Document:

Exhibit 10.5

 

November 18, 2020

 

Consonance-HFW Acquisition Corp.

1 Palmer Square, Suite 305

Princeton NJ 08540

 

Re:                           Initial Public Offering

 

Ladies and Gentlemen:

 

This letter (this
 “Letter Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting
Agreement”) entered into by and between Consonance-HFW Acquisition Corp., a Cayman Islands exempted company (the
 “Company”) and J.P. Morgan Securities LLC, as representative (the “Representative”)
of the underwriter named therein (the “Underwriter”), relating to an underwritten initial public offering
(the “Public Offering”) of 8,000,000 of the Company’s units (including 1,200,000 units that may
be purchased pursuant to the Underwriters’ option to purchase additional units, the “Units”), each
comprised of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”),
and one-third of one redeemable warrant (each whole warrant, a “Warrant”). Each Warrant entitles the
holder thereof to purchase one Ordinary Share at a price of $11.50 per share, subject to adjustment. The Units will be sold in
the Public Offering pursuant to a registration statement on Form S-1 and a prospectus (the “Prospectus”)
filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”). Certain capitalized
terms used herein are defined in paragraph 1 hereof.

 

In order to induce
the Company and the Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Consonance Life Sciences (the “Sponsor”)
and each of the undersigned (each, an “Insider” and, collectively, the “Insiders”)
hereby agree with the Company as follows:

 

1.           Definitions.
As used herein, (i) “Business Combination” shall mean a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses or entities; (ii) “Founder Shares”
shall mean the 2,300,000 Class B ordinary shares of the Company, par value $0.0001 per share, outstanding prior to the consummation
of the Public Offering; (iii) “Private Placement Units” shall mean the 410,000 units (or 434,000 units
if the Underwriter’s over-allotment option is exercised in full) that will be acquired by the Sponsor for an aggregate purchase
price of $4,100,000 (or up to $4,340,000 if the Underwriter exercises its option to purchase additional units in full) in a private
placement that shall close simultaneously with the consummation of the Public Offering (including the Ordinary Shares and private
placement warrants underlying such units and the Ordinary Shares issuable upon exercise of such private placement units thereof);
(iv) “Public Shareholders” shall mean the holders of Ordinary Shares included in the Units issued in
the Public Offering; (v) “Public Shares” shall mean the Ordinary Shares included in the Units issued
in the Public Offering; (vi) “Trust Account” shall mean the trust account into which a portion of the
net proceeds of the Public Offering and the sale of the Private Placement Units shall be deposited; (vii) “Transfer”
shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase
or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position
or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder with respect to, any security,
(b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise,
or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b); and (viii) “Charter”
shall mean the Company’s Amended and Restated Memorandum and Articles of Association, as the same may be amended from time
to time.

 

    1

    

    

 

 2.           Representations and Warranties.

 

(a)               The Sponsor and each Insider, with respect to itself, herself or himself, represent and warrant to the Company that it,
she or he has the full right and power, without violating any agreement to which it, she or he is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement, and,
as applicable, to serve as an officer of the Company and/or a director on the Company’s Board of Directors (the “Board”),
as applicable, and each Insider hereby consents to being named in the Prospectus, road show and any other materials as an officer
and/or director of the Company, as applicable.

 

(b)               Each Insider represents and warrants, with respect to herself or himself, that such Insider’s biographical information
furnished to the Company (including any such information included in the Prospectus) is true and accurate in all material respects
and does not omit any material information with respect to such Insider’s background. The Insider’s questionnaire furnished
to the Company is true and accurate in all material respects. Each Insider represents and warrants that such Insider is not subject
to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any jurisdiction; such Insider has never been convicted of,
or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another
person, or (iii) pertaining to any dealings in any securities and such Insider is not currently a defendant in any such criminal
proceeding; and such Insider has never been suspended or expelled from membership in any securities or commodities exchange or
association or had a securities or commodities license or registration denied, suspended or revoked.

 

3.          
Business Combination Vote. It is acknowledged and agreed that the Company shall not enter into a definitive agreement
regarding a proposed Business Combination without the prior consent of the Sponsor. The Sponsor and each Insider, with respect
to itself or herself or himself, agrees that if the Company seeks shareholder approval of a proposed initial Business Combination,
then in connection with such proposed initial Business Combination, it, she or he, as applicable, shall vote all Founder Shares
and any Public Shares held by it, her or him, as applicable, in favor of such proposed initial Business Combination (including
any proposals recommended by the Board in connection with such Business Combination) and not redeem any Public Shares held by it,
her or him, as applicable, in connection with such shareholder approval.

 

 4.           Failure to Consummate a Business Combination; Trust Account Waiver.

 

(a)              The
Sponsor and each Insider hereby agree, with respect to itself, herself or himself, that in the event that the Company fails to
consummate its initial Business Combination within the time period set forth in the Charter, the Sponsor and each Insider shall
take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up; (ii) as promptly
as reasonably possible but not more than 10 business days thereafter, redeem 100% of the Public Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held
in the Trust Account and not previously released to the Company to pay income taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’
rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Board, liquidate
and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide
for claims of creditors and in all cases subject to the other requirements of applicable law. The Sponsor and each Insider agree
not to propose any amendment to the Charter (i) that would modify the substance or timing of the Company’s obligation to
provide holders of the Public Shares the right to have their shares redeemed in connection with an initial Business Combination
or to redeem 100% of the Public Shares if the Company does not complete an initial Business Combination within the required time
period set forth in the Charter or (ii) with respect to any provision relating to the rights of holders of Public Shares unless
the Company provides its Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account and not previously released to the Company to pay income taxes, if any, divided
by the number of then-outstanding Public Shares.

 

    2

    

    

 

(b)              The Sponsor and each Insider, with respect to itself, herself or himself, acknowledges that it, she or he has no right,
title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result
of any liquidation of the Company with respect to the Founder Shares held by it, her or him, if any. The Sponsor and each Insider
hereby further waives, with respect to any Founder Shares and Public Shares held by it, her or him, as applicable, any redemption
rights it, she or he may have in connection with (x) the completion of the Company’s initial Business Combination, and (y)
a shareholder vote to approve an amendment to the Charter (i) that would modify the substance or timing of the Company’s
obligation to provide holders of the Public Shares the right to have their shares redeemed in connection with an initial Business
Combination or to redeem 100% of the Public Shares if the Company has not consummated an initial Business Combination within the
time period set forth in the Charter or (ii) with respect to any provision relating to the rights of holders of Public Shares (although
the Sponsor and the Insiders shall be entitled to liquidation rights with respect to any Public Shares they hold if the Company
fails to consummate a Business Combination within the required time period set forth in the Charter).

 

 5.           Lock-up; Transfer Restrictions.

 

(a)               The Sponsor and the Insiders agree that they shall not Transfer any Founder Shares (the “Founder Shares Lock-up”)
until the earliest of (A) one year after the completion of the Company’s initial Business Combination and (B) the date following
the completion of an initial Business Combination on which the Company completes a liquidation, merger, share exchange, reorganization
or other similar transaction that results in all of the Public Shareholders having the right to exchange their Ordinary Shares
for cash, securities or other property (the “Founder Shares Lock-up Period”). Notwithstanding the foregoing,
if, subsequent to a Business Combination, the closing price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted
for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within
any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination, the Founder Shares
shall be released from the Founder Shares Lock-up.

 

(b)              Subject
to the provisions set forth in paragraph 5(c), the Sponsor and Insiders agree that they shall not effectuate any Transfer
of Private Placement Units or the private placement shares and private placement warrants underlying such Private Placement Units
until 30 days after the completion of an initial Business Combination.

 

(c)               Notwithstanding
the provisions set forth in paragraphs 5(a) and (b), Transfers of the Founder Shares, Private Placement Units and
the private placement shares and private placement warrants underlying the Private Placement Units are permitted (a) to the Company’s
officers or directors, any affiliates or family member of any of the Company’s officers or directors, any members or partners
of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of such affiliates; (b) in the case of an
individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a
member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case
of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual,
pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of
a Business Combination at prices no greater than the price at which the Founder Shares, private placement warrants, private placement
shares or Ordinary Shares, as applicable, were originally purchased; (f) by virtue of the Sponsor’s organizational documents
upon liquidation or dissolution of the Sponsor; (g) to the Company for no value for cancellation in connection with the consummation
of its initial Business Combination, (h) in the event of the Company’s liquidation prior to the completion of its initial
Business Combination; or (i) in the event of completion of a liquidation, merger, share exchange or other similar transaction
which results in all of the Company’s Public Shareholders having the right to exchange their Ordinary Shares for cash, securities
or other property subsequent to the completion of an initial Business Combination; provided, however, that in the
case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these
transfer restrictions.

 

    3

    

    

 

(d)              During the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the
Sponsor and each Insider shall not, without the prior written consent of the Representative, Transfer any Units, Ordinary Shares,
Warrants or any other securities convertible into, or exercisable or exchangeable for, Ordinary Shares held by it, her or him,
as applicable, subject to certain exceptions enumerated in Section 4(h) of the Underwriting Agreement.

 

6.           Remedies.
The Sponsor and each of the Insiders hereby agree and acknowledge that (i) each of the Underwriters and the Company would be irreparably
injured in the event of a breach by the Sponsor or such Insider of its, her or his obligations, as applicable under paragraphs
3, 4, 5, 7, 10 and 11, (ii) monetary damages may not be an adequate remedy for such breach
and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other remedy that such party may
have in law or in equity, in the event of such breach.

 

7.           Payments
by the Company. Except as disclosed in the Prospectus, neither the Sponsor nor any affiliate of the Sponsor nor any director
or officer of the Company nor any affiliate of the directors and officers shall receive from the Company any finder’s fee,
reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation prior to, or in connection with
any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless
of the type of transaction that it is).

 

8.           Director and Officer Liability Insurance. The Company will maintain an insurance policy or policies providing directors’
and officers’ liability insurance, and the Insiders shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers.

 

9.           Termination.
This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder Shares Lock-up Period and (ii) the liquidation
of the Company; provided, however, that this Letter Agreement shall terminate in the event that the Public Offering
is not consummated and closed by December 31, 2020; provided further that paragraph 10 of this Letter Agreement
shall survive such liquidation.

 

10.         Indemnification. In the event of the liquidation of the Trust Account upon the failure of the Company to consummate
its initial Business Combination within the time period set forth in the Charter, the Sponsor (the “Indemnitor”)
agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including,
but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any
litigation, whether pending or threatened) to which the Company may become subject as a result of any claim by (i) any third party
for services rendered or products sold to the Company (except for the Company’s independent auditors) or (ii) any prospective
target business with which the Company has discussed entering into a transaction agreement (a “Target”);
provided, however, that such indemnification of the Company by the Indemnitor (x) shall apply only to the extent
necessary to ensure that such claims by a third party for services rendered or products sold to the Company or a Target do not
reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per
Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share
due to reductions in the value of the trust assets, in each case net of interest that may be withdrawn to pay the Company’s
tax obligations, (y) shall not apply to any claims by a third party or Target who executed a waiver of any and all rights to the
monies held in the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply to any claims under the Company’s
indemnity of the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.
The Indemnitor shall have the right to defend against any such claim with counsel of its choice reasonably satisfactory to the
Company if, within 15 days following written receipt of notice of the claim to the Indemnitor, the Indemnitor notifies the Company
in writing that it shall undertake such defense.

 

    4

    

    

 

11.         Forfeiture
of Founder Shares. To the extent that the Underwriters do not exercise their option to purchase additional Units within 45
days from the date of the Prospectus in full (as further described in the Prospectus), the Sponsor agrees to automatically surrender
to the Company for no consideration, for cancellation at no cost, an aggregate number of Founder Shares so that the number of
Founder Shares will equal of 20% of the sum of the total number of Ordinary Shares and Founder Shares outstanding at such time.
The Sponsor and Insiders further agree that to the extent that the size of the Public Offering is increased or decreased, the
Company will effect a share capitalization or a share repurchase, as applicable, with respect to the Founder Shares immediately
prior to the consummation of the Public Offering in such amount as to maintain the number of Founder Shares at 20% of the sum
of the total number of Ordinary Shares and Founder Shares outstanding at such time.

 

12.         Entire
Agreement. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the
subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto,
written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This
Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular
provision, except by a written instrument executed by (1) each Insider that is the subject of any such change, amendment, modification
or waiver and (2) the Sponsor.

 

13.         Assignment.
No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the
prior written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual
and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding
on the Sponsor, each of the Insiders and each of their respective successors, heirs, personal representatives and assigns and
permitted transferees.

 

14.         Counterparts.
This Letter Agreement may be executed in any number of original or facsimile counterparts, and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

    5

    

    

 

15.         Effect
of Headings. The paragraph headings herein are for convenience only and are not part of this Letter Agreement and shall not
affect the interpretation thereof.

 

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

 

17.        
Governing Law. This Letter Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive
laws of another jurisdiction. The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or
relating in any way to, this Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New
York, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive, and (ii) waive any
objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.

 

18.         
Notices. Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter
Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt
requested), by hand delivery or facsimile or other electronic transmission.

 

[Signature Page Follows]

 

    6

    

    

 

	 	 	Sincerely,
	 	 	 
	 	 	CONSONANCE LIFE SCIENCES
	 	 	 
	 	 	By:	/s/ Gad Soffer
	 	 	Name:	Gad Soffer
	 	 	Title:	Member
	 	 	 
	 	 	Christopher Haqq
	 	 	 
	 	 	By:	/s/ Christopher Haqq
	 	 	 	 
	 	 	 	 
	 	 	Jennifer Jarrett
	 	 	 	 
	 	 	By:
	/s/ Jennifer Jarrett
	 	 	 	 
	 	 	 	 
	 	 	Donald J. Santel
	 	 	 	 
	 	 	By:	/s/ Donald J. Santel
	 	 	 	 
	 	 	 	 
	Acknowledged and Agreed:	 	 	 
	 	 	 	 
	CONSONANCE-HFW ACQUISITION CORP.	 	 	 
	 	 	 	 
	By:	/s/ Gad Soffer	 	 	 
	Name: 	Gad Soffer	 	 	 
	Title:	Chief Executive OfficerExhibit 4.2

 

THE REGISTERED HOLDER OF THIS UNDERWRITER
WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS UNDERWRITER WARRANT EXCEPT AS HEREIN PROVIDED
AND THE REGISTERED HOLDER OF THIS UNDERWRITER WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS
UNDERWRITER WARRANT OR CAUSE IT TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT
IN THE EFFECTIVE ECONOMIC DISPOSITION OF THE UNDERWRITER WARRANT BY ANY PERSON FOR A PERIOD BEGINNING FROM THE EFFECTIVENESS OF
THE REGISTRATION STATEMENT (DEFINED BELOW) UNTIL 180 DAYS AFTER THE EFFECTIVE DATE OF THE OFFERING (DEFINED BELOW) TO ANYONE OTHER
THAN (I) NETWORK 1 FINANCIAL SECURITIES, INC. (“NETWORK 1”) OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION
WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF NETWORK 1 OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER AND IN
ACCORDANCE WITH FINRA RULE 5110(E)(2).

 

UNDERWRITER WARRANT

 

Warrant Certificate No: ___

 

Original Issue Date: ___

 

For the Purchase of

 

___ Ordinary Shares

 

of

 

CN ENERGY GROUP. INC.

 

1.             Underwriter
Warrant.

 

THIS CERTIFIES THAT, for value received,
Network 1 Financial Securities, Inc. or its registered assigns (the “Holder” or “Network 1”), as registered
owner of this Warrant issued by CN Energy Group. Inc., a British Virgin Islands company (the “Company”), is entitled,
at any time or from time to time from __________, 2020 (the “Commencement Date”), the effective date of the offering
(the “Offering”), as set forth in the Company’s registration statement on Form F-1 (No. 333-239659)
(the “Registration Statement”), until at or before 5:00 p.m., Eastern Time, __________, 2025 (the five-year anniversary
of the Commencement Date) (the “Expiration Date”) but not thereafter, to subscribe for, purchase and receive, in whole
or in part, up to __________ (__________)1 ordinary shares (the “Shares”), no par value per share of the
Company (the “Company Ordinary Shares”). If the Expiration Date is a day on which banking institutions are authorized
by law to close, then this Underwriter Warrant may be exercised on the next succeeding day which is not such a day in accordance
with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate
this Warrant. This Warrant is initially exercisable at $__________ per Share (120% of the public offering price per Company Ordinary
Share at the effective date of the Offering) so purchased; provided, however, that upon the occurrence of any of the events specified
in Section 6 hereof, the rights granted by this Warrant, including the exercise price per share and the number of Shares to
be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial
exercise price or the adjusted exercise price, depending on the context.

 

2.             Exercise.

 

2.1           Exercise
Form. In order to exercise this Warrant, the exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Warrant and payment of the aggregate Exercise Price for the Shares being purchased payable in
cash or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised at or before
5:00 p.m., Eastern Time, on the Expiration Date, this Warrant shall become and be void without further force or effect, and all
rights represented hereby shall cease and expire.

 

 

 

1 5% of the total number of Ordinary Shares being
sold in the offering, excluding any-over allotment shares.

 

    

     

    

 

2.2            Legend.
Each certificate for the Shares purchased under this Warrant shall bear a legend as follows unless such securities have been registered
under the Securities Act of 1933, as amended (“Act”):

 

“The securities represented
by this certificate have not been registered under the Securities Act of 1933, as amended (“Act”) or applicable state
law. The securities may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement
under the Act, or pursuant to an exemption from registration under the Act and applicable state law.”

 

2.3            Cashless
Exercise.

 

2.3.1        Determination
of Amount. In lieu of the payment of the Exercise Price multiplied by the number of Shares for which this Warrant is exercisable
in the manner required by Section 2.1, the Holder shall have the right (but not the obligation) to convert any exercisable
but unexercised portion of this Warrant into Shares (“Cashless Exercise Right”). Upon a “cashless exercise”,
the Holder shall surrender this Warrant to the Company, together with a duly executed facsimile copy or a PDF copy submitted by
e-mail (or e-mail attachment) of an election of purchase (the “Election to Purchase”), and the Company shall issue
to the Holder the number of Shares determined as follows:

 

X = Y (A-B)/A

 

where:

 

X     =     The
number of Shares to be issued to the Holder.

 

Y     =     The
number of Shares with respect to which this Warrant is being exercised.

 

A     =     The
fair market value of one Share.

 

B     =     The
Exercise Price.

 

For purposes of this Section 2.3,
the fair market value of one Share shall be determined by the first of the following clauses that applies:

 

(i)             if
the Company Ordinary Shares are traded on a national securities exchange, the fair market value shall be the last sale price on
the trading day immediately prior to the date of exercise or, if no sale of the Company Ordinary Shares took place on the trading
day immediately prior to the Date of Exercise, then the fair market value shall be the last sale price on the most recent day prior
to the Date of Exercise on which trades were made and reported;

 

(ii)            if
the Company Ordinary Shares are quoted over-the-counter, the fair market value shall be deemed to be the last sale price on the
trading day immediately prior to the Date of Exercise or, if no sale of the Company Ordinary Shares took place on the trading day
immediately prior to the Date of Exercise, then the fair market value shall be the last sale price on the most recent day prior
to the Date of Exercise on which trades were made and reported; or

 

(iii)           if
there is no active public market for the Company Ordinary Shares, the fair market value thereof shall be determined in good faith
by the Company’s Board of Directors (the “Board”).

 

For purposes of Rule 144
of the Act, it is intended, understood and acknowledged that the Shares issued in a cashless exercise transaction shall be deemed
to have been acquired by the Holder, and the holding period for the Shares shall be deemed to have been commenced, on the Issuance
Date.

 

    2

     

    

 

2.3.2        Mechanics
of Cashless Exercise. The Cashless Exercise Right may be exercised by the Holder on any business day on or after the Commencement
Date and not later than the Expiration Date by delivering the Warrant with a duly executed exercise form attached hereto with the
cashless exercise section completed to the Company, exercising the Cashless Exercise Right and specifying the total number of Shares
the Holder will purchase pursuant to such Cashless Exercise Right.

  

2.4           No
Obligation to Net Cash Settle. Notwithstanding anything to the contrary contained in this Warrant, in no event will the Company
be required to net cash settle the exercise of this Warrant. The Holder of this Warrant will not be entitled to exercise this
Warrant unless (i) it exercises such Warrant pursuant to the Cashless Exercise Right, (ii) a registration statement
is effective, or (iii) an exemption from the registration requirements is available at such time and, if the Holder is not
able to exercise this Warrant, this Warrant will expire worthless.

 

3.             Transfer.

 

3.1           General
Restrictions. The registered Holder of this Warrant agrees that it will not sell, transfer, assign, pledge or hypothecate
this Warrant, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would
result in the effective economic disposition of such securities for a period beginning from the effectiveness of the Registration
Statement until 180 days after the effective date of the Offering to anyone other than (i) NETWORK 1 or an Underwriter or
a selected dealer participating in the Offering, or (ii) a bona fide officer or partner of NETWORK 1 or of any such Underwriter
or selected dealer. After a period of 180 days following the effective date of the Offering, transfers to others may be made subject
to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver
to the Company the assignment form attached hereto duly executed and completed, together with the Warrant and payment of all transfer
taxes, if any, payable in connection therewith. The Company shall within five business days transfer this Warrant on the books
of the Company and shall execute and deliver a new Warrant or Warrants of like tenor to the appropriate assignee(s) expressly
evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall
be contemplated by any such assignment.

 

3.2           Restrictions
Imposed by the Act. The securities evidenced by this Warrant shall not be transferred unless and until (i) the Company
has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration
under the Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of
the Company (the Company hereby agrees that the opinion of Loeb & Loeb LLP shall be deemed satisfactory evidence of the
availability of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration Statement
relating to the offer and sale of such securities has been filed by the Company and declared effective by the Securities and Exchange
Commission and compliance with applicable state securities law has been established.

 

4.             New
Warrants to be Issued.

 

4.1           Partial
Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Warrant may be exercised or assigned in whole
or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Warrant for cancellation, together
with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised
pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Warrant of like
tenor to this Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable
hereunder as to which this Warrant has not been exercised or assigned.

 

4.2           Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered as a result of such loss, theft, mutilation or destruction
shall constitute a substitute contractual obligation on the part of the Company.

 

5.             Registration
Rights. The Company has filed the Registration Statement, including a related prospectus, with the Securities and Exchange
Commission, which has been declared effective on Form F-1 (File No. 333-239659). The Registration Statement registers
the Shares.

 

    3

     

    

 

5.1            General
Terms.

 

5.1.1        Indemnification.
The Company shall indemnify the holder(s) of the Shares to be sold pursuant to any registration statement hereunder and each
person, if any, who controls such holder within the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against litigation,
commenced or threatened, or any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise,
arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which
the Company has agreed to indemnify the Underwriter contained in Section 5 of the Underwriting Agreement in the Offering.
The holder(s) of the Shares to be sold pursuant to such registration statement, and their successors and assigns, shall severally,
and not jointly, indemnify the Company, its officers and directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage, expense
or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing
or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such holders, or their successors or assigns, in writing, for specific inclusion
in such registration statement to the same extent and with the same effect as the provisions contained in Section 5 of the
Underwriting Agreement pursuant to which the Underwriter has agreed to indemnify the Company.

 

5.1.2        Exercise
of Warrants. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants
prior to or after the initial filing of any registration statement or the effectiveness thereof.

 

5.1.3        Rule 144
Sale. Notwithstanding anything contained in this Section 5 to the contrary, the Company shall have no obligation to maintain
the effectiveness of the Registration Statement covering the Shares held by any Holder, where such Holder would then be entitled
to sell under Rule 144 within any three-month period (or such other period prescribed under Rule 144 as may be provided
by amendment thereof) all of the Shares then held by such Holder.

 

5.1.4        Supplemental
Prospectus. Each Holder agrees, that upon receipt of any notice from the Company of the happening of any event as a result
of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, or that would otherwise require disclosure of material nonpublic information that,
if disclosed at such time, would be materially harmful to the Company, such Holder will immediately discontinue disposition of
Shares pursuant to the Registration Statement covering such Shares until such Holder’s receipt of the copies of a supplemental
or amended prospectus, or the public disclosure and dissemination of such information, as the case may be, and, if so desired
by the Company, such Holder shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company
a certificate of such destruction) all copies, other than permanent file copies then in such Holder’s possession, of the
prospectus covering such Shares current at the time of receipt of such notice.

 

6.             Adjustments.

 

6.1           Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying this Warrant shall be subject
to adjustment from time to time as hereinafter set forth:

 

6.1.1        Stock
Dividends; Split Ups. If after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding
Company Ordinary Shares is increased by a stock dividend payable in Company Ordinary Shares or by a split up of the Company Ordinary
Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased
in proportion to such increase in outstanding Company Ordinary Shares. For example, if the Company declares a two-for-one stock
dividend and at the time of such dividend this Warrant is for the purchase of one Share at $6.00 per Share, upon effectiveness
of the dividend, this Warrant will be adjusted to allow for the purchase of one Share for $3.00. In such example, the number of
Shares purchasable hereunder would be doubled.

 

    4

     

    

 

6.1.2        Aggregation
of Shares. If after the date hereof, and subject to the provisions of Section 6.3, the number of outstanding Company
Ordinary Shares is decreased by a consolidation, combination or reclassification of Company Ordinary Shares or other similar event,
then, on the effective date thereof, the number of Shares underlying this Warrant purchasable hereunder shall be decreased in
proportion to such decrease in outstanding Company Ordinary Shares.

 

6.1.3        Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Company
Ordinary Shares other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of the
Company Ordinary Shares, or in the case of any merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification
or reorganization of the outstanding Company Ordinary Shares, or in the case of any sale or conveyance to another corporation
or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter (until the expiration of the right of exercise of this Warrant)
to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number
of ordinary share of the Company obtainable upon exercise of this Warrant immediately prior to such event; and if any reclassification
also results in a change in the number of Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant
to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other transfers.

 

6.1.4        Changes
in Form of Warrant. This form of Warrant needs not be changed because of any change pursuant to this Section, and Warrants
issued after such change may state the same Exercise Price and the same number of Shares are stated in the Warrants initially
issued pursuant to this agreement. The acceptance by any Holder of the issuance of new Warrant reflecting a required or permissive
change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.

 

6.2           Substitute
Warrant. In case of any consolidation of the Company with, or merger of the Company with or into, another corporation (other
than a consolidation or merger which does not result in any reclassification or change of the outstanding Company Ordinary Shares),
the corporation formed by such consolidation or merger shall execute and deliver to the Holder a supplemental Warrant providing
that the Holder of each Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration
of such Warrant) to receive, upon exercise of such Warrant, the kind and amount of Shares and other securities and property receivable
upon such consolidation or merger, by a holder of the number of Shares of the Company for which such Warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such supplemental Warrant shall provide for adjustments which
shall be identical to the adjustments provided in Section 6. The above provision of this Section shall similarly apply
to successive consolidations or mergers.

 

6.3           Elimination
of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the
exercise of the Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the
intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number
of warrants, ordinary shares or other securities, properties or rights.

 

7.             Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized Company Ordinary Shares, solely
for the purpose of issuance upon exercise of the Warrants, such number of Shares, or other securities, properties or rights as
shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Warrants and payment of
the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall
be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the
Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise
of the Warrants, to be listed (subject to official notice of issuance) on all securities exchanges on which the Company Ordinary
Shares, issued to the public in the Offering may then be listed and/or quoted.

 

    5

     

    

 

8.             Certain
Notice Requirements.

 

8.1           Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or
to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of the Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such
event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination
of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date
of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder
a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice
is given to the shareholders.

 

8.2           Events
Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the
following events: (i) if the Company shall take a record of the holders of its Company Ordinary Shares for the purpose of
entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable
otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books
of the Company, (ii) the Company shall offer to all the holders of its Company Ordinary Shares any additional Company Ordinary
Shares or securities convertible into or exchangeable for Company Ordinary Shares, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation
or merger) or a sale of all or substantially all of its property, assets and business shall be proposed.

 

8.3           Notice
of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant
to Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall
describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by
the Company’s Chief Financial Officer.

 

8.4           Transmittal
of Notices. All notices, requests, demands and other communications which are required or may be given under this Warrant
shall be in writing and shall be deemed to have been duly given: (a) when received, if personally delivered; (b) when
transmitted, if transmitted by telecopy, electronic or digital transmission method with confirmation of transmission by the transmitting
equipment; (c) the day after it is sent, if sent for next day delivery to a domestic address by a recognized overnight delivery
service (e.g., Federal Express); and (d) upon receipt, if sent by certified or registered mail, return receipt requested.
In each case, notice shall be sent to the parties at the following address (or to such other address as a party may have specified
by notice given to the other party pursuant to this provision):

 

CN Energy
Group. Inc. 

Dikai Yinzuo, Room 1804-1, No. 29 Jiefang East
Road 

Jianggan District, Hangzhou City, Zhejiang Province 

PRC 

Attention: Ye Ren, Chief Financial
Officer 

Email: ry@f0086.com

 

with copies
to (which shall not constitute notice):

 

Hunter Taubman
Fischer & Li LLC 

800 Third Avenue, Suite 2800 

New York,
New York 10022 

Attention:
Ying Li, Esq. 

Email: yli@htflawyers.com

 

    6

     

    

 

9.             Miscellaneous.

 

9.1           Amendments.
The Company and NETWORK 1 may from time to time supplement or amend this Warrant without the approval of any of the Holders in
order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with
any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company
and NETWORK 1 may deem necessary or desirable and that the Company and NETWORK 1 deem shall not adversely affect the interest of
the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom
enforcement of the modification or amendment is sought.

 

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

 

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

 

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

 

10.2         Governing
Law; Submission to Jurisdiction. This Warrant shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. The Company hereby agrees that any action, proceeding or claim
against it arising out of, or relating in any way to this Warrant shall be brought and enforced in the courts of the State of New
York or of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent
an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered
or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof.
Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other
party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.

 

10.3         Waiver,
Etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Warrant shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the validity of this Warrant or any provision hereof
or the right of the Company or any Holder to thereafter enforce each and every provision of this Warrant. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance
or non-fulfillment.

 

10.4         Execution
in Counterparts. This Warrant may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto.

 

[Remainder of page deliberately
left blank]

 

    7

     

    

 

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

 

	 	CN ENERGY GROUP. INC.
	 	 
	 	By:	            
	 	Name: Kangbin Zheng
	 	Title: Chief Executive Officer

 

[signature page of CN Energy Group. Inc. form of warrant]

 

    

     

    

 

NOTICE OF EXERCISE

 

 

To:         CN
ENERGY GROUP. INC.

 

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

 

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

 

[ ] in lawful money of the United
States; or

 

[ ] [if permitted the cancellation
of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2.3.1, to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth
in subsection 2.32.

 

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

 

_______________________________

 

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

 

_______________________________

 

_______________________________

 

_______________________________

 

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

 

[SIGNATURE
OF HOLDER]

 

	Name of Investing Entity:	 

	Signature of Authorized Signatory of Investing Entity:	 

	Name of Authorized Signatory:	 

	Title of Authorized Signatory:	 

	Date:	 

 

    9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00317-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00317-of-00352.parquet"}]]