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aray-ex102_6.htm

EXHIBIT 10.2

AMENDED AND RESTATED 2007 EMPLOYEE STOCK PURCHASE PLAN

Accuray Incorporated hereby approves the Accuray Incorporated Amended and Restated 2007 Employee Stock Purchase Plan (the “Plan”), effective as of the Effective Date (as defined herein). 

	
 
	
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Purpose.  The purposes of the Plan are as follows: 

(a)To assist employees of the Company and its Designated Subsidiaries (as defined below) in acquiring a stock ownership interest in the Company. The Company intends for the Plan to have two components:  a Code Section 423 Component (“423 Component”) and a non-Code Section 423 Component (“Non-423 Component”).  The Company’s intention is to have the 423 Component of the Plan qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended.  The provisions of the 423 Component, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.  In addition, this Plan authorizes the grant of an option to purchase shares of Common Stock under the Non-423 Component that does not qualify as an “employee stock purchase plan” under Section 423 of the Code; an option granted under the Non‐423 Component will provide for substantially the same benefits as an option granted under the 423 Component, except that a Non‐423 Component option may include features necessary to comply with applicable non‐U.S. laws pursuant to rules, procedures, or sub‐plans adopted by the Administrator.  Except as otherwise provided herein, the Non-423 Component will operate and be administered in the same manner as the 423 Component.. 

(b)To help employees provide for their future security and to encourage them to remain in the employment of the Company and its Designated Subsidiaries.

	
 
	
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Definitions.

(a)“Administrator” shall mean the administrator of the Plan, as determined pursuant to Section 14 hereof.

(b)“Board” shall mean the Board of Directors of the Company.

(c)“Change in Control” means the occurrence of any of the following events:

(i)A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control; or 

(ii)A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12)-month period by members of the Board 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.  For purposes of this clause (ii), if any Person 

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is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or 

(iii)A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection, the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3).  For purposes of this subsection, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. 

For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

(d)“Code” shall mean the Internal Revenue Code of 1986, as amended.

(e)“Committee” shall mean the committee appointed to administer the Plan pursuant to Section 14 hereof.

(f)“Common Stock” shall mean the common stock of the Company, no par value per share.  “Common Stock” shall also include (i) the common stock of the surviving corporation in any consolidation, merger or reincorporation effected exclusively to change the domicile of the Company and (ii) such other securities of the Company that may be substituted for Common Stock pursuant to Section 19 hereof.

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(g)“Company” shall mean Accuray Incorporated, a Delaware corporation, or any successor corporation (including, without limitation, the surviving corporation in any consolidation, merger or reincorporation effected exclusively to change the domicile of the Company).

(h)“Compensation” shall mean all base straight time gross earnings and commissions, exclusive of payments for overtime, shift premium, incentive compensation, incentive payments, bonuses, expense reimbursements, fringe benefits and other compensation.  The Administrator, in its discretion, may, on a uniform and nondiscriminatory basis, establish a different definition of Compensation for a subsequent Offering Period.

(i)“Designated Subsidiary” shall mean any Subsidiary which has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan.  The Administrator may designate, or terminate the designation of, a subsidiary as a Designated Subsidiary without the approval of the stockholders of the Company.

(j)“Eligible Employee” shall mean an Employee of the Company or a Designated Subsidiary: (i) who does not, immediately after the option is granted, own stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company, a Parent or a Subsidiary (as determined under Section 423(b)(3) of the Code); (ii) whose customary employment is for more than twenty (20) hours per week; and (iii) whose customary employment is for more than five (5) months in any calendar year, or any lesser number of hours per week and/or number of months in any calendar year established by the Administrator (if required under applicable local law) for purposes of any separate Offering or the Non-423 Component.  For purposes of clause (i), the rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and stock which an employee may purchase under outstanding options shall be treated as stock owned by the employee.  For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company or Designated Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-7(h)(2).  Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated three (3) months and one (1) day following the commencement of such leave.  The Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date in an Offering, determine (on a uniform and nondiscriminatory basis or as otherwise permitted by Treasury Regulation Section 1.423‐2) that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the Code, or (v) is a highly compensated employee within the meaning of Section 414(q) of the Code with compensation above a certain level or is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided the exclusion is applied with respect to each Offering in an identical manner to all highly compensated individuals of the Employer whose Employees are participating in that Offering.  Each exclusion will be applied with respect to an Offering in a manner complying with Treasury Regulation Section 1.423‐2(e)(2)(ii).   

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(k)“Employee” shall mean any person who renders services to the Company or a Subsidiary in the status of an employee within the meaning of Code Section 3401(c).  “Employee” shall not include any director of the Company or a Subsidiary who does not render services to the Company or a Subsidiary in the status of an employee within the meaning of Code Section 3401(c). 

(l)“Employer” shall mean the employer of the applicable Eligible Employee(s).

(m)“Enrollment Date” shall mean the first Trading Day of each Offering Period.  

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

(o)“Exercise Date” shall mean the last Trading Day of each Purchase Period; provided, however, if the last Trading Day falls on the day after the Thanksgiving holiday, then the Exercise Date will be the last Trading Day before the Thanksgiving holiday.

(p)“Fair Market Value” shall mean, as of any date, the value of Common Stock determined as follows:

(i)If the Common Stock is traded on an exchange, its Fair Market Value shall be the closing sales price for a share of Common Stock as reported in The Wall Street Journal (or such other source as the Administrator may deem reliable for such purposes) for such date, or if no sale occurred on such date, the first trading date immediately prior to such date during which a sale occurred;

(ii)If the Common Stock is not traded on an exchange but is quoted on a quotation system, its Fair Market Value shall be the mean between the closing representative bid and asked prices for the Common Stock on such date, or if no sale occurred on such date, the first date immediately prior to such date on which sales prices or bid and asked prices, as applicable, are reported by such quotation system; or

(iii)In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

(q)“Offering” means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4.  For purposes of the Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees of one or more Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering.  To the extent permitted by Treasury Regulation Section 1.423‐2(a)(1), the terms of each Offering need not be identical provided that the terms of the Plan and an Offering together satisfy Treasury Regulation Section 1.423‐2(a)(2) and (a)(3). 

(r)“Offering Period” shall mean each period of approximately twelve (12) months commencing on any December 1 or June 1 and terminating on the last Trading Day on or before the next occurring November 30 or May 31, as applicable.  The duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan, but in no event may an Offering Period have a duration in excess of twenty-seven (27) months.  Notwithstanding the foregoing, if the last Trading Day of an Offering Period falls on the day after the Thanksgiving holiday, the Offering Period shall end on the last trading day before the Thanksgiving holiday.

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(s)“Parent” means any corporation, other than the Company, in an unbroken chain of corporations ending with the Company if, at the time of the determination, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 

(t)“Plan” shall mean this Amended and Restated Accuray Incorporated 2007 Employee Stock Purchase Plan.

(u)“Purchase Period” shall mean (i) with respect to the first Purchase Period in an Offering Period, the approximately six (6)-month period commencing on the Enrollment Date of such Offering Period and ending with the last Trading Day on or before the next occurring May 31 or November 30, as applicable, and (ii) with respect to any other Purchase Period in an Offering Period, the approximately six (6)-month period commencing on the date immediately following the Exercise Date of the previous Purchase Period and ending with the last Trading Day on or before the next occurring May 31 or November 30, as applicable.  

(v)“Purchase Price” shall mean 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided,  however, that the Purchase Price may be adjusted by the Administrator pursuant to Section 19 hereof and/or may be determined for subsequent Offering Periods by the Administrator subject to compliance with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule) or pursuant to Section 20; provided, further, that the Purchase Price shall not be less than the par value of a share of Common Stock.

(w)“Subsidiary” shall mean any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the time of the determination, each of the corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 

(x)“Trading Day” shall mean a day on which national stock exchanges are open for trading.

(y)“Treasury Regulations” means the Treasury regulations of the Code.  Reference to a specific Treasury Regulation or Section of the Code will include such Treasury Regulation or Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.

3.Eligibility.

(a)Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a given Enrollment Date for an Offering Period shall be eligible to participate in the Plan during such Offering Period, subject to the requirements of Section 5 hereof and the limitations imposed by Section 423(b) of the Code.

(b)No Eligible Employee shall be granted an option under the Plan which permits his rights to purchase stock under the Plan, and to purchase stock under all other employee stock purchase plans of the Company, any Parent or any Subsidiary subject to Section 423 of the Code, to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined at the time the option is granted) for each calendar year in which the option is outstanding at any time.  For purposes of the limitation 

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imposed by this subsection, the right to purchase stock under an option accrues when the option (or any portion thereof) first becomes exercisable during the calendar year, the right to purchase stock under an option accrues at the rate provided in the option, but in no case may such rate exceed $25,000 of fair market value of such stock (determined at the time such option is granted) for any one calendar year, and a right to purchase stock which has accrued under an option may not be carried over to any option.  This limitation shall be applied in accordance with Section 423(b)(8) of the Code and the Treasury Regulations thereunder.

4.Offering Periods.  The Plan shall be implemented by consecutive Offering Periods which shall continue until the Plan expires or is terminated in accordance with Section 20 hereof.  The Administrator shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future Offerings without stockholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected thereafter.

5.Participation.

(a)An Eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in a form acceptable to the Administrator and filing it with the Company’s payroll office fifteen (15) days (or such shorter or longer period as may be determined by the Administrator, in its sole discretion) prior to the applicable Enrollment Date.

(b)Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Eligible Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code.  In the case of the Non-423 Component, Eligible Employees may be excluded from participation in the Plan or an Offering if the Administrator determines that participation of such Eligible Employees is not advisable or practicable.

(c)Payroll deductions for a participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof. 

(d)During a leave of absence approved by the Company or a Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-7(h)(2), a participant may continue to participate in the Plan by making cash payments to the Company on each pay day equal to the amount of the participant’s payroll deductions under the Plan for the pay day immediately preceding the first day of such participant’s leave of absence.  

Alternatively, during a leave of absence approved by the Company or a Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-7(h)(2), a participant may elect to continue participating in the Plan, but not make any payroll deductions or cash payments.  Any payroll deductions made prior to the beginning of the leave in the current Offering Period that have not already been used to purchase shares will be used to purchase shares at the end of the Purchase Period.  The participant may resume payroll deduction when the leave ends and they return to work in an amount 

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equal to their payroll deductions under the Plan for the pay day immediately preceding the first day of such participant’s leave of absence.  

If a leave of absence is unapproved or fails to meet the requirements of Treasury Regulation Section 1.421-7(h)(2), the participant will cease automatically to participate in the Plan.  In such event, the Company will automatically cease to deduct the participant’s payroll under the Plan.  The Company will pay to the participant his or her total payroll deductions for the Offering Period that have not already been used to purchase shares, in cash in one lump sum (without interest), as soon as practicable after the participant ceases to participate in the Plan.

(e)A participant’s completion of a subscription agreement will enroll such participant in the Plan for each successive Purchase Period and each subsequent Offering Period on the terms contained therein until the participant either submits a new subscription agreement, withdraws from participation under the Plan as provided in Section 10 hereof or otherwise becomes ineligible to participate in the Plan.

(f)The subscription agreement(s) used in connection with the Plan shall be in a form prescribed by the Administrator, and the Administrator may, in its sole discretion, determine whether such agreement shall be submitted in written or electronic form.

6.Payroll Deductions.

(a)At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount from one percent (1%) to ten percent (10%) of the Compensation which he or she receives on each pay day during the Offering Period.  The Administrator, in its sole discretion, may permit all participants in a specified Offering to contribute amounts to the Plan through payment by cash, check or other means set forth in the subscription agreement prior to each Exercise Date of each Purchase Period.

(b)All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only.  A participant may not make any additional payments into such account.

(c)A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof, or may increase or decrease the rate of his or her payroll deductions during the Offering Period by completing or filing with the Company a new subscription agreement authorizing a change in payroll deduction rate.  The Administrator may, in its discretion, limit the number of participation rate changes during any Offering Period.  The change in rate shall be effective with the first full payroll period following five (5) business days after the Company’s receipt of the new subscription agreement (or such shorter or longer period as may be determined by the Administrator, in its sole discretion). 

(d)Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant’s payroll deductions may be decreased to zero percent (0%) at any time during a Purchase Period.  Subject to Section 423(b)(8) of the Code and Section 3(b) hereof, payroll deductions will recommence at the rate originally elected by the participant effective as of the beginning of the first Purchase Period scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10.

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(e)At the time the option is exercised, in whole or in part, or at the time some or all of the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company’s federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock.  At any time, the Company may, but shall not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Employee.  In addition, the Company or the Employer may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate to the extent permitted by Treasury Regulation Section 1.423‐2(f).

7.Grant of Option.  On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period shall be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company’s Common Stock determined by dividing such participant’s payroll deductions accumulated prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided, however, that in no event shall a participant be permitted to purchase during each Purchase Period more than 2,500 shares of the Company’s Common Stock (subject to any adjustment pursuant to Section 19 hereof) (for the avoidance of doubt, in the event that the Offering Period and Purchase Period are approximately the same length, the participant shall only be entitled to purchase an aggregate of 2,500 shares during such period); and provided, further, that such purchase shall be subject to the limitations set forth in Sections 3(c) and 13 hereof.  The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of the Company’s Common Stock a participant may purchase during each Purchase Period and Offering Period.  Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof or otherwise becomes ineligible to participate in the Plan.  The option shall expire on the last day of the Offering Period. 

8.Exercise of Option.  

(a)Unless a participant withdraws from the Plan as provided in Section 10 hereof or otherwise becomes ineligible to participate in the Plan, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account.  No fractional shares shall be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full share shall be retained in the participant’s account for the subsequent Purchase Period or Offering Period.  During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.

(b)If the Administrator determines that, on a given Exercise Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable 

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among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro rata allocation of the shares available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 hereof.  The Company may make pro rata allocation of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date.  The balance of the amount credited to the account of each participant which has not been applied to the purchase of shares of stock shall be paid to such participant in one lump sum in cash as soon as reasonably practicable after the Exercise Date, without any interest thereon. 

9.Deposit of Shares.  As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company may arrange for the deposit, into each participant’s account with any broker designated by the Company to administer this Plan, of the number of shares purchased upon exercise of his or her option.

10.Withdrawal.

(a)A participant may withdraw all but not less than all of the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company in a form acceptable to the Administrator.  All of the participant’s payroll deductions credited to his or her account during the Offering Period shall be paid to such participant as soon as reasonably practicable after receipt of notice of withdrawal and such participant’s option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period.  If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new subscription agreement.

(b)A participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.

11.Termination of Employment.  Upon a participant’s ceasing to be an Eligible Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant’s account during the Offering Period shall be paid to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 hereof, as soon as reasonably practicable and such participant’s option for the Offering Period shall be automatically terminated.  Unless otherwise provided by the Administrator, a participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Subsidiary will not be treated as terminated under the Plan; however, if a participant transfers from an Offering under the 423 Component to the Non-423 Component, the exercise of the option will be qualified under the 423 Component only to the extent it complies with Section 423 of the Code, unless otherwise provided by the Administrator.

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12.Interest.  No interest shall accrue on the payroll deductions or lump sum contributions of a participant in the Plan, except as may be required by applicable laws, as determined by the Company, and if so required by the laws of a particular jurisdiction, will apply to all participants in the relevant Offering under the 423 Component, except to the extent otherwise permitted by Treasury Regulation Section 1.423‐2(f).

13.Shares Subject to Plan.

(a)Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of the Company’s Common Stock which shall be made available for sale under the Plan shall be 12,263,101 shares.  If any right granted under the Plan shall for any reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for issuance under the Plan.  The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.   

(b)With respect to shares of stock subject to an option granted under the Plan, a participant shall not be deemed to be a stockholder of the Company, and the participant shall not have any of the rights or privileges of a stockholder, until such shares have been issued to the participant or his or her nominee following exercise of the participant’s option.  No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash securities, or other property) or distribution or other rights for which the record date occurs prior to the date of such issuance, except as otherwise expressly provided herein.

14.Administration.  

(a)The Plan shall be administered by the Board unless and until the Board delegates administration to a Committee as set forth below.  The Board may delegate administration of the Plan to a Committee comprised of two or more members of the Board, each of whom is a “non-employee director” within the meaning of Rule 16b-3 which has been adopted by the Securities and Exchange Commission under the Exchange Act and which is otherwise constituted to comply with applicable law, and the term “Committee” shall apply to any persons to whom such authority has been delegated, provided that any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 14(a) or otherwise provided in the charter of the Committee.  If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  The governance of the Committee shall be subject to the charter of the Committee as approved by the Board.  References in this Plan to the “Administrator” shall mean the Board unless administration is delegated to a Committee or subcommittee, in which case references in this Plan to the Administrator shall thereafter be to the Committee or subcommittee.

(b)It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with the provisions of the Plan.  The Administrator shall have the power to interpret the Plan and the terms of the options; to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith; to interpret, amend or revoke any such rules 

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(including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which sub-plans may take precedence over other provisions of this Plan, with the exception of Section 13(a) hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan will govern the operation of such sub-plan); to delegate ministerial duties to any of the Company’s employees; to designate separate Offerings under the Plan; to designate Subsidiaries of the Company as participating in the 423 Component or Non-423 Component; to determine eligibility; and to adjudicate all disputed claims filed under the Plan.  Unless otherwise determined by the Administrator, the Eligible Employees eligible to participate in each sub-plan will participate in a separate Offering or in the Non-423 Component.  Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of contributions, making of contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements.  The Administrator also is authorized to determine that, to the extent permitted by Treasury Regulation Section 1.423‐2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering to employees resident solely in the U.S.  The Administrator at its option may utilize the services of an agent to assist in the administration of the Plan including establishing and maintaining an individual securities account under the Plan for each participant.  In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan.  

(c)All expenses and liabilities incurred by the Administrator in connection with the administration of the Plan shall be borne by the Company.  The Administrator may, with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers or other persons.  The Administrator, the Company and its officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons.  All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon all participants, the Company and all other interested persons.  No member of the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the options, and all members of the Board shall be fully protected by the Company in respect to any such action, determination, or interpretation. 

15.Designation of Beneficiary.

(a)A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash.  In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option.  If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.

(b)Such designation of a beneficiary may be changed by the participant at any time by written notice to the Company.  In the event of the death of a participant and in the absence of a 

11

 

 

beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

16.Transferability.  Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant.  Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.

17.Use of Funds.  All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions except under Offerings or for participants in the Non-423 Component for which applicable laws require that contributions to the Plan by participants be segregated from the Company’s general corporate funds and/or deposited with an independent third party.  Until shares of Common Stock are issued, participants will have only the rights of an unsecured creditor with respect to such shares.

18.Reports.  Individual accounts shall be maintained for each participant in the Plan.  Statements of account shall be given to participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.

19.Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Change in Control.

(a)Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option, the maximum number of shares each participant may purchase each Purchase Period (pursuant to Section 7 hereof), as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.

(b)Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, any Purchase Periods then in progress shall be shortened by setting a new Exercise Date 

12

 

 

(the “New Exercise Date”), and any Offering Periods then in progress shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator.  The New Exercise Date shall be before the effective date of the Company’s proposed dissolution or liquidation.  The Administrator shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.  

(c)Merger or Change in Control.  In the event of a merger of the Company with or into another corporation or a Change in Control, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the option, any Purchase Periods then in progress shall be shortened by setting a New Exercise Date, and any Offering Periods then in progress shall end on the New Exercise Date.  The New Exercise Date shall be before the effective date of the Company’s proposed sale or merger.  The Administrator shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

20.Amendment or Termination.

(a)The Board may at any time and for any reason terminate or amend the Plan.  Except as provided in Section 19 hereof, no such termination shall affect options previously granted, provided that an Offering Period may be terminated by the Board if the Board determines that the termination of the Offering Period or the Plan is in the best interests of the Company and its stockholders.  Except as provided in Section 19 hereof and this Section 20, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant without the consent of such participant.  To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company shall obtain stockholder approval of any amendment in such a manner and to such a degree as required.

(b)Without stockholder consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Administrator shall be entitled to change the Offering Periods or Purchase Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are consistent with the Plan.

(c) In the event the Board determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent 

13

 

 

necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:

(i)altering the Purchase Price for any Offering Period or Purchase Period including an Offering Period or Purchase Period underway at the time of the change in Purchase Price;

(ii)shortening any Offering Period or Purchase Period so that the Offering Period or Purchase Period ends on a new Exercise Date, including an Offering Period or Purchase Period underway at the time of the Administrator action; and

(iii)allocating shares.

Such modifications or amendments shall not require stockholder approval or the consent of any Plan participants.

21.Notices.  All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

22.Conditions to Issuance of Shares.  The Company shall not be required to issue or deliver any certificate or certificates for shares of Common Stock purchased upon the exercise of options prior to fulfillment of all the following conditions: 

(a)The admission of such shares to listing on all stock exchanges, if any, on which the Common Stock is then listed; and 

(b)The completion of any registration or other qualification of such shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; and 

(c)The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and 

(d)The payment to the Company of all amounts which it is required to withhold under federal, state or local law upon exercise of the option; and 

(e)The lapse of such reasonable period of time following the exercise of the option as the Administrator may from time to time establish for reasons of administrative convenience. 

23.Term of Plan.  Subject to approval by the Company’s stockholders, the Plan shall become effective as of its approval by the Board (the “Effective Date”).  The Plan shall be deemed to be approved by the Company’s stockholders if it receives the requisite vote of the holders of the shares of stock of the Company in accordance with applicable law and the applicable provisions of the Company’s bylaws at its first annual meeting of the Company’s stockholders that occurs following the Effective Date.  Subject to approval by the stockholders of the Company in accordance with this Section 23, the Plan shall be in effect until terminated under Section 20 hereof.   

24.Equal Rights and Privileges.  All Eligible Employees of the Company (or of any Designated Subsidiary) will have equal rights and privileges under this Plan so that this Plan qualifies as an “employee 

14

 

 

stock purchase plan” within the meaning of Section 423 of the Code or applicable Treasury Regulations thereunder.  Any provision of this Plan that is inconsistent with Section 423 or applicable Treasury Regulations will, without further act or amendment by the Company, the Board or the Administrator, be reformed to comply with the equal rights and privileges requirement of Section 423 or applicable Treasury Regulations.

25.Section 409A.  The options to purchase shares of Common Stock under the Plan are not intended to constitute "nonqualified deferred compensation" within the meaning of Section 409A of the Code.  However, if at any time the Administrator determines that the options may be subject to Section 409A of the Code, the Administrator shall have the right, in its sole discretion, to amend the Plan and any outstanding options as it may determine is necessary or desirable either to exempt the options from the application of Section 409A of the Code or to cause the options to comply with the requirements of Section 409A of the Code.

26.No Employment Rights.  Nothing in the Plan shall be construed to give any person (including any Eligible Employee or participant) the right to remain in the employ of the Company, a Parent or a Subsidiary or to affect the right of the Company, any Parent or any Subsidiary to terminate the employment of any person (including any Eligible Employee or participant) at any time, with or without cause.

27.Notice of Disposition of Shares.  Each participant shall give prompt notice to the Company of any disposition or other transfer of any shares of stock purchased upon exercise of an option if such disposition or transfer is made:  (a) within two (2) years from the Enrollment Date of the Offering Period in which the shares were purchased or (b) within one (1) year after the Exercise Date on which such shares were purchased.  Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the participant in such disposition or other transfer.

28.Governing Law.  The validity and enforceability of this Plan shall be governed by and construed in accordance with the laws of the State of California without regard to otherwise governing principles of conflicts of law.

29.Automatic Transfer to Low Price Offering Period.  To the extent permitted by applicable laws, if the Fair Market Value on any Exercise Date in an Offering Period is lower than the Fair Market Value on the Enrollment Date of such Offering Period, then all participants in such Offering Period automatically will be withdrawn from such Offering Period immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately following Offering Period as of the first day thereof.

*  *  *  *  *

 

15Exhibit 4.2

 

THE REGISTERED HOLDER OF THIS WARRANT
BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED
HOLDER OF THIS WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS WARRANT FOR A PERIOD OF ONE HUNDRED
EIGHTY (180) DAYS IMMEDIATELY FOLLOWING THE DATE OF EFFECTIVENESS OF THE PUBLIC OFFERING OF THE COMPANY’S SECURITIES PURSUANT
TO REGISTRATION STATEMENT NO.: 333-248919 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, EXCEPT IN ACCORDANCE WITH FINRA
RULE 5110(e)(2).

 

THIS WARRANT IS NOT EXERCISABLE PRIOR
TO_____ __, 2020. VOID AFTER 5:00 P.M., EASTERN TIME, ___________ __, 2025.

 

REPRESENTATIVE WARRANT

 

FOR THE PURCHASE OF _________ ORDINARY
SHARES

 

OF

 

Huadi
International Group Co., Ltd.

 

THIS REPRESENTATIVE
WARRANT (this “Warrant”) certifies that, pursuant to that certain Underwriting Agreement by and between Huadi
International Group Co., Ltd., a Cayman Islands company (the “Company”) and, on behalf of the Underwriters named
on Schedule I thereto, Craft Capital Management LLC and R.F. Lafferty & Co. Inc., as representatives (the “Representatives”),
dated _________, 2020, as amended (the “Underwriting Agreement”), __________(“Holder”) and
its assignees, as registered holders of this Warrant, is entitled, at any time or from time to time from________, 2020 (the “Exercise
Date”), the date that is 180 days after the effective date of the Company Registration Statement on Form F-1 (No. 333-248919)
with the Securities and Exchange Commission (the “Effective Date”), and at or before 5:00 p.m., Eastern time,
on ___________2025 (five (5) years from the Effective Date) (the “Expiration Date”), but not thereafter, to
subscribe for, purchase and receive, in whole or in part, up to ____________Ordinary Shares of the Company (as subject to adjustment
hereunder, the “Warrant Shares”) (equal to six (6%) percent of the Ordinary Shares sold in the offering), subject
to adjustment as provided in Section 5 hereof.

 

1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Underwriting
Agreement.

 

2.
Exercise.

 

2.1
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 Exercise Date and on or before the Expiration Date by delivery to the Company of a duly executed
facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as
defined in Section 2.4.1 herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2.3 below is specified in the applicable Notice
of Exercise. 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 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 on which the final Notice of Exercise is delivered to the Company. Partial
exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver any objection to any Notice of Exercise 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.

 

     

     

    

 

2.2
Exercise Price. The exercise price per Ordinary Share under this Warrant shall be $[ ] (which is 125% of the offering
price per Ordinary Share in the offering contemplated by the Underwriting Agreement), as adjusted hereunder (the “Exercise
Price”).

 

2.3
Cashless Exercise. At any time after the Exercise Date and until the Expiration Date, Holder may elect to receive
the number of Ordinary Shares equal to the value of this Warrant (or the portion thereof being exercised), by surrender of this
Warrant to the Company, together with the Notice of Exercise, in which event the Company shall issue to Holder, an amount of Ordinary
Shares in accordance with the following formula:

 

	X	=	Y(A-B)	 	 
	A	 	 
	 	 	 	 
	Where,	X	=	the number of Ordinary Shares to be issued upon exercise.
	 	Y	=	the number of Ordinary 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.
	 	A	=	the VWAP on the Trading Day immediately preceding the date of delivery of the Notice of Exercise giving rise to the applicable “cashless exercise,” as set forth in the applicable Notice of Exercise; and
	 	B	=	The Exercise Price.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then
listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest
preceding date) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Ordinary Shares are traded
on OTCQB or OTCQX , the volume weighted average sales price of the Ordinary Shares for such date (or the nearest preceding date)
on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if
prices for the Ordinary Shares are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Ordinary Shares
so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determined by an independent appraiser selected
in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

    -2-

     

    

 

2.4
Mechanics of Exercise.

 

2.4.1
Delivery of Warrant Shares upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account 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 Holder, or (B) if there is no effective registration statement and the Warrant
is exercised via cashless exercise at a time when such Warrant Shares would be eligible for resale under Rule 144 by a non-affiliate
of the Company, such Warrant Shares are delivered to Holder’s broker, and the Company receives a statement from Holder’s
broker that it has received instructions to sell the Warrant Shares or that it would take responsibility that the sales of the
Warrant Shares will only be made if the Warrant Shares are eligible to be sold under Rule 144, and otherwise by physical delivery
of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of
Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of
Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise,
(ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising
the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share
Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date
of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise. 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
Ordinary Shares 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. The Company agrees to use commercially reasonable efforts to
maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of
Trading Days, on the Company’s primary Trading Market with respect to the Ordinary Shares as in effect on the date of delivery
of the Notice of Exercise.

 

2.4.2
Delivery of New Warrants upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the 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.

 

2.4.3
Rescission Rights. If the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares
pursuant to Section 2.4.1 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

2.4.4
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 Holder has taken all actions necessary under the terms of this Warrant for such Holder to receive
the Warrant Shares, 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, Ordinary Shares 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 Ordinary Shares 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 Ordinary Shares that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary
Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Ordinary Shares 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
Ordinary Shares upon exercise of the Warrant as required pursuant to the terms hereof.

 

    -3-

     

    

 

2.4.5
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.

 

2.4.6
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 such 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 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 Excise.

 

2.4.7
Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.

 

2.5
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
(such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of Ordinary Shares beneficially owned by the Holder and
its Affiliates and Attribution Parties shall include the number of Ordinary Shares issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon
(i) exercise of the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
or Attribution Parties and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the
Company (including, without limitation, any other Ordinary Shares 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 or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 2.5, 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 2.5 applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) 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 Attribution Parties) and of which portion of this Warrant is exercisable, in each case
subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such
determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2.5,
in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares 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 Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm
orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary
Shares 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 or Attribution Parties since the date as of which such number of outstanding Ordinary Shares was
reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Ordinary Shares outstanding
immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice
to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2.5, provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Ordinary Shares outstanding immediately
after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this
Section 2.5 shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in
a manner otherwise than in strict conformity with the terms of this Section 2.5 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.

 

    -4-

     

    

 

3.
Transfer.

 

3.1
Transferability. Pursuant to FINRA Rule 5110(e)(1) and the Agreement, neither this Warrant nor any Warrant Shares
issued upon exercise of this Warrant shall be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging,
short sale, derivative, put or call transaction that would result in the effective economic disposition of the securities by any
person for a period of one hundred eighty (180) days immediately following the date of effectiveness or commencement of sales of
the offering pursuant to which this Warrant is being issued, except the transfer of any security: (i) by operation of law or by
reason of reorganization of the Company; (ii) to any FINRA member firm participating in the offering and the officers and partners
thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 3.1 for the remainder
of the time period; (iii) if the aggregate amount of securities of the Company held by the Holder or related person do not exceed
1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund,
provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate
do not own more than 10% of the equity in the fund; or (v) the exercise or conversion of any security, if all securities received
remain subject to the lock-up restriction in this Section 3.1 for the remainder of the time period.

 

Subject to the foregoing
restrictions, compliance with any applicable securities laws, and the conditions set forth in Section 3.1 hereof, 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 in 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.

 

3.2
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 3.1, as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated
the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable
pursuant thereto.

 

3.3
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.

 

4.
Registration Rights.

 

4.1
Demand Registration.

 

4.1.1
Grant of Right. If at any time prior to the Expiration Date, the Registration Statement is no longer effective, the
Company, upon written demand (“Initial Demand Notice”) of the Holder(s) of at least 51% of the Warrant Shares
(“Majority Holders”), agrees to use its best efforts to register (the “Demand Registration”)
under the Securities Act on one occasion, all or any portion of the Warrant Shares requested by the Majority Holders in the Initial
Demand Notice (the “Registrable Securities”). The Company will use its best efforts to file a registration statement
covering the Registrable Securities within 30 days after receipt of the Initial Demand Notice and use its best efforts to have
such registration statement declared effective as soon as possible thereafter. The demand for registration may be made at any time
during which the Majority Holders hold any of the Warrant Shares. Notwithstanding the foregoing, the Company shall not be required
to effect a registration pursuant to this Section 4.1.1: (A) with respect to securities that are not Registrable Securities;
(B) during any Scheduled Black-Out Period; or (C) within 90 days after the effective date of a prior registration in respect of
the Company’s Ordinary Shares. For purposes of this Agreement, a “Scheduled Black-Out Period” shall means
the periods from and including the day that is ten days prior to the last day of a fiscal quarter of the Company to and including
the day that is two days after the day on which the Company publicly releases its earnings for such fiscal quarter. The Initial
Demand Notice shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution
thereof. The Company will notify all holders of the Warrant Shares of the demand within ten days from the date of the receipt of
any such Initial Demand Notice. Each holder of the Warrant Shares who wishes to include all or a portion of such holder’s
Warrant Shares in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a
“Demanding Holder”) shall so notify the Company within 15 days after the receipt by the holder of the notice
from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Warrant Shares included in the Demand
Registration. The Company shall not be obligated to effect more than one Demand Registration under this Section 4.1.1 in
respect of all Warrant Shares during the 5 year period after the Effective Date.

 

    -5-

     

    

 

4.1.2
Effective Registration. A registration will not count as a Demand Registration until the registration statement filed
with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all
of its obligations under this Warrant with respect thereto.

 

4.1.3
Terms.  The Company shall bear all fees and expenses attendant to registering the Registrable Securities, but
the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent
them in connection with the sale of the Registrable Securities. The Company agrees to use its best efforts to qualify or register
the Registrable Securities in such states as are reasonably requested by the Majority Holder(s); provided, however, that in no
event shall the Company be required to register the Registrable Securities in a state in which such registration would cause (i)
the Company to be obligated to qualify to do business in such state, or would subject the Company to taxation as a foreign corporation
doing business in such jurisdiction or (ii) the principal shareholders of the Company to be obligated to escrow their Ordinary
Share of the Company. The Company shall use its best efforts to cause any registration statement filed pursuant to the demand rights
granted under Section 4.1 to remain effective until all Registrable Securities are sold.

 

4.1.4
Notwithstanding the foregoing, if the Board of Directors of the Company determines in its good faith judgment that the filing
of a registration statement in connection with a Demand Registration (i) would be seriously detrimental to the Company in that
such registration would interfere with a material corporate transaction or (ii) would require the disclosure of material non-public
information concerning the Company that at the time is not, in the good faith judgment of the Board of Directors, in the best interests
of the Company to disclose and is not, in the opinion of the Company’s counsel, otherwise required to be disclosed, then
the Company shall have the right to defer such filing for the period during which such registration would be seriously detrimental
under clause (i) or would require such disclosure under clause (ii); provided, however, that (x) the Company may not defer such
filing for a period of more than 90 days after receipt of any demand by the Holders and (y) the Company shall not exercise its
right to defer a Demand Registration more than once in any 6-month period. The Company shall give written notice of its determination
to the Holders to defer the filing and of the fact that the purpose for such deferral no longer exists, in each case, promptly
after the occurrence thereof.

 

4.2
“Piggy-Back” Registration.

 

4.2.1
Piggy-Back Rights. Unless all of the Registrable Securities are included in an effective registration statement with
a current prospectus, if the Company proposes to file a registration statement under the Securities Act with respect to an offering
of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities,
by the Company for its own account or for shareholders of the Company for their account (or by the Company and by shareholders
of the Company including, without limitation, pursuant to Section 4.1), other than a registration statement (i) filed in
connection with any employee share option or other benefit plan, (ii) for an exchange offer or offering of securities solely to
the Company’s existing shareholders, or (iii) for a dividend reinvestment plan, then the Company shall (x) give written notice
of such proposed filing to the Holders of Registrable Securities as soon as practicable but in no event less than ten days before
the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing underwriter or underwriters, if any, of the offering,
and (y) offer to the Holders of Registrable Securities in such notice the opportunity to register the sale of such number of Warrant
Shares held by such holder (the “Piggy-Back Registrable Securities”), as such Holders may request in writing
within five days following receipt of such notice (a “Piggy-Back Registration”). The Company shall cause such
Piggy-Back Registrable Securities to be included in such registration and shall use its best efforts to cause the managing underwriter
or underwriters of a proposed underwritten offering to permit the Piggy-Back Registrable Securities requested to be included in
a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other
disposition of such Piggy-Back Registrable Securities in accordance with the intended method(s) of distribution thereof. All Holders
of Piggy-Back Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an
underwriter or underwriters shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected
for such Piggy-Back Registration.

 

    -6-

     

    

 

4.2.2
Reduction of Offering. If the managing underwriter or underwriters for a Piggy-Back Registration that is to be an
underwritten offering advises the Company and the Holders of Registrable Securities in writing that the dollar amount or number
of Ordinary Shares which the Company desires to sell, taken together with Ordinary Shares, if any, as to which registration has
been demanded pursuant to written contractual arrangements with persons other than the Holders of Piggy-Back Registrable Securities
hereunder, the Piggy-Back Registrable Securities as to which registration has been requested under this Section 4.2, and
the Ordinary Shares, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration
rights of other shareholders of the Company, exceeds the maximum dollar amount or maximum number of shares that can be sold in
such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability
of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number
of Shares”), then the Company shall include in any such registration:

 

(i) If the registration
is undertaken for the Company’s account: (A) first, the Ordinary Shares or other securities that the Company desires
to sell that can be sold without exceeding the Maximum Number of Shares; and (B) second, subject to the requirements of registration
rights granted by the Company prior to the date hereof, to the extent that the Maximum Number of Shares has not been reached under
the foregoing clause (A), up to the amount of Ordinary Shares or other securities that can be sold without exceeding the Maximum
Number of Shares, on a pro rata basis, from (i) Piggy-Back Registrable Securities as to which registration has been requested pursuant
to the applicable written contractual piggy-back registration rights of such security holders and (ii) the Ordinary Shares or other
securities for the account of other persons that the Company is obligated to register pursuant to written contractual piggy-back
registration rights with such persons;

 

(ii) If the registration
is a Demand Registration undertaken at the demand of holders of Registrable Securities, subject to the requirements of registration
rights granted by the Company prior to the date hereof, (A) first, the Ordinary Shares or other securities for the account of the
demanding persons that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clause (A), the Ordinary Shares or other securities comprised of Piggy-Back
Registrable Securities, pro rata, as to which registration has been requested pursuant to the terms hereof that can be sold without
exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of Shares has not been reached under
the foregoing clauses (A) and (B), the Ordinary Shares or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the Maximum
Number of Shares.

 

4.2.3
Withdrawal. Any Holder of Piggy-Back Registrable Securities may elect to withdraw such holder’s request for
inclusion of such Piggy-Back Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such
request to withdraw prior to the effectiveness of the registration statement. The Company (whether on its own determination or
as the result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a registration
statement at any time prior to the effectiveness of the registration statement. Notwithstanding any such withdrawal, the Company
shall pay all expenses incurred by the Holders of Piggy-Back Registrable Securities in connection with such Piggy-Back Registration
as provided in Section 4.2.

 

    -7-

     

    

 

4.2.4
Terms. The Company shall bear all fees and expenses attendant to registering the Piggy-Back Registrable Securities,
but the Holders shall pay any and all underwriting commissions related to the Piggy-Back Registrable Securities and the expenses
of any legal counsel selected by the Holders to represent them in connection with the sale of the Piggy-Back Registrable Securities.
In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Piggy-Back Registrable
Securities with not less than fifteen days written notice prior to the proposed date of filing of such registration statement.
Such notice to the Holders shall continue to be given for each applicable registration statement filed (during the period in which
the Warrant is exercisable) by the Company until such time as all of the Piggy-Back Registrable Securities have been registered
and sold. The Holders of the Piggy-Back Registrable Securities shall exercise the “piggy-back” rights provided for
herein by giving written notice, within ten days of the receipt of the Company’s notice of its intention to file a registration
statement. The Company shall use its best efforts to cause any registration statement filed pursuant to the above “piggyback”
rights to remain effective for at least nine months from the date that the Holders of the Piggy-Back Registrable Securities are
first given the opportunity to sell all of such securities.

 

4.3
General Terms.

 

4.3.1
Indemnification.

 

(i) The Company shall,
to the fullest extent permitted by applicable law, indemnify the Holder(s) of the Registrable Securities to be sold pursuant to
any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act against all loss, claim, damage, expense or liability (including all reasonable attorneys’
fees and other expenses reasonably incurred in investigating, preparing or defending against litigation, commenced or threatened,
or any claim whatsoever whether arising out of any action between the underwriter and the Company or between the underwriter and
any third party or otherwise) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from
such registration statement; provided, however, that, with respect to any Holder of Registrable Securities,
this indemnity shall not apply to any loss, liability, claim, damage or expense to the extent arising out of an untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished
to the Company by such Holder expressly for use in the registration statement (or any amendment thereto), or any preliminary prospectus
or the prospectus (or any amendment or supplement thereto).

 

(ii) The Holder(s) of
the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally,
and not jointly, indemnify the Company, its officers and directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any
claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from information furnished
by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement(or
any amendment thereto), or any preliminary prospectus or the prospectus (or any amendment or supplement thereto).

 

(iii) Each indemnified
party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party shall not relieve the indemnifying party from any liability
it may have under this Agreement, except to the extent that the indemnifying party is prejudiced thereby. If it so elects, after
receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it; provided, however, that the indemnified party shall be
entitled to participate in (but not control) the defense of such action with counsel chosen by it, the reasonable fees and expenses
of which shall be paid by such indemnified party, unless a conflict would arise if one counsel were to represent both the indemnified
party and the indemnifying party, in which case the reasonable fees and expenses of counsel to the indemnified party shall be paid
by the indemnifying party or parties. In no event shall the indemnifying party or parties be liable for a settlement of an action
with respect to which they have assumed the defense if such settlement is effected without the written consent of such indemnifying
party, or for the reasonable fees and expenses of more than one counsel for (i) the Company, its officers, directors and controlling
persons as a group, and (ii) the selling Holders and their controlling persons as a group, in each case, in connection with any
one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; provided, however,
that if, in the reasonable judgment of an indemnified party, a conflict of interest may exist between such indemnified party and
the Company or any other of such indemnified parties with respect to such claim, the indemnifying party shall be obligated to pay
the reasonable fees and expenses of such additional counsel.

 

    -8-

     

    

 

(iv) If the indemnification
provided for in or pursuant to Section 4.3.1 is due in accordance with the terms hereof, but held by a court of competent
jurisdiction to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses as well as
any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified
party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.

 

4.3.2
ii. Documents Delivered to Holders. The Company shall furnish the initial Holder a signed counterpart, addressed
to the initial Holder, of (i) an opinion of counsel to the Company, dated the effective date of such registration statement (or,
if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting
agreement related thereto), and (ii) if such registration statement is filed in connection of an underwritten public offering,
a “cold comfort” letter dated the effective date of such registration statement (or, if such registration includes
an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company’s financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein)
and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in
underwritten public offerings of securities.

 

4.3.3
Supplemental Prospectus. Each Holder agrees, that upon receipt of any notice from the Company of the happening of
any event as a result of which the prospectus included in the registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, such Holder will immediately discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable Securities until such Holder’s receipt of the
copies of a supplemental or amended prospectus, and, if so desired by the Company, such Holder shall deliver to the Company (at
the expense of the Company) or destroy (and deliver to the Company a certificate of such destruction) all copies, other than permanent
file copies then in such Holder’s possession, of the prospectus covering such Registrable Securities current at the time
of receipt of such notice. Immediately after discovering of such an event which causes the prospectus included in the registration
statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, the Company
shall prepare and file, as soon as practicable, a supplement or amendment to the prospectus so that such registration statement
does not include any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then existing and distribute such supplement or amendment
to each Holder.

 

    -9-

     

    

 

5.
Adjustments.

 

5.1
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 Ordinary Shares or any other equity or equity equivalent securities
payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise
of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of shares
of the Ordinary Shares 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 Ordinary Shares (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number of Ordinary Shares 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 5.1 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.

 

5.2
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5.1 above, if at any time
the Company grants, issues or sells any Ordinary Shares Equivalents or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right
to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Beneficial Ownership Limitation).

 

5.3
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return
of capital or otherwise, other than cash (including, without limitation, any distribution of stock or other securities, property
or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled
to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the
number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for
the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to
such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever,
as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

    -10-

     

    

 

5.4
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 Ordinary Shares 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 Ordinary Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares
are 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 Ordinary Shares (not including any Ordinary Shares 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 2.5 on the exercise of this Warrant), the number of Ordinary Shares 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 Ordinary Shares for which this Warrant is exercisable
immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.5 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 Ordinary Shares
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 Ordinary Shares
are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor
Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after,
the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental
Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value
of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided,
however, if the Fundamental Transaction is not within the Company's control, including not approved by the Company's Board of Directors
or the consideration is not in all stock of the Successor Entity, Holder shall only be entitled to receive from the Company or
any Successor Entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and
in the same proportion), at the Black Scholes Value (as defined below) of the unexercised portion of this Warrant, that is being
offered and paid to the holders of Ordinary Shares of the Company in connection with the Fundamental Transaction, whether that
consideration be in the form of cash, stock or any combination thereof, or whether the holders of Ordinary Shares are given the
choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction. “Black Scholes
Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg, L.P. (“Bloomberg”) determined as of the day of consummation of the applicable Fundamental Transaction
for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate as of the Trading Day
immediately following the public announcement of the applicable Fundamental Transaction, (B) an expected volatility equal to the
greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation
shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration,
if any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public
announcement of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction
and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction
and the Termination Date. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds within
five Business Days of the Holder’s election (or, if later, on the effective date of the 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 5.4 pursuant to written agreements in form and substance reasonably satisfactory to
the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option
of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares 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 Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance
to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein.

 

    -11-

     

    

 

5.5
Calculations. All calculations under this Section 5 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 5, the number of Ordinary Shares deemed to be issued and outstanding
as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.

 

5.6
Notice to Holder.

 

5.6.1
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 5,
the Company shall promptly deliver to the Holder by facsimile or email 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.

 

5.6.2
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary
Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Shares 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 Ordinary Shares, 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 Ordinary Shares are 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 delivered by facsimile or email to the Holder at its last facsimile number or email 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 Ordinary Shares 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 Ordinary Shares of record shall be entitled to exchange their shares of the Ordinary Shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that
the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate
action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously furnish such
notice with the Commission pursuant to a Foreign Private Issuer Report on Form 6-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.

 

6.
Miscellaneous.

 

6.1
No Rights as shareholder until Exercise. This Warrant does not entitle the Holder to any voting rights, dividend
rights or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2, except as
expressly set forth in Section 5.

 

6.2
Limitation of Liability. No provision hereof, in the absence of affirmative action by the Holder sufficient 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 Ordinary Shares or as a shareholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.

 

6.3
 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 share 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 share
certificate, if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or share certificate.

 

6.4
 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.

 

6.5
 Authorized Shares.

 

6.5.1
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing share certificates to execute and issue the necessary Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all such commercially 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 Ordinary Shares 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).

 

    -12-

     

    

 

6.5.2
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 Memorandum and Articles of Association 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 the exercise of this Warrant, (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.

 

6.5.3
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 therefor, exemptions thereof, or consents thereto, as
may be necessary from any regulatory body having jurisdiction thereof.

 

6.6
Amendments. The Company and the Representatives may from time to time supplement or amend this Warrant without the
approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions
arising hereunder that the Company and the Representatives may deem necessary or desirable and that the Company and the Representatives
deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent
of and be signed by the party against whom enforcement of the modification or amendment is sought.

 

6.7
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 this Warrant.

 

6.8
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 provision
or the remaining provisions of this Warrant.

 

6.9
Entire Agreement. This Warrant (together with the other agreements and documents being delivered pursuant to or in
connection with this Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof,
and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

 

    -13-

     

    

 

6.10
Binding Effect. This Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company
and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed
to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Warrant or any provisions herein
contained.

 

6.11
Governing Law; Submission to Jurisdiction; Trial by Jury. This Warrant shall be governed by and construed and enforced
in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company
hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Warrant shall be brought
and enforced in the New York Supreme Court, County of New York, or in 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 inconvenient forum. Any 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 the Underwriting Agreement. Such mailing shall be deemed personal service
and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing
party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees
and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby
irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.

 

6.12
Waiver, etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Warrant
shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Warrant or
any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Warrant.
No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Warrant shall be effective unless set
forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and
no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent
breach, non-compliance or non-fulfillment. Without limiting any other provision of this Warrant or the Underwriting Agreement,
if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages
to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

6.13
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 or other equitable remedy that a remedy at law would
be adequate.

 

6.14
Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any
way limit or affect the meaning or interpretation of any of the terms or provisions of this Warrant.

 

 

[Signature Page to Follow]

 

    -14-

     

    

 

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to be signed by its duly authorized officer as of the ____ day of __________, 2020.

 

	 	Huadi International Group Co., Ltd.
	 	 	 
	 	By: 	 
	 	 	Name: 
	 	 	Title:  Chief Executive Officer

 

    -15-

     

    

  

EXHIBIT A

NOTICE OF EXERCISE

 

TO: Huadi International Group Co.,
Ltd.

 

(1) The undersigned hereby
elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant, dated _______, 2020, 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
by wire transfer or cashier’s check drawn on a United States bank; or

 

[ ] if permitted by the terms of the Warrant,
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 2.3, to
exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in such section.

 

(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:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity:
_________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ____________________________________________________________________________________

 

    -16-

     

    

  

EXHIBIT B

 

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

 

_______________________________________________________________.

 

_______________________________________________________________

 

Date: ______________, _______

 

Holder’s Signature: _____________________________

 

Holder’s Address:   _____________________________

 

_____________________________

 

Signature Guaranteed: ___________________________________________

 

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

 

 

-17-

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