Document:

Exhibit 10.18

 

Cannabics Pharmaceuticals Inc.

 

2021 SHARE
INCENTIVE PLAN

 

Unless otherwise defined, terms used herein shall
have the meaning ascribed to them in Section 2 hereof.

 

1. PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

 

1.1 Purpose. The purpose of this 2021 Share Incentive
Plan (the “Plan”) is to afford an incentive to Service Providers of Cannabics Pharmaceuticals Inc., a Nevada corporation
(together with any successor corporation thereto, the “Company”), or any Affiliate of the Company, which now exists or hereafter
is organized or acquired by the Company, to continue as Service Providers, to increase their efforts on behalf of the Company or its
Affiliates and to promote the success of the Company's business, by providing such Service Providers with opportunities to acquire a
proprietary interest in the Company by the issuance of Shares or restricted Shares (“Restricted Shares”) of the Company,
and by the grant of options to purchase Shares (“Options”), Restricted Share Units (“RSUs”) and other Share-based
Awards pursuant to Sections 11 through 13 of this Plan.

 

1.2 Types of Awards. This Plan is intended to
enable the Company to issue Awards under various tax regimes, including: (i) pursuant and subject to the provisions of Section 102 of
the Ordinance (or the corresponding provision of any subsequently enacted statute, as amended from time to time), and all regulations
and interpretations adopted by any competent authority, including the Israeli Income Tax Authority (the “ITA”), including
the Income Tax Rules (Tax Benefits in Stock Issuance to Employees) 5763-2003 or such other rules so adopted from time to time (the “Rules”)
(such Awards that are intended to be (as set forth in the Award Agreement) and which qualify as such under Section 102 of the Ordinance
and the Rules, “102 Awards”);

 

(ii) pursuant to Section 3(9) of the Ordinance
or the corresponding provision of any subsequently enacted statute, as amended from time to time (such Awards, “3(9) Awards”);

 

(iii) Incentive Stock Options within the meaning
of Section 422 of the Code, or the corresponding provision of any subsequently enacted United States federal tax statute, as amended from
time to time, to be granted to Employees who are deemed to be residents of the United States, for purposes of taxation (such Awards that
are intended to be (as set forth in the Award Agreement) and which qualify as an incentive stock option within the meaning of Section
422(b) of the Code, “Incentive Stock Options”); and

 

(iv) Awards not intended to be (as set forth in
the Award Agreement) or which do not qualify as an Incentive Stock Option to be granted to Service Providers who are deemed to be residents
of the United States for purposes of taxation (“Nonqualified Stock Options”).

 

In addition to the issuance of Awards under the
relevant tax regimes in the United States of America and the State of Israel, and without derogating from the generality of Section 25,
this Plan contemplates issuances to Grantees in other jurisdictions or under other tax regimes with respect to which the Committee is
empowered to make the requisite adjustments in this Plan and set forth the relevant conditions in an appendix to this Plan or in the Company’s
agreement with the Grantee in order to comply with the requirements of such other tax regimes.

 

1.3 Company Status. This Plan contemplates the
issuance of Awards by the Company, both as a private and public company.

 

 

 

 

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1.4 Construction. To the extent any provision
herein conflicts with the conditions of any relevant tax law, rule or regulation which are relied upon for tax relief in respect of a
particular Award to a Grantee, the Committee is empowered, but is not required, hereunder to determine that the provisions of such law,
rule or regulation shall prevail over those of this Plan and to interpret and enforce such prevailing provisions.

 

2. DEFINITIONS.

 

2.1 Terms Generally. Except when otherwise indicated
by the context, (i) the singular shall Include the plural and the plural shall include the singular; (ii) any pronoun shall include the
corresponding masculine, feminine and neuter forms; (iii) any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented
or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth therein or
herein), (iv) references to any law, constitution, statute, treaty, regulation, rule or ordinance, including any section or other part
thereof shall refer to it as amended from time to time and shall include any successor thereof, (v) reference to a “company”
or “entity” shall include a, partnership, corporation, limited liability company, association, trust, unincorporated organization,
or a government or agency or political subdivision thereof, and reference to a “person” shall mean any of the foregoing or
an individual, (vi) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall
be construed to refer to this Plan in its entirety, and not to any particular provision hereof, (vii) all references herein to Sections
shall be construed to refer to Sections to this Plan; (viii) the words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”; and (ix) use of the term “or” is not intended
to be exclusive.

 

2.2 Defined Terms. The following terms shall have
the meanings ascribed to them in this Section 2:

 

2.2.1 “Affiliate” shall mean, (i)
with respect to any person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, such person (with the term “control” or “controlled by” within the meaning
of Rule 405 of Regulation C under the Securities Act), including, without limitation, any Parent or Subsidiary, or (ii) for the purpose
of 102 Awards, “Affiliate” shall only mean an “employing company” within the meaning and subject to the conditions
of Section 102(a) of the Ordinance.

 

2.2.2 “Applicable Law” shall mean
any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or decree of any federal, provincial,
state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any
stock exchange, over-the-counter market or trading system on which the Company's shares are then traded or listed.

 

2.2.3. “Award” shall mean any Option,
Restricted Share, RSUs or any other Share-based award granted under this Plan.

 

2.2.4. “Board” shall mean the Board
of Directors of the Company.

 

2.2.5. “Code” shall mean the United
States Internal Revenue Code of 1986, and any applicable regulations promulgated thereunder, all as amended.

 

2.2.6. “Committee” shall mean a committee
established or appointed by the Board to administer this Plan, subject to Section 3.1.

 

2.2.7. “Companies Law” shall mean
the Israel Companies Law, 5759-1999, and the regulations promulgated thereunder, all as amended from time to time.

 

2.2.8. “Controlling Shareholder” shall
have the meaning set forth in Section 32(9) of the Ordinance.

 

 

 

 

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2.2.9 “Disability” shall mean (i)
the inability of a Grantee to engage in any substantial gainful activity or to perform the major duties of the Grantee’s position
with the Company or its Affiliates by reason of any medically determinable physical or mental impairment, as determined by a qualified
doctor acceptable to the Company, (ii) if applicable, a “permanent and total disability” as defined in Section 22(e)(3) of
the Code or Section 409A(a)(2)(c)(i) of the Code, as amended from time to time, or (iii) as defined in a policy of the Company that the
Committee deems applicable to this Plan, or that makes reference to this Plan, for purposes of this definition.

 

2.2.10 “Employee” shall mean any
person treated as an employee (including an officer or a director who is also treated as an employee) in the records of the Company or
any of its Affiliates (and in the case of 102 Awards, subject to Section 9.3 or in the case of Incentive Stock Options, who is an employee
for purposes of Section 422 of the Code); provided, however, that neither service as a director nor payment of a director’s fee
shall be sufficient to constitute employment for purposes of this Plan. The Company shall determine in good faith and in the exercise
of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s
employment or termination of employment, as the case may be. For purposes of a person’s rights, if any, under this Plan as of the
time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding
that the Company or any court of law or governmental agency subsequently makes a contrary determination.

 

2.2.11 “employment”, “employed”
and words of similar import shall be deemed to refer to the employment of Employees or to the services of any other Service Provider,
as the case may be.

 

2.2.12. exercise” “exercised”
and words of similar import, when referring to an Award that does not require exercise or that is settled upon vesting (such as may be
the case with RSUs or Restricted Shares, if so determined in their terms), shall be deemed to refer to the vesting of such an Award (regardless
of whether or not the wording included reference to vesting of such an Awards explicitly).

 

2.2.13. “Exercise Period” shall mean
the period, commencing on the date of grant of an Award, during which an Award shall be exercisable, subject to any vesting provisions
thereof (including any acceleration thereof, if any) and subject to the termination provisions hereof.

 

2.2.14. “Exercise Price” shall mean
the exercise price for each Share covered by an Option or the purchase price for each Share covered by any other Award.

 

2.2.15 “Fair Market Value” shall
mean, as of any date, the value of a Share or other property as determined by the Board, in its discretion, subject to the following:
(i) if, on such date, the Shares are listed on any securities exchange, the average closing sales price per Share on which the Shares
are principally traded over the thirty (30) day calendar period preceding the subject date (utilizing all trading days during such 30
calendar day period), as reported in The Wall Street Journal or such other source as the Company deems reliable; (ii) if, on such date,
the Shares are then quoted in an over-the-counter market, the average of the closing bid and asked prices for the Shares in that market
during the thirty (30) day calendar period preceding the subject date (utilizing all trading days during such 30 calendar day period),
as reported in The Wall Street Journal or such other source as the Company deems reliable; (iii) if, on such date, the Shares are not
then listed on a securities exchange or quoted in an over-the-counter market, or in case of any other property, such value as the Committee,
in its sole discretion, shall determine, with full authority to determine the method for making such determination and which determination
shall be conclusive and binding on all parties, and shall be made after such consultations with outside legal, accounting and other experts
as the Committee may deem advisable; provided, however, that, if applicable, the Fair Market Value of the Shares shall be determined
in a manner that satisfies the applicable requirements of and subject to Section 409A of the Code, and with respect to Incentive Stock
Options, in a manner that satisfies the applicable requirements of and subject to Section 422 of the Code, subject to Section 422(c)(7)
of the Code. The Committee shall maintain a written record of its method of determining such value. If the Shares are listed or quoted
on more than one established stock exchange or over-the-counter market, the Committee shall determine the principal such exchange or
market and utilize the price of the Shares on that exchange or market (determined as per the method described in clauses (i) or (ii)
above, as applicable) for the purpose of determining Fair Market Value.

 

 

 

 

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2.2.16. “Grantee” shall mean a person
who has been granted an Award(s) under this Plan.

 

2.2.17 “Ordinance” shall mean the
Israeli Income Tax Ordinance (New Version) 1961, and the regulations and rules (including the Rules) promulgated thereunder, all as amended
from time to time.

 

2.2.18 “Parent” shall mean any company
(other than the Company), which now exists or is hereafter organized, (i) in an unbroken chain of companies ending with the Company if,
at the time of granting an Award, each of the companies (other than the Company) owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if applicable and for purposes
of Incentive Stock Options, as defined in Section 424(e) of the Code.

 

2.2.19. [Intentionally Omitted]

 

2.2.20. [Intentionally Omitted]

 

2.2.21 “Retirement” shall mean a Grantee's
retirement pursuant to Applicable Law or in accordance with the terms of any tax-qualified retirement plan maintained by the Company or
any of its Affiliates in which the Grantee participates or is subject to.

 

2.2.22. “Securities Act” shall mean
the U.S. Securities Act of 1933, and the rules and regulations promulgated thereunder, all as amended from time to time.

 

2.2.23 “Service Provider” shall mean
an Employee, director, officer, consultant, advisor and any other person or entity who provides services to the Company or any Parent,
Subsidiary or Affiliate thereof. Service Providers shall include prospective Service Providers to whom Awards are granted in connection
with written offers of an employment or other service relationship with the Company or any Parent, Subsidiary or any Affiliates thereof,
provided however that such employment or service shall have actually commenced.

 

2.2.24 “Shares” shall mean Ordinary
Shares, par value $0.0001, of the Company (as adjusted for stock split, reverse stock split, bonus shares, combination or other recapitalization
events), or shares of such other class of shares of the Company as shall be designated by the Board in respect of the relevant Award(s).
“Shares” include any securities or property issued or distributed with respect thereto.

 

2.2.25 “Subsidiary” shall mean any
company (other than the Company), which now exists or is hereafter organized or acquired by the Company, (i) in an unbroken chain of companies
beginning with the Company if, at the time of granting an Award, each of the companies other than the last company in the unbroken chain
owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies
in such chain, or (ii) if applicable and for purposes of Incentive Stock Options, as defined in Section 424(f) of the Code.

 

2.2.26 “Ten Percent Shareholder” shall
mean a Grantee who, at the time an Award is granted to the Grantee, owns shares possessing more than ten percent (10%) of the total combined
voting power of all classes of shares of the Company or any Parent or Subsidiary, within the meaning of Section 422(b)(6) of the Code.

 

2.2.27. “Trustee” shall mean the trustee
appointed by the Committee to hold the Awards (and, in relation with 102 Awards, approved by the ITA), if so appointed.

 

 

 

 

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2.3. Other Defined Terms. The following terms
shall have the meanings ascribed to them in the Sections set forth below:

 

	Term	Section
	102 Awards	1.2(i)
	102 Capital Gains Track Awards	9.1
	102 Non-Trustee Awards	9.2
	102 Ordinary Income Track Awards	9.1
	102 Trustee Awards	9.1
	3(9) Awards	1.2(ii)
	Award Agreement	6
	Cause	6.6.4.4
	Company	1.1
	Effective Date	24.1
	Election	9.2
	Eligible 102 Grantees	9.3
	Incentive Stock Options	1.2(iii)
	ISO Share Issuance Limit	5
	ITA	1.1(i)
	Market Stand-Off	17.1
	Market Stand-Off Period	17.1
	Merger/Sale	14.2
	Nonqualified Stock Options	1.2(iv)
	Plan	1.1
	Recapitalization	14.1
	Required Holding Period	9.5
	Restricted Period	11.2
	Restricted Share Agreement	11
	Restricted Share Unit Agreement	12
	Restricted Shares	1.1
	RSUs	1.1
	Rules	1.1
	Securities	17.1
	Successor Corporation	14.2.1
	Withholding Obligations	18.5

 

3. ADMINISTRATION.

 

3.1 To the extent permitted under Applicable Law,
the Articles of Association and any other governing document of the Company, this Plan shall be administered by the Committee. In the
event that the Board does not appoint or establish a committee to administer this Plan, this Plan shall be administered by the Board.
In the event that an action necessary for the administration of this Plan is required under Applicable Law to be taken by the Board without
the right of delegation, or if such action or power was explicitly reserved by the Board in appointing, establishing and empowering the
Committee, then such action shall be so taken by the Board. In any such event, all references herein to the Committee shall be construed
as references to the Board. Even if such a Committee was appointed or established, the Board may take any action that are stated to be
vested in the Committee, and shall not be restricted or limited from exercising all rights, powers and authorities under this Plan or
Applicable Law.

 

 

 

 

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3.2 The Board shall appoint the members of the
Committee, may from time to time remove members from, or add members to, the Committee, and shall fill vacancies in the Committee, however
caused, provided that the composition of the Committee shall at all times be in compliance with any mandatory requirements of Applicable
Law, the Articles of Association and any other governing document of the Company. The Committee may select one of its members as its Chairman
and shall hold its meetings at such times and places as it shall determine. The Committee may appoint a Secretary, who shall keep records
of its meetings, and shall make such rules and regulations for the conduct of its business as it shall deem advisable and subject to mandatory
requirements of Applicable Law.

 

3.3 Subject to the terms and conditions of this
Plan, any mandatory provisions of Applicable Law and any provisions of any Company policy required under mandatory provisions of Applicable
Law, and in addition to the Committee's powers contained elsewhere in this Plan, the Committee shall have full authority, in its discretion,
from time to time and at any time, to determine any of the following, or to recommend to the Board any of the following if it is not authorized
to take such action according to Applicable Law:

 

(i)       eligible
Grantees,

 

(ii)      grants
of Awards and setting the terms and provisions of Award Agreements (which need not be identical) and any other agreements or instruments
under which Awards are made, including, but not limited to, the number of Shares underlying each Award,

 

(iii)     the
time or times at which Awards shall be granted,

 

(iv)      the
terms, conditions and restrictions applicable to each Award (which need not be identical) and any Shares acquired upon the exercise or
(if applicable) vesting thereof, including, without limitation, (1) designating Awards under Section 1.2; (2) the vesting schedule, the
acceleration thereof and terms and conditions upon which Awards may be exercised or become vested, (3) the Exercise Price, (4) the method
of payment for Shares purchased upon the exercise or (if applicable) vesting of the Awards, (5) the method for satisfaction of any tax
withholding obligation arising in connection with the Awards or such Shares, including by the withholding or delivery of Shares, (6) the
time of the expiration of the Awards, (7) the effect of the Grantee’s termination of employment with the Company or any of its Affiliates,
and (8) all other terms, conditions and restrictions applicable to the Award or the Shares not inconsistent with the terms of this Plan,

 

(v)       to accelerate, continue, extend or defer the
exercisability of any Award or the vesting thereof, including with respect to the period following a Grantee’s termination of employment,

 

(vi)      the interpretation of this Plan and the meaning,
interpretation and applicability of terms referred to in Applicable Laws,

 

(vii)     policies, guidelines, rules and regulations
relating to and for carrying out this Plan, and any amendment, supplement or rescission thereof, as it may deem appropriate,

 

(viii)    to adopt supplements to, or alternative
versions of, this Plan, including, without limitation, as it deems necessary or desirable to comply with the laws of, or to accommodate
the tax regime or custom of, foreign jurisdictions whose citizens or residents may be granted Awards,

 

(ix)      the
Fair Market Value of the Shares or other property,

 

(x)       the
tax track (capital gains, ordinary income track or any other track available under the Section 102 of the Ordinance) for the purpose of
102 Awards,

 

 

 

 

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(xi)      the authorization and approval of conversion,
substitution, cancellation or suspension under and in accordance with this Plan of any or all Awards or Shares,

 

(xii)     the amendment, modification, waiver or supplement
of the terms of each outstanding Award (with the consent of the applicable Grantee, if such amendments refers to the increase of the Exercise
Price of Awards or reduction of the number of Shared underlying an Award (but, in each case, other than as a result of an adjustment or
exercise of rights in accordance with Section 14)) unless otherwise provided under the terms of this Plan,

 

(xiii)    without limiting the generality of the
foregoing, and subject to the provisions of Applicable Law, to grant to a Grantee the holder of an outstanding Award, in exchange for
the cancellation of such Award, a new Award having an Exercise Price lower than that provided in the Award so canceled and containing
such other terms and conditions as the Committee may prescribe in accordance with the provisions of this Plan or to set a new Exercise
Price for the same Award lower than that previously provided in the Award,

 

(xiv)     to correct any defect, supply any omission
or reconcile any inconsistency in this Plan or any Award Agreement and all other determinations and take such other actions with respect
to this Plan or any Award as it may deem advisable to the extent not inconsistent with the provisions of this Plan or Applicable Law,
and

 

(xv)      any other matter which is necessary or desirable
for, or incidental to, the administration of this Plan and any Award thereunder.

 

3.4 The authority granted hereunder includes the
authority to modify Awards to eligible individuals who are foreign nationals or are individuals who are employed outside Israel to recognize
differences in local law, tax policy or custom, in order to effectuate the purposes of this Plan but without amending this Plan.

 

3.5 The Board and the Committee shall be free
at all times to make such determination and take such actions as they deem fit. The Board and the Committee need not take the same action
or determination with respect to all Awards, with respect to certain types of Awards, with respect to all Service Providers or any certain
type of Service Providers and actions and determinations may differ as among the Grantees, and as between the Grantees and any other holders
of securities of the Company.

 

3.6 All decisions, determinations, and interpretations
of the Committee, the Board and the Company under this Plan shall be final and binding on all Grantees (whether before or after the issuance
of Shares pursuant to Awards), unless otherwise determined by the Committee, the Board or the Company, respectively. The Committee shall
have the authority (but not the obligation) to determine the interpretation and applicability of Applicable Laws to any Grantee or any
Awards. No member of the Committee or the Board shall be liable to any Grantee for any action taken or determination made in good faith
with respect to this Plan or any Award granted hereunder.

 

3.7 Any officer of the Company shall have the
authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility
of or which is allocated to the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation,
determination or election.

 

4. ELIGIBILITY.

 

4.1 Awards may be granted to Service Providers
of the Company or any Affiliate thereof, taking into account the qualification under each tax regime pursuant to which such Awards are
granted. A person who has been granted an Award hereunder may be granted additional Awards, if the Committee shall so determine, subject
to the limitations herein. However, eligibility in accordance with this Section 4 shall not entitle any person to be granted an Award,
or, having been granted an Award, to be granted an additional Award.

 

 

 

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4.2 Awards may differ in number of Shares covered
thereby, the terms and conditions applying to them or on the Grantees or in any other respect (including, that there should not be any
expectation (and it is hereby disclaimed) that a certain treatment, interpretation or position granted to one shall be applied to the
other, regardless of whether or not the facts or circumstances are the same or similar).

 

5. SHARES.

 

5.1 The maximum aggregate number of Shares that
may be issued under this Plan shall initially be 11,000,000 authorized but unissued Shares (the “Pool”) (except and as adjusted
pursuant to Section 14.1 of this Plan), or such other number as the Board may determine from time to time (without the need to amend
the Plan in case of such determination). However, except as adjusted pursuant to Section 14.1, in no event shall more than such number
of Shares included in the Pool be available for issuance pursuant to the exercise of Incentive Stock Options (the “ISO Share Issuance
Limit”).

 

5.2 Any Share underlying an Award granted hereunder
that has expired or was cancelled, terminated, forfeited or repurchased, for any reason, without having been exercised, shall, automatically
and without any further action on the part of the Company or any Grantee, again be available for grant of Awards and Shares issued upon
exercise or (if applicable) vesting thereof for the purposes of this Plan (unless this Plan shall have been terminated) or unless the
Board determines otherwise. Such Shares may, in whole or in part, be authorized but unissued Shares, treasury shares (dormant shares)
or Shares otherwise that shall have been or may be repurchased by the Company (to the extent permitted pursuant to the Companies Law).
Any Shares under the Pool that are not subject to outstanding or exercised Awards at the termination of this Plan shall cease to be reserved
for the purpose of this Plan.

 

6. TERMS AND CONDITIONS OF AWARDS.

 

Each Award granted pursuant to this Plan shall
be evidenced by a written agreement between the Company and the Grantee or a written notice delivered by the Company (the “Award
Agreement”), in substantially such form or forms and containing such terms and conditions, as the Committee shall from time to time
approve. The Award Agreement shall comply with and be subject to the following general terms and conditions and the provisions of this
Plan (except for any provisions applying to Awards under different tax regimes), unless otherwise specifically provided in such Award
Agreement, or the terms referred to in other Sections of this Plan applying to Awards under such applicable tax regimes, or terms prescribed
by Applicable Law. Award Agreements need not be in the same form and may differ in the terms and conditions included therein.

 

6.1 Number of Shares. Each Award Agreement shall
state the number of Shares covered by the Award.

 

6.2 Type of Award. Each Award Agreement may state
the type of Award granted thereunder, provided that the tax treatment of any Award, whether or not stated in the Award Agreement, shall
be as determined in accordance with Applicable Laws.

 

6.3 Exercise Price. Each Award Agreement shall
state the Exercise Price, which shall not be less than par value. Unless otherwise set forth in this Plan, an Exercise Price of an Award
of less than the par value of the Shares shall comply with Section 304 of the Companies Law, 1999, as amended. Subject to Section 3 and
to the foregoing, the Committee may reduce the Exercise Price of any outstanding Award, on terms and subject to such conditions as it
deems advisable. The Exercise Price shall also be subject to adjustment as provided in Section 14 hereof.

 

6.4 Manner of Exercise. An Award may be exercised,
as to any or all Shares as to which the Award has become exercisable, by written notice delivered in person or by mail (or such other
methods of delivery prescribed by the Company) to the Chief Financial Officer of the Company or to such other person as determined by
the Committee, or in any other manner as the Committee shall prescribe from time to time, specifying the number of Shares with respect
to which the Award is being exercised (which may be equal to or lower than the aggregate number of Shares that have become exercisable
at such time, subject to the last sentence of this Section), accompanied by payment of the aggregate Exercise Price for such Shares in
the manner specified in the following sentence. The Exercise Price shall be paid in full with respect to each Share, at the time of exercise,
either in (i) cash, (ii) if the Company’s shares are listed for trading on any securities exchange or over-the-counter market, all
or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company
or the Trustee, (iii) if the Company’s shares are listed for trading on any securities exchange or over-the-counter market, and
if the Committee so determines, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed
by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for
a loan, and to deliver all or part of the loan proceeds to the Company or the Trustee, or (iv) in such other manner as the Committee shall
determine, which may include procedures for cashless exercise. A Grantee may not exercise Awards unless the aggregate Exercise Price thereof
is equal to or in excess of the lower of: (a) the aggregate Exercise Price for all Shares as to which the Award has become exercisable
at such time; or (b) US$2,000.

 

 

 

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6.5 Term and Vesting of Awards.

 

6.5.1 Each Award Agreement shall provide the vesting
schedule for the Award as determined by the Committee. The Committee shall have the authority to determine the vesting schedule and accelerate
the vesting of any outstanding Award at such time and under such circumstances as it, in its sole discretion, deems appropriate. Unless
otherwise resolved by the Committee and stated in the Award Agreement, and subject to Sections 6.6 and 6.7 hereof, Awards shall vest and
become exercisable under the following schedule: twenty-five percent (25%) of the Shares covered by the Award, on the first anniversary
of the vesting commencement date determine by the Committee (and in the absence of such determination, of date on which such Award was
granted), and six and one-quarter percent (6.25%) of the Shares covered by the Award at the end of each subsequent three-month period
thereafter over the course of the following three (3) years; provided that the Grantee remains continuously as a Service Provider of the
Company or its Affiliates throughout such vesting dates.

 

6.5.2 The Award Agreement may contain performance
goals and measurements (which, in case of 102 Awards, shall, if then required, be subject to obtaining a specific tax ruling or determination
from the ITA), and the provisions with respect to any Award need not be the same as the provisions with respect to any other Award. Such
performance goals may include, but are not limited to, sales, earnings before interest and taxes, return on investment, earnings per
share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee. The Committee may
adjust performance goals pursuant to Awards previously granted to take into account changes in law and accounting and tax rules and to
make such adjustments as the Committee deems necessary or appropriate to reflect the inclusion or the exclusion of the impact of extraordinary
or unusual items, events or circumstances.

 

6.5.3 The Exercise Period of an Award will be
10 years from the date of grant of the Award, unless otherwise determined by the Committee, but subject to the vesting provisions described
above and the early termination provisions set forth in Sections 6.6 and 6.7 hereof. At the expiration of the Exercise Period, any Award,
or any part thereof, that has not been exercised within the term of the Award and the Shares covered thereby not paid for in accordance
with this Plan and the Award Agreement shall terminate and become null and void, and all interests and rights of the Grantee in and to
the same shall expire.

 

6.6 Termination.

 

6.6.1 Unless otherwise determined by the Committee,
and subject to Section 6.7 hereof, an Award may not be exercised unless the Grantee is then a Service Provider of the Company or an Affiliate
thereof or, in the case of an Incentive Stock Option, a company or a parent or subsidiary company of such company issuing or assuming
the Option in a transaction to which Section 424(a) of the Code applies, and unless the Grantee has remained continuously so employed
since the date of grant of the Award and throughout the vesting dates.

 

6.6.2 In the event that the employment or service
of a Grantee shall terminate (other than by reason of death, Disability or Retirement), all Awards of such Grantee that are unvested at
the time of such termination shall terminate on the date of such termination, and all Awards of such Grantee that are vested and exercisable
at the time of such termination may be exercised within up to three (3) months after the date of such termination (or such different period
as the Committee shall prescribe), but in any event no later than the date of expiration of the Award’s term as set forth in the
Award Agreement or pursuant to this Plan; provided, however, that if the Company (or the Subsidiary or Affiliate, when applicable) shall
terminate the Grantee’s employment or service for Cause (as defined below) or if at any time during the Exercise Period (whether
prior to and after termination of employment or service, and whether or not the Grantee’s employment or service is terminated by
either party as a result thereof), facts or circumstances arise or are discovered with respect to the Grantee that would have constituted
Cause, all Awards theretofore granted to such Grantee (whether vested or not) shall, to the extent not theretofore exercised, terminate
on the date of such termination (or on such subsequent date on which such facts or circumstances arise or are discovered, as the case
may be) unless otherwise determined by the Committee.

 

 

 

    	 	9	 

     

    

 

6.6.3 Notwithstanding anything to the contrary,
the Committee, in its absolute discretion, may, on such terms and conditions as it may determine appropriate, extend the periods for which
Awards held by any Grantee may continue to vest and be exercisable; it being clarified that such Awards may lose their entitlement to
certain tax benefits under Applicable Law as a result of the modification of such Awards and/or in the event that the Award is exercised
beyond the later of: (i) three (3) months after the date of termination of the employment or service relationship; or (ii) the applicable
period under Section 6.7 below with respect to a termination of the employment or service relationship because of the death, Disability
or Retirement of Grantee.

 

6.6.4 For purposes of this Plan:

 

6.6.4.1 a termination of employment or service
of a Grantee shall not be deemed to occur in case of (i) a transition or transfer of a Grantee among the Company and its Affiliates, (ii)
a change in the capacity in which the Grantee is employed or renders service to the Company or any of its Affiliates or a change in the
identity of the employing or engagement entity among the Company and its Affiliates, provided, in case of (i) and (ii) above, that the
Grantee has remained continuously employed by and/or in the service of the Company and its Affiliates since the date of grant of the Award
and throughout the vesting period; (iii) if the Grantee takes any unpaid leave as set forth in Section 6.8(i) below.

 

6.6.4.2 An entity or an Affiliate thereof assuming
an Award or issuing in substitution thereof in a transaction to which Section 424(a) of the Code applies or in a Merger/Sale in accordance
with Section 14 shall be deemed as an Affiliate of the Company for purposes of this Section 6.6, unless the Committee determines otherwise.

 

6.6.4.3 In the case of a Grantee whose principal
employer or service recipient is a Subsidiary or Affiliate, the Grantee’s employment shall also be deemed terminated for purposes
of this Section 6.6 as of the date on which such principal employer or service recipient ceases to be a Subsidiary or Affiliate.

 

6.6.4.4 The term “Cause” shall mean
(irrespective of, and in addition to, any definition included in any other agreement or instrument applicable to the Grantee, and unless
otherwise determined by the Committee) any of the following: (i) any theft, fraud, embezzlement, dishonesty, willful misconduct, breach
of fiduciary duty for personal profit, falsification of any documents or records of the Company or any of its Affiliates, felony or similar
act by the Grantee (whether or not related to the Grantee’s relationship with the Company); (ii) an act of moral turpitude by the
Grantee, or any act that causes significant injury to, or is otherwise adversely affecting, the reputation, business, assets, operations
or business relationship of the Company (or a Subsidiary or Affiliate, when applicable); (iii) any breach by the Grantee of any material
agreement with or of any material duty of the Grantee to the Company or any Subsidiary or Affiliate thereof (including breach of confidentiality,
non-disclosure, non-use non-competition or non-solicitation covenants towards the Company or any of its Affiliates) or failure to abide
by code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct);
or (iv) any act which constitutes a breach of a Grantee’s fiduciary duty towards the Company or an Affiliate or Subsidiary, including
disclosure of confidential or proprietary information thereof or acceptance or solicitation to receive unauthorized or undisclosed benefits,
irrespective of their nature, or funds, or promises to receive either, from individuals, consultants or corporate entities that the Company
or a Subsidiary does business with; (v) the Grantee’s unauthorized use, misappropriation, destruction, or diversion of any tangible
or intangible asset or corporate opportunity of a Company or any of its Affiliates (including, without limitation, the improper use or
disclosure of confidential or proprietary information); or (vi) any circumstances that constitute grounds for termination for cause under
the Grantee’s employment or service agreement with the Company or Affiliate, to the extent applicable. For the avoidance of doubt,
the determination as to whether a termination is for Cause for purposes of this Plan, shall be made in good faith by the Committee and
shall be final and binding on the Grantee.

 

6.7 Death, Disability or Retirement of Grantee.
6.7.1 If a Grantee shall die while employed by, or performing service for, the Company or its Affiliates, or within the three (3) month
period (or such longer period of time as determined by the Board, in its discretion) after the date of termination of such Grantee's employment
or service (or within such different period as the Committee may have provided pursuant to Section 6.6 hereof), or if the Grantee's employment
or service shall terminate by reason of Disability, all Awards theretofore granted to such Grantee may (to the extent otherwise vested
and exercisable and unless earlier terminated in accordance with their terms) be exercised by the Grantee or by the Grantee's estate or
by a person who acquired the legal right to exercise such Awards by bequest or inheritance, or by a person who acquired the legal right
to exercise such Awards in accordance with Applicable Law in the case of Disability of the Grantee, as the case may be, at any time within
one (1) year (or such longer period of time as determined by the Board, in its discretion) after the death or Disability of the Grantee
(or such different period as the Committee shall prescribe), but in any event no later than the date of expiration of the Award’s
term as set forth in the Award Agreement or pursuant to this Plan. In the event that an Award granted hereunder shall be exercised as
set forth above by any person other than the Grantee, written notice of such exercise shall be accompanied by a certified copy of letters
testamentary or proof satisfactory to the Committee of the right of such person to exercise such Award.

 

 

 

    	 	10	 

     

    

 

6.7.2 In the event that the employment or service
of a Grantee shall terminate on account of such Grantee's Retirement, all Awards of such Grantee that are exercisable at the time of such
Retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within the three (3) month period after
the date of such Retirement (or such different period as the Committee shall prescribe).

 

6.8 Suspension of Vesting. Unless the Committee
provides otherwise, vesting of Awards granted hereunder shall be suspended during any unpaid leave of absence, other than in the case
of any (i) leave of absence which was pre-approved by the Company explicitly for purposes of continuing the vesting of Awards, or (ii)
transfers between locations of the Company or any of its Affiliates, or between the Company and any of its Affiliates, or any respective
successor thereof. To clarify, for purposes of this Plan, military leave, statutory maternity or paternity leave or sick leave are not
deemed unpaid leave of absence.

 

6.9 Securities Law Restrictions. Except as otherwise
provided in the applicable Award Agreement or other agreement between the Service Provider and the Company, if the exercise of an Award
following the termination of the Service Provider’s employment or service (other than for Cause) would be prohibited at any time
solely because the issuance of Shares would violate the registration requirements under the Securities Act or equivalent requirements
under equivalent laws of other applicable jurisdictions, then the Award shall remain exercisable and terminate on the earlier of (i)
the expiration of a period of three (3) months (or such longer period of time as determined by the Board, in its discretion) after the
termination of the Service Provider’s employment or service during which the exercise of the Award would not be in such violation,
or (ii) the expiration of the term of the Award as set forth in the Award Agreement or pursuant to this Plan. In addition, unless otherwise
provided in a Grantee’s Award Agreement, if the sale of any Shares received upon exercise or (if applicable) vesting of an Award
following the termination of the Grantee's employment or service (other than for Cause) would violate the Company’s insider trading
policy, then the Award shall terminate on the earlier of (i) the expiration of a period equal to the applicable post-termination exercise
period after the termination of the Grantee's employment or service during which the exercise of the Award would not be in violation
of the Company’s insider trading policy, or (ii) the expiration of the term of the Award as set forth in the applicable Award Agreement
or pursuant to this Plan.

 

6.10 Voting Proxy. Until immediately after the
listing for trading on a stock exchange or market or trading system of the Company’s (or the Successor Corporation’s) shares,
the Shares subject to an Award or to be issued pursuant to an Award or any other Securities, shall, unless otherwise determined by the
Committee, be subject to an irrevocable proxy and power of attorney by the Grantee or the Trustee (if so requested from the Trustee),
as the case may be, to the Company, which shall designate such person or persons (with a right of substitution) from time to time as determined
by the Committee (and in the absence of such determination, the CEO or Chairman of the Board, ex officio). The Trustee is deemed to be
instructed by the Grantee to sign such proxy, as requested by the Company. The proxy shall entitle the holder thereof to receive notices,
vote and take such other actions in respect of the Shares or other Securities. Any person holding or exercising such voting proxies shall
do so solely in his capacity as the proxy holder and not individually. All Awards granted hereunder shall be conditioned upon the execution
of such irrevocable proxy in substantially the form prescribed by the Committee from time to time. So long as any such Shares are subject
to such irrevocable proxy and power of attorney or held by a Trustee (and unless a proxy was given by the Trustee as aforesaid), (i) in
any shareholders meeting or written consent in lieu thereof, such Shares shall be voted by the proxy holder, unless directed otherwise
by the Board, in the same proportion as the result of the vote at the shareholders’ meeting (or written consent in lieu thereof)
in respect of which the Shares are being voted (whether an extraordinary or annual meeting), and (ii) or in any act or consent of shareholders
under the Company’s Articles of Association or otherwise, such Shares shall be cast by the proxy holder, unless directed otherwise
by the Board, in the same proportion as the result of the shareholders’ act or consent. The provisions of this Section shall apply
to the Grantee and to any purchaser, assignee or transferee of any Shares.

 

6.11 Other Provisions. The Award Agreement evidencing
Awards under this Plan shall contain such other terms and conditions not inconsistent with this Plan as the Committee may determine, at
or after the date of grant, including provisions in connection with the restrictions on transferring the Awards or Shares covered by such
Awards, which shall be binding upon the Grantees and any purchaser, assignee or transferee of any Awards, and other terms and conditions
as the Committee shall deem appropriate.

 

 

 

 

    	 	11	 

     

    

 

7. NONQUALIFIED STOCK OPTIONS.

 

Awards granted pursuant to this Section 7 are
intended to constitute Nonqualified Stock Options and shall be subject to the general terms and conditions specified in Section 6 hereof
and other provisions of this Plan, except for any provisions of this Plan applying to Awards under different tax laws or regulations.
In the event of any inconsistency or contradictions between the provisions of this Section 7 and the other terms of this Plan, this Section
7 shall prevail.

 

7.1 Eligibility for Awards. Nonqualified Stock
Options may not be granted to Service Providers who is deemed to be a resident of the United States for purposes of taxation and who are
providing services only to a “parent” of the Company, as such term is defined in Rule 405 of Regulation C under the Securities
Act, unless the Shares underlying such Awards are treated as “service recipient stock” under Section 409A of the Code because
the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards comply with the distribution
requirements of Section 409A of the Code.

 

7.2 Exercise Price. The Exercise Price of a Nonqualified
Stock Option shall not be less than 100% of the Fair Market Value of the Shares on the date of grant unless the Committee specifically
indicates that the Awards will have a lower Exercise Price and the Award complies with Section 409A of the Code. Notwithstanding the foregoing,
Nonqualified Stock Option may be granted with an exercise price lower than the minimum exercise price set forth above if such Award is
granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of
the Code.

 

8. INCENTIVE STOCK OPTIONS.

 

Awards granted pursuant to this Section 8 are
intended to constitute Incentive Stock Options and shall be granted subject to the following special terms and conditions, the general
terms and conditions specified in Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying
to Awards under different tax laws or regulations. In the event of any inconsistency or contradictions between the provisions of this
Section 8 and the other terms of this Plan, this Section 8 shall prevail.

 

8.1 Eligibility for Awards. Incentive Stock Options
may be granted only to Employees of the Company, or to Employees of a Parent or Subsidiary corporation thereof (as such terms are defined
in Sections 424(e) and 424(f) of the Code). Any person who is not an Employee on the effective date of the grant of an Award to such person
may be granted only a Nonqualifed Stock Option. An Incentive Stock Option granted to a prospective Employee upon the condition that such
person become an Employee shall be deemed granted effective on the date such person commences employment, with an exercise price determined
as of such date in accordance with Section 8.2.

 

8.2 Exercise Price. The Exercise Price of Incentive
Stock Option shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares covered by the Awards on the date
of grant or such other price as may be determined pursuant to the Code. No Incentive Stock Option granted to any Ten-Percent Shareholder
shall have an Exercise Price less than 110% of the Fair Market Value of a Share covered by the Awards on the effective date of grant.
Notwithstanding the foregoing, Incentive Stock Option may be granted with an exercise price lower than the minimum exercise price set
forth above if such Award is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions
of Section 424(a) of the Code.

 

8.3 Date of Grant. Incentive Stock Option shall
be granted within 10 years from the date this Plan is adopted, or the date this Plan is approved by the shareholders, whichever is earlier.

 

8.4 Exercise Period. No Incentive Stock Option
shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Award, subject to Section 8.6. No
Incentive Stock Option granted to a prospective Employee may become exercisable prior to the date on which such person commences employment.

 

 

 

    	 	12	 

     

    

 

8.5 Value of Shares. The aggregate Fair Market
Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which all Incentive Stock Options
granted under this Plan and all other option plans of any Parent or Subsidiary or Affiliate become exercisable for the first time by each
Grantee during any calendar year shall not exceed one hundred thousand United States dollars ($100,000) with respect to such Grantee.
To the extent that the aggregate Fair Market Value of Shares with respect to which the Incentive Stock Options are exercisable for the
first time by any Grantee during any calendar years as mentioned above exceeds one hundred thousand United States dollars ($100,000),
such Awards shall be treated as Nonqualified Stock Options. The foregoing shall be applied by taking Awards into account in the order
in which they were granted, and the Fair Market Value of any Share to be determined at the time of the grant of the Awards. If the Code
is amended to provide for a different limitation from that set forth in this Section 8.5, such different limitation shall be deemed incorporated
herein effective as of the date and with respect to such Awards as required or permitted by such amendment to the Code. If an Award is
treated as an Incentive Stock Option in part and as a Nonqualifed Stock Option in part by reason of the limitation set forth in this Section
8.5, the Grantee may designate which portion of such Award the Grantee is exercising. In the absence of such designation, the Grantee
shall be deemed to have exercised the Incentive Stock Option portion of the Award first. Separate certificates representing each such
portion may be issued upon the exercise of the Award.

 

8.6 Ten Percent Shareholder. In the case of an
Incentive Stock Option granted to a Ten Percent Shareholder, (i) the Exercise Price shall not be less than one hundred and ten percent
(110%) of the Fair Market Value of the Shares on the date of grant of such Incentive Stock Option, and (ii) the Exercise Period shall
not exceed five (5) years from the effective date of grant of such Incentive Stock Option.

 

8.7 Incentive Stock Option Lock-Up Period. No
disposition of Shares received pursuant to the exercise of Incentive Stock Options, shall be made by the Grantee within 2 years from the
date of grant, nor within 1 year after the transfer of such Shares to him. To the extent that the Grantee violates the aforementioned
limitations, the Incentive Stock Options shall be deemed to be Nonqualified Stock Options.

 

8.8 Approval. To the extent required by Applicable
Law, the status of any Shares issued upon exercise of Incentive Stock Options shall be subject to approval of this Plan and any amendment
thereto by the Company’s shareholders, such approval to be provided 12 months before or after the date of adoption of this Plan
or its amendment (if applicable), as the case may be, by the Board.

 

8.9 Leave of Absence. Notwithstanding Section
6.8, a Grantee’s employment shall not be deemed to have terminated if the Grantee takes any leave as set forth in Section 6.8(i);
provided, however, that if any such leave exceeds ninety (90) days, on the one hundred eighty-first (181st) day following the commencement
of such leave any Incentive Stock Option held by the Grantee shall cease to be treated as an Incentive Stock Option and instead shall
be treated thereafter as a Nonqualifed Stock Option, unless the Grantee’s right to return to employment is guaranteed by statute
or contract.

 

8.10 Exercise Following Termination for Disability.
Notwithstanding anything else in this Plan to the contrary, Incentive Stock Options that are not exercised within three (3) months following
termination of Grantee’s employment with the Company or its Parent or Subsidiary or a corporation or a Parent or Subsidiary of such
corporation issuing or assuming a Award in a transaction to which Section 424(a) of the Code applies, or within one year in case of termination
of Grantee’s employment with the Company or its Parent or Subsidiary due to a disability (within the meaning of Section 22(e)(3)
of the Code), shall be deemed to be Nonqualified Stock Options.

 

8.11 Adjustments to Incentive Stock Options. Any
Awards Agreement providing for the grant of Incentive Stock Options shall indicate that adjustments made pursuant to this Plan with respect
to Incentive Stock Options could constitute a “modification” of such Incentive Stock Options (as that term is defined in Section
424(h) of the Code) or could cause adverse tax consequences for the holder of such Incentive Stock Options and that the holder should
consult with his or her tax advisor regarding the consequences of such “modification” on his or her income tax treatment with
respect to the Incentive Stock Option.

 

8.12 Notice to Company of Disqualifying Disposition.
Each Grantee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Grantee makes a
Disqualifying Disposition of any Shares received pursuant to the exercise of Incentive Stock Options. A “Disqualifying Disposition”
is any disposition (including any sale) of such Shares before the later of

 

 

 

 

    	 	13	 

     

    

 

(i) two years after the date the Grantee was granted
the Incentive Stock Option, or (ii) one year after the date the Grantee acquired Shares by exercising the Incentive Stock Option. If the
Grantee dies before such Shares are sold, these holding period requirements do not apply and no disposition of the Shares will be deemed
a Disqualifying Disposition.

 

9. 102 AWARDS.

 

Awards granted pursuant to this Section 9 are
intended to constitute 102 Awards and shall be granted subject to the following special terms and conditions, the general terms and conditions
specified in Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying to Awards under different
tax laws or regulations. In the event of any inconsistency or contradictions between the provisions of this Section 9 and the other terms
of this Plan, this Section 9 shall prevail.

 

9.1 Tracks. Awards granted pursuant to this Section
9 are intended to be granted pursuant to Section 102 of the Ordinance pursuant to either (i) Section 102(b)(2) thereof, under the capital
gain track (“102 Capital Gain Track Awards”), or (ii) Section 102(b)(1) thereof under the ordinary income track (“102
Ordinary Income Track Awards”, and together with 102 Capital Gain Track Awards, “102 Trustee Awards”). 102 Trustee Awards
shall be granted subject to the special terms and conditions contained in this Section 9, the general terms and conditions specified in
Section 6 hereof and other provisions of this Plan, except for any provisions of this Plan applying to Options under different tax laws
or regulations.

 

9.2 Election of Track. Subject to Applicable Law,
the Company may grant only one type of 102 Trustee Awards at any given time to all Grantees who are to be granted 102 Trustee Awards pursuant
to this Plan, and shall file an election with the ITA regarding the type of 102 Trustee Awards it elects to grant before the date of grant
of any 102 Trustee Awards (the “Election”). Such Election shall also apply to any other securities, including bonus shares,
received by any Grantee as a result of holding the 102 Trustee Awards. The Company may change the type of 102 Trustee Awards that it elects
to grant only after the expiration of at least 12 months from the end of the year in which the first grant was made in accordance with
the previous Election, or as otherwise provided by Applicable Law. Any Election shall not prevent the Company from granting Awards, pursuant
to Section 102(c) of the Ordinance without a Trustee (“102 Non-Trustee Awards”).

 

9.3 Eligibility for Awards.

 

Subject to Applicable Law, 102 Awards may only
be granted to an "employee" within the meaning of Section 102(a) of the Ordinance (which as of the date of the adoption of this
Plan means (i) individuals employed by an Israeli company being the Company or any of its Affiliates, and (ii) individuals who are serving
and are engaged personally (and not through an entity) as “office holders” by such an Israeli company), but may not be granted
to a Controlling Shareholder (“Eligible 102 Grantees”). Eligible 102 Grantees may receive only 102 Awards, which may either
be granted to a Trustee or granted under Section 102 of the Ordinance without a Trustee.

 

9.4 102 Award Grant Date.

 

9.4.1 Each 102 Award will be deemed granted on
the date determined by the Committee, subject to Section 9.4.2, provided that (i) the Grantee has signed all documents required by the
Company or pursuant to Applicable Law, and (ii) with respect to 102 Trustee Award, the Company has provided all applicable documents to
the Trustee in accordance with the guidelines published by the ITA.

 

9.4.2 Unless otherwise permitted by the Ordinance,
any grants of 102 Trustee Awards that are made on or after the date of the adoption of this Plan or an amendment to this Plan, as the
case may be, that may become effective only at the expiration of thirty (30) days after the filing of this Plan or any amendment thereof
(as the case may be) with the ITA in accordance with the Ordinance shall be conditional upon the expiration of such 30-day period, such
condition shall be read and is incorporated by reference into any corporate resolutions approving such grants and into any Award Agreement
evidencing such grants (whether or not explicitly referring to such condition), and the date of grant shall be at the expiration of such
30-day period, whether or not the date of grant indicated therein corresponds with this Section. In the case of any contradiction, this
provision and the date of grant determined pursuant hereto shall supersede and be deemed to amend any date of grant indicating in any
corporate resolution or Award Agreement.

 

 

 

 

    	 	14	 

     

    

 

9.5 102 Trustee Awards.

 

9.5.1 Each 102 Trustee Award, each Share issued
pursuant to the exercise of any 102 Trustee Award, and any rights granted thereunder, including bonus shares, shall be issued to and
registered in the name of the Trustee and shall be held in trust for the benefit of the Grantee for the requisite period prescribed by
the Ordinance or such longer period as set by the Committee (the “Required Holding Period”). In the event that the requirements
under Section 102 of the Ordinance to qualify an Award as a 102 Trustee Award are not met, then the Award may be treated as a 102 Non-Trustee
Award or 3(9) Award, all in accordance with the provisions of the Ordinance. After termination of the Required Holding Period, the Trustee
may release such 102 Trustee Awards and any such Shares, provided that (i) the Trustee has received an acknowledgment from the ITA that
the Grantee has paid any applicable taxes due pursuant to the Ordinance, or (ii) the Trustee and/or the Company and/or its Affiliate
withholds all applicable taxes and compulsory payments due pursuant to the Ordinance arising from the 102 Trustee Awards and/or any Shares
issued upon exercise or (if applicable) vesting of such 102 Trustee Awards. The Trustee shall not release any 102 Trustee Awards or Shares
issued upon exercise or (if applicable) vesting thereof prior to the payment in full of the Grantee’s tax and compulsory payments
arising from such 102 Trustee Awards and/or Shares or the withholding referred to in (ii) above.

 

9.5.2 Each 102 Trustee Award shall be subject
to the relevant terms of the Ordinance, the Rules and any determinations, rulings or approvals issued by the ITA, which shall be deemed
an integral part of the 102 Trustee Awards and shall prevail over any term contained in this Plan or Award Agreement that is not consistent
therewith. Any provision of the Ordinance, the Rules and any determinations, rulings or approvals by the ITA not expressly specified in
this Plan or Award Agreement that are necessary to receive or maintain any tax benefit pursuant to Section 102 of the Ordinance shall
be binding on the Grantee. The Grantee granted a 102 Trustee Awards shall comply with the Ordinance and the terms and conditions of the
Trust Agreement entered into between the Company and the Trustee. The Grantee shall execute any and all documents that the Company and/or
its Affiliates and/or the Trustee determine from time to time to be necessary in order to comply with the Ordinance and the Rules.

 

9.5.3 During the Required Holding Period, the
Grantee shall not release from trust or sell, assign, transfer or give as collateral, the Shares issuable upon the exercise or (if applicable)
vesting of a 102 Trustee Awards and/or any securities issued or distributed with respect thereto, until the expiration of the Required
Holding Period. Notwithstanding the above, if any such sale, release or other action occurs during the Required Holding Period it may
result in adverse tax consequences to the Grantee under Section 102 of the Ordinance and the Rules, which shall apply to and shall be
borne solely by such Grantee. Subject to the foregoing, the Trustee may, pursuant to a written request from the Grantee, but subject to
the terms of this Plan, release and transfer such Shares to a designated third party, provided that both of the following conditions have
been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes and compulsory payments required to
be paid upon the release and transfer of the Shares, and confirmation of such payment has been received by the Trustee and the Company,
and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been
fulfilled according to the terms of the Company’s corporate documents, any agreement governing the Shares, this Plan, the Award
Agreement and any Applicable Law.

 

9.5.4 If a 102 Trustee Award is exercised or (if
applicable) vested, the Shares issued upon such exercise or (if applicable) vesting shall be issued in the name of the Trustee for the
benefit of the Grantee.

 

9.5.5 Upon or after receipt of a 102 Trustee Award,
if required, the Grantee may be required to sign an undertaking to release the Trustee from any liability with respect to any action or
decision duly taken and executed in good faith by the Trustee in relation to this Plan, or any 102 Trustee Awards or Share granted to
such Grantee thereunder.

 

 

 

 

    	 	15	 

     

    

 

9.6 102 Non-Trustee Awards. The foregoing provisions
of this Section 9 relating to 102 Trustee Awards shall not apply with respect to 102 Non-Trustee Awards, which shall, however, be subject
to the relevant provisions of Section 102 of the Ordinance and the applicable Rules. The Committee may determine that 102 Non-Trustee
Awards, the Shares issuable upon the exercise or (if applicable) vesting of a 102 Non-Trustee Awards and/or any securities issued or distributed
with respect thereto, shall be allocated or issued to the Trustee, who shall hold such 102 Non-Trustee Awards and all accrued rights thereon
(if any), in trust for the benefit of the Grantee and/or the Company, as the case may be, until the full payment of tax arising from the
102 Non-Trustee Awards, the Shares issuable upon the exercise or (if applicable) vesting of a 102 Non-Trustee Awards and/or any securities
issued or distributed with respect thereto. The Company may choose, alternatively, to force the Grantee to provide it with a guarantee
or other security, to the satisfaction of each of the Trustee and the Company, until the full payment of the applicable taxes.

 

9.7 Israeli Index Base for 102 Awards. Each 102
Award will be subject to the Israeli index base of the Value of Benefit, as defined in Section 102(a) of the Ordinance, as determined
by the Committee in its discretion, pursuant to the Rules, from time to time. The Committee may amend (which may have a retroactive effect)
the Israeli index base, pursuant to the Ordinance, without the Grantee’s consent.

 

9.8 Written Grantee Undertaking. To the extent
and with respect to any 102 Trustee Award, and as required by Section 102 of the Ordinance and the Rules, by virtue of the receipt of
such Award, the Grantee is deemed to have undertaken and confirm in writing the following (and such undertaking is deemed incorporated
into any documents signed by the Grantee in connection with the employment or service of the Grantee and/or the grant of such Award).
The following written undertaking shall be deemed to apply and relate to all Awards granted to the Grantee, whether under this Plan or
other plans maintained by the Company, and whether prior to or after the date hereof.

 

9.8.1 The Grantee shall comply with all terms
and conditions set forth in Section 102 of the Ordinance with regard to the “Capital Gain Track” or the “Ordinary Income
Track”, as applicable, and the applicable rules and regulations promulgated thereunder, as amended from time to time;

 

9.8.2 The Grantee is familiar with, and understand
the provisions of, Section 102 of the Ordinance in general, and the tax arrangement under the “Capital Gain Track” or the
“Ordinary Income Track” in particular, and its tax consequences; the Grantee agrees that the Awards and Shares that may be
issued upon exercise or (if applicable) vesting of the Awards (or otherwise in relation to the Awards), will be held by a trustee appointed
pursuant to Section 102 of the Ordinance for at least the duration of the "Holding Period" (as such term is defined in Section
102) under the "Capital Gain Track" or the “Ordinary Income Track”, as applicable. The Grantee understands that
any release of such Awards or Shares from trust, or any sale of the Share prior to the termination of the Holding Period, as defined above,
will result in taxation at marginal tax rate, in addition to deductions of appropriate social security, health tax contributions or other
compulsory payments; and

 

9.8.3 The Grantee agrees to the trust deed signed
between the Company, his employing company and the trustee appointed pursuant to Section 102 of the Ordinance.

 

10. 3(9) AWARDS.

 

Awards granted pursuant to this Section 10 are
intended to constitute 3(9) Awards and shall be granted subject to the general terms and conditions specified in Section 6 hereof and
other provisions of this Plan, except for any provisions of this Plan applying to Awards under different tax laws or regulations. In the
event of any inconsistency or contradictions between the provisions of this Section 10 and the other terms of this Plan, this Section
10 shall prevail.

 

10.1 To the extent required by the Ordinance or
the ITA or otherwise deemed by the Committee to be advisable, the 3(9) Awards and/or any shares or other securities issued or distributed
with respect thereto granted pursuant to this Plan shall be issued to a Trustee nominated by the Committee in accordance with the provisions
of the Ordinance. In such event, the Trustee shall hold such Awards and/or any shares or other securities issued or distributed with respect
thereto in trust, until exercised or (if applicable) vested by the Grantee and the full payment of tax arising therefrom, pursuant to
the Company's instructions from time to time as set forth in a trust agreement, which will have been entered into between the Company
and the Trustee. If determined by the Board or the Committee, and subject to such trust agreement, the Trustee shall be responsible for
withholding any taxes to which a Grantee may become liable upon issuance of Shares, whether due to the exercise or (if applicable) vesting
of Awards.

 

 

 

    	 	16	 

     

    

 

10.2 Shares pursuant to a 3(9) Award shall not
be issued, unless the Grantee delivers to the Company payment in cash or by bank check or such other form acceptable to the Committee
of all withholding taxes due, if any, on account of the Grantee acquired Shares under the Award or gives other assurance satisfactory
to the Committee of the payment of those withholding taxes.

 

11. RESTRICTED SHARES.

 

The Committee may award Restricted Shares to any
eligible Grantee, including under Section 102 of the Ordinance. Each Award of Restricted Shares under this Plan shall be evidenced by
a written agreement between the Company and the Grantee (the “Restricted Share Agreement”), in such form as the Committee
shall from time to time approve. The Restricted Shares shall be subject to all applicable terms of this Plan, which in the case of Restricted
Shares granted under Section 102 of the Ordinance shall include Section 9 hereof, and may be subject to any other terms that are not inconsistent
with this Plan. The provisions of the various Restricted Shares Agreements entered into under this Plan need not be identical. The Restricted
Share Agreement shall comply with and be subject to Section 6 and the following terms and conditions, unless otherwise specifically provided
in such Agreement and not inconsistent with this Plan, or Applicable Law:

 

11.1 Purchase Price. Section 6.4 shall not apply.
Each Restricted Share Agreement shall state an amount of Exercise Price to be paid by the Grantee, if any, in consideration for the issuance
of the Restricted Shares and the terms of payment thereof, which may include, payment in cash or by issuance of promissory notes or other
evidence of indebtedness on such terms and conditions as determined by the Committee.

 

11.2 Restrictions. Restricted Shares may not be
sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution (in
which case they shall be transferred subject to all restrictions then or thereafter applicable thereto), until such Restricted Shares
shall have vested (the period from the date on which the Award is granted until the date of vesting of the Restricted Share thereunder
being referred to herein as the “Restricted Period”). The Committee may also impose such additional or alternative restrictions
and conditions on the Restricted Shares, as it deems appropriate, including the satisfaction of performance criteria. Such performance
criteria may include, but are not limited to, sales, earnings before interest and taxes, return on investment, earnings per share, any
combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee or pursuant to the provisions of
any Company policy required under mandatory provisions of Applicable Law. Certificates for shares issued pursuant to Restricted Share
Awards shall bear an appropriate legend referring to such restrictions, and any attempt to dispose of any such shares in contravention
of such restrictions shall be null and void and without effect. Such certificates may, if so determined by the Committee, be held in escrow
by an escrow agent appointed by the Committee, or, if a Restricted Share Award is made pursuant to Section 102 of the Ordinance, by the
Trustee. In determining the Restricted Period of an Award the Committee may provide that the foregoing restrictions shall lapse with respect
to specified percentages of the awarded Restricted Shares on successive anniversaries of the date of such Award. To the extent required
by the Ordinance or the ITA, the Restricted Shares issued pursuant to Section 102 of the Ordinance shall be issued to the Trustee in accordance
with the provisions of the Ordinance and the Restricted Shares shall be held for the benefit of the Grantee for such period as may be
required by the Ordinance.

 

11.3 Forfeiture; Repurchase. Subject to such exceptions
as may be determined by the Committee, if the Grantee's continuous employment with or service to the Company or any Affiliate thereof
shall terminate for any reason prior to the expiration of the Restricted Period of an Award or prior to the timely payment in full of
the Exercise Price of any Restricted Shares, any Shares remaining subject to vesting or with respect to which the purchase price has not
been paid in full, shall thereupon be forfeited, transferred to, and redeemed, repurchased or cancelled by, as the case may be, in any
manner as set forth in Section 6.6.2(i) thought (v), subject to Applicable Laws and the Grantee shall have no further rights with respect
to such Restricted Shares.

 

11.4 Ownership. During the Restricted Period the
Grantee shall possess all incidents of ownership of such Restricted Shares, subject to Section 6.10 and Section 11.2, including the right
to vote and receive dividends with respect to such Shares. All securities, if any, received by a Grantee with respect to Restricted Shares
as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions
applicable to the original Award.

 

 

 

    	 	17	 

     

    

 

12. RESTRICTED SHARE UNITS.

 

An RSU is an Award covering a number of Shares
that is settled, if vested and (if applicable) exercised, by issuance of those Shares. An RSU may be awarded to any eligible Grantee,
including under Section 102 of the Ordinance, provided that, to the extent required by Applicable Laws, a specific ruling is obtained
from the ITA to grant RSUs as 102 Trustee Awards. The Award Agreement relating to the grant of RSUs under this Plan (the “Restricted
Share Unit Agreement”), shall be in such form as the Committee shall from time to time approve. The RSUs shall be subject to all
applicable terms of this Plan, which in the case of RSUs granted under Section 102 of the Ordinance shall include Section 9 hereof, and
may be subject to any other terms that are not inconsistent with this Plan. The provisions of the various Restricted Share Unit Agreements
entered into under this Plan need not be identical. RSUs may be granted in consideration of a reduction in the recipient’s other
compensation.

 

12.1 Exercise Price. No payment of Exercise Price
shall be required as consideration for RSUs, unless included in the Award Agreement or as required by Applicable Law (including, Section
304 of the Companies Law, 1999, as amended), and Section 6.4 shall apply, if applicable.

 

12.2 Shareholders’ Rights. The Grantee shall
not possess or own any ownership rights in the Shares underlying the RSUs and no rights as a shareholder shall exist prior to the actual
issuance of Shares in the name of the Grantee.

 

12.3 Settlements of Awards. Settlement of vested
RSUs shall be made in the form of Shares. Distribution to a Grantee of an amount (or amounts) from settlement of vested RSUs can be deferred
to a date after settlement as determined by the Committee. The amount of a deferred distribution may be increased by an interest factor
or by dividend equivalents. Until the grant of RSUs is settled, the number of Shares underlying such RSUs shall be subject to adjustment
pursuant hereto.

 

12.4 Section 409A Restrictions. Notwithstanding
anything to the contrary set forth herein, any RSUs granted under this Plan that are not exempt from the requirements of Section 409A
of the Code shall contain such restrictions or other provisions so that such RSUs will comply with the requirements of Section 409A of
the Code, if applicable to the Company. Such restrictions, if any, shall be determined by the Committee and contained in the Restricted
Share Unit Agreement evidencing such RSU. For example, such restrictions may include a requirement that any Shares that are to be issued
in a year following the year in which the RSU vests must be issued in accordance with a fixed, pre-determined schedule.

 

13. OTHER SHARE OR SHARE-BASED AWARDS.

 

13.1 The Committee may grant other Awards under
this Plan pursuant to which Shares (which may, but need not, be Restricted Shares pursuant to Section 11 hereof), cash (in settlement
of Share-based Awards) or a combination thereof, are or may in the future be acquired or received, or Awards denominated in stock units,
including units valued on the basis of measures other than market value.

 

13.2 The Committee may also grant stock appreciation
rights without the grant of an accompanying option, which rights shall permit the Grantees to receive, at the time of any exercise of
such rights, cash equal to the amount by which the Fair Market Value of all Shares in respect to which the right was granted exceed the
exercise price thereof.

 

13.3 Such other Share-based Awards as set forth
above may be granted alone, in addition to, or in tandem with any Award of any type granted under this Plan.

 

14. EFFECT OF CERTAIN CHANGES.

 

 

 

 

    	 	18	 

     

    

 

14.1 General. In the event of a divisions or subdivision
of the outstanding share capital of the Company, any distribution of bonus shares (stock split), consolidation or combination of share
capital of the Company (reverse stock split), reclassification with respect to the Shares or any similar recapitalization events (each,
a "Recapitalization"), reorganization (which may include a combination or exchange of shares, spin-off or other corporate divestiture
or division, or other similar occurrences) then (i) the number of Shares reserved and available for grants of Awards and (ii) the number
of Shares covered by outstanding Awards, , will be proportionately adjusted. Any fractional shares resulting from such adjustment shall
be treated as determined by the Committee, and in the absence of such determination shall be rounded to the nearest whole share, and the
Company shall have no obligation to make any cash or other payment with respect to such fractional shares. No adjustment shall be made
by reason of the distribution of subscription rights or rights offering to outstanding shares or distribution of dividends to outstanding
shareholders or other issuance of shares by the Company, unless the Committee determines otherwise. The adjustments determined pursuant
to this Section 14.1 (including a determination that no adjustment is to be made) shall be final, binding and conclusive.

 

14.2 Merger/Sale of Company. In the event of
(i) a sale of all or substantially all of the assets of the Company, or a sale (including an exchange) of all or substantially all of
the shares of the Company, to any person, or a purchase by a shareholder of the Company or by an Affiliate of such shareholder, of all
the shares of the Company held by all or substantially all other shareholders or by other shareholders who are not Affiliated with such
acquiring party; (ii) a merger (including, a reverse merger and a reverse triangular merger), consolidation, amalgamation or like transaction
of the Company with or into another corporation; (iii) a scheme of arrangement for the purpose of effecting such sale, merger, consolidation,
amalgamation or other transaction; or (iv) such other transaction or set of circumstances that is determined by the Board, in its discretion,
to be a transaction subject to the provisions of this Section 14.2; excluding any of the above transactions in clauses (i) through (iii)
if the Committee determines that such transaction should be excluded from the definition hereof and the applicability of this Section
14.2 (such transaction, a “Merger/Sale”), then, without derogating from the Committee’s general authority and power
under this Plan, without the Grantee’s consent and action and without any prior notice requirement:

 

14.2.1 Unless otherwise determined by the Committee
in its sole and absolute discretion, any Award then outstanding shall be assumed or be substituted by the Company, or by the successor
corporation in such Merger/Sale or by any parent or Affiliate thereof, as determined by the Committee in its discretion (the “Successor
Corporation”), under terms as determined by the Committee or the terms of this Plan applied by the Successor Corporation to such
assumed or substituted Awards;

 

For the purposes of this Section 14.2.1, the
Award shall be considered assumed or substituted if, following a Merger/Sale, the Award confers on the holder thereof the right to purchase
or receive, for each Share underlying an Award immediately prior to the Merger/Sale, either (i) the consideration (whether stock, cash,
or other securities or property, or any combination thereof) distributed to or received by holders of Shares in the Merger/Sale for each
Share held on the effective date of the Merger/Sale (and if holders were offered a choice or several types of consideration, the type
of consideration as determined by the Committee), or (ii) regardless of the consideration received by the holders of Shares in the Merger/Sale,
solely shares or any type of Awards (or their equivalent) of the Successor Corporation at a value to be determined by the Committee in
its discretion, or a certain type of consideration (whether stock, cash, or other securities or property, or any combination thereof)
as determined by the Committee. Any of the above consideration referred to clauses (i) and (ii) shall be subject to the same vesting
and expiration terms of the Awards applying immediately prior to the Merger/Sale, unless the Committee determines in its discretion that
the consideration shall be subject to different vesting and expiration terms, or other terms. The foregoing shall not limit the Committee's
authority to determine, in its sole discretion, that in lieu of such assumption or substitution of Awards for Awards of the Successor
Corporation, such Award will be substituted for any other type of asset or property, including as set forth in Section 14.2.2 hereunder.

 

14.2.2 Regardless of whether or not Awards are
assumed or substituted, the Committee may (but shall not be obligated to), in its sole discretion:

 

 

 

 

    	 	19	 

     

    

 

14.2.2.1 provide for the Grantee to have the right
to exercise the Award in respect of Shares covered by the Award which would otherwise be exercisable or vested, under such terms and conditions
as the Committee shall determine, and the cancellation of all unexercised and unvested Awards upon or immediately prior to the closing
of the Merger/Sale, unless the Committee provides for the Grantee to have the right to exercise the Award, or otherwise for the acceleration
of vesting of such Award, as to all or part of the Shares covered by the Award which would not otherwise be exercisable or vested, under
such terms and conditions as the Committee shall determine; and/or

 

14.2.2.2 provide for the cancellation of each
outstanding Award at or immediately prior to the closing of such Merger/Sale, and payment to the Grantee of an amount in cash, shares
of the Company, the acquiror or of a corporation or other business entity which is a party to the Merger/Sale or other property, as determined
by the Committee to be fair in the circumstances, and subject to such terms and conditions as determined by the Committee. The Committee
shall have full authority to select the method for determining the payment (being the Black-Scholes model or any other method). The Committee’s
determination may further provide that payment shall be set to zero if the value of the Shares is determined to be less than the Exercise
Price or in respect of Shares covered by the Award which would not otherwise be exercisable or vested, or that payment may be made only
in excess of the Exercise Price.

 

14.2.3 The Committee may determine that any payments
made in respect of Awards shall be made or delayed to the same extent that payment of consideration to the holders of the Shares in connection
with the Merger/Sale is made or delayed as a result of escrows, indemnification, earn outs, holdbacks or any other contingencies; and
the terms and conditions applying to the payment made to the Grantees, including participation in escrow, indemnification, releases, earn-outs,
holdbacks or any other contingencies.

 

14.2.4 Notwithstanding the foregoing, in the event
of a Merger/Sale, the Committee may determine, in its sole discretion that upon completion of such Merger/Sale the terms of any Award
be otherwise amended, modified or terminated, as the Committee shall deem in good faith to be appropriate and without any liability to
the Company or its Affiliates and to their respective its officers, directors, employees and representatives and the respective successors
and assigns of any of the foregoing in connection with the method of treatment or chosen course of action permitted hereunder.

 

14.2.5 Neither the authorities and powers of the
Committee under this Section 14.2, nor the exercise or implementation thereof, shall (i) be restricted or limited in any way by any adverse
consequences (tax or otherwise) that may result to any holder of an Award, and (ii) as, inter alia, being a feature of the Award upon
its grant, be deemed to constitute a change or an amendment of the rights of such holder under this Plan, nor shall any such adverse consequences
(as well as any adverse tax consequences that may result from any tax ruling or other approval or determination of any relevant tax authority)
be deemed to constitute a change or an amendment of the rights of such holder under this Plan, and may be effected without consent of
any Grantee and without any liability to the Company or its Affiliates and to their respective its officers, directors, employees and
representatives and the respective successors and assigns of any of the foregoing. The Committee need not take the same action with respect
to all Awards or with respect to all Service Providers. The Committee may take different actions with respect to the vested and unvested
portions of an Award. The Committee may determine an amount or type of consideration to be received or distributed in a Merger/Sale which
may differ as among the Grantees, and as between the Grantees and any other holders of shares of the Company.

 

14.2.6 The Committee’s determinations pursuant
to this Section 14 shall be conclusive and binding on all Grantees.

 

14.2.7 If determined by the Committee, the Grantees
shall be subject to the definitive agreement(s) in connection with the Merger/Sale as applying to holders of Shares including, such terms,
conditions, representations, undertakings, liabilities, limitations, releases, indemnities, participating in transaction expenses and
escrow arrangement, in each case as determined by the Committee. Each Grantee shall execute such separate agreement(s) or instruments
as may be requested by the Company, the Successor Corporation or the acquiror in connection with such in such Merger/Sale and in the form
required by them. The execution of such separate agreement(s) may be a condition to the receipt of assumed or substituted Awards, payment
in lieu of the Award or the exercise of any Award.

 

 

 

 

    	 	20	 

     

    

 

14.3 Reservation of Rights. Except as expressly
provided in this Section 14 (if any), the Grantee of an Award hereunder shall have no rights by reason of any Recapitalization of shares
of any class, any increase or decrease in the number of shares of any class, any dissolution, liquidation, reorganization (which may include
a combination or exchange of shares, spin-off or other corporate divestiture or division, or other similar occurrences), Merger/Sale.
Any issue by the Company of shares of any class, or securities convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number, type or price of shares subject to an Award. The grant of an Award
pursuant to this Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structures or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or part
of its business or assets or engage in any similar transactions.

 

15. NON-TRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.

 

15.1 All Awards granted under this Plan by their
terms shall not be transferable otherwise than by will or by the laws of descent and distribution, unless otherwise determined by the
Committee or under this Plan, provided that with respect to Shares issued upon exercise or (if applicable) the vesting of Awards the
restrictions on transfer shall be the restrictions referred to in Section 16 (Conditions upon Issuance of Shares) hereof. Subject to
the above provisions, the terms of such Award, this Plan and any applicable Award Agreement shall be binding upon the beneficiaries,
executors, administrators, heirs and successors of such Grantee. Awards may be exercised or otherwise realized, during the lifetime of
the Grantee, only by the Grantee or by his guardian or legal representative, to the extent provided for herein. Any transfer of an Award
not permitted hereunder (including transfers pursuant to any decree of divorce, dissolution or separate maintenance, any property settlement,
any separation agreement or any other agreement with a spouse) and any grant of any interest in any Award to, or creation in any way
of any direct or indirect interest in any Award by, any party other than the Grantee shall be null and void and shall not confer upon
any party or person, other than the Grantee, any rights. Notwithstanding the foregoing, upon the request of the Grantee and subject to
Applicable Law the Committee, at its sole discretion, may permit the Grantee to transfer the Award to a trust whose beneficiaries are
the Grantee and/or the Grantee’s immediate family members (all or several of them).

 

15.2 As long as the Shares are held by the Trustee
in favor of the Grantee, all rights possessed by the Grantee over the Shares are personal, and may not be transferred, assigned, pledged
or mortgaged, other than by will or laws of descent and distribution.

 

15.3 The provisions of this Section 15 shall apply
to the Grantee and to any purchaser, assignee or transferee of any Shares.

 

16. CONDITIONS UPON ISSUANCE OF SHARES; GOVERNING
PROVISIONS.

 

16.1 Legal Compliance. The grant of Awards and
the issuance or Shares upon exercise or settlement of Awards shall be subject to compliance with all Applicable Laws as determined by
the Company, including, applicable requirements of federal, state and foreign law with respect to such securities. The Company shall have
no obligations to issue Shares pursuant to the exercise or settlement of an Award and Awards may not be exercised or settled, if the issuance
of Shares upon exercise or settlement would constitute a violation of any Applicable Laws as determined by the Company, including, applicable
federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon
which the Shares may then be listed. In addition, no Award may be exercised unless (i) a registration statement under the Securities Act
shall at the time of exercise or settlement of the Award be in effect with respect to the shares issuable upon exercise of the Award,
or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Award may be issued in accordance with
the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, if any, deemed by the Company to be necessary to the lawful issuance and sale
of any Shares hereunder, and the inability to issue Shares hereunder due to non-compliance with any Company policies with respect to the
sale of Shares, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority or compliance shall not have been obtained or achieved. As a condition to the exercise of an Award, the Company may require
the person exercising such Award to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any Applicable
Law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company, including to represent
and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares, all in form and content specified by the Company.

 

 

 

 

    	 	21	 

     

    

 

16.2 Provisions Governing Shares. Shares issued
pursuant to an Award shall be subject to the Articles of Association of the Company, any limitation, restriction or obligation included
in any shareholders agreement applicable to all or substantially all of the holders of shares (regardless of whether or not the Grantee
is a formal party to such shareholders agreement), any other governing documents of the Company, all policies, manuals and internal regulations
adopted by the Company from time to time, in each case, as may be amended from time to time, including any provisions included therein
concerning restrictions or limitations on disposition of Shares (such as, but not limited to, right of first refusal and lock up/market
stand-off) or grant of any rights with respect thereto, forced sale and bring along provisions, any provisions concerning restrictions
on the use of inside information and other provisions deemed by the Company to be appropriate in order to ensure compliance with Applicable
Laws. Each Grantee shall execute such separate agreement(s) as may be requested by the Company relating to matters set forth in this Section
16.2. The execution of such separate agreement(s) may be a condition by the Company to the exercise of any Award.

 

16.3 Forced Sale. In the event the that Board
approves a Merger/Sale effected by way of a forced or compulsory sale (whether pursuant to the Companyג€TMs
Articles of Association or pursuant to Section 341 of the Companies Law), then, without derogating from such provisions and in addition
thereto, the Grantee shall be obligated, and shall be deemed to have agreed to the offer to effect the Merger/Sale on the terms approved
by the Board (and the Shares held by or for the benefit of the Grantee shall be included in the shares of the Company approving the terms
of such Merger/Sale for the purpose of satisfying the required majority), and shall sell all of the Shares held by or for the benefit
of the Grantee on the terms and conditions applying to the holders of Shares, in accordance with the instructions then issued by the Board,
whose determination shall be final. No Grantee shall contest, bring any claims or demands, or exercise any appraisal rights related to
any of the foregoing. The proxy pursuant to Section 6.10 includes an authorization of the holder of such proxy to sign, by and on behalf
of any Grantee, such documents and agreements as are required to affect the sale of Shares in connection with such Merger/Sale.

 

17. MARKET STAND-OFF

 

17.1 In connection with any underwritten public
offering of equity securities of the Company pursuant to an effective registration statement filed under the Securities Act or equivalent
law in another jurisdiction, the Grantee shall not directly or indirectly, without the prior written consent of the Company or its underwriters,
(i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares or other Awards, any
securities of the Company (whether or not such Shares were acquired under this Plan), or any securities convertible into or exercisable
or exchangeable (directly or indirectly) for Shares or securities of the Company and any other shares or securities issued or distributed
in respect thereto or in substitution thereof (collectively, ג€œSecuritiesג€�),
or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of the Securities, whether any such transaction described in clauses (i) or (ii) is to be settled by delivery of Securities, in cash or
otherwise. The foregoing provisions of this Section 17.1 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting
agreement. Such restrictions (the ג€œMarket Stand-Offג€�)
shall be in effect for such period of time (the ג€œMarket
Stand-Off Periodג€�): (A) following the first public filing
of the registration statement relating to the underwritten public offering until the extirpation of 180 days following the effective date
of such registration statement relating to the Companyג€TMs
initial public offering or 90 days following the effective date of such registration statement relating to any other public offering,
in each case, provided, however, that if (1) during the last 17 days of the initial Market Stand-Off Period, the Company releases earnings
results or announces material news or a material event or (2) prior to the expiration of the initial Market Stand-Off Period, the Company
announces that it will release earnings results during the 15-day period following the last day of the initial Market Stand-Off Period,
then in each case the Market Stand-Off Period will be automatically extended until the expiration of the 18-day period beginning on the
date of release of the earnings results or the announcement of the material news or material event; or (B) such other period as shall
be requested by the Company or the underwriters. Notwithstanding anything herein to the contrary, if the underwriter(s) and the Company
agree on a termination date of the Market Stand-Off Period in the event of failure to consummation a certain public offering, then such
termination shall apply also to the Market Stand-Off Period hereunder with respect to that particular public offering.

 

17.2 In the event of a subdivision of the outstanding
share capital of the Company, the distribution of any securities (whether or not of the Company), whether as bonus shares or otherwise,
and whether as dividend or otherwise, a recapitalization, a reorganization (which may include a combination or exchange of shares or a
similar transaction affecting the Companyג€TMs outstanding
securities without receipt of consideration), a consolidation, a spin-off or other corporate divestiture or division, a reclassification
or other similar occurrence, any new, substituted or additional securities which are by reason of such transaction distributed with respect
to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the
Market Stand-Off.

 

 

 

 

    	 	22	 

     

    

 

17.3 In order to enforce the Market Stand-Off,
the Company may impose stop-transfer instructions with respect to the Shares acquired under this Plan until the end of the applicable
Market Stand-Off period.

 

17.4 The underwriters in connection with a registration
statement so filed are intended third party beneficiaries of this Section 17 and shall have the right, power and authority to enforce
the provisions hereof as though they were a party hereto. Each Grantee shall execute such separate agreement(s) as may be requested by
the Company or the underwriters in connection with such registration statement and in the form required by them, relating to Market Stand-Off
(which need not be identical to the provisions of this Section 17, and may include such additional provisions and restrictions as the
underwriters deem advisable) or that are necessary to give further effect thereto. The execution of such separate agreement(s) may be
a condition by the Company to the exercise of any Award.

 

17.5 Without derogating from the above provisions
of this Section 17 or elsewhere in this Plan, the provisions of this Section 17 shall apply to the Grantee and the Grantee’s heirs,
legal representatives, successors, assigns, and to any purchaser, assignee or transferee of any Awards or Shares.

 

18. AGREEMENT REGARDING TAXES; DISCLAIMER.

 

18.1 If the Committee shall so require, as a condition
of exercise of an Award, the release of Shares by the Trustee or the expiration of the Restricted Period, a Grantee shall agree that,
no later than the date of such occurrence, the Grantee will pay to the Company (or the Trustee, as applicable) or make arrangements satisfactory
to the Committee and the Trustee (if applicable) regarding payment of any applicable taxes and compulsory payments of any kind required
by Applicable Law to be withheld or paid.

 

18.2 TAX LIABILITY. ALL TAX CONSEQUENCES UNDER
ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY AWARDS OR THE EXERCISE THEREOF, THE SALE OR DISPOSITION OF ANY SHARES GRANTED
HEREUNDER OR ISSUED UPON EXERCISE OR (IF APPLICABLE) THE VESTING OF ANY AWARD, THE ASSUMPTION, SUBSTITUTION, CANCELLATION OR PAYMENT IN
LIEU OF AWARDS OR FROM ANY OTHER ACTION IN CONNECTION WITH THE FOREGOING (INCLUDING WITHOUT LIMITATION ANY TAXES AND COMPULSORY PAYMENTS,
SUCH AS SOCIAL SECURITY OR HEALTH TAX PAYABLE BY THE GRANTEE OR THE COMPANY IN CONNECTION THEREWITH) SHALL BE BORNE AND PAID SOLELY BY
THE GRANTEE, AND THE GRANTEE SHALL INDEMNIFY THE COMPANY, ITS SUBSIDIARIES AND AFFILIATES AND THE TRUSTEE, AND SHALL HOLD THEM HARMLESS
AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PAYMENT OR ANY PENALTY, INTEREST OR INDEXATION THEREON. EACH GRANTEE AGREES TO, AND
UNDERTAKES TO COMPLY WITH, ANY RULING, SETTLEMENT, CLOSING AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT WITH ANY TAX AUTHORITY
IN CONNECTION WITH THE FOREGOING WHICH IS APPROVED BY THE COMPANY.

 

18.3 NO TAX ADVISE. THE GRANTEE IS ADVISED TO
CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING, EXERCISING OR DISPOSING OF AWARDS HEREUNDER. THE COMPANY
DOES NOT ASSUME ANY RESPONSIBILITY TO ADVISE THE GRANTEE ON SUCH MATTERS, WHICH SHALL REMAIN SOLELY THE RESPONSIBILITY OF THE GRANTEE.

 

18.4 TAX TREATMENT. THE COMPANY DOES NOT UNDERTAKE
OR ASSUME ANY LIABILITY OR RESPONSIBILITY TO THE EFFECT THAT ANY AWARD SHALL QUALIFY WITH ANY PARTICULAR TAX REGIME OR RULES APPLYING
TO PARTICULAR TAX TREATMENT, OR BENEFIT FROM ANY PARTICULAR TAX TREATMENT OR TAX ADVANTAGE OF ANY TYPE AND THE COMPANY SHALL BEAR NO LIABILITY
IN CONNECTION WITH THE MANNER IN WHICH ANY AWARD IS EVENTUALLY TREATED FOR TAX PURPOSES, REGARDLESS OF WHETHER THE AWARD WAS GRANTED OR
WAS INTENDED TO QUALIFY UNDER ANY PARTICULAR TAX REGIME OR TREATMENT. THIS PROVISION SHALL SUPERSEDE ANY TYPE OF AWARDS OR TAX QUALIFICATION
INDICATED IN ANY CORPORATE RESOLUTION OR AWARD AGREEMENT, WHICH SHALL AT ALL TIMES BE SUBJECT TO THE REQUIREMENTS OF APPLICABLE LAW. THE
COMPANY DOES NOT UNDERTAKE AND SHALL NOT BE REQUIRED TO TAKE ANY ACTION IN ORDER TO QUALIFY THE AWARD WITH THE REQUIREMENT OF ANY PARTICULAR
TAX TREATMENT AND NO INDICATION IN ANY DOCUMENT TO THE EFFECT THE ANY AWARD IS INTENDED TO QUALIFY FOR ANY TAX TREATMENT SHALL IMPLY SUCH
AN UNDERTAKING. NO ASSURANCE IS MADE BY THE COMPANY OR ANY OF ITS AFFILIATES THAT ANY PARTICULAR TAX TREATMENT ON THE DATE OF GRANT WILL
CONTINUE TO EXIST OR THAT THE AWARD WOULD QUALIFY AT THE TIME OF EXERCISE OR DISPOSITION THEREOF WITH ANY PARTICULAR TAX TREATMENT. THE
COMPANY AND ITS AFFILIATES SHALL NOT HAVE ANY LIABILITY OR OBLIGATION OF ANY NATURE IN THE EVENT THAT AN AWARD DOES NOT QUALIFY FOR ANY
PARTICULAR TAX TREATMENT, REGARDLESS WHETHER THE COMPANY COULD HAVE OR SHOULD HAVE TAKEN ANY ACTION TO CAUSE SUCH QUALIFICATION TO BE
MET AND SUCH QUALIFICATION REMAINS AT ALL TIMES AND UNDER ALL CIRCUMSTANCES AT THE RISK OF THE GRANTEE. THE COMPANY DOES NOT UNDERTAKE
OR ASSUME ANY LIABILITY TO CONTEST A DETERMINATION OR INTERPRETATION

 

 

 

    	 	23	 

     

    

 

(WHETHER WRITTEN OR UNWRITTEN) OF ANY TAX AUTHORITIES,
INCLUDING IN RESPECT OF THE QUALIFICATION UNDER ANY PARTICULAR TAX REGIME OR RULES APPLYING TO PARTICULAR TAX TREATMENT. IF THE AWARDS
DO NOT QUALIFY UNDER ANY PARTICULAR TAX TREATMENT IT COULD RESULT IN ADVERSE TAX CONSEQUENCES TO THE GRANTEE.

 

18.5 The Company or any Subsidiary or Affiliate
may take such action as it may deem necessary or appropriate, in its discretion, for the purpose of or in connection with withholding
of any taxes and compulsory payments which the Trustee, the Company or any Subsidiary or Affiliate is required by any Applicable Law to
withhold in connection with any Awards (collectively, “Withholding Obligations”). Such actions may include (i) requiring a
Grantees to remit to the Company in cash an amount sufficient to satisfy such Withholding Obligations and any other taxes and compulsory
payments, payable by the Company in connection with the Award or the exercise or (if applicable) the vesting thereof; (ii) subject to
Applicable Law, allowing the Grantees to provide Shares to the Company, in an amount that at such time, reflects a value that the Committee
determines to be sufficient to satisfy such Withholding Obligations; (iii) withholding Shares otherwise issuable upon the exercise of
an Award at a value which is determined by the Committee to be sufficient to satisfy such Withholding Obligations; or (iv) any combination
of the foregoing. The Company shall not be obligated to allow the exercise of any Award by or on behalf of a Grantee until all tax consequences
arising from the exercise of such Award are resolved in a manner acceptable to the Company.

 

18.6 Each Grantee shall notify the Company in
writing promptly and in any event within ten (10) days after the date on which such Grantee first obtains knowledge of any tax bureau
inquiry, audit, assertion, determination, investigation, or question relating in any manner to the Awards granted or received hereunder
or Shares issued thereunder and shall continuously inform the Company of any developments, proceedings, discussions and negotiations relating
to such matter, and shall allow the Company and its representatives to participate in any proceedings and discussions concerning such
matters. Upon request, a Grantee shall provide to the Company any information or document relating to any matter described in the preceding
sentence, which the Company, in its discretion, requires.

 

18.7 With respect to 102 Non-Trustee Options,
if the Grantee ceases to be employed by the Company or any Affiliate, the Grantee shall extend to the Company and/or its Affiliate with
whom the Grantee is employed a security or guarantee for the payment of taxes due at the time of sale of Shares, all in accordance with
the provisions of Section 102 of the Ordinance and the Rules.

 

18.8 For the purpose hereof “tax(es)”
means (a) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including all income, capital
gains, transfer, withholding, payroll, employment, social security, national security, health tax, wealth surtax, stamp, registration
and estimated taxes, customs duties, fees, assessments and charges of any similar kind whatsoever (including under Section 280G of the
Code), (b) all interest, indexation differentials, penalties, fines, additions to tax or additional amounts imposed by any taxing authority
in connection with any item described in clause (a), (c) any transferee or successor liability in respect of any items described in clauses
(a) or (b) payable by reason of contract, assumption, transferee liability, successor liability, operation of Applicable Law, or as a
result of any express or implied obligation to assume Taxes or to indemnify any other person, and (d) any liability for the payment of
any amounts of the type described in clause (a) or (b) payable as a result of being a member of an affiliated, consolidated, combined,
unitary or aggregate group for any taxable period, including under U.S. Treasury Regulations Section 1.1502-6(a) (or any predecessor or
successor thereof of any analogous or similar provision under Law) or otherwise.

 

19. RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.

 

19.1 Subject to Section 11.4, a Grantee shall
have no rights as a shareholder of the Company with respect to any Shares covered by an Award until the Grantee shall have exercised the
Award, paid the Exercise Price therefor and becomes the record holder of the subject Shares. In the case of 102 Awards or 3(9) Awards
(if such Awards are being held by a Trustee), the Trustee shall have no rights as a shareholder of the Company with respect to the Shares
covered by such Award until the Trustee becomes the record holder for such Shares for the Grantee’s benefit, and the Grantee shall
not be deemed to be a shareholder and shall have no rights as a shareholder of the Company with respect to the Shares covered by the Award
until the date of the release of such Shares from the Trustee to the Grantee and the transfer of record ownership of such Shares to the
Grantee (provided however that the Grantee shall be entitled to receive from the Trustee any cash dividend or distribution made on account
of the Shares held by the Trustee for such Grantee’s benefit, subject to any tax withholding and compulsory payment). No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights
for which the record date is prior to the date on which the Grantee or Trustee (as applicable) becomes the record holder of the Shares
covered by an Award, except as provided in Section 14 hereof.

 

 

 

    	 	24	 

     

    

 

19.2 With respect to all Awards issued in the
form of Shares hereunder or upon the exercise or (if applicable) the vesting of Awards hereunder, any and all voting rights attached to
such Shares shall be subject to Section 6.9, and the Grantee shall be entitled to receive dividends distributed with respect to such Shares,
subject to the provisions of the Company’s Articles of Association, as amended from time to time, and subject to any Applicable
Law.

 

19.3 The Company may, but shall not be obligated
to, register or qualify the sale of Shares under any applicable securities law or any other Applicable Law.

 

20. NO REPRESENTATION BY COMPANY.

 

By granting the Awards, the Company is not, and
shall not be deemed as, making any representation or warranties to the Grantee regarding the Company, its business affairs, its prospects
or the future value of its Shares. The Company shall not be required to provide to any Grantee any information, documents or material
in connection with the Grantee’s considering an exercise of an Award. To the extent that any information, documents or materials
are provided, the Company shall have no liability with respect thereto. Any decision by a Grantee to exercise an Award shall solely be
at the risk of the Grantee.

 

21. NO RETENTION RIGHTS.

 

Nothing in this Plan, any Award Agreement or in
any Award granted or agreement entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ of, or be
in the service of the Company or any Subsidiary or Affiliate thereof as a Service Provider or to be entitled to any remuneration or benefits
not set forth in this Plan or such agreement, or to interfere with or limit in any way the right of the Company or any such Subsidiary
or Affiliate to terminate such Grantee's employment or service (including, any right of the Company or any of its Affiliates to immediately
cease the Grantee’s employment or service or to shorten all or part of the notice period, regardless of whether notice of termination
was given by the Company or its Affiliates or by the Grantee). Awards granted under this Plan shall not be affected by any change in duties
or position of a Grantee, subject to Sections 6.6 through 6.8. No Grantee shall be entitled to claim and the Grantee hereby waives any
claim against the Company or any Subsidiary or Affiliate that he or she was prevented from continuing to vest Awards as of the date of
termination of his or her employment with, or services to, the Company or any Subsidiary or Affiliate. No Grantee shall be entitled to
any compensation in respect of the Awards which would have vested had such Grantee’s employment or engagement with the Company (or
any Subsidiary or Affiliate) not been terminated.

 

22. PERIOD DURING WHICH AWARDS MAY BE GRANTED.

 

Awards may be granted pursuant to this Plan from
time to time within a period of ten (10) years from the Effective Date, which period may be extended from time to time by the Board. From
and after such date (as extended) no grants of Awards may be made and this Plan shall continue to be in full force and effect with respect
to Awards or Shares issued thereunder that remain outstanding.

 

23. AMENDMENT OF THIS PLAN.

 

23.1 The Board at any time and from time to time
may suspend, terminate, modify or amend this Plan, whether retroactively or prospectively. Any amendment effected in accordance with this
Section shall be binding upon all Grantees and all Awards, whether granted prior to or after the date of such amendment, and without the
need to obtain the consent of any Grantee. No termination or amendment of this Plan shall affect any then outstanding Award unless expressly
provided by the Board.

 

23.2 Subject to changes in Applicable Law that
would permit otherwise, without the approval of the Company’s shareholders, there shall be (i) no increase in the maximum aggregate
number of Shares that may be issued under this Plan as Incentive Stock Options (except by operation of the provisions of Section 14.1),
(ii) no change in the class of persons eligible to receive Incentive Stock Options, and (iii) no other amendment of this Plan that would
require approval of the Company’s shareholders under any Applicable Law. Unless not permitted by Applicable Law, if the grant of
an Award is subject to approval by shareholders, the date of grant of the Award shall be determined as if the Award had not been subject
to such approval. Failure to obtain approval by the shareholders shall not in any way derogate from the valid and binding effect of any
grant of an Award, which is not an Incentive Stock Option. Upon approval of an amendment to this Plan by the shareholders of the Company
as set forth above, all Incentive Stock Options granted under this Plan on or after such amendment shall be fully effective as if the
shareholders of the Company had approved the amendment on the same date.

 

 

 

    	 	25	 

     

    

 

24. APPROVAL.

 

24.1 This Plan shall take effect upon its adoption
by the Board (the “Effective Date”).

 

24.2 Solely with respect to grants of Incentive
Stock Options, this Plan shall also be subject to shareholders’ approval, within one year of the Effective Date, by the required
majority (however, if the grant of an Award is subject to approval by shareholders, the date of grant of the Award shall be determined
as if the Award had not been subject to such approval). Failure to obtain approval by the shareholders shall not in any way derogate from
the valid and binding effect of any grant of an Award, which is not an Incentive Stock Option. Upon approval of this Plan by the shareholders
of the Company as set forth above, all Incentive Stock Options granted under this Plan on or after the Effective Date shall be fully effective
as if the shareholders of the Company had approved this Plan on the Effective Date.

 

24.3 102 Awards are conditional upon the filing
with or approval by the ITA, if required, as set forth in Section 9.49. Failure to so file or obtain such approval shall not in any way
derogate from the valid and binding effect of any grant of an Award, which is not an 102 Award.

 

25. RULES PARTICULAR TO SPECIFIC COUNTRIES; SECTION
409A.

 

25.1 Notwithstanding anything herein to the contrary,
the terms and conditions of this Plan may be supplemented or amended with respect to a particular country or tax regime by means of an
appendix to this Plan, and to the extent that the terms and conditions set forth in any appendix conflict with any provisions of this
Plan, the provisions of such appendix shall govern. Terms and conditions set forth in such appendix shall apply only to Awards granted
to Grantees under the jurisdiction of the specific country or such other tax regime that is the subject of such appendix and shall not
apply to Awards issued to a Grantee not under the jurisdiction of such country or such other tax regime. The adoption of any such appendix
shall be subject to the approval of the Board or the Committee, and if determined by the Committee to be required in connection with the
application of certain tax treatment, pursuant to applicable stock exchange rules or regulations or otherwise, then also the approval
of the shareholders of the Company at the required majority.

 

25.2 The Company intends that this Plan comply
with Section 409A of the Code, including any amendments or replacements of such section, and this Plan shall be so construed. To the extent
applicable, this Plan and any agreement hereunder shall be interpreted in accordance with Section 409A of the Code. Notwithstanding any
provision of this Plan to the contrary, in the event that, following the Effective Date, the Board determines that any Award may be subject
to Section 409A of the Code, the Board may adopt such amendments to this Plan and such agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary
or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided
with respect to the Award or (b) comply with the requirements of Section 409A of the Code.

 

26. GOVERNING LAW; JURISDICTION.

 

This Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of Delaware, except with respect to matters that are subject to tax laws,
regulations and rules of any specific jurisdiction, which shall be governed by the respective laws, regulations and rules of such jurisdiction.
Certain definitions, which refer to laws other than the laws of such jurisdiction, shall be construed in accordance with such other laws.
The competent courts located in Delaware shall have exclusive jurisdiction over any dispute arising out of or in connection with this
Plan and any Award granted hereunder. By signing any Award Agreement or any other agreement relating to an Award, each Grantee irrevocably
submits to such exclusive jurisdiction.

 

27. NON-EXCLUSIVITY OF THIS PLAN.

 

The adoption of this Plan shall not be construed
as creating any limitations on the power or authority of the Company to adopt such other or additional incentive or other compensation
arrangements of whatever nature as the Company may deem necessary or desirable or preclude or limit the continuation of any other plan,
practice or arrangement for the payment of compensation or fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Affiliate now has lawfully put into effect, including any retirement, pension, savings and stock purchase plan,
insurance, death and disability benefits and executive short-term or long-term incentive plans.

 

 

 

    	 	26	 

     

    

 

28. MISCELLANEOUS.

 

28.1 Survival. The Grantee shall be bound by and
the Shares issued upon exercise or (if applicable) the vesting of any Awards granted hereunder shall remain subject to this Plan after
the exercise or (if applicable) the vesting of Awards, in accordance with the terms of this Plan, whether or not the Grantee is then or
at any time thereafter employed or engaged by the Company or any of its Affiliates.

 

28.2 Additional Terms. Each Award awarded under
this Plan may contain such other terms and conditions not inconsistent with this Plan as may be determined by the Committee, in its sole
discretion.

 

28.3 Fractional Shares. No fractional Share shall
be issuable upon exercise or vesting of any Award and the number of Shares to be issued shall be rounded down to the nearest whole Share,
with in any Share remaining at the last vesting date due to such rounding to be issued upon exercise at such last vesting date.

 

28.4 Severability. If any provision of this Plan,
any Award Agreement or any other agreement entered into in connection with an Award shall be determined to be illegal or unenforceable
by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other jurisdiction. In addition, if any particular provision contained
in this Plan, any Award Agreement or any other agreement entered into in connection with an Award shall for any reason be held to be excessively
broad as to duration, geographic scope, activity or subject, it shall be construed by limiting and reducing such provision as to such
characteristic so that the provision is enforceable to fullest extent compatible with Applicable Law as it shall then appear.

 

28.5 Captions and Titles. The use of captions
and titles in this Plan or any Award Agreement or any other agreement entered into in connection with an Award is for the convenience
of reference only and shall not affect the meaning or interpretation of any provision of this Plan or such agreement.

 

* * *

 

 

 

 

    	 	27Document

Exhibit 10.1

REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 15, 2022, by and among Earthstone Energy, Inc., a Delaware corporation (“Parent”), Chisholm Energy Operating, LLC, a Delaware limited liability company (“Chisholm”), and the Persons identified on Schedule I hereto who become party to this Agreement from time to time upon the execution of a Joinder (as defined herein) in accordance with Section 2.10 of this Agreement (collectively, the “Chisholm Stockholders”).  
RECITALS
WHEREAS, Parent, Earthstone Energy Holdings, LLC, a Delaware limited liability company (“EEH”), Chisholm and Chisholm Energy Agent, Inc., a Delaware corporation (“Chisholm Energy”), entered into a Purchase and Sale Agreement, dated as of December 15, 2021 (the “Purchase Agreement”), under which, among other things, EEH will acquire certain assets from Chisholm and Chisholm Energy;
WHEREAS, in connection with the transactions contemplated by the Purchase Agreement, Parent will issue shares of Class A Common Stock of Parent, $0.001 par value per share (“Class A Common Stock”), to Chisholm or to the Chisholm Stockholders, at the direction of Chisholm; and
WHEREAS, in connection with the transactions contemplated by the Purchase Agreement, Parent has agreed to grant to the Holders (as defined herein) certain rights with respect to the registration of the Registrable Securities (as defined herein) on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01    Definitions.  Capitalized terms used herein without definition shall have the meanings given to them in the Purchase Agreement, except that the terms set forth below are used herein as so defined:
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such Person. As used in this definition, the term “control” and its derivatives means, with respect to any Person, the possession, directly or indirectly, of more than 50% of the equity interests or the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.
“Agreement” is defined in the preamble.
“Board” means the board of directors of Parent. 
“Bold” is defined in Section 2.02(e). 
“Bold Unitholders” is defined in Section 2.02(e). 
“Business Day” means a day (other than a Saturday or Sunday) on which commercial banks in Texas are generally open for business. 
“Chisholm” is defined in the preamble. 
“Chisholm Energy” is defined in the recitals. 
“Class A Common Stock” is defined in the recitals.
“Class A Common Stock Price” means, as of any date of determination, the volume weighted average closing price of Class A Common Stock (as reported by the New York Stock Exchange) for the ten trading days immediately preceding such date of determination.
“Class B Common Stock” means the Class B Common Stock of Parent, $0.001 par value per share.
“EDGAR” is defined in Section 2.04(i). 
“EEH” is defined in the recitals. 

“EEH A&R LLC Agreement” means that certain First Amended and Restated Limited Liability Company Agreement of EEH (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time).
“EEH Units” means units representing limited liability company interests in EEH.
“Effectiveness Period” means the period beginning from and after the date the Shelf Registration Statement is declared or becomes effective until the earlier of (i) all Registrable Securities covered by the Shelf Registration Statement have been distributed in the manner set forth and as contemplated in the Shelf Registration Statement or there are no longer any Registrable Securities outstanding and (ii) the Termination Date.
“Equity Securities” means (i) with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock of such corporation (whether voting or nonvoting and whether common or preferred), (ii) with respect to any Person that is not a corporation, individual or governmental entity, any and all partnership, membership, limited liability company or other equity interests of such Person that confer on the holder thereof the right to receive a share of the profits and losses of, or the distribution of assets of the issuing Person, and (iii) any and all warrants, rights (including conversion and exchange rights) and options to purchase any security described in the clause (i) or (ii) above.  Unless otherwise indicated, the term “Equity Securities” refers to Equity Securities of Parent.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.
“Financial Counterparty” is defined in Section 2.04(r).
“Foreland” means Foreland Investments LP, a Delaware limited partnership.  
“Foreland Stockholders” is defined in Section 2.02(e). 
“Holder” means a holder of any Registrable Securities.
“Included Registrable Securities” is defined in Section 2.02(a).
“Independence” means Independence Resources Holdings, LLC, a Delaware limited liability company.
“Independence Stockholders” is defined in Section 2.02(e). 
“Investor Holder” means Chisholm and Chisholm Energy Holdings, LLC, a Delaware limited liability company.
“Joinder” is defined in Section 2.10.
“Launch Date” is defined in Section 2.02(b).
“Losses” is defined in Section 2.08(a).
“Managing Underwriter(s)” means, with respect to any Underwritten Offering or Overnight Underwritten Offering, the book running lead manager or managers of such Underwritten Offering or Overnight Underwritten Offering.
“Maximum Number of Securities” is defined in Section 2.02(c).
“Member Distribution” is defined in Section 2.01(c).
“Offering Holders” is defined in Section 2.03(a).
“Opt-Out Notice” is defined in Section 2.02(a).
“Overnight Underwritten Offering” is defined in Section 2.02(b).
“Parent” is defined in the preamble.
“Parent Cooperation Event” is defined in Section 2.04(r).
“Parity Holders” is defined in Section 2.02(c).
“Person” means an individual or any corporation, partnership, limited liability company, trust, unincorporated organization, association, joint venture or any other organization or entity, whether or not a legal entity.
“Piggyback Notice” is defined in Section 2.02(a).

“Piggyback Offering” is defined in Section 2.02(a).
“Purchase Agreement” is defined in the recitals.
“Registrable Securities” means (i) any Class A Common Stock received by Chisholm or the Chisholm Stockholders in connection with the transactions contemplated by the Purchase Agreement; (ii) any common Equity Securities of Parent issued or issuable with respect to the securities referred to in clause (i) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization; and (iii) any other shares of Class A Common Stock owned as of the date hereof by Persons that are the registered holders of securities described in clauses (i) and (ii) above.  
“Registration Expenses” is defined in Section 2.07(a).
“Registration Statement” means any registration statement of Parent filed or to be filed with the SEC under the Securities Act, including the related prospectus, amendments and supplements to such registration statement, and including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.
“Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.
“SEG I” means SEG-TRD LLC, a Delaware limited liability company. 
“SEG II” means SEG-TRD II LLC, a Delaware limited liability company. 
“Selling Expenses” is defined in Section 2.07(a).
“Selling Holder” means a Holder who is selling Registrable Securities pursuant to a registration statement.
“Selling Holder Indemnified Persons” is defined in Section 2.08(a).
“Selling Holder Underwriter Registration Statement” is defined in Section 2.04(p).
“Sequel” means collectively, SEG I and SEG II.  
“Sequel Stockholders” is defined in Section 2.02(e). 
“Shelf Registration Statement” is defined in Section 2.01(a).
“Staff” means the staff of the SEC. 
“Tracker” means Tracker Resource Development III, LLC, a Delaware limited liability company. 
“Tracker Stockholders” is defined in Section 2.02(e).
“Underwritten Offering” means an offering (including an offering pursuant to a Shelf Registration Statement) in which shares of Class A Common Stock are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.
“Underwritten Offering Filing” is defined in Section 2.02(a).
“WKSI” means “well known seasoned issuer” as defined under Rule 405 under the Securities Act (or any successor or similar provision adopted by the SEC then in effect).
Section 1.02    Registrable Securities.  Any Registrable Security will cease to be a Registrable Security when (a) a Registration Statement covering such Registrable Security is effective and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any successor rule or regulation to Rule 144 then in force) under the Securities Act; or (c) such Registrable Security is held by Parent or one of its subsidiaries; provided that any security that has ceased to be a Registrable Security shall not thereafter become a Registrable Security and any security that is issued or distributed in respect of securities that have ceased to be Registrable Securities shall not be a Registrable Security.

Section 1.03    Effectiveness. This Agreement is effective as of the date of hereof and shall continue in full force and effect until there are no longer any Registrable Securities outstanding.
ARTICLE II.
REGISTRATION RIGHTS
Section 2.01    Shelf Registration.
(a)    Shelf Registration.  Parent shall (i) prepare and file by no later than the date that is 45 days after the date hereof a registration statement under the Securities Act to permit the public resale of the Registrable Securities from time to time, including as permitted by Rule 415 under the Securities Act (or any similar provision then in force) with respect to all of the Registrable Securities (the “Shelf Registration Statement”) and (ii) use its reasonable best efforts to cause the Shelf Registration Statement to become effective as soon as reasonably practicable thereafter but in no event later than 80 days (or 120 days, if the Shelf Registration Statement is on Form S-1) after the date hereof; provided, however, in the event of a review by the Staff, within five Business Days of being informed by the Staff that the Staff have no further comments on the Shelf Registration Statement. 
(b)    The Shelf Registration Statement shall be on Form S-3 (or any equivalent or successor form) under the Securities Act and, if Parent is a WKSI as of the filing date thereof, shall be an Automatic Shelf Registration Statement or, if Form S-3 is not then available to Parent, on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of the Registrable Securities; provided, however, that if Parent has filed the Shelf Registration Statement on Form S-1 and subsequently becomes eligible to use Form S-3 or any equivalent or successor form or forms, Parent shall (i) file a post-effective amendment to the Shelf Registration Statement converting such Registration Statement on Form S-1 to a Registration Statement on Form S-3 or any equivalent or successor form or forms or (ii) withdraw the Shelf Registration Statement on Form S-1 and file a subsequent Shelf Registration Statement on Form S-3 or any equivalent or successor form or forms.  The Shelf Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders of any and all Registrable Securities covered by such Shelf Registration Statement. Subject to Section 2.01(c), Parent shall use its reasonable best efforts to cause the Shelf Registration Statement to remain effective under the Securities Act during the Effectiveness Period and to be supplemented and amended to the extent necessary to ensure that the Shelf Registration Statement is available for the resale of all the Registrable Securities by the Holders. The Shelf Registration Statement when declared effective (including the documents incorporated therein by reference) shall comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  As soon as practicable following the date of effectiveness of such Shelf Registration Statement, but in any event within three Business Days of such date, Parent will notify the Holders of the effectiveness of such Shelf Registration Statement. Notwithstanding anything contained herein to the contrary, Parent hereby agrees that (i) the Shelf Registration Statement filed pursuant to this Section 2.01(b) shall contain all language (including on the prospectus cover sheet, the principal stockholders’ table and the plan of distribution) as may be reasonably requested by any Investor Holder to allow for a distribution to, and resale by, the members, stockholders or partners (as the case may be) of such Investor Holder (each, a “Member Distribution”), and (ii) Parent shall, at the reasonable request of any Investor Holder seeking to effect a Member Distribution, file any prospectus supplement or post-effective amendments and otherwise take any action reasonably necessary to include such language, if such language was not included in the initial Shelf Registration Statement, or revise such language if deemed reasonably necessary by such Investor Holder to effect any such Member Distribution.
(c)    Delay Rights.  Notwithstanding anything to the contrary contained herein, Parent may, upon written notice to (x) all Holders, delay the filing of the Shelf Registration Statement or (y) any Selling Holder whose Registrable Securities are included in the Shelf Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part of the Shelf Registration Statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to the Shelf Registration Statement but such Selling Holder may settle any contracted sales of Registrable Securities) if Parent (i) is pursuing an acquisition, merger, tender offer, reorganization, disposition or other similar transaction and the Board determines in good faith that its ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in the Shelf Registration Statement or (ii) has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of the Board would materially adversely affect Parent; provided, however, in no event shall (A) such filing of the Shelf Registration Statement be delayed under clauses (i) or (ii) of this Section 2.01(c) for a period that exceeds 90 days or (B) such Selling Holders be suspended under clauses (i) or (ii) of this Section 2.01(c) from selling Registrable Securities pursuant to the Shelf Registration Statement for a period that exceeds an aggregate of 30 days in any 90-day period or 60 days in any 365-day period.  Upon disclosure of such information or the termination of the condition described above, Parent shall provide prompt notice to the Selling Holders whose Registrable Securities are included in the Shelf Registration Statement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement.  Parent will only exercise its suspension rights under this Section 2.01(c) if it exercises similar suspension rights with respect to any Parity Holders.  If Parent exercises its suspension rights under this Section 2.01(c), then during such suspension period Parent shall not engage in any transaction involving the offer, issuance, sale or purchase of Equity Securities (whether for the benefit of Parent or a third Person), except transactions involving (I) the issuance or purchase of Equity Securities as contemplated by the Parent’s employee benefit plans or employee or director arrangements, (II) the issuance of Equity Securities to a seller as consideration for, or to a third party in order to finance or partially finance, the transaction specified under clause (i) of this Section 2.01(c) that was the basis for which the suspension rights under this Section 2.01(c) were exercised or (III) the issuance of Equity Securities to a member of EEH in connection with the redemption of Class B Common Stock and EEH Units pursuant to the EEH A&R LLC Agreement.

Section 2.02    Piggyback Rights.
(a)    Participation.  Except as provided in Section 2.02(b), if at any time during the Effectiveness Period, Parent proposes to file (i) a shelf registration statement other than the Shelf Registration Statement (in which event Parent covenants and agrees to include thereon a description of the transaction under which the Holders acquired the Registrable Securities), (ii) a prospectus supplement to an effective shelf registration statement, other than the Shelf Registration Statement contemplated by Section 2.01(a) of this Agreement, or (iii) a registration statement, other than a shelf registration statement, in the case of each of clause (i), (ii) or (iii), for the sale of Class A Common Stock in an Underwritten Offering or Overnight Underwritten Offering for its own account and/or the account of another Person, then as soon as practicable but not less than ten Business Days (or one Business Day in the case of an Overnight Underwritten Offering) prior to the filing of (A) any preliminary prospectus supplement relating to such Underwritten Offering pursuant to Rule 424(b) under the Securities Act, (B) the prospectus supplement relating to such Underwritten Offering pursuant to Rule 424(b) under the Securities Act (if no preliminary prospectus supplement is used) or (C) such registration statement (other than a Shelf Registration Statement), as the case may be (an “Underwritten Offering Filing”), Parent shall give notice (including, but not limited to, notification by email) of such proposed Underwritten Offering (a “Piggyback Offering”) to the Holders and such notice shall offer the Holders the opportunity to include in such Underwritten Offering such number of shares of Class A Common Stock (the “Included Registrable Securities”) as each such Holder may request in writing; provided, however, that if Parent has been advised by the Managing Underwriter(s) in writing that the inclusion of Registrable Securities for sale for the benefit of the Selling Holders will have a material adverse effect on the price, timing or distribution of the Class A Common Stock in the Underwritten Offering, then the amount of Registrable Securities to be offered for the accounts of Selling Holders shall be determined based on the provisions of Section 2.02(c) of this Agreement.  The notice required to be provided in this Section 2.02(a) to each Holder (the “Piggyback Notice”) shall be provided on a Business Day pursuant to Section 3.01 hereof.  Each Holder shall then have five Business Days (or one Business Day in the case of an Overnight Underwritten Offering) after the date on which the Holders received the Piggyback Notice to request inclusion of Registrable Securities in the Underwritten Offering.  If no request for inclusion from a Holder is received within such period, such Holder shall have no further right to participate in such Underwritten Offering.  If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Board shall determine for any reason not to undertake or to delay such Underwritten Offering, Parent may, at its election, give written notice of such determination to the Selling Holders and (x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering.  Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in any Underwritten Offering, Overnight Underwritten Offering or Piggyback Offering by giving written notice to Parent of such withdrawal up to and including the time of pricing of such offering.  Notwithstanding the foregoing, any Holder may deliver written notice (an “Opt-Out Notice”) to Parent requesting that such Holder not receive notice from Parent of any proposed Underwritten Offering; provided, however, that such Holder may later revoke any such Opt-Out Notice in writing. Following receipt of an Opt-Out Notice from a Holder, Parent shall not deliver any notice to such Holder pursuant to this Section 2.02(a), unless such Opt-Out Notice is revoked by such Holder. Notwithstanding anything contained herein to the contrary, Parent hereby agrees that (i) any shelf registration statement which includes Registrable Securities pursuant to this Section 2.02(a) shall contain all language (including on the prospectus cover sheet, the principal stockholders’ table and the plan of distribution) as may be reasonably requested by any Investor Holder to allow for a Member Distribution and (ii) Parent shall, at the reasonable request of any Investor Holder seeking to effect a Member Distribution, file any prospectus supplement or post-effective amendments and otherwise take any action reasonably necessary to include such language, if such language was not included in the initial registration statement, or revise such language if deemed reasonably necessary by such Investor Holder to effect such Member Distribution.
(b)    Overnight Underwritten Offering Piggyback Rights.  If, at any time during any Effectiveness Period, Parent proposes to file an Underwritten Offering Filing and such Underwritten Offering is expected to be launched (the “Launch Date”) after the close of trading on one trading day and priced before the open of trading on the next succeeding trading day (such execution format, an “Overnight Underwritten Offering”), then no later than one Business Day after Parent engages one or more Managing Underwriter(s) for the proposed Overnight Underwritten Offering, Parent shall notify (including, but not limited to, notice by email) the Holders of the pendency of the Overnight Underwritten Offering and such notice shall offer the Holders the opportunity to include in such Overnight Underwritten Offering such number of Registrable Securities as each such Holder may request in writing within two Business Days after such Holder receives such notice.  Notwithstanding the foregoing, if Parent has been advised by the Managing Underwriter(s) in writing that the inclusion of Registrable Securities in the Overnight Underwritten Offering for the accounts of the Selling Holders is likely to have a material adverse effect on the price, timing or distribution of the Class A Common Stock being offered in such Overnight Underwritten Offering, then the amount of Registrable Securities to be included in the Overnight Underwritten Offering for the accounts of Selling Holders shall be determined based on the provisions of Section 2.02(c) of this Agreement.  If, at any time after giving written notice of its intention to execute an Overnight Underwritten Offering and prior to the closing of such Overnight Underwritten Offering, Parent determines for any reason not to undertake or to delay such Overnight Underwritten Offering, Parent shall give written notice of such determination to the Selling Holders and, (i) in the case of a determination not to undertake such Overnight Underwritten Offering, shall be relieved of its obligation to sell any Registrable Securities held by the Selling Holders in connection with such abandoned or delayed Overnight Underwritten Offering, and (ii) in the case of a determination to delay such Overnight Underwritten Offering, shall be permitted to delay offering any Registrable Securities held by the Selling Holders for the same period as the delay of the Overnight Underwritten Offering.  Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such Overnight Underwritten Offering by giving written notice to Parent of such withdrawal at least one Business Day prior to the expected Launch Date.  Notwithstanding the foregoing, any Holder may deliver an Opt-Out Notice to Parent requesting that such Holder not receive notice from Parent of any proposed Overnight Underwritten Offering and, following receipt of such an Opt-Out Notice from a Holder, Parent shall not deliver any notice to such Holder pursuant to this Section 2.02(b), unless such Opt-Out Notice is revoked by such Holder.

(c)    Priority of Rights.  In connection with an Underwritten Offering and Overnight Underwritten Offering contemplated by Section 2.02(a) and Section 2.02(b), respectively, if the Managing Underwriter(s) of any such Underwritten Offering or Overnight Underwritten Offering, as the case may be, advises Parent that the total amount of Class A Common Stock that the Selling Holders and any other Persons intend to include in such Underwritten Offering or Overnight Underwritten Offering exceeds the number that can be sold in such Underwritten Offering or Overnight Underwritten Offering without being likely to have a material adverse effect on the price, timing or distribution of the Class A Common Stock offered in such Underwritten Offering or Overnight Underwritten Offering, as the case may be, or the market for the Class A Common Stock, then the Class A Common Stock to be included in such Underwritten Offering or Overnight Underwritten Offering shall include the number of shares of Class A Common Stock that such Managing Underwriter(s) advise Parent can be sold without having such adverse effect (such maximum number of shares of Class A Common Stock, the “Maximum Number of Securities”), with such number to be allocated (i) first, to Parent, (ii) second, pro rata among all Selling Holders and holders of any other securities of Parent having rights of registration on parity with the Registrable Securities (“Parity Holders”) who have requested participation in such Underwritten Offering or Overnight Underwritten Offering. The pro rata allocations for each such Selling Holder or Parity Holder shall be (A) based on the percentage derived by dividing (1) the number of shares of Class A Common Stock (or other securities) that such Selling Holder or such Parity Holder has requested be included in such Underwritten Offering or Overnight Underwritten Offering by (2) the aggregate number of shares of Class A Common Stock (or other securities) that all Selling Holders and all Parity Holders have requested be included in such Underwritten Offering or Overnight Underwritten Offering or (B) as otherwise agreed by such Selling Holder or Parity Holder, as applicable. 
(d)    Notwithstanding anything in this Section 2.02 to the contrary, no Holder shall have any right to include any Class A Common Stock in any offering by Parent of Class A Common Stock executed pursuant to any “at the market” program that Parent may have in effect from time to time on or after the date of this Agreement.
(e)    Parent, Chisholm and the Chisholm Stockholders hereby agree that the rights of (i) Bold Energy Holdings, LLC (“Bold”) and its permitted assigns to register shares of Class A Common Stock under that certain Registration Rights Agreement, dated May 9, 2017, by and among the Parent, Bold and the Persons identified on Schedule I attached thereto (such Persons, together with their respective permitted assigns, the “Bold Unitholders”); (ii) Independence and its permitted assigns to register shares of Class A Common Stock under that certain Registration Rights Agreement, dated January 7, 2021, by and among Parent, Independence and the Persons identified on Schedule I attached thereto (such Persons, together with their respective permitted assigns, the “Independence Stockholders”); (iii) Tracker and its permitted assigns to register shares of Class A Common Stock under that certain Registration Rights Agreement, dated July 20, 2021, by and among Parent, Tracker, EnCap Energy Capital Fund VIII, L.P., ZIP Ventures I, L.L.C., and Tracker III Holdings, LLC (collectively, together with their respective permitted assigns, the “Tracker Stockholders”); (iv) Sequel and its permitted assigns to register shares of Class A Common Stock under that certain Registration Rights Agreement, dated July 20, 2021, by and among Parent, Sequel and the Persons identified on Schedule I attached thereto (the “Sequel Stockholders”); and (v) Foreland and its permitted assigns to register shares of Class A Common Stock under that certain Registration Rights Agreement, dated November 2, 2021, by and among Parent, Foreland, the parties identified on Schedule I attached thereto and the Persons identified on Schedule II attached thereto (collectively, the “Foreland Stockholders”), shall rank pari passu with the rights of Chisholm and the Chisholm Stockholders to register shares of Class A Common Stock under this Agreement.  For purposes of clarity and the avoidance of doubt, Parent, Chisholm and the Chisholm Stockholders expressly agree that Bold, the Bold Unitholders, Independence, the Independence Stockholders, Tracker, the Tracker Stockholders, Sequel, the Sequel Stockholders, Foreland and the Foreland Stockholders shall be Parity Holders for purposes of this Section 2.02.
Section 2.03    Underwritten Offering. 
(a)    In the event that one or more Holders of Registrable Securities (the “Offering Holders”) notify Parent in writing of their election to dispose of Registrable Securities under the Shelf Registration Statement pursuant to an Underwritten Offering or Overnight Underwritten Offering and reasonably expect aggregate gross proceeds of at least $25 million from such Underwritten Offering or Overnight Underwritten Offering, (i) Parent shall give notice (including, but not limited to, notification by email, with such notice given no later than one Business Day after the engagement by Parent of the Managing Underwriter(s) in the case of a proposed Overnight Underwritten Offering) of such proposed Underwritten Offering or Overnight Underwritten Offering to the other Holders on a Business Day and such notice shall offer such Holders the opportunity to include in such Underwritten Offering or Overnight Underwritten Offering such number of Registrable Securities as each such Holder may request in writing (within five Business Days in the case of an Underwritten Offering that is not an Overnight Underwritten Offering and within two Business Days after the Holder receives such notice in the case of an Overnight Underwritten Offering) and (ii) Parent will retain Underwriters selected by the Offering Holders holding a majority of the Registrable Securities to be disposed of pursuant to such Underwritten Offering or Overnight Underwritten Offering (which Underwriters shall be reasonably acceptable to Parent) subject to such sale through an Underwritten Offering or Overnight Underwritten Offering including entering into an underwriting agreement in customary form with the Managing Underwriter(s), which underwriting agreement shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08, and will take all reasonable actions as are requested by the Managing Underwriter(s) in order to expedite or facilitate the registration and disposition of the Registrable Securities; provided, however, that Parent shall not be required to effect (A) more than two Underwritten Offerings or Overnight Underwritten Offerings pursuant to this Section 2.03 in any 365-day period or (B) an Underwritten Offering or Overnight Underwritten Offering pursuant to this Section 2.03 prior to the six month anniversary of the date hereof. Parent management shall participate in a roadshow or similar marketing effort on behalf of any such Holder or Holders if the aggregate gross proceeds from such Underwritten Offering or Overnight Underwritten Offering are reasonably expected to exceed $35 million. No Selling Holder may participate in such Underwritten Offering or Overnight Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably and customarily required under the terms of such underwriting agreement.  No Selling Holder shall be required to make any representations or warranties to or agreements with Parent or the underwriters other than representations, warranties or agreements regarding such Selling Holder and its ownership of the securities being registered on its behalf and its intended method of distribution and any 

other representations required by law.  If any Selling Holder disapproves of the terms of an Underwritten Offering or Overnight Underwritten Offering contemplated by this Section 2.03(a), such Selling Holder may elect to withdraw therefrom by notice to Parent and the Managing Underwriter(s); provided, however, that such notice of withdrawal must be made at a time up to and including the time of pricing of such offering in order to be effective.  No such withdrawal or abandonment shall affect Parent’s obligation to pay Registration Expenses.
(b)    In connection with an Underwritten Offering and Overnight Underwritten Offering contemplated by Section 2.03(a), if the Managing Underwriter(s) of any such Underwritten Offering or Overnight Underwritten Offering, as the case may be, advises the Selling Holders that the total amount of Registrable Securities that the Selling Holders intend to include in such Underwritten Offering or Overnight Underwritten Offering exceeds the Maximum Number of Securities, then the Registrable Securities to be included in such Underwritten Offering or Overnight Underwritten Offering shall include the Maximum Number of Securities, with such number to be allocated (i) first, pro rata among all Selling Holders and (ii) second, to the extent the number of securities proposed to be included in such Underwritten Offering or Overnight Underwritten Offering by the Selling Holders is less than the Maximum Number of Securities, pro rata among all Parity Holders who have requested participation in such Underwritten Offering or Overnight Underwritten Offering. The pro rata allocations for each such Selling Holder or Parity Holder, as applicable, shall be (A) (1) with respect to any Selling Holder, based on the percentage derived by dividing (aa) the number of shares of Class A Common Stock (or other securities) that such Selling Holder has requested be included in such Underwritten Offering or Overnight Underwritten Offering by (bb) the aggregate number of shares of Class A Common Stock (or other securities) that all Selling Holders have requested be included in such Underwritten Offering or Overnight Underwritten Offering, and (2) with respect to any Parity Holder, based on the percentage derived by dividing (aa) the number of shares of Class A Common Stock (or other securities) that such Parity Holder has requested be included in such Underwritten Offering or Overnight Underwritten Offering by (bb) the aggregate number of shares of Class A Common Stock (or other securities) that all Parity Holders have requested be included in such Underwritten Offering or Overnight Underwritten Offering, or (B) as otherwise agreed by such Selling Holder(s) or Parity Holder(s), as applicable.
Section 2.04    Registration Procedures.  In connection with its obligations under this Article II, Parent will, as expeditiously as possible:
(a)    prepare and file with the SEC such amendments and supplements to the Shelf Registration Statement and the prospectus used in connection therewith as may be necessary to cause the Shelf Registration Statement to be effective and to keep the Shelf Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Shelf Registration Statement;
(b)    if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering or Overnight Underwritten Offering from the Shelf Registration Statement and the Managing Underwriter(s) at any time shall notify Parent in writing that, in the good faith judgment of such Managing Underwriter(s), inclusion of detailed information to be used in such prospectus supplement is of material importance to the success of the Underwritten Offering or Overnight Underwritten Offering of such Registrable Securities, Parent shall use its commercially reasonable efforts to include such information in such a prospectus supplement;
(c)    furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing the Shelf Registration Statement or any other Registration Statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the SEC other than annual or quarterly reports on Form 10-K or 10-Q, respectively, current reports on Form 8-K or proxy statements; provided, however, that such reports or proxy statements shall be provided at least two Business Days prior to filing in connection with an Underwritten Offering or Overnight Underwritten Offering), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing the Shelf Registration Statement or such other Registration Statement or supplement or amendment thereto, and (ii) such number of copies of the Shelf Registration Statement or such other Registration Statement and the prospectus included therein and any supplements and amendments thereto as such Persons may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by the Shelf Registration Statement or such other Registration Statement;
(d)    if applicable, use its reasonable best efforts to register or qualify the Registrable Securities covered by the Shelf Registration Statement or any other Registration Statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering or Overnight Underwritten Offering, the Managing Underwriter(s) shall reasonably request, except that Parent will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject;
(e)    promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of the Shelf Registration Statement or any other Registration Statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Shelf Registration Statement or any other Registration Statement contemplated by this Agreement, when the same has become effective; and (ii) the receipt of any written comments from the SEC with respect to any filing referred to in clause (i) and any written request by the SEC for amendments or supplements to the Shelf 

Registration Statement or any other Registration Statement contemplated by this Agreement or any prospectus or prospectus supplement thereto;
(f)    promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which, the prospectus or prospectus supplement contained in the Shelf Registration Statement or any other Registration Statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) the issuance or threat of issuance by the SEC of any stop order suspending the effectiveness of the Shelf Registration Statement or any other Registration Statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by Parent of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction.  Following the provision of such notice, Parent agrees to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in the light of the circumstances then existing, and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;
(g)    upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to any offering of Registrable Securities;
(h)    in connection with an Underwritten Offering or Overnight Underwritten Offering, use commercially reasonable efforts to furnish upon request and addressed to the underwriters and to the Selling Holders on the date that shares of Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion of counsel for Parent, and (ii) a “comfort letter” signed by the independent public accountants (and, if applicable, independent reserve engineers) who have certified Parent’s financial statements included or incorporated by reference into the applicable Registration Statement, and each of the opinion and the “comfort letter” shall be in customary form and covering substantially the same matters with respect to such Registration Statement (and the prospectus and any prospectus supplement included therein) as are customarily covered in opinions of issuer’s counsel and in accountants’ (and, if applicable, independent reserve engineers’) letters delivered to the underwriters in Underwritten Offerings or Overnight Underwritten Offerings of securities, and such other matters as such underwriters or Selling Holders may reasonably request;
(i)    otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders (which may be satisfied by making such information available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system or any successor system known as “EDGAR”), as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;
(j)    make available to the appropriate representatives of the Managing Underwriter(s) and Selling Holders access to such information and Parent personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided that Parent need not disclose any non-public information to any such representative unless and until such representative has entered into a customary confidentiality agreement with Parent;
(k)    cause all such Registrable Securities covered by such Shelf Registration Statement to be listed on each securities exchange or nationally recognized quotation system on which the Class A Common Stock is then listed or quoted;
(l)    use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of Parent to enable the Selling Holders to consummate the disposition of such Registrable Securities;
(m)    provide a transfer agent and registrar for all Registrable Securities covered by a Registration Statement not later than the effective date of such Registration Statement;
(n)    enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of such Registrable Securities;
(o)    if reasonably required by Parent’s transfer agent, Parent use its commercially reasonable efforts to promptly (and in no more than two (2) Business Days) deliver any customary authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to transfer such Registrable Securities without legend, in accordance with applicable law, upon sale by the Holder of such Registrable Securities under the Registration Statement;
(p)    if any Selling Holder could reasonably be deemed to be an “underwriter,” as defined in Section 2(a)(11) of the Securities Act, in connection with the registration statement in respect of any registration of Registrable Securities of such Selling Holder pursuant to this Agreement, and any amendment or supplement thereof (any such registration statement or amendment or supplement, a “Selling Holder Underwriter Registration Statement”), then, until the Effectiveness Period ends, (i) cooperate with such Selling Holder in allowing such Selling Holder to conduct customary “underwriter’s due diligence” with respect to Parent and satisfy its obligations in respect thereof; (ii) until the Effectiveness Period ends, at any Selling Holder request, furnish to such Selling Holder, on the date of the effectiveness of any Selling Holder Underwriter Registration Statement and thereafter no more often than on a quarterly basis, (A) a letter, dated such date, from Parent’s independent certified public accountants (and, 

if applicable, independent reserve engineers) in form and substance as is customarily given by independent certified public accountants (and, if applicable, independent reserve engineers) to underwriters in an underwritten public offering, addressed to such Selling Holder, (B) an opinion, dated as of such date, of counsel representing Parent for purposes of such Selling Holder Underwriter Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, including a standard “10b-5” opinion for such offering, addressed to such Selling Holder and (C) a standard officer’s certificate from the Chief Executive Officer and Chief Financial Officer of Parent addressed to such Selling Holder; and (iii) permit legal counsel of such Selling Holder to review and comment upon any Selling Holder Underwriter Registration Statement at least five  Business Days prior to its filing with the SEC and all amendments and supplements to any such Selling Holder Underwriter Registration Statement within a reasonable number of days prior to their filing with the SEC and not file any Selling Holder Underwriter Registration Statement or amendment or supplement thereto in a form to which such Selling Holder’s legal counsel reasonably objects; 
(q)    if requested by a Selling Holder, (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement; and
(r)    in connection with any transaction or series of anticipated transactions (i) effected pursuant to the Shelf Registration Statement, (ii) except as set forth on Schedule 2.04(r), with reasonably anticipated gross proceeds in excess of $12.5 million or involving Registrable Securities having a fair market value in excess of $12.5 million (which value shall be determined by multiplying the number of such Registrable Securities by the Class A Common Stock Price) and (iii) involving a broker, agent, counterparty, underwriter, bank or other financial institution (“Financial Counterparty”) (each a “Parent Cooperation Event”), to the extent requested by the Financial Counterparty in order to engage in the proposed Parent Cooperation Event, Parent will cooperate with the applicable Holder(s) in allowing Financial Counterparty to conduct customary “underwriter’s due diligence” with respect to Parent, including (1) by using commercially reasonable efforts to cause its independent certified public accountants to provide to the Financial Counterparty a “cold comfort” letter in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Financial Counterparty, (2) by using commercially reasonable efforts to cause its outside counsel to deliver an opinion in form, scope and substance as is customarily given in an underwritten public offering, including a standard “10b-5” letter for such offering, addressed to such Financial Counterparty, and (3) by providing a standard officer’s certificate from the chief executive officer or chief financial officer, or other officer serving such functions, of Parent addressed to the Financial Counterparty; provided, that, for the avoidance of doubt, no Parent Cooperation Event shall be deemed an Underwritten Offering or Overnight Underwritten Offering for purposes of Section 2.03. Notwithstanding the foregoing, except as set forth on Schedule 2.04(r), Parent shall not be required to participate in more than four Parent Cooperation Events in any 365-day period and shall not be required to participate in any Parent Cooperation Events prior to the six month anniversary of the date hereof.  
Notwithstanding anything to the contrary in this Section 2.04, Parent will not name a Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act) in any Registration Statement or Selling Holder Underwriter Registration Statement, as applicable, without such Holder’s consent. If the Parent determines, upon advice of counsel, that Parent is required to name any Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act), and such Holder does not consent thereto, then such Holder’s Registrable Securities shall not be included on the applicable Registration Statement and Parent shall have no further obligations hereunder with respect to Registrable Securities held by such Holder with respect to such Registration Statement or Selling Holder Registration Statement unless such Holder has not had an opportunity to conduct customary underwriter’s due diligence as set forth in Section 2.04(p) with respect to Parent at the time such Holder’s consent is sought.
Each Selling Holder, upon receipt of notice from Parent of the happening of any event of the kind described in subsection (e) of this Section 2.04, shall forthwith discontinue disposition of the Registrable Securities until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 2.04 or until it is advised in writing by Parent that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by Parent, such Selling Holder will, or will request the Managing Underwriter(s), if any, to deliver to Parent (at Parent’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
Section 2.05    Cooperation by Holders.  Parent shall have no obligation to include Registrable Securities of a Holder in any Registration Statement or Underwritten Offering if such Holder has failed to timely furnish such information which Parent determines, after consultation with counsel, is reasonably required for any registration statement or prospectus supplement thereto, as applicable, to comply with the Securities Act.
Section 2.06    Restrictions on Public Sale by Holders of Registrable Securities.  Each Holder of Registrable Securities who is included in the Shelf Registration Statement agrees not to effect any public sale or distribution of the Registrable Securities for a period of up to 30 days following completion of an Underwritten Offering or Overnight Underwritten Offering of Equity Securities by Parent, provided that (i) Parent gives written notice to such Holder of the date of the commencement and termination of such period with respect to any such Underwritten Offering or Overnight Underwritten Offering and (ii) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters of such public sale or distribution on Parent or on the officers or directors or any other Affiliate of Parent on whom a restriction is imposed; provided further, that this Section 2.06 shall not apply to a Holder that holds less than 10% of the voting power of Parent’s outstanding Equity Securities.

Section 2.07    Expenses. 
(a)    Certain Definitions.  The term “Registration Expenses” means all expenses incident to Parent’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on the Shelf Registration Statement, an Underwritten Offering or Overnight Underwritten Offering covered under this Agreement, and/or the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, Inc., fees of transfer agents and registrars, all word processing, duplicating and printing expenses, and the fees and disbursements of counsel and independent public accountants for Parent, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance, and fees and expenses of one counsel engaged by the Holders of a majority of the Registrable Securities, not to exceed $20,000, in connection with the registration of the Registrable Securities on the initial Shelf Registration Statement; provided, however, that “Registration Expenses” shall not include any Selling Expenses. The term “Selling Expenses” means all (i) transfer taxes allocable to the sale of the Registrable Securities; (ii) fees and expenses of counsel engaged by the Holders in excess of the amounts payable by Parent under the definition of “Registration Expenses”; and (iii) commissions and discounts of brokers, dealers and underwriters.  
(b)    Expenses.  Parent will pay all Registration Expenses as determined in good faith, including, in the case of an Underwritten Offering or Overnight Underwritten Offering, whether or not any sale is made pursuant to the Shelf Registration Statement. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any sale of Registrable Securities hereunder.
Section 2.08    Indemnification.
(a)    By Parent.  In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, to the extent permitted by applicable law, Parent will indemnify and hold harmless each Selling Holder thereunder, its Affiliates that own Registrable Securities and their respective directors and officers and each underwriter pursuant to the applicable underwriting agreement with such underwriter and each Person, if any, who controls such Selling Holder or underwriter within the meaning of the Securities Act and the Exchange Act and its directors and officers (collectively, the “Selling Holder Indemnified Persons”), against any losses, claims, damages, expenses or liabilities (including reasonable attorneys’, accountants’ and experts’ fees and expenses) (collectively, “Losses”), joint or several, to which such Selling Holder or underwriter or controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in (which, for the avoidance of doubt, includes documents incorporated by reference in) the Shelf Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, free writing prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading or arise out of or are based upon a Selling Holder being deemed to be an “underwriter,” as defined in Section 2(a)(11) of the Securities Act, in connection with the registration statement in respect of any registration of Parent’s securities, and will reimburse each such Selling Holder Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings; provided, however, that Parent will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in strict conformity with information furnished by such Selling Holder Indemnified Person in writing specifically for use in the Shelf Registration Statement or such other registration statement or any prospectus contained therein or any amendment or supplement thereof.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder or any such director, officer or controlling Person, and shall survive the transfer of such securities by such Selling Holder.
(b)    By Each Selling Holder.  Each Selling Holder agrees severally and not jointly to indemnify and hold harmless Parent, its directors and officers and each Person, if any, who controls Parent within the meaning of the Securities Act or of the Exchange Act against any Losses to the same extent as the foregoing indemnity from Parent to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in the Shelf Registration Statement or any prospectus contained therein or any amendment or supplement thereof relating to the Registrable Securities; provided, however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds received by such Selling Holder (net of Selling Expenses) from the sale of the Registrable Securities giving rise to such indemnification.
(c)    Notice.  Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but such indemnified party’s failure to so notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to any indemnified party other than under this Section 2.08.  The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume the defense and employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel 

and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of one such separate counsel (firm) and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred.  Notwithstanding any other provision of this Agreement, no indemnified party shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent of the indemnifying party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnifying party.
(d)    Contribution.  If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to Parent or any Selling Holder or is insufficient to hold it harmless in respect of any Losses, then each such 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 as between Parent, on the one hand, and such Selling Holder, on the other hand, in such proportion as is appropriate to reflect the relative fault of Parent, on the one hand, and of such Selling Holder, on the other, in connection with the statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds 
received by such Selling Holder (net of Selling Expenses) from the sale of Registrable Securities giving rise to such indemnification.  The relative fault of Parent, on the one hand, and each Selling Holder, on the other hand, 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 has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this paragraph.  The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss which is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.
(e)    Other Indemnification.  The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution which an indemnified party may have pursuant to law, equity, contract or otherwise.
Section 2.09    Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to the public without registration, Parent agrees to use its reasonable best efforts to:
(a)    make and keep public information regarding Parent available, as those terms are understood and defined in Rule 144 (or any successor rule or regulation to Rule 144 then in force) of the Securities Act, at all times from and after the date of this Agreement;
(b)    file with the SEC in a timely manner all reports and other documents required of Parent under the Securities Act and the Exchange Act at all times from and after the date of this Agreement;
(c)    so long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a copy of the most recent annual or quarterly report of Parent, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing such Holder to sell any such securities without registration; and
(d)    take such further action as any Holder may reasonably request, all to the extent required from time to time to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 (or any successor rule or regulation to Rule 144 then in force) under the Securities Act. 
Section 2.10    Transfer or Assignment of Registration Rights.  The rights to cause Parent to include Registrable Securities in a Shelf Registration Statement may be transferred or assigned by any Holder to one or more transferee(s) or assignee(s) of such Registrable Securities; provided that (a) Parent is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee and identifying the securities with respect to which such registration rights are being transferred or assigned; (b) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of such Holder under this Agreement by executing a Joinder in the form attached hereto as Exhibit A (the “Joinder”); and (c) unless any such transferee or assignee is (i) a Chisholm Stockholder or (ii) an Affiliate of such Holder or any other Chisholm Stockholder and after such transfer or assignment continues to be an Affiliate of such Holder or any other Chisholm Stockholder, the amount of Registrable Securities transferred or assigned to such transferee or assignee shall represent at least $30 million of Registrable Securities (determined by multiplying the number of Registrable Securities owned by the Class A Common Stock Price); provided further that nothing in this Section 2.10 shall limit an Investor Holder’s rights set forth in Section 2.01(b) and Section 2.02(a) in connection with a Member Distribution.
Section 2.11    Information by Holder.  Any Holder or Holders of Registrable Securities included in any Registration Statement shall promptly furnish to Parent such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as Parent may reasonably request and as shall be required in connection with any registration, qualification or compliance referred to herein, including but not limited to information related to the number of Registrable Securities beneficially owned by the Holder.

Section 2.12    Limitation on Subsequent Registration Rights.  From and after the date of this Agreement, Parent shall not, without the prior written consent of the Holders, enter into any agreement with any current or future holder of any securities of Parent that would allow such current or future holder to require Parent to include securities in any Piggyback Offering by Parent for its own account on a basis that is superior in any material respect to the Piggyback Offering rights granted to the Holders pursuant to Section 2.02 of this Agreement.
ARTICLE III.
MISCELLANEOUS
Section 3.01    Communications.  All notices or other communications which are required or permitted hereunder shall be in writing and shall be deemed to have been given if (a) personally delivered, (b) sent by nationally recognized overnight courier, (c) sent by registered or certified mail, postage prepaid, return receipt requested, or (d) sent by email. Such notices and other communications must be sent to the following addresses or email addresses:
if to Parent to:

Earthstone Energy, Inc.
1400 Woodloch Forest Drive, Suite 300
The Woodlands, Texas 77380
Attention:     Robert J. Anderson, President and Chief Executive Officer
Email:         robert@earthstoneenergy.com
with a copy to:
Jones & Keller, P.C.
1675 Broadway, 26th Floor
Denver, Colorado 80202
Attention:     Reid A. Godbolt
         Adam J. Fogoros
Email:         rgodbolt@joneskeller.com
adamf@joneskeller.com
if to Chisholm to:
Chisholm Energy Operating, LLC
801 Cherry Street, Suite 1200 
Fort Worth, Texas 76102
Attention:     Aaron Gaydosik
Email:         agaydosik@chisholmenergy.com
And with copies to (which will not constitute notice):
Kirkland & Ellis LLP
609 Main Street, Suite 4500
Houston, Texas 77002
Attention:     Adam D. Larson, P.C.
Christopher S.C. Heasley
Email:           adam.larson@kirkland.com 
        christopher.heasley@kirkland.com
if to any Holder: at its address listed on the signature pages hereof or Joinder, if applicable;
or to such other address or email address as the party to whom notice is to be given may have furnished to such other party in writing in accordance herewith. Any such communication shall be deemed to have been received (a) when delivered, if personally delivered, (b) the next Business Day after delivery, if sent by nationally recognized, overnight courier, (c) on the second Business Day following the date on which the piece of mail containing such communication is posted, if sent by first-class mail or (d) on the date sent, if sent by email during normal business hours of the recipient or on the next Business Day, if sent by email after normal business hours of the recipient.
Section 3.02    Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.
Section 3.03    Assignment of Rights.  All or any portion of the rights and obligations of the Holders under this Agreement may be transferred or assigned by the Holders only (a) in connection with a Member Distribution or (b) in accordance with Section 2.10 of this Agreement. Parent may not transfer or assign any portion of its rights and obligations under this Agreement without the prior written consent of the Holders holding one percent (1%) or more of the voting power of Parent’s outstanding Equity Securities.

Section 3.04    Change of Control. Parent shall not merge, consolidate or combine with any other Person unless the agreement providing for such merger, consolidation or combination expressly provides for the continuation of the registration rights specified in this Agreement with respect to the Registrable Securities or other Equity Securities issued pursuant to such merger, consolidation or combination.
Section 3.05    Specific Performance. Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity which such Person may have.
Section 3.06    Recapitalization, Exchanges, Etc. Affecting the Class A Common Stock.  The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of capital stock of Parent or any successor or assign of Parent (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, recapitalizations and the like occurring after the date of this Agreement.
Section 3.07    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.  This Agreement may also be executed and delivered by facsimile signature or other electronic means and in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Section 3.08    Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Section 3.09    Governing Law.  This Agreement is governed by and construed and enforced in accordance with the Laws of the State of Delaware, without giving effect to any conflicts of law principles that would result in the application of any Law other than the Law of the State of Delaware.
Section 3.10    Jurisdiction.  Each of the parties irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder shall be brought and determined exclusively in the Court of Chancery of the State of Delaware or, if such Court does not have subject matter jurisdiction, to the Superior Court of the State of Delaware or, if jurisdiction is vested exclusively in the Federal courts of the United States, the Federal courts of the United States sitting in the State of Delaware, and any appellate court from any such state or Federal court.  Each of the parties hereby irrevocably and unconditionally agrees that all claims with respect to any such claim shall be heard and determined in such Delaware court or in such Federal court, as applicable.  The parties agree that a final judgment in any such claim is conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law.
Section 3.11    WAIVER OF JURY TRIAL.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY IRREVOCABLY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON, OR IN CONNECTION WITH, THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE.  ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 3.11 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
Section 3.12    Severability of Provisions.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.
Section 3.13    Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by Parent set forth herein.  This Agreement and the Purchase Agreement supersede all prior agreements and understandings between the parties with respect to such subject matter.
Section 3.14    Amendment.  This Agreement may be amended only by means of a written amendment signed by Parent and the Holders of a majority of the then outstanding Registrable Securities; provided, however, that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder, unless such Holder holds less than two percent of Parent's then-outstanding voting power (except as otherwise provided on Schedule 3.14).
Section 3.15    No Presumption.  In the event any claim is made by a party relating to any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

Section 3.16    Obligations Limited to Parties to Agreement. Each of the Parties hereto covenants, agrees and acknowledges that no Person other than the Holders (and their transferees or assignees) and Parent shall have any obligation hereunder and that, notwithstanding that one or more of the Holders may be a corporation, partnership or limited liability company, no recourse under this Agreement shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or affiliate of any Holder or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or affiliate of any Holder or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or affiliate of any of the foregoing, as such, for any obligations of a Holder under this Agreement or for any claim based on, in respect of or by reason of such obligation or its creation.
Section 3.17    Independent Nature of Each Holder’s Obligations.  The obligations of each Holder under this Agreement are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this Agreement.  Nothing contained herein, and no action taken by any Holder pursuant thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement.  Each Holder shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
Section 3.18    Further Assurances.  Parent and each of the Holders shall cooperate with each other and shall take such further action and shall execute and deliver such further documents as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement.
Section 3.19    Termination of Registration Rights.  After effectiveness in accordance with Section 2.01, this Agreement shall terminate with respect to each individual Holder, and such Holder and Parent shall have no further rights or obligations hereunder on the earlier of (a) the third anniversary of the date hereof (as may be extended pursuant to the following proviso, the “Termination Date”); provided, however, that such Termination Date shall automatically be extended for additional successive one-year periods with respect to any Holder that, together with its Affiliates, continues to hold at least two percent (2%) of the then-outstanding Class A Common Stock; or (b) on such earlier date on which both (i) such individual Holder, together with its Affiliates owns less than one percent (1%) of Parent’s outstanding voting power and (ii) all Registrable Securities owned by such Holder may be sold without restriction pursuant to Rule 144.

[Signature pages follow]

IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.
												
		

EARTHSTONE ENERGY, INC.

				
		By:
	/s/ Robert J. Anderson
			Name:	Robert J. Anderson
			Title:	President and Chief Executive Officer
				
				

												
		

CHISHOLM ENERGY OPERATING, LLC

				
		By:
	/s/ Scott Germann
			Name:	Scott Germann
			Title:	Chief Executive Officer
				
				

EXHIBIT A

FORM OF JOINDER AGREEMENT

[DATE]
The undersigned hereby absolutely, unconditionally and irrevocably agrees to be bound by the terms and provisions of that certain Registration Rights Agreement, dated as of February 15, 2022, by and among Earthstone Energy, Inc., a Delaware corporation, Chisholm Energy Operating, LLC, a Delaware limited liability company, and the Persons identified on Schedule I thereto who become party thereto from time to time (the “Registration Rights Agreement”), and to join in the Registration Rights Agreement as a Holder with the same force and effect as if the undersigned were originally a party thereto.
[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date first written above.

						
		
		
		
		Name:
		
		
		Address:

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