Exhibit 10.16

EXA CORPORATION

November 7, 2013

Edmond L. Furlong

172 Valley Road

Needham, MA 02492

Dear Ed:

As we have discussed, the purpose of this letter agreement (the “Agreement”) is
to confirm the terms regarding your transition services and separation of
employment from Exa Corporation (the “Company”). As more fully set forth below,
the Company desires to provide you with the opportunity to transition from the
Company in exchange for certain agreements by you, contingent upon your
execution and non-revocation of this Agreement. This Agreement shall become
effective (the “Effective Date”) on the eighth (8th) day following your
acceptance of it as provided below.

1.        Transition Arrangement and Separation of Employment. You hereby resign
your employment with the Company, effective on March 31, 2014 (the “Separation
Date”). During the period of continued employment between the Effective Date of
this Letter Agreement and the Separation Date (the “Transition Period”), you
will be employed in a transition capacity for the Company, focusing your
attention and best efforts, among your other responsibilities, on transitioning
your duties to selected Company personnel and overseeing the signing off of the
Company’s third quarter Form 10-Q filing (“Form 10-Q”)and the Company’s Form
10-K (the “Transition Services”). During the Transition Period, you will
continue to be paid at the annual rate of $245,000.00 and you will continue to
participate in the Company’s benefit plans under the same terms and conditions
as you currently are participating. Your last day in your current role as Chief
Financial Officer and Chief Operating Officer and as an officer or Director of
any subsidiary of the Company will be the Separation Date. On the Separation
Date, you will receive your regular pay plus the value of your unused
PTO/vacation earned through that date. You acknowledge that from and after the
Separation Date, you will have no authority and will not represent yourself as
an employee, officer or agent of the Company.

2.        Bonus Payment. On December 13, 2013, you will be paid an amount
equivalent to your Fiscal 2014 target bonus in the amount of $220,500.00, less
applicable withholdings.

3.        Separation Payment. In exchange for the transition services to be
provided by you and the other mutual covenants set forth in this Agreement, on
the Separation Date, you will receive a lump sum payment from the Company in the
amount of $122,500, less applicable withholdings.

4.        Equity. Pursuant to the terms of a Stock Option Award Agreement
between the Company and you dated July 1, 2005, (the “2005 Option”), your option
to purchase 230,769 shares of the Company’s Common Stock (the “Shares”) is
vested fully as of the date hereof. Pursuant to the terms of a [Stock Option
Award Agreement] between the Company and you dated July 19, 2011 (the “2011
Option” and together with the 2005 Option, the “Options”), you were granted the
option to purchase up

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to 23,076 Shares, of which 577 are vested as of the date hereof. The 2011 Option
will continue to vest in accordance with its terms through the Separation Date.
Except as set forth herein, the 2005 Option and the 2011 Option will continue to
be governed by and subject to the terms of the respective award agreements and,
with respect to the 2005 Option, the Company’s 2005 Series G Convertible
Preferred Stock Incentive Plan, and, with respect to the 2011 Option, the
Company’s 2007 Stock Incentive Plan. For the avoidance of doubt, you have until
the 60th day following the Separation Date to exercise the 2005 Option and until
the 90th day following the Separation Date to exercise the 2011 Option.

5.         Covenants by You. You expressly acknowledge and agree to the
following:

(a)        that no later than the Separation Date, you will return to the
Company, and will not retain, any and all Company files, documents and other
confidential information (and any copies thereof in any form or media) and
property, including without limitation, any cell phone, computer, hand-held
computer device, keys, key cards and vehicles;

(b)        that you reaffirm and will abide by the Agreement Regarding
Intellectual Property and Proprietary Information (the “NDA”) signed by you on
                , and attached hereto as Exhibit A, and that you will abide by
any and all common law and/or statutory obligations relating to protection and
non-disclosure of the Company’s trade secrets and/or confidential and
proprietary documents and information; and

(c)        that all of the Company’s rights under this Agreement will inure to
the benefit of the Company’s successors and assigns.

6.        Nondisparagement. We agree that neither party (including, in the case
of the Company, its officers or directors) will make any statements that are
professionally or personally disparaging about, or adverse to, the interests of
the other party and will not engage in any conduct which is intended to harm,
professionally or personally, the other party.

 

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7.        Release of Claims.

(i) You hereby agree and acknowledge that by signing this Letter Agreement and
accepting the payments and benefits described herein, you are waiving your right
to assert any and all forms of legal Claims against the Company1/ of any kind
whatsoever, arising from the beginning of time through the date you execute this
Agreement. With the sole and limited exceptions set forth in paragraph
(ii) below, for purposes of this Section 7 the words “Claim” and “Claims” are
intended to be as broad as the law allows and to mean: any and all charges,
complaints and other form of action against the Company, seeking any form of
relief including, without limitation, equitable relief (whether declaratory,
injunctive or otherwise), the recovery of

any damages, or any other form of monetary recovery whatsoever (including,
without limitation, back pay, front pay, compensatory damages, emotional
distress damages, punitive damages, attorneys’ fees and any other costs) against
the Company, including, without limitation:

(a)        Claims under any Massachusetts (or any other state) or federal
discrimination, fair employment practices or other employment related statute,
regulation or executive order (as they may have been amended through the date
you sign this Agreement), including, without limitation, the Age Discrimination
in Employment Act and Mass. Gen. L. c. 151B;

(b)        Claims under any other Massachusetts (or any other state) or federal
employment related statute, regulation or executive order (as they may have been
amended through the date you sign this Agreement), including the Massachusetts
Wage Act, Mass. Gen. L. c. 149, section 148 et seq. and the Massachusetts
overtime pay law, Mass. Gen. L. c. 151, section 1A, et seq.;

(c)        Claims under any Massachusetts (or any other state) or federal common
law theory; and

(d)        Any other Claims arising under other state or federal law.

(ii)        Notwithstanding the foregoing, this Section 7 shall not release the
Company from any obligation expressly set forth in this Agreement, and does not
preclude you from filing a charge of discrimination with the United States Equal
Employment Opportunity Commission (“EEOC”), but you will not be entitled to any
monetary or other relief from the EEOC or from any Court as a result of
litigation brought on the basis of or in connection with such charge.

(iii)        You expressly acknowledge and agree that, but for providing the
foregoing release of Claims, you would not be receiving the payments and
benefits described in this Agreement.

8.        Indemnification by the Company

The Company shall indemnify you to the fullest extent permitted by the Delaware
General Corporation Law for any acts or omissions allegedly made by you while
you serve and have served as the Company’s Chief Financial Officer and Chief
Operating Officer. Without limiting the generality of the foregoing, the Company
shall indemnify you to the fullest extent provided for in Article XI of the
Amended and Restated By-Laws of the Company, to the same extent and in the same
manner as if you had served as a director of the Company. The Company
acknowledges and agrees that the rights under the Certificate of Incorporation
and By-laws vested upon the commencement of your service as the Company’s Chief
Financial Officer and Chief Operating Officer. The Company will not amend its
Certificate of Incorporation or its By-laws in any way that would result in any
reduction in your indemnification rights as they existed during your employment
with the Company. Moreover, the Company acknowledges that you serve and have
served as an officer or employee at the direction or request of the Company.

 

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For purposes of this Section, the term “Company” includes Exa Corporation and
any of its divisions, affiliates (which means all persons and entities directly
or indirectly controlling, controlled by or under common control with Exa
Corporation) parents, subsidiaries and all other related entities, and its and
their Directors, officers, employees, trustees, agents, successors and assigns.

 

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9.        Understanding this Agreement. Before signing this Agreement, you
should take whatever steps you believe are necessary to ensure that you
understand what you are signing, what benefits you are receiving and what rights
you are giving up.

(a)        By signing this Agreement, you are acknowledging that you have read
it carefully and understand all of its terms.

(b)        You understand that, among other claims you are releasing in the
Release of Claims are any claims against the Company alleging discrimination on
the basis of age and claims for wages and/or overtime pay under Massachusetts
law.

(d)        You are hereby advised and encouraged to consult with legal counsel
for the purpose of reviewing the terms of this Agreement.

(e)        You are being given twenty-one (21) days in which to consider this
Agreement and whether to accept this Agreement. If you choose to accept this
Agreement within that time, you are to sign and date below and return it to the
Company, c/o Stephen Remondi, President and Chief Executive Officer, Exa
Corporation, 55 Network Drive, Burlington, MA 01803.

(f)        Even after executing this Agreement, you have seven (7) days after
signing to revoke this Agreement. The Agreement will not be effective or
enforceable until this seven (7) day period has expired. In order to revoke your
assent to this Agreement, you must, within seven (7) days after you sign this
Agreement, deliver a written notice of rescission to Mr. Remondi. To be
effective, the notice of rescission must be hand delivered, or postmarked within
the seven (7) day period and sent by certified mail, return receipt requested,
to the referenced address.

This Agreement may be signed on one or more copies, each of which when signed
will be deemed to be an original, and all of which together will constitute one
and the same Agreement.

Please acknowledge your understanding and agreement with the foregoing by
countersigning this Letter Agreement and returning it to the Company.

 

Very truly yours, Exa Corporation By:     /s/ Stephen Remondi     Name: Stephen
Remondi     Its: President and Chief Executive Officer

 

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Confirmed and Agreed:   /s/ Edmond L. Furlong Edmond L. Furlong Dated:  

11/12/13

 

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EXHIBIT A

Agreement Regarding Intellectual Property and Proprietary Information

 

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