Document:

Exhibit 10.16

 

ENTERA BIO LTD.

2018 EQUITY INCENTIVE PLAN

 

Section 1. Purpose. The purpose of
the Entera Bio Ltd. 2018 Equity Incentive Plan (the “Plan”) is to motivate and reward those employees, directors,
consultants and advisors of Entera Bio Ltd. (the “Company”) and its Affiliates to perform at the highest level
and to further the best interests of the Company and its shareholders. Capitalized terms not otherwise defined herein are defined
in ‎Section 21.

 

Section 2. Eligibility. 

 

(a)          Any
employee, Non-Employee Director, consultant or other advisor of the Company or any subsidiary shall be eligible to be selected
to receive an Award under the Plan.

 

(b)          Holders
of equity compensation awards granted by a company acquired by the Company (or whose business is acquired by the Company) or with
which the Company combines are eligible for grants of Replacement Awards under the Plan.

 

Section 3. Administration. 

 

(a)          The
Plan shall be administered by the Board, provided that the Board may delegate authority to administer the Plan, as allowed under
Applicable Law and the Articles of Association of the Company, to the Committee (the Board and the Committee shall be referred
to herein as the “Administrator” as applicable) . The Committee shall be appointed by the Board and shall consist
of not less than two directors of the Board. The Board may designate one or more directors as a subcommittee who may act for the
Committee if necessary to satisfy the requirements of this Section. The Board may issue rules and regulations for administration
of the Plan.

 

(b)          Subject
to the terms of the Plan and Applicable Law, the Administrator shall have full power and authority to: (i) designate Participants;
(ii) determine the type or types of Awards (including Replacement Awards) to be granted to each Participant under the Plan; (iii) determine
the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection
with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent and under what
circumstances Awards may be settled or exercised in cash, Shares, other Awards, other property, net settlement (including broker-assisted
cashless exercise) or any combination thereof, or canceled, forfeited or suspended, and the method or methods by which Awards may
be settled, exercised, canceled, forfeited or suspended (including as the result of any change to the scope of engagement of a
Participant on previously granted Awards) ; (vi) determine whether, to what extent and under what circumstances cash, Shares,
other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically
or at the election of the holder thereof or of the Administrator; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration of the Plan; (ix) authorize conversion or substitution
under the Plan of any or all Awards or Shares and to cancel or suspend Awards, as necessary, provided that, if such action is not
specifically allowed under the terms of this Plan, any material harm to the interests of the Participants shall be subject to consent
from the Participants;; (ix) authorize any person to execute on behalf of the Company any instrument required to effectuate the
grant of an Award previously granted by the Board; and (x) make any other determination and take any other action that the Administrator
deems necessary or desirable for the administration of the Plan.

 

     

     

    

 

(c)          All
decisions of the Administrator shall be final, conclusive and binding upon all parties, including the Company, its shareholders
and Participants and any Beneficiaries thereof.

 

Section 4. Shares Available for Awards.

 

(a)          Subject
to adjustment as provided in ‎Section 4(c), the maximum number of Shares available for
issuance under the Plan shall not exceed 12% of the Company’s issued and outstanding share capital; provided that,
starting on January 1, 2019, on January 1 of each year, the total number of Shares available for issuance under the Plan will be
increased by an amount equal to the lesser of (i) 5% of the Company’s outstanding Shares on December 31 of the immediately
preceding year or (ii) such number of Shares as determined by the Board in its discretion. Shares underlying Replacement Awards
and Shares remaining available for grant under a plan of an acquired company or of a company with which the Company combines, appropriately
adjusted to reflect the acquisition or combination transaction, shall not reduce the number of Shares remaining available for grant
hereunder.

 

(b)          Any
Shares subject to an Award or to an equity-based award granted under a prior plan of the Company (other than a Replacement Award
and any Award granted out of the authorized shares of an acquired plan), that expires, is canceled, forfeited or otherwise terminates
without the delivery of such Shares, including any Shares subject to such Award or award to the extent that such Award or award
is settled without the issuance of Shares, shall again be, or shall become, available for issuance under the Plan. Any Shares surrendered
or withheld in payment of any grant, acquisition or exercise price of such Award or award or taxes related to such Award or award
shall not become available for issuance under the Plan.

 

(c)          In
the event that, as a result of any dividend or other distribution (whether in the form of cash, Shares or other securities), recapitalization,
share split, reverse share split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange
of Shares or other securities of the Company, issuance of warrants or other rights to acquire Shares or other securities of the
Company, issuance of Shares pursuant to the anti-dilution provisions of securities of the Company, or other similar corporate transaction
or event affecting the Shares, or of changes in Applicable Law, regulations or accounting principles, an adjustment is necessary
in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan,
then the Administrator shall, subject to ‎Section 18, adjust equitably any or all of:

 

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(i)          the
number and type of Shares (or other securities) which thereafter may be made the subject of Awards, including the aggregate and
individual limits specified in ‎Section 4(a);

 

(ii)         the
number and type of Shares (or other securities) subject to outstanding Awards; and

 

(iii)        the
grant, acquisition, exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award;

 

provided, however, that the number of Shares subject
to any Award denominated in Shares shall always be a whole number (and to the extent required by law or tax regulations, fractional
Shares shall be rounded down).

 

(d)          Any
Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or Shares acquired by
the Company.

 

Section 5. Options. The Administrator
is authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions,
in either case not inconsistent with the provisions of the Plan, as the Administrator shall determine.

 

(a)          The
exercise price per Share under an Option shall be determined by the Administrator; provided, however, that, except
in the case of Replacement Awards, such exercise price shall not be less than the Fair Market Value of a Share on the date of grant
of such Option.

 

(b)          The
term of each Option shall be fixed by the Administrator but shall not exceed 10 years from the date of grant of such Option.

 

(c)          The
Administrator shall determine the time or times at which an Option may be exercised in whole or in part.

 

(d)          The
Administrator shall determine the methods by which, and the forms in which payment of the exercise price with respect thereto may
be made or deemed to have been made, including cash, Shares, other Awards, other property, net settlement (including broker-assisted
cashless exercise) or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price.

 

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Section 6. Share Appreciation Rights.
The Administrator is authorized to grant SARs to Participants with the following terms and conditions and with such additional
terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Administrator shall determine.

 

(a)          SARs
may be granted under the Plan to Participants either alone (“freestanding”) or in addition to other Awards granted
under the Plan (“tandem”).

 

(b)          The
exercise price per Share under a SAR shall be determined by the Administrator; provided, however, that, except in the case
of Replacement Awards, such exercise price shall not be less than the Fair Market Value of a Share on the date of grant of such
SAR (or if granted in connection with an Option, on the grant date of such Option).

 

(c)          The
term of each SAR shall be fixed by the Administrator but shall not exceed 10 years from the date of grant of such SAR.

 

(d)          The
Administrator shall determine the time or times at which a SAR may be exercised or settled in whole or in part.

 

(e)          Upon
the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of Shares subject to the SAR multiplied
by the excess, if any, of the Fair Market Value of one Share on the exercise date over the exercise price of such SAR. The Company
shall pay such excess in cash, in Shares valued at Fair Market Value, or any combination thereof, as determined by the Administrator.

 

Section 7. Restricted Shares and RSUs.
 The Administrator is authorized to grant Awards of Restricted Shares and RSUs to Participants with the following terms and
conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the
Administrator shall determine.

 

(a)          The
applicable Award Document shall specify the vesting schedule and, with respect to RSUs, the delivery schedule (which may include
deferred delivery later than the vesting date) and whether the Award of Restricted Shares or RSUs is entitled to dividends or dividend
equivalents, voting rights or any other rights.

 

(b)          Restricted
Shares and RSUs shall be subject to such restrictions as the Administrator may impose (including any limitation on the right to
vote a Restricted Share or the right to receive any dividend, dividend equivalent or other right), which restrictions may lapse
separately or in combination at such time or times, in such installments or otherwise, as the Administrator may deem appropriate.
Without limiting the generality of the foregoing, if the Award relates to Shares on which dividends are declared during the period
that the Award is outstanding, the Award shall not provide for the payment of such dividend (or a dividend equivalent) to the Participant
prior to the time at which such Award, or applicable portion thereof, becomes nonforfeitable, unless otherwise provided in the
applicable Award Document.

 

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(c)          Restricted
Shares granted under the Plan may be evidenced in such manner as the Administrator may deem appropriate, including book-entry registration
or issuance of a share certificate or certificates. In the event that any share certificate is issued in respect Restricted Shares
granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such Restricted Share.

 

(d)          The
Administrator may determine the form or forms (including cash, Shares, other Awards, other property or any combination thereof)
in which payment of the amount owing upon settlement of any RSU Award may be made.

 

Section 8. Performance Awards. The
Administrator is authorized to grant Performance Awards to Participants with the following terms and conditions and with such additional
terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Administrator shall determine.

 

(a)          Performance
Awards may be denominated as a cash amount, a number of Shares or a combination thereof and are Awards which may be earned upon
achievement or satisfaction of performance conditions specified by the Administrator. In addition, the Administrator may specify
that any other Award shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have
it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the
Administrator. The Administrator may use such business criteria and other measures of performance as it may deem appropriate in
establishing any performance conditions. Subject to the terms of the Plan, the performance goals to be achieved during any Performance
Period, the length of any Performance Period, the amount of any Performance Award granted and the amount of any payment or transfer
to be made pursuant to any Performance Award shall be determined by the Administrator. If the Performance Award relates to Shares
on which dividends are declared during the Performance Period, the Performance Award shall not provide for the payment of such
dividend (or dividend equivalent) to the Participant prior to the time at which such Performance Award, or the applicable portion
thereof, is earned.

 

(b)          Performance
criteria may be measured on an absolute (e.g., plan or budget) or relative basis, and may be established on a corporate-wide
basis or with respect to one or more business units, divisions, subsidiaries or business segments. Relative performance may be
measured against a group of peer companies, a financial market index or other acceptable objective and quantifiable indices. If
the Administrator determines that a change in the business, operations, corporate structure or capital structure of the Company,
or the manner in which the Company conducts its business, or other events or circumstances render the performance objectives unsuitable,
the Administrator may modify the minimum acceptable level of achievement, in whole or in part, as the Administrator deems appropriate
and equitable. Performance objectives shall be adjusted for material items not originally contemplated in establishing the performance
target for items resulting from discontinued operations, extraordinary gains and losses, the effect of changes in accounting standards
or principles, acquisitions or divestitures, changes in tax rules or regulations, capital transactions, restructuring, nonrecurring
gains or losses or unusual items. Performance measures may vary from Performance Award to Performance Award, and from Participant
to Participant, and may be established on a stand-alone basis, in tandem or in the alternative. The Administrator shall have the
power to impose such other restrictions on Awards subject to this ‎Section 8(b) as it
may deem necessary or appropriate to ensure that such Awards satisfy all requirements of any Applicable Law, stock market or exchange
rules and regulations or accounting or tax rules and regulations.

 

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(c)          Settlement
of Performance Awards; Other Terms. Settlement of Performance Awards shall be in cash, Shares, other Awards, other property,
net settlement or any combination thereof, as determined in the discretion of the Administrator. Performance Awards will be settled
only after the end of the relevant Performance Period. The Administrator may, in its discretion, increase or reduce the amount
of a settlement otherwise to be made in connection with a Performance Award.

 

Section 9. Other Share-Based Awards.
The Administrator is authorized, subject to limitations under Applicable Law, to grant to Participants such other Awards that may
be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares or factors
that may influence the value of Shares, including convertible or exchangeable debt securities, other rights convertible or exchangeable
into Shares, acquisition rights for Shares, Awards with value and payment contingent upon performance of the Company or business
units thereof or any other factors designated by the Administrator. The Administrator shall determine the terms and conditions
of such Awards.

 

Section 10. Minimum Vesting. Notwithstanding
any provisions of this Plan to the contrary and except as provided in this ‎Section
10 or pursuant to ‎Section 11, Awards (other than Replacement Awards) shall not
vest in full prior to the one-year anniversary of the applicable grant date; provided, however, that no more than five percent
(5%) of the Shares available for issuance under the Plan may be granted subject to Awards with such other vesting requirements,
if any, as the Administrator may establish in its sole discretion (which number of Shares shall not include any Shares subject
to Awards granted pursuant to ‎Section 8).

 

Section 11. Effect of Termination of
Service, Change in Control or Structural Change on Awards. 

 

(a)          The
Administrator may provide, by rule or regulation or in any Award Document, or may determine in any individual case, the circumstances
in which, and the extent to which, an Award may be exercised, settled, vested, paid or forfeited in the event of a Participant’s
Termination of Service prior to the vesting, exercise or settlement of such Award or the end of a Performance Period.

 

(b)          In
the event of a Change in Control, to the extent not inconsistent with the provisions of ‎Section
11(a) above or the applicable Award Document, the Committee, in its sole discretion, and on such terms and conditions as it deems
appropriate, either by the terms of the Award or by action taken prior to the occurrence of such Change in Control, may take any
one or more of the following actions whenever the Committee determines that such action is appropriate or desirable in order to
prevent the dilution or enlargement of the benefits intended to be made available under the Plan or to facilitate the Change in
Control transaction:

 

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(i)          Awards
may be continued in effect or converted into an award or right with respect to shares of the successor or surviving corporation
(or a parent or subsidiary thereof) (in the case of Options and SARs awarded to a Participant to whom ‎Section
18 applies, in a manner that complies with Sections 424 and 409A of the Code) in accordance with the terms of such Change of Control;

 

(ii)         Awards
may immediately vest and settle and, in the case of Options and SARs, become fully exercisable;

 

(iii)        Unvested
Awards may be cancelled for no consideration;

 

(iv)        Awards
may be terminated or cancelled in exchange for a cash payment (and, for the avoidance of doubt, if as of the date of the Change
in Control, the Board determines that no amount would have been realized upon the exercise of the Award or other realization of
the Participant’s rights, then the Award may be cancelled by the Company without payment of consideration); and

 

(v)         Awards
may be assumed, exchanged, replaced or continued by the successor or surviving corporation (or a parent or subsidiary thereof)
with cash, securities, rights or other property to be paid or issued, as the case may be, by the successor or surviving corporation
(or a parent or subsidiary thereof).

 

For purposes of subsections (i) and (ii)
above, no Option, SAR, Restricted Share or RSU shall be treated as “continued or converted” on a basis consistent with
the requirements of subsection (i) or (ii), as applicable, unless the shares underlying such award after such continuation or conversion
consists of securities of a class that is widely held and publicly traded on a U.S. national securities exchange.

 

Under any of subsections (i) through (iv)
above, appropriate adjustments will be made with respect to the number and type of securities (or other consideration) of the successor
or surviving corporation (or a parent or subsidiary thereof), subject to any replacement awards, the terms and conditions of the
replacement awards (including, without limitation, any applicable performance targets or criteria with respect thereto) and the
grant, exercise or purchase price per share for the replacement awards.

 

(c)          Adjustment
Due to a Structural Change. In the event of a Structural Change, Awards shall be exchanged or converted into awards to acquire
shares of the Company (if it is the surviving corporation) or the successor company in accordance with the applicable exchange
ratio, and the Exercise Price and quantity of shares underlying the Awards shall be adjusted in accordance with the terms of the
Structural Change. The adjustments required shall be determined in good faith solely by the Board in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made available in respect of the Awards, and shall be subject
to the receipt of any approval required, including any tax ruling, if necessary.

 

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Section 12. General Provisions Applicable
to Awards.

 

(a)          Awards
shall be granted for no cash consideration or for such minimal cash consideration as may be required by Applicable Law.

 

(b)          Awards
may, in the discretion of the Administrator, be granted either alone or in addition to or in tandem with any other Award or any
award granted under any other plan of the Company. Awards granted in addition to or in tandem with other Awards, or in addition
to or in tandem with awards granted under any other plan of the Company, may be granted either at the same time as or at a different
time from the grant of such other Awards or awards.

 

(c)          Subject
to the terms of the Plan and ‎Section 18, payments or transfers to be made by the Company
upon the grant, exercise or settlement of an Award may be made in the form of cash, Shares, other Awards, other property, net settlement
or any combination thereof, as determined by the Administrator in its discretion, and may be made in a single payment or transfer,
in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Administrator.
Such rules and procedures may include provisions for the payment or crediting of reasonable interest on installment or deferred
payments or the grant or crediting of dividend equivalents in respect of installment or deferred payments.

 

(d)          Except
as may be permitted by the Board or as specifically provided in an Award Document, (i) no Award and no right under any Award
shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will or pursuant to ‎Section
12(e) and (ii) during a Participant’s lifetime, each Award, and each right under any Award, shall be exercisable only
by the Participant or, if permissible under Applicable Law, by the Participant’s guardian or legal representative. The provisions
of this ‎Section 12(d) shall not apply to any Award that has been fully exercised or settled,
as the case may be, and shall not preclude forfeiture of an Award in accordance with the terms thereof.

 

(e)          A
Participant may designate a Beneficiary or change a previous Beneficiary designation at such times prescribed by the Board by using
forms and following procedures approved or accepted by the Board for that purpose.

 

(f)          All
certificates for Shares and/or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the Plan or the rules,
regulations and other requirements of the Securities and Exchange Commission, any stock market or exchange upon which such Shares
or other securities are then quoted, traded or listed, and any applicable securities laws, and the Administrator may cause a legend
or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

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(g)          Without
limiting the generality of ‎Section 12(h), the Administrator may impose restrictions on
any Award with respect to noncompetition, confidentiality and other restrictive covenants, or requirements to comply with minimum
share ownership requirements, as it deems necessary or appropriate in its sole discretion.

 

(h)          The
Administrator may specify in an Award Document that the Participant’s rights, payments and benefits with respect to an Award
shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition
to any otherwise applicable vesting or performance conditions of an Award. Such events may include a Termination of Service with
or without Cause (and, in the case of any Cause that is resulting from an indictment or other non-final determination, the Administrator
may provide for such Award to be held in escrow or abeyance until a final resolution of the matters related to such event occurs,
at which time the Award shall either be reduced, cancelled or forfeited (as provided in such Award Document) or remain in effect,
depending on the outcome), violation of material policies, breach of noncompetition, confidentiality or other restrictive covenants
that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the
Company and/or its Affiliates.

 

(i)          Rights,
payments and benefits under any Award shall be subject to repayment to or recoupment (“clawback”) by the Company in
accordance with such policies and procedures as the Committee or Board may adopt from time to time, including policies and procedures
to implement Applicable Law, stock market or exchange rules and regulations or accounting or tax rules and regulations.

 

Section 13. Amendments and Termination.

 

(a)          Except
to the extent prohibited by Applicable Law and unless otherwise expressly provided in an Award Document or in the Plan, the Board
may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided, however, that
no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) shareholder approval,
if such approval is required by Applicable Law or the rules of the stock market or exchange, if any, on which the Shares are principally
quoted or traded or (ii) the consent of the affected Participant, if such action would materially adversely affect the rights
of such Participant under any outstanding Award, except to the extent any such amendment, alteration, suspension, discontinuance
or termination is made to cause the Plan to comply with Applicable Law, stock market or exchange rules and regulations or accounting
or tax rules and regulations, or to impose any recoupment provisions on any Awards in accordance with ‎Section
12(i). Notwithstanding anything to the contrary in the Plan, the Board may amend the Plan in such manner as may be necessary to
enable the Plan to achieve its stated purposes in any jurisdiction in a tax-efficient manner and in compliance with local laws,
rules and regulations.

 

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(b)          The
Board may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate any Award
theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or holder or Beneficiary of
an Award; provided, however, that, subject to ‎Section 4(c) and ‎Section
11(b), no such action shall materially adversely affect the rights of any affected Participant or holder or Beneficiary under any
Award theretofore granted under the Plan, except to the extent any such action is made to cause the Plan to comply with Applicable
Law, stock market or exchange rules and regulations or accounting or tax rules and regulations, or to impose any recoupment provisions
on any Awards in accordance with ‎Section 12(i); provided further that, except
as provided in ‎Section 4(c), the Board shall not without the approval of the Company’s
shareholders (a) lower the exercise price per Share of an Option or SAR after it is granted or take any other action that
would be treated as a repricing of such Award under the rules of the principal stock market or exchange on which the Company’s
Shares are quoted or traded, or (b) cancel an Option or SAR when the exercise price per Share exceeds the Fair Market Value
in exchange for cash or another Award (other than in connection with a Change in Control).

 

(c)          Except
as provided in ‎Section 8(b), the Administrator shall be authorized to make adjustments
in the terms and conditions of, and the criteria included in, Awards in recognition of events (including the events described in
‎Section 4(c)) affecting the Company, or the financial statements of the Company, or of
changes in Applicable Law, stock market or exchange rules and regulations or accounting or tax rules and regulations, whenever
the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits
or potential benefits intended to be made available under the Plan.

 

(d)          The
Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to
the extent it shall deem desirable to carry the Plan into effect.

 

Section 14. Prohibition on Option and
SAR Repricing. Except as provided in ‎Section 4(c), the Board may not, without prior
approval of the Company’s shareholders, seek to effect any re-pricing of any previously granted “underwater”
Option or SAR by: (i) amending or modifying the terms of the Option or SAR to lower the exercise price; (ii) cancelling
the underwater Option or SAR and granting either (A) replacement Options or SARs having a lower exercise price or (B) Restricted
Share, RSU, Performance Award or Other Share-Based Award in exchange; or (iii) cancelling or repurchasing the underwater Options
or SARs for cash or other securities. An Option or SAR will be deemed to be “underwater” at any time when the Fair
Market Value of the Shares covered by such Award is less than the exercise price of the Award.

 

Section 15. Miscellaneous. 

 

(a)          No
employee, Participant or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of employees, Participants or holders or Beneficiaries of Awards under the Plan. The terms and conditions
of Awards need not be the same with respect to each recipient. Any Award granted under the Plan shall be a one-time Award that
does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future
grants under the Plan.

 

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(b)          The
grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide
services to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss a Participant,
free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Document
or in any other agreement binding the parties. The receipt of any Award under the Plan is not intended to confer any rights on
the receiving Participant except as set forth in the applicable Award Document.

 

(c)          Nothing
contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements,
and such arrangements may be either generally applicable or applicable only in specific cases.

 

(d)          Any
taxes recognized by a Participant in respect of his or her Awards and/or Shares, including, but not limited to, in respect of the
grant of an Award, and/or the vesting, exercise or settlement of the Award, and/or the sale of Shares underlying an Award, shall
be borne solely by such Participant and his or her heirs or transferees. Except as provided in ‎Section
15(e) below, neither the Company nor any of its Affiliates shall be required to bear the aforementioned taxes, directly or indirectly,
nor shall they be required to gross up such tax in the Participants’ salaries or remuneration.

 

(e)          The
Company shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the
Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other Awards, other property,
net settlement or any combination thereof) of applicable withholding taxes due in respect of an Award, its exercise or settlement
or any payment or transfer under such Award or under the Plan and to take such other action (including providing for elective payment
of such amounts in cash or Shares by the Participant) as may be necessary in the opinion of the Company to satisfy all obligations
for the payment of such taxes. Without limiting the foregoing, the Administrator, in its sole discretion and pursuant to such procedures
as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by
(without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares
having a fair market value not in excess of the maximum statutory amount required to be withheld, or (iii) delivering to the
Company already-owned Shares having a fair market value not in excess of the maximum statutory amount required to be withheld.
The fair market value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to
be withheld.

 

(f)          For
avoidance of doubt, it is clarified that the tax treatment of any Award granted under this Plan is not guaranteed and although
Awards may be granted under a certain tax route, they may become subject to a different tax route in the future.

 

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(g)          If
any provision of the Plan or any Award Document is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction,
or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such
provision shall be construed or deemed amended to conform to Applicable Laws, or if it cannot be so construed or deemed amended
without, in the determination of the Administrator, materially altering the intent of the Plan or the Award Document, such provision
shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award Document shall remain
in full force and effect.

 

(h)          Neither
the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship
between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from
the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

 

(i)          No
fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Board shall determine whether cash or
other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.

 

(j)          Awards
may be granted to Participants who are non-Israeli nationals or employed or providing services outside Israel, or both, on such
terms and conditions different from those applicable to Awards to Participants who are employed or providing services in Israel
as may, in the judgment of the Board, be necessary or desirable to recognize differences in local law, tax policy or custom. The
Board also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with
respect to tax equalization for Participants on assignments outside their home country.

 

Section 16. Effective Date of the Plan.
The Plan is effective as of         (the “Effective Date”).

 

Section 17. Term of the Plan. No
Award shall be granted under the Plan after the earliest to occur of (i) the ten-year anniversary of the Effective Date; provided
that to the extent permitted by the listing rules of any stock exchanges on which the Company is listed, such ten-year term may
be extended indefinitely so long as the maximum number of Shares available for issuance under the Plan have not been issued, (ii) the
maximum number of Shares available for issuance under the Plan have been issued or (iii) the Board terminates the Plan in
accordance with ‎Section 13(a). However, unless otherwise expressly provided in the Plan
or in an applicable Award Document, any Award theretofore granted may extend beyond such date, and the authority of the Board to
amend, alter, adjust, suspend, discontinue or terminate any such Award, or to waive any conditions or rights under any such Award,
and the authority of the Board to amend the Plan, shall extend beyond such date.

 

    	 	12	 

     

    

 

Section 18. Section 409A of the
Code. With respect to Awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements
of Section 409A of the Code, and the provisions of the Plan and any Award Document shall be interpreted in a manner that satisfies
the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan or
any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition will
be interpreted and deemed amended so as to avoid this conflict. If an amount payable under an Award as a result of the Participant’s
Termination of Service (other than due to death) occurring while the Participant is a “specified employee” under Section 409A
of the Code constitutes a deferral of compensation subject to Section 409A of the Code, then payment of such amount shall
not occur until six months and one day after the date of the Participant’s Termination of Service, except as permitted under
Section 409A of the Code. If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii)
of the Treasury Regulations), the Participant’s right to the series of installment payments shall be treated as a right to
a series of separate payments and not as a right to a single payment, and if the Award includes “dividend equivalents”
(within the meaning of Section 1.409A-3(e) of the Treasury Regulations), the Participant’s right to the dividend equivalents
shall be treated separately from the right to other amounts under the Award. Notwithstanding the foregoing, the tax treatment of
the benefits provided under the Plan or any Award Document is not warranted or guaranteed, and in no event shall the Company be
liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account
of non-compliance with Section 409A of the Code.

 

Section 19. Data Protection. By participating
in the Plan, the Participant consents to the holding and processing of personal information provided by the Participant to the
Company or any Affiliate, trustee or third party service provider, for all purposes relating to the operation of the Plan. These
include, but are not limited to:

 

(i)          administering
and maintaining Participant records;

 

(ii)         providing
information to the Company, Affiliates, trustees of any employee benefit trust, registrars, brokers or third party administrators
of the Plan;

 

(iii)        providing
information to future purchasers or merger partners of the Company or any Affiliate, or the business in which the Participant works;
and

 

(iv)        transferring
information about the Participant to any country or territory that may not provide the same protection for the information as the
Participant’s home country.

 

Section 20. Governing Law. The Plan
and each Award Document shall be governed by the laws of the State of Israel. The Company, its Affiliates and each Participant
(by acceptance of an Award) irrevocably submit, in respect of any suit, action or proceeding related to the implementation or enforcement
of the Plan, to the exclusive jurisdiction of the competent courts in Tel-Aviv-Jaffe.

 

    	 	13	 

     

    

 

Section 21. Definitions. As used
in the Plan, the following terms shall have the meanings set forth below:

 

(a)          “Affiliate”
means (i) any entity that, directly or indirectly, is controlled by the Company, (ii) any entity in which the Company,
directly or indirectly, has a significant equity interest, in each case as determined by the Committee and (iii) any other
entity which the Committee determines should be treated as an “Affiliate.”

 

(b)          “Applicable
Law” means the legal requirements applicable to the administration of equity incentive plans, any applicable laws, rules
and regulations of any country or jurisdiction where Awards are granted under the Plan or in which Participants pay are subject
to taxation, as such laws, rules, regulations and requirements shall be in place from time to time, and any applicable stock exchange
rules or regulations.

 

(c)          “Award”
means any Option, SAR, Restricted Share, RSU, Performance Award or Other Share-Based Award granted under the Plan.

 

(d)          “Award
Document” means any agreement, contract or other instrument or document, which may be in electronic format, evidencing
any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant.

 

(e)          “Beneficiary”
means a person entitled to receive payments or other benefits or exercise rights that are available under the Plan in the event
of the Participant’s death. If no such person is named by a Participant, or if no Beneficiary designated by the Participant
is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant’s
death, such Participant’s Beneficiary shall be such Participant’s estate.

 

(f)          “Board”
means the board of directors of the Company.

 

(g)          “Cause”
means, with respect to any Participant, “cause” as defined in such Participant’s employment agreement with the
Company, if any, or if not so defined, except as otherwise provided in such Participant’s Award Document, such Participant’s:

 

(i)           indictment
for any crime (A) constituting a felony, or (B) that has, or could reasonably be expected to result in, an adverse impact
on the performance of a Participant’s duties to the Company or any of its subsidiaries, or otherwise has, or could reasonably
be expected to result in, an adverse impact to the business or reputation of the Company or any of its subsidiaries;

 

(ii)          having
been the subject of any order, judicial or administrative, obtained or issued by the Securities and Exchange Commission for any
securities violation involving fraud, including, for example, any such order consented to by the Participant in which findings
of facts or any legal conclusions establishing liability are neither admitted nor denied;

 

    	 	14	 

     

    

 

(iii)        conduct,
in connection with his or her employment or service, which is not taken in good faith and has, or could reasonably be expected
to result in, material injury to the business or reputation of the Company or any of its subsidiaries;

 

(iv)        willful
violation of the Company’s code of conduct or other material policies set forth in the manuals or statements of policy of
the Company or any of its subsidiaries;

 

(v)         willful
neglect in the performance of a Participant’s duties for the Company or any of its subsidiaries or willful or repeated failure
or refusal to perform such duties;

 

(vi)        material
breach of any applicable employment agreement or other agreement with the Company; or

 

(vii)       conduct,
in connection with his or her employment or service.

 

The occurrence of any such event
described in clauses (ii) through (v) that is susceptible to cure or remedy shall not constitute Cause if such Participant cures
or remedies such event within 30 (thirty) days after the Company provides notice to such Participant.

 

(h)          “Change
in Control” means the occurrence of any one or more of the following events:

 

(i)           a
direct or indirect change in ownership or control of the Company effected through one transaction or a series of related transactions
within a 12-month period, whereby any Person other than the Company, directly or indirectly acquires or maintains beneficial ownership
of securities of the Company constituting more than 50% of the total combined voting power of the Company’s equity securities
outstanding immediately after such acquisition;

 

(ii)          at
any time during a period of 12 consecutive months, individuals who at the beginning of such period constituted the Board cease
for any reason to constitute a majority of members of the Board; provided, however, that any new member of the Board whose
election or nomination for election was approved by a vote of at least a majority of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination for election was so approved, shall be considered
as though such individual were a member of the Board at the beginning of the period, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board;

 

    	 	15	 

     

    

 

(iii)        the
consummation of a merger or consolidation of the Company or any of its subsidiaries with any other corporation or entity, other
than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding or being converted into voting securities of the
surviving entity or, if applicable, the ultimate parent thereof) at least 50% of the combined voting power and total fair market
value of the securities of the Company or such surviving entity or parent outstanding immediately after such merger or consolidation;
or

 

(iv)        the
consummation of any sale, lease, exchange or other transfer to any Person (other than an Affiliate of the Company), in one transaction
or a series of related transactions within a 12-month period, of all or substantially all of the assets of the Company and its
subsidiaries.

 

Notwithstanding the foregoing or any provision
of any Award Document to the contrary, for any Award to which ‎Section 18 applies that
provides for accelerated distribution on a Change in Control of amounts that constitute “deferred compensation” (as
defined in Section 409A of the Code), if the event that constitutes such Change in Control does not also constitute a change
in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets
(in either case, as defined in Section 409A of the Code), such amount shall not be distributed on such Change in Control but
instead shall vest as of the date of such Change in Control and shall be paid on the scheduled payment date specified in the applicable
Award Document, except to the extent that earlier distribution would not result in the Participant who holds such Award incurring
any additional tax, penalty, interest or other expense under Section 409A of the Code.

 

(a)          “Code”
means the United States Internal Revenue Code of 1986, as amended from time to time, and the rules, regulations and guidance thereunder.
Any reference to a provision in the Code shall include any successor provision thereto.

 

(b)          “Committee”
means the Compensation Committee of the Board or such other committee as may be designated by the Board.

 

(c)          “Exchange
Act” means the United States Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations
and guidance thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto.

 

(d)          “Fair
Market Value” means (i) with respect to a Share, the closing price of a Share on the date in question (or, if there
is no reported sale on such date, on the last preceding date on which any reported sale occurred) on the principal stock market
or exchange on which the Shares are quoted or traded, or if Shares are not so quoted or traded, the fair market value of a Share
as determined by the Board, and (ii) with respect to any property other than Shares, the fair market value of such property
determined by such methods or procedures as shall be established from time to time by the Board.

 

    	 	16	 

     

    

 

(e)          “Non-Employee
Director” means a member of the Board who is not an employee of the Company or an Affiliate.

 

(f)          “Option”
means an option representing the right to acquire Shares from the Company, granted in accordance with the provisions of ‎Section
5.

 

(g)          “Other
Share-Based Award” means an Award granted in accordance with the provisions of ‎Section
9.

 

(h)          “Participant”
means the recipient of an Award granted under the Plan.

 

(i)          “Performance
Award” means an Award granted in accordance with the provisions of ‎Section
8.

 

(j)          “Performance
Period” means the period established by the Administrator at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the Administrator with respect to such Award are measured.

 

(k)          ''Person''
means a natural person or a partnership, company, association, cooperative, mutual insurance society, foundation or any other body
which operates externally as an independent unit or organisation.

 

(l)          “Replacement
Award” means an Award granted in assumption of, or in substitution for, an outstanding award previously granted by a
company or business acquired by the Company or with which the Company, directly or indirectly, combines.

 

(m)          “Restricted
Share” means any Share granted in accordance with the provisions of ‎Section
7.

 

(n)          “RSU”
means a contractual right granted in accordance with the provisions of ‎Section 7 that
is denominated in Shares. Each RSU represents a right to receive the value of one Share. Awards of RSUs may include the right to
receive dividend equivalents.

 

(o)          “SAR”
means any right granted in accordance with the provisions of ‎Section 6 to receive upon
exercise by a Participant or settlement the excess of (i) the Fair Market Value of one Share on the date of exercise or settlement
over (ii) the exercise price of the right on the date of grant, or if granted in connection with an Option, on the date of
grant of the Option.

 

(p)          “Shares”
means ordinary shares of the Company.1

 

 

1
Note to HFN Corporate: Please confirm there is only one class of ordinary shares.

 

    	 	17	 

     

    

 

(q)         “Structural
Change” means any re-domestication of the Company, share flip, creation of a holding company for the Company which will
hold substantially all of the Shares of the Company or any other transaction involving the Company in which the Shares of the Company
outstanding immediately prior to such transaction continue to represent, or are converted into or exchanged for shares that represent,
immediately following such transaction, at least a majority, by voting power, of the share capital of the surviving, acquiring
or resulting corporation;

 

(r)          “Termination
of Service” means:

 

(i)          in
the case of a Participant who is an employee of the Company or an Affiliate, cessation of the employment relationship such that
the Participant is no longer an employee of the Company or Subsidiary;

 

(ii)         in
the case of a Participant who is a director of the Board, the date that the Participant ceases to be a member of the Board for
any reason; or

 

(iii)        in
the case of a Participant who is a consultant or other advisor, the effective date of the cessation of the performance of services
for the Company or an Subsidiary;

 

provided, however, that in the case
of an employee, the transfer of employment from the Company to an Affiliate, from an Affiliate to the Company, from one Affiliate
to another Affiliate or, unless the Administrator determines otherwise, the cessation of employee status but the continuation of
the performance of services for the Company or an Affiliate as a member of the Board or a consultant or other advisor shall not
be deemed a cessation of service that would constitute a Termination of Service; and provided further, that a Termination
of Service will be deemed to occur for a Participant employed by an Affiliate when an Affiliate ceases to be an Affiliate, unless
such Participant’s employment continues with the Company or another Affiliate.

 

    	 	18	 

     

    

  

ENTERA BIO LTD.

 

2018 EQUITY INCENTIVE
PLAN

 

ISRAELI SUB PLAN

 

		1.	GENERAL

 

		1.1	This sub-plan (the “Sub-plan”) shall apply only to Participants who are residents of the State of Israel
upon the date of grant of the Award, as defined below in Section 2, or who are deemed Israeli tax residents (collectively, “Israeli
Participants”). The provisions specified hereunder shall form an integral part of the Entera Bio Ltd. 2018 Equity Incentive
Plan (hereinafter the “Plan”).

 

		1.2	This Sub-plan is adopted pursuant to Sections ‎Section 3(a) and ‎Section
13(a) of the Plan and is to be read as a continuation of the Plan and modifies Awards granted to Israeli Participants only to the
extent necessary to comply with the requirements set by the Israeli law in general, and in particular, with the provisions of the
Israeli Income Tax Ordinance [New Version] 1961, as may be amended or replaced from time to time. This Sub-plan does not add to
or modify the Plan in respect of any other category of Participants.

 

		1.3	The Plan and this Sub-plan are complimentary to each other and shall be deemed as one. In the event of any conflict, whether
explicit or implied, between the provisions of this Sub-plan and the Plan, the provisions set out in the Sub-plan shall prevail.

 

		1.4	Any capitalized term not specifically defined in this Sub-plan shall be construed according to the interpretation given to
it in the Plan.

 

		1.5	This Sub-plan does not apply to any Award which is settled in cash.

 

		2.	DEFINITIONS

 

		2.1	“102 Award” means any Award, provided it is settled in Shares, granted to an Approved Israeli Participant
pursuant to Section 102 of the Ordinance.

 

		2.2	“Approved Israeli Participant” means an Israeli Participant who is an employee, director or an officer of
the Company or any an Israeli resident Affiliate, excluding any Controlling Share Holder of the Company.

 

		2.3	“Capital Gain Award” or “CGA”
means a Trustee 102 Award elected and designated by the Company to qualify under the capital gain tax treatment in accordance
with the provisions of Section 102(b)(2) and Section 102(b)(3) of the Ordinance.

 

    	 	19	 

     

    

 

		2.4	“Controlling Share Holder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.

 

		2.5	“ITA” means the Israeli Tax Authority.

 

		2.6	“Israeli Award Agreement”means the Award Agreement between the Company and an Israeli Participant that
sets out the terms and conditions of an Award.

 

		2.7	“Non-Trustee 102 Award” means a 102 Award granted pursuant to Section 102(c) of the Ordinance and not held
in trust by a Trustee.

 

		2.8	“Ordinary Income Award” or “OIA” means a Trustee 102 Award elected and designated by the Company
to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.

 

		2.9	“Ordinance” means the Israeli Income Tax Ordinance [New Version] – 1961, as now in effect or as hereafter
amended.

 

		2.10	“Section 102” means Section 102 of the Ordinance and any regulations, rules, orders or procedures promulgated
thereunder as now in effect or as hereafter amended.

 

		2.11	“Tax” means any applicable tax and other compulsory payments such as social security and health tax contributions
under any Applicable Law.

 

		2.12	“Trustee” means any person or entity appointed by the Company or the Subsidiary to serve as a trustee and
approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance, as may be replaced from time to
time.

 

		2.13	"Trustee 102 Award” means a 102 Award granted to an Approved Israeli Participant pursuant to Section 102(b)
of the Ordinance and held in trust by a Trustee for the benefit of an Approved Israeli Participant.

 

		2.14	"Unapproved Israeli Participant” means an Israeli Participant who is not an Approved Israeli Participant,
including a consultant or a Controlling Share Holder of the Company.

 

		3.	ISSUANCE OF AWARDS

 

		3.1	The persons eligible for participation in the Plan as Israeli Participants shall include Approved Israeli Participants and
Unapproved Israeli Participants, provided, however, that only Approved Israeli Participants may be granted 102 Awards.

 

    	 	20	 

     

    

 

		3.2	The Company may designate Awards granted to Approved Israeli Participants pursuant to Section 102 as Trustee 102 Awards or
Non-Trustee 102 Awards.

 

		3.3	The grant of Trustee 102 Awards shall be made under this Sub-plan and shall not be made until 30 days from the date the Plan
has been submitted for approval by the ITA and shall be conditioned upon the approval of the Plan and this Sub-plan by the ITA.

 

		3.4	Trustee 102 Awards may either be classified as Capital Gain Awards (CGAs) or Ordinary Income Awards (OIAs).

 

		3.5	No Trustee 102 Award may be granted under this Sub-plan to any Approved Israeli Participant, unless and until the Company has
filed with the ITA its election regarding the type of Trustee 102 Awards, whether CGAs or OIAs, that will be granted under the
Plan and this Sub-plan (the “Election”). Such Election shall become effective beginning the first date of grant
of a Trustee 102 Award under this Sub-plan and shall remain in effect at least until the end of the year following the year during
which the Company first granted Trustee 102 Awards. The Election shall obligate the Company to grant only the type of Trustee
102 Award it has elected, and shall apply to all Israeli Participants who are granted Trustee 102 Awards during the period indicated
herein, all in accordance with the provisions of Section 102(g) of the Ordinance. For the avoidance of doubt, the Election shall
not prevent the Company from granting Non-Trustee 102 Awards simultaneously.

 

		3.6	All Trustee 102 Awards must be held in trust by, or subject to the approval of the ITA, under the control or supervision of
a Trustee, as described in Section 4 below.

 

		3.7	The designation of Non-Trustee 102 Awards and Trustee 102 Awards shall be subject to the terms and conditions set forth in
Section 102.

 

		3.8	Awards granted to Unapproved Israeli Participants shall be subject to tax according to the provisions of the Ordinance and
shall not be subject to the Trustee arrangement detailed herein.

 

		4.	TRUSTEE

 

		4.1	Trustee 102 Awards which shall be granted under this Sub-plan and/or any Shares allocated or issued upon grant, vesting or
exercise of a Trustee 102 Award and/or other Shares received following any realization of rights under the Plan, shall be allocated
or issued to the Trustee or controlled by the Trustee, for the benefit of the Approved Israeli Participants, in accordance with
the provisions of Section 102. In the event that the requirements for Trustee 102 Awards are not met, the Trustee 102 Awards may
be regarded as Non-Trustee 102 Awards or as Awards which are not subject to Section 102, all in accordance with the provisions
of Section 102.

 

    	 	21	 

     

    

 

		4.2	With respect to any Trustee 102 Award, subject to the provisions of Section 102, an Approved Israeli Participant shall not
sell or release from trust any Shares received upon the grant, vesting or exercise of a Trustee 102 Award and/or any Shares received
following any realization of rights, including, without limitation, stock dividends, under the Plan at least until the lapse of
the period of time required under Section 102 or any shorter period of time determined by the ITA (the “Holding Period”).
Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 shall
apply to and shall be borne by such Approved Israeli Participant.

 

		4.3	Notwithstanding anything to the contrary, the Trustee shall not release or sell any Shares allocated or issued upon grant,
vesting or exercise of a Trustee 102 Award unless the Company, its Israeli Subsidiary and the Trustee are satisfied that the full
amounts of Tax due have been paid or will be paid.

 

		4.4	Upon receipt of any Trustee 102 Award, the Approved Israeli Participant will consent to the grant
of the Award under Section 102 and undertake to comply with the terms of Section 102 and the trust arrangement between the Company
and the Trustee.

 

		5.	THE AWARDS

 

The terms and conditions upon which the Awards shall be issued
and exercised or vest, shall be specified in the Israeli Award Agreement to be executed pursuant to the Plan and to this Sub-plan.
Each Israeli Award Agreement shall state, inter alia, the number of Shares to which the Award relates, the type of Award
granted thereunder (i.e., a CGA, OIA or Non-Trustee 102 Award or any Award granted to Unapproved Israeli Participant), and
any applicable vesting provisions and exercise price that may be payable. For the avoidance of doubt it is clarified that there
is no obligation for uniformity of treatment of Israeli Participants and that the terms and conditions of Awards need not be the
same with respect to each Israeli Participant (whether or not such Israeli Participants are similarly situated).

 

    	 	22	 

     

    

 

		6.	EXERCISE AND VESTING OF AWARDS

 

The grant, vesting
and exercise of Awards granted to Israeli Participants shall be subject to the terms and conditions and, with respect to exercise,
the method, as may be determined by the Company (including the provisions of the Plan) and, when applicable, by the Trustee, in
accordance with the requirements of Section 102. 

 

		7.	ASSIGNABILITY, DESIGNATION AND SALE OF AWARDS

 

		7.1.	Notwithstanding any other provision of the Plan (including sections 5(e) and 6(a)(iv) of the Plan), no Award or any right with
respect thereto, or purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral,
or any right with respect to any Award given to any third party whatsoever, and during the lifetime of the Israeli Participant,
each and all of such Israeli Participant’s rights with respect to an Award shall belong only to the Israeli Participant.
Any such action made directly or indirectly, for an immediate or future validation, shall be void.

 

		7.2	As long as Awards or Shares issued or purchased hereunder are held by the Trustee on behalf of the Israeli Participant, all
rights of the Israeli Participant over the Shares cannot be transferred, assigned, pledged or mortgaged, other than by will or
laws of descent and distribution.

 

		8.	INTEGRATION OF SECTION 102 AND TAX ASSESSING OFFICER’S APPROVAL

 

		8.1.	With regard to Trustee 102 Awards, the provisions of the Plan and/or the Sub-plan and/or the Israeli Award Agreement shall
be subject to the provisions of Section 102 and any approval issued by the ITA and the said provisions shall be deemed an integral
part of the Plan, the Sub-plan and the Israeli Award Agreement.

 

		8.2.	Any provision of Section 102 and/or said approval issued by the ITA which must be complied with in order to receive and/or
to maintain any tax Award pursuant to Section 102, which is not expressly specified in the Plan, the Sub-plan or the Israeli Award
Agreement, shall be considered binding upon the Company, any Israeli Subsidiary and the Israeli Participants.

 

		9.	TAX CONSEQUENCES

 

		9.1	Any tax consequences arising from the grant, exercise, vesting or sale of any Award, from the payment for or sale of Shares
covered thereby or from any other event or act (of the Company, and/or its Subsidiaries, and the Trustee or the Israeli Participant),
hereunder, shall be borne solely by the Israeli Participant. The Company and/or its Subsidiaries, and/or the Trustee shall withhold
Tax according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore,
the Israeli Participant agrees to indemnify the Company and/or its Subsidiaries and/or the Trustee and hold them harmless against
and from any and all liability for any such Tax or interest or penalty thereon, including without limitation, liabilities relating
to the necessity to withhold, or to have withheld, any such Tax from any payment made to the Israeli Participant.

 

    	 	23	 

     

    

 

		9.2	The Company and/or, when applicable, the Trustee shall not be required to release any Award or Shares to an Israeli Participant
until all required Tax payments have been fully made.

 

		9.3	Approved Awards that do not comply with the requirements of Section 102 shall be considered Non-Approved 102 Awards or Awards
subject to tax under Section 3(i) or 2 of the Ordinance.

 

		9.4	With respect to Non-Trustee 102 Awards, if the Israeli Participant ceases to be employed by the Company or any Subsidiary,
or otherwise if so requested by the Company or the Subsidiary, the Israeli Participant shall extend to the Company and/or the Subsidiary
a security or guarantee for the payment of Tax due at the time of sale of Shares, in accordance with the provisions of Section
102.

 

		9.5	For avoidance of doubt, it is clarified that the tax treatment of any Award granted under this Sub-plan is not guaranteed and,
although Awards may be granted under a certain tax route, they may become subject to a different tax route in the future.

 

		10.	ONE TIME AWARD

 

The Awards and underlying Shares are extraordinary, one-time
awards granted to the Participants, and are not and shall not be deemed a salary component for any purpose whatsoever, including
in connection with calculating severance compensation under Applicable Law, nor shall receipt of an award entitle a Participant
to any future Awards.

 

    	 	24Exhibit 10.18

 

 

 

Entera Bio Ltd.

 

and

 

American Stock Transfer & Trust
Company, LLC, as

Warrant Agent

 

 

 

Warrant Agency Agreement

 

Dated as of [ ], 2018

 

     

     

    

 

WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT, dated as of [
], 2018 (“Agreement”), between Entera Bio Ltd., a company limited by shares incorporated under the laws of Israel
(the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company
(the “Warrant Agent”).

 

WITNESSETH

 

WHEREAS, pursuant to a registered offering
by the Company of ordinary shares of the Company, nominal value NIS [ ] per share (the “Ordinary Shares”) and
warrants (the “Warrants”) to purchase Ordinary Shares pursuant to an effective registration statement on Form
F-1 (File No. 333-221472), as amended (the “Registration Statement”), the Company wishes to issue Warrants in
book-entry form entitling the respective holders of the Warrants (the “Holders”, which term shall include a
Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street
name”, a Participant (as defined below) or a designee appointed by such Participant) to purchase an aggregate of up to [
] Ordinary Shares upon the terms and subject to the conditions hereinafter set forth (the “Offering”);

 

WHEREAS, the Ordinary Shares and Warrants
to be issued in connection with the Offering shall be immediately separable and will be issued separately; and

 

WHEREAS, the Company wishes the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration,
transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s
transfer agent, the delivery of the Warrant Shares.

 

NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1. Certain Definitions. For
purposes of this Agreement, the following terms have the meanings indicated:

 

(a)       “Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
Israel or any day on banking institutions in the State of New York or Israel are authorized or required by law or other governmental
action to close.

 

(b)       “Close
of Business” on any given date means 5:00 p.m., New York City time, on such date.

 

(c)       “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

     

     

    

 

(d)       “Warrant
Certificate” means a certificate in substantially the form attached as Exhibit 1 hereto, representing such number
of Warrant Shares as is indicated therein, provided that any reference to the delivery of a Warrant Certificate in this
Agreement shall include delivery of notice from the Depositary or a Participant (each as defined below) of the transfer or exercise
of Warrant in the form of a Global Warrant (as defined below).

 

(d)       “Warrant
Shares” means the Ordinary Shares underlying the Warrants and issuable upon exercise of the Warrants.

 

All other capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate.

 

Section 2. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions hereof,
and the Warrant Agent hereby accepts such appointment. The Company may from time to time appoint a co-Warrant Agent as it may,
in its sole discretion, deem necessary or desirable. The Warrant Agent shall have no duty to supervise, and will in no event be
liable for the acts or omissions of, any co-Warrant Agent.

 

Section 3. Global Warrants.

 

(a)       The
Warrants shall be issuable in book-entry form (the “Global Warrants”). All of the Warrants shall initially be
represented by one or more Global Warrants deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee
of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of
beneficial interests in the Global Warrants shall be shown on, and the transfer of such ownership shall be effected through, records
maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary
(each such institution, with respect to a Warrant in its account, a “Participant”), in each case, in accordance
with the applicable procedures of the Depositary. All notices and communications to be given to the Holders and all deliveries
to be made to Holders in respect of the Warrants shall be given or made only to, or upon the order of, the registered Holder(s)
(which shall be the Depositary or its nominee in the case of the Global Warrants), and the Company shall not have any responsibility
or liability for the delivery of Warrant Shares or other property to owners of beneficial interests in a Global Warrant, for any
aspect of the records relating to or payments or deliveries made on account of those interests by or to the Depositary, for maintaining,
supervising or reviewing any records of the Depositary relating to such beneficial ownership of those interests or for any act
or omission of the Depositary.

 

(b)       If
the Depositary subsequently ceases to make its book-entry settlement system available for the Warrants or if required by applicable
law, the Company may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that the Warrants
are not eligible for, or it is no longer necessary or permitted under applicable law to have the Warrants available in, book-entry
form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each
Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each Holder a Warrant Certificate.

 

    	 	2	 

     

    

 

(c)       A
Holder has the right to elect at any time or from time to time a Warrant Exchange (as defined below) pursuant to a Warrant Certificate
Request Notice (as defined below). Upon written notice by a Holder to the Warrant Agent for the exchange of some or all of such
Holder’s Global Warrants for a Warrant Certificate evidencing the same number of Warrants, which request shall be in the
form attached hereto as Annex A (a “Warrant Certificate Request Notice” and the date of delivery of such Warrant
Certificate Request Notice by the Holder, the “Warrant Certificate Request Notice Date” and the deemed surrender
upon delivery by the Holder of a number of Global Warrants for the same number of Warrants evidenced by a Warrant Certificate,
a “Warrant Exchange”), the Warrant Agent shall provide a written copy of such Warrant Certificate Request Notice
to the Company, upon receipt of which the Company shall promptly effect the Warrant Exchange by issuing and delivering to the Holder
a Warrant Certificate for the number of Warrants subject to such Warrant Exchange in the name set forth in the Warrant Certificate
Request Notice. Such Warrant Certificate shall be signed in the name and on behalf of the Company by the manual or facsimile signature
of an authorized signatory of the Company and shall be in substantially the form attached hereto as Exhibit 1. The Company
covenants and agrees that, upon a Holder’s submission of a completed Warrant Certificate Request Notice, such Holder (or
such other Person as such Holder may have specified in the applicable Warrant Certificate Request Notice) shall be deemed to be
the holder of a Warrant Certificate representing the number of Warrants subject to such Warrant Certificate Request Notice as of
the Warrant Certificate Request Notice Date and, notwithstanding anything to the contrary set forth herein, the Warrant Certificate
shall be deemed for all purposes to contain all of the terms and conditions of the Warrants evidenced by such Warrant Certificate
and the terms of this Agreement, other than Sections 3(c) and 9 hereof, which shall not apply to the Warrants evidenced by the
Warrant Certificate.

 

Section 4. Form of Warrant Certificates.
The Warrant Certificate, together with the form of election to purchase Ordinary Shares (“Notice of Exercise”)
and the form of assignment to be printed on the reverse thereof, shall be in substantially the form of Exhibit 1 hereto.
Any Warrant Certificate may have such letters, numbers or other marks of identification and such notations, legends or endorsements
as the officer executing the same on behalf of the Company may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Agreement and the Warrants, or as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation
system on which the Warrants may be listed or designated for issuance, or to conform to usage or to indicate any special limitations
or restrictions to which any particular Warrants are subject.

 

    	 	3	 

     

    

 

Section 5. Countersignature and Registration.
The Warrant Certificates shall be executed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer, Treasurer,
Secretary or any President or Vice President, either manually or by facsimile signature. The Warrant Certificates shall be countersigned
by the Warrant Agent either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer of the
Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless,
may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed
such Warrant Certificate had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of
the Company to sign such Warrant Certificate, although at the date of the execution of this Agreement any such person was not such
an officer.

 

The Warrant Agent will keep or cause to
be kept, at one of its offices, or at the office of one of its agents, books for registration and transfer of the Warrant Certificates
issued hereunder. Such books shall show the names and addresses of the respective Holders of the Warrant Certificates, the number
of Warrants evidenced on the face of each of such Warrant Certificate and the date of each of such Warrant Certificate. The Warrant
Agent will create a special account for the issuance of Warrant Certificates.

 

Section 6. Transfer, Split Up, Combination
and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With respect to the Global
Warrant, subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph of Section 6 and subject
to applicable law, rules or regulations or any “stop transfer” instructions the Company may give to the Warrant Agent,
at any time after their original issuance, and at or prior to the Close of Business on the Termination Date (as such term is defined
in the Warrant Certificate), any Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants may be transferred,
split up, combined or exchanged for another Warrant Certificate or Warrant Certificates or Global Warrant or Global Warrants, as
the case may be, entitling the Holder to purchase a like number of Ordinary Shares as the Warrant Certificate or Warrant Certificates
or Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split
up, combine or exchange any Warrant Certificate or Global Warrant shall make such request in writing delivered to the Warrant Agent,
and shall surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined or exchanged at the principal
office of the Warrant Agent, provided that no such surrender shall be required by the Holder of a Global Warrant deposited
with the Warrant Agent in accordance with Section 3(a). Any requested transfer of Warrants, whether in book-entry form or certificate
form, shall be accompanied by reasonable evidence of authority of the party making such request that may be required by the Warrant
Agent. Thereupon the Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver
to the Person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so requested. The Company
may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Warrant Certificates.

 

    	 	4	 

     

    

 

Upon receipt by the Warrant Agent of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Warrant Certificate, which evidence shall include
an affidavit of loss, or in the case of mutilated certificates, the certificate or portion thereof remaining, and, in case of loss,
theft or destruction, of indemnity in customary form and amount, and satisfaction of any other reasonable requirements established
by Section 8-405 of the Uniform Commercial Code as in effect in the State of New York, and reimbursement to the Company and the
Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant Agent and cancellation of the Warrant
Certificate if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor to the Warrant Agent for delivery
to the Holder in lieu of the Warrant Certificate so lost, stolen, destroyed or mutilated.

 

Section 7. Exercise of Warrants; Exercise
Price; Termination Date.

 

(a)       The
Warrants shall be exercisable commencing on the Initial Exercise Date (as such term is defined in the Warrant Certificate). The
Warrants shall cease to be exercisable and shall terminate and become void, and all rights thereunder and under this Agreement
shall cease, at or prior to the Close of Business on the Termination Date. Subject to Section 7(b) below, the Holder of a Warrant
may exercise the Warrant in accordance with Section 2(a) and, if applicable, Section 2(c) of the Warrant Certificate. Notwithstanding
any other provision in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant
held in book-entry form through the Depositary (or another established clearing corporation performing similar functions) shall
effect exercises by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction
form for exercise and complying with the applicable procedures to effect exercise that are then required by the Depositary (or
such other clearing corporation, as applicable).

 

(b)       Upon
receipt by the Company of a Notice of Exercise for a “cashless” exercise pursuant to Section 2(c) of the Warrant
Certificate (a “Cashless Exercise”) and following the conclusion of the applicable Calculation Period, the Company
will promptly calculate and notify the Warrant Agent of the number of Warrant Shares issuable in connection with such Cashless
Exercise and deliver (x) a copy of the Notice of Exercise and (y) instruction to issue such number of Warrant Shares, in each case,
to the Warrant Agent (the date on which such notice and instruction are delivered by the Company under this Section 7(b), a “Cashless
Exercise Notice Delivery Date”), which shall issue such number of Warrant Shares in accordance with Section 7(c)
below (it being understood that the notices provided for in this paragraph may be delivered by electronic transmission (including
by way of email attachment)). The Company shall be responsible for making all calculations in respect of each Cashless Exercise,
and the Warrant Agent shall have no liability for making any such calculations.

 

    	 	5	 

     

    

 

(c)       Upon
the Warrant Agent’s receipt of (x) (i) an executed Notice of Exercise, which shall have the Warrant Certificate attached
if the Warrants represented thereby are being exercised in full, and (ii) solely in respect of a Cashless Exercise, the instruction
described in Section 7(b) above, in each case, at or prior to the Close of Business on the Termination Date or, if applicable,
the Cashless Exercise Notice Delivery Date and (y) confirmation by the Company of its timely receipt of the Exercise Price
for the Warrant Shares to be purchased (other than in the case of a Cashless Exercise) and an amount equal to any applicable tax,
governmental charge or expense reimbursement referred to in Section 6 in cash, or by certified check or bank draft payable to the
order of the Company (or, in the case of the Holder of a Global Warrant, the delivery of the executed Notice of Exercise and the
payment of the Exercise Price (other than in the case of a Cashless Exercise) and any other applicable amounts as set forth herein),
the Warrant Agent shall cause the Warrant Shares to which the Holder is entitled as a result of such exercise to be delivered to
or upon the order of such Holder, registered in such name or names as may be designated by such Holder, no later than the applicable
Warrant Share Delivery Date (as such term is defined in the Warrant Certificate). If the Company is then a participant in the DWAC
system of the Depositary and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares
to the Holder or (B) the Warrant is being exercised via Cashless Exercise, then the relevant Warrant Shares shall be transmitted
by the Warrant Agent to the Holder by crediting the account of the Holder’s broker with the Depositary through its DWAC system.
For the avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2(d)(i)
or 2(d)(iv) of the Warrant Certificate, such obligation to Holders shall be solely that of the Company and not that of the Warrant
Agent. Notwithstanding anything else to the contrary in this Agreement, except in the case of a Cashless Exercise, if any Holder
fails to timely deliver valid payment to the Company of an amount equal to the aggregate Exercise Price of the Warrant Shares to
be purchased upon exercise of such Holder’s Warrants as set forth in Section 7(a) hereof, the Warrant Agent will not obligated
to deliver certificates representing any such Warrant Shares (via DWAC or otherwise).

 

(d)       In
case the Holder of any Warrants shall exercise fewer than all Warrants evidenced by such Holder’s Warrant Certificate, a
new Warrant Certificate evidencing the number of Warrants equivalent to the number of Warrants remaining unexercised may be issued
by the Warrant Agent to the Holder of such Warrants or to its duly authorized assigns in accordance with Section 2(d)(ii) of the
Warrant Certificate, subject to the provisions of Section 6 hereof.

 

Section 8. Cancellation and Destruction
of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination
or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Warrant Agent for cancellation or
in canceled form, or, if surrendered to the Warrant Agent, shall be canceled by it, and no Warrant Certificates shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant
Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates
to the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant
Agent to retain such canceled certificates.

 

    	 	6	 

     

    

 

Section 9. Certain Representations; Reservation
and Availability of Ordinary Shares.

 

(a)       This
Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery
hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company
in accordance with its terms, and the Warrants have been duly authorized, executed and issued by the Company and, assuming due
authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration
Statement, constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their
terms and entitled to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(b)       The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Ordinary Shares
or its authorized and issued Ordinary Shares held in its treasury, free from preemptive rights, the number of Ordinary Shares that
will be sufficient to permit the exercise in full of all outstanding Warrants.

 

(c)       The
Warrant Agent will create a special reserve for the issuance of Ordinary Shares upon the exercise of Warrants.

 

(d)       The
Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the original issuance or delivery of Warrant Certificates or certificates evidencing Ordinary
Shares upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may
be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery
of certificates for Ordinary Shares in a name other than that of the Holder of the Warrants evidenced by the Warrant Certificate
surrendered for exercise or to issue or deliver any certificate for Ordinary Shares upon the exercise of any Warrants until any
such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrants
at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental
charge is due.

 

Section 10. Ordinary Shares Record Date.
Each Person in whose name any certificate for Ordinary Shares is issued (or whose broker’s account is credited with Ordinary
Shares through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record
for the Ordinary Shares represented thereby on, and such certificate shall be dated (i) in the case of any exercise other than
a Cashless Exercise, the date of delivery of the Notice of Exercise in accordance with Section 2(a) of the Warrant Certificate
or (ii) in the case of a Cashless Exercise, the final day of the related Calculation Period (as such term is defined in the Warrant
Certificate), as applicable; provided, however, that payment to the Company of the aggregate Exercise Price (other than
in the case of a Cashless Exercise) and any applicable transfer taxes shall have been timely made prior to the issuance of such
Ordinary Shares; provided, further, that if the date of such payment and submission, or such final day of the Calculation
Period, as the case may be, is a date upon which the Ordinary Share transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding day on which
the Ordinary Share transfer books of the Company are open.

 

    	 	7	 

     

    

 

Section 11. Adjustment of Exercise Price
or Number of Ordinary Shares. The Exercise Price and the number of Ordinary Shares covered by each Warrant are subject to adjustment
from time to time as provided in Section 3 of the Warrant Certificate. In the event that at any time, as a result of an adjustment
made pursuant to Section 3 of the Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Ordinary Shares, thereafter the number of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Ordinary Shares contained in Section 3 of the Warrant Certificate, and the
provisions of Sections 7, 9(b) through (d) and 13 of this Agreement with respect to the Ordinary Shares shall apply on like terms
to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price
pursuant to the Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of Ordinary
Shares purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.

 

Section 12. Certification of Adjusted
Exercise Price or Number of Ordinary Shares. Whenever the Exercise Price or the number of Ordinary Shares issuable upon the
exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate setting
forth the Exercise Price and the number of Ordinary Shares covered by each Warrant, in each case, as so adjusted, and a brief statement
of the facts accounting for such adjustment(s), (b) promptly file with the Warrant Agent and with each transfer agent for the Ordinary
Shares a copy of such certificate and (c) instruct the Warrant Agent to send a brief summary thereof to each Holder of Warrants.

 

Section 13. Fractional Interests.

 

(a)       The
Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any
fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a
rounding of such fraction to the nearest whole Warrant (rounded down).

 

(b)       The
Company shall not issue fractions of Ordinary Shares upon exercise of Warrants or distribute stock certificates which evidence
fractional Ordinary Shares. Whenever any fraction of an Ordinary Share would otherwise be required to be issued or distributed,
the actual issuance or distribution in respect thereof shall be made in accordance with Section 2(d)(v) of the Warrant Certificate.

 

    	 	8	 

     

    

 

Section 14. Conditions of the Warrant
Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof,
including the following, to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to
time of the Warrants shall be subject:

 

(a)       Compensation
and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation as separately agreed with the Warrant
Agent for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable and documented out-of-pocket
expenses (including reasonable counsel fees) incurred without gross negligence, bad faith or willful misconduct by the Warrant
Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant
Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, bad faith or willful
misconduct on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, including
the reasonable and documented costs and expenses of defending against any claim of such liability.

 

(b)       Agent
for the Company. In acting under this Agreement and in connection with the Warrants, the Warrant Agent is acting solely as
agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of Warrants
or beneficial owners of Warrants.

 

(c)       Counsel.
The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice
of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the advice of such counsel.

 

(d)       Documents.
The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance
upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the proper parties.

 

(e)       Certain
Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest
in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted
by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on,
or as depositary, trustee or agent for, any committee or body of Holders of Warrant Securities or other obligations of the Company
as freely as if it were not the Warrant Agent hereunder. Nothing in this Agreement shall be deemed to prevent the Warrant Agent
from acting as trustee under any indenture to which the Company is a party.

 

    	 	9	 

     

    

 

(f)       No
Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall have no liability for interest on
any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.

 

(g)       No
Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or any
of the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon).

 

(h)       No
Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein
or in the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon), all of which are made solely
by the Company.

 

(i)       No
Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against
the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it
in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The
Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the Warrants. The Warrant Agent shall have no duty or responsibility in case of any default by the Company
in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt
of any written demand from a Holder of a Warrant with respect to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law.

 

Section 15. Purchase or Consolidation
or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may be merged
or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent
or any successor Warrant Agent shall be party, or any corporation succeeding to the corporate trust business of the Warrant Agent
or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Warrant Agent under the provisions of Section 17. In case at the time such successor Warrant Agent
shall succeed to the agency created by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered,
any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates
so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, any successor Warrant
Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor
Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and
in this Agreement.

 

    	 	10	 

     

    

 

In case at any time the name of the Warrant
Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant
Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates
either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided
in the Warrant Certificates and in this Agreement.

 

Section 16. Duties of Warrant Agent.
The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all
of which the Company, by its acceptance hereof, shall be bound:

 

(a)       The
Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

 

(b)       Whenever
in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate
signed by the Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary or any President or Vice President of the
Company; and such certificate shall be full authentication to the Warrant Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.

 

(c)       Subject
to the limitation set forth in Section 14, the Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith
or willful misconduct, or for a breach by it of this Agreement.

 

(d)       The
Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or
in the Warrant Certificates (except its countersignature thereof) by the Company or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company only.

 

(e)       The
Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution and delivery hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise
Price (other than, for the avoidance of doubt, providing notice to Holders as provided in Section 12(c)) or the making of any change
in the number of Ordinary Shares required under the provisions of Section 11 or 13 or responsible for the manner, method or amount
of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with
respect to the exercise of Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price);
nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any
Ordinary Shares to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any Ordinary Shares will, when
issued, be duly authorized, validly issued, fully paid and nonassessable.

 

    	 	11	 

     

    

 

(f)       Each
party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for
the carrying out or performing by any party of the provisions of this Agreement.

 

(g)       The
Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief
Executive Officer, Chief Financial Officer, Treasurer, Secretary or any President or Vice President of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified
and held harmless for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such
officer, provided Warrant Agent carries out such instructions without gross negligence, bad faith or willful misconduct.

 

(h)       The
Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal
entity.

 

(i)       The
Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment thereof.

 

Section 17. Change of Warrant Agent.
The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing sent
to the Company and to each transfer agent for the Ordinary Shares, and to the Holders of the Warrants. The Company may remove the
Warrant Agent or any successor Warrant Agent upon 30 days’ notice in writing, sent to the Warrant Agent or successor Warrant
Agent, as the case may be, and to each transfer agent for the Ordinary Shares, and to the Holders of the Warrants. If the Warrant
Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment within a period of 30 days after such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by a Holder of Warrants (which
shall, with such notice, submit its Warrant Certificate for inspection by the Company), then the Holder of any Warrants may apply
to any court of competent jurisdiction for the appointment of a new Warrant Agent, provided that, for purposes of this Agreement,
the Company shall be deemed to be the Warrant Agent until a new warrant agent is appointed. Any successor Warrant Agent, whether
appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States
or of a state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject
to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined
capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor
Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute
and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent for
the Ordinary Shares, and mail a notice thereof in writing to the Holders of the Warrants. However, failure to give any notice provided
for in this Section 17, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor Warrant Agent, as the case may be.

 

    	 	12	 

     

    

 

Section 18. Issuance of New Warrant Certificates.
Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue
new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable
under the several Warrant Certificates made in accordance with the provisions of this Agreement, the Warrants and the Warrant Certificates.

 

Section 19. Notices. Notices or demands
authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrants to or on the Company,
(ii) subject to the provisions of Section 17, by the Company or by the Holder of any Warrants to or on the Warrant Agent or (iii)
by the Company or the Warrant Agent to the Holder of any Warrants, shall be deemed given (a) upon receipt, if delivered personally;
(b) when sent, if sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept
on file by the sending party); (c) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically
or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s
e-mail server that such e-mail could not be delivered to such recipient) and (d) if sent by overnight courier service, one (1)
Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed
to the party to receive the same. If notice is given by facsimile or email, a copy of such notice shall be dispatched no later
than the next Business Day by first class mail, postage prepaid. The addresses, facsimile numbers and e-mail addresses for such
communications shall be:

 

    	 	13	 

     

    

 

		(a)	If to the Company, to its agent for service:

 

Cogency Global Inc.

10 E 40th Street, 40th Floor

New York, New York 10016

Reference: Entera Bio Ltd.

 

     With a copy to:

 

Email: Notice@enterabio.com

 

     And with a copy (for informational
purposes only) to:

 

Michael P. Kaplan, Esq.

Sophia Hudson, Esq.

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

(212) 450-4000

 

and

 

Yair Geva, Adv.

Ron Ben Menachem, Adv.

Tomer Farkash, Adv.

Herzog Fox & Neeman

4 Weizmann Street

Tel Aviv 6423904, Israel

+972 (3) 692-2020

 

		(b)	If to the Warrant Agent, to:

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

Email: [_______]

 

(c)          If to the Holder of any Warrants,
to the address of such Holder as shown on the registry books of the Company. Any notice required to be delivered by the Company
to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding any other provision of
this Agreement, where this Agreement provides for notice of any event to a Holder of any Global Warrant, such notice shall be sufficiently
given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.

 

    	 	14	 

     

    

 

Or, in each of the above instances, to such
other address, facsimile number or e-mail address and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party at least five (5) days prior to the effectiveness of such change.

 

Section 20. Supplements and Amendments.

 

(a)       The
Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Warrants
in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Warrants or to surrender any
rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall
not adversely affect the interests of the Holders of the Warrants in any material respect.

 

(b)       In
addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a
majority of the Ordinary Shares issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose
of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or modifying in any
manner the rights of the Holders of the Warrants; provided, however, that no modification of the terms (including
but not limited to the adjustments described in Section 11) upon which the Warrants are exercisable or reducing the percentage
required for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding Warrant
affected thereby. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to
the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment complies
with the terms of this Section 20.

 

Section 21. Successors. All covenants
and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.

 

Section 22. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrants and the Warrant
Agent any legal or equitable right, remedy or claim under this Agreement. This Agreement shall be for the sole and exclusive benefit
of the Company, the Warrant Agent and the Holders of the Warrants.

 

Section 23. Governing Law. This Agreement
and each Warrant Certificate issued hereunder shall be governed by, and construed in accordance with, the laws of the State of
New York without giving effect to the conflicts of law principles thereof.

 

Section 24. Counterparts. This Agreement
may be executed in any number of 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.

 

    	 	15	 

     

    

 

Section 25. Captions. The captions
of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.

 

Section 26. Information. The Company
agrees to promptly provide to the Holders of the Warrants any information it provides to the holders of the Ordinary Shares, except
to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the Securities and Exchange
Commission.

 

[Signature Page Follows]

 

    	 	16	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the day and year first above written.

 

	 	ENTERA BIO LTD.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

     

     

    

 

Annex A: Form of Warrant Certificate
Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

 

To: American Stock Transfer & Trust Company, LLC, as Warrant
Agent for Entera Bio Ltd. (the “Company”)

 

The undersigned Holder of Ordinary Share Purchase Warrants (“Warrants”)
in the form of Global Warrants issued by the Company hereby elects to receive a Warrant Certificate evidencing the Warrants held
by the Holder as specified below:

 

		1.	Name of Holder of Warrants in form of Global Warrants:
______________________

 

		2.	Name of Holder in Warrant Certificate (if different from
name of Holder of Warrants in form of Global Warrants): ________________________________

 

		3.	Number of Warrants in name of Holder in form of Global
Warrants: _____________

 

		4.	Number of Warrants for which Warrant Certificate shall
be issued: _______________

 

		5.	Number of Warrants in name of Holder in form of Global
Warrants after issuance of Warrant Certificate, if any: ___________

 

		6.	Warrant Certificate shall be delivered to the following
address:

 

______________________________

 

______________________________

 

______________________________

 

______________________________

 

The undersigned hereby acknowledges and agrees that, in connection
with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the number of
Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: __________________________________________________

 

Signature of Authorized Signatory of Investing Entity:
___________________________

 

Name of Authorized Signatory: ______________________________________________

 

Title of Authorized Signatory: _______________________________________________

 

Date: _______________________________________________________________

 

     

     

    

 

Exhibit 1: Form of Warrant Certificate

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