Document:

EXHIBIT 10.5

 

WARRANT
AMENDMENT AGREEMENT

 

MELA
SCIENCES, INC.

 

THIS WARRANT AMENDMENT
AGREEMENT (the “Agreement”) is entered into as of June 22, 2015, by and among MELA Sciences, Inc., a Delaware
corporation (the “Company”) and the other parties which are signatories hereto (individually, an “Investor”
and collectively, the “Investors”).

 

In consideration of
the mutual premises and covenants contained herein and in the Purchase Agreement and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as
follows:

 

Section 1.          Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase Agreement”), dated June 22, 2015, among the Company and the purchasers signatory
thereto.

 

Section 2.          Existing
Warrants. Each of the Investors is a party to one or more warrant agreements with the Company, all of which are listed on
Exhibit A hereto, each of which is herein referred to as an “Existing Warrant” and collectively, the
“Existing Warrants”).

 

Section 3.          Amendment
to Existing Warrants. Each Existing Warrant shall be amended in a form
substantially consistent with the form of warrant attached hereto as Exhibit B including the terms set forth below (such
warrants, as amended, the “Amended Warrants”) the exercise price per share under the Amended Warrants shall
be $0.75, subject to full ratchet anti-dilution adjustments as provided in the attached form. Such Amended Warrants shall be effective
upon receipt of Shareholder Approval notwithstanding the requirement to deliver originally executed Amended Warrants pursuant
to Section 4 and the holders of Existing Warrants may exercise them upon the terms of the Amended Warrants immediately upon receipt
of Shareholder Approval.

 

Section 4.          Amended
Warrants. Within thirty (30) days of the date hereof, the Company and the Investors shall agree on the final form of Amended
Warrant in lieu of each of the Existing Warrants. Within three (3) day of the receipt of Shareholder Approval, the Company shall
deliver originally executed Amended Warrants to each Investor. The Company shall update the warrant register for each of the Existing
Warrants to reflect the adoption of the Amended Warrants.

 

Section 5.          Miscellaneous.

 

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

 

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

 

    	 

    	 

    

 

c)        Amendment.
This Agreement may be modified or amended or the provisions hereof waived with the written consent of the Company and each Investor.

 

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

 

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

 

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

 

(Signature Page Follows)

 

    	2

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Warrant Amendment Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.

 

	 	MELA SCIENCES, INC.
	 	 
	 	By:	 
	 	 	Michael R. Stewart
	 	 	Chief Executive Officer

 

[Signature Page to Warrant Amendment
Agreement]

 

    	 

    	 

    

 

 

[INVESTOR SIGNATURE PAGES TO MELA
WARRANT AMENDMENT AGREEMENT]

 

IN WITNESS WHEREOF,
the undersigned have caused this Warrant Amendment Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.

 

	Name of Investor:                                                                                                                                             
	 
	Signature of Authorized Signatory of Investor:                                                                                         
	 
	Name of Authorized Signatory:                                                                                                                     
	 
	Title of Authorized Signatory:                                                                                                                       

 

    	 

    	 

    

 

Exhibit A

 

List of Existing
Warrants

 

	Issue Date	 	Type	 	Holder	 	# of warrants	 	 	Current
 Exercise
 Price	 	 	Expiration
	10/31/2013	 	 	 	Sabby	 	 	685,715	 	 	$	8.50	 	 	4/30/2019
	2/5/2014	 	 	 	Sabby	 	 	897,298	 	 	$	7.40	 	 	2/5/2019
	2/5/2014	 	 	 	Broadfin	 	 	432,433	 	 	$	7.40	 	 	2/5/2019
	7/24/2014	 	Series A	 	Sabby	 	 	3,020,651	 	 	$	2.45	 	 	7/24/2019
	7/24/2014	 	Series A	 	Broadfin	 	 	1,267,849	 	 	$	2.45	 	 	7/24/2019
	7/24/2014	 	Series B	 	Sabby	 	 	3,235,867	 	 	$	2.45	 	 	1/24/2016
	7/24/2014	 	Series B	 	Broadfin	 	 	1,559,454	 	 	$	2.45	 	 	1/24/2016
	Total Warrants	 	 	 	 	 	 	11,099,267	 	 	 	 	 	 	 

 

    	A-1

    	 

    

 

Exhibit B

 

Form of Amended
Warrant

 

    	B-1

    	 

    

 

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

 

COMMON STOCK
PURCHASE WARRANT

 

MELA
SCIENCES, INC.

 

	Warrant No.:  ____

Warrant Shares: _______	Initial Exercise Date:  [●]

 

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

 

Section 1.          Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase
Agreement (as amended, the “Purchase Agreement”), dated July 21, 2014, among the Company and the purchasers
signatory thereto.

 

    	B-2

    	 

    

 

Section 2.          Exercise.

 

a)        Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing
on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise form annexed hereto and within three (3)
Trading Days of the date said Notice of Exercise is received by the Company, the Company shall have received payment of the aggregate
Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or, if available,
pursuant to the cashless exercise procedure specified in Section 2(c) below. No ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the
Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice
of Exercise is received by the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number
of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder
in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of
Exercise form within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on
the face hereof.

 

b)        Exercise
Price. The exercise price per share of the Common Stock under this Warrant shall be $0.75, subject to adjustment hereunder
(the “Exercise Price”).

 

c)        Cashless
Exercise. If at any time after the 6 month anniversary of the Initial Exercise Date, there is no effective Registration Statement
registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may only
be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

		(A) =	the VWAP on the Trading Day immediately preceding the
date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable
Notice of Exercise;

 

		(B) =	the Exercise Price of this Warrant, as adjusted hereunder;
and

 

		(X) =	the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise.

 

If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9)
of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the
holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees
not to take any position contrary to this Section 2(c).

 

    	B-3

    	 

    

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the
volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX 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 issued pursuant to the Purchase Agreement then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.

 

Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant
to this Section 2(c).

 

d)        Mechanics of Exercise.

 

i.            Delivery
of Warrant Shares Upon Exercise. Warrant Shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder
by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal
at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder
or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144,
and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the end of the day on the
date that is three (3) Trading Days after the latest of (A) the receipt by the Company of the Notice of Exercise and (B) surrender
of this Warrant (if required) (such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed
to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi)
prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant
Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock
on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant
Shares are delivered or Holder rescinds such exercise.

 

    	B-4

    	 

    

 

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

 

iii.          Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

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

 

    	B-5

    	 

    

 

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

 

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

 

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

 

    	B-6

    	 

    

 

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

 

    	B-7

    	 

    

 

f)         Issuance
Restrictions. If the Company has not obtained Shareholder Approval, the Company may not issue upon exercise of this Warrant
(1) any shares until six months from the Initial Exercise Date and (2) from and after six months from the Initial Exercise Date
(or until such later date if the Company continues to seek shareholder approval at the request of the holders of Warrants), a
number of shares of Common Stock, which, when aggregated with any shares of Common Stock issued (i) pursuant to any Debentures
issued pursuant to the Purchase Agreement (whether upon conversion or as payment of interest), and (ii) upon prior exercise of
this or any other Warrant issued pursuant to the Purchase Agreement, would exceed 1,622,612, subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of the Purchase Agreement (such number of shares, the “Issuable Maximum”). The Holder and the holders
of the other Debentures and Warrants issued pursuant to the Purchase Agreement shall be entitled to a portion of the Issuable
Maximum equal to the quotient obtained by dividing (x) the Holder’s original Subscription Amount by (y) the aggregate original
Subscription Amount of all holders pursuant to the Purchase Agreement. In addition, the Holder may allocate its pro-rata portion
of the Issuable Maximum among Warrants and Debentures held by it in its sole discretion. Such portion shall be adjusted upward
ratably in the event a Purchaser (other than the Holder) no longer holds any Warrants or Debentures and the amount of shares issued
to such Purchaser pursuant to its Warrants and Debentures was less than such Purchaser’s pro-rata share of the Issuable
Maximum.

 

Section 3.          Certain
Adjustments.

 

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

 

    	B-8

    	 

    

 

b)         Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding, shall
sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective
price per share less than the Exercise Price then in effect (such lower price, the “Base Share Price” and such
issuances collectively, a “Dilutive Issuance”) (it being understood and agreed that if the holder of the Common
Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than
the Exercise Price, such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive
Issuance at such effective price), then simultaneously with the consummation of each Dilutive Issuance the Exercise Price shall
be reduced and only reduced to equal the Base Share Price and the number of Warrant Shares issuable hereunder shall be increased
such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall
be equal to the aggregate Exercise Price prior to such adjustment. Such adjustment shall be made whenever such Common Stock or
Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section
3(b) in respect of an Exempt Issuance. The Company shall notify the Holder, in writing, no later than the Trading Day following
the issuance or deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein
the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice,
the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive
a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share
Price in the Notice of Exercise. If the Company enters into a Variable Rate Transaction, despite the prohibition thereon in the
Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible
conversion or exercise price at which such securities may be converted or exercised. Notwithstanding anything herein to the contrary,
this Section 3(b) shall terminate and be of no further force or effect after the later of (i) the one year anniversary of the
Initial Exercise Date, and (ii) the earlier of (A) six months after the effective date of the registration statement registering
all of the shares of Common Stock required to be registered pursuant to the Registration Rights Agreement (in the event multiple
registration statements are required to register all such shares, then this provision shall refer to the last of such registration
statements to become effective), and (B) six months after the date that all of the Warrant Shares and shares of Common Stock issued
or issuable under the Debentures are freely tradable under Rule 144 without the requirement to be in compliance with the current
public information requirements thereunder.

 

c)         Subsequent
Rights Offerings. If the Company, at any time while the Warrant is outstanding, shall issue rights, options or warrants to
all holders of Common Stock (and not to the Holder) entitling them to subscribe for or purchase shares of Common Stock at a price
per share less than the Exercise Price on the record date mentioned below, then the Exercise Price shall be reduced to equal to
the Base Share Price. Such adjustment shall be made whenever such rights, options or warrants are issued, and shall become effective
immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.

 

    	B-9

    	 

    

 

d)        Pro
Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common
Stock (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 3(b)), 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 or rights or warrants
so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In
either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness
so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any
such distribution is made and shall become effective immediately after the record date mentioned above.

 

e)         Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) or Section 2(f) on the exercise of this Warrant), the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number
of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard
to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
3(e) pursuant to written agreements which are exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise
price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of
the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number
of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately
prior to the consummation of such Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this
Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

    	B-10

    	 

    

 

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

 

g)        Notice
to Holder.

 

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

 

    	B-11

    	 

    

 

ii.           Notice
to Allow Exercise by Holder. If, prior to the earlier of (i) the Termination Date and (ii) the date on which this Warrant has
been exercised in full, (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock,
(B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all
or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address
as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity
of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes,
or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this
Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except
as may otherwise be expressly set forth herein.

 

Section 4.          Transfer
of Warrant.

 

a)         Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Sections 4.1 and 5.7 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company
unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within
three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant,
if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having
a new Warrant issued.

 

    	B-12

    	 

    

 

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

 

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

 

d)        Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any
exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for
distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.

 

e)        Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer,
that the Holder or transferee of this Warrant, as the case may be, comply with the transfer restrictions in the Purchase Agreement.

 

Section 5.          Miscellaneous.

 

f)         No
Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in
Section 3.

 

    	B-13

    	 

    

 

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

 

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

 

i)         Authorized
Shares. The Company covenants that it will use its best efforts to promptly seek shareholder approval for an amendment to its
certificate of incorporation to increase the number of authorized shares of Common Stock to permit the exercise of this Warrant
in its entirety and, at all times thereafter, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise
of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment
for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

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

 

    	B-14

    	 

    

 

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

 

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

 

k)        Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

l)         Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all
rights hereunder terminate on the Termination Date. If the Company fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs
and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred
by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

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

 

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

 

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

 

    	B-15

    	 

    

 

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

 

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

 

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

 

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

 

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

 

(Signature Page Follows)

 

    	B-16

    	 

    

 

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

 

	 	MELA SCIENCES, INC.
	 	 
	 	By:	 
	 	 	Michael R. Stewart
	 	 	Chief Executive Officer

 

[Signature Page to Warrant]

 

    	 

    	 

    

 

NOTICE OF EXERCISE

 

To:mela
sciences, inc.

 

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

 

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

 

 ̈
in lawful money of the United States; or

 

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

 

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

 

	 

 

The Warrant Shares shall be delivered to
the following DWAC Account Number:

 

	 
	 
	 
	 
	 

 

(4)  Accredited
Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities
Act of 1933, as amended.

 

[SIGNATURE
OF HOLDER]

 

Name of Investing Entity: ___________________________________________________________________________

Signature of Authorized Signatory of
Investing Entity: _____________________________________________________

Name of Authorized Signatory: _______________________________________________________________________

Title of Authorized Signatory: ________________________________________________________________________

Date: ___________________________________________________________________________________________

 

    	 

    	 

    

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

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

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

 

Dated: ______________,
_______

 

	Holder’s Signature:	 
	 	 
	Holder’s Address:	 
	 	 
	 	 

 

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

 

[Signature Page to Warrant]sret_Ex101

		
			Exhibit 10.1
		

		
			AMENDED AND RESTATED
		

		
			STERLING REAL ESTATE TRUST
		

		
			INDEPENDENT TRUSTEE COMMON SHARES PLAN
		

		
			 
		

		
			1.Purposes.  The purposes of this AMENDED AND RESTATED STERLING REAL ESTATE TRUST INDEPENDENT TRUSTEE COMMON SHARES PLAN are: (i) to promote the growth and long-term interests of the Trust and its Affiliates by strengthening the Trust’s ability to attract, motivate and retain Independent Trustees; (ii) conserve cash assets of the Trust by providing for Independent Trustees to receive their compensation for service as an Independent Trustee in the form of shares of the Trust’s Common Shares; and (iii) closely associate the interests of Independent Trustees with that of the Trust’s Shareholders by allowing Independent Trustees to have a personal financial stake in the Trust through an ownership interest in the Common Shares, which the Board of Trustees believes will benefit the Trust and the Shareholders. 
		

		
			2.Eligibility. Only Independent Trustees of the Trust, as defined below, shall be participants in the Plan. 
		

		
			3.Definitions.  As used in this Plan, the following definitions shall apply:
		

		
			a.“Affiliate” means any entity that is (i) a member of a controlled group of corporations (within the meaning of Code Section 414(b)) that includes the Trust, (ii) any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Trust, (iii) any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Trust, and (iv) any other entity required to be aggregated with the Trust pursuant to regulations under Code Section 414(o).
		

		
			b.“Board of Trustees” or “Board”  means the Board of Trustees of the Trust.
		

		
			c.“Code” means the Internal Revenue Code of 1986, as amended.
		

		
			d.“Committee” means any Committee of the Board of Trustees appointed by the Board to administer the Plan.  The Committee may be comprised of the entire Board or two or more members of the Board.
		

		
			e.“Common Shares” means the Trust’s Common Shares of Beneficial Interest, $0.01 par value per share
		

		
			f.“Fair Market Value” means  (i) if the Common Shares are listed or admitted to unlisted trading privileges on any national securities exchange, the average of the closing sales prices of the Common Shares on the end of any day on all national securities exchanges on which the Common Shares may at the time be listed or, if there have been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day 
		

		

		

		 

 

		or, (ii) if the Common Shares are not so listed or admitted to unlisted trading privileges on any national securities exchange, and bid and asked prices therefor in the domestic over-the-counter market are reported by the National Quotation Bureau, Incorporated (or any comparable reporting service), the average of the closing bid and asked prices on such day as reported by the National Quotation Bureau, Incorporated (or any comparable reporting service), or (iii) if the Common Shares are not listed on any national securities exchange or quoted in the domestic over-the-counter market, the fair value of the Common Shares determined by the Board of Trustees or the Committee in good faith in the exercise of its reasonable discretion based upon a reasonable application of a reasonable valuation method.
		

		
			g.“Independent Trustee”  shall have the meaning set forth in Article II of the Sterling Real Estate Trust Trustee Independence Policy, as amended from time to time.  
		

		
			h.“Plan” means this Amended and Restated Sterling Real Estate Trust Independent Trustee Common Shares Plan,  outlined herein.
		

		
			i.“Shareholders” means the holders of the Trust’s outstanding Common Shares.
		

		
			j.“Schedule of Compensation”  shall mean the attached Exhibit A.  
		

		
			k.“Trust” means Sterling Real Estate Trust, a trust established under the laws of the State of North Dakota.
		

		
			l.“Trustee” shall mean a member of the Board of Trustees of the Trust. 
		

		
			4.Issuance of Common Shares.  With respect to any compensation for service as an Independent Trustee that becomes payable following the date on which this Plan is adopted:
		

		
			a.One Hundred percent (100.00%) of each Independent Trustee’s compensation for service as an Independent Trustee shall be paid to the Independent Trustee in the form of Whole Common Shares based upon the Fair Market Value of such Common Shares. Any fractional Common Share otherwise payable will be paid as cash compensation. 
		

		
			b.Compensation for service as an Independent Trustee shall be calculated based on the Schedule of Compensation,  as amended from time to time in accordance with this Plan.  
		

		
			c.Payment of compensation under this Plan for each Independent Trustee’s prior year of service shall be paid in the month of July, such date to be determined by the Board of Trustees or the Committee, or such other date as determined by the Board of Trustees or the Committee.  
		

		

		

		 

		

			1

		

 

		5.Available Common Shares.  
		

		
			a.The maximum number of Common Shares which may be issued under the Plan is Fifteen Thousand (15,000) Common Shares.  In addition, the number of Common Shares authorized for issuance under the Plan may be increased from time to time by approval of the Board of Trustees or the Committee and, if required by the Code or any rules or regulations adopted thereunder, the Shareholders.
		

		
			b.The Trust, during the term of the Plan and all Common Shares issued under the Plan, will at all times reserve and keep available, and will use its commercially reasonable best efforts to seek or obtain approval from any regulatory body having jurisdiction over the transactions contemplated by this Plan necessary in order to issue such number of Common Shares as shall be sufficient to satisfy the requirements of the Plan.
		

		
			6.Administration.
		

		
			a.Board of Trustees or Committee.  Except as otherwise provided for in this Plan, the Plan shall be administered by the Board of Trustees or the Committee.  
		

		
			b.Powers and Duties.  Subject to the provisions of this Plan, the Board of Trustees or the Committee shall have sole authority to do everything necessary or appropriate to administer the Plan, including, without limitation, making any rules and regulations governing the administration of the Plan; determining whether any restrictions shall be placed on Common Shares granted under the Plan, interpreting the Plan; and making all other determinations necessary or advisable for the administration of the Plan.  The determinations of the Board or the Committee need not be uniform and may be made by it selectively among persons who are eligible to receive Common Shares under the Plan, whether or not such persons are similarly situated.  All decisions, determinations and interpretations of the Board of Trustees or the Committee regarding the Plan shall be final and binding on all Trustees.  The day-to-day administrative duties for the Plan may be delegated by the Board of Trustees or the Committee to one or more executive officers of the Trust.  All actions authorized to be taken by the Board of Trustees under this Plan may as well be taken by any appropriately appointed committee thereof.
		

		
			7.Amendment or Termination.
		

		
			a.The Board of Trustees or Committee may amend the Plan from time to time in such respects as the Board of Trustees or Committee may deem advisable, and, if required, seek the Shareholders approval for such amendment. 
		

		
			b.The Board of Trustees or the Committee may at any time terminate the Plan.  Any such termination of the Plan shall not affect Common Shares already granted.
		

		

		

		 

		

			2

		

 

		8.Income Tax Treatment.
		

		
			a.Government jurisdiction and income reporting requirements will be complied with by the Trust whenever the Common Shares are issued and any income tax payment and any income tax prepayment requirements (including any tax withholding requirements imposed upon the Trust) will be effectively borne by the Independent Trustee.
		

		
			b.The Trust recognizes that certain persons who receive Common Shares may be subject to restrictions regarding their right to trade Common Shares under Section 16(b) of the Securities Exchange Act of 1934.  Such restrictions may cause Independent Trustees not to be taxable when they receive the Common Shares.  However, it may be more beneficial to an Independent Trustee to be taxed upon grant of the Common Shares as opposed to when trading restrictions lapse.  Accordingly, Independent Trustees receiving Common Shares under those circumstances may consider making an election under Section 83(b) of the Code to be taxed at the time of grant of the Shares.  If requested, the Trust shall provide reasonable assistance to such Independent Trustees to effect a Section 83(b) election.
		

		
			9.No Right to Continued Providing of Services.  Nothing in this Plan or in any agreement entered into in accordance with the Plan shall confer on an Independent Trustee any right to continuance as an Independent Trustee of or the providing of services to the Trust or its Affiliates.
		

		
			10.Expenses of Plan.  The expenses of administering this Plan shall be borne by the Trust and its Affiliates.
		

		
			11.Reliance on Reports.  Each member of the Board or Committee and each member of the Board of Trustees shall be fully justified in relying or acting in good faith upon any report made by the independent public accountants of the Trust and its Affiliates and upon any other information furnished in connection with this Plan by any person or persons other than himself or herself.  In no event shall any person who is or shall have been a member of the Board of Trustees or of a Committee of the Board of Trustees be liable for any determination made or other action taken or omitted in reliance upon any such report or information, or for any action taken or omitted, including the furnishing of information, in good faith.
		

		
			12.General Restrictions.  
		

		
			a.Each Common Share granted pursuant to the Plan shall be subject to the requirement that if, in the opinion of the Board or Committee, the listing, registration, or qualification of any Common Shares related thereto upon any securities exchange or under any state or federal law, the consent or approval of any regulatory body, or an agreement by the recipient with respect to the disposition of any such units, is necessary or desirable as a condition of the issuance or sale of such shares, such Common Share shall not be granted without 
		

		

		

		 

		

			3

		

 

		restriction and/or such Common Shares shall not be sold unless and until such listing, registration, qualification, consent, approval, or agreement is effected or obtained in form satisfactory to the Board or Committee.
		

		
			b.The Trust may restrict the transfer of the Common Shares purchased or received and affix a legend to the certificate representing such shares, stating that such shares may not be transferred without an opinion of counsel satisfactory to the Trust that the proposed transfer may lawfully be made without registration under the federal Securities Act of 1933 and registration, notice or approval under any applicable state securities laws, or such applicable registration(s), notice(s) and approval(s).
		

		
			13.Successors and Assigns.  This Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Trust and the Trustees.
		

		
			14.North Dakota Law.  The validity, construction, interpretation, administration and effect of the Plan, any rules, regulations and actions relating to the Plan, and the agreements evidencing Common Shares granted under the Plan, will be governed by and construed exclusively in accordance with the laws of the State of North Dakota.
		

		
			I hereby certify that this Plan was adopted initially by the Board of Trustees of the Trust effective December ___, 2013 and this Amended and Restated Plan was adopted by the Board of Trustees of the Trust effective June 18, 2015.  
		

		
			 
		

		
			 
		

		
			STERLING REAL ESTATE TRUST
		

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

				
	
					
						Its:

					
					
						 

				

		
			 
		

		
			 
		

		

		

		 

		

			4

		

 

		STERLING REAL ESTATE TRUST
		

		
			INDEPENDENT TRUSTEE
		

		
			SCHEDULE OF COMPENSATION
		

		
			 
		

		
			The following schedule shall be in effect for Independent Trustee compensation: 
		

		
			 
		

			
					
						Board Chairman – Board Meeting

					
					
						105 Common Shares per meeting**

				
	
					
						Trustee* – Board Meeting

					
					
						75 Common Shares per meeting**

				
	
					
						Committee Chair – Committee Meeting

					
					
						30 Common Shares per meeting**

				
	
					
						Trustee* – Committee Meeting

					
					
						30 Common Shares per meeting**

				

		
			 
		

		
			*Compensation shall only be paid to Independent Trustees.
		

		
			 
		

		
			** Common Shares earned in accordance with the Schedule of Compensation shall be calculated on an annual basis. Common Shares earned for each Independent Trustees’ prior year of service shall be issued on or about July 15, as determined by the Board of Trustees or the Committee.  
		

		
			 
		

		
			 
		

		 

		

			5

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