Document:

Exhibit 10.4

 

 

 

 

GI
Dynamics, Inc.

 

____________________________

 

Note
Exchange and Warrant Cancellation Agreement

 

____________________________

 

 

 

 

 

     

     

    

 

GI
Dynamics, Inc.

 

Note
Exchange and Warrant Cancellation Agreement

 

This
Note Exchange and Warrant Cancellation Agreement (this
“Agreement”) is made as of the 4th day of September, 2020 (the “Effective Date”),
between GI Dynamics, Inc., a Delaware corporation (the “Company”),
and Crystal Amber Fund Limited (the “Holder”).
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the New Note
(as defined below).

 

Recitals

 

WHEREAS,
pursuant to that certain Securities Purchase Agreement, dated as of August 21, 2019 (the “SPA”), between
the Company and the Holder, the Company issued to the Holder an unsecured convertible promissory note in the aggregate principal
amount of up to Four Million Five Hundred Ninety-Six Thousand Eight Hundred Ninety-Three Dollars (US$4,596,893) (the “2019
Note”);

 

WHEREAS,
in connection with the issuance of the 2019 Note and pursuant to the terms and conditions of the SPA, the Company, on January
13, 2020, issued to the Holder a warrant to purchase up to 229,844,650 CHESS Depositary Interests of the Company (the “Warrant”);

 

WHEREAS,
the Company plans to complete a Series A Preferred Stock financing with gross proceeds of not less than US$10 million in the aggregate,
upon the terms and subject to the conditions of a Series A Preferred Stock Purchase Agreement between the Company and the Holder
dated as of an even date herewith (the “Purchase Agreement”);

 

WHEREAS,
as a condition precedent to entering into the Purchase Agreement, the Company is required to restructure the 2019 Note and cancel
the Warrant;

 

WHEREAS,
immediately prior to the execution of the Purchase Agreement, the Company will issue to the Holder a new unsecured convertible
promissory note in the aggregate principal amount of the Outstanding Amount (as defined below), substantially in the form attached
hereto as Exhibit A (the “New Note,” and, together with the 2019 Note, the “Notes”),
in exchange for the surrender and cancellation of the 2019 Note and the cancellation of the Warrant, on the terms and conditions
set forth in this Agreement (the “Exchange”).

 

NOW,
THEREFORE, in consideration of the foregoing premises and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and the Holder, intending to be legally bound, agree as follows:

 

		1.	Terms
                                         of the Exchange

 

1.1       Exchange
of the Notes. Upon the terms and subject to the conditions of this Agreement, the Holder agrees to surrender and deliver the
2019 Note to the Company for cancellation in exchange for the New Note in the aggregate principal amount equal to the total outstanding
unpaid principal amount of the 2019 Note together with any interest accrued but unpaid thereon, immediately prior to the Closing
Date (the “Outstanding Amount”). At the Closing (as defined below), the New Note issued in exchange
for the cancellation of the 2019 Note shall be deemed the full and final consideration for the cancellation of such 2019 Note,
and notwithstanding anything to the contrary contained in the 2019 Note or otherwise, the Company and Holder hereby agree that
upon the Closing: (i) the Company’s obligations under the 2019 Note, including related contractual obligations, shall be
deemed fully paid and satisfied and (ii) the 2019 Note shall automatically terminate and have no further force and effect.

 

    1

     

    

 

1.2       Warrant
Cancellation. Contemporaneously with exchange of the Notes pursuant to Section 1.1 and without any further action on
the part of the Company or the Holder, the Warrant shall be terminated and cancelled and shall no longer be exercisable and the
Holder shall automatically be deemed to have released any and all rights it has or may have had in, and in respect of, the Warrant,
including related contractual rights.

 

		2.	The
                                         Closing

 

2.1       Closing
Date. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and Section 6, the closing
of the transactions contemplated by this Agreement (the “Closing”) shall be held remotely via the electronic
exchange of documents and signatures immediately prior to entering into the Purchase Agreement (the “Closing Date”).

 

2.2       Deliveries.

 

(a)       At
or prior to the Closing, the Company shall, in accordance with the terms of this Agreement, deliver to the Holder: (i) this Agreement
duly executed by the Company; (ii) the New Note; and (iii) such other documents relating to the transactions contemplated by this
Agreement as the Holder shall reasonably require.

 

(b)       At
or prior to the Closing, the Holder shall, in accordance with the terms of this Agreement, deliver to the Company: (i) this Agreement
duly executed by the Holder; (ii) the 2019 Note (or an affidavit of loss and indemnity undertaking with respect thereto, in a
form reasonably acceptable to the Company); and (iii) such other documents relating to the transactions contemplated by this Agreement
as the Company shall reasonably require.

 

		3.	Representations,
                                         Warranties and Covenants of the Company

 

The
Company hereby represents and warrants to the Holder, as of the date hereof and as of the Closing Date, as follows:

 

3.1       Organization;
Good Standing and Qualification. The Company is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware and has all requisite corporate power and authority to own its property and carry on its business
as now conducted. The Company is duly qualified to transact business and is in good standing in the Commonwealth of Massachusetts
and in each jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification
necessary.

 

    2

     

    

 

3.2       Corporate
Power and Authorization. 

 

(a)       Corporate
Power. The Company has all requisite corporate power to execute and deliver this Agreement and the New Note and to carry out
and perform its obligations under the terms of this Agreement and the New Note.

 

(b)       Authorization.
The execution and delivery of this Agreement and the New Note by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance of the New Note, the reservation of shares of the
Company’s common stock, par value $0.01 per share issuable upon conversion of the New Note (the “Common Stock”
and, together with the New Note, the “Securities”) and the cancellation of the Warrant, was duly authorized
by the Company’s board of directors. Other than those consents and authorizations obtained by the Company prior to the date
hereof that are in full force and effect on the Closing Date, no further consent or authorization is required by the Company,
its board of directors or its stockholders. This Agreement and the New Note have been duly executed and delivered by the Company,
and each of them constitutes the legal, valid and binding obligations of the Company enforceable in accordance with its terms,
subject to laws of general application relating to equitable principles, bankruptcy, insolvency and the relief of debtors. Upon
conversion of the New Note into Common Stock in accordance with the provisions of this Agreement and the New Note, the Common
Stock will be validly issued, fully paid and nonassessable and free of any liens or encumbrances (other than as set out in Section
2(c) of the New Note). The issuance of the New Note (and the Common Stock) pursuant to the provisions of this Agreement will not
give rise to any preemptive rights or rights of first refusal granted by the Company, and the New Note (and the Common Stock)
will be issued in compliance with all applicable federal and state securities laws, and will be free of any liens or encumbrances;
provided, however, that the New Note may be subject to restrictions on transfer as set out in this Agreement and the New
Note or under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time the transfer
is proposed. The issuance of the New Note (and the Common Stock) does not and will not cause any dilution adjustment in any existing
securities of the Company, and the Holder hereby waives any dilution adjustment that might otherwise result from the issuance
of the New Note (and the Common Stock) pursuant to the terms of any existing security held by the Holder.

 

3.3       Governmental
Consents. All consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company in connection with the valid execution and delivery
of this Agreement and the New Note, the issuance of the New Note or the consummation of any other transaction contemplated hereby
shall have been obtained and will be effective at the Closing, except for any notices required or permitted to be filed with certain
foreign, state and/or federal securities commissions or stock exchanges, which notices will be filed on a timely basis.

 

3.4       No
Conflicts. The execution, delivery and performance of this Agreement and the New Note by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the certificate of incorporation
or by-laws of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material
agreement, indenture or instrument to which the Company is a party or by which the Company is bound, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree including federal and state securities laws and regulations applicable
to the Company or by which any property or asset of the Company is bound or affected.

 

    3

     

    

 

3.5       Offering.
Assuming the accuracy of the representations and warranties of the Holder contained in Section 4 hereof, the issuance
of the New Note is and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933,
as amended (the “Act”), and has been registered or qualified (or is exempt from registration and qualification)
under the registration, permit, or qualification requirements of all applicable state securities laws.

 

3.6       [Intentionally
Omitted].

 

3.7       Delivery
of SEC Filings. The Company has provided the Holder with copies of the Company’s most recent Annual Report on Form 10-K
for the fiscal year ended December 31, 2019, and all other reports filed by the Company pursuant to the Securities Exchange Act
of 1934, as amended (the “1934 Act”), since the filing of the Annual Report on Form 10-K and prior to
the date hereof (collectively, the “SEC Filings”); which reports represent all filings required of the
Company pursuant to the 1934 Act for such period. During the two (2) years prior to the date hereof, the Company has filed all
reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements
of 1934 Act (all of the foregoing filed prior to the date hereof or prior to the date of the Closing, and all exhibits included
therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the “SEC Documents”). As of their respective filing dates, or, if amended or superseded
by a subsequent filing, as of the date of the last such amendment or superseding filing, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time they were filed or, if amended or superseded by a subsequent filing,
as of the date of the last such amendment or superseding filing, with the SEC, contained any untrue statement of a material fact
or omitted to state a 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. As of their respective filing dates, or, if amended or
superseded by a subsequent filing, as of the date of the last such amendment or superseding filing, the financial statements of
the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent
they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).

 

3.8       Conduct
of Business; Regulatory Permits. To the knowledge of the Company, the Company is not in violation of any term of, or in default
under, its certificate of incorporation, as amended and as in effect on the date hereof, or any certificate of designation of
an outstanding series of stock of the Company or its by-laws, as amended and as in effect on the date hereof. The Company is not
in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company, and the
Company does not and will not conduct its business in violation of any of the foregoing, except for possible violations which
could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company. Except as
set forth in its SEC Filings, the Company possesses all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct its business, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit.

 

    4

     

    

 

3.9       Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by the SEC, any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its subsidiaries or affiliates, the Securities or any of the Company’s or its subsidiaries’
officers or directors, whether of a civil or criminal nature or otherwise, which, if adversely determined, would have a material
adverse effect on the Company’s business or financial condition.

 

3.10       Securities
Laws. The Company shall timely make all filings and reports relating to the issuance of the Securities required under applicable
securities laws, including filing any notice of sale of securities required by applicable law or regulation and complying with
any applicable “blue sky” laws of the states of the United States. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 3.10. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any “security” (as defined in the Act) that could be integrated
with the issuance of the New Note in a manner that could require the registration of the New Note under the Act.

 

		4.	Representations
                                         and Warranties of the Holder

 

The
Holder hereby represents and warrants to the Company as follows:

 

4.1       Purchase
for Own Account. The Holder understands that the Securities have not been registered under the Act and the Holder is acquiring
the Securities for its own account and not with a view towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration. The Holder represents that its acquisition of any
Securities under the New Note will be acquired solely for its own account and beneficial interest for investment and not for sale
or with a view to distribution of the Securities or any part thereof, has no present intention of selling (in connection with
a distribution or otherwise), granting any participation in, or otherwise distributing the same.

 

4.2       Information
and Sophistication. Without lessening or obviating the representations and warranties of the Company set forth in Section
3, the Holder hereby: (i) acknowledges that it has received all the information it has requested from the Company including,
but not limited to, the SEC Filings, (ii) represents that it has had an opportunity to ask questions and receive answers from
the Company regarding the Company, its business and the terms and conditions of the offering of the Securities and (iii) further
represents that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits
and risk of this investment.

 

    5

     

    

 

4.3       Ability
to Bear Economic Risk. The Holder acknowledges that investment in the Securities involves a high degree of risk, and represents
that it is able, without materially impairing its financial condition, to hold the Securities for an indefinite period of time
and to suffer a complete loss of its investment.

 

4.4       Rule
144. The Holder is aware that none of the Securities may be sold pursuant to Rule 144 adopted under the Act unless certain
conditions are met, including, among other things, the existence of a public market for the shares, the availability of certain
current public information about the Company, the resale following the required holding period under Rule 144 and the number of
shares being sold during any three month period not exceeding specified limitations.

 

4.5       Accredited
Investor Status. The Holder is an “accredited investor” as such term is defined in Rule 501 under
the Act.

 

4.6      Regulation
S. In issuing the Securities, the Company may be relying upon the “safe harbor” provided by Regulation S and/or
on Section 4(a)(2) under the Act; it is a condition to the availability of the Regulation S “safe harbor” that the
Securities not be offered or sold in the United States or to a U.S. person until the expiration of a one-year “distribution
compliance period” (or a six-month “distribution compliance period,” if the issuer is a “reporting issuer,”
as defined in Regulation S) following the closing; and notwithstanding the foregoing, prior to the expiration of the one-year
“distribution compliance period” (or six-month “distribution compliance period,” if the issuer is a “reporting
issuer,” as defined in Regulation S) after the closing (the “Restricted Period”), the New Note
may, subject to any restrictions contained in the New Note, be offered and sold by the holder thereof only if such offer and sale
is made in compliance with the terms of this Agreement and the New Note, and either: (a) if the offer or sale is within the United
States or to or for the account of a U.S. person (as such terms are defined in Regulation S), the securities are offered and sold
pursuant to an effective registration statement or pursuant to Rule 144 under the Act or pursuant to an exemption from the registration
requirements of the Act; or (b) the offer and sale is outside the United States and to other than a U.S. person. If the Holder
is not a United States person, the Holder hereby represents that the Holder is satisfied as to the full observance of the laws
of the Holder’s jurisdiction applicable to the Holder in connection with any invitation to subscribe for the Securities,
including (i) the legal requirements within the Holder’s jurisdiction for the purchase of the New Note, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained and (iv)
the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer
of the such Securities. The Holder’s subscription and payment for, and the Holder’s continued beneficial ownership
of the Securities, will not violate any applicable securities or other laws of the Holder’s jurisdiction that are applicable
to the Holder.

 

4.7       Rule
506(d). If the Holder beneficially owns twenty percent (20%) or more of the outstanding voting securities of the Company,
calculated in accordance with Rule 506(d) of Regulation D of the Act, or may designate a director of the Company, the Holder hereby
represents and warrants to the Company that the Holder has not been convicted of any of the felonies or misdemeanors or been subject
to any of the orders, judgments, decrees or other conditions set forth in Rule 506(d) of Regulation D of the Act.

 

    6

     

    

 

4.8       [Intentionally
Omitted].

 

4.9       Legends.
The Holder understands that any securities issued upon conversion of the New Note may bear one or all of the following legends:

 

(a)       
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SALE OR DISTRIBUTION OF SUCH SHARES MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.”

 

(b)       Any
legend set forth in or required by another section of this Agreement or the New Note.

 

(c)       Any
legend required by the securities laws of any state or country to the extent such laws are applicable to the securities represented
by the certificate so legended.

 

4.10       Market
Standoff. The Holder agrees not to sell any of the Securities during a period specified by the representative of the applicable
underwriters (not to exceed one hundred eighty (180) days) following the effective date of the initial registration statement
of the Company filed under the Act, so long as all officers, directors, and 1% stockholders have executed similar agreements and
are similarly restricted from selling the Company’s stock.

 

4.11       [Intentionally
Omitted].

 

4.12.       No
Conversion. Upon execution of this Agreement until the earlier of (i) the consummation of the Exchange or (ii) the termination
of this Agreement pursuant to Section 7.1 hereof, the Holder hereby agrees that it shall not convert any or all of the
outstanding balance under the 2019 Note.

 

		5.	Events
                                         of Default; Remedies

 

5.1       Events
of Default. Each of the following shall constitute an event of default (each, an “Event of Default”)
under this Agreement and the New Note:

 

(a)       Any
default in the payment, when the same becomes due and payable, of principal under or interest in respect of the New Note, including,
but not limited to, the failure by the Company to pay on the Maturity Date, any and all unpaid principal, accrued interest and
all other amounts owing under this Agreement and the New Note;

 

(b)       The
Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other
law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any general assignment for the benefit of
creditors or takes any corporate action in furtherance of any of the foregoing;

 

(c)       An
involuntary petition is filed against the Company (unless such petition is dismissed or discharged within sixty (60) days) under
any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or
other similar official) is appointed to take possession, custody or control of any property of the Company;

 

    7

     

    

 

(d)       The
Company’s stockholders (other than the Holder) or board of directors affirmatively vote to liquidate, dissolve, or wind
up the Company or the Company otherwise ceases to carry on its ongoing business operations;

 

(e)       If
(i) a material portion of the Company’s assets is attached, seized, levied on, or comes into possession of a trustee or
receiver and the attachment, seizure or levy is not removed in thirty (30) days, (ii) the Company is enjoined, restrained, or
prevented by a court order or other order of a governmental body from conducting its business or (iii) notice of lien, levy, or
assessment is filed against any material portion of the Company’s assets by any court order or other order of any governmental
body and it is not paid within sixty (60) days after the Company received notice thereof; or

 

(f)       The
Company shall fail in any material respect to observe or perform any covenant, obligation, condition or agreement contained in
this Agreement or the New Note (other than a failure to pay as specified in Section 5.1(a) hereof) and such failure shall
continue for thirty (30) days after the Company’s receipt of written notice thereof.

 

5.2       Remedies.
Upon the occurrence or existence of any Event of Default (other than an Event of Default referred to in Sections 5.1(b)
or 5.1(c) hereof) and at any time thereafter during the continuance of such Event of Default, the Holder or any holder
of the New Note may, by written notice to the Company, declare all outstanding obligations payable by the Company under the New
Note to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein to the contrary notwithstanding. Upon the occurrence or existence of any Event
of Default described in Sections 5.1(b) or 5.1(c) hereof, immediately and without notice, all outstanding obligations
payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding.
In the event of any Event of Default, the Company shall pay all reasonable attorneys’ fees and costs incurred by the Holder
in enforcing and collecting the New Note and this Agreement. No right or remedy conferred upon or reserved to the Holder under
this Agreement is intended to be exclusive of any other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right and remedy given hereunder or now and hereafter existing under applicable law.

 

		6.	Conditions
                                         to Closing 

 

6.1       Conditions
to Holder’s Obligations at the Closing. The obligations of the Holder under this Agreement and the New Note are subject
to the fulfillment on or before the Closing of each of the following conditions, which may be waived in writing by the Holder:

 

(a)       Representations
and Warranties. The representations and warranties of the Company contained in Section 3 shall be true on and as of
the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak
as of a specific date, which shall be true and correct as of such specified date).

 

    8

     

    

 

(b)       Performance.
The Company shall have performed and complied with all agreements, obligations, and conditions contained in this Agreement
and the New Note that are required to be performed or complied with by it on or before the Closing.

 

(c)       Qualifications.
All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale of the New Note shall be duly obtained and effective
as of the Closing.

 

(d)       Proceedings
and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and substance to the Holder’s counsel, which shall have
received all such counterpart original and certified copies of such documents as it may reasonably request.

 

6.2       Conditions
to Company’s Obligations at the Closing. The obligations of the Company under this Agreement and the New Note are subject
to the fulfillment on or before the Closing of each of the following conditions, which may be waived in writing by the Company:

 

(a)       Representations
and Warranties. The representations and warranties made by the Holder in Section 4 hereof shall be true and correct
on the Closing Date.

 

(b)       Performance.
The Holder shall have performed and complied with all agreements, obligations, and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the Closing.

 

		7.	Termination

 

7.1       Voluntary
Termination. Except as provided in Section 7.2, this Agreement may be terminated and the Exchange abandoned at any
time prior to the Closing by:

 

(a)       the
mutual agreement of the Company and the Holder; or

 

(b)       the
Company or the Holder if the Closing Date shall not have occurred by October 31, 2020; provided, however, that the right to terminate
this Agreement under this Section 7.1(b) shall not be available to any party whose action or failure to act has been a
principal cause or resulted in the failure of the Closing to occur on or before such date and such action or failure constitutes
a breach of this Agreement.

 

7.2       Effect
of Termination. In the event of the termination of this Agreement as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability or obligation hereunder on the part of the Company or the Holder, or their
respective representatives, as applicable; provided, however, that each party hereto shall remain liable
for any willful breaches of this Agreement, or any certificate or other instruments delivered pursuant to this Agreement prior
to its termination; and provided further, however, that, the provisions of Section 9
and this Section 7.2 shall remain in full force and effect and survive any termination of this Agreement pursuant to the
terms of this Section 7.

 

    9

     

    

 

		8.	Miscellaneous

 

8.1       Binding
Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights,
remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

8.2       Governing
Law. This Agreement shall be governed by and construed under the laws of the State of New York.

 

8.3       Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

8.4       Titles
and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

8.5       Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) five (5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (c) one (1) day after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be sent to the address set forth in this Section
8.5 or at such other address as the Company or the Holder may designate by ten (10) days advance written notice to the other
party hereto.

 

If
to the Holder:

 

Crystal
Amber Fund Limited 

PO
Box 286 

Floor
2, Trafalgar Court 

Les
Banques 

St
Peter Port 

Guernsey 

GY1
4LY

 

With
a copy (that shall not constitute notice) to:

 

Estera
- GG - Crystal Amber Team 

CrystalAmberTeam@estera.com

 

    10

     

    

 

If
to the Company:

 

GI
DYNAMICS, INC. 

320
Congress Street 

Floor
3 

Boston,
MA 02205 

Attention:
Chief Executive Officer

 

With
a copy (that shall not constitute notice) to:

 

Blake
Baron, Esq. 

Mitchell
Silberberg & Knupp LLP 

437
Madison Avenue, 25th Floor 

New
York, New York 10022 

Email:
bjb@msk.com

 

8.6       Amendment;
Modification; Waiver. No amendment, modification or waiver of any provision of this Agreement or consent to departure therefrom
shall be effective unless in writing and approved by the Company and the Holder.

 

8.7       Entire
Agreement. This Agreement and the New Note, including the exhibits attached hereto and thereto, constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any
other party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein
and therein.

 

    11

     

    

 

In
Witness Whereof, the parties have executed
this Note Exchange and Warrant Cancellation Agreement as of the date first
written above.

 

	 	COMPANY:
	 	 	 
	 	GI
    Dynamics, Inc.
	 	 	 
	 	By:	/s/
                                         Scott Schorer

	 	Name: 	Scott Schorer
	 	Title:	Chief Executive
    Officer
	 	 	 
	 	HOLDER:
	 	 	 
	 	Crystal
    Amber Fund Limited
	 	 	 
	 	By:	/s/
                                         Mark Huntley

	 	Name:	Mark
                                         Huntley

	 	Title:	Director

	 	 	 
	 	Executed
    by Crystal Amber Asset Management (Guernsey) Ltd as Investment Manager of Crystal Amber Fund Limited

 

 

 

[Signature
Page to Note Exchange and Warrant Cancellation Agreement]

 

    12

     

    

 

Exhibit
A

 

Form
of Unsecured Convertible Promissory Note

 

See
Exhibit 4.1 to the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission by GI Dynamics, Inc. on September
10, 2020.

 

    Exhibit A-1Exhibit 10.5

 

GI
DYNAMICS, INC. 

 

2020
EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN

 

	 	1.	DEFINITIONS. 	 

 

Unless
otherwise specified or unless the context otherwise requires, the following terms, as used in this GI Dynamics, Inc. 2020 Employee,
Director and Consultant Equity Incentive Plan, have the following meanings:

 

Administrator
means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator
means the Committee.

 

Affiliate
means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.

 

Agreement
means an agreement between the Company and a Participant delivered pursuant to the Plan and pertaining to a Stock Right, in
such form as the Administrator shall approve.

 

Board
of Directors means the Board of Directors of the Company.

 

Cause
means, with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial
malfeasance or non-feasance of duty, (c) unauthorized disclosure of confidential information, (d) breach by a Participant of any
provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant
and the Company or any Affiliate, and (e) conduct substantially prejudicial to the business of the Company or any Affiliate; provided,
however, that any provision in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting
definition of Cause for termination and which is in effect at the time of such termination, shall supersede this definition with
respect to that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant
and the Company.

 

Code
means the United States Internal Revenue Code of 1986, as amended including any successor statute, regulation and guidance
thereto.

 

Committee
means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant
to the provisions of the Plan.

 

Common
Stock means shares of the Company’s common stock, $.01 par value per share.

 

Company
means GI Dynamics, Inc., a Delaware corporation.

 

Consultant
means any natural person who is an advisor or consultant that provides bona fide services to the Company or its Affiliates,
provided that such services are not in connection with the offer or sale of securities in a capital raising transaction, and do
not directly or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.

 

    1

     

    

 

Disability
or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.

 

Employee
means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an
officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more
Stock Rights under the Plan.

 

Exchange
Act means the United States Securities Exchange Act of 1934, as amended.

 

Fair
Market Value of a Share of Common Stock means:

 

(1)
If the Common Stock is listed or quoted on a securities exchange or traded in the over-the-counter market and sales prices are
regularly reported for the Common Stock, the closing price or, if not applicable, the last price of a share of Common Stock as
quoted on that securities exchange constituting the primary market for the Common Stock, as reported in The Wall Street Journal
or such other source as the Company deems reliable and if such applicable date is not a trading day, the last market trading
day prior to such date;

 

(2)
If the Common Stock is not traded on a securities exchange but is traded on the over-the-counter market, if sales prices are not
regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common
Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the
over-the-counter market for the trading day on which Common Stock was traded on the applicable date and if such applicable date
is not a trading day, the last market trading day prior to such date; and

 

(3)
If the Common Stock is neither listed on a securities exchange nor traded in the over-the-counter market, such value as the Administrator,
in good faith, shall determine.

 

ISO
means an option intended to qualify as an incentive stock option under Section 422 of the Code.

 

Non-Qualified
Option means an option which is not intended to qualify as an ISO.

 

Option
means an ISO or Non-Qualified Option granted under the Plan.

 

Participant
means an Employee, director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under
the Plan. As used herein, “Participant” shall include “Participant’s Survivors” where the context
requires.

 

    2

     

    

 

Plan
means this GI Dynamics, Inc. 2020 Employee, Director and Consultant Equity Incentive Plan.

 

Securities
Act means the United States Securities Act of 1933, as amended.

 

Shares
means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital
stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The
Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.

 

Stock-Based
Award means a grant by the Company under the Plan of an equity award or an equity based award which is not an Option or a
Stock Grant.

 

Stock
Grant means a grant by the Company of Shares under the Plan.

 

Stock
Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan -- an ISO, a Non-Qualified
Option, a Stock Grant or a Stock-Based Award.

 

Survivor
means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s
rights to a Stock Right by will or by the laws of descent and distribution. 

 

	 	2.	PURPOSES
    OF THE PLAN. 	 

 

The
Plan is intended to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its
Affiliates in order to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate
and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the
granting of ISOs, Non-Qualified Options, Stock Grants and Stock-Based Awards. 

 

	 	3.	SHARES
    SUBJECT TO THE PLAN. 	 

 

(a)
The number of Shares which may be issued from time to time pursuant to this Plan is 41,710,968 shares of Common Stock.

 

(b)
[Intentionally Omitted].

 

(c)
If an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or if the Company shall reacquire
(at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock
Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued or reacquired
Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding
the foregoing, if a Stock Right is exercised, in whole or in part, by tender of Shares or if the Company or an Affiliate’s
tax withholding obligation is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan
for purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock
Right or portion thereof, and not the net number of Shares actually issued. However, in the case of ISOs, the foregoing provisions
shall be subject to any limitations under the Code.

 

    3

     

    

 

	 	4.	ADMINISTRATION
    OF THE PLAN. 	 

 

The
Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority
to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator
is authorized to:

 

(a)
Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or
advisable for the administration of the Plan;

 

(b)
Determine which Employees, directors and Consultants shall be granted Stock Rights;

 

(c)
Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided, however, that in no event shall
Stock Rights with respect to more than 5,000,000 Shares be granted to any non-employee member of the Board of Directors in any
fiscal year;

 

(d)
Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;

 

(e)
Amend any term or condition of any outstanding Stock Right, including, without limitation, to increase the exercise price or purchase
price or accelerate the vesting schedule, provided that (i) such term or condition as amended is permitted by the Plan; (ii) any
such amendment shall not impair the rights of a Participant under any Stock Right previously granted without such Participant’s
consent or in the event of death of the Participant the Participant’s Survivors; and (iii) any such amendment shall be made
only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including,
but not limited to, the annual vesting limitation contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv)
below with respect to ISOs and pursuant to Section 409A of the Code;

 

(f)
Buy out for a payment in cash or Shares, a Stock Right previously granted and/or cancel any such Stock Right and grant in substitution
therefor other Stock Rights, covering the same or a different number of Shares and having an exercise price or purchase price
per share which may be lower or higher than the exercise price or purchase price of the cancelled Stock Right, based on such terms
and conditions as the Administrator shall establish and the Participant shall accept; and

 

(g)
Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply
with or take advantage of any tax or other laws applicable to the Company, any Affiliate or to Participants or to otherwise facilitate
the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Rights or
Shares issuable pursuant to a Stock Right;

 

provided,
however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context
of not causing any adverse tax consequences under Section 409A of the Code and preserving the tax status under Section 422 of
the Code of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator
of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board
of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors
may take any action under the Plan that would otherwise be the responsibility of the Committee.

 

    4

     

    

 

To
the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities
and powers to any one or more of its members and may delegate to one or more officers of the Company the power to grant an Award,
other than to themselves, under this Plan to Participants who are Employees and/or Consultants. The Board of Directors or the
Committee may revoke any such allocation or delegation at any time. Notwithstanding the foregoing if the Company is subject to
Section 16 of the Exchange Act, only the Board of Directors or the Committee shall be authorized to grant a Stock Right to any
director of the Company or to any “officer” of the Company as defined by Rule 16a-1 under the Exchange Act.

  

	 	5.	ELIGIBILITY
    FOR PARTICIPATION. 	 

 

The
Administrator will, in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be
an Employee, director or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the
foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant
of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such
person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock
Right. ISOs may be granted only to Employees who are deemed to be residents of the United States for tax purposes. Non-Qualified
Options, Stock Grants and Stock-Based Awards may be granted to any Employee, director or Consultant of the Company or an Affiliate.
The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation
in any other grant of Stock Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees,
directors or Consultants. 

 

	 	6.	TERMS
    AND CONDITIONS OF OPTIONS. 	 

 

Each
Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and
conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate
including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto.
The Option Agreements shall be subject to at least the following terms and conditions:

 

(a)
Non-Qualified Options: Each Option intended to be a Non-Qualified Option shall be subject to the terms and conditions which
the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards
for any such Non-Qualified Option:

 

	 	(i)	Exercise
    Price: Each Option Agreement shall state the exercise price (per share) of the Shares covered by each Option, which exercise
    price shall be determined by the Administrator and shall be at least equal to the Fair Market Value per share of Common Stock
    on the date of grant of the Option.	 

 

    5

     

    

 

	 	(ii)	Number
    of Shares: Each Option Agreement shall state the number of Shares to which it pertains.	 

 

	 	(iii)	Option
    Periods: Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which
    it may no longer be exercised, and may provide that the Option rights accrue or become exercisable in installments over a
    period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events.	 

 

	 	(iv)	Option
    Conditions: Exercise of any Option may be conditioned upon the Participant’s execution of a Share purchase agreement
    in form satisfactory to the Administrator providing for certain protections for the Company and its other shareholders, including
    requirements that:	 

 

	 	A.	The
    Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and	 

 

	 	B.	The
    Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge
    that the Shares will bear legends noting any applicable restrictions.	 

 

	 	(v)	Term
    of Option: Each Option shall terminate not more than ten years from the date of the grant or at such earlier time as the
    Option Agreement may provide.	 

 

(b)
ISOs: Each Option intended to be an ISO shall be issued only to an Employee who is deemed to be a resident of the United
States for tax purposes, and shall be subject to the following terms and conditions, with such additional restrictions or changes
as the Administrator determines are appropriate but not in conflict with Section 422 of the Code and relevant regulations and
rulings of the Internal Revenue Service:

 

	 	(i)	Minimum
    standards: The ISO shall meet the minimum standards required of Non-Qualified Options, as described in Paragraph 6(a)
    above, except clause (i) and (v) thereunder.	 

 

	 	(ii)	Exercise
    Price: Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable attribution
    rules in Section 424(d) of the Code:	 

 

	 	A.	10%
    or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price
    per share of the Shares covered by each ISO shall not be less than 100% of the Fair Market Value per share of the Common Stock
    on the date of grant of the Option; or	 

 

    6

     

    

 

	 	B.	More
    than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per
    share of the Shares covered by each ISO shall not be less than 110% of the Fair Market Value per share of the Common Stock
    on the date of grant of the Option.	 

 

	 	(iii)	Term
    of Option: For Participants who own:	 

 

	 	A.	10%
    or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate
    not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or	 

 

	 	B.	More
    than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate
    not more than five years from the date of the grant or at such earlier time as the Option Agreement may provide.	 

 

	 	(iv)	Limitation
    on Yearly Exercise: The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar
    year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined
    on the date each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant
    in any calendar year does not exceed $100,000.	 
	 	 	 	 
	 	(v)	Aggregate
    Limitation. No more than 41,709,605 Shares shall be issued pursuant to the exercise of ISOs.	 

 

	 	7.	TERMS
    AND CONDITIONS OF STOCK GRANTS. 	 

 

Each
Stock Grant to a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required
by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall
contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject
to the following minimum standards:

 

(a)
Each Agreement shall state the purchase price per share, if any, of the Shares covered by each Stock Grant, which purchase price
shall be determined by the Administrator but shall not be less than the minimum consideration required by the Delaware General
Corporation Law, if any, on the date of the grant of the Stock Grant;

 

(b)
Each Agreement shall state the number of Shares to which the Stock Grant pertains; and

 

(c)
Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant,
including the time and events upon which such rights shall accrue and the purchase price therefor, if any. 

 

    7

     

    

 

	 	8.	TERMS
    AND CONDITIONS OF OTHER STOCK-BASED AWARDS. 	 

 

The
Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions
as the Administrator may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant
of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal
terms of each Stock-Based Award shall be set forth in an Agreement, duly executed by the Company and, to the extent required by
law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall
contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company.

 

The
Company intends that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the
Code or meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable,
and be operated in accordance with Section 409A of the Code so that any compensation deferred under any Stock-Based Award (and
applicable investment earnings) shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall
be construed to effect the intent as described in this Paragraph 8. 

 

	 	9.	EXERCISE
    OF OPTIONS AND ISSUE OF SHARES. 	 

 

An
Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form
acceptable to the Administrator, which may include electronic notice), together with provision for payment of the aggregate exercise
price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any
other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option (which signature
may be provided electronically in a form acceptable to the Administrator), shall state the number of Shares with respect to which
the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the
exercise price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or
by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months
(if required to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate
cash exercise price for the number of Shares as to which the Option is being exercised, or (c) at the discretion of the Administrator,
by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair
Market Value equal as of the date of exercise to the aggregate exercise price for the number of Shares as to which the Option
is being exercised, or (d) at the discretion of the Administrator, (after consideration of applicable securities, tax and accounting
implications), by delivery of the grantee’s personal recourse note bearing interest payable not less than annually at no
less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (e) at the discretion of the Administrator,
in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator,
or (f) at the discretion of the Administrator, by any combination of (a), (b), (c), (d) and (e) above or (g) at the discretion
of the Administrator, by payment of such other lawful consideration as the Administrator may determine. Notwithstanding the foregoing,
the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.

 

    8

     

    

 

The
Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the
Participant’s Survivors, as the case may be). In determining what constitutes “reasonably promptly,” it is expressly
understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation
(including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action
with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares. 

 

	 	10.	PAYMENT
    IN CONNECTION WITH THE ISSUANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES. 	 

 

Any
Stock Grant or Stock-Based Award requiring payment of a purchase price for the Shares as to which such Stock Grant or Stock-Based
Award is being granted shall be made (a) in United States dollars (or in such other currency as the Administrator may determine)in
cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least
six months (if required to avoid negative accounting treatment) and having a Fair Market Value equal as of the date of payment
to the purchase price of the Stock Grant or Stock-Based Award, or (c) at the discretion of the Administrator, by any combination
of (a) and (b) above; or (d) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator
may determine.

 

The
Company shall when required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or
Stock-Based Award was made to the Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow
provision set forth in the applicable Agreement. In determining what constitutes “reasonably promptly,” it is expressly
understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation
(including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action
with respect to the Shares prior to their issuance. 

 

	 	11.	RIGHTS
    AS A SHAREHOLDER. 	 

 

No
Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such
Stock Right except after due exercise of an Option or issuance of Shares as set forth in any Agreement, tender of the aggregate
exercise or purchase price, if any, for the Shares being purchased and registration of the Shares in the Company’s share
register in the name of the Participant.

 

	 	12.	ASSIGNABILITY
    AND TRANSFERABILITY OF STOCK RIGHTS. 	 

 

By
its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the
laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement
provided that no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred
except in compliance with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right
by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not
be deemed a transfer prohibited by this Paragraph. Except as provided above during the Participant’s lifetime a Stock Right
shall only be exercisable by or issued to such Participant (or his or her legal representative) and shall not be assigned, pledged
or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar
process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted
thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall
be null and void.

 

    9

     

    

 

	 	13.	EFFECT
    ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY. 	 

 

Except
as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an Employee,
director or Consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:

 

(a)
A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate (for any reason other than
termination for Cause, Disability, or death for which events there are special rules in Paragraphs 14, 15, and 16, respectively),
may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of
service, but only within such term as the Administrator has designated in a Participant’s Option Agreement.

 

(b)
Except as provided in Subparagraph (c) below, or Paragraph 15 or 16, in no event may an Option intended to be an ISO, be exercised
later than three months after the Participant’s termination of employment.

 

(c)
The provisions of this Paragraph, and not the provisions of Paragraph 15 or 16, shall apply to a Participant who subsequently
becomes Disabled or dies after the termination of employment, director status or consultancy; provided, however, in the case of
a Participant’s Disability or death within three months after the termination of employment, director status or consultancy,
the Participant or the Participant’s Survivors may exercise the Option within one year after the date of the Participant’s
termination of service, but in no event after the date of expiration of the term of the Option.

 

(d)
Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination
of director status or termination of consultancy, but prior to the exercise of an Option, the Administrator determines that, either
prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then
such Participant shall forthwith cease to have any right to exercise any Option.

 

(e)
A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary
disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose,
shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s
employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly
provide; provided, however, that, for ISOs, any leave of absence granted by the Administrator of greater than ninety days, unless
pursuant to a contract or statute that guarantees the right to reemployment, shall cause such ISO to become a Non-Qualified Option
on the 181st day following such leave of absence.

 

    10

     

    

 

(f)
Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not
be affected by any change of a Participant’s status within or among the Company and any Affiliates, so long as the Participant
continues to be an Employee, director or Consultant of the Company or any Affiliate.

  

	 	14.	EFFECT
    ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE. 	 

 

Except
as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service
(whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause prior to the time that
all his or her outstanding Options have been exercised:

 

(a)
All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated for Cause
will immediately be forfeited.

 

(b)
Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary
that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s
termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant’s termination
the Participant engaged in conduct which would constitute Cause, then the right to exercise any Option is forfeited.

 

	 	15.	EFFECT
    ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY. 	 

 

Except
as otherwise provided in a Participant’s Option Agreement:

 

(a)
A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability may
exercise any Option granted to such Participant:

  

	 	(i)	To
the extent that the Option has become exercisable but has not been exercised on the date of the Participant’s termination
of service due to Disability; and
	 

 

	 	(ii)	In
    the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of the Participant’s
    termination of service due to Disability of any additional vesting rights that would have accrued on the next vesting date
    had the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting
    period prior to the date of the Participant’s termination of service due to Disability.	 

  

    11

     

    

 

(b)
A Disabled Participant may exercise the Option only within the period ending one year after the date of the Participant’s
termination of service due to Disability, notwithstanding that the Participant might have been able to exercise the Option as
to some or all of the Shares on a later date if the Participant had not been terminated due to Disability and had continued to
be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.

 

(c)
The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless
a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such
procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved
by the Administrator, the cost of which examination shall be paid for by the Company. 

 

	 	16.	EFFECT
    ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT. 	 

 

Except
as otherwise provided in a Participant’s Option Agreement:

 

(a)
In the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an
Affiliate, such Option may be exercised by the Participant’s Survivors: 

 

	 	(i)	To
the extent that the Option has become exercisable but has not been exercised on the date of death; and
	 

 

	 	(ii)	In
    the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death
    of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration
    shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.	 

 

(b)
If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within
one year after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option
as to some or all of the Shares on a later date if he or she had not died and had continued to be an Employee, director or Consultant
or, if earlier, within the originally prescribed term of the Option.

  

	 	17.	EFFECT
    OF TERMINATION OF SERVICE ON STOCK GRANTS AND STOCK-BASED AWARDS. 	 

 

In
the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any
reason before the Participant has accepted a Stock Grant or a Stock-Based Award and paid the purchase price, if required, such
grant shall terminate.

 

For
purposes of this Paragraph 17 and Paragraph 18 below, a Participant to whom a Stock Grant has been issued under the Plan who is
absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a Disability
as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence,
be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy
with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.

 

    12

     

    

 

In
addition, for purposes of this Paragraph 17 and Paragraph 18 below, any change of employment or other service within or among
the Company and any Affiliates shall not be treated as a termination of employment, director status or consultancy so long as
the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate. 

 

	 	18.	EFFECT
    ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY. 	 

 

Except
as otherwise provided in a Participant’s Stock Grant Agreement, in the event of a termination of service (whether as an
Employee, director or Consultant), other than termination for Cause, Disability, or death for which events there are special rules
in Paragraphs 19, 20, and 21, respectively, before all forfeiture provisions or Company rights of repurchase shall have lapsed,
then the Company shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant as to which the Company’s
forfeiture or repurchase rights have not lapsed. 

 

	 	19.	EFFECT
    ON STOCK GRANTS OF TERMINATION OF SERVICE FOR CAUSE. 	 

 

Except
as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply if the Participant’s service
(whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:

 

(a)
All Shares subject to any Stock Grant that remain subject to forfeiture provisions or as to which the Company shall have a repurchase
right shall be immediately forfeited to the Company as of the time the Participant is notified his or her service is terminated
for Cause.

 

(b)
Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary
that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s
termination of service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct
which would constitute Cause, then all Shares subject to any Stock Grant that remained subject to forfeiture provisions or as
to which the Company had a repurchase right on the date of termination shall be immediately forfeited to the Company.

  

	 	20.	EFFECT
    ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY. 	 

 

Except
as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply if a Participant ceases to be
an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions
or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however,
that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse
to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of Disability as would have lapsed
had the Participant not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.

 

    13

     

    

 

The
Administrator shall make the determination both as to whether Disability has occurred and the date of its occurrence (unless a
procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such
procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved
by the Administrator, the cost of which examination shall be paid for by the Company. 

 

	 	21.	EFFECT
    ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT. 	 

  

Except
as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply in the event of the death of a
Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the
forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall be exercisable;
provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or
rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of death as
would have lapsed had the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant’s
date of death.

  

	 	22.	PURCHASE
    FOR INVESTMENT. 	 

 

Unless
the offering and sale of the Shares shall have been effectively registered under the Securities Act, the Company shall be under
no obligation to issue Shares under the Plan unless and until the following conditions have been fulfilled:

 

(a)
The person who receives a Stock Right shall warrant to the Company, prior to the receipt of Shares, that such person is acquiring
such Shares for his or her own account, for investment, and not with a view to, or for sale in connection with, the distribution
of any such Shares, in which event the person acquiring such Shares shall be bound by the provisions of the following legend (or
a legend in substantially similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant to
such exercise or such grant:

 

“The
shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any
person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under
the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an
exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state
securities laws.”

 

(b)
At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued
in compliance with the Securities Act without registration thereunder.

 

    14

     

    

 

	 	23.	DISSOLUTION
    OR LIQUIDATION OF THE COMPANY. 	 

 

Upon
the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised
and all Stock Grants and Stock-Based Awards which have not been accepted, to the extent required under the applicable Agreement,
will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors
have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately
prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable
or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation
of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator
or specifically provided in the applicable Agreement.

  

	 	24.	ADJUSTMENTS. 	 

 

Subject
to the requirements imposed on the Company under the rules of any securities exchange, upon the occurrence of any of the following
events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter
provided, unless otherwise specifically provided in a Participant’s Agreement:

 

(a)
Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller
number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock,
or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed
with respect to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable thereunder
shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the exercise
or purchase price per share, to reflect such events. The number of Shares subject to the limitations in Paragraph 3(a) and 4(c)
shall also be proportionately adjusted upon the occurrence of such events.

 

(b)
Corporate Transactions. If the Company is to be consolidated with or acquired by another entity in a merger, consolidation,
or sale of all or substantially all of the Company’s assets other than a transaction to merely change the state of incorporation
(a “Corporate Transaction”), the Administrator or the board of directors of any entity assuming the obligations of
the Company hereunder (the “Successor Board”), shall, as to outstanding Options, either (i) make appropriate provision
for the continuation of such Options by substituting on an equitable basis for the Shares then subject to such Options either
the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction
or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that such Options
must be exercised (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options
being made partially or fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of
such notice, at the end of which period such Options which have not been exercised shall terminate; or (iii) terminate such Options
in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder
of the number of shares of Common Stock into which such Option would have been exercisable (either (A) to the extent then exercisable
or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this
Subparagraph) less the aggregate exercise price thereof. For purposes of determining the payments to be made pursuant to
Subclause (iii) above, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than
cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board of
Directors.

 

    15

     

    

 

With
respect to outstanding Stock Grants, the Administrator or the Successor Board, shall make appropriate provision for the continuation
of such Stock Grants on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such
Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate
Transaction or securities of any successor or acquiring entity. In lieu of the foregoing, in connection with any Corporate Transaction,
the Administrator may provide that, upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be terminated
in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder
of the number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no longer subject to any
forfeiture or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights
being waived upon such Corporate Transaction).

 

In
taking any of the actions permitted under this Paragraph 24(b), the Administrator shall not be obligated by the Plan to treat
all Stock Rights, all Stock Rights held by a Participant, or all Stock Rights of the same type, identically.

 

(c)
Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company other than a Corporate
Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares
of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization
shall be entitled to receive for the price paid upon such exercise or acceptance if any, the number of replacement securities
which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.

 

(d)
Adjustments to Stock-Based Awards. Upon the happening of any of the events described in Subparagraphs (a), (b) or (c) above,
any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator
or the Successor Board shall determine the specific adjustments to be made under this Paragraph 25, including, but not limited
to the effect of any, Corporate Transaction and, subject to Paragraph 5, its determination shall be conclusive.

 

(e)
Modification of Options. Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph (a), (b) or (c) above
with respect to Options shall be made only after the Administrator determines whether such adjustments would (i) constitute a
“modification” of any ISOs (as that term is defined in Section 424(h) of the Code) or (ii) cause any adverse tax consequences
for the holders of Options, including, but not limited to, pursuant to Section 409A of the Code. If the Administrator determines
that such adjustments made with respect to Options would constitute a modification or other adverse tax consequence, it may refrain
from making such adjustments, unless the holder of an Option specifically agrees in writing that such adjustment be made and such
writing indicates that the holder has full knowledge of the consequences of such “modification” on his or her income
tax treatment with respect to the Option. This paragraph shall not apply to the acceleration of the vesting of any ISO that would
cause any portion of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in
Paragraph 6(b)(iv).

  

    16

     

    

 

	 	25.	ISSUANCES
    OF SECURITIES. 	 

 

Except
as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of
shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or
in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.

  

	 	26.	FRACTIONAL
    SHARES. 	 

 

No
fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in
lieu of such fractional shares equal to the Fair Market Value thereof. 

 

	 	27.	CONVERSION
    OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOS. 	 

 

The
Administrator, at the written request of any Participant, may in its discretion take such actions as may be necessary to convert
such Participant’s ISOs (or any portions thereof) that have not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs, regardless of whether the Participant is an Employee of the Company
or an Affiliate at the time of such conversion. At the time of such conversion, the Administrator (with the consent of the Participant)
may impose such conditions on the exercise of the resulting Non-Qualified Options as the Administrator in its discretion may determine,
provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant
the right to have such Participant’s ISOs converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Administrator takes appropriate action. The Administrator, with the consent of the Participant, may also terminate
any portion of any ISO that has not been exercised at the time of such conversion.

 

	 	28.	WITHHOLDING. 	 

 

In
the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act (“F.I.C.A.”)
withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s
salary, wages or other remuneration in connection with the issuance of a Stock Right or Shares under the Plan or for any other
reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant
advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum
amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common
Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value
of the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of
Fair Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the
Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required
to advance the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may condition
the exercise of an Option for less than the then Fair Market Value on the Participant’s payment of such additional withholding.

 

    17

     

    

 

	 	29.	NOTICE
    TO COMPANY OF DISQUALIFYING DISPOSITION. 	 

 

Each
Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying
Disposition of any Shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c)
of the Code and includes any disposition (including any sale or gift) of such Shares before the later of (a) two years after the
date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except
as otherwise provided in Section 424(c) of the Code. If the Employee has died before such Shares are sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur thereafter.

 

	 	30.	TERMINATION
    OF THE PLAN. 	 

 

The
Plan will terminate on August 8, 2030, the date which is ten years from the earlier of the date of its adoption by the
Board of Directors and the date of its approval by the shareholders of the Company. The Plan may be terminated at an earlier date
by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such earlier termination shall
not affect any Agreements executed prior to the effective date of such termination. Termination of the Plan shall not affect any
Stock Rights theretofore granted. 

 

	 	31.	AMENDMENT
    OF THE PLAN AND AGREEMENTS. 	 

 

The
Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without
limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be
granted under the Plan for favorable federal income tax treatment as may be afforded incentive stock options under Section 422
of the Code (including deferral of taxation upon exercise), and to the extent necessary to qualify the Shares issuable under the
Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers.
Any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval
shall be subject to obtaining such shareholder approval. Any modification or amendment of the Plan shall not, without the consent
of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her. With the consent of
the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant
but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements may be amended by
the Administrator in a manner which is not adverse to the Participant.

 

    18

     

    

 

	 	32.	EMPLOYMENT
    OR OTHER RELATIONSHIP. 	 

 

Nothing
in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy
or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director
status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any
period of time.

  

	 	33.	GOVERNING
    LAW. 	 

 

This
Plan shall be construed and enforced in accordance with the law of the State of Delaware.

 

*
* * * *

 

Originally
adopted by the Board of Directors on August 8, 2020

 

Originally
adopted by the stockholders on September 3, 2020  

 

    19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}]]