Document:

Exhibit 4.3

 

MICRONET ENERTEC TECHNOLOGIES, INC.

FORM OF WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT (this “Warrant
Agreement”) made as of April ___, 2013 (the “Issuance Date”), between Micronet Enertec Technologies, Inc., a
Delaware corporation, with offices at 70 Kinderkamack Road, Emerson, New Jersey 07630 (“Company”), and Continental
Stock Transfer & Trust Co., with offices at 17 Battery Place, 8th Floor, New York, New York 10004 (“Warrant Agent”).

 

WHEREAS, the Company is engaged in a public
offering (the “Offering”) of Common Stock and Warrants and, in connection therewith, has determined to issue and deliver
up to _______ Warrants (the “Warrants”) to the public investors, with each such Warrant evidencing the right of the
holder thereof to purchase one share of common stock, par value $.001 per share, of the Company’s Common Stock (the “Common
Stock”) for $_____, subject to adjustment as described herein; and

 

WHEREAS, the Company has filed with the
U.S. Securities and Exchange Commission (the “Commission”) a Registration Statement, No. 333-185470 on Form S-1 (as
the same may be amended from time to time, the “Registration Statement”) for the registration, under the Securities
Act of 1933, as amended (the “Securities Act”) of, among other securities, the Warrants and the Common Stock issuable
upon exercise of the Warrants (the “Warrant Shares”), and such Registration Statement was declared effective on April
___, 2013; and

 

WHEREAS, the Company desires the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange and exercise of the Warrants; and

 

WHEREAS, the Company desires to provide
for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants (each, a “Holder”);
and

 

WHEREAS, all acts and things have been done
and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf
of the Warrant Agent, as provided herein, the valid and binding obligations of the Company, and to authorize the execution and
delivery of this Warrant Agreement.

 

NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:

 

1.Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this
Warrant Agreement.

 

2.Warrants.

 

2.1.Form
of Warrant. Each Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto,
the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chief Executive
Officer, President, Chief Financial Officer or Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile
of the Company’s seal. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased
to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same
effect as if he or she had not ceased to be such at the date of issuance. All of the Warrants shall initially be represented by
one or more book-entry certificates (each a “Book-Entry Warrant Certificate”).

 

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2.2.Effect
of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Warrant Agreement, a Warrant shall
be invalid and of no effect and may not be exercised by a Holder.

 

2.3.Registration.

 

2.3.1.Warrant
Register. The Warrant Agent shall maintain books (“Warrant Register”), for the registration of the original issuance
and the registration of any transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue
and register the Warrants in the names of the respective Holders in such denominations and otherwise in accordance with instructions
delivered to the Warrant Agent by the Company. To the extent the Warrants are DTC eligible as of the Issuance Date, all of the
Warrants shall be represented by one or more Book-Entry Warrant Certificates deposited with the Depository Trust Company (the “Depository”)
and registered in the name of Cede & Co., a nominee of the Depository. Ownership of beneficial interests in the Book-Entry
Warrant Certificates shall be shown on, and the transfer of such ownership shall be effected through, records maintained (i) by
the Depository or its nominee for each Book-Entry Warrant Certificate; (ii) by institutions that have accounts with the Depository
(such institution, with respect to a Warrant in its account, a “Participant”); or (iii) directly on the book-entry
records of the Warrant Agent with respect only to owners of beneficial interests that represent such direct registration.

 

If the Warrants are not DTC Eligible as
of the Issuance Date or the Depository subsequently ceases to make its book-entry settlement system available for the Warrants,
the Company may instruct the Warrant Agent to make other arrangements for book-entry settlement within ten (10) Business Days after
the Depository ceases to make its book-entry settlement available. In the event that the Company does not make alternative arrangements
for book-entry settlement within ten (10) Business Days or the Warrants are not eligible for, or it is no longer necessary to have
the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depository to deliver to
the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver
to the Depository definitive Warrant Certificates in physical form evidencing such Warrants. Such definitive Warrant Certificates
shall be in substantially the form annexed hereto as Exhibit A.

 

As used herein, the term “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized
or required by law or executive order to remain closed.

 

2.3.2.Beneficial
Owner; Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant
Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“registered
holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of
ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose
of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice
to the contrary. Any person in whose name ownership of a beneficial interest in the Warrants evidenced by a Book-Entry Warrant
Certificate is recorded in the records maintained by the Depository or its nominee shall be deemed the “beneficial owner”
thereof; provided, that all such beneficial interests shall be held through a Participant which shall be the registered
holder of such Warrants. As used herein, the term “Holder” refers only to a registered holder of the Warrants.

 

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2.4.Uncertificated
Warrants. Notwithstanding the foregoing and anything else herein to the contrary, the Warrants may be issued in uncertificated
form.

 

3.Terms
and Exercise of Warrants.

 

3.1.Exercise
Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Holder, subject to the provisions of such Warrant
and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of
$____ per whole share, subject to the subsequent adjustments provided in Section 4 hereof. The term “Exercise Price”
as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is
exercised.

 

3.2.Duration
of Warrants. A Warrant may be exercised only during the period (“Exercise Period”) commencing on the Issuance Date
and terminating at 5:00 P.M., New York City time on April ____, 2018 (“Expiration Date”). Each Warrant not exercised
on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Warrant
Agreement shall cease at the close of business on the Expiration Date.

 

3.3.Exercise
of Warrants.

 

3.3.1.Exercise
and Payment. A Holder may exercise a Warrant by delivering, not later than 5:00 P.M., New York City time, on any Business
Day during the Exercise Period (the “Exercise Date”) to the Warrant Agent at its corporate trust department (i) the
Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants
to be exercised (the “Book-Entry Warrants”) shown on the records of the Depository to an account of the Warrant Agent
at the Depository designated for such purpose in writing by the Warrant Agent to the Depository from time to time, (ii) an election
to purchase the Warrant Shares underlying the Warrants to be exercised (an “Election to Purchase”), properly completed
and executed by the Holder on the reverse of the Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly
delivered by the Participant in accordance with the Depository’s procedures, and (iii) the Exercise Price for each Warrant
to be exercised in lawful money of the United States of America by certified or official bank check or by bank wire transfer in
immediately available funds.

 

If any of (A) the Warrant Certificate or
the Book-Entry Warrants, (B) the Election to Purchase, or (C) the Exercise Price therefor, is received by the Warrant Agent after
5:00 P.M., New York City time, on the specified Exercise Date, the Warrants will be deemed to be received and exercised on
the Business Day next succeeding the Exercise Date. If the date specified as the Exercise Date is not a Business Day, the Warrants
will be deemed to be received and exercised on the next succeeding day that is a Business Day. If the Warrants are received or
deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant
Agent will be returned to the Holder. In no event will interest accrue on funds deposited with the Warrant Agent in respect of
an exercise or attempted exercise of Warrants. The validity of any exercise of Warrants will be determined by the Company in its
sole discretion and such determination will be final and binding upon the Holder and the Warrant Agent. Neither the Company nor
the Warrant Agent shall have any obligation to inform a Holder of the invalidity of any exercise of any Warrants.

 

The Warrant Agent shall promptly deposit
all funds received by it in payment of the Exercise Price in the account of the Company maintained with the Warrant Agent for such
purpose and shall advise the Company via telephone at the end of each day on which funds for the exercise of the Warrants are received
of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice to the Company in writing.

 

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3.3.2.Issuance
of Certificates. The Warrant Agent shall, by 11:00 A.M. New York City time on the Business Day following the Exercise
Date of any Warrant, advise the Company or the transfer agent and registrar in respect of (a) the number of Warrant Shares issuable
upon such exercise in accordance with the terms and conditions of this Warrant Agreement, (b) the instructions of each Holder with
respect to delivery of the Warrant Shares issuable upon such exercise, and the delivery of definitive Warrant Certificates, as
appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise, (c) in case of a Book-Entry Warrant
Certificate, the notation that shall be made to the records maintained by the Depository, its nominee for each Book-Entry Warrant
Certificate, or a Participant, as appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise and
(d) such other information as the Company or such transfer agent and registrar shall reasonably require.

 

The Company shall, by 5:00 P.M., New
York City time, on the third Business Day next succeeding the Exercise Date of any Warrant and the clearance of the funds in payment
of the aggregate Exercise Price, execute, issue and deliver to the Warrant Agent, the Warrant Shares to which such Holder is entitled,
in fully registered form, registered in such name or names as may be directed by such Holder. Upon receipt of such Warrant Shares,
the Warrant Agent shall, by 5:00 P.M., New York City time, on the third Business Day next succeeding such Exercise Date, transmit
such Warrant Shares to, or upon the order of, such Holder.

 

In lieu of delivering physical certificates
representing the Warrant Shares issuable upon exercise of any Warrants, provided the Company’s transfer agent is participating
in the Depository’s Fast Automated Securities Transfer program, the Company shall use its commercially reasonable efforts
to cause its transfer agent to electronically transmit the Warrant Shares issuable upon exercise to the Depository by crediting
the account of the Depository or of the Participant, as the case may be, through its Deposit Withdrawal Agent Commission system.
The time periods for delivery described in the immediately preceding paragraph shall apply to the electronic transmittals described
herein.

 

3.3.3.Valid
Issuance. All Warrant Shares issued upon the proper exercise of a Warrant in conformity with this Warrant Agreement shall be
validly issued, fully paid and nonassessable.

 

3.3.4.No
Fractional Exercise. Warrants may be exercised only in whole numbers of Warrant Shares. No fractional Warrant Shares are to
be issued upon the exercise of a Warrant, but rather the number of Warrant Shares to be issued shall be rounded up or down, as
applicable, to the nearest whole number. If fewer than all of the Warrants evidenced by a Warrant Certificate are exercised, a
new Warrant Certificate for the number of unexercised Warrants remaining shall be executed by the Company and countersigned by
the Warrant Agent as provided in Section 2 of this Warrant Agreement, and delivered to the Holder at the address specified on the
books of the Warrant Agent or as otherwise specified by such Holder. If fewer than all of the Warrants evidenced by a Book-Entry
Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depository, its nominee for each Book-Entry
Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise.

 

3.3.5.No
Transfer Taxes. The Company shall not be required to pay any stamp or other tax or governmental charge required to be paid
in connection with any transfer involved in the issue of the Warrant Shares upon the exercise of Warrants; and in the event that
any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Shares until such tax or other
charge shall have been paid or it has been established to the Company’s satisfaction that no such tax or other charge is
due.

 

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3.3.6.Date
of Issuance. Each person in whose name any such certificate for Warrant Shares is issued shall for all purposes be deemed to
have become the holder of record of such shares on the date on which the applicable Warrant was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of any such certificate, except that, if the date of such surrender
and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder
of record of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

3.3.7.Cashless
Exercise Under Certain Circumstances.

 

(i)The
Company shall provide to the Holder prompt written notice of any time that the Company is unable to issue the Warrant Shares via
DTC transfer or otherwise (without restrictive legend), because (A) the Commission has issued a stop order with respect to the
Registration Statement, (B) the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, (C) the Company has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, or (D) otherwise (each a “Restrictive Legend Event”). To the extent that a Restrictive
Legend Event occurs after the Holder has exercised a Warrant in accordance with the terms of the Warrants but prior to the delivery
of the Warrant Shares, the Company shall, at the election of the Holder to be given within five (5) Business Days of receipt of
notice of the Restrictive Legend Event, either (A) rescind the previously submitted Election to Purchase and the Company shall
return all consideration paid by the Holder for such shares upon such rescission or (B) treat the attempted exercise as a cashless
exercise as described in the next paragraph and refund the cash portion of the Exercise Price to the Holder.

 

(ii)If
a Restrictive Legend Event has occurred and no exemption from the registration requirements is available, the Warrants shall only
be exercisable on a cashless basis. Notwithstanding anything herein to the contrary, the Company shall not be required to make
any cash payments or net cash settlement to the Holder in lieu of issuance of the Warrant Shares. Upon a “cashless exercise,”
the Holder shall be entitled to receive a certificate (or book entry) for the number of Warrant Shares equal to the quotient obtained
by dividing [(A-B) (X)] by (A), where:

 

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

  

Upon receipt of an Election to Purchase for
a cashless exercise, the Warrant Agent will promptly deliver a copy of the Election to Purchase to the Company to confirm the number
of Warrant Shares issuable in connection with the cashless exercise. The Company shall calculate and transmit to the Warrant Agent,
and the Warrant Agent shall have no obligation under this section to calculate, the number of Warrant Shares issuable in connection
with the cashless exercise.

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“VWAP” means, for any date, the
price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on NYSE AMEX,
the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market or the New York Stock Exchange (each, a “Trading
Market”), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time) on any day that the Trading Market on which the Common Stock is then
listed is open for trading), (b) the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and
if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.

 

3.3.8.Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the applicable Holders the number of Warrant Shares that are not disputed.

 

4.Adjustments.

 

4.1.Adjustment
upon Subdivision or Combination of Common Stock. If the Company at any time after the Issuance Date subdivides (by any stock
split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares of Common Stock
into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time after the Issuance Date combines
(by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 4.1 shall become
effective at the close of business on the date the subdivision or combination becomes effective. The Company shall promptly notify
Warrant Agent of any such adjustment and give specific instructions to Warrant Agent with respect to any adjustments to the Warrant
Register.

 

4.2.Adjustment
for Other Distributions. In the event the Company shall fix a record date for the making of a dividend or distribution to all
holders of Common Stock of any evidences of indebtedness or assets or subscription rights or warrants (excluding those referred
to in Section 4.1 or other dividends paid out of retained earnings), then in each such case the Exercise Price shall be adjusted
by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled
to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned
above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record
date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided
to each Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one
share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately
after the record date mentioned above.

 

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4.3.Reclassification,
Consolidation, Purchase, Combination, Sale or Conveyance. If, at any time while the Warrants are outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another
person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition
of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common Stock
are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders
of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person whereby
such other person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held
by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon
any subsequent exercise of a Warrant, each Holder shall have the right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the same amount and kind of securities,
cash or property, if any, of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and
any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which each Warrant is exercisable immediately prior to such Fundamental
Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock
in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are
given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given
the same choice as to the Alternate Consideration that such Holder receives upon any exercise of each Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor
(the “Successor Entity”) and for which stockholders received any equity securities of the Successor Entity, to assume
in writing all of the obligations of the Company under this Warrant Agreement in accordance with the provisions of this Section
4.3 pursuant to written agreements and shall, upon the written request of such Holder, deliver to such Holder in exchange for the
applicable Warrants created by this Warrant Agreement a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to the Warrants which are exercisable for a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity), if any, plus any Alternate Consideration, receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which the Warrants are exercisable immediately prior to such Fundamental
Transaction, and with an exercise price which applies the Exercise Price hereunder to such shares of capital stock, if any, plus
any Alternate Consideration (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being
for the purpose of protecting the economic value of such Warrant immediately prior to the consummation of such Fundamental Transaction).
Upon the occurrence of any such Fundamental Transaction the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant Agreement and the Warrants referring to
the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant Agreement and the Warrants with the same effect as if such
Successor Entity had been named as the Company herein and therein.

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The Company shall instruct the Warrant Agent
to mail, by first class mail, postage prepaid, to each Holder, written notice of the execution of any such amendment, supplement
to this Warrant Agreement and/or the Warrants or other agreement. Any such amendment, supplement or other agreement entered into
by the Successor Entity shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 4. The Warrant Agent shall be under no responsibility to determine the correctness of any provisions
contained in such amendment, supplement or other agreement relating either to the kind or amount of securities or other property
receivable upon exercise of the Warrants or with respect to the method employed and provided therein for any adjustments and shall
be entitled to rely upon the provisions contained in any such amendment, supplement or other agreement. The provisions of this
Section 4.3 shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales and conveyances of the
kind described above.

 

4.4.Other
Events. If any event occurs of the type contemplated by the provisions of Section 4.1, 4.2 or 4.3 but not expressly provided
for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other
rights with equity features to all holders of Common Stock for no consideration), then the Company’s Board of Directors will
in good faith make an adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of each Holder.

 

4.5.Notices
of Changes in Warrant. Upon every adjustment of the Exercise Price or the number of Warrant Shares, the Company shall give
written notice thereof to the Warrant Agent, which notice shall state the Exercise Price resulting from such adjustment and the
increase or decrease, if any, in the number of Warrant Shares purchasable upon the exercise of a Warrant, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified
in Sections 4.1, 4.2 or 4.3, then, in any such event, the Company shall give written notice to each Holder, at the last address
set forth for such Holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such event.

 

4.6.No
Fractional Shares. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not
issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, a Holder would
be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise,
round up or down, as applicable, to the nearest whole number the number of Warrant Shares to be issued to such Holder.

 

4.7.Form
of Warrant. The form of Warrant annexed hereto as Exhibit A need not be changed because of any adjustment pursuant to
this Section 4, and Warrants issued after such adjustment may state the same Exercise Price and the same number of shares as is
stated in the Warrants initially issued pursuant to this Warrant Agreement. However, the Company may at any time in its sole discretion
make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and
any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may
be in the form as so changed.

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5.Transfer
and Exchange of Warrants.

 

5.1.Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants
shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the
Warrant Agent to the Company from time to time upon request.

 

5.2.Procedure
for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or
transfer reasonably acceptable to Warrant Agent, duly executed by the Holder thereof, or by a duly authorized attorney, and thereupon
the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Holder of the Warrants so surrendered,
representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry
Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another
nominee of the Depository, to a successor depository, or to a nominee of a successor depository; provided further, however, that
in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant
and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating
that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend. Upon any such registration
of transfer, the Company shall execute, and the Warrant Agent shall countersign and deliver, in the name of the designated transferee
a new Warrant Certificate or Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised
Warrants.

 

5.3.Fractional
Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the
issuance of a Warrant Certificate for a fraction of a Warrant.

 

5.4.Service
Charges. A service charge shall be made for any exchange or registration of transfer of Warrants, as negotiated between Company
and Warrant Agent.

 

5.5.Warrant
Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the
terms of this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for
such purpose.

 

    	9

    	 

    

 

6.Limitations
on Exercise. Neither the Warrant Agent nor the Company shall effect any exercise of any Warrant, and no Holder shall have the
right to exercise any portion of a Warrant, to the extent that after giving effect to the issuance of shares of Common Stock after
exercise as set forth on the applicable Election to Purchase, such Holder (together with such Holder’s Affiliates (as defined
in Rule 405 under the Securities Act), and any other persons acting as a group together with such Holder or any of such Holder’s
Affiliates), would beneficially own in excess of 4.99% of the Company’s Common Stock. For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by a Holder and its Affiliates shall include the number of shares of Common
Stock issuable upon exercise of the Warrant with respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which would be issuable upon exercise of the remaining, nonexercised portion of any Warrant beneficially
owned by such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and the rules and regulations promulgated thereunder, it being acknowledged by each Holder that neither the Warrant
Agent nor the Company is representing to such Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the
limitation contained in this Section 6 applies, the determination of whether a Warrant is exercisable (in relation to other securities
owned by a Holder together with any Affiliates) and of which portion of a Warrant is exercisable shall be in the sole discretion
of a Holder, and the submission of an Election to Purchase shall be deemed to be such Holder’s determination of whether such
Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of which portion
of a Warrant is exercisable, and neither the Warrant Agent nor the Company shall have any obligation to verify or confirm the accuracy
of such determination and neither of them shall have any liability for any error made by such Holder. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 6, in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common
Stock outstanding. The provisions of this Section 6 shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 6 to correct this subsection (or any portion hereof) which may be defective or inconsistent with
the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor Holder.

 

7.Other
Provisions Relating to Rights of Holders of Warrants.

 

7.1.No
Rights as Stockholder. Except as otherwise specifically provided herein, a Holder, solely in its capacity as an owner of a
Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose,
nor shall anything contained in this Warrant Agreement be construed to confer upon a Holder, solely in its capacity as the owner
of a Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate
action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which it is then entitled to receive upon the due exercise of a Warrant. For the avoidance of doubt, ownership of
a Warrant does not entitle the Holder or any beneficial owner thereof to any of the rights of a stockholder.

 

7.2.Lost,
Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity (including obtaining an open penalty bond protecting the Warrant Agent) or otherwise as
they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed
Warrant shall be at any time enforceable by anyone.

 

7.3.Reservation
of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of
Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant
Agreement.

    	10

    	 

    

 

8.Concerning
the Warrant Agent and Other Matters.

 

8.1.Concerning
the Warrant Agent. The Warrant Agent:

 

a)shall
have no duties or obligations other than those set forth herein and no duties or obligations shall be inferred or implied;

 

b)may
rely on and shall be held harmless by the Company in acting upon any certificate, statement, instrument, opinion, notice, letter,
facsimile transmission, telegram or other document, or any security delivered to it, and reasonably believed by it to be genuine
and to have been made or signed by the proper party or parties;

 

c)may
rely on and shall be held harmless by the Company in acting upon written or oral instructions or statements from the Company with
respect to any matter relating to its acting as Warrant Agent;

 

d)may
consult with counsel satisfactory to it (including counsel for the Company) and shall be held harmless by the Company in relying
on the advice or opinion of such counsel in respect of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion of such counsel;

 

e)solely
shall make the final determination as to whether or not a Warrant received by Warrant Agent is duly, completely and correctly executed,
and Warrant Agent shall be held harmless by the Company in respect of any action taken, suffered or omitted by Warrant Agent hereunder
in good faith and in accordance with its determination;

 

f)shall
not be obligated to take any legal or other action hereunder which might, in its judgment, subject or expose it to any expense
or liability unless it shall have been furnished with an indemnity satisfactory to it; and

 

g)shall
not be liable or responsible for any failure of the Company to comply with any of the Company’s obligations relating to the
Registration Statement or this Warrant Agreement, including without limitation obligations under applicable regulation or law.

 

8.2.Payment
of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the
Warrant Agent in respect of the issuance or delivery of Warrant Shares upon the exercise of Warrants, but the Company shall not
be obligated to pay any transfer taxes in respect of the Warrants or such Warrant Shares. The Warrant Agent shall not register
any transfer or issue or deliver any Warrant Certificate(s) or Warrant Shares unless or until the persons requesting the registration
or issuance shall have paid to the Warrant Agent for the account of the Company the amount of such tax, if any, or shall have established
to the reasonable satisfaction of the Company that such tax, if any, has been paid.

    	11

    	 

    

 

8.3.Resignation,
Consolidation, or Merger of Warrant Agent.

 

8.3.1.Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) calendar days’ notice in writing to the Company.
If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in
writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period
of thirty (30) calendar days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by
the Holder (who shall, with such notice, submit such Holder’s Warrants for inspection by the Company), then such Holder may
apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent,
the expenses of which shall be paid by the Company. Any successor Warrant Agent (but not including the initial Warrant Agent),
whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of
New York, in good standing and having its principal office in the Borough of Manhattan, City of New York and State of New York,
and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties,
and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any
further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and
deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and
rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor
Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

 

8.3.2.Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.

 

8.3.3.Merger
or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor
Warrant Agent under this Warrant Agreement without any further act.

 

8.4.Fees
and Expenses of Warrant Agent.

 

8.4.1.Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration in an amount separately agreed to between Company and Warrant
Agent for its services as Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder. One half of the total Warrant Agent fees (not including
postage) must be paid upon execution of this Warrant Agreement. The remaining half must be paid within fifteen (15) Business Days
thereafter. An invoice for any out-of-pocket and/or per item fees incurred will be rendered to and payable by the Company within
fifteen (15) Business Days of the date of said invoice. It is understood and agreed that all services to be performed by Warrant
Agent shall cease if full payment for its services has not been received in accordance with the above schedule, and said services
will not commence thereafter until all payment due has been received by Warrant Agent.

 

8.4.2.Further
Assurances. The Company agrees to 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 Warrant Agent for
the carrying out or performing of the provisions of this Warrant Agreement.

 

8.5.Liability
of Warrant Agent.

 

8.5.1.Reliance
on Company Statement. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering 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 statement signed by the President, Chief Executive Officer or Chief Financial Officer
of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered
in good faith by it pursuant to the provisions of this Warrant Agreement.

 

    	12

    	 

    

 

8.5.2.Indemnity.
The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees
to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, claims, losses, damages,
costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Warrant Agreement
except as a result of the Warrant Agent’s gross negligence, willful misconduct, or bad faith.

 

8.5.3.Limitation
of Liability. The Warrant Agent’s aggregate liability, if any, during the term of this Warrant Agreement with respect
to, arising from, or arising in connection with this Warrant Agreement, or from all services provided or omitted to be provided
under this Warrant Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid
or payable hereunder by the Company to Warrant Agent as fees and charges (not including reimbursable expenses).

 

8.5.4.Disputes.
In the event any question or dispute arises with respect to the proper interpretation of this Warrant Agreement or the Warrant
Agent’s duties hereunder or the rights of the Company or of any Holder, the Warrant Agent shall not be required to act and
shall not be held liable or responsible for refusing to act until the question or dispute has been judicially settled (and the
Warrant Agent may, if it deems it advisable, but shall not be obligated to, file a suit in interpleader or for a declaratory judgment
for such purpose) by final judgment rendered by a court of competent jurisdiction, binding on all parties interested in the matter
which is no longer subject to review or appeal, or settled by a written document in form and substance satisfactory to the Warrant
Agent and executed by the Company and each other interested party. In addition, the Warrant Agent may require for such purpose,
but shall not be obligated to require, the execution of such written settlement by all of the Holders of the Warrants and all other
parties that may have an interest in the settlement.

 

8.5.5.Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity
or execution of any Warrant (except its countersignature hereof and thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make
any adjustments required under the provisions of Section 4 hereof or 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; nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or reservation of any Warrant Shares to be issued pursuant
to this Warrant Agreement or any Warrant or as to whether any Warrant Shares will, when issued, be validly issued and fully paid
and nonassessable.

 

8.6.Acceptance
of Agency. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same
upon the terms and conditions herein set forth and, among other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of Warrant
Shares through the exercise of Warrants.

    	13

    	 

    

 

9.Miscellaneous
Provisions.

 

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

 

9.2.Notices.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by a Holder to
or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or
private courier service within five (5) Business Days after deposit of such notice, postage prepaid, addressed (until another address
is filed in writing by the Company with the Warrant Agent), as follows:

 

Micronet Enertec Technologies, Inc.

70 Kinderkamack Road

Emerson, New Jersey 07630

Attn: Chief Executive Officer

 

Any notice, statement or demand authorized
by this Warrant Agreement to be given or made by the a Holder or by the Company to or on the Warrant Agent shall be sufficiently
given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5)
Business Days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant
Agent with the Company), as follows:

 

Continental Stock Transfer & Trust Co.

17 Battery Place, 8th Floor

New York, New York 10004

Attn: [__________]

 

with a copy in each case to:

 

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, NY 10022

Attn: Kenneth M. Silverman, Esq.

 

and:

 

Aegis Capital Corp.

810 Seventh Avenue, 11th Fl

New York, NY 10019

Attn: Compliance Department

 

and:

 

Zysman Aharoni Gayer and

Sullivan & Worcester LLP

1633 Broadway

New York, New York 10019

Attn: Oded Har-Even, Esq.

 

    	14

    	 

    

 

9.3.Applicable
Law. The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects
by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application
of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Warrant Agreement shall be brought and enforced in the courts of the State of New York or
the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience
forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.

 

9.4.Persons
Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from
any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than
the parties hereto and the Holders of the Warrants and, for purposes of Sections 3.3, 9.3 and 9.8, the Underwriter, any right,
remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement
hereof. The Underwriters shall be deemed to be an express third-party beneficiary of this Warrant Agreement with respect to Sections
3.3, 9.3 and 9.8 hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement
shall be for the sole and exclusive benefit of the parties hereto (and the Underwriters with respect to the Sections 3.3, 9.3 and
9.8 hereof) and their successors and assigns and of the Holders.

 

9.5.Examination
of this Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the
Warrant Agent in the City of New York, State of New York, for inspection by any Holder. The Warrant Agent may require any such
Holder to submit his Warrant for inspection by it.

 

9.6.Counterparts.
This Warrant Agreement may be executed in any number of original or facsimile 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.

 

9.7.Effect
of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not
affect the interpretation thereof.

 

9.8.Amendments.
This Warrant Agreement may be amended by the parties hereto without the consent of any Holder for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with
respect to matters or questions arising under this Warrant Agreement as the parties may deem necessary or desirable and that the
parties deem shall not adversely affect the interest of the Holders. All other modifications or amendments, including any amendment
to increase the Exercise Price or shorten the Exercise Period, shall require the written consent of the Underwriter and the Holders
of a majority of the then outstanding Warrants.

 

9.9.Severability.
This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu
of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant
Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

 

    	15

    	 

    

 

9.10.Force
Majeure. In the event either party is unable to perform its obligations under the terms of this Warrant Agreement because of
acts of God, strikes, failure of carrier or utilities, equipment or transmission failure or damage that is reasonably beyond its
control, or any other cause that is reasonably beyond its control, such party shall not be liable for damages to the other for
any damages resulting from such failure to perform or otherwise from such causes. Performance under this Warrant Agreement shall
resume when the affected party or parties are able to perform substantially that party’s duties.

 

9.11.Consequential
Damages. Notwithstanding anything in this Warrant Agreement to the contrary, neither party to this Warrant Agreement shall
be liable to the other party for any consequential, indirect, special or incidental damages under any provision of this Warrant
Agreement or for any consequential, indirect, punitive, special or incidental damages arising out of any act or failure to act
hereunder even if that party has been advised of or has foreseen the possibility of such damages.

 

[Signature Page Follows]

 

    	16

    	 

    

 

IN WITNESS WHEREOF, this Warrant Agreement
has been duly executed by the parties hereto as of the day and year first above written.

 

	 	MICRONET ENERTEC TECHNOLOGIES, INC.
	 	 
	 	By: 	 
	 	Name: 
	 	Title: 

 

 

	 	CONTINENTAL STOCK TRANSFER & TRUST CO.
	 	 
	 	By: 	 
	 	Name: 
	 	Title: 

   

    	17

    	 

    

 

Exhibit A

 

[FORM OF WARRANT CERTIFICATE]

 

EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT

AGENT AS PROVIDED HEREIN.

 

Warrant Certificate Evidencing Warrants
to Purchase

Common Stock, par value of $0.001 per share, as described herein.

 

MICRONET ENERTEC TECHNOLOGIES, INC.

 

	No. ___________	CUSIP  595117 110

 

VOID AFTER 5:00 P.M., NEW YORK
CITY TIME,

ON _______ __, 2018

 

This certifies that ________________________
or registered assigns is the registered holder (the “Holder”) of _____________________ warrants to purchase certain
securities (each a “Warrant”). Each Warrant entitles the Holder, subject to the provisions contained herein
and in the Warrant Agreement (as defined below), to purchase from Micronet Enertec Technologies, Inc., a Delaware corporation (the
“Company”), one share (collectively, the “Warrant Shares”) of Common Stock, par value $0.001
per share, of the Company (“Common Stock”), at the Exercise Price set forth below. The price per share at which
each Warrant Share may be purchased at the time each Warrant is exercised (the “Exercise Price”) is $____ initially,
subject to adjustments as set forth in the Warrant Agreement (as defined below).

 

This Warrant Certificate is issued under
and in accordance with the Warrant Agreement, dated as of [_____ _], 2013 (the “Warrant Agreement”), between
the Company and the Warrant Agent, and is subject to the terms and provisions contained in the Warrant Agreement, to all of which
terms and provisions the Holder of this Warrant Certificate and the beneficial owners of the Warrants represented by this Warrant
Certificate consent by acceptance hereof. Copies of the Warrant Agreement are on file and can be inspected at the below-mentioned
office of the Warrant Agent and at the office of the Company at 70 Kinderkamack Road, Emerson, New Jersey 07630. Capitalized terms
used but not defined herein shall have the meaning ascribed to them in the Warrant Agreement.

 

Subject to the terms of the Warrant Agreement,
each Warrant evidenced hereby may be exercised in whole but not in part at any time, as specified herein, on any Business Day (as
defined below) occurring during the period (the “Exercise Period”) commencing on the Issuance Date and terminating
at 5:00 P.M., New York City time, on April __, 2018 (the “Expiration Date”). Each Warrant remaining
unexercised after 5:00 P.M., New York City time, on the Expiration Date shall become void, and all rights of the Holder of
this Warrant Certificate evidencing such Warrant shall cease.

 

The Holder of the Warrants represented by
this Warrant Certificate may exercise any Warrant evidenced hereby by delivering, not later than 5:00 P.M., New York City
time, on any Business Day during the Exercise Period (the “Exercise Date”) to Continental Stock Transfer &
Trust Co. (the “Warrant Agent”, which term includes any successor warrant agent under the Warrant Agreement
described below) at its corporate trust department at 17 Battery Place, 8th Floor, New York, New York 10004, (i) this Warrant Certificate
or, in the case of a Book-Entry Warrant Certificate (as defined in the Warrant Agreement), the Warrants to be exercised (the “Book-Entry
Warrants”) as shown on the records of The Depository Trust Company (the “Depository”) to an account
of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository, (ii) an election
to purchase (“Election to Purchase”), properly executed by the Holder hereof on the reverse of this Warrant
Certificate or properly executed by the institution in whose account the Warrant is recorded on the records of the Depository (the
“Participant”), and substantially in the form included on the reverse of this Warrant Certificate and (iii)
unless cashless exercise is permitted under the Warrant Agreement, the Exercise Price for each Warrant to be exercised in lawful
money of the United States of America by certified or official bank check or by bank wire transfer in immediately available funds,
in each case payable to the order of the Company.

 

    	A-1

    	 

    

 

As used herein, the term “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized
or required by law or executive order to remain closed.

 

Warrants may be exercised only in whole
numbers of Warrants. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of
Warrant Shares to be issued shall be rounded up or down, as applicable, to the nearest whole number. If fewer than all of the Warrants
evidenced by this Warrant Certificate are exercised, a new Warrant Certificate for the number of Warrants remaining unexercised
shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 of the Warrant Agreement, and
delivered to the Holder of this Warrant Certificate at the address specified on the books of the Warrant Agent or as otherwise
specified by such Holder.

 

The Company shall provide to the Holder
prompt written notice of any time that the Company is unable to issue the Warrant Shares via DTC transfer or otherwise (without
restrictive legend), because (A) the Commission has issued a stop order with respect to the Registration Statement, (B) the Commission
otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, (C) the
Company has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or (D) otherwise
(each a “Restrictive Legend Event”). To the extent that a Restrictive Legend Event occurs after the Holder has
exercised a Warrant in accordance with the terms of the Warrants but prior to the delivery of the Warrant Shares, the Company shall,
at the election of the Holder to be given within five (5) Business Days of receipt of notice of the Restrictive Legend Event, either
(A) rescind the previously submitted Election to Purchase and the Company shall return all consideration paid by the Holder for
such shares upon such rescission or (B) treat the attempted exercise as a cashless exercise as described in the next paragraph
and refund the cash portion of the exercise price to the Holder.

 

If a Restrictive Legend Event has occurred
and no exemption from the registration requirements is available, the Warrant shall only be exercisable on a cashless basis. Notwithstanding
anything herein to the contrary, the Company shall not be required to make any cash payments or net cash settlement to the Holder
in lieu of issuance of the Warrant Shares. Upon a “cashless exercise,” the Holder shall be entitled to receive a certificate
(or book entry) for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

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

 

    	A-2

    	 

    

 

Upon receipt of an Election to Purchase
for a cashless exercise, the Warrant Agent will promptly deliver a copy of the Election to Purchase to the Company to confirm the
number of Warrant Shares issuable in connection with the cashless exercise. The Company shall calculate and transmit to the Warrant
Agent, and the Warrant Agent shall have no obligation under this section to calculate, the number of Warrant Shares issuable in
connection with the cashless exercise.

 

“VWAP” means, for any
date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted
on NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange
(each, a “Trading Market”), the daily volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P.
(based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time) on any day that the Trading
Market on which the Common Stock is then listed is open for trading), (b) the volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for
trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published
by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

The Exercise Price and the number of Warrant
Shares purchasable upon the exercise of each Warrant shall be subject to adjustment as provided pursuant to Section 4 of the Warrant
Agreement.

 

Upon due presentment for registration of
transfer or exchange of this Warrant Certificate at the stock transfer division of the Warrant Agent, the Company shall execute,
and the Warrant Agent shall countersign and deliver, as provided in Section 5 of the Warrant Agreement, in the name of the designated
transferee one or more new Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised
Warrants, subject to the limitations provided in the Warrant Agreement.

 

Neither this Warrant Certificate nor the
Warrants evidenced hereby entitles the Holder to any of the rights of a stockholder of the Company, including, without limitation,
the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice
as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

 

The Warrant Agreement and this Warrant Certificate
may be amended as provided in the Warrant Agreement including, under certain circumstances described therein, without the consent
of the Holder of this Warrant Certificate or the Warrants evidenced thereby.

 

THIS WARRANT CERTIFICATE AND ALL RIGHTS
HEREUNDER AND UNDER THE WARRANT AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS FORMED AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION.

    	A-3

    	 

    

 

This Warrant Certificate shall not be entitled
to any benefit under the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant evidenced hereby may be exercised,
unless this Warrant Certificate has been countersigned by the manual signature of the Warrant Agent.

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.

 

	Dated as of ________ __, 2013	 	 
	 	 	 
	 	MICRONET ENERTEC TECHNOLOGIES, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

 

	CONTINENTAL STOCK TRANSFER & TRUST CO., as Warrant Agent
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

    	A-4

    	 

    

 

[REVERSE]

 

Instructions for Exercise of Warrant

 

To exercise the Warrants evidenced hereby,
the Holder must, by 5:00 P.M., New York City time, on the specified Exercise Date, deliver to the Warrant Agent at its stock
transfer division, a certified or official bank check or a bank wire transfer in immediately available funds, in each case payable
to the Company, in an amount equal to the Exercise Price in full for the Warrants exercised. In addition, the Holder must provide
the information required below and deliver this Warrant Certificate to the Warrant Agent at the address set forth below and the
Book-Entry Warrants to the Warrant Agent in its account with the Depository designated for such purpose. The Warrant Certificate
and this Election to Purchase must be received by the Warrant Agent by 5:00 P.M., New York City time, on the specified Exercise
Date.

 

ELECTION TO PURCHASE

TO BE EXECUTED IF WARRANT HOLDER DESIRES

TO EXERCISE THE WARRANTS EVIDENCED HEREBY

 

The undersigned hereby irrevocably elects
to exercise, on __________, ____ (the “Exercise Date”), __________ Warrants, evidenced by this Warrant Certificate,
to purchase, __________ shares (the “Warrant Shares”) of Common Stock, par value of $0.001 per share (the “Common
Stock”) of Micronet Enertec Technologies, Inc., a Delaware corporation (the “Company”), and represents
that on or before the Exercise Date:

 

o such Holder has
tendered payment for such Warrant Shares by certified or official bank check payable to the order of the Company c/o Continental
Stock Transfer & Trust Co., 17 Battery Place, 8th Floor, New York, New York 10004, or by bank wire transfer in immediately
available funds payable to the Company at Account No. [ ], in each case in the amount of $_______ in accordance with the terms
hereof, or

 

o [if permitted]
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 3.3.7
of the Warrant Agreement, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to
the cashless exercise procedure set forth in subsection 3.3.7.

 

The undersigned requests that said number of Warrant Shares
be in fully registered form, registered in such names and delivered, all as specified in accordance with the instructions set forth
below.

 

If said number of Warrant Shares is less
than all of the Warrant Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate evidencing the remaining
balance of the Warrants evidenced hereby be issued and delivered to the Holder of the Warrant Certificate unless otherwise specified
in the instructions below.

 

    	A-5

    	 

    

 

Dated: ________ __, ____

 

 

	 	Name	 	 
	 	 	(Please Print)	 

 

/   /   /   / - /   /   / - /   /   /   /   /

(Insert Social Security or Other Identifying Number
of Holder)

 

	 	Address	__________________________
	 	 	__________________________
	 	 	 
	 	Signature	__________________________

 

This Warrant may only be exercised by presentation
to the Warrant Agent at one of the following locations:

 

	 	By hand at:  	Continental Stock Transfer & Trust Co.
	 	 	17 Battery Place, 8th Floor
	 	 	New York, New York 10004
	 	 	 
	 	By mail at:	Continental Stock Transfer & Trust Co.
	 	   	17 Battery Place, 8th Floor
	 	   	New York, New York 10004

 

The method of delivery of this Warrant Certificate is at the
option and risk of the exercising Holder and the delivery of this Warrant Certificate will be deemed to be made only when actually
received by the Warrant Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended.
In all cases, sufficient time should be allowed to ensure timely delivery.

 

(Instructions as to form and delivery of Warrant Shares and/or
Warrant Certificates)

 

	Name in which Warrant Shares are to be registered if other than in the name of the Holder of this Warrant Certificate:	 	
 

	 	 	 
	Address to which Warrant Shares are to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on the books of the Warrant Agent:	 	
 

	 	 	(Street Address)
	 	 	 
	 	 	
 

	 	 	(City and State) (Zip Code)
	 	 	 
	Name in which Warrant Certificate evidencing unexercised Warrants, if any, is to be registered if other than in the name of the Holder of this Warrant Certificate:	 	
 

	 	 	 
	Address to which certificate representing unexercised Warrants, if any, is to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on the books of the Warrant Agent:	 	
 

 

    	A-6

    	 

    

 

	 	 	(Street Address)
	 	 	 
	 	 	
 

	 	 	(City and State) (Zip Code)
	 	 	 
	 	 	Dated:
	 	 	 
	 	 	
 

	 	 	Signature
	 	 	 
	 	 	Signature must conform in all respects to the name of the Holder as specified on the face of this Warrant Certificate.  If Warrant Shares, or a Warrant Certificate evidencing unexercised Warrants, are to be issued in a name other than that of the Holder hereof or are to be delivered to an address other than the address of such Holder as shown on the books of the Warrant Agent, the above signature must be guaranteed by a an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended).
	SIGNATURE GUARANTEE	 	 
	 	 	 

	Name of Firm	 	 	 

	Address	 	 	 

	Area Code	 	 	 

	and Number	 	 	 

 

	Authorized Signature	 	 	 

	Name	 	 	 

	Title	 	 	 

	Dated:	 	     , 20__	 

 

    	A-7

    	 

    

 

ASSIGNMENT

 

(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT
HOLDER

DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY)

 

FOR VALUE RECEIVED, ____________ HEREBY SELL(S), ASSIGN(S) AND
TRANSFER(S) UNTO

 

 

	
 

	 	 
	
 

	 	 
	
 

	 	 
	
 

	 	
 

	(Please print name and address

including zip code of assignee)	 	(Please insert social security or

other identifying number of assignee)

 

the rights represented by the within Warrant Certificate and
does hereby irrevocably constitute and appoint ____________ Attorney to transfer said Warrant Certificate on the books of the Warrant
Agent with full power of substitution in the premises.

 

	 	Dated:
	 	 
	 	

	 	Signature
	 	 
	 	(Signature must conform in all respects to the name of the Holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended).

 

	SIGNATURE GUARANTEE	 	 

 

	Name of Firm	 	 

	Address	 	 

	Area Code	 	 

	and Number	 	 

 

	Authorized Signature	 	 

	Name	 	 

	Title	 	 

	Dated:	 	     , 20__

 

    	A-8AMENDED AND RESTATED
	 	EFFECTIVE NOVEMBER 26, 2012

 

XCEL BRANDS, INC.

2011 EQUITY INCENTIVE PLAN

 

Section 1. Purposes; Definitions.

 

The purpose of the Xcel Brands, Inc. Equity
Incentive Plan is to enable Xcel Brands, Inc. to offer to those of its employees and to the employees of its Subsidiaries and other
persons who are expected to contribute to the success of the Company, long term performance-based stock and/or other equity interests
in the Company, thereby enhancing their ability to attract, retain and reward such key employees or other persons, and to increase
the mutuality of interests between those employees or other persons and the stockholders of Xcel Brands, Inc.

 

For purposes of the Plan, unless the context
requires otherwise, the following terms shall be defined as set forth below:

 

(a)         “Award”
means an award granted under the Plan including a Stock Option or Restricted Stock.

 

(b)        
“Board” means the Board of Directors of Xcel Brands, Inc.

(c)        
“Cause” shall have the meaning ascribed thereto in Section 5(b)(ix) below.

 

(d)        
“Change of Control” shall have the meaning ascribed thereto in Section 8 below.

 

(e)        
“Code” means the Internal Revenue Code of 1986, as amended from time to time and any successor thereto.

 

(f)      
   “Committee” means the Compensation Committee of the Board, if established, or any other committee
of the Board which the Board may designate, consisting of two or more members of the Board each of whom shall meet the definition
of an “independent director” under the listing rules of any securities exchange or national securities association
on which the Stock is listed for trading  and the requirements set forth in any other law, rule or regulation applicable
to the Plan hereinafter enacted, provided, however, that (i) with respect to any Award that is intended to satisfy the requirements
of Rule 16b-3, such Award shall be granted and administered by a committee of the Board consisting of at least such number of directors
as are required from time to time by Rule 16b-3, and each such committee member shall meet such qualifications as are required
by Rule 16b-3 and (ii) with respect to any Award that is intended to satisfy the requirements of Section 162(m) of the Code, such
Award shall be granted and administered by a committee of the Board consisting of at least such number of directors as are required
from time to time by Section 162(m) of the Code, and each such committee member shall meet such qualifications as are required
by Section 162(m) of the Code.

 

(g)         “Company”
means Xcel Brands, Inc., a corporation organized under the laws of the State of Delaware or any successor entity.

 

(h)         “Covered
Employee” shall mean any employee of the Company or any of its Subsidiaries who is deemed to be a “covered employee”
within the meaning of Section 162(m) of the Code.

   

(i)      
   “Disability” means the permanent and total disability as defined in Section 22(e)(3) of the Code.

 

(j)      
   “Early Retirement” means retirement, with the approval of the Board or the Committee, for purposes
of one or more Award(s) hereunder, from active employment with the Company or any Parent or Subsidiary prior to age 65.

  

(k)        
“Exchange Act” means the Securities Exchange Act of 1934, as amended, as in effect from time to time.

 

    	1

    	 

    

 

(l)          “Fair
Market Value”, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, means,
as of any given date: (i) if the principal market for the Stock is a national securities exchange or the National Association of
Securities Dealers Automated Quotations System (“NASDAQ”), the closing sales price of the Stock on such day as reported
by such exchange or market system, or on a consolidated tape reflecting transactions on such exchange or market system, or (ii)
if the principal market for the Stock is not a national securities exchange and the Stock is not quoted on NASDAQ, the arithmetic
mean of the high and low prices of the Stock on the trading day of the grant as reported or provided  by NASDAQ or the
National Quotation Bureau, Inc., provided that if clauses (i) and (ii) of this paragraph are both inapplicable, or if no trades
have been made or no quotes are available for such day, the Fair Market Value of the Stock shall be determined in good faith by
the Board or the Committee, as the case may be, which determination shall be conclusive as to the Fair Market Value of the Stock.

 

(m)        “409A
Change” shall mean (i) the acquisition by any one person, or more than one person acting as a group, of Stock that, together
with Stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting
power of the Stock; (ii) (a) the acquisition by any one person, or more than one person acting as a group (or the acquisition during
the 12-month period ending on the date of the most recent acquisition by such person or persons) of ownership of Stock possessing
fifty percent (50%) or more of the total voting power of the Stock; or (b) a majority of members of the Board is replaced during
any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior
to the date of the appointment or election; or (iii) the acquisition by any one person or more than one person acting as a group
(or the acquisition during the 12-month period ending on the date of the most recent acquisition by such person or persons) of
assets from the Company resulting in a Change of Control and, in any event, that have a total gross fair market value equal to
or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately prior to
such acquisition or acquisitions. The foregoing definition of “409A Change” shall be interpreted consistent with, and
shall include all of the requirements of, Section 409A of the Code and the Treasury regulations issued thereunder, to constitute
a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of
the corporation as defined therein.

 

(n)        
“Incentive Stock Option” means any Stock Option which is intended to be and is designated as an “incentive stock
option” within the meaning of Section 422 of the Code, or any successor thereto. An Incentive Stock Option may only be granted
to an employee of the Company, a Parent or a Subsidiary as set forth in Section 421 and 422 of the Code, as applicable.

 

(o)        
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

 

(p)         “Normal
Retirement” means retirement from active employment with the Company or any Parent or Subsidiary on or after age 65.

 

(q)         “Participant”
shall mean any person who has received an award of an Option or Restricted Stock under the Plan.

 

(r)         
“Parent” means any present or future parent of the Company, as such term is defined in Section 424(e) of the Code,
or any successor thereto.

 

(s)        
“Plan” means this Xcel Brands, Inc. 2011 Equity Incentive Plan, as hereinafter amended from time to time.

 

(t)          “Restricted
Stock” means Stock, received under an award made pursuant to Section 6 below that is subject to restrictions imposed pursuant
to said Section 6.

 

(u)         “Retirement”
means Normal Retirement or Early Retirement.

 

(v)        
“Rule 16b-3” means Rule 16b-3 of the General Rules and Regulations under the Exchange Act, as in effect from time to
time, and any successor thereto.

 

    	2

    	 

    

 

(w)        “Securities
Act” means the Securities Act of 1933, as amended, as in effect from time to time.

 

(x)         “Stock”
means the common stock of the Company.

 

(y)        
“Stock Option” or “Option” means any option to purchase shares of Stock which is granted pursuant to the
Plan.

  

(z)         
“Subsidiary” means any present or future subsidiary corporation of the Company, as such term is defined in Section
424(f) of the Code, or any successor thereto.

 

Section 2. Administration.

 

The Plan shall be administered by the Board,
or, at its discretion, the Committee.

 

The Board or the Committee, as the case
may be, shall have the authority to grant Awards pursuant to the terms of the Plan, to officers and other employees or other persons
eligible under Section 4 below.

 

For purposes of illustration and not of
limitation, the Board or the Committee, as the case may be, shall have the authority (subject to the express provisions of the
Plan):

 

(i)          to
select the officers, other employees of the Company or any Parent or Subsidiary and other persons to whom Stock Options and/or
Restricted Stock may be from time to time granted hereunder;

 

(ii)         to
determine the Incentive Stock Options, Non-Qualified Stock Options and/or Restricted Stock, or any combination thereof, if any,
to be granted hereunder to one or more eligible persons;

 

(iii)        to
determine the number of shares of Stock to be covered by each Award granted hereunder;

 

(iv)        to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including, but
not limited to, share price, any restrictions or limitations, and any vesting acceleration, exercisability and/or forfeiture provisions);
and

 

(v)         to
determine the terms and conditions under which Awards granted hereunder are to operate on a tandem basis and/or in conjunction
with or apart from other awards made by the Company or any Parent or Subsidiary outside of the Plan.

 

Subject to Section 9 hereof, the Board
or the Committee, as the case may be, shall have the authority to (i) adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall, from time to time, deem advisable, (ii) interpret the terms and provisions of the
Plan and any Award issued under the Plan (and to determine the form and substance of all agreements relating thereto), and (iii)
to otherwise supervise the administration of the Plan.

  

Subject to the express provisions of the
Plan, all decisions made by the Board or the Committee, as the case may be, pursuant to the provisions of the Plan shall be made
in the Board’s or the Committee's, as the case may be, sole and absolute discretion and shall be final and binding upon all
persons, including the Company, its Parent and Subsidiaries and the Plan Participants.

 

Subject to the provisions of the Plan,
the Board or the Committee, as the case may be, may, in its sole discretion, from time to time delegate to the Chief Executive
Officer of the Company (the “CEO”) the authority, subject to such terms as the Board or the Committee, as the case
may be, to determine and designate from time to time the employees or other persons to whom Awards may be granted and to perform
other specified functions under the Plan; provided, however, that the CEO may not grant any Award to, or perform any function related
to an Award to, himself or any individual (i) then subject to Section 16 of the Exchange Act or (ii) who is or, in the determination
of the Board or the Committee, as the case may be, may become a Covered Employee, and any such grant or function relating to such
individuals shall be performed solely by the Board or the Committee, as the case may be, to ensure compliance with the applicable
requirements of the Exchange Act and the Code or (iii) where the grant or performance of such function by the CEO will cause the
Plan not to comply with any applicable regulation of any securities exchange or automated quotation system where the Stock is listed
for trading.

 

    	3

    	 

    

 

Any such delegation of authority by the
Board or the Committee, as the case may be, shall be by a resolution adopted by the Board or the Committee, as the case may be,
and shall specify all of the terms and conditions of the delegation. The resolution of the Board or the Committee, as the case
may be, granting such authority may authorize the CEO to grant Awards pursuant to the Plan and may set forth the types of Awards
that may be granted; provided, however, that the resolution shall (i) specify the maximum number of shares of Stock that may be
awarded to any individual Plan participant and to all participants during a specified period of time and (ii) specify the exercise
price (or the method for determining the exercise price) of an Award, the vesting schedule, and any other terms, conditions, or
restrictions that may be imposed by the Board or the Committee, as the case may be, in its sole discretion. The resolution of the
Board or the Committee, as the case may be, shall also require the CEO to provide the Board or the Committee, as the case may be,
on at least a monthly basis, a report that identifies the Awards granted, the Awards granted pursuant to the delegated authority
and, with respect to each Award: the name of the participant, the date of grant of the award, the number of shares of Stock, the
exercise price and period, if any, and the vesting provisions of such Award, the terms of such Awards, in all cases, being subject
to the resolutions of the Board or the Committee, as the case may be, granting such authority.

 

The Board or the Committee, or the case
may be, may also delegate to other officers of the Company, pursuant to a written delegation, the authority to perform specified
functions under the Plan that are not inconsistent with Rule 16b-3 or other rules or regulations applicable to the Plan. Any actions
taken by any officers of the Company pursuant to such written delegation of authority shall be deemed to have been taken by the
Board or the Committee, as the case may be.

 

Section 3. Stock Subject to Plan.

 

The total number of shares of Stock reserved
and available for distribution under the Plan shall be 5,000,000 shares. Such shares may consist, in whole or in part, of authorized
and unissued shares or treasury shares. The maximum number of shares of Stock with respect to which Incentive Stock Options may
be granted under the Plan shall be 2,000,000 shares of Stock. 

 

If any shares of Stock that have been optioned
cease to be subject to a Stock Option award for any reason (other than by issuance of such shares upon exercise of a Stock Option),
or if any shares of Stock that are subject to any Restricted Stock award are forfeited or any such award otherwise terminates without
the issuance of such shares, such shares shall again be available for distribution under the Plan. Without limiting the foregoing,
(i) any shares of Stock subject to an Award that remain unissued upon the cancellation, surrender, exchange or termination of such
Award without having been exercised or settled, (ii) any shares of Stock subject to an Award that are retained by the Company as
payment of the exercise price or tax withholding obligations with respect to an Award, and (iii) any shares of Stock equal to the
number of previously owned shares of Stock surrendered to the Company as payment of the exercise price of a Stock Option or to
satisfy tax withholding obligations with respect to an Award.

 

In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, extraordinary distribution with respect to the Stock or other change
in corporate structure affecting the Stock, such substitution or adjustments shall be made in the (A) aggregate number of shares
of Stock reserved for issuance under the Plan, (B) number, kind and exercise price of shares of Stock subject to outstanding Options
granted under the Plan, and (C) number, kind, purchase price and/or appreciation base of shares of Stock subject to other outstanding
Awards granted under the Plan, as may be determined to be appropriate by the Board or the Committee, as the case may be, in order
to prevent dilution or enlargement of rights; provided, however, that the number of shares of Stock subject to any Award shall
always be a whole number. Such adjusted exercise price shall also be used to determine the amount which is payable to the optionee
upon the exercise by the Board or the Committee, as the case may be, of the alternative settlement right which is set forth in
Section 5(b)(xi) below.  

 

    	4

    	 

    

 

Subject to the provisions of the immediately
preceding paragraph, the maximum number of shares of Stock with respect to which Options or Restricted Stock may be granted or
measured to any Participant under the Plan during any calendar year or part thereof shall not exceed 2,000,000 shares.

 

Section 4. Eligibility.

 

Officers and other employees of the Company
or any Parent or Subsidiary (but excluding any person whose eligibility would adversely affect the compliance of the Plan with
the requirements of Rule 16b-3) who are at the time of the grant of an Award under the Plan employed by the Company or any Parent
or Subsidiary and who are responsible for or contribute to the management, growth and/or profitability of the business of the Company
or any Parent or Subsidiary are eligible to be granted Awards under the Plan. In addition, Non-Qualified Stock Options and other
awards (but not Incentive Stock Options) may be granted under the Plan to any person, including, but not limited to, directors,
independent agents, consultants and attorneys who the Board or the Committee, as the case may be, believes has contributed or will
contribute to the success of the Company. Eligibility under the Plan shall be determined by the Board or the Committee, as the
case may be.

 

The Board or the Committee, as the case
may be, may, in its sole discretion, include additional conditions and restrictions in the agreement entered into in connection
with such Awards under the Plan. The grant of an Option or other award under the Plan, and any determination made in connection
therewith, shall be made on a case by case basis and can differ among optionees and grantees. The grant of an Option or other award
under the Plan is a privilege and not a right and the determination of the Board or the Committee, as the case may be, can be applied
on a non-uniform (discretionary) basis.

 

Section 5. Stock Options.

 

(a) Grant and Exercise. Stock Options granted
under the Plan may be of two types: (i) Incentive Stock Options and (ii) Non-Qualified Stock Options. Any Stock Option granted
under the Plan shall contain such terms as the Board or the Committee, as the case may be, may from time to time approve. The Board
or the Committee, as the case may be, shall have the authority to grant to any optionee Incentive Stock Options, Non-Qualified
Stock Options, or both types of Stock Options, and they may be granted alone or in addition to other awards granted under the Plan.
To the extent that any Stock Option is not designated as an Incentive Stock Option or does not qualify as an Incentive Stock Option,
it shall constitute a Non-Qualified Stock Option. The grant of an Option shall be deemed to have occurred on the date on which
the Board or the Committee, as the case may be, by resolution, designates an individual as a grantee thereof, and determines the
number of shares of Stock subject to, and the terms and conditions of, said Option, including the exercise price.

 

Anything in the Plan to the contrary notwithstanding,
no term of the Plan relating to Incentive Stock Options or any agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of the optionee(s) affected, to disqualify any Incentive Stock Option under said
Section 422.

 

(b) Terms and Conditions. Stock Options
granted under the Plan shall be subject to the following terms and conditions:

 

(i)       
  Option Price. The option price per share of Stock purchasable under a Stock Option shall be determined by the Board
or the Committee, as the case may be, at the time of the grant and shall not be less than 100% (110% in the case of an Incentive
Stock Option granted to an optionee who, at the time of grant, owns Stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or its Parent, if any, or its Subsidiaries (“10% Stockholder”)) of the
Fair Market Value of the Stock at the time the Stock Option is granted.

 

(ii)         Option
Term. The term of each Stock Option shall be fixed by the Board or the Committee, as the case may be, but no Incentive Stock Option
shall be exercisable more than ten years (five years, in the case of an Incentive Stock Option granted to a 10% Stockholder) after
the date on which the Option is granted.  

 

    	5

    	 

    

 

(iii)        Exercisability.
Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the
Board or the Committee, as the case may be. If the Board or the Committee, as the case may be, provides, in its discretion, that
any Stock Option is exercisable only in installments, the Board or the Committee, as the case may be, may waive such installment
exercise provisions at any time at or after the time of grant in whole or in part, based upon such factors as the Board or the
Committee, as the case may be, shall determine.

 

(iv)        Method
of Exercise. Subject to whatever installment, exercise and waiting period provisions are applicable in a particular case, Stock
Options may be exercised in whole or in part at any time during the option period by giving written notice of exercise to the Company
specifying the number of shares of Stock to be purchased. Such notice shall be accompanied by payment in full of the exercise price
for the Stock Options exercised, which shall be in cash or, if provided in the Stock Option agreement referred to in Section 5(b)(xii)
below or otherwise provided by the Board, or Committee, as the case may be, either at or after the date of grant of the Stock Option,
in whole shares of Stock which are already owned by the holder of the Option or partly in cash and partly in such Stock. Cash payments
shall be made by wire transfer, certified or bank check or personal check, in each case payable to the order of the Company; provided,
however, that the Company shall not be required to deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available funds in payment of the purchase price thereof. If
permitted, payments of the exercise price and any tax required to be withheld by the Company in the form of Stock (which shall
be valued at the Fair Market Value of a share of Stock on the date of exercise) shall be made by delivery of stock certificates
in negotiable form which are effective to transfer good and valid title thereto to the Company, free of any liens or encumbrances.
In addition to the foregoing, payment of the exercise price may be made by delivery to the Company by the optionee of an executed
exercise form, together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the shares covered
by the option and deliver the sale or margin loan proceeds directly to the Company. Except as otherwise expressly provided in the
Plan or in the Stock Option agreement referred to in Section 5(b)(xii) below or otherwise provided by the Board or Committee, as
the case may be, either at or after the date of grant of the Option, no Option which is granted to a person who is at the time
of grant an employee of the Company or of a Subsidiary or Parent of the Company may be exercised at any time unless the holder
thereof is then an employee of the Company or of a Parent or a Subsidiary. The holder of an Option shall have none of the rights
of a stockholder with respect to the shares subject to the Option until the optionee has given written notice of exercise, has
paid in full for those shares of Stock and, if requested by the Board or Committee, as the case may be, has given the representation
described in Section 11(a) below.

 

 (v)        Transferability;
Exercisability. No Stock Option shall be transferable by the optionee other than by will or by the laws of descent and distribution,
except as may be otherwise provided with respect to a Non-Qualified Option pursuant to the specific provisions of the Stock Option
agreement pursuant to which it was issued as referred to in Section 5(b)(xii) below (which agreement may be amended, from time
to time). Except as otherwise provided in the Stock Option agreement relating to a Non-Qualified Stock Option, all Stock Options
shall be exercisable, during the optionee's lifetime, only by the optionee or his or her guardian or legal representative.

 

(vi)        Termination
by Reason of Death. Subject to Section 5(b)(x) below, if an optionee's employment by the Company or any Parent or Subsidiary terminates
by reason of death, any Stock Option held by such optionee may thereafter be exercised, to the extent then exercisable or on such
accelerated basis as the Board or Committee, as the case may be, may determine at or after the time of grant, for a period of one
year (or such other period as the Board or the Committee, as the case may be, may specify at or after the time of grant) from the
date of death or until the expiration of the stated term of such Stock Option, whichever period is the shorter.

 

(vii)       Termination
by Reason of Disability. Subject to Section 5(b)(x) below, if an optionee's employment by the Company or any Parent or Subsidiary
terminates by reason of Disability, any Stock Option held by such optionee may thereafter be exercised by the optionee, to the
extent it was exercisable at the time of termination or on such accelerated basis as the Board or the Committee, as the case may
be, may determine at or after the time of grant, for a period of one year (or such other period as the Board or the Committee,
as the case may be, may specify at or after the time of grant) from the date of such termination of employment or until the expiration
of the stated term of such Stock Option, whichever period is the shorter; provided, however, that if the optionee dies within such
one year period (or such other period as the Board or the Committee, as the case may be, shall specify at or after the time of
grant), any unexercised Stock Option held by such optionee shall thereafter be exercisable to the extent to which it was exercisable
at the time of death for a period of one year from the date of death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.

 

    	6

    	 

    

 

(viii)      Termination
by Reason of Retirement. Subject to Section 5(b)(x) below, if an optionee's employment by the Company or any Parent or Subsidiary
terminates by reason of Normal Retirement, any Stock Option held by such optionee may thereafter be exercised by the optionee,
to the extent it was exercisable at the time of termination or on such accelerated basis as the Board or the Committee, as the
case may be, may determine at or after the time of grant, for a period of one year (or such other period as the Board or the Committee,
as the case may be, may specify at or after the time of grant) from the date of such termination of employment or the expiration
of the stated term of such Stock Option, whichever period is the shorter; provided, however, that if the optionee dies within such
one year period (or such other period as the Board or the Committee, as the case may be, shall specify at or after the date of
grant), any unexercised Stock Option held by such optionee shall thereafter be exercisable to the extent to which it was exercisable
at the time of death for a period of one year from the date of death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. If an optionee's employment with the Company or any Parent or Subsidiary terminates by reason
of Early Retirement, the Stock Option shall thereupon terminate; provided, however, that if the Board or the Committee, as the
case may be, so approves at the time of Early Retirement, any Stock Option held by the optionee may thereafter be exercised by
the optionee as provided above in connection with termination of employment by reason of Normal Retirement.

 

(ix)         Other
Termination. Subject to the provisions of Section 11(h) below, and unless otherwise determined by the Board or Committee, as the
case may be, at or after the time of grant, if an optionee's employment by the Company or any Parent or Subsidiary terminates for
any reason other than death, Disability or Retirement, the Stock Option shall thereupon automatically terminate, except that if
the optionee is involuntarily terminated by the Company or any Parent or a Subsidiary without Cause (as hereinafter defined), such
Stock Option may be exercised for a period of three months (or such other period as the Board or the Committee, as the case may
be, shall specify at or after the time of grant) from the date of such termination or until the expiration of the stated term of
such Stock Option, whichever period is shorter. For purposes of the Plan, “Cause” shall mean (1) the conviction of
the optionee of a felony under Federal law or the law of the state in which such action occurred, (2) dishonesty by the optionee
in the course of fulfilling his or her employment duties, or (3) the failure on the part of the optionee to perform his or her
employment duties in any material respect. In addition, with respect to an option granted to an employee of the Company, a Parent
or a Subsidiary, for purposes of the Plan, “Cause” shall also include any definition of “Cause” contained
in any employment agreement between the optionee and the Company, Parent or Subsidiary, as the case may be.

 

(x)         Additional
Incentive Stock Option Limitation. In the case of an Incentive Stock Option, the aggregate Fair Market Value of Stock (determined
at the time of grant of the Option) with respect to which Incentive Stock Options are exercisable for the first time by an individual
optionee during any calendar year (under all such plans of optionee's employer corporation and its Parent and Subsidiaries) shall
not exceed $100,000.

 

(xi)        Alternative
Settlement of Option. If provided for, upon the receipt of written notice of exercise or otherwise provided for by the Board or
Committee, as the case may be, either at or after the time of grant of the Stock Option, the Board or the Committee, as the case
may be, may elect to settle all or part of any Stock Option by paying to the optionee an amount, in cash or Stock (valued at Fair
Market Value on the date of exercise), equal to the product of the excess of the Fair Market Value of one share of Stock, on the
date of exercise over the Option exercise price, multiplied by the number of shares of Stock with respect to which the optionee
proposes to exercise the Option. Any such settlements which relate to Options which are held by optionees who are subject to Section
16(b) of the Exchange Act shall comply with any “window period” provisions of Rule 16b-3, to the extent applicable,
and with such other conditions as the Board or Committee, as the case may be, may impose.

 

(xii)       Stock
Option Agreement. Each grant of a Stock Option shall be confirmed by, and shall be subject to the terms of, an agreement executed
by the Company and the Participant.  An Incentive Stock Option granted pursuant to the Plan shall be issued substantially
in the form set forth in Appendix I hereof, which form is hereby incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein.   A Non-Qualified Stock Option granted  to an
Employee pursuant to the Plan shall be issued substantially in the form set forth in Appendix II hereof, which form is hereby incorporated
by reference and made a part hereof, and shall contain substantially the terms and conditions set forth therein.  A Non-Qualified
Stock Option granted to a non-employee directors or consultants shall be issued substantially in the form set forth in Appendix
III hereof, which form is hereby incorporated by reference and made a part hereof, and shall contain substantially the terms and
conditions set forth therein. At the time of the grant of a Stock Option, the Board or Committee may, in the Board or Committee’s
sole discretion, amend or supplement any of the option terms contained in Appendix I, II or III hereof for any particular optionee,
provided that with respect to an Incentive Stock Option, the Stock Option satisfies the requirements for an Incentive Stock Option
set forth in the Code.

 

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Section 6. Restricted Stock.

  

(a) Grant and Exercise. Shares of Restricted
Stock may be issued either alone or in addition to or in tandem with other awards granted under the Plan. The Board or the Committee,
as the case may be, shall determine the eligible persons to whom, and the time or times at which, grants of Restricted Stock will
be made, the number of shares to be awarded, the price (if any) to be paid by the recipient, the time or times within which such
Awards may be subject to forfeiture (the “Restriction Period”), the vesting schedule and rights to acceleration thereof,
and all other terms and conditions of the Awards. The Board or the Committee, as the case may be, may condition the grant of Restricted
Stock upon the attainment of such factors as the Board or the Committee, as the case may be, may determine.

 

 (b) Terms and Conditions. Each Restricted
Stock award shall be subject to the following terms and conditions:

 

(i)      
   Restricted Stock, when issued, shall be represented by a stock certificate or certificates registered in the
name of the holder to whom such Restricted Stock shall have been awarded. During the Restriction Period, any certificates representing
the Restricted Stock and any securities constituting Retained Distributions (as defined below) shall bear a restrictive legend
to the effect that ownership of the Restricted Stock (and such Retained Distributions), and the enjoyment of all rights related
thereto, are subject to the restrictions, terms and conditions provided in the Plan and the Restricted Stock agreement referred
to in Section 6(b)(iv) below. Any such certificates shall be deposited by the holder with the Company, together with stock powers
or other instruments of assignment, endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted
Stock and any securities constituting Retained Distributions that shall be forfeited or that shall not become vested in accordance
with the Plan and the applicable Restricted Stock agreement.

 

(ii)         Restricted
Stock shall constitute issued and outstanding shares of Common Stock for all corporate purposes, and the issuance thereof shall
be made for at least the minimum consideration (if any) necessary to permit the shares of Restricted Stock to be deemed to be fully
paid and nonassessable. Unless the Board or the Committee, as the case may be, determines otherwise, the holder will have the right
to vote such Restricted Stock, to receive and retain all regular cash dividends and other cash equivalent distributions as the
Board or the Committee, as the case may be, may, in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Stock with respect to such Restricted Stock, with the exceptions
that (A) the holder will not be entitled to delivery of the stock certificate or certificates representing such Restricted Stock
until the Restriction Period shall have expired and unless all other vesting requirements with respect thereto shall have been
fulfilled; (B) the Company will retain custody of the stock certificate or certificates representing the Restricted Stock during
the Restriction Period; (C) other than regular cash dividends and other cash equivalent distributions as the Board or the Committee,
as the case may be, may in its sole discretion designate, pay or distribute, the Company will retain custody of all distributions
(“Retained Distributions”) made or declared with respect to the Restricted Stock (and such Retained Distributions will
be subject to the same restrictions, terms and conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall have been made, paid or declared shall have become
vested and with respect to which the Restriction Period shall have expired; (D) the holder may not sell, assign, transfer, pledge,
exchange, encumber or dispose of the Restricted Stock or any Retained Distributions during the Restriction Period; and (E) a breach
of any of the restrictions, terms or conditions contained in the Plan or the Restricted Stock agreement referred to in Section
6(b)(iv) below, or otherwise established by the Board or the Committee, as the case may be, with respect to any Restricted Stock
or Retained Distributions will cause a forfeiture of such Restricted Stock and any Retained Distributions with respect thereto.
 

 

    	8

    	 

    

 

(iii)        Upon
the expiration of the Restriction Period with respect to each award of Restricted Stock and the satisfaction of any other applicable
restrictions, terms and conditions (A) all or part of such Restricted Stock shall become vested in accordance with the terms of
the Restricted Stock agreement referred to in Section 6(b)(iv) below, and (B) any Retained Distributions with respect to such Restricted
Stock shall become vested to the extent that the Restricted Stock related thereto shall have become vested. Any such Restricted
Stock and Retained Distributions that do not vest shall be forfeited to the Company and the holder shall not thereafter have any
rights with respect to such Restricted Stock and Retained Distributions that shall have been so forfeited.

 

(iv)        Restricted
Stock Agreement.  Each Restricted Stock award shall be confirmed by, and shall be subject to the terms of, an agreement executed
by the Company and the Participant.  A Restricted Stock award granted pursuant to the Plan shall be issued substantially
in the form set forth in Appendix IV hereof, which form is hereby incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein. At the time of the grant of Restricted Stock, the Board or Committee
may, in the Board or Committee’s sole discretion, amend or supplement any of the terms contained in Appendix IV hereof for
any particular Restricted Stock holder.

  

Section 7. Performance-Based Awards.

 

(a) In General. All Options and certain
Restricted Stock awards  granted under the Plan, and the compensation attributable to such awards, are intended to (i)
qualify as Performance-Based Awards (as defined in the next sentence) or (ii) be otherwise exempt from the deduction limitation
imposed by Section 162(m) of the Code. Certain Awards granted under the Plan may be granted in a manner such that Awards qualify
as “performance-based compensation” (as such term is used in Section 162(m) of the Code and the regulations thereunder)
and thus be exempt from the deduction limitation imposed by Section 162(m) of the Code (“Performance-Based Awards”).
Awards may only qualify as Performance-Based Awards if they are granted by the Committee at a time when the Committee is comprised
solely of two or more “outside directors” (as such term is used in Section 162(m) of the Code and the regulations thereunder)
(“Qualifying Committee”).

 

(b) Options. Stock Options granted under
the Plan with an exercise price at or above the Fair Market Value of Common Stock on the date of grant are intended to qualify
as Performance-Based Awards.

 

(c) Other Performance-Based Awards. Restricted
Stock awards  granted under the Plan may qualify as Performance-Based Awards if, as determined by a Qualifying Committee,
in its discretion, either the granting of such award is subject to the achievement of a performance target or targets based on
one or more of the performance measures specified in Section 7(d) below. With respect to such awards intended to qualify as Performance-Based
Awards:

 

(1) the Qualifying Committee shall establish
in writing (x) the objective performance-based goals applicable to a given period and (y) the individual employees or class of
employees to which such performance-based goals apply no later than 90 days after the commencement of such period (but in no event
after 25 percent of such period has elapsed);

 

(2) no Performance-Based Awards shall be
payable to or vest with respect to, as the case may be, any Participant for a given period until the Qualifying Committee certifies
in writing that the objective performance goals (and any other material terms) applicable to such period have been satisfied; and

 

(3) after the establishment of a performance
goal, the Qualifying Committee shall not revise such performance goal or increase the amount of compensation payable thereunder
(as determined in accordance with Section 162(m) of the Code) upon the attainment of such performance goal.  

 

    	9

    	 

    

 

(d) Performance Measures. The Qualifying
Committee may use the following performance measures (either individually or in any combination) to set performance targets with
respect to awards intended to qualify as Performance-Based Awards: revenue; pretax income before allocation of corporate overhead
and bonus; budget; earnings per share; net income; division, group or corporate financial goals; return on stockholders’
equity; return on assets; return on net assets; return on investment capital; gross margin return on investment; gross margin dollars
or percent; payroll as a percentage of revenues; inventory shrink; employee turnover; sales, general and administrative expense;
attainment of strategic and operational initiatives; appreciation in and/or maintenance of the price of Common Stock or any other
publicly-traded securities of the Company, if any; market share; gross profits; earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; economic value-added models; comparisons with various stock market indices; achievement
of technological or product development milestones; and/or reductions in costs. The foregoing criteria shall have any reasonable
definitions that the Qualifying Committee may specify, which may include or exclude any or all of the following items as the Qualifying
Committee may specify: extraordinary, unusual or non-recurring items; effects of accounting changes; effects of financing activities;
expenses for restructuring or productivity initiatives; other non-operating items; spending for acquisitions; effects of divestitures;
and effects of litigation activities and settlements. Any such performance criterion or combination of such criteria may apply
to the Participant’s award opportunity in its entirety or to any designated portion or portions of the award opportunity,
as the Qualifying Committee may specify.

 

Section 8. Change of Control Provisions.

 

(a) A “Change of Control” shall
be deemed to have occurred on the tenth day after:

 

(i)          any
individual, corporation or other entity or group (as defined in Section 13(d)(3) of the Exchange Act), becomes, directly or indirectly,
the beneficial owner (as defined in the General Rules and Regulations of the Securities and Exchange Commission with respect to
Sections 13(d) and 13(g) of the Exchange Act) of more than 50% of the then outstanding shares of the Company's capital stock entitled
to vote generally in the election of directors of the Company; or

 

(ii)         the
commencement of, or the first public announcement of the intention of any individual, firm, corporation or other entity or of any
group (as defined in Section 13(d)(3) of the Exchange Act) to commence, a tender or exchange offer subject to Section 14(d)(1)
of the Exchange Act for any class of the Company's capital stock; or

 

(iii)        the
stockholders of the Company approve (A) a definitive agreement for the merger or other business combination of the Company with
or into another corporation pursuant to which the stockholders of the Company do not own, immediately after the transaction, more
than 50% of the voting power of the corporation that survives, or (B) a definitive agreement for the sale, exchange or other disposition
of all or substantially all of the assets of the Company, or (C) any plan or proposal for the liquidation or dissolution of the
Company; provided, however, that a “Change of Control” shall not be deemed to have taken place if beneficial ownership
is acquired (A) directly from the Company, other than an acquisition by virtue of the exercise or conversion of another security
unless the security so converted or exercised was itself acquired directly from the Company, or (B) by, or a tender or exchange
offer is commenced or announced by, the Company, any profit-sharing, employee ownership or other employee benefit plan of the Company;
or any trustee of or fiduciary with respect to any such plan when acting in such capacity.

 

(b) In the event of a “Change of
Control” as defined in Section 8(a) above, Awards granted under the Plan will be subject to the following provisions, unless
the provisions of this Section 8 are suspended or terminated by an affirmative vote of a majority of the Board prior to the occurrence
of such a “Change of Control”:

 

(i)          all
outstanding Stock Options which have been outstanding for at least six months  shall become exercisable in full, whether
or not otherwise exercisable at such time, and any such Stock Option shall remain exercisable in full thereafter until it expires
pursuant to its terms; and

 

(ii)         all
restrictions and deferral limitations contained in Restricted Stock awards granted under the Plan shall lapse and the shares of
stock subject to such awards shall be distributed to the Participant within thirty (30) days of the “Change of Control.”
Notwithstanding the foregoing to the contrary, all restrictions and deferral limitations with respect to an Award to which Section
409A of the Code applies shall not lapse and no distribution made under this Section 8(b) unless the “Change of Control”
qualifies as a 409A Change and such lapse and distribution does not cause adverse tax consequences under Section 409A of the Code.
 

 

    	10

    	 

    

 

Section 9. Amendments and Termination.

 

The Board may at any time, and from time
to time, amend any of the provisions of the Plan, and may at any time suspend or terminate the Plan. The Board or the Committee,
as the case may be, may amend the terms of any Stock Option or other award theretofore granted under the Plan; provided, however,
that subject to Section 3 above, no such amendment may be made by the Board or the Committee, as the case may be, which in any
material respect impairs the rights of the Participant without the Participant's consent, except for such amendments which are
made to cause the Plan to qualify for the exemption provided by Rule 16b-3. Moreover, no Stock Option previously granted under
the Plan may be amended to reduce the exercise price of the Stock Option.

  

Section 10. Unfunded Status of Plan.

 

The Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant or optionee by the Company,
nothing contained herein shall give any such Participant or optionee any rights that are greater than those of a creditor of the
Company.

 

Section 11. General Provisions.

 

(a) The Board or the Committee, as the
case may be, may require each person acquiring shares of Stock pursuant to an Option, Restricted Stock, or other award under the
Plan to represent to and agree with the Company in writing, among other things, that the optionee or Participant is acquiring the
shares for investment without a view to distribution thereof.

 

(b) All certificates for shares of Stock
delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Board or the Committee, as
the case may be, may deem to be advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange or association upon which the Stock is then listed or traded, any applicable Federal or state securities law,
and any applicable corporate law, and the Board or the Committee, as the case may be, may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.

 

(c) Nothing contained in the Plan shall
prevent the Board from adopting such other or additional incentive arrangements as it may deem desirable, including, but not limited
to, the granting of stock options and the awarding of stock and cash otherwise than under the Plan; and such arrangements may be
either generally applicable or applicable only in specific cases.

   

(d) Nothing contained in the Plan or in
any award hereunder shall be deemed to confer upon any employee of the Company or any Parent or Subsidiary any right to continued
employment with the Company or any Parent or Subsidiary, nor shall it interfere in any way with the right of the Company or any
Parent or Subsidiary to terminate the employment of any of its employees at any time.

 

(e) No later than the date as of which
an amount first becomes includable in the gross income of the Participant for Federal income tax purposes with respect to any Option,
Restricted Stock , or other award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to
the Board or the Committee, as the case may be, regarding the payment of, any Federal, state and local taxes of any kind required
by law to be withheld or paid with respect to such amount. If permitted by the Board or the Committee, as the case may be, tax
withholding or payment obligations may be settled with Stock, including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be conditional upon such payment or arrangements,
and the Company or the Participant's employer (if not the Company) shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the Participant from the Company or any Parent or Subsidiary.

 

(f) The Plan and all awards made and actions
taken thereunder shall be governed by and construed in accordance with the laws of the State of   Delaware (without
regard to choice of law provisions).

  

    	11

    	 

    

 

(g) Any Stock Option, Restricted Stock
or other award made under the Plan shall not be deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Parent or Subsidiary and shall not affect any benefits under any other benefit plan now or subsequently in
effect under which the availability or amount of benefits is related to the level of compensation (unless required by specific
reference in any such other plan to awards under the Plan).

 

(h) Subject to the requirements of Section
409A of the Code if applicable, a leave of absence, unless otherwise determined by the Board or the Committee, as the case may
be, prior to the commencement thereof, shall not be considered a termination of employment. Any Stock Option Restricted Stock 
or other awards made under the Plan shall not be affected by any change of employment, so long as the holder continues to be an
employee of the Company or any Parent or Subsidiary.

 

(i) Except as otherwise expressly provided
in the Plan or in any Stock Option agreement or Restricted Stock agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or charged, and any attempt to alienate, sell, assign,
hypothecate, pledge, exchange, transfer, encumber or charge the same shall be void. No right or benefit hereunder shall in any
manner be subject to the debts, contracts or liabilities of the person entitled to such benefit.

 

(j)
The obligations of the Company with respect to all Stock Options and Restricted Stock and other awards under the Plan shall be
subject to (A) all applicable laws, rules and regulations, and such approvals by any governmental agencies as may be required,
including, without limitation, the effectiveness of a registration statement under the Securities Act, and (B) the rules and regulations
of any securities exchange or association on which the Stock may be listed or traded.

 

(k) If any of the terms or provisions of
the Plan conflicts with the requirements of Rule 16b-3 as in effect from time to time, or with the requirements of any other applicable
law, rule or regulation, and with respect to Incentive Stock Options, Section 422 of the Code, then such terms or provisions shall
be deemed inoperative to the extent they so conflict with the requirements of said Rule 16b-3, and with respect to Incentive Stock
Options, Section 422 of the Code. With respect to Incentive Stock Options, if the Plan does not contain any provision required
to be included herein under Section 422 of the Code, such provision shall be deemed to be incorporated herein with the same force
and effect as if such provision had been set out at length herein.

 

(l) The Board or the Committee, as the
case may be, may terminate any Stock Option, Restricted Stock or other award made under the Plan if a written agreement relating
thereto is not executed and returned to the Company within 30 days after such agreement has been delivered to the optionee or Participant
for his or her execution.

 

(m) The grant of awards pursuant to the
Plan shall not in any way effect the right or power of the Company to make reclassifications, reorganizations or other changes
of or to its capital or business structure or to merge, consolidate, liquidate, sell or otherwise dispose of all or any part of
its business or assets.

 

Section 12. Effective Date of Plan.

 

The Plan shall be effective upon the effective
date of a business combination with a public reporting company that, upon the effectiveness of such business combination, such
public reporting company shall have at least 2,000,000 authorized and unissued shares.

 

Section 13. Term of Plan.

 

No Stock Option or Restricted Stock award
shall be granted pursuant to the Plan after the tenth anniversary of the effective date of the Plan, but awards granted on or prior
to such tenth anniversary may extend beyond that date.

 

    	12

    	 

    

 

Section 14. Section 409A of the Code
Compliance.

 

(a) Awards under the Plan are intended
either to be exempt from the rules of Section 409A of the Code or to satisfy those rules and shall be construed accordingly. If
intended to satisfy the applicable requirements of Section 409A of the Code, an Award and the Plan, as applicable, shall be performed
and interpreted consistent with such intent. If the Board or the Committee, as the case may be, determines in good faith that any
provision of this Plan does not satisfy such requirements or could cause any person to recognize additional taxes, penalties or
interest under Section 409A of the Code, the Board or the Committee, as the case may be, is empowered to modify, to the extent
practicable, the original intent of the applicable provision without violation of Section 409A of the Code. In addition, notwithstanding
any provision contained herein to the contrary, the Board or the Committee, as the case may be, shall have broad authority to amend
or to modify the Plan, without advance notice to or consent by any person, to the extent necessary or desirable to ensure compliance
with Section 409A of the Code. However, the Company shall not be liable to any Participant or other holder of an Award with respect
to any Award-related adverse tax consequences arising under Section 409A of the Code or other provision of the Code.

 

(b) If any provision of the Plan or an
Award agreement contravenes any regulations or treasury guidance promulgated under Section 409A of the Code or could cause an Award
to be subject to the interest and penalties under Section 409A of the Code, such provision of the Plan or Award shall be deemed
automatically modified to maintain, to the maximum extent practicable, the original intent of the applicable provision without
violating the provisions of Section 409A of the Code and the Board or the Committee, as the case may be, in its reasonable discretion,
may take such actions as it determines to avoid contravention of Section 409A of the Code. Moreover, any discretionary authority
that the Board or the Committee, as the case may be, may have pursuant to the Plan shall not be applicable to an Award that is
subject to Section 409A of the Code to the extent such discretionary authority will contravene Section 409A of the Code or the
treasury regulations or guidance promulgated thereunder.

 

(c) Notwithstanding any provisions of this
Plan or any Award granted hereunder to the contrary, no acceleration shall occur with respect to any Award to the extent such acceleration
would cause the Plan or an Award granted hereunder to fail to comply with Section 409A of the Code.

 

(d) Notwithstanding any provisions of this
Plan or any applicable Award agreement to the contrary, no payment shall be made with respect to any Award granted under this Plan
to a “specified employee” (as such term is defined for purposes of Section 409A of the Code) prior to the first date
that is at least six months after the employee’s separation of service to the extent such six-month delay in payment is required
to comply with Section 409A of the Code. To the extent required to comply with Section 409A of the Code, a termination of employment
shall not be deemed to have occurred for purposes of any payment or distribution upon or following a termination of employment
unless such termination is also a “separation from service” within the meaning of Section 409A of the Code and accordingly,
a reference to termination of employment, termination of service or like terms shall mean a “separation from service”
as the context may require.

 

(e) The Board or the Committee, as the
case may be, may adopt rules and procedures subject to the requirements of Section 409A of the Code to permit a Participant to
defer the receipt of any of the cash or Stock to be received pursuant to an Award.

 

(f) In the case of an Award providing for
the payment of deferred compensation subject to Section 409A of the Code, any payment of such deferred compensation by reason of
a “change of control” shall be made only if the “change of control” is (1) one described in Section 8 and
(2) one described in a 409A Change, and shall be paid consistent with the requirements of Section 409A of the Code. If any deferred
compensation that would otherwise be payable by reason of a “change of control” cannot be paid by reason of the immediately
preceding sentence, it shall be paid as soon as practicable thereafter consistent with the requirements of Section 409A of the
Code, as determined by the Board or the Committee, as the case may be.  

 

    	13

    	 

    

 

APPENDIX I

 

INCENTIVE STOCK OPTION

 

	To:	 	 
	 	Name	 
	 	 	 
	 	Address	 

 

Date of Grant:  _____________________

 

You (“Optionee”) are hereby
granted an option, effective as of the date hereof, to purchase __________ shares of common stock ("Common Stock"), of
Xcel Brands, Inc., a Delaware corporation (the "Company"), at a price of $ ___ per share pursuant to the Company's
Equity Incentive Plan (the "Plan").

 

This option shall terminate and is not
exercisable after ten years from the date of its grant (the "Scheduled Termination Date"), except if terminated earlier
as hereafter provided.

 

Your option may first be exercised on and
after one year from the date of grant, but not before that time.  On and after one year and prior to two years from the
date of grant, your option may be exercised for up to _________ % of the total number of shares subject to the option minus
the number of shares previously purchased by exercise of the option (as adjusted for any change in the outstanding shares of the
Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation,
transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion to be similar circumstances).  Each
succeeding year thereafter your option may be exercised for up to an additional __________ % of the total number of shares subject
to the option minus the number of shares previously purchased by exercise of the option (as adjusted for any change in the outstanding
shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion
to be similar circumstances).  Thus, this option is fully exercisable on and after _________ years after the date of
grant, except if terminated earlier as provided herein.

 

You may exercise your option by giving
written notice to the Secretary of the Company on forms supplied by the Company at its then principal executive office, accompanied
by payment of the option price for the total number of shares you specify that you wish to purchase.  The payment may
be in any of the following forms: (a) cash, which may be evidenced by a check and includes cash received from a stock brokerage
firm in a so-called "cashless exercise"; (b) (unless prohibited by the Board or Committee) certificates representing
shares of Common Stock of the Company, which will be valued by the Secretary of the Company at the fair market value per share
of the Company's Common Stock (as determined in accordance with the Plan) on the date of delivery of such certificates to the Company,
accompanied by an assignment of the stock to the Company; or (c) (unless prohibited by the Board or Committee) any combination
of cash and Common Stock of the Company valued as provided in clause (b).  The use of the so-called "attestation
procedure") to exercise a stock option may be permitted by the Board or Committee. Any assignment of stock shall be in a form
and substance satisfactory to the Secretary of the Company, including guarantees of signature(s) and payment of all transfer taxes
if the Secretary deems such guarantees necessary or desirable.

 

Your option will, to the extent not previously
exercised by you, terminate three months after the date on which your employment by the Company or any Parent or Subsidiary is
terminated other than: (i)  by reason of Disability or death, in which case your option will terminate one year from
the date of termination of employment due to Disability or death (but in no event later than the Scheduled Termination Date) or
(ii) for Cause or your resignation, in which case your option will terminate immediately and you will forfeit any right to exercise
the option. After the date your employment is terminated, as aforesaid (other than for the reasons stated in clause ii), you may
exercise this option only for the number of shares which you had a right to purchase and did not purchase on the date your employment
terminated.  If you are employed by any Parent or Subsidiary, your employment shall be deemed to have terminated on the
date your employer ceases to be a Parent or Subsidiary, unless you are on that date transferred to the Company or another Parent
or Subsidiary.  Your employment shall not be deemed to have terminated if you are transferred from the Company to any
Parent or Subsidiary, or vice versa, or from one Subsidiary to another Subsidiary.  

 

    	I-1

    	 

    

 

If you die while employed by the Company
or any Parent or Subsidiary, your executor or administrator, as the case may be, may, at any time within one year after the date
of your death (but in no event later than the Scheduled Termination Date), exercise the option as to any shares which you had a
right to purchase and did not purchase during your lifetime.  If your employment with the Company or  any Parent
or Subsidiary n is terminated by reason of your Disability, you or your legal guardian or custodian may at any time within one
year after the date of such termination (but in no event later than the Scheduled Termination Date), exercise the option as to
any shares which you had a right to purchase and did not purchase prior to such termination.  Your executor, administrator,
guardian or custodian must present proof of his authority satisfactory to the Company prior to being allowed to exercise this option.

 

In the event of any change in the outstanding
shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion
to be similar circumstances, the number and kind of shares subject to this option and the option price of such shares shall be
appropriately adjusted in a manner to be determined in the sole discretion of the Board or Committee, whose decision shall be final,
binding and conclusive in the absence of clear and convincing evidence of bad faith.

 

In the event of a liquidation or proposed
liquidation of the Company, including (but not limited to) a transfer of assets followed by a liquidation of the Company, or in
the event of a Change in Control or proposed Change in Control, the Board shall have the right to accelerate this option.

 

This option is not transferable otherwise
than by will or the laws of descent and distribution, and is exercisable during your lifetime only by you, including, for this
purpose, your legal guardian or custodian in the event of Disability.  Until the option price has been paid in full pursuant
to due exercise of this option and the purchased shares are delivered to you, you do not have any rights as a shareholder of the
Company.  The Company reserves the right not to deliver to you the shares purchased by virtue of the exercise of this
option during any period of time in which the Company deems, in its sole discretion, that such delivery would violate a federal,
state, local or securities exchange rule, regulation or law.

 

Notwithstanding anything to the contrary
contained herein, this option is not exercisable until all the following events occur and during the following periods of time:

 

(a)           Until
the Plan pursuant to which this option is granted is approved by the shareholders of the Company in the manner required by any
applicable provision of the Code and the regulations thereunder and any applicable securities exchange or listing rule or agreement;

 

(b)          Until
this option and the optioned shares are approved, registered and listed with such federal, state, local and foreign regulatory
bodies or agencies and securities exchanges as the Company may deem necessary or desirable, or the Company deems such option or
optioned shares to be exempted therefrom;

 

(c)           During
any period of time in which the Company deems that the exercisability of this option, the offer to sell the shares optioned hereunder,
or the sale thereof, may violate a federal, state, local or foreign law, rule or regulation, or any applicable securities exchange
or listing rule or agreement, or may cause the Company to be legally obligated to issue or sell more shares than the Company is
legally entitled to issue or sell; or

 

(d)          Until
you have paid or made suitable arrangements to pay (which may include payment through the surrender of Common Stock, unless prohibited
by the Board or Committee) (i) all federal, state, local and foreign tax withholding required by the Company in connection with
the option exercise and (ii) the employee's portion of other federal, state, local and foreign payroll and other taxes due in connection
with the option exercise.  

 

    	I-2

    	 

    

 

The following two paragraphs shall be applicable
if, on the date of exercise of this option, no registration statement and current prospectus under the Securities Act of 1933 covers
the Common Stock to be purchased pursuant to such exercise, and shall continue to be applicable for so long as such registration
has not occurred and such current prospectus is not available:

 

(a)           You
hereby agree, warrant and represent that you will acquire the Common Stock to be issued hereunder for your own account for investment
purposes only, and not with a view to, or in connection with, any resale or other distribution of any of such shares, except as
hereafter permitted.  You further agree that you will not at any time make any offer, sale, transfer, pledge or other
disposition of such Common Stock to be issued hereunder without an effective registration statement under the Securities Act of
1933, as amended, and under any applicable state securities laws or an opinion of counsel acceptable to the Company to the effect
that the proposed transaction will be exempt from such registration.  You agree to execute such instruments, representations,
acknowledgments and agreements as the Company may, in its sole discretion, deem advisable to avoid any violation of federal, state,
local or foreign law, rule or regulation, or any securities exchange rule or listing agreement.

 

(b)           The
certificates for the Common Stock to be issued to you hereunder shall bear the following legend:

 

"The shares represented
by this certificate have not been registered under the Securities Act of 1933, as amended, or under applicable state securities
laws.  The shares have been acquired for investment and may not be offered, sold, transferred, pledged or otherwise disposed
of without an effective registration statement under the Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company that the proposed transaction will be exempt from such registration."

 

The foregoing legend shall be removed upon
registration of the legended shares under the Securities Act of 1933, as amended, and under any applicable state laws, and the
availability of a current prospectus, or upon receipt of any opinion of counsel acceptable to the Company that such registration
and current prospectus are no longer required.

 

The sole purpose of the agreements, warranties,
representations and legend set forth in the two immediately preceding paragraphs is to prevent violations of the Securities Act
of 1933, as amended, and any applicable state securities laws.

 

It is the intention of the Company and
you that this option shall, if possible, be an "Incentive Stock Option" as that term is used in Section 422(b) of
the Code and the regulations thereunder.  In the event this option is in any way inconsistent with the legal requirements
of the Code or the regulations thereunder for an "Incentive Stock Option," this option shall be deemed automatically
amended as of the date hereof to conform to such legal requirements, if such conformity may be achieved by amendment.  To
the extent that the number of shares subject to this option which are exercisable for the first time exceed the $100,000 limitation
contained in Section 422(d) of the Code, this option will not be considered an Incentive Stock Option.

 

If shares of Common Stock acquired by exercise
of this option are disposed of within two (2) years following the date of grant or one (1) year following the issuance of the shares
to you (or any situation in which the option will be taxed as a non-qualified option), you shall, immediately prior to such disposition,
notify the Company in writing of the date and terms of such disposition and provide such other information regarding the disposition
as the Company may reasonably require .

 

Nothing herein shall modify your status
as an at-will employee of the Company or any Parent or Subsidiary.  Further, nothing herein guarantees you employment
for any specified period of time.  This means that either you or the Company or any Parent or Subsidiary may terminate
your employment at any time for any reason, with or without cause, or for no reason.  You recognize that, for instance,
you may terminate your employment or the Company or any Parent or Subsidiary may terminate your employment prior to the date on
which your option becomes vested or exercisable.  

 

    	I-3

    	 

    

 

You understand and agree that the existence
of this option will not affect in any way the right or power of the Company or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or
any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stocks with preference ahead
of or convertible into, or otherwise affecting the common shares or the rights thereof, 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.

 

Any notice you give to the Company must
be in writing and either hand-delivered or mailed to the office of the Company. If mailed, it should be addressed to  the
Chief Financial Officer of the Company at its then main headquarters. Any notice given to you will be addressed to you at your
address as reflected on the personnel records of the Company. You and the Company may change the address for notice by like notice
to the other. Notice will be deemed to have been duly delivered when hand-delivered or, if mailed, on the day such notice is postmarked.

 

In the event that any question or controversy
shall arise with respect to the nature, scope or extent of any one or more rights conferred by this option, or any provision of
this option, the determination in good faith by the Board of Directors of the Company (as constituted at the time of such determination)
of your rights as the Optionee shall be conclusive, final and binding upon you as the Optionee and upon any other person who shall
assert any right pursuant to this option.

 

This option shall be subject to the terms
of the Plan in effect on the date this option is granted, which terms are hereby incorporated herein by reference and made a part
hereof.  Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in
the Plan. In the event of any conflict between the terms of this option and the terms of the Plan in effect on the date of this
option, the terms of the Plan shall govern.  This option constitutes the entire understanding between the Company and
you with respect to the subject matter hereof and no amendment, supplement or waiver of this option, in whole or in part, shall
be binding upon the Company unless in writing and signed by the President of the Company.  This option and the performances
of the parties hereunder shall be construed in accordance with and governed by the laws of the State of Delaware.

 

Please sign the copy of this option and
return it to the Company's Secretary, thereby indicating your understanding of and agreement with its terms and conditions .

 

	 	XCEL BRANDS, INC.
	 	 
	 	By:	 

 

    	I-4

    	 

    

 

ACKNOWLEDGMENT

 

I hereby acknowledge receipt of a copy
of the Plan.  I hereby represent that I have read and understood the terms and conditions of the Plan and of this option.  I
hereby signify my understanding of, and my agreement with, the terms and conditions of the Plan and of this option.  I
agree to accept as binding, conclusive, and final all decisions or interpretations of the Board or Committee concerning any questions
arising under the Plan with respect to this option.  I accept this option in full satisfaction of any previous written
or verbal promise made to me by the Company or any Parent or Subsidiary with respect to option or stock grants.

 

	Date:  _____________	 	 
	 	Signature of Optionee
	 	 	 
	 	 	 
	 	Print Name

 

    	I-5

    	 

    

 

APPENDIX II

 

NON-QUALIFIED STOCK OPTION FOR OFFICERS
AND OTHER

EMPLOYEES

 

	To:	 	 
	 	Name	 
	 	 	 
	 	Address	 

 

Date of Grant:  _____________________

 

You (“Optionee”) are hereby
granted an option, effective as of the date hereof, to purchase __________ shares of common stock ("Common Stock"), of  Xcel
Brands, Inc. , a Delaware corporation (the "Company"), at a price of $ ___ per share pursuant to the Company's  Equity
Incentive Plan (the "Plan").

 

This option shall terminate and is not
exercisable after ten years from the date of its grant (the "Scheduled Termination Date"), except if terminated earlier
as hereafter provided.

 

Your option may first be exercised on and
after one year from the date of grant, but not before that time.  On and after one year and prior to two years from the
date of grant, your option may be exercised for up to ______% of the total number of shares subject to the option minus the number
of shares previously purchased by exercise of the option (as adjusted for any change in the outstanding shares of the Common Stock
of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, transfer
of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion to be similar circumstances).  Each
succeeding year thereafter your option may be exercised for up to an additional _______% of the total number of shares subject
to the option minus the number of shares previously purchased by exercise of the option (as adjusted for any change in the outstanding
shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion
to be similar circumstances).  Thus, this option is fully exercisable on and after _______ years after the date of grant,
except if terminated earlier as provided herein.

 

You may exercise your option by giving
written notice to the Secretary of the Company on forms supplied by the Company at its then principal executive office, accompanied
by payment of the option price for the total number of shares you specify that you wish to purchase.  The payment may
be in any of the following forms: (a) cash, which may be evidenced by a check and includes cash received from a stock brokerage
firm in a so-called "cashless exercise"; (b) (unless prohibited by the Board or Committee) certificates representing
shares of Common Stock of the Company, which will be valued by the Secretary of the Company at the fair market value per share
of the Company's Common Stock (as determined in accordance with the Plan) on the date of delivery of such certificates to the Company,
accompanied by an assignment of the stock to the Company; or (c) (unless prohibited by the Board or Committee) any combination
of cash and Common Stock of the Company valued as provided in clause (b).  The use of the so-called "attestation
procedure" to exercise a stock option may be permitted by the Board or Committee. Any assignment of stock shall be in a form
and substance satisfactory to the Secretary of the Company, including guarantees of signature(s) and payment of all transfer taxes
if the Secretary deems such guarantees necessary or desirable.  

 

    	II-1

    	 

    

 

Your option will, to the extent not previously
exercised by you, terminate three months after the date on which your employment by the Company or  any Parent or Subsidiary
is terminated other than: (i)  by reason of Disability or death, in which case your option will terminate one year from
the date of termination of employment due to Disability or death (but in no event later than the Scheduled Termination Date) or
(ii) for Cause or your resignation, in which case your option will terminate immediately and you will forfeit any right to exercise
the option. After the date your employment is terminated, as aforesaid (other than for the reasons stated in clause ii), you may
exercise this option only for the number of shares which you had a right to purchase and did not purchase on the date your employment
terminated.  If you are employed by any Parent or Subsidiary, your employment shall be deemed to have terminated on the
date your employer ceases to be a Parent or Subsidiary, unless you are on that date transferred to the Company or another Parent
or Subsidiary.  Your employment shall not be deemed to have terminated if you are transferred from the Company to any
Parent or Subsidiary, or vice versa, or from one Subsidiary to another Subsidiary.

 

If you die while employed by the Company
or any Parent or Subsidiary, your executor or administrator, as the case may be, may, at any time within one year after the date
of your death (but in no event later than the Scheduled Termination Date), exercise the option as to any shares which you had a
right to purchase and did not purchase during your lifetime.  If your employment with the Company or any Parent or Subsidiary
is terminated by reason of your Disability, you or your legal guardian or custodian may at any time within one year after the date
of such termination (but in no event later than the Scheduled Termination Date), exercise the option as to any shares which you
had a right to purchase and did not purchase prior to such termination.  Your executor, administrator, guardian or custodian
must present proof of his authority satisfactory to the Company prior to being allowed to exercise this option.

 

In the event of any change in the outstanding
shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion
to be similar circumstances, the number and kind of shares subject to this option and the option price of such shares shall be
appropriately adjusted in a manner to be determined in the sole discretion of the Board or Committee, whose decision shall be final,
binding and conclusive in the absence of clear and convincing evidence of bad faith.

 

In the event of a liquidation or proposed
liquidation of the Company, including (but not limited to) a transfer of assets followed by a liquidation of the Company, or in
the event of a Change in Control or proposed Change in Control, the Board shall have the right to accelerate this option.

 

This option is not transferable otherwise
than by will or the laws of descent and distribution, and is exercisable during your lifetime only by you, including, for this
purpose, your legal guardian or custodian in the event of Disability.  Until the option price has been paid in full pursuant
to due exercise of this option and the purchased shares are delivered to you, you do not have any rights as a shareholder of the
Company.  The Company reserves the right not to deliver to you the shares purchased by virtue of the exercise of this
option during any period of time in which the Company deems, in its sole discretion, that such delivery would violate a federal,
state, local or securities exchange rule, regulation or law.

 

Notwithstanding anything to the contrary
contained herein, this option is not exercisable until all the following events occur and during the following periods of time:

 

(a)           Until
the Plan pursuant to which this option is granted is approved by the shareholders of the Company in the manner required by any
applicable provision of the Code and the regulations thereunder and any applicable securities exchange or listing rule or agreement;

 

(b)           Until
this option and the optioned shares are approved, registered and listed with such federal, state, local and foreign regulatory
bodies or agencies and securities exchanges as the Company may deem necessary or desirable, or the Company deems such option or
optioned shares to be exempted therefrom;

 

(c)           During
any period of time in which the Company deems that the exercisability of this option, the offer to sell the shares optioned hereunder,
or the sale thereof, may violate a federal, state, local or foreign law, rule or regulation, or any applicable securities exchange
or listing rule or agreement, or may cause the Company to be legally obligated to issue or sell more shares than the Company is
legally entitled to issue or sell; or  

 

    	II-2

    	 

    

 

(d)           Until
you have paid or made suitable arrangements to pay (which may include payment through the surrender of Common Stock, unless prohibited
by the Board or Committee) (i) all federal, state, local and foreign tax withholding required by the Company in connection with
the option exercise and (ii) the employee's portion of other federal, state, local and foreign payroll and other taxes due in connection
with the option exercise.

 

The following two paragraphs shall be applicable
if, on the date of exercise of this option, no registration statement and current prospectus under the Securities Act of 1933 covers
the Common Stock to be purchased pursuant to such exercise, and shall continue to be applicable for so long as such registration
has not occurred and such current prospectus is not available:

 

(a)           You
hereby agree, warrant and represent that you will acquire the Common Stock to be issued hereunder for your own account for investment
purposes only, and not with a view to, or in connection with, any resale or other distribution of any of such shares, except as
hereafter permitted.  You further agree that you will not at any time make any offer, sale, transfer, pledge or other
disposition of such Common Stock to be issued hereunder without an effective registration statement under the Securities Act of
1933, as amended, and under any applicable state securities laws or an opinion of counsel acceptable to the Company to the effect
that the proposed transaction will be exempt from such registration.  You agree to execute such instruments, representations,
acknowledgments and agreements as the Company may, in its sole discretion, deem advisable to avoid any violation of federal, state,
local or foreign law, rule or regulation, or any securities exchange rule or listing agreement.

 

(b)           The
certificates for the Common Stock to be issued to you hereunder shall bear the following legend:

 

"The shares represented
by this certificate have not been registered under the Securities Act of 1933, as amended, or under applicable state securities
laws.  The shares have been acquired for investment and may not be offered, sold, transferred, pledged or otherwise disposed
of without an effective registration statement under the Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company that the proposed transaction will be exempt from such registration."

 

The foregoing legend shall be removed upon
registration of the legended shares under the Securities Act of 1933, as amended, and under any applicable state laws or upon receipt
of any opinion of counsel acceptable to the Company that said registration is no longer required.

 

The sole purpose of the agreements, warranties,
representations and legend set forth in the two immediately preceding paragraphs is to prevent violations of the Securities Act
of 1933, as amended, and any applicable state securities laws.

 

It is the intention of the Company and
you that this option shall not be an “Incentive Stock Option” as that term is used in Section 422(b) of the Code
and the regulations thereunder.

 

Nothing herein shall modify your status
as an at-will employee of the Company or any Parent or Subsidiary.  Further, nothing herein guarantees you employment
for any specified period of time.  This means that either you or the Company or any Parent or Subsidiary may terminate
your employment at any time for any reason, with or without cause, or for no reason.  You recognize that, for instance,
you may terminate your employment or the Company or any Parent or Subsidiary may terminate your employment prior to the date on
which your option becomes vested or exercisable.

 

You understand and agree that the existence
of this option will not affect in any way the right or power of the Company or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or
any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stocks with preference ahead
of or convertible into, or otherwise affecting the common shares or the rights thereof, 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.  

 

    	II-3

    	 

    

 

Any notice you give to the Company must
be in writing and either hand-delivered or mailed to the office of the Company . If mailed, it should be addressed to the
Chief Financial Officer of the Company at its then main headquarters. Any notice given to you will be addressed to you at your
address as reflected on the personnel records of the Company. You and the Company may change the address for notice by like notice
to the other. Notice will be deemed to have been duly delivered when hand-delivered or, if mailed, on the day such notice is postmarked.

 

In the event that any question or controversy
shall arise with respect to the nature, scope or extent of any one or more rights conferred by this option, or any provision of
this option, the determination in good faith by the Board of Directors of the Company (as constituted at the time of such determination)
of your rights as the Optionee shall be conclusive, final and binding upon you as the Optionee and upon any other person who shall
assert any right pursuant to this option.

 

This option shall be subject to the terms
of the Plan in effect on the date this option is granted, which terms are hereby incorporated herein by reference and made a part
hereof.  Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in
the Plan.  In the event of any conflict between the terms of this option and the terms of the Plan in effect on the date
of this option, the terms of the Plan shall govern.  This option constitutes the entire understanding between the Company
and you with respect to the subject matter hereof and no amendment, supplement or waiver of this option, in whole or in part, shall
be binding upon the Company unless in writing and signed by the President of the Company.  This option and the performances
of the parties hereunder shall be construed in accordance with and governed by the laws of the State of Delaware.

 

Please sign the copy of this option and
return it to the Company's Secretary, thereby indicating your understanding of and agreement with its terms and conditions .

 

	 	XCEL BRANDS GROUP, INC.
	 	 
	 	By:	 

 

    	II-4

    	 

    

 

ACKNOWLEDGMENT

 

I hereby acknowledge receipt of a copy
of the Plan.  I hereby represent that I have read and understood the terms and conditions of the Plan and of this option.  I
hereby signify my understanding of, and my agreement with, the terms and conditions of the Plan and of this option.  I
agree to accept as binding, conclusive, and final all decisions or interpretations of the Board or Committee concerning any questions
arising under the Plan with respect to this option.  I accept this option in full satisfaction of any previous written
or verbal promise made to me by the Company or any Parent or Subsidiary with respect to option or stock grants.

 

	Date:  _____________	 	 
	 	Signature of Optionee
	 	 	 
	 	 	 
	 	Print Name

 

    	II-5

    	 

    

 

APPENDIX III

 

NON-QUALIFIED STOCK OPTION FOR DIRECTORS

AND CONSULTANTS

 

	To:	 	 
	 	Name	 
	 	 	 
	 	Address	 

 

Date of Grant:  _____________________

 

You (“Optionee”) are hereby
granted an option, effective as of the date hereof, to purchase __________ shares of common stock ("Common Stock"), of
Xcel Brands Group, Inc., a Delaware corporation (the "Company"), at a price of $ ____ per share pursuant to the
Company's  Equity Incentive Plan (the "Plan").

 

This option shall terminate and is not
exercisable after ten years from the date of its grant (the "Scheduled Termination Date"), except if terminated earlier
as hereafter provided.

 

Your option may first be exercised on and
after one year from the date of grant, but not before that time.  On and after one year and prior to two years from the
date of grant, your option may be exercised for up to _____% of the total number of shares subject to the option minus the number
of shares previously purchased by exercise of the option (as adjusted for any change in the outstanding shares of the Common Stock
of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, transfer
of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion to be similar circumstances).  Each
succeeding year thereafter your option may be exercised for up to an additional ____% of the total number of shares subject to
the option minus the number of shares previously purchased by exercise of the option (as adjusted for any change in the outstanding
shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion
to be similar circumstances).  Thus, this option is fully exercisable on and after ________ years after the date of grant,
except if terminated earlier as provided herein.

 

You may exercise your option by giving
written notice to the Secretary of the Company on forms supplied by the Company at its then principal executive office, accompanied
by payment of the option price for the total number of shares you specify that you wish to purchase.  The payment may
be in any of the following forms: (a) cash, which may be evidenced by a check and includes cash received from a stock brokerage
firm in a so-called "cashless exercise"; (b) (unless prohibited by the Board or Committee) certificates representing
shares of Common Stock of the Company, which will be valued by the Secretary of the Company at the fair market value per share
of the Company's Common Stock (as determined in accordance with the Plan) on the date of delivery of such certificates to the Company,
accompanied by an assignment of the stock to the Company; or (c) (unless prohibited by the Board or Committee) any combination
of cash and Common Stock of the Company valued as provided in clause (b).  The use of the so-called "attestation
procedure" to exercise a stock option may be permitted by the Board or Committee. Any assignment of stock shall be in a form
and substance satisfactory to the Secretary of the Company, including guarantees of signature(s) and payment of all transfer taxes
if the Secretary deems such guarantees necessary or desirable.

 

Your option will, to the extent not previously
exercised by you, terminate three months after the date on which your directorship or consultancy by the Company or any Parent
or Subsidiary is terminated other than by reason of (i) Disability or death, in which case your option will terminate one year
from the date of termination of directorship or consultancy due to Disability or death (but in no event later than the Scheduled
Termination Date) or (ii) for Cause or your resignation, in which case your option will terminate immediately and you will forfeit
any right to exercise the option. After the date your directorship or consultancy is terminated, as aforesaid (other than for the
reasons stated in clause (ii), you may exercise this option only for the number of shares which you had a right to purchase and
did not purchase on the date your directorship or consultancy terminated. Provided you are willing to continue your directorship
or consultancy for the Company or a successor after a Change in Control at the same compensation you enjoyed immediately prior
to such Change in Control, if your directorship or consultancy is involuntarily terminated without cause after a Change in Control,
you may exercise this option for the number of shares you would have had a right to purchase on the date of an Acceleration Event.
If you are employed by any Parent or Subsidiary, your directorship or consultancy shall be deemed to have terminated on the date
your employer ceases to be a Parent or Subsidiary, unless you are on that date transferred to the Company or another Parent or
Subsidiary.  Your directorship or consultancy shall not be deemed to have terminated if you are transferred from the
Company to a Parent or Subsidiary, or vice versa, or from one Subsidiary to another Subsidiary.  

 

    	III-1

    	 

    

 

If you die while acting as a director of
consultant of  the Company or any Parent or Subsidiary, your executor or administrator, as the case may be, may, at any
time within one year after the date of your death (but in no event later than the Scheduled Termination Date), exercise the option
as to any shares which you had a right to purchase and did not purchase during your lifetime.  If your directorship or
consultancy with the Company or  any Parent or Subsidiary is terminated by reason of your Disability, you or your legal
guardian or custodian may at any time within one year after the date of such termination (but in no event later than the Scheduled
Termination Date), exercise the option as to any shares which you had a right to purchase and did not purchase prior to such termination.  Your
executor, administrator, guardian or custodian must present proof of his authority satisfactory to the Company prior to being allowed
to exercise this option.

 

In the event of any change in the outstanding
shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization,
merger, consolidation, transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion
to be similar circumstances, the number and kind of shares subject to this option and the option price of such shares shall be
appropriately adjusted in a manner to be determined in the sole discretion of the Board or Committee, whose decision shall be final,
binding and conclusive in the absence of clear and convincing evidence of bad faith.

 

In the event of a liquidation or proposed
liquidation of the Company, including (but not limited to) a transfer of assets followed by a liquidation of the Company, or in
the event of a Change in Control or proposed Change in Control, the Board shall have the right to accelerate this option.

 

This option is not transferable otherwise
than by will or the laws of descent and distribution, and is exercisable during your lifetime only by you, including, for this
purpose, your legal guardian or custodian in the event of Disability.  Until the option price has been paid in full pursuant
to due exercise of this option and the purchased shares are delivered to you, you do not have any rights as a shareholder of the
Company.  The Company reserves the right not to deliver to you the shares purchased by virtue of the exercise of this
option during any period of time in which the Company deems, in its sole discretion, that such delivery would violate a federal,
state, local or securities exchange rule, regulation or law.

 

Notwithstanding anything to the contrary
contained herein, this option is not exercisable until all the following events occur and during the following periods of time:

 

(a)           Until
the Plan pursuant to which this option is granted is approved by the shareholders of the Company in the manner required by any
applicable provision of the Code and the regulations thereunder and any applicable securities exchange or listing rule or agreement;

 

(b)           Until
this option and the optioned shares are approved, registered and listed with such federal, state, local and foreign regulatory
bodies or agencies and securities exchanges as the Company may deem necessary or desirable, or the Company deems such option or
optioned shares to be exempted therefrom;

 

(c)           During
any period of time in which the Company deems that the exercisability of this option, the offer to sell the shares optioned hereunder,
or the sale thereof, may violate a federal, state, local or foreign law, rule or regulation, or any applicable securities exchange
or listing rule or agreement, or may cause the Company to be legally obligated to issue or sell more shares than the Company is
legally entitled to issue or sell; or  

 

    	III-2

    	 

    

 

 (d)          Until
you have paid or made suitable arrangements to pay (which may include payment through the surrender of Common Stock, unless prohibited
by the Board or Committee) (i) all federal, state, local and foreign tax withholding required by the Company in connection with
the option exercise and (ii) the employee's portion of other federal, state, local and foreign payroll and other taxes due in connection
with the option exercise.

 

The following two paragraphs shall be applicable
if, on the date of exercise of this option, no registration statement and current prospectus under the Securities Act of 1933 covers
the Common Stock to be purchased pursuant to such exercise, and shall continue to be applicable for so long as such registration
has not occurred and such current prospectus is not available:

 

(a)           You
hereby agree, warrant and represent that you will acquire the Common Stock to be issued hereunder for your own account for investment
purposes only, and not with a view to, or in connection with, any resale or other distribution of any of such shares, except as
hereafter permitted.  You further agree that you will not at any time make any offer, sale, transfer, pledge or other
disposition of such Common Stock to be issued hereunder without an effective registration statement under the Securities Act of
1933, as amended, and under any applicable state securities laws or an opinion of counsel acceptable to the Company to the effect
that the proposed transaction will be exempt from such registration.  You agree to execute such instruments, representations,
acknowledgments and agreements as the Company may, in its sole discretion, deem advisable to avoid any violation of federal, state,
local or foreign law, rule or regulation, or any securities exchange rule or listing agreement.

 

(b)           The
certificates for the Common Stock to be issued to you hereunder shall bear the following legend:

 

"The shares represented
by this certificate have not been registered under the Securities Act of 1933, as amended, or under applicable state securities
laws.  The shares have been acquired for investment and may not be offered, sold, transferred, pledged or otherwise disposed
of without an effective registration statement under the Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company that the proposed transaction will be exempt from such registration."

 

The foregoing legend shall be removed upon
registration of the legended shares under the Securities Act of 1933, as amended, and under any applicable state laws or upon receipt
of any opinion of counsel acceptable to the Company that said registration is no longer required.

 

The sole purpose of the agreements, warranties,
representations and legend set forth in the two immediately preceding paragraphs is to prevent violations of the Securities Act
of 1933, as amended, and any applicable state securities laws.

 

It is the intention of the Company and
you that this option shall not be an "Incentive Stock Option" as that term is used in Section 422(b) of the Code
and the regulations thereunder.

 

Nothing herein guarantees your term
as a director of, or consultant to, the Company or any Parent or Subsidiary for any specified period of time.  This means
that either you or the Company or any Parent or Subsidiary may terminate your directorship or consultancy at any time for any reason,
with or without cause, or for no reason.  You recognize that, for instance, the Company or any Parent or Subsidiary may
terminate your directorship or consultancy with the Company or any Parent or Subsidiary prior to the date on which your option
becomes vested or exercisable.

 

You understand and agree that the existence
of this option will not affect in any way the right or power of the Company or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or
any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stocks with preference ahead
of or convertible into, or otherwise affecting the common shares or the rights thereof, 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.  

 

    	III-3

    	 

    

 

Any notice you give to the Company must
be in writing and either hand-delivered or mailed to the office of the Company. If mailed, it should be addressed to the Chief
Financial Officer of the Company at its then main headquarters. Any notice given to you will be addressed to you at your address
as reflected on the records of the Company. You and the Company may change the address for notice by like notice to the other.
Notice will be deemed to have been duly delivered when hand-delivered or, if mailed, on the day such notice is postmarked.

 

In the event that any question or controversy
shall arise with respect to the nature, scope or extent of any one or more rights conferred by this option, or any provision of
this option, the determination in good faith by the Board of Directors of the Company (as constituted at the time of such determination)
of your rights as the Optionee shall be conclusive, final and binding upon you as the Optionee and upon any other person who shall
assert any right pursuant to this option.

 

This option shall be subject to the terms
of the Plan in effect on the date this option is granted, which terms are hereby incorporated herein by reference and made a part
hereof.  Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in
the Plan.  In the event of any conflict between the terms of this option and the terms of the Plan in effect on the date
of this option, the terms of the Plan shall govern.  This option constitutes the entire understanding between the Company
and you with respect to the subject matter hereof and no amendment, supplement or waiver of this option, in whole or in part, shall
be binding upon the Company unless in writing and signed by the President of the Company.  This option and the performances
of the parties hereunder shall be construed in accordance with and governed by the laws of the State of Delaware.

 

Please sign the copy of this option and
return it to the Company's Secretary, thereby indicating your understanding of and agreement with its terms and conditions .

 

	 	XCEL BRANDS, INC.
	 	 
	 	By:	 

 

    	III-4

    	 

    

 

ACKNOWLEDGMENT

 

I hereby acknowledge receipt of a copy
of the Plan.  I hereby represent that I have read and understood the terms and conditions of the Plan and of this option.  I
hereby signify my understanding of, and my agreement with, the terms and conditions of the Plan and of this option.  I
agree to accept as binding, conclusive, and final all decisions or interpretations of the Board or Committee concerning any questions
arising under the Plan with respect to this option.  I accept this option in full satisfaction of any previous written
or verbal promise made to me by the Company or any Parent or Subsidiary with respect to option or Stock grants.

 

	Date:  _____________	 	 
	 	Signature of Optionee
	 	 	 
	 	 	 
	 	Print Name

 

    	III-5

    	 

    

 

APPENDIX IV

 

RESTRICTED STOCK AGREEMENT

 

To:

 

Date of Award:

 

You are hereby awarded, effective as of
the date hereof (the “Award Date”), _________ shares (the “Shares”) of common stock (“Common
Stock”), of Xcel Brands, Inc., a Delaware corporation (the “Company”), pursuant to the Company’s Equity
Incentive Plan (the “Plan”), subject to certain restrictions specified below in Restrictions and Forfeiture.
(While subject to the Restrictions, this Agreement refers to the Shares as “Restricted Shares”).

 

During the period commencing on the Award
Date and terminating on ________________ (the “Restricted Period”), except as otherwise provided herein, the
Shares may not be sold, assigned, transferred, pledged, or otherwise encumbered and are subject to forfeiture (the “Restrictions”).

 

Except as set forth below, the Restricted
Period with respect to the Shares will lapse in accordance with the vesting schedule set forth below (the “Vesting Schedule”).  Subject
to the restrictions set forth in the Plan, the Board or Committee shall have the authority, in its discretion, to accelerate the
time at which any or all of the Restrictions shall lapse with respect to any Shares subject thereto, or to remove any or all of
such Restrictions, whenever the Board or Committee may determine that such action is appropriate by reason of changes in applicable
tax or other laws, or other changes in circumstances occurring after the commencement of the Restricted Period.

 

In addition to the terms, conditions, and
restrictions set forth in the Plan, the following terms, conditions, and restrictions apply to the Restricted Shares:

 

	Restrictions and Forfeiture	 	You may not sell, assign, pledge, encumber, or otherwise transfer any interest in the Restricted Shares until the dates set forth in the Vesting Schedule, at which point the Restricted Shares will be referred to as “ Vested. ”

 

	Vesting Schedule	 	Assuming you provide Continuous Service (as defined herein) as an employee of the Company or any Parent or Subsidiary of the Company, all Restrictions will lapse on the Restricted Shares on the Vesting date or Vesting dates set forth in the schedule below for the applicable grant of Restricted Shares and they will become Vested.

 

	Vesting Schedule
	Vesting Date	 	Number of Restricted Shares that Vest
	 	 	 
	 	 	 
	 	 	 

 

	Continuous Service	 	“Continuous Service,” as used herein, means the absence of any interruption or termination of your service as an employee of the Company or any Parent or Subsidiary.  If you are employed by a Parent or Subsidiary, your employment shall be deemed to have terminated on the date your employer ceases to be a Parent or Subsidiary, unless you are on that date transferred to the Company or another Parent or Subsidiary.  Service shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Company or any then Parent or Subsidiary.  Your employment shall not be deemed to have terminated if you are transferred from the Company to any Parent or Subsidiary, or vice versa, or from one Subsidiary to another Subsidiary.

 

    	IV-1

    	 

    

 

	 Share Certificates	 	The Company will issue a certificate (or certificates) in your name with respect to the Shares, and will hold such certificate (or certificates) on deposit for your account until the expiration of the Restricted Period with respect to the Shares represented thereby.  Such certificate (or certificates) will contain the following restrictive legend:
	 	 	 
	 	 	“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in the Equity Incentive Plan of the Company, copies of which are on file in the office of the Secretary of the Company.”
	 	 	 
	
        Additional Conditions

        to Issuance of Stock

        Certificates
	 	You will not receive the certificates representing the Restricted Shares unless and until the Company has received a stock power or stock powers in favor of the Company executed by you.
	 	 	 
	Voting Rights	 	Prior to vesting, you will have no voting rights with respect to any Restricted Shares that have not Vested.
	 	 	 
	Cash Dividends	 	Cash dividends, if any, paid on the Restricted Shares shall be held by the Company for your account and paid to you upon the expiration of the Restricted Period, except as otherwise determined by the Board or Committee.  All such withheld dividends shall not earn interest, except as otherwise determined by the Board or Committee.  You will not receive withheld cash dividends on any Restricted Shares which are forfeited and all such cash dividends shall be forfeited along with the Restricted Shares which are forfeited.
	 	 	 
	Tax Withholding	 	Unless you make an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and pay taxes in accordance with that election, you will be taxed on the Shares as they become Vested and must arrange to pay the taxes on this income. If the Board or Committee so determines, arrangements for paying the taxes may include your surrendering Shares that otherwise would be released to you upon becoming Vested or your surrendering Shares you already own. The fair market value of the Shares you surrender, determined as of the date when taxes otherwise would have been withheld in cash, will be applied as a credit against the withholding taxes.
	 	 	 
	 	 	The Company shall have the right to withhold from your compensation an amount sufficient to fulfill its or its Parent’s or Subsidiary’s obligations for any applicable withholding and employment taxes.  Alternatively, the Company may require you to pay to the Company the amount of any taxes which the Company is required to withhold with respect to the Shares, or, in lieu thereof, to retain or sell without notice a sufficient number of Shares to cover the amount required to be withheld.  The Company may withhold from any cash dividends paid on the Restricted Shares an amount sufficient to cover taxes owed as a result of the dividend payment.  The Company’s method of satisfying its withholding obligations shall be solely in the discretion of the Board or Committee, subject to applicable federal, state, local and foreign laws.  The Company shall have a lien and security interest in the Shares and any accumulated dividends to secure your obligations hereunder.

 

	Tax Representations	 	You hereby represent and warrant to the Company as follows:
	 	 	 
	 	 	(a)           You have reviewed with your own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement.  You are relying solely on such advisors and not on any statements or representations of the Company or any of its Employees or agents.
	 	 	 
	 	 	(b)           You understand that you (and not the Company) shall be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.  You understand that Section 83 of the Code taxes (as ordinary income) the fair market value of the Shares as of the date any “restrictions” on the Shares lapse.  To the extent that an award hereunder is not otherwise an exempt transaction for purposes of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), with respect to officers, directors and 10% shareholders subject to Section 16 of the 1934 Act, a “restriction” on the Shares includes for these purposes the period after the award of the Shares during which such officers, directors and 10% shareholders could be subject to suit under Section 16(b) of the 1934 Act.  Alternatively, you understand that you may elect to be taxed at the time the Shares are awarded rather than when the restrictions on the Shares lapse, or the Section 16(b) period expires, by filing an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30) days from the date of the award.

 

    	IV-2

    	 

    

 

	 	 	YOU HEREBY ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION AVAILABLE TO YOU UNDER SECTION 83(B) OF THE CODE, EVEN IF YOU REQUEST THAT THE COMPANY OR ITS REPRESENTATIVES MAKE THIS FILING ON YOUR BEHALF.
	 	 	 
	Securities Law Representations	 	The following two paragraphs shall be applicable if, on the date of issuance of the Restricted Shares, no registration statement and current prospectus under the Securities Act of 1933, as amended (the “1933 Act”), covers the Shares, and shall continue to be applicable for so long as such registration has not occurred and such current prospectus is not available:
	 	 	 
	 	 	(a)           You hereby agree, warrant and represent that you will acquire the Shares to be issued hereunder for your own account for investment purposes only, and not with a view to, or in connection with, any resale or other distribution of any of such shares, except as hereafter permitted.  You further agree that you will not at any time make any offer, sale, transfer, pledge or other disposition of such Shares to be issued hereunder without an effective registration statement under the 1933 Act, and under any applicable state securities laws or an opinion of counsel acceptable to the Company to the effect that the proposed transaction will be exempt from such registration.  You agree to execute such instruments, representations, acknowledgments and agreements as the Company may, in its sole discretion, deem advisable to avoid any violation of federal, state, local or foreign law, rule or regulation, or any securities exchange rule or listing agreement.
	 	 	 
	 	 	(b)          The certificates for Shares to be issued to you hereunder shall bear the following legend:
	 	 	 
	 	 	“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or under applicable state securities laws.  The shares have been acquired for investment and may not be offered, sold, transferred, pledged or otherwise disposed of without an effective registration statement under the Securities Act of 1933, as amended, and under any applicable state securities laws or an opinion of counsel acceptable to the Company that the proposed transaction will be exempt from such registration.”

 

    	IV-3

    	 

    

 

	
        Stock Dividend, Stock

        Split and Similar

        Capital Changes
	 	In the event of any change in the outstanding shares of the Common Stock of the Company by reason of a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, transfer of assets, reorganization, conversion or what the Board or Committee deems in its sole discretion to be similar circumstances, the number and kind of shares subject to this Agreement shall be appropriately adjusted in a manner to be determined in the sole discretion of the Board or Committee, whose decision shall be final, binding and conclusive in the absence of clear and convincing evidence of bad faith.  Any shares of Common Stock or other securities received, as a result of the foregoing, by you with respect to the Restricted Shares shall be subject to the same restrictions as the Restricted Shares, the certificate or other instruments evidencing such shares of Common Stock or other securities shall be legended and deposited with the Company as provided above with respect to the Restricted Shares, and any cash dividends received with respect to such shares of Common Stock or other securities shall be accumulated as provided above with respect to the Restricted Shares.
	 	 	 
	Non-Transferability	 	Restricted Shares are not transferable.
	 	 	 
	
        No Effect on

        Employment
	 	Except as otherwise provided in your Employment Agreement [IF APPLICABLE], dated _____________________, nothing herein shall modify your status as an at-will employee of the Company or any Parent or Subsidiary.  Further, nothing herein guarantees you employment for any specified period of time.  This means that, except as provided in the Employment Agreement, either you or the Company or any Parent or Subsidiary may terminate your employment at any time for any reason, with or without cause, or for no reason.  You recognize that, for instance, you may terminate your employment or the Company or any Parent or Subsidiary may terminate your employment prior to the date on which your Shares become vested.
	 	 	 
	
        No Effect on Corporate

        Authority
	 	You understand and agree that the existence of this Agreement will not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stocks with preferences ahead of or convertible into, or otherwise affecting the common shares or the rights thereof, 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.
	 	 	 
	
        Questions or

        Controversies
	 	In the event that any question or controversy shall arise with respect to the nature, scope or extent of any one or more rights conferred by this Agreement, or any provision of this Agreement, the determination in good faith by the Board of Directors of the Company (as constituted at the time of such determination) of your rights under this Agreement shall be conclusive, final and binding upon you and upon any other person who shall assert any right pursuant to this Agreement.
	 	 	 
	Governing Law	 	The laws of the State of Delaware will govern all matters relating to this Agreement, without regard to the principles of conflict of laws.
	 	 	 
	Notices	 	Any notice you give to the Company must be in writing and either hand-delivered or mailed to the office of the Chief Financial Officer of the Company. If mailed, it should be addressed to the Chief Financial Officer   of the Company at its then main headquarters. Any notice given to you will be addressed to you at your address as reflected on the personnel records of the Company. You and the Company may change the address for notice by like notice to the other. Notice will be deemed to have been duly delivered when hand-delivered or, if mailed, on the day such notice is postmarked.

 

    	IV-4

    	 

    

 

	
        Agreement Subject to

        Plan; Entire Agreement
	 	This Agreement shall be subject to the terms of the Plan in effect on the date hereof, which terms are hereby incorporated herein by reference and made a part hereof.  Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in the Plan. This Agreement constitutes the entire understanding between the Company and you with respect to the subject matter hereof and no amendment, supplement or waiver of this Agreement, in whole or in part, shall be binding upon the Company unless in writing and signed by the Chief Executive Officer of the Company
	 	 	 
	Conflicting Terms	 	Wherever a conflict may arise between the terms of this Agreement and the terms of the Plan in effect on the date hereof, the terms of the Plan will control.

 

Please sign the copy of this Restricted Stock Agreement and
return it to the Chief Financial Officer, thereby indicating your understanding of, and agreement with, its terms and
conditions .

 

	 	XCEL BRANDS, INC.
	 	 
	 	By:	 

 

    	IV-5

    	 

    

 

ACKNOWLEDGMENT

 

I hereby acknowledge receipt of a copy
of the Plan.  I hereby represent that I have read and understood the terms and conditions of the Plan and of the Restricted
Stock Agreement.  I hereby signify my understanding of, and my agreement with, the terms and conditions of the Plan and
of the Restricted Stock Agreement.  I agree to accept as binding, conclusive, and final all decisions or interpretations
of the Board or Committee concerning any questions arising under the Plan with respect to this Restricted Stock Agreement.  I
accept this Restricted Stock Agreement in full satisfaction of any previous written or oral promise made to me by the Company or
any Parent or Subsidiary with respect to option or stock grants.

 

Date:  ____________________

	 	 	 
	 	 	 
	 	 	 
	 	ADDRESS

 

    	IV-6

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