
the offeror, or a combination thereof, in each such case (whether such shares are outstanding at the commencement of the offer or become
outstanding thereafter upon the exercise or conversion of options or other securities that are outstanding at the commencement of the
offer) at the same per share consideration;

 

(ii)            such
offer has been commenced within the meaning of Rule 14d-2(a) of the Exchange Act;

 

(iii)           an
offer that is subject to only to customary terms and conditions, which conditions may include a condition based upon the occurrence of
a material adverse event, but which shall not include any financing, funding or similar conditions or any requirements with respect to
the offeror or its agents or any Person being permitted any due diligence with respect to the books, records, management, accountants
or other outside advisors of the Company;

 

(iv)           an
offer pursuant to which the Company has received an irrevocable written commitment of the offeror that the offer will remain open for
at least ninety (90) calendar days and, if a Special Meeting is duly requested in accordance with Section 23(b), for at least 10
Business Days after the date of the Special Meeting or, if no Special Meeting is held within sixty (60) calendar days following such initial
ninety (90) calendar day period in accordance with Section 23(b), for at least 10 Business Days following such sixty (60) calendar
days;

 

(v)            an
offer pursuant to which the Company has received an irrevocable written commitment of the offeror to consummate, as promptly as practicable
upon successful completion of the offer, a second-step transaction whereby all Common Stock not tendered into the offer will be acquired
at the same consideration per share actually paid pursuant to the offer, subject to stockholders’ statutory appraisal rights, if
any;

 

    7

     

    

 

(vi)           an
offer pursuant to which the Company has received an irrevocable written commitment of the offeror that no amendments will be made to the
offer to reduce the consideration being offered or to otherwise change the terms of the offer in a way that is adverse to a tendering
holders of Common Stock (other than extensions of the offer consistent with the terms thereof);

 

(vii)          an
offer that is conditioned on a minimum of at least two-thirds of the outstanding shares of the Common Stock not held by the Person making
such offer (and/or such Person’s Affiliates and Associates) being tendered and not withdrawn as of the offer’s expiration
date, which condition shall not be waivable;

 

(viii)         if
the offer includes shares of common stock of the offeror, an offer pursuant to which the offeror shall permit representatives of the Company
(including a nationally recognized investment banking firm retained by the Board of Directors and legal counsel and an accounting firm
designated by the Company) to have access to such offeror’s books, records, management, accountants, financial advisors, counsel
and any other appropriate outside advisers for the purposes of permitting such representatives to conduct a due diligence review of the
offeror in order to permit the Board of Directors to evaluate the offer and make an informed decision and, if requested by the Board of
Directors, to permit such investment banking firm (relying as appropriate on the advice of such legal counsel) to be able to render an
opinion to the Board of Directors with respect to whether the consideration being offered to the stockholders of the Company is fair from
a financial point of view;

 

(ix)            an
offer (other than an offer consisting solely of cash consideration) pursuant to which the Company has received the written representation
and certification of the offeror and the written representations and certifications of the offeror’s Chief Executive Officer and
Chief Financial Officer, acting in such capacities, that (A) all facts about the offeror that would be material to making an investor’s
decision to accept the offer have been fully and accurately disclosed as of the date of the commencement of the offer within the meaning
of Rule 14d-2(a) under the Exchange Act, (B) all such new facts will be fully and accurately disclosed on a prompt basis
during the entire period during which the offer remains open, and (C) all required Exchange Act reports will be filed by the offeror
in a timely manner during such period; and

 

(x)            if
the offer includes non-cash consideration (A) the non-cash portion of the consideration offered must consist solely of common stock
of a Person that is a publicly-owned United States corporation, (B) such common stock must be freely tradable and listed or admitted
to trading on either the New York Stock Exchange or the Nasdaq Global Select Market or Nasdaq Global Market (C) no stockholder approval
of the issuer of such common stock is required to issue such common stock, or, if such approval is required, such approval has already
been obtained, (D) such issuer of such common stock has no other class of voting stock or other voting securities, and (E) the
issuer of such common stock meets the registrant eligibility requirements for use of Form S-3 for registering securities under the
Securities Act, including the filing of all required Exchange Act reports in a timely manner during the twelve calendar months prior to
the date of commencement of such offer.

 

    8

     

    

 

For
the purposes of this definition of Qualifying Offer, “fully financed” shall mean that the offeror has sufficient
funds for the offer and related expenses which shall be evidenced by (1) firm, unqualified, written commitments from responsible
financial institutions having the necessary financial capacity, accepted by the offeror, to provide funds for such offer subject only
to customary terms and conditions, which conditions shall not include any requirements with respect to such financial institutions or
any other Person being permitted any due diligence with respect to the books, records, management, accountants and other outside advisors
of the Company, (2) cash or cash equivalents then available to the offeror, set apart and maintained solely for the purpose of funding
the offer with an irrevocable written commitment being provided by the offeror to the Board of Directors to maintain such availability
until the offer is consummated or withdrawn or (3) a combination of the foregoing; which evidence has been provided to the Company
prior to, or upon, commencement of the offer and is reasonably satisfactory to the Board of Directors. If an offer becomes a Qualifying
Offer in accordance with this definition, but subsequently ceases to be a Qualifying Offer as a result of the failure at a later date
to continue to satisfy any of the requirements of this definition, such offer shall cease to be a Qualifying Offer and the provisions
of Section 23(b) shall no longer be applicable to such offer, provided that the actual redemption of the Rights pursuant to
Section 23(b) shall not have already occurred.

 

(ff)            “Qualifying
Offer Resolution” shall have the meaning set forth in Section 23(b) hereof.

 

(gg)         “Record
Date” shall have the meaning set forth in the Recitals of this Rights Agreement.

 

(hh)          “Redemption
Price” shall have the meaning set forth in Section 23(a) hereof.

 

(ii)            “Right”
shall have the meaning set forth in the Recitals of this Rights Agreement.

 

(jj)            “Right
Certificate” shall have the meaning set forth in Section 3(a) hereof.

 

(kk)          “Rights
Agent” shall have the meaning set forth in the Preamble of this Rights Agreement.

 

(ll)            “Rights
Declaration Date” shall have the meaning set forth in the Recitals of this Rights Agreement.

 

(mm)        “Schedule
13 Investor” shall have the meaning set forth in Section 1(a)(ii) hereof.

 

    9

     

    

 

(nn)         “Section 11(b) Event”
shall have the meaning set forth in Section 11(b) hereof.

 

(oo)          “Section 13
Event” means an event described in clauses (x), (y) or (z) of Section 13(a) hereof.

 

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

 

(qq)          “Security”
shall have the meaning set forth in Section 11(f) hereof.

 

(rr)            “Series B
Preferred Stock” means the Series B Junior Participating Preferred Stock, par value $0.001 per share, of the Company having
the rights and preferences set forth in the Statement of Terms of Series B Junior Participating Preferred Stock attached to this
Rights Agreement as Exhibit A (as it may be amended from time to time) and, to the extent that there are not a sufficient
number of shares of Series B Junior Participating Preferred Stock authorized to permit the exercise in full of the Rights, any other
series of preferred stock of the Company designated for such purpose containing terms substantially similar to the terms of the Series B
Junior Participating Preferred Stock.

 

(ss)          “Special
Meeting” shall have the meaning set forth in Section 23(b) hereof.

 

(tt)            “Special
Meeting Notice” shall have the meaning set forth in Section 23(b) hereof.

 

(uu)          “Special
Meeting Period” shall have the meaning set forth in Section 23(b) hereof.

 

(vv)          “Stock
Acquisition Date” means the earlier of (i) the first date of public announcement (which, for purposes of this definition,
shall include a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such, or (ii) the date on which the Company first has notice, direct or indirect, or otherwise determines that
a Person has become an Acquiring Person; provided, however, that, if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a) hereof, then no Stock Acquisition Date shall be deemed to have occurred.

 

(ww)        “Subsidiary”
of any Person means any other Person of which voting securities or other ownership interests, in the absence of contingencies, having
voting power to elect a majority of the board of directors (or other persons performing similar functions) of such other Person are at
the time directly or indirectly owned by such Person or one or more of such Person’s Subsidiaries.

 

(xx)           “Trading
Day” shall have the meaning set forth in Section 11(f)(i) hereof.

 

(yy)          “Trading
Regulation” means any rule or regulation of any national securities exchange or quotation system on which the Common Stock
or the Rights may from time to time be listed or traded.

 

    10

     

    

 

(zz)           “Triggering
Event” means a Section 11(b) Event or a Section 13 Event.

 

(aaa)        “Trust”
shall have the meaning set forth in Section 24(f) hereof.

 

(bbb)       “Trust
Agreement” shall have the meaning set forth in Section 24(f) hereof.

 

Section 2.            Appointment
of Rights Agent. The Company hereby appoints the Rights Agent to act as rights agent for the Company in accordance with the express
terms and conditions hereof (and no implied terms or conditions), and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-rights agents as it may deem necessary or desirable upon ten (10) calendar days’ prior written
notice to the Rights Agent, setting forth the respective duties of the Rights Agent and any co-rights agent. The Rights Agent shall have
no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-rights agent.

 

Section 3.            Issuance
of Right Certificates. (a)  Until the earlier of (i) the Close of Business on the tenth (10th) Business Day after the Stock
Acquisition Date (or, in the event the Board of Directors determines on or before such tenth (10th) day to effect an exchange in accordance
with Section 24 hereof and determines in accordance with Section 24(g) hereof that a later date is advisable,
such later date that is not more than twenty (20) calendar days after the Stock Acquisition Date) or (ii) the Close of Business on
the tenth (10th) Business Day (or such later date as may be determined by Action of the Board of Directors but in no event later than
the tenth (10th) Business Day after such time as any Person becomes an Acquiring Person) after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan or compensation arrangement of the Company
or of any Subsidiary of the Company, or any entity holding securities of the Company to the extent organized, appointed or established
by the Company or any Subsidiary of the Company for or pursuant to the terms of any such employee benefit plan or compensation arrangement
or any Excepted Person) is first published or sent or given within the meaning of Rule 14d 2(a) of the General Rules and
Regulations under the Exchange Act, without the Prior Written Approval of the Company, which tender or exchange offer would result in
any such Person becoming an Acquiring Person (including any such date which is after the date of this Rights Agreement and prior to the
issuance of the Rights) (the earlier of the dates referred to in clauses (i) and (ii), the “Distribution Date;”
provided, that if the foregoing results in the Distribution Date being prior to the Record Date, then the Distribution Date shall
be the Record Date), without giving effect to any restrictions set forth in the Company’s Amended and Restated Articles of Incorporation,
(x) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates
for the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also
to be Right Certificates) or, for Common Stock held in book-entry accounts, through the direct registration service of the Company’s
transfer agent by such book-entry accounts (together with a direct registration transaction advice or such other notification as the Board
of Directors in its discretion may determine with respect to such shares), and not by separate Right Certificates, as more fully set forth
below, and (y) the Rights (and the right to receive certificates therefor) will be transferable only in connection with the transfer
of the underlying shares of Common Stock, as more fully set forth below. As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date, the Company shall prepare and execute (either by manual or facsimile or electronic signature),
and the Rights Agent shall countersign (either by manual or facsimile or electronic signature) and the Company shall send or cause to
be sent (or the Rights Agent shall, if requested to do so by the Company and provided with all necessary information and documentation,
in form and substance reasonably satisfactory to the Rights Agent, at the expense of the Company, send) (i) by first class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company or the transfer agent or registrar for the shares of Common Stock (and if the Rights Agent
is not the transfer agent or registrar for the Common Stock, the Company shall, as promptly as practicable, provide such information to
the Rights agent in a form reasonably satisfactory to the Rights Agent), a right certificate, in substantially the form of Exhibit B
hereto (the “Right Certificate”), evidencing one Right for each share of Common Stock so held subject to adjustment
as provided herein or (ii) credit the book-entry account of such holder with such Rights and send a direct registration transaction
advice or such other notification as the Board of Directors in its discretion may determine with respect to such Rights to such holder.
As of and after the Distribution Date, the Rights will be evidenced solely by such Right Certificates or such book-entry credits. In the
event the Company elects to distribute any Rights by crediting book-entry accounts, the provisions of this Rights Agreement that reference
Right Certificates shall be interpreted to reflect that the Rights are credits to the book-entry accounts, that separate Rights Certificates
are not issued with respect to some or all of the Rights, and that any legend required on a Rights Certificate may be placed on the direct
registration transaction advice or such other notification as the Board of Directors in its discretion may determine with respect to such
Rights. The absence of specific language regarding book-entry accounts and credits in any provision of this Rights Agreement shall not
be interpreted to mean that the foregoing sentence is not applicable as appropriate to such provision. The Company shall promptly notify
the Rights Agent in writing upon the occurrence of the Distribution Date and, if such notification is given orally, the Company shall
confirm the same in writing within two (2) Business Days. Until such written notice is received by the Rights Agent, the Rights Agent
may presume conclusively for all purposes that the Distribution Date has not occurred.

 

    11

     

    

 

(b)            At
any time following the Record Date, the Company will send a copy of a Summary of Rights to Purchase Shares of Series B Preferred
Stock, in substantially the form of Exhibit C hereto (the “Summary of Rights”), to each record holder of
Common Stock as of the Close of Business on the Record Date (other than any Acquiring Person or any Associate or Affiliate of any Acquiring
Person), at the address of such holder shown on the records of the Company or transfer agent or registrar for Common Stock. With respect
to shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights associated with such shares will
be evidenced by the share certificate or book entries for such shares of Common Stock registered in the names of the holders thereof together
with the Summary of Rights. Until the Distribution Date (or, if earlier, the Expiration Date), the surrender for transfer of any shares
of Common Stock outstanding on the Record Date in respect of which Rights have been issued, with or without a copy of the Summary of Rights,
shall also constitute the transfer of the Rights associated with the Common Stock represented thereby.

 

    12

     

    

 

(c)            Certificates
for the Common Stock issued after the Record Date but prior to the earlier of the Distribution Date or the redemption, expiration or termination
of the Rights shall be deemed also to be certificates for Rights and shall have impressed, printed or written on, or otherwise affixed
to them a legend or statement in substantially the following form:

 

“This certificate also evidences and entitles the holder
hereof to certain rights as set forth in the Rights Agreement between Innovative Solutions and Support, Inc. (the “Company”)
and Broadridge Corporate Issuer Solutions, Inc. (and any successor rights agent), as Rights Agent, dated as of September 12,
2022, as the same may be amended, supplemented or otherwise modified from time to time (the “Rights Agreement”), the
terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate, may be redeemed or exchanged or may expire. The Company will mail to the holder of this certificate
a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights owned by or transferred to any Person who is or becomes an Acquiring Person or an Affiliate or Associate
thereof (each as defined in the Rights Agreement) and any subsequent holder of such Rights may become null and void.”

 

Each book-entry account for such Common Stock that shall so become
outstanding or shall be transferred or exchanged after the Record Date but prior to the earlier of the Distribution Date or the redemption,
expiration or termination of the Rights shall also be deemed to include the associated Rights, and the direct registration transaction
advice or such other notification as the Board of Directors in its discretion may determine with respect to such shall bear a legend in
substantially the following form:

 

“Each security covered by this advice/ownership statement
also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between Innovative Solutions and
Support, Inc. (the “Company”) and Broadridge Corporate Issuer Solutions, Inc. (and any successor rights agent),
as Rights Agent, dated as of September 12, 2022, as the same may be amended, supplemented or otherwise modified from time to time
(the “Rights Agreement”), the terms of which are incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights may expire
or may be redeemed, exchanged or be evidenced by separate certificates and no longer be evidenced by this direct registration transaction
advice/ownership statement. The Company will mail to the holder hereof a copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor. Under certain circumstances, Rights issued to or held by an Acquiring
Person or an Affiliate or Associate thereof (each as defined in the Rights Agreement) and any subsequent holder of such Rights may become
null and void.”

 

    13

     

    

 

With respect to such certificates or direct registration transaction
advices containing the foregoing legend, until the Distribution Date (or the earlier redemption, expiration or termination of the Rights),
the Rights associated with the Common Stock represented by such certificates or held in such book-entry accounts shall be evidenced by
such certificates or held in such book-entry accounts (together with the direct registration transaction advice or such other notification
as the Board of Directors in its discretion may determine with respect to such shares) alone, and the surrender for transfer of any of
such certificates, whether by transfer of physical certificates or book-entry transfer, except as otherwise provided herein, shall also
constitute the transfer of the Rights associated with the Common Stock represented by such certificates or direct registration transaction
advices.

 

In the event that the Company purchases or acquires
any Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any Rights associated with shares of Common Stock which are
no longer outstanding.

 

Notwithstanding this paragraph (c), the omission
of a legend shall not affect the enforceability of any part of this Rights Agreement or the rights of any holder of the Rights.

 

Section 4.            Form of
Right Certificates (a)  The Right Certificates (and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (which shall not affect
the rights, duties, liabilities, protections or responsibilities of the Rights Agent hereunder) and as are not inconsistent with the provisions
of this Rights Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of Nasdaq or of any other stock exchange or automated quotation system on which the Rights may from
time to time be listed, or to conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-thousandths of a share of Series B Preferred Stock as shall
be set forth therein at the Purchase Price (as determined pursuant to Section 7 hereof), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein.

 

(b)            Any
Right Certificate issued pursuant hereto that represents Rights beneficially owned by (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) which becomes
a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
which becomes a transferee prior to or concurrently with the Acquiring Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring Person (or any such Associate or Affiliate) to holders
of equity interests in such Acquiring Person (or such Associate or Affiliate) or to any Person with whom such Acquiring Person (or such
Associate or Affiliate) has any continuing plan, agreement, arrangement or understanding regarding either the transferred Rights, Common
Stock or (B) a transfer that has been determined by Action of the Board of Directors to be part of a plan, agreement, arrangement
or understanding which has as a primary purpose or effect the avoidance of Section 7(e) hereof, and any Right Certificate
issued pursuant to Section 6 hereof, Section 11 hereof or Section 22 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this sentence, shall contain (to the extent feasible) a legend
in substantially the following form:

 

    14

     

    

 

“The Rights represented by this Right Certificate are
or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or an Associate of an Acquiring Person. Accordingly,
this Right Certificate and the Rights represented hereby are void in the circumstances specified in Section 7(e) of the
Rights Agreement.”

 

The failure to print the foregoing legend on any
such Right Certificate or any defect therein shall not affect in any manner whatsoever the application or interpretation of the provisions
of Section 7(e) hereof.

 

Section 5.            Countersignature
and Registration. (a)  The Right Certificates shall be executed on behalf of the Company by the Chief Executive Officer, the
Chief Financial Officer, the President or any Senior Vice President of the Company, either manually or by facsimile or electronic signature,
shall have affixed thereto the Company’s seal or a facsimile thereof and shall be attested by the Secretary or any Assistant Secretary
of the Company, either manually or by facsimile or electronic signature. The Right Certificates shall be countersigned by an authorized
signatory of the Rights Agent, either manually or by facsimile or electronic signature, and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the Person who
signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of
the Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company
to sign such Right Certificate, although at the date of the execution of this Rights Agreement any such Person was not such an officer.
In case any authorized signatory of the Rights Agent who has countersigned any Right Certificate ceases to be an authorized signatory
of the Rights Agent before issuance and delivery by the Company, such Right Certificate, nevertheless, may be issued and delivered by
the Company with the same force and effect as though the Person who countersigned such Right Certificate had not ceased to be an authorized
signatory of the Rights Agent; and any Right Certificate may be countersigned on behalf of the Rights Agent by any person who, at the
actual date of the countersignature of such Right Certificate, is properly authorized to countersign such Right Certificate, although
at the date of the execution of this Rights Agreement any such Person was not so authorized.

 

(b)            Following
the Distribution Date, upon receipt by the Rights Agent of notice to that effect and all other relevant information and documents referred
to in Section 3(a), the Rights Agent will keep or cause to be kept, at an office or agency designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.

 

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Section 6.            Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated Rights.
(a)  Subject to the provisions of this Rights Agreement, at any time after the Close of Business on the Distribution Date, and
prior to the Close of Business on the Expiration Date, any Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths
of a share of Series B Preferred Stock (or, following such time, other securities, cash or assets as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender, together with any required form of assignment, duly executed and properly completed, the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office or agency of the Rights Agent designated for such purpose,
along with a signature guarantee and such other and further documentation as the Company or the Rights Agent may reasonably request. The
Rights Certificates are transferable only on the registry books of the Rights Agent. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered holder
has duly executed and properly completed the certificate contained in the form of assignment on the reverse side of such Right Certificate
and has provided such additional evidence, as the Company or the Rights Agent may reasonably request, of the identity of the Beneficial
Owner (or former Beneficial Owner), any Affiliates or Associates of such Beneficial Owner, or of any other Person with which such Beneficial
Owner or any of such Beneficial Owner’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting or disposing of securities of the Company. Pursuant to Section 9(e) hereof,
the Company or the Rights Agent may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates. The Rights Agent shall not have any duty or obligation
to take any action under any section of this Rights Agreement that requires the payment of taxes and/or charges unless and until it is
satisfied that all such payments have been made, and the Rights Agent shall promptly forward any such sum collected by it to the Company
or to such Persons as the Company may specify by written notice. Thereupon the Rights Agent, subject to the provisions of this Rights
Agreement, shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested.

 

(b)            Subject
to the provisions of this Rights Agreement, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, along with a signature
guarantee and such other and further documentation as the Company or the Rights Agent may reasonably request and, at the Company’s
request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company shall execute (either by manual or facsimile or electronic signature)
and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated. Without limiting the foregoing, the Company or the Rights Agent may
require the owner of any lost, stolen or destroyed Right Certificate, or his, her or its legal representative, to give the Company and
the Rights Agent a bond sufficient to indemnify the Company and the Rights Agent against any claim that may be made against it on account
of the alleged loss, theft or destruction of any such Right Certificate or the issuance of any such new Right Certificate.

 

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(c)            Notwithstanding
anything in this Rights Agreement to the contrary, the Company and the Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates, to the extent permitted by applicable law.

 

Section 7.            Exercise
of Rights, Purchase Price; Expiration Date of Rights. (a)  Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of any Right Certificate may, subject to Section 11(a)(ii) hereof
and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon surrender of the Right Certificate,
with the form of election to purchase and the certificate on the reverse side thereof duly executed and properly completed (with such
signature duly guaranteed), to the Rights Agent at the office or agency of the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one one-thousandth of a share of Series B Preferred Stock (or other securities, cash or assets,
as the case may be) as to which the Rights are exercised and an amount equal to any tax or charge required to be paid under Section 9(e) hereof,
at any time which is both after the Distribution Date and prior to the time (the “Expiration Date”) that is the earliest
of (i) the Final Expiration Date, (ii) the time at which the Rights are redeemed as provided in Section 23 hereof
or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof. Except for those provisions herein
that expressly survive the termination of this Rights Agreement, this Rights Agreement shall terminate at such time as the Rights are
no longer exercisable hereunder.

 

(b)            The
purchase price (the “Purchase Price”) shall be initially $41.57 for each one one-thousandth of a share of Series B
Preferred Stock purchasable upon the exercise of a Right. The Purchase Price and the number of one one-thousandths of a share of Series B
Preferred Stock or other securities or property to be acquired upon exercise of a Right shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance
with paragraph (c) of this Section 7.

 

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(c)            Except
as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase
duly executed and properly completed and accompanied by payment of the aggregate Purchase Price for the number of shares of Series B
Preferred Stock to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate
in accordance with Section 6 hereof, in cash or by certified check, cashier’s check or money order payable to the order
of the Company, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the Series B Preferred Stock or make available if the Rights Agent is the transfer agent for the Series B
Preferred Stock certificates for the number of shares of Series B Preferred Stock to be purchased (and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests), or (B) if the Company elects to deposit the total number of shares
of Series B Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent and provides notice of such election
to the Rights Agent, requisition from the depositary agent appointed by the Company depositary receipts representing interests in such
number of one one-thousandths of a share of Series B Preferred Stock as are to be purchased, in which case certificates for the Series B
Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent (and the Company hereby
irrevocably authorizes and directs the depositary agent to comply with such request), (ii) when necessary to comply with this Rights
Agreement, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when
necessary to comply with this Rights Agreement, after receipt, promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate.

 

(d)            Except
as otherwise provided herein, in case the registered holder of any Right Certificate shall properly exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the exercisable Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.

 

(e)            Notwithstanding
anything in this Rights Agreement to the contrary, upon the first occurrence of a Triggering Event, any Rights that are or were at any
time on or after the earlier of the Stock Acquisition Date or the Distribution Date Beneficially Owned by (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (ii) a direct or indirect transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person becomes such, or (iii) a direct or indirect transferee
of an Acquiring Person (or of any such Associate or Affiliate) which becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and which receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or any such Associate or Affiliate) to holders of equity interests in such Acquiring Person (or any such Associate or
Affiliate) or to any Person with whom such Acquiring Person (or such Associate or Affiliate) has any continuing plan, agreement, arrangement
or understanding (whether written or oral) regarding the transferred Rights, shares of Common Stock or (B) a transfer that has been
determined by Action of the Board of Directors to be part of a plan, agreement, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall be null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any provision of this Rights Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section 4(b) are complied
with, but shall have no liability to any holder of Rights or any other Person as a result of its failure to make any determination under
this Section 7(e) or Section 4(b) with respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.

 

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(f)             Notwithstanding
anything in this Rights Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights or any other securities upon the occurrence of any purported transfer or exercise of such
Rights or any other securities pursuant to Section 6 hereof or this Section 7 unless such registered holder shall
have (i) duly executed and properly completed the certificate contained in the form of assignment or election to purchase set forth
on the reverse side of the Right Certificate surrendered for such transfer or exercise, (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company or the Rights Agent shall reasonably request
and (iii) tendered the Purchase Price (and an amount equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9) to the Company in the manner required by this Agreement.

 

Section 8.            Cancellation
and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Rights Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy or cause to be destroyed such cancelled Right Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.

 

Section 9.            Availability
of Shares of Series B Preferred Stock. (a)  Subject to the Company’s rights under Section 11(c) hereof,
the Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Series B
Preferred Stock or any shares of Series B Preferred Stock held in its treasury, the number of shares of Series B Preferred Stock
that will be sufficient to permit the exercise in full of all outstanding Rights and, after the occurrence of a Triggering Event, shall
so reserve and keep available a sufficient number of shares of Series B Preferred Stock, Common Stock and/or other securities which
may be required to permit the exercise in full of the Rights pursuant to this Rights Agreement.

 

(b)            So
long as the shares of Series B Preferred Stock (and, following the time that a Person becomes an Acquiring Person, shares of Common
Stock and other securities) issuable and deliverable upon the exercise of Rights may be listed or admitted to trading on Nasdaq or listed
on any other national securities exchange or quotation system, the Company shall use commercially reasonable efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted to trading on Nasdaq
or listed on any other exchange or quotation system upon official notice of issuance upon such exercise.

 

(c)            The
Company covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Series B Preferred
Stock (and, following the time that a Person becomes an Acquiring Person, shares of Common Stock and other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates therefor (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.

 

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(d)            If
the Company determines that registration under the Securities Act is required, then the Company shall use commercially reasonable efforts
to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(b) Event on
which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(b) hereof
and Section 11(c) hereof, a registration statement under the Securities Act, with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the earlier of (1) the Expiration Date or (2) the date as of which the Rights are no longer exercisable
for such securities. The Company will also take such action as may be appropriate under the “blue sky laws” of the various
states. The Company may temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(d), the exercisability of the Rights in order to prepare and file such registration statement
and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect,
in each case with simultaneous written notice to the Rights Agent. In addition, if the Company determines that a registration statement
should be filed under the Securities Act or any securities laws following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights in each relevant jurisdiction until such time as a registration statement has been declared effective and,
upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no longer in effect, in each case with simultaneous written
notice to the Rights Agent. Notwithstanding anything in this Rights Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained or be obtainable or the exercise thereof
shall not be permitted under applicable law or a registration statement shall not have been declared effective.

 

(e)            The
Company further covenants and agrees that it will pay when due and payable any and all taxes and charges which may be payable in respect
of the issuance or delivery of the Right Certificates or of any shares of Series B Preferred Stock (or shares of Common Stock or
other securities) upon the exercise of Rights. The Company shall not, however, be required to pay any tax or charge which may be payable
in respect of any transfer or delivery of Right Certificates to a Person other than, or in respect of the issuance or delivery of certificates,
creation of book-entry accounts, or depositary receipts for the Series B Preferred Stock (or shares of Common Stock or other securities)
in a name other than, that of the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates, book-entry accounts or depositary receipts for Series B Preferred Stock (or shares of Common Stock or other
securities) upon the exercise of any Rights until any such tax or charge shall have been paid (any such tax or charge being payable by
that holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s or the Rights
Agent’s reasonable satisfaction that no such tax or charge is due.

 

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Section 10.          Series B
Preferred Stock Record Date. Each Person in whose name any certificate or book-entry accounts for Series B Preferred Stock is
issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the shares of Series B
Preferred Stock represented thereby on, and such certificate or book-entry account shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable taxes or charges) was made; provided,
however, that if the date of such surrender and payment is a date upon which the Series B Preferred Stock transfer books of
the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate or book-entry
account shall be dated, the next succeeding Business Day on which such transfer books are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Series B Preferred Stock for which
the Rights shall be exercisable, including, without limitation, the right to vote or to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided
herein.

 

Section 11.          Adjustment
of Purchase Price, Number of Shares and Number of Rights. The Purchase Price, the number of shares of Series B Preferred Stock
or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.

 

(a)            In
the event the Company shall at any time after the date of this Rights Agreement (A) declare and pay a dividend on the Series B
Preferred Stock payable in shares of Series B Preferred Stock, (B) subdivide the outstanding shares of Series B Preferred
Stock, (C) combine the outstanding shares of Series B Preferred Stock into a smaller number of shares of Series B Preferred
Stock or (D) issue any shares of its capital stock in a reclassification of the shares of Series B Preferred Stock (including
any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11, the Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or reclassification, as the case may be, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time (except
as provided in this Rights Agreement) shall thereafter be entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at a time when the Series B Preferred Stock transfer books
of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right.

 

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(b)            In
the event any Person becomes an Acquiring Person (“Section 11(b) Event”), then proper provision shall be
made so that each holder of a Right, subject to Section 7(e) hereof and Section 24 hereof and except as provided
below, shall after the later of the occurrence of such event and the effective date of an appropriate registration statement pursuant
to Section 9 hereof, have a right to receive, upon exercise thereof, at an exercise price per Right equal to the product of
the then current Purchase Price, multiplied by the then number of one one-thousandths of a share of Series B Preferred Stock for
which a Right is then exercisable, in accordance with the terms of this Rights Agreement, in lieu of shares of Series B Preferred
Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (y) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of Series B Preferred Stock for which a Right is then exercisable
and dividing that product by (z) fifty percent (50%) of the current market price per one share of Common Stock (determined pursuant
to Section 11(f) hereof on the date of the occurrence of the Section 11(b) Event) (such number of shares being
referred to as the “Number of Adjustment Shares”).

 

(c)            In
the event that there shall not be sufficient treasury shares or authorized but unissued shares of Common Stock to permit the exercise
in full of the Rights in accordance with the foregoing Section 11(b), and the Rights become so exercisable, notwithstanding
any other provision of this Rights Agreement, to the extent necessary and permitted by applicable law and any agreements in effect on
the date hereof to which the Company is a party, each Right shall thereafter represent the right to receive, upon exercise thereof at
the then current Purchase Price, multiplied by the then number of one one-thousandths of a share of Series B Preferred Stock for
which a Right is then exercisable, in accordance with the terms of this Rights Agreement, a number of shares, or units of shares, of (y) (to
the extent available) Common Stock and then, (z) (to the extent available) other equity securities of the Company, including, but
not limited to Series B Preferred Stock, equal in the aggregate to the Number of Adjustment Shares where the Board of Directors by
Action of the Board of Directors shall have in good faith deemed such shares or units of shares to have at least the same value and voting
rights as the Common Stock (a “common stock equivalent”); provided, however, if there are unavailable
sufficient shares (or units of shares) of Common Stock and/or common stock equivalents, then the Company shall take all such action as
may be necessary to authorize additional shares of Common Stock or common stock equivalents for issuance upon exercise of the Rights,
including the calling of a meeting of stockholders; provided, further, that if the Company is unable to cause sufficient
shares of Common Stock and/or common stock equivalents to be available for issuance upon exercise in full of the Rights, then the Company,
to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the date thereof to which it is
a party, shall make provision to pay an amount in cash or other consideration (including, without limitation, debt securities or assets
or a combination of any of the foregoing) equal to twice the Purchase Price (as adjusted pursuant to this Section 11), in
lieu of issuing shares of Common Stock and/or common stock equivalents. To the extent that the Company determines that some action needs
to be taken pursuant to this Section 11(c), the Board of Directors by Action of the Board of Directors may suspend the exercisability
of the Rights for a period of up to ninety (90) calendar days following the date on which the Section 11(b) Event shall have
occurred, in order to decide the appropriate form of distribution to be made pursuant to this Section 11(c) and to determine
the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended as well as a public announcement at such time as the suspension is no longer in effect, in
each case with simultaneous written notice to the Rights Agent. The Board of Directors may, but shall not be required to, establish, by
Action of the Board of Directors, procedures to allocate the right to receive Common Stock and common stock equivalents upon exercise
of the Rights among holders of Rights, which such allocation may be, but is not required to be, pro rata.

 

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(d)            If
the Company shall fix a record date for the issuance of rights (other than any Rights hereunder) or warrants to all holders of Series B
Preferred Stock entitling them (for a period expiring within ninety (90) calendar days after such record date) to subscribe for or purchase
Series B Preferred Stock (or securities having the same or more favorable rights, privileges and preferences as the Series B
Preferred Stock (“equivalent preferred stock”)) or securities convertible into Series B Preferred Stock or equivalent
preferred stock, at a price per share of Series B Preferred Stock or per share of equivalent preferred stock or having a conversion
or exercise price per share, as the case may be, less than the current market price per share of Series B Preferred Stock (as defined
in Section 11(f) hereof) on such record date, the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such date by a fraction, the numerator of which shall be the number of
shares of Series B Preferred Stock outstanding on such record date plus the number of shares of Series B Preferred Stock which
the aggregate offering price of the total number of shares of Series B Preferred Stock or equivalent preferred stock to be offered
(and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price,
and the denominator of which shall be the number of shares of Series B Preferred Stock outstanding on such record date plus the number
of additional shares of Series B Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid in a consideration,
part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by Action
of the Board of Directors, which determination shall be described in a statement filed with the Rights Agent. Shares of Series B
Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been
fixed.

 

(e)            If
the Company shall fix a record date for the making of a distribution to all holders of Series B Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences
of indebtedness, cash (other than a regular periodic cash dividend out of earnings or retained earnings of the Company), assets (other
than a dividend payable in Series B Preferred Stock, but including any dividend payable in stock other than Series B Preferred
Stock) or convertible securities, subscription rights or warrants (excluding those referred to in Section 11(d) hereof),
the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the current market price for one share of Series B Preferred
Stock (as determined pursuant to Section 11(f) hereof) on such record date less the fair market value (as determined
in good faith by Action of the Board of Directors, which determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to be distributed or of such convertible securities, subscription rights
or warrants applicable to one share of Series B Preferred Stock, and the denominator of which shall be such current market price
for one share of Series B Preferred Stock. Such adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.

 

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(f)             (i) 
For the purpose of any computation hereunder, the “current market price” of any security (a “Security”
for purposes of this Section 11(f)(i)) on any date shall be deemed to be the average of the daily closing prices per share
of such Security for the thirty (30) consecutive Trading Days immediately prior to, but not including such date; provided, however,
that in the event that the current market price per share of such Security is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible
into shares of such Security or (B) any subdivision, combination or reclassification of such Security, and prior to the expiration
of thirty (30) Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the “current market price” shall be appropriately adjusted by the Board
of Directors to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to
trading on Nasdaq or the New York Stock Exchange or, if the Security is not listed or admitted to trading on Nasdaq or the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading
on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed
or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over the counter market, or, if on any such date the Security is not quoted, and if such bid and asked prices
are not available, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the
Security selected by Action of the Board of Directors. If on any such date no market maker is making a market in the Security, the fair
value of such Security on such date as determined in good faith by Action of the Board of Directors shall be used. The term “Trading
Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading
is open for the transaction of business or a Business Day. If the Security is not publicly held or not so listed or traded, “current
market price” shall mean the fair value as determined in good faith by Action of the Board of Directors, which determination
shall be described in a statement filed with the Rights Agent, or, if at the time of such determination there is an Acquiring Person,
by a nationally recognized investment banking firm selected by the Board of Directors, which shall have the duty to make such determination
in a reasonable and objective manner, whose determination shall be described in a statement filed with the Rights Agent and conclusive
for all purposes.

 

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(ii)            For
the purpose of any computation hereunder, the “current market price” per share (or one one-thousandth of a share) of Series B
Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(f) (other
than the last sentence thereof). If the current market price per share (or one one-thousandth of a share) of Series B Preferred Stock
cannot be determined in the manner provided above or if the Series B Preferred Stock is not publicly held or listed or traded in
a manner described in clause (i) of this Section 11(f), the “current market price” per share of Series B
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as such number may be appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Rights Agreement)
multiplied by the current market price per share of the Common Stock and the “current market price” per one one-thousandth
of a share of Series B Preferred Stock shall be equal to the current market price per share of the Common Stock (as appropriately
adjusted). If neither the Common Stock nor the Series B Preferred Stock is publicly held or so listed or traded, “current market
price” per share shall mean the fair value per share as determined in good faith by Action of the Board of Directors, which determination
shall be described in a statement filed with the Rights Agent or, if at the time of such determination there is an Acquiring Person, by
a nationally recognized investment banking firm selected by the Board of Directors, which shall have the duty to make such determination
in a reasonable and objective manner, whose determination shall be described in a statement filed with the Rights Agent.

 

(g)            Notwithstanding
anything in this Rights Agreement to the contrary, no adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase Price; provided, however, that any adjustments
not required to be made by reason of this Section 11(g) shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one ten-thousandth
of a share of Series B Preferred Stock or share of Common Stock or other share or security as the case may be.

 

(h)            In
the event that at any time, as a result of an adjustment made pursuant to Section 11(a) or (b) hereof, the
holder of any Right shall be entitled to receive upon exercise of such Right any shares of capital stock of the Company other than shares
of Series B Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares
of Series B Preferred Stock contained in Section 11, and the provisions of Sections 7, 9, 10, 13
and 14 hereof with respect to the shares of Series B Preferred Stock shall apply on like terms to any such other shares.

 

(i)             All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Series B Preferred Stock or other capital
stock of the Company purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment of the Purchase
Price.

 

(j)             Unless
the Company shall have exercised its election as provided in Section 11(k) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(d) and (e) hereof, each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Series B Preferred Stock (calculated to the nearest ten thousandth) obtained by (i) multiplying
(A) the number of one one-thousandths of a share of Series B Preferred Stock covered by a Right immediately prior to the adjustment
by (B) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

 

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(k)            The
Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Series B Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the number of one one-thousandths of a share of Series B Preferred
Stock for which such Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the nearest ten thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least ten (10) calendar days
later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant
to this Section 11(k), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public announcement.

 

(l)             Irrespective
of any adjustment or change in the Purchase Price or the number of shares of Series B Preferred Stock issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of shares
which were expressed in the initial Right Certificates issued hereunder.

 

(m)           Before
taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the shares of Common
Stock or other securities and below one one-thousandth of the then par value, if any, of the Series B Preferred Stock, issuable upon
exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of such Series B Preferred Stock, Common Stock or other
securities at such adjusted Purchase Price. If upon any exercise of the Rights, a holder is to receive a combination of Common Stock and
common stock equivalents, a portion of the consideration paid upon such exercise, equal to at least the then par value of a share of Common
Stock of the Company, shall be allocated as the payment for each share of Common Stock of the Company so received.

 

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(n)            In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised
after such record date the Series B Preferred Stock, Common Stock or other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the Series B Preferred Stock, Common Stock or other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive
such additional shares upon the occurrence of the event requiring such adjustment.

 

(o)            Notwithstanding
anything in this Section 11 to the contrary, the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as and to the extent that in its sole discretion the
Board of Directors shall determine by Action of the Board of Directors to be advisable in order that any (i) consolidation or subdivision
of the Series B Preferred Stock, (ii) issuance wholly for cash of any Series B Preferred Stock at less than the then current
market price, (iii) issuance wholly for cash of Series B Preferred Stock or securities which by their terms are convertible
into or exchangeable for Series B Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to the holders of its Series B Preferred Stock,
shall not be taxable to such stockholders.

 

(p)            In
the event that at any time after the date of this Rights Agreement and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Stock payable in shares of Common Stock or (ii) effect a subdivision, combination or consolidation
of the Common Stock (by reclassification or otherwise than by payment of dividends in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in any such case (y) the number of one one-thousandths of a share of Series B Preferred
Stock purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-thousandths
of a share of Series B Preferred Stock so purchasable immediately prior to such event by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately before such event and the denominator of which is the number of shares of Common
Stock outstanding immediately after such event, and (z) each share of Common Stock outstanding immediately after such event shall
have issued with respect to it that number of Rights which each share of Common Stock outstanding immediately prior to such event had
issued with respect to it.

 

The adjustments provided for in this Section 11(p) shall
be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

 

(q)            The
Company covenants and agrees that it shall not, at any time after the Distribution Date and so long as the Rights have not been redeemed
pursuant to Section 23 hereof or exchanged pursuant to Section 24 hereof, (i) consolidate with, (ii) merge
with or into, or (iii) sell or transfer, in one or more transactions, assets or earning power aggregating more than fifty percent
(50%) of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, if at the time of or
immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights.

 

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(r)             The
Company covenants and agrees that, after the Stock Acquisition Date, it will not, except as permitted by Sections 23 and 24
hereof, take any action the purpose or effect of which is to diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights; provided, however, that the issuance of additional Rights pursuant hereto, including without limitation,
by Action of the Board of Directors under Section 22 hereof, shall not be deemed to violate this Section 11(s).

 

Section 12.          Certificate
of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made or any event affecting the Rights or their exercisability
(including without limitation an event which causes any Rights to become null and void) occurs, as provided in Sections 11 or 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment, and a brief statement of the facts and
computations accounting for such adjustment or describing such event, (b) promptly file with the Rights Agent and with each transfer
agent for the Series B Preferred Stock and the Common Stock a copy of such certificate and (c) if a Distribution Date has occurred,
include a brief summary thereof in a mailing to each holder of a Right Certificate in accordance with Section 26 hereof, or
prior to the Distribution Date, disclose a brief summary in a filing under the Exchange Act; provided, however, that the
failure to give, or any defect in, any such disclosure shall not affect the legality or validity of such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any adjustments or statements therein contained and shall have no duty
or liability with respect to, and shall not be deemed to have knowledge of any such adjustment or event unless and until it shall have
received such certificate.

 

Section 13.          Consolidation,
Merger or Sale or Transfer of Assets or Earnings Power.

 

(a)            In
the event that, directly or indirectly, at any time after a Person has become an Acquiring Person, (x) the Company shall consolidate
with, or merge with and into, any other Person, (y) any Person shall consolidate with or merge with and into the Company, and the
Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or
merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or (z) the Company shall sell, or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one or more transactions, assets or earning power aggregating fifty percent (50%) or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any other Person other than to the Company or one or more of its
wholly owned Subsidiaries, then, and in each such case, proper provision shall be made so that (i) each holder of a Right, subject
to Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase
Price multiplied by the then number of one one-thousandth of a share of Series B Preferred Stock for which a Right is then exercisable
(or if a Section 11(b) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of
such one one-thousandths of a share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(b) Event
by the Purchase Price in effect immediately prior to such first occurrence) in accordance with the terms of this Rights Agreement, in
lieu of Series B Preferred Stock, such number of shares of freely tradable Common Stock of the Principal Party, free and clear of
liens, rights of call or first refusal, encumbrances or other adverse claims, as shall be equal to the result obtained by (A) multiplying
the then current Purchase Price by the number of one one-thousandths of a share of Series B Preferred Stock for which a Right is
then exercisable (or if a Section 11(b) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying
the number of such one one-thousandths of a share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(b) Event
by the Purchase Price in effect immediately prior to such first occurrence), and dividing that product by (B) fifty percent (50%)
of the current market price per share of the Common Stock of such Principal Party (determined in the manner described in Section 11(f) hereof)
on the date of consummation of such consolidation, merger, sale or transfer; (ii) the Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Rights Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof, except for the provisions of Section 11(b) hereof,
shall apply to such Principal Party; and (iv) such Principal Party shall take such steps (including, but not limited to, the authorization
and reservation of a sufficient number of shares of its Common Stock to permit exercise of all outstanding Rights in accordance with this
Section 13(a)) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to the shares of its Common Stock thereafter deliverable upon the exercise
of the Rights

 

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(b)            “Principal
Party” shall mean:

 

(i)             in
the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a) hereof, the
Person that is the issuer of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation,
and if no securities are so issued, the Person, including the Company, that is the other party to the merger or consolidation; and

 

(ii)            in
the case of any transaction described in clause (z) of the first sentence of Section 13(a) hereof, the Person that
is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions;

 

provided,
however, that in any case described in clause (i) or (ii) in this Section 13(b), (x) if the Common Stock
of such Person is not at such time and has not been continuously over the preceding twelve (12)-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary or Affiliate of another Person, “Principal Party”
shall refer to such other Person, (y) in case such Person is a Subsidiary, directly or indirectly, or Affiliate of more than one
Person, the Common Stocks of all of which are and have been so registered, “Principal Party” shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest aggregate market value, and (z) in case such Person is, or is owned
directly or indirectly by, a partnership or joint venture formed by two or more Persons that are not owned, directly or indirectly, by
the same Person, the rules set forth in (x) and (y) above shall apply to each of the chains of ownership having an interest
in such joint venture as if such party were a “Subsidiary” of both or all of such joint venturers and the Principal Parties
in each such chain shall bear the obligations set forth in this Section 13 in the same ratio as their direct or indirect interests
in such Person bear to the total of such interests.

 

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(c)            The
Company shall not consummate any such consolidation, merger, sale or transfer unless (i) the Principal Party shall have a sufficient
number of shares of its authorized Common Stock which have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13, (ii) all rights of first refusal or preemptive rights in respect of the
issuance of Common Stock of such Principal Party upon exercise of outstanding Rights have been waived, (iii) there are no rights,
warrants, instruments or securities outstanding or any plan, agreement, arrangement or transaction which, as a result of the consummation
of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights, (iv) such transaction
shall not result in a default by such Principal Party under this Rights Agreement, and (v) prior thereto the Company and each Principal
Party and each other Person who may become a Principal Party as a result of such consolidation, merger, sale or transfer shall have executed
and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13, and further providing that, as soon as practicable after the date of any consolidation, merger, sale or transfer
of assets mentioned in paragraph (a) of this Section 13, the Principal Party will:

 

(i)             prepare
and file a registration statement under the Securities Act with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, will use its best efforts to cause such registration statement to become effective as soon as practicable
after such filing and will use its best efforts to cause such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date;

 

(ii)            use
its reasonable best efforts to qualify or register the Rights and the securities purchasable upon exercise of the Rights under the “blue
sky laws” of such jurisdictions as may be necessary or appropriate; and

 

(iii)           deliver
to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 (or any successor form) under the Exchange Act.

 

The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur
at any time after the occurrence of a Section 11(b) Event, the Rights which have not theretofore been exercised shall thereafter
also become exercisable in the manner described in Section 13(a) hereof.

 

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Section 14.          Fractional
Rights and Fractional Shares.

 

(a)            The
Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, the Company may pay or cause to be paid to the registered holders of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of
a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The
closing price for any Trading Day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock Exchange or Nasdaq or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange or Nasdaq, as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the principal national securities exchange on which the Rights are listed or admitted
to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price, or, if
not so quoted, the average of the high bid and low asked prices in the over the counter market, or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by Action of the Board of Directors. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by Action of the Board of Directors, whose determination
shall be used and conclusive for all purposes, or, if at the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board of Directors, which shall have the duty to make such determination in a reasonable
and objective manner, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all
purposes.

 

(b)            The
Company shall not be required to issue fractions of shares of Series B Preferred Stock (other than fractions which are integral multiples
of one one-thousandth of a share of Series B Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Series B Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share
of Series B Preferred Stock). Fractions of shares of Series B Preferred Stock in integral multiples of one one-thousandth of
a share of Series B Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are entitled as Beneficial Owners of the shares of Series B
Preferred Stock represented by such depositary receipts. In lieu of fractional shares of Series B Preferred Stock that are not integral
multiples of one one-thousandth of a share of Series B Preferred Stock, the Company may pay to the registered holders of Right Certificates
at the time such Right Certificates are exercised as herein provided an amount in cash equal to the same fraction of the current market
value of one one-thousandths of a share of Series B Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-thousandth of a share of Series B Preferred Stock shall be one one-thousandth of the closing price of a share
of Series B Preferred Stock (as determined pursuant to Section 11(f) hereof) for the Trading Day immediately prior
to the date of such exercise.

 

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(c)            Following
the occurrence of one of the transactions or events specified in Section 11 hereof giving rise to the right to receive common
stock equivalents (other than Series B Preferred Stock) or other securities upon the exercise of a Right, the Company shall not be
required to issue fractions of shares or units of such common stock equivalents or other securities upon exercise of the Rights or to
distribute certificates or create book-entry accounts which evidence fractional shares of such common stock equivalents or other securities.
In lieu of fractional shares or units of such common stock equivalents or other securities, the Company may pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current
market value of a share or unit of such common stock equivalent or other securities. For purposes of this Section 14(c), the
current market value shall be determined in the manner set forth in Section 11(f) hereof for the Trading Day immediately
prior to the date of such exercise and, if such common stock equivalent is not traded, each such common stock equivalent shall have the
value of one one-thousandth of a share of Series B Preferred Stock.

 

(d)            Except
as otherwise expressly provided in this Section 14, the holder of a Right by the acceptance of the Right expressly waives
such holder’s right to receive any fractional Rights or any fractional share upon exercise of Rights.

 

(e)            Whenever
a payment for fractional Rights or fractional shares is to be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and/or
formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected
funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with
respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional shares under any Section of
this Rights Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received
such a certificate and sufficient monies.

 

Section 15.          Rights
of Action. All rights of action in respect of this Rights Agreement, except for rights of action given to the Rights Agent hereunder,
including Section 18 or Section 20 hereof, are vested in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Stock), may, in such holder’s own behalf and for such holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of,
such holder’s right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate
and in this Rights Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person
subject to this Rights Agreement.

 

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Section 16.          Agreement
of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:

 

(a)            prior
to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Stock;

 

(b)            after
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office
of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate
forms and certificates duly executed and properly completed, along with a signature guarantee and such other and further documentation
as the Company or the Rights Agent may reasonably request;

 

(c)            subject
to Section 6 and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated Common Stock) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated
Common Stock certificate or book-entry registration advice made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; and

 

(d)            notwithstanding
anything in this Rights Agreement to the contrary, neither the Company nor the Rights Agent, nor any of their respective directors, officers,
employees or agents, shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of
its obligations under this Rights Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling
(whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental, self-regulatory, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting
or otherwise restraining performance of such obligation.

 

Section 17.          Right
Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Series B Preferred Stock, Common Stock or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate
be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.

 

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Section 18.          Concerning
the Rights Agent. (a)  The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred
in the preparation, negotiation, delivery, amendment, administration and execution of this Rights Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability,
damage, claim or expense (including the reasonable documented fees and expenses of outside legal counsel and including reasonable fees
and expenses arising from enforcing its rights hereunder), incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent (each as determined by a final judgment of a court of competent jurisdiction), for any action taken, suffered or omitted
to be taken by the Rights Agent in connection with the acceptance, administration, exercise and performance of its duties under this Rights
Agreement, including the costs and expenses of defending against any claim of liability or enforcing its rights hereunder. The provisions
of this Section 18 and of Section 20 below shall survive the termination of this Rights Agreement, the exercise or expiration
of the Rights and the resignation, replacement or removal of the Rights agent. The Rights Agent shall not be deemed to have any knowledge
of any event of which it was supposed to receive notice hereunder, and the Rights Agent shall be fully protected and shall incur no liability
for failing to take any action in connection therewith, unless and until it has received such notice in writing.

 

(b)            The
Rights Agent shall be authorized and protected and shall incur no liability for or in respect of any action taken, suffered or omitted
to be taken by it in connection with its acceptance and administration of this Rights Agreement and the exercise and performance of its
duties hereunder, in reliance upon any Right Certificate or certificate or book-entry registration for Series B Preferred Stock,
Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to
receive notice thereof hereunder but for which it has not received such notice, and the Rights Agent shall be fully protected and shall
incur no liability for failing to take action in connection therewith unless and until it has received such notice in writing.

 

(c)            The
provisions of this Section 18 and Section 20 below shall survive the termination of this Rights Agreement, the
resignation, replacement or removal of the Rights Agent and the exercise, termination and the expiration of the Rights. Notwithstanding
anything in this Rights Agreement to the contrary, in no event shall the Rights Agent be liable for special, punitive, incidental, indirect
or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage and regardless of the form of the action unless such damage occurred as a result of the
gross negligence, bad faith or willful misconduct on the part of the Rights Agent. Any liability of the Rights Agent under this Rights
Agreement shall be limited to the amount of annual fees paid by the Company to the Rights Agent.

 

Section 19.          Merger
or Consolidation or Change of Name of Rights Agent(a)            .

 

(a)            Any
Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting
from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to
the corporate trust, stock transfer or other stockholder services business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Rights Agreement without the execution or filing of any paper or any further act on the part
of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Rights Agreement,
any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Rights Agreement.

 

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(b)            In
case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.

 

Section 20.          Duties
of Rights Agent. The Rights Agent undertakes to perform the duties and obligations expressly imposed by this Rights Agreement (and
no implied duties or obligations) upon the following terms and conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:

 

(a)            The
Rights Agent may consult with legal counsel (who may be legal counsel for the Company or an employee of the Rights Agent), and the advice
or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur
no liability as to any action taken, suffered or omitted to be taken by it in the absence of bad faith, gross negligence or willful misconduct
(each as determined by a final judgment of a court of competent jurisdiction) and in accordance with such advice or opinion.

 

(b)            Whenever
in the performance of its duties under this Rights Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter
(including the identity of any Acquiring Person or any other Person referred to in Section 7(e) hereof and the determination
of current market price of any security) be proved or established by the Company prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chief Executive Officer, the Chief Financial Officer, the President,
any Senior Vice President, the Secretary, any Assistant Secretary of the Company or any such other officers as the Board of Directors
may designate (each, an “Authorized Officer”) and delivered to the Rights Agent; and such certificate shall be full
and complete authorization and protection to the Rights Agent for any action taken, suffered or omitted to be taken by it, in the absence
of bad faith, gross negligence or willful misconduct under the provisions of this Rights Agreement in reliance upon such certificate.

 

(c)            The
Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct
(each as determined by a final judgment of a court of competent jurisdiction). In no case, however, will the Rights Agent be liable for
special, indirect, punitive, incidental or consequential losses or damages of any kind whatsoever (including but not limited to lost profits
or reputational harm), even if the Rights Agent has been advised of the possibility of such losses or damages.

 

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(d)            The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Rights Agreement or in
the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.

 

(e)            The
Rights Agent shall not have any liability for or be under any responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution and delivery hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant
or condition contained in this Rights Agreement or in any Right Certificate; nor shall it be responsible for any adjustment required under
the provisions of Sections 11 or 13 hereof or be responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice to the Rights Agent of any such adjustment, upon which the Rights Agent may conclusively rely);
nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares
of Series B Preferred Stock or other securities to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any shares of Series B Preferred Stock or other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.

 

(f)             The
Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Rights Agreement.

 

(g)            The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the Authorized Officers, and to apply to such Authorized Officers for advice
or instructions in connection with its duties, and such advice or instruction shall be full authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it, in the
absence of bad faith, gross negligence or willful misconduct (each as determined by a final judgment of a court of competent jurisdiction)
in accordance with the advice or instructions of any such Authorized Officer or for any delay in acting while waiting for such advice
or instructions. The Rights agent shall be fully authorized and protected in relying in good faith upon the most recent instructions received
by it from any such officer. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken, suffered or omitted to be taken by the Rights Agent under this Agreement
and the date on and/or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable
for any action taken, suffered or omitted to be taken by, the Rights Agent in accordance with a proposal included in such application
on or after the date specified in such application (which date shall not be less than three Business Days after the date any Authorized
Officer of the Company actually receives such application, unless any such Authorized Officer shall have consented in writing to any earlier
date) unless prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be taken, suffered or omitted to be taken.

 

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(h)            The
Rights Agent and any stockholder, affiliate, director, officer, employee, agent or representative of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights Agent or any such stockholder, affiliate, director, officer,
employee, agent or representative of the Rights Agent from acting in any other capacity for the Company or for any other Person.

 

(i)             The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself (through
its directors, officers and employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct (each as determined by a final, non-appealable
judgment of a court of competent jurisdiction).

 

(j)             No
provision of this Rights Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

(k)            If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response
to clause 1, clause 2 and/or, in the case of the certificate attached to the form of election to purchase, clause 3 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise of transfer without first consulting with the Company

 

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Section 21.          Change
of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Rights Agreement
upon at least sixty (60) calendar days’ prior written notice mailed to the Company and in the event that the Rights Agent or one
of its affiliates is not also the transfer agent for the Company, to each transfer agent of the Common Stock or the Series B Preferred
Stock by registered or certified mail. In the event the transfer agency relationship in effect between the Company and the Rights Agent
terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties as Rights Agent under this
Rights Agreement as of the effective date of such termination and the Company shall be responsible for sending any required notice. The
Company may remove the Rights Agent or any successor Rights Agent upon at least sixty (60) calendar days’ prior written notice,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock or the Series B
Preferred Stock by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) calendar days after giving notice
of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (A) a Person organized and doing business
under the laws of the United States or any State thereof, which is authorized under such laws to exercise corporate trust, stock transfer
or stockholder services powers and is subject to supervision or examination by federal or state authority and which has at the time of
its appointment as Rights Agent has, or along with its Affiliates has, a combined capital and surplus or net assets, on a consolidated
basis of at least $50 million or (B) an affiliate of a Person described in clause (A) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent under this Rights Agreement without further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the Common Stock or the Series B Preferred Stock, and, following
the Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

 

Section 22.          Issuance
of New Right Certificates.

 

(a)            Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by Action of the Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares of stock or other securities or property purchasable under the Right Certificates made
in accordance with the provisions of this Rights Agreement.

 

(b)            In
addition, in connection with the issuance or sale of Common Stock following the Distribution Date and prior to the redemption, exchange
or expiration of the Rights, the Company (i) shall with respect to shares of Common Stock so issued or sold pursuant to the exercise
of stock options or under any employee benefit plan or arrangement, or upon the exercise, conversion or exchange of securities or other
rights or options to acquire Common Stock hereinafter issued by the Company, and (ii) may, in any other case, if deemed necessary
or appropriate by Action of the Board of Directors, issue Right Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (A) no such Right Certificates shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificates would be issued, and (B) no Right Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

 

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Section 23.          Redemption
and Termination.

 

(a)            The
Board of Directors may, at its option, at any time prior to the earlier of (i) such time as any Person becomes an Acquiring Person
or (ii) the Close of Business on the Final Expiration Date, by Action of the Board of Directors, elect to redeem all but not less
than all of the then outstanding Rights at a redemption price of $0.001 per Right, as appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption
Price”). The redemption of the Rights by the Board of Directors may be made effective at such time, on such basis, in such form
and with such conditions as the Board of Directors in its sole discretion may establish by Action of the Board of Directors.

 

(b)            If
the Company receives a Qualifying Offer and the Board of Directors has not redeemed the outstanding Rights in accordance with Section 23(a) above
or exempted such offer from the terms of this Rights Agreement or called a special meeting of stockholders for the purpose of voting on
whether or not to exempt such Qualifying Offer from the terms of this Rights Agreement, in each case by the end of the ninety (90) calendar
day period following the commencement of such Qualifying Offer within the meaning of Rule 14d-2(a) under the Exchange Act (the
 “Board Evaluation Period”), and if the Company receives, not earlier than seventy (70) calendar days nor later than
ninety (90) calendar days following the commencement of such Qualifying Offer, a written notice complying with the terms of this Section 23(b) (the “Special
Meeting Notice”), properly executed by the holders of record (or their duly authorized proxy) of 10% or more of the Common Stock
then outstanding, directing the Board of Directors to submit to a vote of stockholders at a special meeting of the stockholders of the
Company (a “Special Meeting”) a resolution exempting such Qualifying Offer from the provisions of this Rights
Agreement (the “Qualifying Offer Resolution”), then the Board of Directors shall take such actions as are necessary
or desirable to cause the Qualifying Offer Resolution to be submitted to a vote of stockholders within sixty (60) calendar days following
the last day of the Board Evaluation Period (the “Special Meeting Period”), by including a proposal relating to adoption
of the Qualifying Offer Resolution in the proxy materials of the Company for the Special Meeting; provided, however, that
if the Company, at any time during the Special Meeting Period and prior to a vote on the Qualifying Offer Resolution, enters into a Definitive
Acquisition Agreement, the Special Meeting Period may be extended (and any Special Meeting called in connection therewith may be cancelled)
if the Qualifying Offer Resolution will be separately submitted to a vote at the same meeting as the Definitive Acquisition Agreement.
For purposes of a Special Meeting Notice, the record date for determining eligible holders of record of the Common Stock shall be the
seventieth (70th) calendar day following the commencement of a Qualifying Offer. Any Special Meeting Notice must be delivered
to the Secretary of the Company at the principal executive offices of the Company and must set forth, as to the stockholders of record
executing such Special Meeting Notice, (i) the name and address of such stockholders, as they appear on the Company’s books
and records, (ii) the number of shares of Common Stock that are owned of record by each of such holders and (iii) in the case
of Common Stock owned beneficially by another Person, an executed certification by the holder of record that such holder has executed
such Special Meeting Notice only after obtaining instructions to do so from such Beneficial Owner. Subject to the requirements of applicable
law, the Board of Directors may take a position in favor of or opposed to the adoption of the Qualifying Offer Resolution, or no position
with respect to the Qualifying Offer Resolution, as it determines to be appropriate in the exercise of its fiduciary duties. In the event
that (A) no Person has become an Acquiring Person prior to the Exemption Date (as defined below), (B) the Qualifying Offer continues
to be a Qualifying Offer prior to the last day of the Special Meeting Period (the “Outside Meeting Date”) and (C) either
(1) the Special Meeting is not held on or prior to the end of the Special Meeting Period or (2) at the Special Meeting at which
a quorum is present, the holders of a majority of the Common Stock outstanding as of the record date for the Special Meeting selected
by the Board of Directors (excluding Common Stock beneficially owned by the Person making the Qualifying Offer and such Affiliates and
Associates of such Person), shall vote in favor of the Qualifying Offer Resolution, then the Qualifying Offer shall be, so long as it
is a Qualifying Offer, exempt from the provisions of this Rights Agreement, such exemption to be effective (the “Exemption Date”)
(x) as of the Close of Business on the Outside Meeting Date if a Special Meeting is not held on or prior to such date or (y) if
a Special Meeting is held on or prior to the Outside Meeting Date, as of the date on which the results of the vote adopting the Qualifying
Offer Resolution at the Special Meeting are certified as official by the appointed inspectors of election for the Special Meeting. Notwithstanding
anything herein to the contrary, no action or vote by stockholders not in compliance with the provisions of this Section 23(b) shall
serve to exempt any offer from the terms of this Rights Agreement. Immediately upon the Close of Business on the Exemption Date, and without
any further action and without any notice, the right to exercise the Rights with respect to the Qualifying Offer will terminate and, notwithstanding
anything in this Rights Agreement to the contrary, the consummation of the Qualifying Offer shall not cause the Person making the Qualifying
Offer (or Affiliates and Associates of such Person) to become an Acquiring Person; and the Rights shall immediately expire and have no
further force and effect upon consummation of such Qualifying Offer.

 

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(c)            Immediately
upon the effectiveness of the Action of the Board of Directors electing to redeem the Rights, evidence of which shall be promptly filed
with the Rights Agent, or, when appropriate, immediately upon the time or satisfaction of such conditions as the Board of Directors may
have established, and without any further action and without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public disclosure
of any such redemption (with prompt written notice to the Rights Agent); provided, however, that the failure to give, or
any defect in, any such disclosure shall not affect the legality or validity of such redemption. Within ten (10) calendar days after
the Action of the Board of Directors ordering the redemption of the Rights, the Company shall give notice of such redemption to the holders
of the then outstanding Rights by mailing such notice to all such holders at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made. Amounts payable shall be rounded down to the nearest
one cent.

 

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(d)            Neither
the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof and other than in connection with
the purchase of Common Stock prior to the Distribution Date.

 

Section 24.          Exchange.

 

(a)            By
Action of the Board of Directors, the Board of Directors may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant
to the provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect adjustments in the number of Rights pursuant to Section 11 hereof (such exchange ratio being
hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit
plan or compensation arrangement of the Company or any such Subsidiary, or any entity holding securities of the Company to the extent
organized, appointed or established by the Company or any such Subsidiary for or pursuant to the terms of any such employee benefit plan
or compensation arrangement or any Excepted Person) becomes the Beneficial Owner of fifty percent (50%) or more of the Common Stock then
outstanding.

 

(b)            Immediately
upon the effectiveness of the Action of the Board of Directors ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company promptly shall give public notice of any such exchange (with
prompt written notice thereof to the Rights Agent); provided, however, that the failure to give, or any defect in, such
notice shall not affect the legality or validity of such exchange. The Company promptly shall mail or cause to be mailed a notice of any
such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.

 

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(c)            In
any exchange pursuant to this Section 24, the Company, at its option, may substitute Series B Preferred Stock (or equivalent
preferred stock, as such term is defined in Section 11(d) hereof) for Common Stock exchangeable for Rights, at the initial
rate of one one-thousandth of a share of Series B Preferred Stock (or equivalent preferred stock) for each share of Common Stock,
as appropriately adjusted to reflect adjustments in the voting rights of the Preferred Stock pursuant to the terms thereof, so that the
fraction of a share of Series B Preferred Stock delivered in lieu of each share of Common Stock shall have the same voting rights
as one share of Common Stock.

 

(d)            In
the event that there shall not be sufficient shares of Common Stock or Series B Preferred Stock (or equivalent preferred stock) issued
but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24,
the Company shall either (i) take all such action as may be necessary to authorize additional shares of Common Stock or Series B
Preferred Stock (or equivalent preferred stock) for issuance upon exchange of the Rights (provided that if such authorization is not obtained
the Company will take the action specified in clause (ii) of this sentence), or (ii) take such action as shall be necessary
to ensure and provide, as and when and to the maximum extent permitted by applicable law and without exposing directors to personal liability
in connection therewith (as determined by the Board of Directors in its sole discretion) and any agreements or instruments in effect
on the Stock Acquisition Date (and remaining in effect) to which it is a party, that each Right shall thereafter constitute the right
to receive debt or equity securities or other assets (or a combination thereof) having a fair value equal to the product of the current
market price of a share of Common Stock (as determined pursuant to Section 11(f) hereof) on the date of the Section 11(b) Event
multiplied by the Exchange Ratio in effect on the date of the Section 11(b) Event, where the fair value of such debt or equity
securities or other assets (or a combination thereof) shall be as determined in good faith by the Board of Directors after consultation
with a nationally recognized investment banking firm.

 

(e)            The
Company shall not be required to issue fractions of Common Stock or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this paragraph (e), the current market value of a whole share
of Common Stock shall be the current market price of a share of Common Stock (as determined pursuant to Section 11(f) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

 

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(f)             Upon
or prior to effecting an exchange pursuant to this Section 24, or as promptly as reasonably practicable thereafter, the Board
of Directors of the Company may direct the Company to enter into a trust agreement in such form and with such terms as the Board of Directors
of the Company shall approve (the “Trust Agreement”). If the Board of Directors so directs, the Company shall enter
into the Trust Agreement and shall issue to the trust created by such agreement (the “Trust”) all or part (as determined
by the Board of Directors in its sole discretion) of the Common Stock, fractional Series B Preferred Stock or other securities, if
any, subject to exchange in accordance with this Section 24(f) to (x) all holders of outstanding and exercisable
Rights subject to exchange in accordance with Section 24(a), which shall not include Rights that have become void pursuant
to the provisions of Section 7(e) hereof, or (y) some portion of such holders (which may consist of holders who
have not taken proper steps to certify or otherwise demonstrate to the satisfaction of the Company that the Rights held by them have not
become void pursuant to the provisions of Section 7(e) hereof), and all Persons entitled to receive such shares or other
securities (and any dividends or distributions made thereon after the date on which such shares or other securities are deposited in the
Trust) shall be entitled to receive such shares or other securities only from the Trust and solely upon compliance with the relevant terms
and provisions of the Trust Agreement. Prior to effecting an exchange and registering shares of Common Stock (or other such securities)
in any Person’s name, including any nominee or transferee of a Person, the Company may require (or cause the trustee of the Trust
to require), as a condition thereof, that any holder of Rights provide evidence, including, without limitation, the identity of the Beneficial
Owners and their Affiliates and Associates (or former Beneficial Owners and their Affiliates and Associates) as the Company or the Rights
Agent shall reasonably request in order to determine if such Rights are void. If any Person shall fail to comply with such request, the
Company shall be entitled conclusively to deem the Rights formerly held by such Person to be void pursuant to Section 7(e) and
not transferable or exercisable or exchangeable in connection herewith. Any shares of Common Stock or other securities issued at the direction
of the Board of Directors in connection herewith shall be validly issued, fully paid and nonassessable shares of Common Stock or other
securities (as the case may be), and the Company shall be deemed to have received as consideration for such issuance a benefit having
a value that is at least equal to the aggregate par value of the shares so issued.

 

(g)            In
the event the Board of Directors determines, before the Distribution Date, to effect an exchange, such Board of Directors may delay the
occurrence of the Distribution Date to such time as such the Board of Directors deems advisable; provided, that the Distribution
Date must occur no later than twenty (20) calendar days after the Stock Acquisition Date.

 

Section 25.          Notice
of Proposed Actions.

 

(a)            In
case the Company shall propose at any time after the Distribution Date (i) to pay any dividend payable in stock of any class to the
holders of the Series B Preferred Stock or to make any other distribution to the holders of the Series B Preferred Stock (other
than a regular periodic cash dividend out of earnings or retained earnings of the Company), (ii) to offer to the holders of the Series B
Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Series B Preferred Stock or shares of
stock of any other class or any other securities, rights or options, (iii) to effect any reclassification of the Series B Preferred
Stock (other than a reclassification involving only the subdivision of outstanding shares of Series B Preferred Stock), (iv) to
effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sales or other transfer), in one or more transactions, of fifty percent (50%) or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or winding up
of the Company, or (vi) to declare or pay any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock), then, in each such
case, the Company shall give to the Rights Agent and each holder of a Right, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Common Stock and/or Series B Preferred Stock, if any such date is to be fixed.
Such notice shall be so given in the case of any action covered by clauses (i) or (ii) above at least ten (10) calendar
days prior to the record date for determining holders of the Series B Preferred Stock for purposes of such action, and in the case
of any such other action, at least ten (10) calendar days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Series B Preferred Stock, whichever shall be the earlier. The failure to give notice required
by this Section 25 or any defect therein shall not affect the legality or validity of the action taken by the Company or the
vote upon any such action.

 

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(b)            In
case a Section 11(b) Event shall occur, then the Company shall as soon as practicable thereafter give to each holder of a Right
Certificate and the Rights Agent, in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under Section 11(b) hereof.

 

Section 26.          Notices.
Notices or demands authorized by this Rights Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by overnight delivery service or first class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:

 

Innovative Solutions and Support, Inc.

720 Pennsylvania Drive

Exton, PA 19341

Attention: Chief Financial Officer

 

Subject to the provisions of Section 21 hereof, any notice
or demand authorized by this Rights Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by overnight delivery service or first class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:

 

Broadridge Corporate Issuer Solutions, Inc.

51 Mercedes Way

Edgewood, NY 11717

Attn: Corporate Actions Department

 

With a copy to:

 

Broadridge Financial Solutions, Inc.

2 Gateway Center, Newark, New Jersey 07102

legalnotices@broadridge.com

Attention: General Counsel.

 

Notices or demands authorized by this Rights Agreement to be given
or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first
class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

 

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Section 27.          Supplements
and Amendments.

 

(a)            Subject
to Section 27(c), the Company may from time to time, by Action of the Board of Directors in its sole and absolute discretion,
supplement or amend this Rights Agreement without the approval of any holders of Right Certificates in any manner which the Company may
deem necessary or desirable, including, without limitation, in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder (including without limitation to extend the Final Expiration Date), (iv) to increase or decrease the Purchase
Price, or (v) to make any other change.

 

(b)            Subject
to Section 27(c), and notwithstanding anything set forth in Section 27(a), from and after such time as any Person
becomes an Acquiring Person, the Company may supplement or amend this Rights Agreement to make any changes which the Company may deem
necessary or desirable (i) that shall not materially adversely affect the interests of the holders of Rights (other than an Acquiring
Person, an Affiliate or Associate of an Acquiring Person, or any Person whose Rights have become null and void pursuant to Section 7(e));
or (ii)(A) in order to cure any ambiguity; (B) to correct or supplement any provision contained herein that may be inconsistent
with any other provisions herein or otherwise defective, including, without limitation, any change in order to satisfy any applicable
law, rule or regulation, including, without limitation, any Trading Regulation on any applicable exchange so as to allow trading
of the Company’s securities thereon; or (C) to shorten or lengthen any time period herein; provided, however,
that this Rights Agreement may not be supplemented or amended to lengthen pursuant to clause (ii)(C) of this subsection, (x) the
time period relating to when the Rights may be redeemed at such time as the Rights are not then redeemable, or (y) any other time
period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders
of the Rights; provided that no amendment to this Rights Agreement may cause the Rights again to become redeemable or cause this
Rights Agreement again to become amendable other than in accordance with this subsection; provided, further, that the Company
shall have the right to make unilaterally any changes necessary to facilitate the appointment of a successor Rights Agent, which such
changes shall be set forth in a writing by the Company or by the Company and such successor Rights Agent.

 

(c)            Any
such supplement or amendment shall be evidenced by a writing signed by the Company and the Rights Agent. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment; provided, that notwithstanding anything to
the contrary contained herein, the Rights Agent may, but shall not be obligated to, enter into any supplement or amendment that affects
the Rights Agent’s own rights, duties, obligations or immunities under this Rights Agreement; provided, further, that
such supplement or amendment does not adversely affect the rights and privileges of the Company and/or the holders of the Rights under
this Rights Agreement.

 

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Section 28.          Successors.
All the covenants and provisions of this Rights Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.

 

Section 29.          Benefits
of this Rights Agreement. Nothing in this Rights Agreement shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock).

 

Section 30.          Determinations
and Actions by the Board of Directors. The Board of Directors shall have the exclusive power and authority to administer this Rights
Agreement and to exercise all rights and powers specifically granted to the Board of Directors or to the Company, or as may be necessary
or advisable in the administration of this Rights Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Rights Agreement and (ii) make all determinations deemed necessary or advisable for the administration of
this Rights Agreement (including a determination to redeem or exchange or not to redeem or exchange the Rights or to amend this Rights
Agreement). All such actions, interpretations, calculations and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) done or made by the Board of Directors shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board of Directors to any liability
to the holders of the Rights. The Rights Agent shall be entitled to assume that the Board of Directors acted in good faith and shall be
fully protected and incur no liability in reliance thereon.

 

Section 31.          Severability.
If any term, provision, covenant or restriction of this Rights Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Rights Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if any
such excluded term, provision, covenant or restriction shall materially affect the rights, immunities, liabilities, duties, responsibilities
or obligations of the Rights Agent, the Rights Agent shall be entitled to resign immediately. It is the intent of the parties hereto to
enforce the remainder of the terms, provisions, covenants and restrictions of this Rights Agreement to the maximum extent permitted by
law.

 

Section 32.          Governing
Law; Forum Selection; Waiver of Jury Trial. This Rights Agreement, each Right and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the Commonwealth of Pennsylvania and for all purposes shall be governed by and construed
in accordance with the laws of such Commonwealth applicable to contracts to be made and performed entirely within such Commonwealth, except
that the rights, duties and liabilities of the Rights Agent shall be governed by and construed in accordance with the laws of the State
of New York applicable to contracts to be made and performed entirely within such State. To the fullest extent permitted by law, any claim
relating to or brought pursuant to this Rights Agreement by any Person (including any record or Beneficial Owner of Common Stock or Preferred
Stock, any registered or Beneficial Owner of a Right, any Acquiring Person or the Rights Agent) shall be brought solely and exclusively
in the Courts of the Commonwealth of Pennsylvania (or, if such courts do not have jurisdiction, the United States District Court for the
Eastern District of Pennsylvania). Notwithstanding the foregoing, to the fullest extent permitted by law, any claim relating to or brought
pursuant to this Rights Agreement against the Rights Agent by any Person (including any record or Beneficial Owner of Common Stock or
Preferred Stock, any registered or Beneficial Owner of a Right, any Acquiring Person or the Rights Agent) shall be brought solely and
exclusively in the Courts of the State of New York (or, if such courts do not have jurisdiction, the United States District Court for
the Southern District of New York). EACH OF THE PARTIES HERETO ALSO IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF THIS RIGHTS AGREEMENT.

 

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Section 33.          Counterparts.
This Rights Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Rights Agreement
transmitted electronically shall have the same authority, effect and enforceability as an original signature.

 

Section 34.          Descriptive
Headings; Interpretation. Descriptive headings of the several Sections of this Rights Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the provisions hereof. Unless otherwise indicated to the contrary
herein by the context or use thereof, (i) whenever the words “include,” “includes” or “including”
are used in this Rights Agreement, they shall be deemed to be followed by the words “without limitation,” (ii) the words,
 “herein,” “hereto,” “hereof” and words of similar import refer to this Rights Agreement as a whole
and not to any particular Article, Section or paragraph of this Rights Agreement, (iii) masculine gender shall also include
the feminine and neutral genders, and vice versa, (iv) words importing the singular shall also include the plural, and vice versa,
(v) all references to currency, monetary values, “$” and dollars set forth herein shall mean United States dollars, (vi) references
to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto, (vii) references
to statutes shall include all rules and regulations promulgated thereunder, and (viii) references to statutes or regulations
shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing such statutes or regulations.

 

Section 35.          Force
Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall not be liable for any delays or failures
in performance resulting from acts beyond its reasonable control including acts of God, terrorist acts, shortage of supply, breakdowns
or malfunctions, interruptions or malfunctions of computer facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war or civil unrest.

 

[The remainder of this page is intentionally
left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused
this Rights Agreement to be duly executed, as of the day and year first above written.

 

 

	 	INNOVATIVE SOLUTIONS AND SUPPORT, INC.
	 	 	 
	 	 	 
		By:	/s/ Michael Linacre 
	 	 	Name: Michael Linacre 
	 	 	Title: Chief Financial Officer
	 	 	 
	 	BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC.
	 	 	 
	 	 	 
		By:	/s/ John P. Dunn
	 	 	Name: John P. Dunn
	 	 	Title: SVP

 

[Signature Page to Rights Agreement]

 

    

     

    

 

EXHIBIT A

 

STATEMENT OF TERMS

 

OF

 

SERIES
B JUNIOR PARTICIPATING PREFERRED STOCK

 

OF

 

INNOVATIVE SOLUTIONS AND SUPPORT, INC.

 

 

 

Section 1.            Designation
and Amount. The shares of such series shall be designated as “Series B Junior Participating Preferred Stock” (the
 “Series B Preferred Stock”) and the number of shares constituting the Series B Preferred Stock shall be 50,000.
Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series B Preferred Stock to a number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series B Preferred Stock.

 

Section 2.            Dividends
and Distributions

 

(A)          Subject
to the rights of the holders of any shares of any series of preferred stock of the Corporation ranking prior and superior to the Series B
Preferred Stock with respect to dividends, the holders of shares of Series B Preferred Stock, in preference to the holders of shares
of common stock, par value $0.001 per share of the Corporation (the “Common Stock”) and of any other stock of the Corporation
ranking junior to the Series B Preferred Stock, shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on any regular quarterly dividend payment date as
shall be established by the Board of Directors (each such date being referred to herein as a “Dividend Payment Date”), commencing
on the first Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately
preceding Dividend Payment Date or, with respect to the first Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series B Preferred Stock. In the event the Corporation shall at any time after the Rights Declaration Date declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series B Preferred
Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

    A-1

     

    

 

(B)          The
Corporation shall declare a dividend or distribution on the Series B Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Dividend Payment
Date and the next subsequent Dividend Payment Date, a dividend of $1.00 per share on the Series B Preferred Stock shall nevertheless
be payable on such subsequent Dividend Payment Date.

 

(C)          Dividends
shall begin to accrue and be cumulative on outstanding shares of Series B Preferred Stock from the Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Dividend
Payment Date or is a date after the record date for the determination of holders of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Dividend Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B
Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may, in accordance with applicable
law, fix a record date for the determination of holders of shares of Series B Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be not more than such number of days prior to the date fixed for the payment
thereof as may be allowed by applicable law.

 

Section 3.            Voting
Rights. The holders of shares of Series B Preferred Stock shall have the following voting rights:

 

(A)          Each
share of Series B Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters upon which the holders of the Common
Stock of the Corporation are entitled to vote. In the event the Corporation shall at any time after the Rights Declaration Date declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock, then in each such case the number of votes to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

 

    A-2

     

    

 

(B)          Except
as otherwise provided herein, in the Articles of Incorporation or by law, the holders of shares of Series B Preferred Stock, the
holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.

 

(C)          Except
as otherwise set forth herein or as otherwise provided by law, holders of Series B Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.

 

Section 4.            Certain
Restrictions.

 

(A)          Whenever
dividends or distributions payable on the Series B Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:

 

(i)          declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock;

 

(ii)         declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred Stock, except dividends paid ratably on the Series B Preferred Stock
and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;

 

(iii)        except
as permitted in Section 4(A)(iv) below, redeem or purchase or otherwise acquire for consideration any shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (as to dividends or upon dissolution, liquidation or winding up) to the Series B Preferred Stock;
or

 

(iv)       purchase
or otherwise acquire for consideration any shares of Series B Preferred Stock, or any shares of stock ranking on a parity with the
Series B Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board
of Directors in its sole discretion) to all holders of such shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or classes.

 

    A-3

     

    

 

(B)          The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock
of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares
at such time and in such manner.

 

Section 5.            Reacquired
Shares. Any shares of Series B Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall
be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to any conditions and restrictions on issuance set forth herein.

 

Section 6.            Liquidation,
Dissolution or Winding Up.

 

(A)         Subject
to the rights of the holders of any shares of any series of Preferred Stock of the Corporation ranking prior and superior to the Series B
Preferred Stock with respect to liquidation, upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation,
no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up), to the Series B Preferred Stock unless, prior thereto, the holders of shares of Series B Preferred Stock shall
have received $1,000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the “Series B Liquidation Preference”). Following the payment of the full amount of the
Series B Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common Adjustment”)
equal to the quotient obtained by dividing (i) the Series B Liquidation Preference by (ii) 1,000 (as appropriately adjusted
as set forth in subparagraph C below to reflect such events as stock dividends, and subdivisions, combinations and consolidations with
respect to the Common Stock) (such number in clause (ii) being referred to as the “Adjustment Number”). Following the
payment of the full amount of the Series B Liquidation Preference and the Common Adjustment in respect of all outstanding shares
of Series B Preferred Stock and Common Stock, respectively, holders of Series B Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate shares of the remaining assets to be distributed in the ratio of the Adjustment Number
to 1 with respect to such Series B Preferred Stock and Common Stock, on a per share basis, respectively.

 

(B)           In
the event there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a parity with the Series B Preferred Stock, then such remaining
assets available for such distribution shall be distributed ratably to the holders of such parity shares in proportion to their respective
liquidation preferences. In the event there are not sufficient assets available to permit payment in full of the Common Adjustment, then
such remaining assets shall be distributed ratably to the holders of Common Stock.

 

    A-4

     

    

 

(C)           In
the event the Corporation shall at any time after the Rights Declaration Date declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number
by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

Section 7.            Consolidation,
Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case
the shares of Series B Preferred Stock shall at the same time be similarly exchanged for or changed into an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time after the Rights Declaration Date declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior
to such event.

 

Section 8.            Redemption.
The shares of Series B Preferred Stock shall not be redeemable.

 

Section 9.            Rank.
The Series B Preferred Stock shall rank junior to all other series of the Corporation’s preferred stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.

 

Section 10.          Fractional
Shares. Series B Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s
fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights
of holders of Series B Preferred Stock.

 

    A-5

     

    

 

EXHIBIT B

 

[Form of Right Certificate]

 

	Certificate No. R- ____   	         ___ Rights

 

NOT EXERCISABLE AFTER THE EXPIRATION DATE. AT THE OPTION
OF THE COMPANY, THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT OR EXCHANGE FOR COMMON STOCK, UNDER THE CIRCUMSTANCES AND ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS
OR BECOMES AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A
PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OF AN ACQUIRING PERSON.
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY ARE NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF
THE RIGHTS AGREEMENT.]

 

Right Certificate

 

INNOVATIVE SOLUTIONS AND SUPPORT, Inc.

 

This certifies that ___________ or registered assigns,
is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of September 12, 2022, as the same may be amended from time to time (the “Rights
Agreement”), between Innovative Solutions and Support, Inc., a Pennsylvania corporation (the “Company”),
and Broadridge Corporate Issuer Solutions, Inc. (the “Rights Agent”), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 p.m., New York City time, on the Expiration
Date, as that term is defined in the Rights Agreement, at the office or offices designated for such purpose of the Rights Agent, or its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series B Junior Participating Preferred Stock,
par value $0.001 per share (the “Series B Preferred Stock”), of the Company, at a purchase price of $41.57
per one one-thousandth of a share of Series B Preferred Stock (the “Purchase Price”), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase duly executed along with a signature guarantee and such other and
further documentation as the Company or the Rights Agent may reasonably request. The number of Rights evidenced by this Right Certificate
(and the number of one one-thousandths of a share of Series B Preferred Stock which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price as of [_______], 202__, based on the Series B Preferred
Stock as constituted at such date.

 

    B-1

     

    

 

As provided in the Rights Agreement, the Purchase
Price, the number of one one-thousandths of a share of Series B Preferred Stock (or other securities or property) which may be purchased
upon the exercise of the Rights and the number of Rights evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events as provided in the Rights Agreement. In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to purchase securities of an entity other than the Company or securities
of the Company other than Preferred Stock or assets of the Company, all as provided in the Rights Agreement.

 

This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive offices of the Company. The Company will mail to the holder of this Right Certificate
a copy of the Rights Agreement without charge after receipt of a written request therefor.

 

This Right Certificate, with or without other Right
Certificates, upon surrender at the stockholder services office (or such office designated for such purpose) of the Rights Agent, may
be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of shares of Series B Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof along with a signature guarantee and such other and further documentation as the Company or the Rights
Agent may reasonably request another Right Certificate or Right Certificates for the number of whole Rights not exercised.

 

Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate may be redeemed by the Company at its option at a redemption price of $0.001 per Right
on or prior to the Stock Acquisition Date (as defined in the Rights Agreement). In addition, subject to the provisions of the Rights Agreement,
each Right evidenced by this Right Certificate may be exchanged by the Company at its option for one share of Common Stock or one one-thousandth
of a share of Preferred Stock per Right (or, in certain cases, other securities or assets of the Company), subject in each case to adjustment
in certain events as provided in the Rights Agreement, following the Stock Acquisition Date and prior to the time an Acquiring Person,
as such term is defined in the Rights Agreement, becomes the Beneficial Owner (as defined in the Rights Agreement) of 50% or more of the
Common Stock of the Company then outstanding.

 

No fractional shares of Series B Preferred Stock
or Common Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions of Series B Preferred
Stock which are integral multiples of one one-thousandth of a share of Series B Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.

 

    B-2

     

    

 

No holder of this Right Certificate, as such, shall
be entitled to vote or receive dividends or be deemed for any purpose the holder of the Series B Preferred Stock or of any other
securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement)
or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.

 

This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Rights Agent.

 

    B-3

     

    

 

Dated as of _____________ __, ____.

 

	ATTEST:	 	INNOVATIVE
SOLUTIONS AND SUPPORT, Inc.
	 	 	 	 	 
	By:	       	 	By:	             

 

Countersigned:

 

Broadridge
Corporate Issuer Solutions, Inc.,

 

as Rights Agent

 

	By:	 	 
	 	         Authorized Signatory	 

 

    B-4

     

    

 

Form of Reverse Side of Right Certificate

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if
such

holder desires to transfer the Rights evidenced
by this Right Certificate)

 

FOR VALUE RECEIVED _________________________ hereby
sells, assigns and transfers unto                                                            

 

 

(Please print name and address of transferee)

 

 

 

this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ___________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.

 

Dated: ______________, ____

 

	 	Signature
	 	 
	 	(Signature must conform in all respects to the name of holder as specified on the face of this Right Certificate)

 

Signature Guaranteed:

 

Signatures must be guaranteed by an “eligible guarantor institution”
a defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, which is a member of a recognized Medallion Signature
Guarantee Program.

 

    B-5

     

    

 

CERTIFICATE

 

(To be completed if true)

 

The undersigned hereby represents, for the benefit
of the Company and all holders of Rights and shares of Common Stock that the Rights evidenced by this Right Certificate are not, and,
to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as
each such term is defined in the Rights Agreement).

 

	Dated:	 	 

 

	 	Signature
	 	 
	 	(Signature must confirm in all respects to name of holder as specified on the face of this Right Certificate)

 

NOTICE

 

In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial Owner of the Rights evidenced by the enclosed Right Certificate
to be an Acquiring Person or an Affiliate or Associate thereof (as each such term is defined in the Rights Agreement) or a transferee
of any of the foregoing and accordingly will deem the Rights evidenced by such Right Certificate to be null and void and not transferable
or exercisable.

 

    B-6

     

    

 

Form of Reverse Side of Right Certificate
 — continued

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires to exercise

Rights represented by the Rights Certificate)

 

To the Rights Agent:

 

The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the shares of Series B Junior Participating Preferred
Stock (or other securities or property) issuable upon the exercise of such Rights and requests that certificates for such shares of Series B
Junior Participating Preferred Stock (or such other securities) be issued in the name of:

 

 

(Please print name and address)

 

 

 

If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name
of and delivered to:

 

Please insert social security

or other identifying number:                                                                                                                                     

 

 

(Please print name and address)

 

 

 

Dated: ________________, ___

 

	 	Signature
	 	(Signature must conform to holder specified on Right Certificate)

 

    B-7

     

    

 

Signature Guaranteed:

 

Signatures must be guaranteed by an “eligible guarantor institution”
a defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, which is a member of a recognized Medallion Signature
Guarantee Program.

 

The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned by, were not acquired by the undersigned from, and are not being sold,
assigned or transferred to, an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).

 

	Dated:	 	 

 

	 	Signature

 

    B-8

     

    

 

Form of Reverse Side of Right Certificate
 — continued

 

 

NOTICE

 

The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.

 

In the event the certification set forth above in
the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such Assignment or Election
to Purchase will not be honored.

 

 

 

    B-9

     

    

 

EXHIBIT C

 

SUMMARY OF RIGHTS TO PURCHASE

Shares of Series B Junior Participating Preferred
Stock

 

On
September 11, 2022 the Board of Directors of Innovative Solutions and Support, Inc., a Pennsylvania corporation (the
 “Company”), declared a dividend of one preferred share purchase right (a “Right”) for each
outstanding share of common stock, par value $0.001 per share, of the Company (the “Common Stock”). The dividend is
payable on September 27, 2022 to the stockholders of record as of the close of business on September 27, 2022 (the “Record
Date”). Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series B
Junior Participating Preferred Stock, par value $0.001 per share (the “Preferred Stock”), of the Company at a price
of $41.57 per one one-thousandth of a share of Series B Preferred Stock (as the same may be adjusted, the “Purchase Price”).
The description and terms of the Rights are set forth in a Rights Agreement, dated as of September 12, 2022 (as the same may be amended
from time to time, the “Rights Agreement”), between the Company and Broadridge Corporate Issuer Solutions, Inc.,
as Rights Agent (the “Rights Agent”).

 

Until the earlier to occur of (i) the close
of business on the tenth business day following the date of public announcement or the date on which the Company first has notice or determines
that a person or group of affiliated or associated persons (other than the Company, any subsidiary of the Company or any employee benefit
plan of the Company) has acquired Beneficial Ownership (as defined below) of 15% or more of the Common Stock (an “Acquiring Person”)
(or, in the event an exchange is effected in accordance with Section 24 of the Rights Agreement and the Board determines that a later
date is advisable, then such later date that is not more than twenty (20) calendar days after such public announcement) (the “Stock
Acquisition Date”) or (ii) the close of business on the tenth business day (or such later date as may be determined by
Action of the Board of Directors but not later than the tenth business day after such time as any such person or group becomes an Acquiring
Person) following the commencement of a tender offer or exchange offer by a person or group (other than the Company, any subsidiary of
the Company or an employee benefit plan of the Company) which, upon consummation, would result in such person or group being an Acquiring
Person (the earlier of the dates in clause (i) or (ii) above being called the “Distribution Date”), the Rights
will be evidenced, with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock certificates;
provided that, for purposes of this paragraph, the applicable Beneficial Ownership threshold may differ in circumstances where
a prospective Acquiring Person has filed a statement on Schedule 13G or Schedule 13D with the U.S. Securities and Exchange Commission.

 

    C-1

     

    

 

A Person shall not be deemed to be an “Acquiring
Person” if such Person, on the date of the first public announcement of the adoption of the Rights Agreement, is a Beneficial
Owner of 15% or more of the Common Stock of the Company then outstanding, (an “Excepted Person”); provided,
however, that if an Except Person becomes the Beneficial Owner of additional shares of Common Stock (not including any stock dividend,
rights dividend, stock split or similar transaction effected by the Company in which all holders of Common Stock are treated equally,
in each case not caused, directly or indirectly, by such Person) at any time such that the Excepted Person is or thereby becomes the Beneficial
Owner of 15% or more of the Common Stock then outstanding, then such Excepted Person shall be deemed an Acquiring Person; provided,
further, that upon the first decrease of an Excepted Person’s Beneficial Ownership below 15%, such Excepted Person shall
no longer be considered an Excepted Person. “Beneficial Ownership” shall include any securities such Person or any
of such Person’s Affiliates or Associates (i) beneficially owns, directly or indirectly, within the meaning of Rule 13d-3
and 13d-5 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) has
the right to acquire, pursuant to any plan, agreement, arrangement or understanding (written or oral), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise, or has the right to vote pursuant to any agreement, arrangement or
understanding (written or oral), (iii) except under limited circumstances, which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding
(written or oral) for the purpose of acquiring, holding, voting or disposing of any securities of the Company, or with which such Person
is acting in concert, and (iv) which are the subject of, or the reference securities for, or that underlie, any derivative securities
(as defined under Rule 16a-1 under the Exchange Act) of such Person or any of such Person’s Affiliates or Associates with the
number of shares of Common Stock deemed beneficially owned being (1) the number of shares of Common Stock that are synthetically
owned as a result of the derivative interest, and (2) the notional or other number of shares of Common Stock specified in the documentation
evidencing the derivative interest as being subject to be acquired upon the exercise or settlement of the derivative interest or as the
basis upon which the value or settlement amount of such derivative interest is to be calculated in whole or in part or, if no such number
of shares of Common Stock is specified in such documentation, as determined by the Board of Directors in its sole discretion to be the
number of shares of Common Stock to which the derivative interest relates.

 

The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be transferred with and only with the Company’s Common
Stock. Until the Distribution Date (or earlier redemption, exchange or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuances of Common Stock will contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange or expiration of the Rights), the surrender for transfer of any certificates
for shares of Common Stock outstanding as of the Record Date, even without such notation or a copy of this Summary of Rights, will also
constitute the transfer of the Rights associated with the Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders
of record of Common Stock as of the close of business on the Distribution Date and such separate certificates alone will then evidence
the Rights.

 

The Rights are not exercisable until the Distribution
Date. The Rights will expire on September 12, 2023 (the “Final Expiration Date”), unless (i) the Final Expiration
Date is extended or (ii) the Rights are earlier redeemed or exchanged by the Company, in each case as described below.

 

    C-2

     

    

 

The Purchase Price payable, and the number of shares
of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution in the case of specified events, including (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than
the then-current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences
of indebtedness, cash or assets (excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription
rights or warrants (other than those referred to above).

 

The number of outstanding Rights and the number of
one one-thousandths of a share of Preferred Stock issuable upon exercise of each Right are also subject to adjustment in the event of
a stock split of the Common Stock or a stock dividend on the Common Stock payable in shares of Common Stock or subdivisions, consolidations
or combinations of the Common Stock occurring, in any such case, prior to the Distribution Date.

 

Shares of Preferred Stock or fractions thereof purchasable
upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will have a preferential dividend in an amount equal
to the greater of $1 or 1,000 times any dividend declared on each share of Common Stock. In the event of liquidation, the holders of the
Preferred Stock will receive a preferred liquidation payment of $1,000 per share, plus an amount equal to accrued and unpaid dividends
and distributions, whether or not declared. Each share of Preferred Stock will have 1,000 votes, voting together with the Common Stock.
In the event of any merger, consolidation or other transaction in which shares of Common Stock are converted or exchanged, each share
of Preferred Stock will be entitled to receive 1,000 times the amount and type of consideration received per share of Common Stock. The
rights of the Preferred Stock as to dividends, liquidation and voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.

 

Because of the nature of the Preferred Stock’s
dividend and liquidation rights, the value of the one one-thousandth interest in a share of Preferred Stock purchasable upon exercise
of each Right should approximate the value of one share of Common Stock.

 

If any person, group of affiliated or associated
person or person (other than the Company, any subsidiary of the Company, or any employee benefit plan of the Company) becomes an Acquiring
Person, each Right, except those held by such persons (which thereafter will be void), would entitle the holders thereof to a number of
shares of Common Stock as shall equal the result obtained by multiplying the then current Purchase Price by the number of one one-thousandths
of a share of Preferred Stock for which a Right is then exercisable and dividing that product by 50% of the then current per share market
price of Common Stock.

 

If any person or group (other than the Company, any
subsidiary of the Company or any employee benefit plan of the Company, which will be void) acquires more than 15% but less than 50% of
the outstanding shares of Common Stock without prior written consent of the Board of Directors, each Right, except those held by such
persons, may be exchanged by the Board of Directors for one share of Common Stock.

 

    C-3

     

    

 

If, after a person has become an Acquiring Person,
the Company were acquired in a merger or other business combination transaction where the Company is not the surviving corporation or
where Common Stock is exchanged or 50% or more of the Company’s assets or earnings power is sold in one or several transactions,
each Right would entitle the holders thereof (except for the Acquiring Person) upon exercise to receive such number of shares of the acquiring
company’s common stock as shall be equal to the result obtained by multiplying the then current Purchase Price by the number of
one one-thousandths of a share of Preferred Stock for which a Right is then exercisable and dividing that product by 50% of the then current
market price per share of the common stock of the acquiring company on the date of such merger or other business combination transaction.

 

With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares
of Preferred Stock will be issued (other than fractions which are integral multiples of one one-thousandths of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading day prior to the date of exercise.

 

At any time prior to the time an Acquiring Person
becomes such, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the
 “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions
as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

 

A “Qualifying Offer” (as defined in the
Rights Agreement) is eligible for exemption from the operation of the Rights Agreement under certain conditions. In general, a Qualifying
Offer is a fully financed all-cash tender offer for any and all outstanding shares of the Common Stock that includes a commitment by the
offeror to promptly consummate any second step transaction needed to acquire all remaining Company shares for the same consideration and
that meets other requirements specified in the Rights Agreement. In the event the Company receives such a Qualifying Offer and, within
ninety (90) calendar days of the commencement of such Qualifying Offer (the “Board Evaluation Period”), the Board has
not redeemed the outstanding rights under the Rights Agreement, exempted the Qualifying Offer from the terms of the Rights Agreement or
called a special meeting of stockholders to vote on whether to exempt the Qualifying Offer from the terms of the Rights Agreement, holders
of at least 10% of the Company’s Common Stock (excluding shares beneficially owned by the offeror and its affiliates and associates)
may request that the Board call a special meeting for this purpose. If the special meeting is not convened by the 60th calendar day following
the last day of the Board Evaluation Period or the special meeting is convened and a majority of shares of the Company’s Common
Stock outstanding as of the record date for the special meeting (excluding shares beneficially owned by the offeror and its affiliates
and associates) are voted in favor of exempting the Qualifying Offer, the Qualifying Offer will be deemed exempt from the Rights Agreement.

 

    C-4

     

    

 

The terms of the Rights may be amended by the Board
of Directors without the consent of the holders of the Rights in any manner which it may deem necessary or desirable; provided,
however, that after such time as any person becomes an Acquiring Person, the Company may supplement or amend the Rights Agreement
to make such changes (i) that shall not materially adversely affect the interests of the holders of the Rights or (ii) (a) in
order to cure any ambiguity, (b) to correct or supplement any provision contained in the agreement that may be inconsistent with
any other provisions or otherwise defective, or (c) subject to certain exceptions, to shorten or lengthen any time period therein.

 

Until a Right is exercised or exchanged, the holder
thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive
dividends.

 

A
copy of the Rights Agreement has been filed with the U.S. Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A dated September 12, 2022. A copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement,
as the same may be amended from time to time, which is hereby incorporated herein by reference.

 

    C-5

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