Document:

2004 Employee Stock Purchase Plan

 EXHIBIT 10.4 
  
  
 Cogent, Inc. 
  
 2004 Employee Stock Purchase Plan 
  

 TABLE OF CONTENTS 
  

							
	 	  	 	  	Page

	1.	  	Establishment, Purpose and Term of Plan	  	1
	 	  	1.1	  	Establishment	  	1
	 	  	1.2	  	Purpose	  	1
	 	  	1.3	  	Term of Plan	  	1
			
	2.	  	Definitions and Construction	  	1
	 	  	2.1	  	Definitions	  	1
	 	  	2.2	  	Construction	  	4
			
	3.	  	Administration	  	4
	 	  	3.1	  	Administration by the Board	  	4
	 	  	3.2	  	Authority of Officers	  	4
	 	  	3.3	  	Policies and Procedures Established by the Company	  	4
	 	  	3.4	  	Indemnification	  	5
			
	4.	  	Shares Subject to Plan	  	5
	 	  	4.1	  	Maximum Number of Shares Issuable	  	5
	 	  	4.2	  	Adjustments for Changes in Capital Structure	  	5
			
	5.	  	Eligibility	  	6
	 	  	5.1	  	Employees Eligible to Participate	  	6
	 	  	5.2	  	Exclusion of Certain Stockholders	  	6
	 	  	5.3	  	Determination by Company	  	6
			
	6.	  	Offerings	  	7
			
	7.	  	Participation in the Plan	  	7
	 	  	7.1	  	Initial Participation	  	7
	 	  	7.2	  	Continued Participation	  	8
			
	8.	  	Right to Purchase Shares	  	8
	 	  	8.1	  	Grant of Purchase Right	  	8
	 	  	8.2	  	Pro Rata Adjustment of Purchase Right	  	8
	 	  	8.3	  	Calendar Year Purchase Limitation	  	9
			
	9.	  	Purchase Price	  	9
			
	10.	  	Accumulation of Purchase Price through Payroll Deduction	  	9
	 	  	10.1	  	Amount of Payroll Deductions	  	10
	 	  	10.2	  	Commencement of Payroll Deductions	  	10
	 	  	10.3	  	Election to Change or Stop Payroll Deductions	  	10
	 	  	10.4	  	Administrative Suspension of Payroll Deductions	  	10
	 	  	10.5	  	Participant Accounts	  	10
	 	  	10.6	  	No Interest Paid	  	11
			
	11.	  	Purchase of Shares	  	11
	 	  	11.1	  	Exercise of Purchase Right	  	11

  

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 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	11.2	  	Pro Rata Allocation of Shares	  	11
	 	  	11.3	  	Delivery of Certificates	  	12
	 	  	11.4	  	Return of Cash Balance	  	12
	 	  	11.5	  	Tax Withholding	  	12
	 	  	11.6	  	Expiration of Purchase Right	  	12
	 	  	11.7	  	Provision of Reports and Stockholder Information to Participants	  	12
			
	12.	  	Withdrawal from Plan	  	13
	 	  	12.1	  	Voluntary Withdrawal from the Plan	  	13
	 	  	12.2	  	Return of Payroll Deductions	  	13
			
	13.	  	Termination of Employment or Eligibility	  	13
			
	14.	  	Change in Control	  	13
	 	  	14.1	  	Definitions	  	13
	 	  	14.2	  	Effect of Change in Control on Purchase Rights	  	14
			
	15.	  	Nontransferability of Purchase Rights	  	14
			
	16.	  	Compliance with Securities Law	  	14
			
	17.	  	Rights as a Stockholder and Employee	  	15
			
	18.	  	Legends	  	15
			
	19.	  	Notification of Disposition of Shares	  	16
			
	20.	  	Designation of Beneficiary	  	16
	 	  	20.1	  	Designation Procedure	  	16
	 	  	20.2	  	Absence of Beneficiary Designation	  	16
			
	21.	  	Notices	  	16
			
	22.	  	Amendment or Termination of the Plan	  	16

  

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 Cogent, Inc. 
 2004 Employee Stock Purchase Plan 
  
 1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN. 
  
 1.1 Establishment. The Cogent, Inc. 2004 Employee
Stock Purchase Plan (the “Plan”) is hereby established effective as of the effective date of the initial registration by the Company of its Stock under Section 12 of the Securities Exchange Act of 1934, as
amended (the “Effective Date”). 
  
 1.2 Purpose. The purpose of the Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward Eligible Employees of the Participating Company Group
and by motivating such persons to contribute to the growth and profitability of the Participating Company Group. The Plan provides such Eligible Employees with an opportunity to acquire a proprietary interest in the Company through the purchase of
Stock. The Company intends that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code (including any amendments or replacements of such section), and the Plan shall be so construed. 
  
 1.3 Term of Plan. The Plan shall continue in effect
until its termination by the Board. 
  
 2.
DEFINITIONS AND CONSTRUCTION. 
  
 2.1 Definitions. Any term not expressly defined in the Plan but defined for purposes of Section 423 of the Code shall have the same
definition herein. Whenever used herein, the following terms shall have their respective meanings set forth below: 
  
 (a) “Board” means the Board of Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, “Board” also means such Committee(s). 
  
 (b) “Cash Exercise Notice” means a written notice in such form as specified by the Company, which
states a Participant’s election to exercise, as of the next Purchase Date, a Purchase Right granted to such Participant with respect to the Initial Offering Period or other Offering Period for which the Board has suspended payroll deductions by
all Participants. 
  
 (c)
“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder. 
  
 (d) “Committee” means the Compensation Committee or other committee of the Board duly appointed to
administer the Plan and having such powers as specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without 

 limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and
any applicable limitations imposed by law. 
  
 (e) “Company” means Cogent, Inc., a Delaware corporation, or any successor corporation thereto. 
  
 (f) “Compensation” means, with respect to any Offering Period, base wages or
salary, overtime, bonuses, commissions, shift differentials, payments for paid time off, payments in lieu of notice, and compensation deferred under any program or plan, including, without limitation, pursuant to Section 401(k) or Section 125 of the
Code. Compensation shall be limited to amounts actually payable in cash or deferred during the Offering Period. Compensation shall not include moving allowances, payments pursuant to a severance agreement, termination pay, relocation payments,
sign-on bonuses, any amounts directly or indirectly paid pursuant to the Plan or any other stock purchase or stock option plan, or any other compensation not included above. 
  
 (g) “Eligible Employee” means an Employee who meets the requirements
set forth in Section 5 for eligibility to participate in the Plan. 
  
 (h) “Employee” means a person treated as an employee of a Participating Company for purposes of Section 423 of the Code. A Participant shall be deemed to have ceased to be an
Employee either upon an actual termination of employment or upon the corporation employing the Participant ceasing to be a Participating Company. For purposes of the Plan, an individual shall not be deemed to have ceased to be an Employee while on
any military leave, sick leave, or other bona fide leave of absence approved by the Company of ninety (90) days or less. If an individual’s leave of absence exceeds ninety (90) days, the individual shall be deemed to have ceased to be an
Employee on the ninety-first (91st) day of such leave unless the individual’s right to reemployment with the Participating Company Group is guaranteed either by statute or by contract. 
  
 (i) “Fair Market
Value” means, as of any date: 
  
 (i) If the Stock is then listed on a national or regional securities exchange or market system or is regularly quoted by a recognized securities dealer, the closing sale price of a share of Stock (or the mean of the closing bid and asked
prices if the Stock is so quoted instead) as quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or such other national or regional securities exchange or market system constituting the primary market for the Stock, or by such
recognized securities dealer, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system or
has been quoted by such securities dealer, the date on which the Fair Market Value is established shall be the last day on which the Stock was so traded or quoted prior to the relevant date, or such other appropriate day as determined by the Board,
in its discretion. 
  
 (ii) If, on the relevant
date, the Stock is not then listed on a national or regional securities exchange or market system or regularly quoted by a recognized 
  

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 securities dealer, the Fair Market Value of a share of Stock shall be as determined in good faith by the
Board. 
  
 (iii) Notwithstanding the foregoing,
the Fair Market Value of a share of Stock on the Effective Date shall be deemed to be the public offering price set forth in the final prospectus filed with the Securities and Exchange Commission in connection with the Company’s initial public
offering of the Stock. 
  
 (j)
“Initial Offering Period” means the Offering Period commencing on the Effective Date of the Plan, as established pursuant to Section 6. 
  
 (k) “Offering” means an offering of Stock as provided in Section 6.

  
 (l) “Offering
Date” means, for any Offering, the first day of the Offering Period. 
  
 (m) “Offering Period” means an Offering Period established in accordance with Section 6. 

 
 (n) “Parent
Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code. 
  
 (o) “Participant” means an Eligible Employee who has become a participant in an Offering Period in
accordance with Section 7 and remains a participant in accordance with the Plan. 
  
 (p) “Participating Company” means the Company and any Parent Corporation or Subsidiary Corporation
designated by the Board as a corporation the Employees of which may, if Eligible Employees, participate in the Plan. The Board shall have the sole and absolute discretion to determine from time to time which Parent Corporations or Subsidiary
Corporations shall be Participating Companies. 
  
 (q) “Participating Company Group” means, at any point in time, the Company and all other corporations collectively which are then Participating Companies. 
  
 (r) “Purchase Date”
means, for any Offering Period, the last day of such period, or, if so determined by the Board, the last day of each Purchase Period occurring within an Offering Period. 
  
 (s) “Purchase Period” means a Purchase Period established in
accordance with Section 6. 
  
 (t)
“Purchase Price” means the price at which a share of Stock may be purchased under the Plan, as determined in accordance with Section 9. 
  
 (u) “Purchase Right” means an option granted to a Participant pursuant
to the Plan to purchase such shares of Stock as provided in Section 8, which the Participant may or may not exercise during the Offering Period in which such option is 
  

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 outstanding. Such option arises from the right of a Participant to withdraw any accumulated payroll
deductions of the Participant not previously applied to the purchase of Stock under the Plan and to terminate participation in the Plan at any time during an Offering Period. 
  
 (v) “Registration Date” means the effective date of the initial
registration on Form S-8 of shares of Stock issuable pursuant to the Plan. 
  
 (w) “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2. 
  
 (x) “Subscription Agreement” means a written agreement in such form as
specified by the Company, stating an Employee’s election to participate in the Plan and authorizing payroll deductions under the Plan from the Employee’s Compensation. 
  
 (y) “Subscription Date” means the last business day prior to the
Offering Date of an Offering Period or such earlier date as the Company shall establish. 
  
 (z) “Subsidiary Corporation” means any present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the Code. 
  
 2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 
  
 3. ADMINISTRATION. 
  
 3.1 Administration by the Board. The Plan shall be
administered by the Board. All questions of interpretation of the Plan, of any form of agreement or other document employed by the Company in the administration of the Plan, or of any Purchase Right shall be determined by the Board, and such
determinations shall be final, binding and conclusive upon all persons having an interest in the Plan or the Purchase Right, unless fraudulent or made in bad faith. Subject to the provisions of the Plan, the Board shall determine all of the relevant
terms and conditions of Purchase Rights; provided, however, that all Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the meaning of Section 423(b)(5) of the Code. Any and all actions,
decisions and determinations taken or made by the Board in the exercise of its discretion pursuant to the Plan or any agreement thereunder (other than determining questions of interpretation pursuant to the second sentence of this Section 3.1) shall
be final, binding and conclusive upon all persons having an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the Company. 
  
 3.2 Authority of Officers. Any officer of the Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein, provided that the officer has apparent authority with respect to such matter, right,
obligation, determination or election. 
  

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 3.3 Policies and Procedures Established by the Company. Without regard to whether
any Participant’s Purchase Right may be considered adversely affected, the Company may, from time to time, consistent with the Plan and the requirements of Section 423 of the Code, establish, change or terminate such rules, guidelines,
policies, procedures, limitations, or adjustments as deemed advisable by the Company, in its discretion, for the proper administration of the Plan, including, without limitation, (a) a minimum payroll deduction amount required for participation in
an Offering, (b) a limitation on the frequency or number of changes permitted in the rate of payroll deduction during an Offering, (c) an exchange ratio applicable to amounts withheld in a currency other than United States dollars, (d) a payroll
deduction greater than or less than the amount designated by a Participant in order to adjust for the Company’s delay or mistake in processing a Subscription Agreement or in otherwise effecting a Participant’s election under the Plan or as
advisable to comply with the requirements of Section 423 of the Code, (e) suspension of payroll deductions under the Plan and imposition of a requirement that the Purchase Price be paid in cash or by check, and (f) determination of the date and
manner by which the Fair Market Value of a share of Stock is determined for purposes of administration of the Plan. All such actions by the Company shall be taken consistent with the requirement under Section 423(b)(5) of the Code that all
Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the meaning of such section. 
  
 3.4 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all
reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad
faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and
defend the same. 
  
 4. SHARES
SUBJECT TO PLAN. 
  
 4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of
Stock that may be issued under the Plan shall be Two Million (2,000,000), cumulatively increased on January 1, 2005 and each January 1st thereafter until and including January 1, 2013 (the “Annual Increase”), by
the smallest of (a) three quarters of a percent (3/4%) of the number of shares of Stock issued and outstanding on the immediately preceding December 31st, (b) Three Hundred and Seventy-Five Thousand (375,000) shares, or (c) such lesser number of
shares determined by the Board, and shall consist of authorized but unissued or reacquired shares of Stock, or any combination thereof. If an outstanding Purchase Right for any reason expires or is terminated or canceled, the 
  

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 shares of Stock allocable to the unexercised portion of that Purchase Right shall again be available for
issuance under the Plan. 
  
 4.2 Adjustments
for Changes in Capital Structure. Subject to any required action by the stockholders of the Company, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the
Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate
adjustments shall be made in the number and class of shares subject to the Plan, the Annual Increase, the limit on the shares which may be purchased by any Participant during an Offering (as described in Sections 8.1 and 8.2) and each Purchase
Right, and in the Purchase Price in order to prevent dilution or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected
without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the Purchase Price be decreased to an amount
less than the par value, if any, of the stock subject to the Purchase Right. The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive. 
  
 5. ELIGIBILITY. 
  
 5.1 Employees Eligible to Participate. Each Employee of a Participating Company is eligible to
participate in the Plan and shall be deemed an Eligible Employee, except the following: 
  
 (a) Any Employee who is customarily employed by the Participating Company Group for twenty (20) hours or less per week; or 
  
 (b) Any Employee who is customarily employed by the
Participating Company Group for not more than five (5) months in any calendar year. 
  
 5.2 Exclusion of Certain Stockholders. Notwithstanding any provision of the Plan to the contrary, no Employee shall be treated as
an Eligible Employee and granted a Purchase Right under the Plan if, immediately after such grant, the Employee would own or hold options to purchase stock of the Company or of any Parent Corporation or Subsidiary Corporation possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock of such corporation, as determined in accordance with Section 423(b)(3) of the Code. For purposes of this Section 5.2, the attribution rules of Section 424(d) of the
Code shall apply in determining the stock ownership of such Employee. 
  
 5.3 Determination by Company. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee or an Eligible Employee and the
effective date of such individual’s attainment or termination of such status, as the case may be. For purposes of an individual’s participation in or 
  

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 other rights, if any, under the Plan as of the time of the Company’s determination, all such
determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination. 
  
 6. OFFERINGS. 
  
 The Plan initially shall be implemented on and after the
Effective Date by sequential Offerings of approximately six (6) months duration or such other duration as the Board shall determine (individually, an “Offering Period”); provided, however, that the first
Offering Period (the “Initial Offering Period”)shall commence on the Effective Date and end on or about April 30, 2005. Subsequent Offering Periods shall commence on or about May 1st and November 1st of
each year and end on or about the last day of the next October 31st and April 30th, respectively, occurring thereafter. Notwithstanding the foregoing, the Board may establish additional or alternative sequential or overlapping Offering Periods, a
different duration for one or more Offering Periods or different commencing or ending dates for such Offering Periods; provided, however, that no Offering Period may have a duration exceeding twenty-seven (27) months. If the Board shall so determine
in its discretion, each Offering Period may consist of two (2) or more consecutive purchase periods having such duration as the Board shall specify (individually, a “Purchase Period”), and the last day of each
such Purchase Period shall be a Purchase Date. If the first or last day of an Offering Period or a Purchase Period is not a day on which the national securities exchanges or Nasdaq Stock Market are open for trading, the Company shall specify the
trading day that will be deemed the first or last day, as the case may be, of the Offering Period or Purchase Period. 
  
 7. PARTICIPATION IN THE PLAN. 
  
 7.1 Initial Participation. 
  
 (a) Generally. Except as provided in Section 7.1(b),
an Eligible Employee may become a Participant in an Offering Period by delivering a properly completed Subscription Agreement to the office designated by the Company not later than the close of business for such office on the Subscription Date
established by the Company for that Offering Period. An Eligible Employee who does not deliver a properly completed Subscription Agreement to the Company’s designated office on or before the Subscription Date for an Offering Period shall not
participate in the Plan for that Offering Period or for any subsequent Offering Period unless the Eligible Employee subsequently delivers a properly completed Subscription Agreement to the appropriate office of the Company on or before the
Subscription Date for such subsequent Offering Period. An Employee who becomes an Eligible Employee after the Offering Date of an Offering Period shall not be eligible to participate in that Offering Period but may participate in any subsequent
Offering Period provided the Employee is still an Eligible Employee as of the Offering Date of such subsequent Offering Period. 
  
 (b) Automatic Participation in Initial Offering Period. Notwithstanding Section 7.1(a), each Employee who is an Eligible Employee
as of the Effective Date shall automatically become a Participant in the Initial Offering Period and shall be granted automatically a Purchase Right consisting of an option to purchase the lesser of (a) a number of 
  

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 whole shares of Stock determined in accordance with Section 8 or (b) a number of whole shares of Stock
determined by dividing fifteen percent (15%) of such Participant’s Compensation paid during the Initial Offering Period by the Purchase Price applicable to the Initial Offering Period. The Company shall not require or permit any Participant to
deliver a Subscription Agreement for participation in the Initial Offering Period; provided, however, that following the Registration Date a Participant may deliver a Subscription Agreement to the office designated by the Company if the Participant
wishes to change the terms of the Participant’s participation in the Initial Offering Period. Such changes may include, for example, an election to commence payroll deductions in accordance with Section 10. 
  
 7.2 Continued Participation. 
  
 (a) Generally. Except as provided in Section 7.2(b),
a Participant shall automatically participate in the next Offering Period commencing immediately after the Purchase Date of each Offering Period in which the Participant participates provided that the Participant remains an Eligible Employee on the
Offering Date of the new Offering Period and has not either (a) withdrawn from the Plan pursuant to Section 12.1 or (b) terminated employment as provided in Section 13. A Participant who may automatically participate in a subsequent Offering Period,
as provided in this Section, is not required to deliver any additional Subscription Agreement for the subsequent Offering Period in order to continue participation in the Plan. However, a Participant may deliver a new Subscription Agreement for a
subsequent Offering Period in accordance with the procedures set forth in Section 7.1(a) if the Participant desires to change any of the elections contained in the Participant’s then effective Subscription Agreement. 
  
 (b) Participation Following Initial Offering Period.
Notwithstanding Section 7.2(a), an Eligible Employee who was automatically enrolled in the Initial Offering Period and who wishes to participate in an Offering Period which begins after the Initial Offering Period shall deliver a Subscription
Agreement in accordance with Section 7.1(a) no earlier than the Registration Date and no later than the Subscription Date for such subsequent Offering Period, unless such Employee was a Participant in the Initial Offering Period who delivered a
Subscription Agreement with respect to the Initial Offering Period as provided in Section 7.1(b). 
  
 8. RIGHT TO PURCHASE SHARES. 
  
 8.1 Grant of Purchase Right. Except as provided in
Section 7.1 with respect to the Initial Offering Period or as otherwise provided below, on the Offering Date of each Offering Period, each Participant in such Offering Period shall be granted automatically a Purchase Right consisting of an option to
purchase the lesser of (a) that number of whole shares of Stock determined by dividing Twelve Thousand Five Hundred Dollars ($12,500) by the Fair Market Value of a share of Stock on such Offering Date or (b) Two Thousand Five Hundred (2,500) shares
of Stock. The Board may, in its discretion and prior to the Offering Date of any Offering Period, (i) change the method of, or any of the foregoing factors in, determining the number of shares of Stock subject to Purchase Rights to be granted on
such Offering Date or (ii) specify a maximum aggregate number of shares that may be purchased by all Participants in an Offering or on any Purchase Date within an Offering Period. No Purchase Right shall be 
  

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 granted on an Offering Date to any person who is not, on such Offering Date, an Eligible Employee.

  
 8.2 Pro Rata Adjustment of Purchase
Right. If the Board establishes an Offering Period of any duration other than six months, then (a) the dollar amount in Section 8.1 shall be determined by multiplying $2,083.33 by the number of months (rounded to the nearest whole month) in the
Offering Period and rounding to the nearest whole dollar, and (b) the share amount in Section 8.1 shall be determined by multiplying 2,500 shares by the number of months (rounded to the nearest whole month) in the Offering Period and rounding to the
nearest whole share. 
  
 8.3 Calendar Year
Purchase Limitation. Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted a Purchase Right which permits his or her right to purchase shares of Stock under the Plan to accrue at a rate which, when aggregated
with such Participant’s rights to purchase shares under all other employee stock purchase plans of a Participating Company intended to meet the requirements of Section 423 of the Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair
Market Value (or such other limit, if any, as may be imposed by the Code) for each calendar year in which such Purchase Right is outstanding at any time. For purposes of the preceding sentence, the Fair Market Value of shares purchased during a
given Offering Period shall be determined as of the Offering Date for such Offering Period. The limitation described in this Section shall be applied in conformance with applicable regulations under Section 423(b)(8) of the Code. 
  
 9. PURCHASE PRICE.

  
 The Purchase Price at which each share of
Stock may be acquired in an Offering Period upon the exercise of all or any portion of a Purchase Right shall be established by the Board; provided, however, that the Purchase Price on each Purchase Date shall not be less than eighty-five percent
(85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date. Subject to adjustment as provided below or in Section 22 and
unless otherwise provided by the Board, the Purchase Price for each Offering Period shall be eighty-five percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market
Value of a share of Stock on the Purchase Date. Notwithstanding the foregoing, in the event that (i) the stockholders of the Company approve an amendment to the Plan to increase the maximum aggregate number of shares of Stock issuable under the Plan
in accordance with Section 4.1, (ii) all or any portion of such additional shares of Stock (the “Additional Shares”) are to be issued pursuant to an Offering Period in progress at the time of such stockholder approval and
(iii) the Fair Market value per share of Stock on the date of such stockholder approval (the “Approval Date”) is greater than the Fair Market value per share of Stock on the Offering Date of such Offering period, then, the
Board may, in its discretion and without the consent of any Participant, adjust the Purchase Price for such Offering Period to be an amount equal to eighty-five percent (85%) (or such other percentage as in effect prior to such adjustment) of the
lesser of (a) the Fair Market Value of a share of Stock on the Approval Date or (b) the Fair Market Value of a share of Stock on the Purchase Date. 
  

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 10 ACCUMULATION OF PURCHASE PRICE
THROUGH PAYROLL DEDUCTION. 
  
 Except as provided in Section 11.1(b) with respect to the Initial Offering Period or unless the Board, in its discretion, suspends payroll
deductions for all Participants in an Offering Period, shares of Stock acquired pursuant to the exercise of all or any portion of a Purchase Right may be paid for only by means of payroll deductions from the Participant’s Compensation
accumulated during the Offering Period for which such Purchase Right was granted, subject to the following: 
  
 10.1 Amount of Payroll Deductions. Except as otherwise provided herein, the amount to be deducted under the Plan from a
Participant’s Compensation on each pay day during an Offering Period shall be determined by the Participant’s Subscription Agreement. The Subscription Agreement shall set forth the percentage of the Participant’s Compensation to be
deducted on each pay day during an Offering Period in whole percentages of not less than one percent (1%) (except as a result of an election pursuant to Section 10.3 to stop payroll deductions effective following the first pay day during an
Offering) or more than fifteen percent (15%). The Board may change the foregoing limits on payroll deductions effective as of any Offering Date. 
  
 10.2 Commencement of Payroll Deductions. Payroll deductions shall commence on the first pay day following the Offering Date and
shall continue to the end of the Offering Period unless sooner altered or terminated as provided herein; provided, however, that with respect to the Initial Offering Period, payroll deductions shall commence as soon as practicable following the
Company’s receipt of the Participant’s Subscription Agreement (delivered no earlier than the Registration Date), if any. 
  
 10.3 Election to Change or Stop Payroll Deductions. During an Offering Period, a Participant may elect to increase or decrease the
rate of or to stop deductions from his or her Compensation by delivering to the Company’s designated office an amended Subscription Agreement authorizing such change on or before the “Change Notice Date.” The “Change Notice
Date” shall be a date prior to the beginning of the first pay period for which such election is to be effective as established by the Company from time to time and announced to the Participants. A Participant who elects, effective
following the first pay day of an Offering Period, to decrease the rate of his or her payroll deductions to zero percent (0%) shall nevertheless remain a Participant in the current Offering Period unless such Participant withdraws from the Plan as
provided in Section 12.1. 
  
 10.4
Administrative Suspension of Payroll Deductions. The Company may, in its sole discretion, suspend a Participant’s payroll deductions under the Plan as the Company deems advisable to avoid accumulating payroll deductions in excess of the
amount that could reasonably be anticipated to purchase the maximum number of shares of Stock permitted (a) under the Participant’s Purchase Right or (b) during a calendar year under the limit set forth in Section 8.3. Unless the Participant
has either withdrawn from the Plan as provided in Section 12.1 or has ceased to be an Eligible Employee, payroll deductions shall be resumed at the rate specified in the Participant’s then effective Subscription Agreement either (i) at the
beginning of the next Offering Period if the reason for suspension was clause (a) in the preceding sentence or (ii) at the beginning of the next Offering Period having a first Purchase Date that 
  

 10 

 falls within the subsequent calendar year if the reason for suspension was clause (b) in the preceding
sentence. 
  
 10.5 Participant Accounts.
Individual bookkeeping accounts shall be maintained for each Participant. All payroll deductions from a Participant’s Compensation (and other amounts received from the Participant in the Initial Offering Period) shall be credited to such
Participant’s Plan account and shall be deposited with the general funds of the Company. All such amounts received or held by the Company may be used by the Company for any corporate purpose. 
  
 10.6 No Interest Paid. Interest shall not be paid on
sums deducted from a Participant’s Compensation pursuant to the Plan or otherwise credited to the Participant’s Plan account. 
  
 11. PURCHASE OF SHARES. 
  
 11.1 Exercise of Purchase Right. 
  
 (a) Generally. Except as provided in Section 11.1(b),
on each Purchase Date of an Offering Period, each Participant who has not withdrawn from the Plan and whose participation in the Offering has not otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise of
the Participant’s Purchase Right the number of whole shares of Stock determined by dividing (a) the total amount of the Participant’s payroll deductions accumulated in the Participant’s Plan account during the Offering Period and not
previously applied toward the purchase of Stock by (b) the Purchase Price. However, in no event shall the number of shares purchased by the Participant during an Offering Period exceed the number of shares subject to the Participant’s Purchase
Right. No shares of Stock shall be purchased on a Purchase Date on behalf of a Participant whose participation in the Offering or the Plan has terminated before such Purchase Date. 
  
 (b) Purchase in Initial Offering Period. Notwithstanding Section 11.1(a), on the Purchase Date of the
Initial Offering Period or any other Offering Period for which the Board has suspended payroll deductions for all Participants, each Participant who has not withdrawn from the Plan and whose participation in such Offering has not otherwise
terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase Right (i) a number of whole shares of Stock determined in accordance with Section 11.1(a) to the extent of the total amount
of the Participant’s payroll deductions accumulated in the Participant’s Plan account during the Offering Period, if any, and not previously applied toward the purchase of Stock and (ii) such additional shares of Stock (not exceeding in
the aggregate the Participant’s Purchase Right) as determined in accordance with a Cash Exercise Notice delivered to the office designated by the Company no earlier than the Registration Date and not later than the close of business for such
office on the business day immediately preceding the Purchase Date or such earlier date as the Company shall establish, accompanied by payment in cash or by check of the Purchase Price for such additional shares. However, in no event shall the
number of shares purchased by a Participant during such Offering Period exceed the number of shares subject to the Participant’s Purchase Right. In addition, if a Participant delivers a Subscription Agreement to the Company after the
Registration Date, the 
  

 11 

 Participant may not elect to exercise a Purchase Right pursuant to a Cash Exercise Notice in an amount
which, when aggregated with payroll deductions pursuant to such Subscription Agreement, exceeds fifteen percent (15%) of the Participant’s Compensation during the Offering Period. The Company shall refund to the Participant in accordance with
Section 11.4 any excess Purchase Price payment received from the Participant. 
  
 11.2 Pro Rata Allocation of Shares. If the number of shares of Stock which might be purchased by all Participants on a Purchase Date exceeds the number of shares of Stock available in the Plan as provided in
Section 4.1 or the maximum aggregate number of shares of Stock that may be purchased on such Purchase Date pursuant to a limit established by the Board pursuant to Section 8.1, the Company shall make a pro rata allocation of the shares available in
as uniform a manner as practicable and as the Company determines to be equitable. Any fractional share resulting from such pro rata allocation to any Participant shall be disregarded. 
  
 11.3 Delivery of Certificates. As soon as practicable after each Purchase Date, the Company shall
arrange the delivery to each Participant of a certificate representing the shares acquired by the Participant on such Purchase Date; provided that the Company may deliver such shares to a broker designated by the Company that will hold such shares
for the benefit of the Participant. Shares to be delivered to a Participant under the Plan shall be registered in the name of the Participant, or, if requested by the Participant, in the name of the Participant and his or her spouse, or, if
applicable, in the names of the heirs of the Participant. 
  
 11.4 Return of Cash Balance. Any cash balance remaining in a Participant’s Plan account following any Purchase Date shall be refunded to the Participant as soon as practicable after such Purchase Date.
However, if the cash balance to be returned to a Participant pursuant to the preceding sentence is less than the amount that would have been necessary to purchase an additional whole share of Stock on such Purchase Date, the Company may retain the
cash balance in the Participant’s Plan account to be applied toward the purchase of shares of Stock in the subsequent Offering Period. 
  
 11.5 Tax Withholding. At the time a Participant’s Purchase Right is exercised, in whole or in part, or at the time a
Participant disposes of some or all of the shares of Stock he or she acquires under the Plan, the Participant shall make adequate provision for the federal, state, local and foreign tax withholding obligations, if any, of the Participating Company
Group which arise upon exercise of the Purchase Right or upon such disposition of shares, respectively. The Participating Company Group may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary to
meet such withholding obligations. 
  
 11.6
Expiration of Purchase Right. Any portion of a Participant’s Purchase Right remaining unexercised after the end of the Offering Period to which the Purchase Right relates shall expire immediately upon the end of the Offering Period.

  
 11.7 Provision of Reports and Stockholder
Information to Participants. Each Participant who has exercised all or part of his or her Purchase Right shall receive, as soon as practicable after the Purchase Date, a report of such Participant’s Plan account setting forth the total
amount credited to his or her Plan account prior to such exercise, the number of shares of Stock purchased, the Purchase Price for such shares, the date of purchase and the cash 
  

 12 

 balance, if any, remaining immediately after such purchase that is to be refunded or retained in the
Participant’s Plan account pursuant to Section 11.4. The report required by this Section may be delivered in such form and by such means, including by electronic transmission, as the Company may determine. In addition, each Participant shall be
provided information concerning the Company equivalent to that information provided generally to the Company’s common stockholders. 
  
 12. WITHDRAWAL FROM PLAN. 
  
 12.1 Voluntary Withdrawal from the Plan. A
Participant may withdraw from the Plan by signing and delivering to the Company’s designated office a written notice of withdrawal on a form provided by the Company for this purpose. Such withdrawal may be elected at any time prior to the end
of an Offering Period; provided, however, that if a Participant withdraws from the Plan after a Purchase Date, the withdrawal shall not affect shares of Stock acquired by the Participant on such Purchase Date. A Participant who voluntarily withdraws
from the Plan is prohibited from resuming participation in the Plan in the same Offering from which he or she withdrew, but may participate in any subsequent Offering by again satisfying the requirements of Sections 5 and 7.1. The Company may
impose, from time to time, a requirement that the notice of withdrawal from the Plan be on file with the Company’s designated office for a reasonable period prior to the effectiveness of the Participant’s withdrawal. 
  
 12.2 Return of Payroll Deductions. Upon a
Participant’s voluntary withdrawal from the Plan pursuant to Section 12.1, the Participant’s accumulated Plan account balance which has not been applied toward the purchase of shares of Stock shall be refunded to the Participant as soon as
practicable after the withdrawal, without the payment of any interest, and the Participant’s interest in the Plan and the Offering shall terminate. Such amounts to be refunded in accordance with this Section may not be applied to any other
Offering under the Plan. 
  
 13. TERMINATION
OF EMPLOYMENT OR ELIGIBILITY. 
  
 Upon a Participant’s ceasing, prior to a Purchase Date, to be an Employee of the Participating Company Group for any reason,
including retirement, disability or death, or upon the failure of a Participant to remain an Eligible Employee, the Participant’s participation in the Plan shall terminate immediately. In such event, the Participant’s Plan account balance
which has not been applied toward the purchase of shares shall, as soon as practicable, be returned to the Participant or, in the case of the Participant’s death, to the Participant’s beneficiary designated in accordance with Section 20,
if any, or legal representative, and all of the Participant’s rights under the Plan shall terminate. Interest shall not be paid on sums returned pursuant to this Section 13. A Participant whose participation has been so terminated may again
become eligible to participate in the Plan by satisfying the requirements of Sections 5 and 7.1. 
  
 14. CHANGE IN CONTROL. 
  
 14.1 Definitions. 
  
 (a) An “Ownership Change Event”
shall be deemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or 
  

 13 

 exchange in a single or series of related transactions by the stockholders of the Company of more than
fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or
dissolution of the Company. 
  
 (b) A
“Change in Control” shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more
than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in Section 14.1(a)(iii), the corporation or other business entity to which the assets of the
Company were transferred (the “Transferee”), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting
securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right
to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive. 
  
 14.2 Effect of Change in Control on Purchase Rights.
In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or parent thereof, as the case may be (the “Acquiring Corporation”), may, without the consent of any Participant, assume the
Company’s rights and obligations under the Plan. If the Acquiring Corporation elects not to assume the Company’s rights and obligations under the Plan, the Purchase Date of the then current Offering Period shall be accelerated to a date
before the date of the Change in Control specified by the Board, but the number of shares of Stock subject to outstanding Purchase Rights shall not be adjusted. All Purchase Rights which are neither assumed by the Acquiring Corporation in connection
with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control. 
  
 15. NONTRANSFERABILITY OF PURCHASE
RIGHTS. 
  
 Neither payroll deductions or other amounts credited to a Participant’s Plan account nor a Participant’s Purchase Right may be assigned, transferred, pledged or otherwise disposed of in any manner other than
as provided by the Plan or by will or the laws of descent and distribution. (A beneficiary designation pursuant to Section 20 shall not be treated as a disposition for this purpose.) Any such attempted assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act as an election to withdraw from the Plan as provided in Section 12.1. A Purchase Right shall be exercisable during the lifetime of the Participant only by the
Participant. 
  

 14 

 16. COMPLIANCE WITH SECURITIES
LAW. 
  
 The issuance of shares under the Plan shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities. A Purchase Right may not be exercised if the
issuance of shares upon such exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any securities exchange or market system upon which the Stock may then
be listed. In addition, no Purchase Right may be exercised unless (a) a registration statement under the Securities Act of 1933, as amended, shall at the time of exercise of the Purchase Right be in effect with respect to the shares issuable upon
exercise of the Purchase Right, or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an applicable exemption from the registration requirements
of said Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall
relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of a Purchase Right, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.

  
 17. RIGHTS AS
A STOCKHOLDER AND EMPLOYEE. 
  
 A Participant shall have no rights as a stockholder by virtue of the Participant’s participation in the Plan until the date of the
issuance of the shares purchased pursuant to the exercise of the Participant’s Purchase Right (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made
for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.2. Nothing herein shall confer upon a Participant any right to continue in the employ of the
Participating Company Group or interfere in any way with any right of the Participating Company Group to terminate the Participant’s employment at any time. 
  
 18. LEGENDS. 
  
 The Company may at any time place legends or other
identifying symbols referencing any applicable federal, state or foreign securities law restrictions or any provision convenient in the administration of the Plan on some or all of the certificates representing shares of Stock issued under the Plan.
The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to a Purchase Right in the possession of the Participant in order to carry out the provisions of
this Section. Unless otherwise specified by the Company, legends placed on such certificates may include but shall not be limited to the following: 
  
 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES 
  

 15 

 UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE
REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE).” 
  
 19. NOTIFICATION OF DISPOSITION OF SHARES. 
  
 The Company may require the Participant to give the Company
prompt notice of any disposition of shares acquired by exercise of a Purchase Right. The Company may require that until such time as a Participant disposes of shares acquired upon exercise of a Purchase Right, the Participant shall hold all such
shares in the Participant’s name (or, if elected by the Participant, in the name of the Participant and his or her spouse but not in the name of any nominee) until the later of two years after the date of grant of such Purchase Right or one
year after the date of exercise of such Purchase Right. The Company may direct that the certificates evidencing shares acquired by exercise of a Purchase Right refer to such requirement to give prompt notice of disposition. 
  
 20. DESIGNATION OF
BENEFICIARY. 
  
 20.1 Designation Procedure. Subject to local laws and procedures, a Participant may file a written designation of a beneficiary who is to receive (a) shares and cash, if any, from the Participant’s Plan
account if the Participant dies subsequent to a Purchase Date but prior to delivery to the Participant of such shares and cash or (b) cash, if any, from the Participant’s Plan account if the Participant dies prior to the exercise of the
Participant’s Purchase Right. If a married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness of such designation may be subject to the consent of the Participant’s spouse. A Participant may
change his or her beneficiary designation at any time by written notice to the Company. 
  
 20.2 Absence of Beneficiary Designation. If a Participant dies without an effective designation pursuant to Section 20.1 of a
beneficiary who is living at the time of the Participant’s death, the Company shall deliver any shares or cash credited to the Participant’s Plan account to the Participant’s legal representative. 
  
 21. NOTICES.

  
 All notices or other communications by a
Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

  
 22. AMENDMENT OR
TERMINATION OF THE PLAN. 
  
 The Board may at any time amend, suspend or terminate the Plan, except that (a) no such amendment, suspension or termination shall affect
Purchase Rights previously granted under the Plan unless expressly provided by the Board and (b) no such amendment, suspension or termination may adversely affect a Purchase Right previously 
  

 16 

 granted under the Plan unless expressly provided by the Board and (b) no such amendment, suspension or
termination may adversely affect a Purchase Right previously granted under the Plan without the consent of the Participant, except to the extent permitted by the Plan or as may be necessary to qualify the Plan as an employee stock purchase plan
pursuant to Section 423 of the Code or to comply with any applicable law, regulation or rule. In addition, an amendment to the Plan must be approved by the stockholders of the Company within twelve (12) months of the adoption of such amendment if
such amendment would authorize the sale of more shares than are then authorized for issuance under the Plan or would change the definition of the corporations that may be designated by the Board as Participating Companies. Notwithstanding the
foregoing, in the event that the Board determines that continuation of the Plan or an Offering would result in unfavorable financial accounting consequences to the Company as a result of a change after the Effective Date in the generally accepted
accounting principles applicable to the Plan, the Board may, in its discretion and without the consent of any Participant, including with respect to an Offering Period then in progress: (a) terminate the Plan or any Offering Period, (b) accelerate
the Purchase Date of any Offering Period, (c) reduce the discount applicable in determining the Purchase Price of any Offering Period, (d) reduce the maximum number of shares of Stock that may be purchased in any Offering Period or (e) take any
combination of the foregoing actions. 
  
  

 17 

 APPENDIX A 
  
 Participating Companies 
  
 Cogent, Inc. 
  

 APPENDIX B 
  
 FORMS OF 
  
 SUBSCRIPTION AGREEMENT 
 AND 
 NOTICE OF WITHDRAWAL 
  

 COGENT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
 SUBSCRIPTION AGREEMENT 
  
 NAME (Please
print):                                       
                                       
                                        
                                        
               
 (Last)
                                        
    (First)
                                        
                            (Middle) 
  

	TM	Original application for the Offering Period beginning (date):
                                        
                                        
                     

  

	TM	Change in payroll deduction rate effective with the pay period beginning (date):
                                        
                               

  

	TM	Stop payroll deductions effective with the pay period beginning (date):
                                        
                                        
     

  

	TM	Change of beneficiary. 

  

	I.	SUBSCRIPTION 

  
 I elect to participate in the 2004 Employee Stock Purchase Plan (the “Plan”) of Cogent, Inc. (the “Company”) and to
subscribe to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan. 
  
 I authorize payroll deductions of
                     percent (in whole percentages not less than 1%, unless an election to stop deductions is being made, or more than 15%) of
my Compensation on each pay day throughout the Offering Period in accordance with the Plan. I understand that these payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable purchase price
determined in accordance with the Plan. Except as otherwise provided by the Plan, I will automatically purchase shares on each Purchase Date unless I withdraw from the Plan by giving written notice on a form provided by the Company or unless
my eligibility or employment terminates. 
  
 I understand that I
will automatically participate in each subsequent Offering that commences immediately after the last day of an Offering in which I am participating until I withdraw from the Plan by giving written notice on a form provided by the Company or my
eligibility or employment terminates. 
  
 Shares I purchase under
the Plan should be issued in the name(s) set forth below. (Shares may be issued in the participant’s name alone or together with the participant’s spouse as community property or in joint tenancy.) 
  
 NAME(S) (please print):
                                        
                                      
                                        
                                        
       
  
 ADDRESS:                                     
                                       
                                        
                                        
                             
  
 MY SOCIAL SECURITY
NUMBER:                                       
                                      
                                        
                            
  
 I agree to make adequate provision for the federal, state, local and foreign tax withholding obligations, if any, which
arise upon my purchase of shares under the Plan and/or my disposition of shares. The Company may withhold from my compensation the amount necessary to meet such withholding obligations. 
  
 I agree that, unless otherwise permitted by the Company, until I dispose of shares I purchase under the Plan, I will hold
such shares in the name(s) entered above (and not in the name of any nominee) until the later of (i) two years after the first day of the Offering Period in which I purchased the shares and (ii) one year after the Purchase Date on which I purchased
the shares. This restriction only applies to the name(s) in which shares are held and does not affect my ability to dispose of Plan shares. 
  

 1 

 I agree that I will notify the Chief Financial Officer of the Company in writing within 30 days after
any sale, gift, transfer or other disposition of any kind prior to the end of the periods referred to in the preceding paragraph (a “Disqualifying Disposition”) of any shares I purchased under the Plan. If I do not respond within 30 days
of the date of a Disqualifying Disposition Survey delivered to me by certified mail, the Company is authorized to treat my nonresponse as my notice to the Company of a Disqualifying Disposition and to compute and report to the Internal Revenue
Service the ordinary income I must recognize upon such Disqualifying Disposition. 
  

	II.	BENEFICIARY DESIGNATION 

  
 In the event of my death, I designate the following as my beneficiary to receive all payments and shares then due me under the Plan: 
  
 BENEFICIARY’S NAME (please print):
                                       
                                        
                                        
              
                                     (First)
                                       
 (Middle)                                      
              (Last)          
  
 RELATIONSHIP:
                                        
                                        
    SOC. SEC. NO.:
                                        
                     
  
 ADDRESS:
                                        
                                        
                                       
                                       
                             
  
 If you are married and your beneficiary is someone other than your spouse, then your spouse must sign and date this form as
indicated below. If you are not married when you designate a beneficiary and you later become married, or if you later become married to a different person, the beneficiary designation previously made will be automatically revoked. Payments and
shares then due you upon your death will be delivered to your legal representative unless you have completed a new beneficiary designation and it is consented to by your then spouse. 
  

	III.	CONSENT OF SPOUSE 

  
 I am the spouse of
                                        
                    . I consent to the above designation of a beneficiary other than me to receive payments and shares due my spouse under the
Plan. 
  
 Date:                                    
                                        
                                        
                                      
                 
                                        
                   Signature of Participant’s Spouse 
  

	IV.	PARTICIPANT DECLARATION 

  
 Any election I have made on this form revokes all prior elections with regard to this form. 
  
 I am familiar with the provisions of the Plan and agree to participate in the Plan subject to all of its provisions. I
understand that the Board of Directors of the Company reserves the right to terminate the Plan or to amend the Plan and my right to purchase stock under the Plan to the extent provided by the Plan. I understand that the effectiveness of this
Subscription Agreement is dependent upon my eligibility to participate in the Plan. 
  
  

Date:                                    
                                        
                                        
                                      
                 
                                        
                   Signature of Participant 
  
  

 2 

 COGENT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
 NOTICE OF WITHDRAWAL 
  
 NAME (Please print):
                                        
                                        
                                        
                                        
         
 (Last)
                                        
    (First)
                                        
                            (Middle) 
  
 I elect to withdraw from the Cogent, Inc. 2004 Employee Stock Purchase Plan (the “Plan”) and the Offering
which began on (date)
                                        
         and in which I am participating (the “Current Offering”). 
  
 I understand that I am terminating immediately my interest in the Plan and the Current Offering, and that no further payroll deductions will be made
(provided I have given sufficient notice before the next pay day). My payroll deductions not previously used to purchase shares will not be used to purchase shares in the Current Offering, but instead will be paid to me as soon as practicable. I
understand that I will not participate in the Plan unless I elect to become a participant in another Offering by filing a new Subscription Agreement with the Company. I understand that I will receive no interest on the amounts paid to me from my
Plan account, and that I may not apply such amounts to any other Offering under the Plan or any other employee stock purchase plan of the Company. 
  
 Date:
                                       
                                   Signature:Employment Agreement by and between the registrant and Paul Kim

 EXHIBIT 10.5 
  
 EMPLOYMENT AGREEMENT 
  

This Employment Agreement is made as of January 5, 2004, between Cogent Systems, Inc., a California corporation (the “Employer”), and Paul
Kim (the “Employee”). 
  
 The Employer is engaged in the
business of supplying biometric identification systems that perform biometric comparisons (the “Business”). 
  
 The Employee has substantial experience as a financial executive. 
  

The Employer desires to employ the Employee as a senior executive of the Employer and the Employee desires to work for the Employer in such capacity.

  
 In consideration of the premises and of the mutual covenants
and agreements hereinafter contained, the parties do hereby agree as follows: 
  

	 	1.	Employment. 

  
 Effective as of the date hereof through the end of the Employment Term (as such term is defined in Section 4.1 hereof), the Employer hereby employs the
Employee as a senior executive of the Employer. The Employee shall have all those duties and responsibilities with respect to the Employer and its affiliates customarily performed by a chief financial officer of a company. In particular but without
limiting the generality of the foregoing, the Employee shall be responsible for overseeing all of the financial reporting of the Employer, the preparation of its internal and external budgets and financial statements, the management of its financial
resources and condition, the development of its internal financial control procedures and its relationships with banks and other financial institutions and shall have such other powers and duties with the Employer and its affiliates as may be
consistent with this Employment Agreement and with the Employee’s position and status and as the President or Board of Directors of the Employer (the “Board”) may assign. The Employee shall report to both the President of the Employer
and the Board. 
  
 The Employee hereby accepts such employment and
agrees to devote substantially all of his business time and effort to the performance of such duties and agrees, subject to his election as such and without additional compensation, to serve in such offices to which he may be elected from time to
time in the Employer and its affiliates; provided, however, that the Employee may serve on the boards of and provide volunteer services to non-profit educational, charitable or religious organizations, family members or personal friends and may
engage in his own personal investment activities, so long as such services or activities do not violate any policy of the Employer applicable to such practices, materially interfere with the Employee’s performance of his duties and
responsibilities to the Employer hereunder, conflict in any way with the business of the Employer or subject the Employer to public disrepute. The Employee shall perform his duties and responsibilities hereunder in accordance with, and comply with,
such reasonable policies, procedures and standards as may be established and modified from time to time by the Employer and as befit a person holding his position, including, without limitation, those contained in any employee handbook now or
hereafter adopted by the Employer as the same may be in effect from time to time (if and to the extent so adopted, the “Handbook”). 

 The Employee shall use his best efforts, skill and abilities to discharge his responsibilities hereunder
and to promote the business and interests of the Employer and shall perform in a professional manner all services and duties necessary or appropriate for such purpose and as directed by the President of the Employer and the Board; provided, however,
that the Employee shall not commit the Employer to any obligation, liability, agreement or undertaking not in the ordinary course of business of the Employer or exceeding such amount as may be approved by the Board from time to time, nor shall the
Employee execute any agreements or other documents on behalf of the Employer outside the ordinary course of business of the Employer, in each case without the prior consent of the Board. 
  
 The Employee hereby represents and warrants to the Employer that he is not subject to or bound by any agreement,
understanding, policy or undertaking that would prohibit him from entering into and performing his responsibilities under this Agreement or that would in any way restrict his activities on behalf of the Employer. 
  

	 	2.	Location. 

  
 The Employee’s services under this Agreement shall be performed principally in the Los Angeles County, California, metropolitan area; the Employee
acknowledges and agrees, however, that the nature of his duties hereunder may require reasonable travel within and outside of the United States from time to time, subject to the reimbursement of the expenses incurred therefor pursuant to Section 3.3
hereof. 
  

	 	3.	Compensation. 

  
 3.1 Initial Bonus; Salary. 
  
 In consideration of the agreement of the Employee to be employed by the Employer in accordance with the provisions hereof, the Employer is herewith paying
to the Employee an initial bonus of $20,000 (the “Initial Bonus”). During the Employment Term the Employer shall pay to the Employee, in monthly or more frequent installments in accordance with the Employer’s regular payroll
practices, an annual salary of $208,000, subject to increase from time to time at the discretion of the Board based on its assessment of the performance of the Employee and of the Employer as well as its assessment of the then financial condition of
the Employer and then prevailing business conditions. The Initial Bonus and all salary and other compensation payable to the Employee shall be subject to customary withholding tax and other employment taxes and deductions as required by law with
respect to compensation paid by an employer to an employee. 
  
 3.2 Additional Benefits. 
  
 Commencing at the end of the Introduction Period (as such term is defined below) and thereafter during the Employment Term, the Employee shall be entitled to participate in any stock option, bonus, 401(k), life and health insurance,
pension, incentive, profit-sharing or other benefit plan of the Employer now existing or hereafter adopted for the benefit of the management level employees of the Employer generally (collectively, as the same may exist from time to time, the
“Employer Benefits”). 
  

 2 

 3.3 Reimbursement of Expenses. 
  
 The Employer shall reimburse the Employee for all reasonable expenses
incurred by the Employee in connection with the performance of his duties and the discharge of his responsibilities hereunder in accordance with the policies and procedures of the Employer. The Employee shall submit to the Employer, not more than
thirty (30) days following the end of each calendar month that begins or ends during the Employment Term, such information as the Employer may request, which may include, but need not be limited to, an itemized list of all expenses incurred by him
during the preceding calendar month, setting forth the dates, the purposes for which incurred and the amounts thereof, together with such receipts as the Employee may be reasonably able to obtain and such other documentation as may be required from
time to time to enable the Employer to deduct such expenses under the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. 
  
 3.4 Stock Options. 
  
 The Employer hereby grants to the Employee an option to purchase a number of shares of the Common Stock of the Employer
equal to 1.25% of the outstanding shares of such Common Stock on the date hereof, assuming all currently outstanding options, warrants and other rights to acquire shares of the Common Stock of the Employer were fully exercised on the date hereof;
provided, however, that in no event shall the number of shares purchasable upon the exercise of such option exceed 475,000 or be less than 431,250. The exercise price of such option shall be $2.00 per share, which is the fair market value of the
Common Stock of the Employer as of the date hereof. Such option shall be evidenced and governed by a separate stock option agreement, dated the date hereof, between the Employer and the Employee (the “Option Agreement”). 
  
 3.5 Relocation Reimbursement. 
  
 The Employer shall reimburse the Employee for all reasonable moving expenses
incurred by the Employee in relocating his household from La Jolla, California, to Los Angeles County, California; provided, however that the amount of such reimbursement shall not exceed $5,000. 
  

	 	4.	Term and Termination. 

  
 4.1 Introduction Period. 
  
 The Introduction Period is the portion of the Employment Term that commences on the date hereof and terminates on the earlier to occur of (i) the
ninetieth day following the date hereof or (ii) the termination of the Employment Term. 
  
 4.2 Term. 
  
 The Employment Term is the period that commences on the date hereof and terminates on the first to occur of the following: 
  
 (i) the death or disability of the Employee; 
  

 3 

 (ii) the termination of the conduct of the Business by the Employer or any successor
employer; 
  
 (iii) the election of the Employee
upon (a) the sale of substantially all of the assets of the Employer to a natural person not currently affiliated, directly or indirectly, with the Employer or to an entity in which at least 50% of the voting power is held by a person or persons who
are not shareholders of the Employer immediately prior to the consummation of such transaction (such natural person or entity, a “Non-Affiliate”), (b) a sale or transfer, by the Employer or any of its shareholders, to a Non-Affiliate of
shares of capital stock or other securities having at least 50% of the voting power of the Employer following such sale, or (c) a consolidation, merger or other reorganization involving the Employer in which the surviving corporation, whether or not
the Employer, is a Non-Affiliate, in each case in a single transaction or a series of related transactions, other than a public offering of such capital stock pursuant to a registration statement declared effective by the Securities and Exchange
Commission (each of (a), (b) and (c), a “Control Event”) or (d) the failure of the Employer to elect and maintain the Employee as the Chief Financial Officer of the Employer (a “Status Event”); such election to be made within
thirty calendar days following the date the right to elect first accrues by written notice from the Employee to the Employer; if the Employee does not timely deliver notice of such election, the Employee shall not thereafter have the right to do so
unless and until another Control Event or Status Event occurs; 
  
 (iv) the Employee’s conviction (which conviction, through lapse of time or otherwise is not subject to appeal) in a court of law of, or plea of nolo contendere to, a felony or a crime involving moral turpitude;

  
 (v) the violation by the Employee of his
fiduciary duty to the Employer or the breach by the Employee of any of his obligations hereunder in any material respect; 
  
 (vi) the Employee’s taking or failing to take any action, or engaging or failing to engage in any conduct or activity, which taking
or engaging or failing to do so has, or should reasonably be expected to have, a material adverse effect on the business, operation, condition (financial or other), prospects or reputation of the Employer; 
  
 (vii) notice from the Employee to the Employer of
termination of the Employment Term other than as the result of a Control Event or a Status Event and other than pursuant to (viii) below; provided, however that such notice shall not be effective until the later of (a) the date specified therein or
(b) fifteen days following the date of such notice; 
  
 (viii) the failure by the Employer to comply with any provision of this Agreement within 30 days following receipt of notice of such failure from the Employee; 
  
 (ix) notice from the Employer to the Employee of termination of the Employment Term without cause;
provided, however, that such notice shall not be effective until the later of (a) the date specified therein or (b) the fifteenth day following the date thereof. 
  

 4 

 (x) For the purposes of (i) above, the term “disability” means the inability
of the Employee substantially to perform his duties and discharge his responsibilities hereunder (a) for a period of three consecutive calendar months or (b) for an aggregate of one hundred twenty (120) calendar days within any period of twelve (12)
consecutive calendar months. The termination of the Employment Term pursuant to (iv), (v) or (vi) above shall be deemed a termination for cause. If the Employer elects to terminate the Employment Term for cause, the Employer shall so notify the
Employee. Such notice shall specify that the termination is for cause and shall identify in reasonable detail the cause for such termination. A termination for cause shall be effective immediately; and, if such notice so demands, the Employee shall
vacate the premises of the Employer and return to the Employer all keys, key cards and other means of access to such premises and to any databases and electronically stored information regarding the Employer immediately upon receipt of such notice.

  
 4.3 Obligations of the Employer Upon
Termination. 
  
 4.3.1 If the Employment Term
is terminated (i) during the Introduction Period for any reason whatsoever by either the Employer or the Employee, (ii) as the result of the death or disability of the Employee, (iii) by the Employer for cause, or (iv) by the Employee pursuant to
(vii) in Section 4.1 hereof, then the Employee shall not be entitled to any compensation, Employer Benefits or other benefits provided for under this Agreement except as provided in Section 4.3.3 below. 
  
 4.3.2 If the Employment Term is terminated after the
Introduction Period by the Employee as the result of a Control Event, the Employer shall pay to the Employee his salary for and with respect to the one year period commencing on the day after the effective date of termination (in the same manner and
at the same times as specified in Section 3 hereof assuming the Employee remained an employee hereunder). If the Employment Term is terminated after the Introduction Period by the Employee as the result of a Status Event or pursuant to (viii) in
Section 4.1 above, or by the Employer pursuant to (ix) in Section 4.1 above, the Employer shall pay to the Employee his salary for and with respect to the three month period commencing on the day after the effective date of termination (in the same
manner and at the same times as specified in Section 3 hereof assuming the Employee remained an employee hereunder). Notwithstanding the foregoing provisions of this Sections 4.3.2, in no event shall the Employer have any obligation to make any
payment contemplated hereby for any period following the breach by the Employee of any of his obligations under Sections 6.2,7,8 or 9 hereof if the Employer or any successor employer is continuing to conduct the Business at the time of such breach.

  
 4.3.3 If the Employment Term is terminated at
any time during the Employment Term by the Employer or the Employee, the Employer shall pay to the Employee, in addition to the amounts required by Sections 4.3.1 and 4.3.2 hereof, his salary and accrued paid time off prorated through the effective
date of such termination and reimbursement of his expenses theretofore incurred in accordance with Section 3.3 hereof and of his relocation expenses theretofore incurred in accordance with Section 3.5 hereof through the effective date of such
termination. 
  

 5 

 4.4 Remedies. 
  
 No termination of the Employment Term pursuant to this Section 4 shall limit any right or remedy available to the Employer
or the Employee hereunder or otherwise at law or in equity with respect to the event causing such termination. 
  

	 	5.	Paid Time Off. 

  
 The Employee shall be entitled to three weeks of paid time off each calendar year during the Employment Term. The Employee shall take such paid time off
at times mutually convenient to the Employee and the Employer. Not more than two weeks of such paid time off allowance may be carried over to the next year and not more than six weeks may be accumulated at any time. At any time that six weeks of
paid time off has accrued, no further paid time off shall accrue hereunder until the Employee has taken some portion of the accrued paid time off and then paid time off shall resume accruing up to the aggregate six week maximum, including the paid
time off theretofore accrued and not taken. Paid time off time shall be deemed to accrueratably over each year except that any carried over week shall be deemed fully accrued on the first day of the year to which it is carried over. For the purposes
of this Section 5, the term “year” means a calendar year. 
  

	 	6.	Restrictions and Non-Solicit. 

  
 6.1 The Employee acknowledges that, during the Employment Term, the Employee owes to the Employer a duty of loyalty. Consequently, the
Employee agrees that, during the Employment Term, he will not, except on behalf of the Employer, directly or indirectly, engage in, or, whether as an officer, director, stockholder, partner, proprietor, associate, employee, representative or
otherwise, become or be interested in or associated with any other person, corporation, firm, partnership or other entity whatsoever which is engaged in, the Business or any other business then conducted or actively planned to be conducted by the
Employer (a “Competing Business”); provided, however, that anything above to the contrary notwithstanding, the Employee may own, as an inactive investor, securities of any Competing Business listed on a national securities exchange, so
long as his holding in any one such corporation shall not be more than two percent of any outstanding class of equity securities of such an entity. 
  
 6.2 The Employee further agrees that, during the Employment Term and for one year thereafter, he shall not, directly or indirectly, (i)
hire, solicit or encourage to leave the employ of the Employer any person employed by the Employer or hire any such person who has left the employ of the Employer within one year of the termination of such person’s employment with the Employer
or (ii) induce or attempt to induce any of the customers or suppliers of the Employer to reduce the business they conduct with the Employer or change the terms of their relationships with the Employer to terms that are less favorable to the Employer
or (iii) solicit any person or entity who or which is or had been a customer of the Employer at any time during the Employment term to provide products or services similar to those then provided by the Employer. 
  

 6 

	 	7.	Confidential Information. 

  
 The Employee acknowledges that his work for the Employer may bring him into close contact with Confidential Material of the Employer and its present and
potential customers, suppliers, joint venture partners and others with which it establishes business relationships, which is not readily available to the public. The Employee further acknowledges that his work for the Employer may bring him into
close contact with Confidential Material of third parties that has been disclosed to the Employer under the protection of confidentiality agreements now or hereafter entered into between the Employer and such third parties. 
  
 For the purposes of this Agreement, Confidential Material includes
information concerning the business of the Employer or other sources of the Confidential Material as currently conducted or plans for the future conduct thereof, including, without limitation, customer and prospect lists and files, prospective
business, marketing approaches and plans, methods of doing business, potential acquisition candidates, proposed terms of potential acquisitions, cost and pricing data, bidding strategies, the identity and skills of employees or consultants,
financial data and all other similar information, and all proprietary information concerning the performance of biometric identification systems heretofore or hereafter developed and other services now and hereafter under development by the Employer
or other sources of the Confidential Material, including, without limitation, technical specifications, system designs, protocols, methods of operation, plans, drawings, internal specifications, data, diagrams, designs, formulations, protocols,
processes, source code, object code, flow charts, formulae, programs, applications, software, firmware, hardware and devices, internal specifications, prototypes and equipment which the Employer or other sources of the Confidential Material own,
plan, propose to develop or develop, whether for their own use or for the use by their customers or licensees and all component parts of any of the foregoing, irrespective of form, together with all improvements, corrections or modifications
thereto, regardless of the manner in which such improvements, corrections or modifications may be made or the entity which may make any such improvements, corrections or modifications. 
  
 The Employee acknowledges that the Employer has already expended, and expects to expend, substantial sums and has devoted
and expects to devote substantial other resources to create the proprietary Confidential Material on which the business of the Employer depends and to create other Confidential Material to be exploited by the Employer and the business relationships
and information related thereto and has substantial proprietary interests and valuable trade secrets in the Confidential Material. The Employee also acknowledges the damages that could be incurred by the Employer and its reputation from the
violation of any confidentiality agreements to which it is a party. The Employee further acknowledges the competitive value and confidential nature of the Confidential Material and the damage that could result to the Employer if information
contained therein is disclosed to any third party. The Employee shall at all times treat the Confidential Material as the valuable proprietary information of the Employer and shall notify the Employer in writing if he learns of the unauthorized use
or disclosure of the Confidential Material. The Employee shall safeguard the Confidential Material with all due care. The Employee hereby agrees that the Confidential Material will be used solely for the benefit of the Employer and that he shall
keep such information confidential and not use it for any other purpose, publish it or disclose it to any other party or assist any other party to obtain any benefit from the Confidential Material to solicit 
  

 7 

 business from or to provide any products or services to the Employer and shall deliver promptly to the Employer on
termination of his employment with the Employer, or at any other time the Employer may so request, all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents and all copies thereof in all media in which resident
relating to the Confidential Material or otherwise to the business of the Employer, and all property associated therewith, which he may then possess or have under his control. Notwithstanding the foregoing, the Confidential Material does not include
any material which (a) is or becomes publicly known through no fault of the Employee or (b) is disclosed to the Employee under no obligation of confidentiality by a third party or parties having the right to do so. 
  

	 	8.	Inventions. 

  
 The Employee shall promptly disclose in writing to the Employer all ideas, programs, systems, devices, processes, business concepts, discoveries and
inventions, whether or not patentable, which are related to the Business or the planned business of the Employer or are used by the Employer or arise out of or in connection with the duties performed by the Employee hereunder and which he conceives,
makes, develops, acquires or reduces to practice, whether alone or with others during the Employment Term and whether during or after usual working hours (collectively, “Discoveries”). All Discoveries and the results and proceeds of any
and all services rendered by Employee during the Employment Term (collectively “Materials”), and the content and use thereof, shall be considered Works Made For Hire to the extent possible or required under applicable law, including,
without limitation, the U.S. Copyright Act. If and to the extent the Discoveries or Materials are not legally capable of being considered as Works Made For Hire, the Employee hereby transfers and assigns to the Employer in perpetuity all right,
title and interest in and to such Discoveries and Materials, including any and all domestic and foreign patent rights, copyrights, trademarks, trade names and other industrial and intellectual property rights and applications therefor therein and
any renewals thereof, throughout the universe free and clear of any and all claims for royalties or other compensation other than that specified herein. On request of the Employer, the Employee shall, from time to time during or after the Employment
Term, execute such further reasonable instruments (including, without limitation, applications for letters patent and assignments thereof) and do all such other reasonable and legal acts and things as may be deemed necessary or desirable by the
Employer to protect and enforce its rights in respect of Discoveries and Materials. The Employer shall pay all expenses of filing or prosecuting any patent, trademark or copyright application; but the Employee shall cooperate in filing and
prosecuting any such application. The Employee shall not be entitled to any additional compensation for the performance of his obligations hereunder. 
  

	 	9.	Books and Records. 

  
 All books, records, files, manuals, lists of customers, blanks, forms or other materials furnished to the Employee by the Employer in any and all media,
used on its behalf or created, generated or obtained during the Employment Term, whether by the Employee or any other person or entity (collectively, “Books and Records”), shall be and remain the property of the Employer. The Employee hold
or possess the same for the sole use and benefit of the Employer and shall safely keep and preserve the Books and Records, except as consumed in the normal business operations of the Employer. The Employee acknowledges that the Books and Records are
confidential and not readily accessible to the Employer’s competitors. Upon termination of 
  

 8 

 the Employment Term for any reason whatsoever, the Employee shall immediately deliver to the Employer, or its authorized
representative, any and all such Books and Records, including all copies in all media, remaining in the Employee’s possession or control. 
  

	 	10.	Enforcement. 

  
 The Employee acknowledges that the provisions of Sections 6, 7, 8 and 9 hereof are essential to the goodwill and potential profitability of the Employer
and have provided a substantial inducement for the Employer to execute, and perform its obligations under, this Agreement and that the application thereof will not involve a substantial hardship upon his future business or livelihood. The Employee
agrees that a violation of the covenants set forth in Sections 6,7, 8 and 9 hereof, or any provision thereof, will cause irreparable injury to the Employer and the Employer shall be entitled, in addition to any other rights and remedies it may have,
at law or in equity, to an injunction enjoining and restraining the Employee from doing or continuing to do any such act and any other violations or threatened violations of such covenants or provisions. 
  
 If any provision of Sections 6, 7, 8 or 9 hereof as applied to any
circumstance shall be adjudged by a court to be invalid or unenforceable, the same shall in no way affect any other provision of Sections 6 , 7 , 8 or 9; the application of such provision in any other circumstances or the validity or enforceability
of Sections 6 , 7 , 8 or 9 in any other jurisdiction. If any provisions of Sections 6 , 7 , 8 or 9 as applied to any circumstances shall be adjudged by a court to be invalid or unenforceable, the same shall in no way affect any other provision in
any other circumstances or the validity or enforceability of Sections 6 , 7 , 8 or 9 to be enforced as written. If any provision, or any part thereof, is held to be unenforceable because of the duration of such provision or the area covered thereby,
the Employee agrees that the court making such determination shall have the power to reduce the duration or area, or both, of such provision or to delete specific words or phrases (“blue-penciling”) and in its reduced or blue-pencilled
form such provision shall then be enforceable and shall be enforced. 
  
 The Employee intends to, and does hereby, confer jurisdiction to enforce the covenants contained herein upon the courts of any state of the United States or any other governmental jurisdiction within the geographical scope of such
covenants. If the courts of any one or more of such states or jurisdictions shall hold such covenants wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination shall
not bar or in any way affect the Employee’s right to the relief provided above in the courts of any state or jurisdiction within the geographical scope of such covenants, as to breaches of such covenants in such other respective states or
jurisdictions, the above covenants as they relate to each state or jurisdiction being, for this purpose, severable into diverse and independent covenants. 
  

	 	11.	Trade Secrets of Others. 

  
 The Employee understands that it is a criminal offense under the federal Economic Espionage Act for the Employee to misappropriate trade secrets of any
other person or entity for the Employee’s own benefit or for the benefit of the Employer. Violation of the federal Economic Espionage Act can subject both the Employer and the Employee to potential criminal 
  

 9 

 liability. The Employee recognizes that the Employee may possess trade secrets of a prior employer and that the Employee
may not use or disclose such trade secrets during the course of the Employee’s employment by the Employer. 
  

	 	12.	Indemnification. 

  
 12.1 The Employer shall indemnify, defend and hold harmless the Employee from and against any and all judgments, fines, damages,
liabilities, obligations, settlements and Expenses (as such term is defined below) incurred by the Employee in connection with any pending, threatened or completed action or proceeding (a “Proceeding”) (other than a Proceeding by or in the
right of the Employer to procure a judgment in its favor) (a “Third Party Proceeding”), whether civil or criminal, administrative or investigative, in arbitration, mediation or in any other alternative dispute resolution mechanism, or
before a court of law or equity or in any other forum or before any other tribunal, by reason of the fact that the Employee was or is a director, officer, employee or other agent of the Employer or was or is serving at the request of the Employer as
a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, limited liability company, trust or other enterprise unless the Employer shall establish that the Employee was not acting in good faith or
in a manner that the Employee reasonably believed to be in the best interests of the Employer or, in the case of a criminal Proceeding, that the Employee had reason to believe that the conduct of the Employee was unlawful. 
  
 For the purposes of this Agreement, the term Expenses means all direct and
indirect costs of any type or nature whatsoever actually and reasonably incurred by the Employee in connection with the investigation, defense or appeal of a Proceeding or in successfully establishing the right of Employee to indemnification
hereunder, including, without limitation, all attorneys’ fees and related disbursements, other out-of-pocket costs and reasonable compensation for time spent by the Employee for which he is not otherwise compensated by the Employer or a third
party so long as the rate of compensation and estimated time involved is approved in advance by the Employer. 
  
 12.2 The Employer shall indemnify, defend and hold harmless the Employee from and against any and all judgments, fines, damages,
liabilities, obligations, settlements and Expenses incurred by the Employee in connection with the defense or settlement of any Proceeding brought or threatened to be brought by or in the right of the Employer to procure a judgment in its favor (a
“Employer Proceeding”) unless (i) the Employer shall establish that the Employee was not acting in good faith or in a manner that the Employee reasonably believed to be in the best interests of the Employer, or (ii) the Employer Proceeding
is settled without court approval; provided, however, that, in respect of any Employer Proceeding in which the Employee is adjudged liable to the Employer in the performance of his duty to the Employer and its shareholders, the Employer shall have
an obligation under this Section 12.2 only to the extent that the court in which the Proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, the Employee is fairly and reasonably entitled to
indemnity hereunder. 
  
 12.3 For the purposes of
Sections 12.1 and 12.2 above, the successful defense of any Proceeding, or of any claim, issue or matter therein, whether on the merits or otherwise, 
  

 10 

 shall be conclusive evidence that the Employee was acting in good faith and in a manner that the Employee
reasonably believed to be in the best interests of the Employer and, in the case of a criminal proceeding, that the Employee had no reason to believe that the conduct of the Employee was unlawful. For the purposes hereof, a successful defense
includes, without limitation, a dismissal of the Proceeding without prejudice. In addition, the termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create
a presumption that the Employee was not acting in good faith or in a manner that the Employee reasonably believed to be in the best interests of the Employer or that the Employee had reasonable cause to believe his conduct was unlawful. 

 
 12.4 If, at any time after the date hereof, a Third Party
Proceeding is commenced or threatened against the Employee, the Employee shall so notify the Employer; the Employer shall defend such Third Party Proceeding by appropriate proceedings and, except to the extent provided in Section 12.1 hereof, the
Employer shall pay all Expenses of such Third Party Proceeding and the amount of any judgment imposed on the Employee. The Employer shall engage any counsel selected by the Employer and reasonably acceptable to the Employee to defend the Third Party
Proceeding or to compromise, settle or otherwise dispose of the same. No compromise or settlement shall be effected without the consent of the Employee, which consent shall not be unreasonably withheld or delayed. Subject to the provisions of the
next paragraph and if, and to the extent, ethically permissible, the Company shall be entitled to engage one counsel to represent the Employee and the Company and other potential employee defendants. 
  
 After assuming the defense of any Third Party Proceeding, the Employer shall
not be obligated for any Expenses subsequently incurred by the Employee for the retention of counsel in such Third Party Proceeding; provided that (i) the Employee shall have the right to employ his own counsel at his own expense and (ii) if (a) the
employment of counsel by the Employee has previously been authorized by the Employer or (b) the Employer shall have reasonably concluded that there may be a conflict of interest between the Employer and the Employee in the conduct of the defense of
such Third Party Proceeding, then, in the case of either (a) or (b), the Employer shall be liable for the Expenses of the Employee’s counsel. 
  
 12.5 With respect to any Third Party Proceeding commenced or threatened against both the Employee and the Employer, each of the Employee
and the Employer shall fully cooperate in the defense of such Third Party Proceeding and shall make available to each other all books or records necessary or appropriate for such defense pursuant to a joint defense agreement consistent with the
provisions hereof. 
  
 12.6 The Employer shall
advance all Expenses incurred by the Employee in the defense of any Third Party Proceeding or any Employer Proceeding; provided, however, that, if it is ultimately determined that the Employee was not entitled to indemnity therefore hereunder, the
Employee shall immediately reimburse the Employer for all amounts so advanced. The Employee shall not be required to post a bond or otherwise provide security for the reimbursement obligation of the Employee hereunder. The Employee shall provide to
the Employer evidence of all Expenses incurred by the Employee hereunder; and the Employer shall reimburse the Employee therefor not later than fifteen days following its receipt of such evidence. 
  

 11 

 12.7 Notwithstanding anything to the contrary contained elsewhere in this Agreement, the
Employer shall have no obligation to indemnify, defend or hold harmless the Employee in connection with any claim, issue or matter that arises out of or is related to a breach by the Employee of the duty of the Employee to the Employer and its
shareholders in the capacity of the Employee as a director of the Employer if and to the extent that the Employer establishes that (i) the breach of duty involved intentional misconduct or a knowing and culpable violation of law on the part of the
Employee, or (ii) the breach of duty was contrary to the best interests of the Employer or its shareholders or involved the absence or good faith on the part of the Employee, or (iii) the Employee derived an improper personal benefit from the breach
of duty, or (iv) the breach of duty showed a reckless disregard for the duty of the Employee to the Employer or its shareholders in circumstances in which the Employee was aware, or should have been aware, in the ordinary course of performing the
Employee’s duties as a director, of a risk of serious injury to the Employer or its shareholders, or (v) the breach of duty constituted an unexcused pattern of inattention that amounts to an abdication of the duty of the Employee to the
Employer and its shareholders as a director of the Employer, or (vi) the breach of duty involved a violation of Sections 3 10 or 3 16 of the California Corporations Code or any successors thereto. 
  
 If the Employee is entitled under any provision of this Agreement to
indemnification by the Employer for some or a portion of any Expenses or liabilities of any type whatsoever (including, without limitation, judgments, fines or damages) actually and reasonably incurred by him in the investigation, defense,
settlement or appeal of a Proceeding but is not entitled, however, to indemnification for the total amount thereof, the Employer shall nevertheless indemnify the Employee for the portion thereof to which he is entitled. 
  

	 	13.	Notices. 

  
 All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be personally delivered
or sent by overnight package delivery service, by electronic mail (if receipt thereof is confirmed by return electronic mail) or by facsimile machine (if confirmed in writing within one (1) day thereafter) or sent by registered or certified mail,
postage prepaid, as follows (or to such other address as either party shall designate by notice in writing to the other in accordance herewith): 
  
 If to the Employer, to it at: 
  
 209 Fair Oaks Ave. 
 South Pasadena, California 91030 
 Attention: Chief Executive Officer 
 Facsimile No. 1-626-799-9639 
 E-Mail: minghsieh@cogentsystems.com 
  
 If to the Employee, to him at his address set forth 
 on the personnel records of the
Employer 
  

 12 

	 	14.	General. 

  
 14.1 This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California
applicable to agreements made and to be performed entirely in such state without giving effect to the conflicts of laws provisions thereof. 
  
 14.2 The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation
of this Agreement. 
  
 14.3 This Agreement and
the Option Agreement set forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersede all prior agreements, arrangements and understandings, written or oral, between the parties, including, without
limitation, the letter, dated December 24,2003, from the Employer to the Employee. 
  
 14.4 This Agreement and the benefits hereunder are personal to the Employer and the Employee and are not assignable or transferable by
either party without the prior written consent of the other. 
  
 14.5 This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants hereof may be waived, only by written instrument executed by both of the parties hereto, or in the
case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver by either party of
the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach or a waiver of the breach of any
other term or covenant contained in this Agreement. 
  
 14.6 Neither this Agreement nor any provision hereof shall be construed or interpreted against any party on the basis that such party or such party’s attorney drafted this Employment Agreement or such provision. 
  
 14.7 All disputes and claims between the parties arising out
of or relating to the Employee’s employment with the Employer, the termination of Employee’s employment with the Employer and this Agreement or the breach thereof, shall be resolved by final and binding arbitration in Los Angeles,
California, administered by the American Arbitration Association (“AAA”), in accordance with the AAA’s National Rules for the Resolution of Employment Disputes then in effect, Such AAA rules shall be applicable to, and govern, the
arbitration except to the extent of any conflict with the provisions of this Section 14.7 in which event the provisions of this Section 14.7 shall govern. Any final award issued as a result of such arbitration shall be binding between the parties
thereto, and shall be enforceable by any court having jurisdiction over the party against whom enforcement is sought. 
  
 This arbitration clause covers all disputes and claims, including, but not limited to, contract claims; tort claims; claims involving laws against
discrimination, whether based on race, sex, sexual orientation, religion, national origin, age, marital status, handicap, disability or medical condition and harrassment on any of the foregoing bases, whether allegedly in violation of federal or
state law; claims for an alleged violation of any federal, state or other governmental 
  

 13 

 law, common law, statute, regulation or ordinance, including, but not limited to, the California Fair Employment and
Housing Act. Each party thereto waives any right to have any such dispute or claim heard in any form other than the arbitration form set forth in this Agreement and expressly waives its right to trial by jury. 
  
 Claims for workers’ compensation or unemployment compensation benefits
are not covered by this Agreement. Claims by either party for temporary restraining orders and preliminary injunctions in the California Superior Court, where such temporary equitable relief would otherwise be authorized by law, are also not covered
by this Agreement. Any trial on the merits of the underlying action relating to any such temporary restraining order or preliminary injunction, however, shall occur in front of and will be decided by an Arbitrator as set forth in this Agreement.
Either party may also bring an action in any court of competent jurisdiction to compel arbitration of a matter covered by this Agreement and to enforce an arbitration award. 
  
 The aggrieved party must give written notice of any claim subject to arbitration under this Agreement to the other party no
later than the expiration of the statute of limitations that the laws of the State of California prescribe for such claim, With respect to claims based on a statute, the Employer shall pay the reasonable fees of the Arbitrator and the expenses
associated with the Arbitration, to the extent that such fees and expenses exceed the amount the Employee would have incurred had the claim(s) been brought in the state court having jurisdiction over the claim(s). In addition, in statutory claim
cases, Employee shall have the option, but not the obligation, to pay one half (1/2) of the fees and expenses of the Arbitrator. With respect to all other claims not arising from a state or federal statute, the parties shall each pay their pro rutu
shares of the neutral arbitrator’s expenses and fees. Each party will pay its own attorney’s fees and expenses associated with the arbitration. A neutral arbitrator, with at least ten (10) years of experience in deciding employment
disputes under California law, shall be selected as provided for by the AAA rules governing employment disputes. Discovery shall be allowed pursuant to the aforesaid AAA rules. At least thirty (30) days before the arbitration, the parties will
exchange lists of witnesses, including any experts, and copies of all exhibits intended to be used at the arbitration. Either party may request such remedies and damages as are allowed by California law. A written arbitration decision with a
statement of the reasons for the award shall be issued by the appointed Arbitrator. That decision will not be final and binding until twenty (20) days have elapsed after the issuance thereof without a motion to reconsider the decision having been
delivered to the Arbitrator. Either party shall have the right to file with the Arbitrator a motion to reconsider his decision within twenty (20) days after issuance of the Arbitrator’s opinion. The other party shall then have twenty (20) days
to respond to the motion. The Arbitrator shall consider the motion and either confirm or change the previously issued arbitration decision. Any such reconsidered award will be final and binding upon issuance thereof by the Arbitrator. 
  

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 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above
written. 
  

	
	 COGENT SYSTEMS, INC.

	
	 /s/    Ming Hsieh        

	

	Ming Hsieh, President
	 
	 
	 /s/    Paul Kim        

	

	Paul Kim

  

 15

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