Document:

EX-10.16

 Exhibit 10.16 

Execution Copy 
 DATED
26 AUGUST 2020 
 FIRST AMENDMENT AGREEMENT TO THE

 UP TO £1,000,000,000 FACILITY AGREEMENT DATED
24 OCTOBER 2017 
 between 

AP WIP INTERNATIONAL HOLDINGS, LLC 

as Borrower 
 and

 AP WIP INVESTMENTS, LLC 

as Parent 
 and 

AP SERVICE COMPANY, LLC 

as Servicer 
 and

 GOLDMAN SACHS LENDING PARTNERS, LLC 

acting as Agent for the Finance Parties 

and 
 GLAS
TRUST CORPORATION LIMITED 
 acting as Security Agent for the Secured Parties 

and 

TELECOM CREDIT INFRASTRUCTURE DESIGNATED ACTIVITY
COMPANY 
 as Original Lender 
  

 CONTENTS 

 
 CLAUSE 

 

							
	1.	  	Definitions and Interpretation	  	 	2	 
			
	2.	  	Amendments to the Original Facility Agreement	  	 	2	 
			
	3.	  	Action By The Lender Hereunder	  	 	3	 
			
	4.	  	Continuity	  	 	3	 
			
	5.	  	Security and Guarantees	  	 	4	 
			
	6.	  	Representations	  	 	4	 
			
	7.	  	Miscellaneous	  	 	4	 
			
	8.	  	Third Party Rights	  	 	4	 
			
	9.	  	Instructions to the Security Agent	  	 	4	 
			
	10.	  	Incorporation of Provisions from the Original Facility Agreement	  	 	5	 
			
	11.	  	Governing Law and Jurisdiction	  	 	5	 

 THIS FIRST AMENDMENT AGREEMENT (this “Agreement”) is dated 26 August 2020. 

PARTIES 
  

	(1)	 AP WIP INVESTMENTS, LLC, a company formed under the laws of the State of Delaware, U.S.A., with limited
liability (registered number 5242986) (the “Parent”); 

  

	(2)	 AP WIP INTERNATIONAL HOLDINGS, LLC, a company formed under the laws of the State of Delaware, U.S.A.,
with limited liability (registered number 4991472) (the “Borrower”); 

  

	(3)	 AP SERVICE COMPANY, LLC, a company formed under the laws of the State of Delaware, U.S.A., with limited
liability (registered number 5242568) (the “Servicer”); 

  

	(4)	 GOLDMAN SACHS LENDING PARTNERS, LLC as agent of the other Finance Parties (the
“Agent”); 

  

	(5)	 GLAS TRUST CORPORATION LIMITED, a limited company incorporated and registered in England and Wales, not
in its individual capacity but solely as security agent for the Secured Parties (the “Security Agent”); and 

  

	(6)	 TELECOM CREDIT INFRASTRUCTURE DESIGNATED ACTIVITY COMPANY as lender (the “Original
Lender”). 

 BACKGROUND 
  

	(A)	 The Parent, Borrower, Servicer, Agent, Security Agent and the Original Lender entered into a facility agreement
dated 24 October 2017 pursuant to which the Original Lender agreed to make available to the Borrower a term loan facility consisting of a Tranche A Loan (made available in Euro) and a Tranche B Loan (made available in Sterling) (the
“Original Facility Agreement”). 

  

	(B)	 The parties have agreed, subject to the terms of this Agreement, to amend the Original Facility Agreement as
set out in this Agreement. 

  

	(C)	 This Agreement is supplemental to the Original Facility Agreement and will be designated as a Finance Document.

 IWIP First Amendment Agreement 

  
 1 

 AGREED TERMS 

 

	1.	 DEFINITIONS AND INTERPRETATION 

 

	1.1.	 In this Agreement: 

  

	 	(a)	 “Effective Date” means the date on which the Agent notifies the Borrower that it has received
all of the documents and other evidence listed in Schedule 1 (Conditions Precedent) in form and substance satisfactory to the Agent. 

  

	1.2.	 Unless otherwise provided including, without limitation in this Clause 1 or unless the context otherwise
requires, terms defined in the Original Facility Agreement shall have the same meaning when used in this Agreement. 

  

	1.3.	 The rules of interpretation of the Original Facility Agreement shall apply to this Agreement as if set out in
this Agreement, save that references in the Original Facility Agreement to “this agreement” shall be construed as references to this Agreement. 

  

	1.4.	 Unless the context otherwise requires, references in the Original Facility Agreement to “this
agreement” shall be to the Original Facility Agreement as amended by this Agreement. 

  

	1.5.	 In this Agreement: 

  

	 	(a)	 any reference to a “Clause” is, unless the context otherwise requires, a reference to a clause of
this Agreement; and 

  

	 	(b)	 Clause headings are for ease of reference only. 

 

	1.6.	 This Agreement is hereby designated a Finance Document by the Borrower and the Agent. 

 

	2.	 AMENDMENTS TO THE ORIGINAL
FACILITY AGREEMENT 

  

	2.1.	 Each of the parties to this Agreement agrees that, with effect on and from the Effective Date, the Original
Facility Agreement will be amended by this Agreement as set out in this Clause 2. 

  

	2.2.	 The Original Facility Agreement will only be amended if the Agent has received all of the documents and other
evidence listed in Schedule 1 (Conditions Precedent) in form and substance satisfactory to the Agent or receipt of such documents and evidence has been waived by all the Lenders. The Agent shall notify the Borrower promptly after being so
satisfied. 

  

	2.3.	 The definition of “Termination Date” shall be deleted in its entirety and replaced with the
following: 

 “Termination Date” means, in respect of each Tranche (including for the avoidance
of doubt any sub tranches), such relevant termination date as set forth in Schedule 1; provided however, for the avoidance of doubt, the Termination Date applicable in respect of any provision contained in Clause 20 and/or Clause 30 shall be the
final termination date as set forth in Schedule 1. 
 IWIP First Amendment Agreement 

  
 2 

	2.4.	 Clause 24 (Changes to the Obligors, release of share pledge Security and additional deposits into the account
for restricted cash) of the Original Facility Agreement shall be amended by inserting, immediately following sub-clause (d) therein: 

“(e) Notwithstanding anything to the contrary in this Agreement, the Guarantor or an affiliate of the Guarantor may deposit additional
amounts of cash into the Account For Restricted Cash (such cash that is deposited shall not be from proceeds of any Loan under this Facility) from time to time to facilitate a Subsidiary to become an Unrestricted Subsidiary related to the removal of
Ground Rents from Group 2 Countries. Any amounts deposited into the Account For Restricted Cash in accordance with this Clause 24(e) may be used to make Permitted Acquisitions in accordance with this Agreement or may be withdrawn by the Borrower or
the Guarantor on any Payment Date as long as Leverage is at 8.25:1 or lower on the most recent Compliance Certificate after taking into account such withdrawal and without the consent of any Finance Party, provided that: (i) following such
withdrawal, the Obligors will be in compliance with Clause 19.1 (Financial Covenants); (ii) no Event of Default has occurred and is continuing or would occur as a result of such withdrawal; (iii) all deposits and withdrawals related to
this provision are listed on the next Compliance Certificate immediately after such withdrawal and (iv) the provisions of this Clause 24(e) shall only apply if any individual removal event of Ground Rents from Group 2 Countries referred to
above exceeds $750,000 per annum at the time of such removal.” 
  

	2.5.	 Sub-Clause 20.27(c) shall be amended such that all references to
“Minimum Required Amount” are deleted and replaced with “Minimum Required Balance”. 

  

	2.6.	 Schedule 1 of the Original Facility Agreement shall be deleted in its entirety and replaced with the form set
out in Schedule 2 (Schedule 1 (Original Lenders)) to this Agreement. 

  

	2.7.	 Schedule 12 of the Original Facility Agreement shall be updated by deleting the core concentration criteria in
respect of aggregate of unhedged and unmatched currency and replacing it with the following: 

  

			
	The aggregate of unhedged and unmatched currency (measured as a percentage of rent on the quarterly rent tape), including any forward currency hedge of at least 12 months	 	50% maximum of the principal amount as long as the principal amount outstanding is less than $560m or
equivalent and 35% thereafter.

  

	2.8.	 Schedule 1 (Relevant Commitment/rights and obligations to be assumed by the Increase Lender) of Schedule
17 of the Original Facility Agreement shall be amended by inserting, immediately following sub-clause (d) therein: 

“(e) Termination Date:                
[•]” 
  

	3.	 ACTION BY THE LENDER HEREUNDER

 The Lender confirms and represents that it has received the required Lender consents (being all Lender consent as
required under Clause 37.1 (Required Consents) of the Original Facility Agreement). 
  

	4.	 CONTINUITY 

 

	4.1.	 Each of the Finance Documents (including, without limitation, the guarantee and indemnity of each Obligor)
shall, save as amended in this Agreement, continue in full force and effect, and the Original Facility Agreement shall (from the Effective Date) be read and construed as one document with this Agreement. 

 

	4.2.	 The rights and obligations of each of the Parties to the Original Facility Agreement and under each of the
Finance Documents shall not be discharged, impaired or otherwise affected by this Agreement other than as provided for in this Agreement. Nothing in this Agreement (without prejudice to the terms of the Finance Documents) shall constitute a waiver
or release of any right or remedy of the Finance Parties. 

 IWIP First Amendment Agreement 

  
 3 

	5.	 SECURITY AND GUARANTEES 

Each Obligor acknowledges and agrees that with effect from the Effective Date: 

 

	 	(a)	 any Security or guarantee given by each Obligor under any Finance Document will be preserved for the benefit of
each Finance Party to secure the obligations of the relevant Obligors under the Finance Documents (including this Agreement and the Original Facility Agreement as amended by this Agreement) and will continue in full force and effect notwithstanding
the implementation of the amendments set out in this Agreement; 

  

	 	(b)	 the Security created under the Transaction Security Documents continues in full force and effect on the terms
of the respective Transaction Security Documents notwithstanding the implementation of the amendments set out in this Agreement; and 

  

	 	(c)	 each Obligor’s liabilities and obligations arising under the Original Facility Agreement as amended by
this Agreement form part of the Secured Obligations (as defined in the Transaction Security Documents). 

  

	6.	 REPRESENTATIONS 

On the date of this Agreement and on the Effective Date, each Obligor confirms that each of the Repeating Representations is true (on the basis
that references to the Original Facility Agreement in each case are construed as references to the Original Facility Agreement as amended by this Agreement). 
  

	7.	 MISCELLANEOUS 

This Agreement may be executed in any number of counterparts, each of which when executed shall constitute a duplicate original, but all the
counterparts together shall constitute one Agreement. 
  

	8.	 THIRD PARTY RIGHTS 

 

	8.1.	 Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under
the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or enjoy the benefit of any term of this Agreement. The Account Bank shall have the right to enforce or enjoy the benefit of any term of this Agreement
expressed to benefit the Account Bank. 

  

	8.2.	 Subject to Clause 37.3 (Other Exceptions) in the Original Facility Agreement but otherwise notwithstanding any
term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time. 

  

	9.	 INSTRUCTIONS TO THE SECURITY
AGENT 

 Pursuant to clauses 37.1(a) (Required consents) and 37.2 (All Lender material loan
amendment matters) of the Original Facility Agreement, the Borrower and the Original Lender (as the sole Lender), hereby instructs the Security Agent to enter into this Agreement and to consent to the amendments to the Original Facility
Agreement as described herein. Each Party other than the Security Agent acknowledges that the Security Agent is entering into this Agreement solely in accordance with the instructions of the Original Lender (as the sole Lender) and the Borrower, and
agrees that: (i) by entering into this Agreement the Security Agent does not incur any additional obligation or liability; and (ii) the entry into this Agreement is without prejudice to any indemnity which the Security Agent may have,
whether under the documentation relating to the transaction contemplated herein and under the Original Facility Agreement, at law or otherwise. 

IWIP First Amendment Agreement 

  
 4 

	10.	 INCORPORATION OF PROVISIONS FROM
THE ORIGINAL FACILITY AGREEMENT 

 The provisions of Clause
26 (The Security Agent) of the Original Facility Agreement will have effect as if set out in full in this Agreement mutatis mutandis. 
  

	11.	 GOVERNING LAW AND JURISDICTION

  

	11.1.	 Governing Law 

This Agreement and all non-contractual obligations arising out of or in connection with it shall be
governed by English law. 
  

	11.2.	 Jurisdiction of English courts 

 

	 	(a)	 The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with
this Agreement (including a dispute relating to its existence, validity or termination and any non-contractual obligation arising out of or in connection with it) (a “Dispute”).

  

	 	(b)	 The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes
and accordingly no Party will argue to the contrary. 

  

	 	(c)	 This Clause 11.2 is for the benefit of the Finance Parties and Secured Parties only. As a result, no Finance
Party or Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. 

To the extent allowed by law, the Finance Parties and Secured Parties may take concurrent proceedings in any number of jurisdictions. 

This Agreement has been entered into on the date stated at the beginning of it. 

IWIP First Amendment Agreement 

  
 5 

 Execution Copy 

SIGNATURES 
 The Borrower 

AP WIP INTERNATIONAL HOLDINGS, LLC 
  

			
	By:	 	 /s/ Scott G. Bruce

	Name:	 	 Scott G. Bruce

	Title:	 	 Secretary

  

	Address:	 3 Bala Plaza East, Suite 502 

Bala Cynwyd, PA 19004 
  

	Fax:	 +1 (610) 660-4920 

	Email:	 sbruce@dlgix.com 

  

	Attn:	 Scott G. Bruce 

 The Parent 

AP WIP INVESTMENTS, LLC 
  

			
	By:	 	 /s/ Scott G. Bruce

	Name:	 	 Scott G. Bruce

	Title:	 	 Secretary

  

	Address:	 3 Bala Plaza East, Suite 502 

Bala Cynwyd, PA 19004 
  

	Fax:	 +1 (610) 660-4920 

	Email:	 sbruce@dlgix.com 

  

	Attn:	 Scott G. Bruce 

[Signature page to the first amendment agreement of the facility agreement] 

 The Servicer 

AP SERVICE COMPANY, LLC 
  

			
	By:	 	 /s/ Scott G. Bruce

	Name:	 	 Scott G. Bruce

	Title:	 	 Secretary

  

	Address:	 3 Bala Plaza East, Suite 502 

Bala Cynwyd, PA 19004 
  

	Fax:	 +1 (610) 660-4920 

	Email:	 sbruce@dlgix.com 

  

	Attn:	 Scott G. Bruce 

[Signature page to the first amendment agreement of the facility agreement] 

 The Agent, acting for the Finance Parties 

GOLDMAN SACHS LENDING PARTNERS LLC 
  

									
	 By:
	 	 /s/ Douglas Tansey
	 		 	 By:
	 	 N/A

		 	 Douglas Tansey

Authorized Signatory
	 		 		 	

  

	Address:	 2001 Ross Ave, 29th Floor 

Dallas, TX 75201 

	Telephone:	 972-368-2323

	Fax:	 (646) 769-7829 

	Email:	 gs-dallas-adminagency@ny.email.gs.com 

	Attn:	 SBD Operations 

[Signature page to the first amendment agreement of the facility agreement] 

 The Security Agent, acting for the Secured Parties 

GLAS TRUST CORPORATION LIMITED, as Security Agent 
  

			
	By:	 	 /s/ Paul Cattermole

		 	 PAUL CATTERMOLE

AUTHORISED SIGNATORY

  

	Address:	 45 Ludgate Mill 

London 
 EC4M 7JO 

	Fax:	 +44 (0) 20 3070 0113 

 

	Attn:	 MANAGER TES / AP WIP 

[Signature page to the first amendment agreement of the facility agreement] 

 The Original Lender 

TELECOM CREDIT INFRASTRUCTURE 
 DESIGNATED ACTIVITY
COMPANY 
  

									
	By:	 	 /s/ Rolando Ebuna
	 		 	By:	 	 /s/ Lester Almojuela

		 	 Rolando EBUNA
 Director
	 		 		 	 Lester Almojuela
 Director

  

	Address:	 2nd Floor, Palmerston House 

Fenian Street Dublin 2 
  

	Fax:	 +353 1 905 8029 

  

	Attn:	 The Directors 

[Signature page to the first amendment agreement of the facility agreement]Exhibit 10.22

 

 

January 4, 2020

 

Roger Holliday

 

Dear Roger:

 

This letter (“Agreement”)
will confirm our understanding and agreement regarding your employment with Lantronix, Inc. (“Lantronix” or the “Company”),
commencing January 20, 2020 (“Commencement Date”).

 

POSITION EXCLUSIVITY:

 

The Company hereby agrees
to employ you as its Vice President, Worldwide Sales and Marketing, reporting to Paul Pickle, President and Chief Executive Officer
of the Company (“CEO”). Your primary office will be located at the Lantronix corporate headquarters in Irvine, CA.
During your employment with Lantronix, you will not render any services to any other person or entity, whether for compensation
or otherwise, or engage in any business activities competitive with or adverse to the Company’s business or welfare, whether
alone, as an employee, as a partner, as a member, or as a shareholder, officer or director of any other corporation, or as a trustee,
fiduciary or in any other similar representative capacity of any other entity, without the prior written consent of the CEO.

 

BASE SALARY:

 

The Company shall pay you
a bi-weekly base salary of $9,615.38 ($250,000 on an annualized basis), less applicable withholdings and deductions, paid on the
Company’s regular bi-weekly payroll dates. Your salary will be reviewed at the time executive salaries are reviewed periodically,
and the Company may in its sole discretion, adjust it to reflect Company performance, your performance, market conditions and other
factors deemed relevant by the Company.

 

BONUS:

 

You will be eligible to
participate in the Lantronix Performance Bonus Plan at a rate of 40% of your base salary. As far as the 2020 Lantronix Performance
Bonus plan, you will be eligible to participate in the 2nd half plan period, which has a performance period of January 1, 2020
through June 30, 2020. A full year target is $100,000. Lantronix reserves the right to change or discontinue the plan at any time.

 

STOCK OPTIONS:

 

You will receive the following
stock option grant to purchase 100,000 shares of the Company’s common stock that shall vest according to the following schedule:
25% (25,000) of the options shall vest one year from the date of grant and the remaining options shall vest ratably each month
thereafter for a period of 36 months, subject to your remaining a Service Provider to the Company through such dates (as defined
in the Company’s 2010 Stock Plan);

 

 

 

    	 	1	 

     

    

 

 

The Options shall be considered
an inducement grant of Non-Qualified Stock Option (NQSO). The grant shall be effective on the first business day of the month following
your date of hire and the exercise price of the Options shall be the fair market value of the Company’s common stock on the
grant date. Except as otherwise provided in this letter, the Options will be subject to the terms and conditions of the Company’s
standard form of stock option agreement.

 

RESTRICTED STOCK UNITS

 

You will receive the following
one-time restricted stock unit (RSU) grant of 50,000 shares of the Company’s common stock that shall vest according to the
following schedule: 25% (12,500) of the RSUs shall vest March 1, 2021 and the remaining options shall vest ratably each quarter
thereafter for a period of twelve quarters, subject to your remaining a Service Provider to the Company through such dates (as
defined in the Company’s 2010 Stock Plan).

 

PERFORMANCE SHARE UNITS

 

You will receive the following
one-time stock award of 70,000 performance shares units (the “Performance Shares”), pursuant to the same performance
criteria, other terms and conditions set forth in the grant documents issued to the other Executives of the Company on or about
October 18, 2019, which cover the Company’s performance in fiscal years 2020 through 2022 as compared to the pre-established
performance criteria, all as set forth in the foregoing grant documents; provided, however, that your vesting schedule shall be
as follows: 16% of your award shall vest with the rest of the Executives in FY2020 and 42% of the award shall vest with the Executives
in each of FY2021 and 2022.

 

BENEFITS:

 

You will be eligible to participate
in the employee benefit plans and programs generally available to the Company’s employees, including group medical, dental,
vision and life insurance, and disability benefits, subject to the terms and conditions of such plans and programs. You will be
entitled to paid time off for vacation leave, in a reasonable amount that you deem appropriate consistent with your duties, provided
that your job performance remains acceptable. You will be expected to schedule vacation at reasonable times so as to not interfere
with your duties. There shall be no accrual of unused vacation time and you will not be entitled to payment for any unused vacation
time upon the termination of your employment with the Company. The Company reserves the right to amend, modify or terminate any
of its benefit plans or programs at any time and for any reason.

 

EXPENSES:

 

You shall be entitled to
reimbursement for all reasonable and necessary out-of-pocket business, entertainment and travel expenses incurred by you in connection
with the performance of your duties hereunder in accordance with the Company’s expense reimbursement policies and procedures,
including reimbursement for economy travel on domestic flights and for international flights.

 

WITHHOLDING:

 

All forms of compensation
paid to you as an employee of the Company shall be less all applicable withholdings.

 

 

 

    	 	2	 

     

    

 

CONFIDENTIAL INFORMATION:

 

As an employee of Lantronix,
you will have access to certain Company confidential information and you may, in the course of your employment, develop certain
information or inventions, which will be the property of the Company. To protect the interests of the Company, you will be required
to sign the Company’s Employment, Confidential Information, and Invention Assignment Agreement as a condition of employment.
We wish to impress upon you that we do not want you to bring with you any confidential or proprietary information from a previous
employer or violate any obligation you may have to that employer.

 

NON-SOLICITATION:

 

In consideration of the
promises and covenants contained in this letter, you agree that for a period of one (1) year following your effective date of termination
or resignation, you will not, either directly or indirectly, either on your own behalf or on behalf of any other person, recruit
or solicit for hire any individual who is then employed by the Company. You acknowledge and agree that the restrictions contained
in this section are reasonable and appropriate. You further acknowledge and agree that the restrictions contained in this section
will not preclude you from engaging in any trade, business or profession that you are qualified to engage in.

 

AT-WILL EMPLOYMENT:

 

Your employment with the
Company will be for no specific period of time. Rather, your employment will be at-will, meaning that you or the Company may terminate
the employment relationship at any time, with or without cause, and with or without notice and for any reason or no particular
reason. Although your compensation and benefits may change from time to time, the at-will nature of your employment may only be
changed by an express written agreement signed by an authorized officer of the Company.

 

SEVERANCE:

 

If your employment with
the Company is terminated by you for Good Reason or by the Company without Cause within two years of the Commencement Date, then
subject to your execution and non-revocation of a release of claims in a form provided by the Company, then in addition to any
base salary earned through the termination date, any earned but as-yet unpaid bonuses, unpaid expense reimbursements and vested
benefits to which you are entitled under the terms of any Company employee benefit plan (which compensation and benefits will be
paid to you or your estate in connection with your ceasing to be employed without regard to the reason for such cessation), you
will be entitled to the following:

 

You will be entitled to receive severance pay in a
total amount equal to the sum of (i) six

(6) months of your then current Base Salary, plus (ii)
an amount equal to fifty percent

 

(50%) of Bonus amounts you
earned over the previous twelve (12) months (collectively, the “Severance Payment”). The Severance Payment shall be
less required tax deductions and withholdings and shall be paid in a lump sum on the 53rd day
following your date of termination or such later date as is required to avoid potentially adverse taxation under Internal Revenue
Code Section 409A pursuant to section under the caption “Section 409A” below.

 

 

 

    	 	3	 

     

    

 

For purposes of this letter,
“Cause” shall mean: (i) gross negligence or willful misconduct in the performance of your duties to the Company; (ii)
intentional and continual failure to substantially perform your reasonably assigned duties for the Company; (iii) intentional conduct
that is demonstrably and materially injurious to the Company, including but not limited to committing or cooperating in an act
of fraud, theft, or dishonesty against the Company; (iv) your breach of a fiduciary duty to the Company or its shareholders; (v)
your conviction for, or plea of guilty or nolo contendre to, the commission of any felony or any crime involving deceit,
material dishonesty, fraud, embezzlement, theft, any crime that results in or is intended to result in personal enrichment at the
expense of the Company, any crime that involves the use or sale of a controlled substance, or any other offense that will adversely
affect in any material respect the Company’s reputation or your ability to perform your obligations or duties to the Company;
or (vi) your violation of a material written policy of the Company or breach of a written agreement with Company, including but
not limited to a breach of the Employment, Confidential Information, and Invention Assignment Agreement. Notwithstanding the foregoing,
Cause shall not exist under (i), (ii), (iii), (iv) or (vi) unless the Company provides you with written notice of the existence
of one or more of the actions, conditions or events set forth above in such definition of Cause, and if such action, event or condition
is curable, you fail to cure such action, event or condition within thirty (30) days after receipt of such notice.

 

For the sake of
clarity, termination of your employment in connection with your death or disability will not be considered “termination
by the Company without Cause” hereunder. For purposes of this letter, you shall be considered disabled if you have been
physically or mentally unable to perform your job duties hereunder for a continuous period of at least one hundred twenty
(120) days or a total of one hundred fifty (150) days during any one hundred and eighty (180) day period, and you have not
recovered and returned to the full time performance of your duties within thirty (30) days after written notice is given to
you by the Company following such 120 day period or 180 day period, as applicable.

 

For purposes of this letter, “Good Reason”
shall mean your resignation within one hundred and twenty (120) days after the Company has taken any of the following actions without
your express written consent: (i) a material reduction in your base salary, your target annual bonus opportunity or benefits (unless,
outside of a Change in Control context, such reduction is in connection with a salary or benefit reduction program of general application
at the senior level executives of the Company); (ii) a material breach by the Company of any written agreement with you, including
the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform the obligations
under this letter in the same manner and to the same extent that the Company would be required to perform, except where such assumption
occurs by operation of law; (iii) a material adverse change in your title, duties or responsibilities (other than temporarily while
you are disabled or as otherwise permitted by applicable law); or (iv) relocation of your principal workplace by more than 45 miles,
which

 

change results in a material increase in your
one-way commute. Notwithstanding the foregoing, Good Reason shall not exist unless you provide the Company written notice of the
existence of the one or more of the actions, conditions or events set forth above in this definition of Good Reason within ninety
(90) days after the initial existence or occurrence of such action, condition or event, and if such action, event or condition
is curable, the Company fails to cure such action, event or condition within thirty (30) days after its receipt of such notice.

 

CHANGE IN CONTROL:

 

If within five years of the
Commencement date, your employment with the Company is terminated by you for Good Reason or by the Company without Cause within
60 days prior to or 12 months following a Change in Control (as defined below), then, subject to your execution and non- revocation
of a release of claims in a form provided by the Company, in keeping with past practice, and resignation from any Company-affiliated
board positions, all unvested Company equity awards that you then hold shall fully vest and be settled or become exercisable, as
applicable, and you will be entitled to receive (as applicable, the “Change-in-Control Severance Payment”):

 

 

 

    	 	4	 

     

    

 

(a)   
In the event of a Change in Control where the transaction results in Lantronix shareholders receiving at closing consideration
with a value of less than a value of $5 per share on a fully diluted basis, in lieu of any other severance benefits, you will be
entitled to receive severance pay in a total amount equal to the sum of (i) six (6) months of your then current Base Salary, plus
(ii) an amount equal to one hundred percent (50%) of your previous 12 months bonus. The Company will also provide you, your spouse
and your eligible dependents with continued group health, dental and vision coverage pursuant to the provisions of COBRA at the
level in effect and upon substantially the same terms and conditions as existed under applicable insurance plans immediately prior
to the date of termination of your employment (including without limitation contributions required by you, if any, for such benefits),
for the first six (6) months following the date of termination your employment without Cause or for Good Reason or until you become
eligible for comparable benefits from another employer.

 

(b)   In the event of a Change in Control where the transaction results in Lantronix shareholders receiving at closing consideration
with a value of $5 per share or greater on a fully diluted basis, in lieu of any other severance benefits, you will be entitled
to receive severance pay in a total amount equal to the sum of (i) twelve (12) months of your then current Base Salary, plus

(ii)   
an amount equal to one hundred percent (100%) of your then current target bonus. The Company will also provide you, your
spouse and your eligible dependents with continued group health, dental and vision coverage pursuant to the provisions of COBRA
at the level in effect and upon substantially the same terms and conditions as existed under applicable insurance plans immediately
prior to the date of termination of your employment (including without limitation contributions required by you, if any, for such
benefits), for the first twelve (12) months following the date of termination your employment without Cause or for Good Reason
or until you become eligible for comparable benefits from another employer.

 

Any Change-of-Control Severance
Payments shall be less required tax deductions and withholdings and shall be paid in a lump sum on the 53rd
day following your date of termination or such later date as is required to avoid potentially adverse taxation under Internal Revenue
Code Section 409A as described under the caption “Section 409A” below. Change-of-Control

 

Severance Payments may also
be subject to reduction required to avoid potentially adverse taxation under Internal Revenue Code Section 280G as described under
the caption “Section 280G” below.

 

For purposes of this letter,
“Change in Control” shall mean the occurrence of any of the following events: (i) any “person” (as such
term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other
than the TL Parties, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent (50%) or, more of the total voting power represented
by the Company’s then outstanding voting securities; or (ii) the consummation of the sale or disposition by the Company of
all or substantially all of the Company’s assets, other than to the TL Parties; (iii) the consummation of a merger or consolidation
of the Company with any other corporation, other than (A) a merger or consolidation with the TL Parties or (B) a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent
(50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation; or (iv) a majority of the members of the Board are replaced during any twelve-
month period by directors whose appointment or election is not endorsed by a majority of the Board or the TL Parties before the
date of appointment or election. In no event shall a “Change in Control” be deemed to have occurred for purposes of
this letter solely because the Company engages in an internal reorganization, which may include a transfer of assets to, or a merger
or consolidation with, one or more affiliates.

 

For purposes of this letter,
“TL Parties” shall mean, either individually or collectively, Bernhard Bruscha, TL Investments.

 

 

 

    	 	5	 

     

    

 

SECTION 409A:

 

This letter is intended
to comply with Section 409A of the Internal Revenue Code (“Section 409A”) or an exemption thereunder and shall be construed
and administered in accordance with Section 409A. Notwithstanding any other provision of this offer letter, payments provided under
this letter may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments
under this letter that may be excluded from Section 409A either as separation pay due to an involuntary separation from service
or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each
instalment payment provided under this letter shall be treated as a separate payment. Any payments to be made under this letter
upon a termination of employment shall only be made upon a “separation from service” under Section 409A. Notwithstanding
the foregoing, the Company makes no representations that the payments and benefits provided under this letter comply with Section
409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that
may be incurred by you on account of non- compliance with Section 409A.

 

Notwithstanding any other
provision of this letter, if any payment or benefit provided to you in connection with termination of employment is determined
to constitute “nonqualified deferred

 

compensation” within
the meaning of Section 409A and you are determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i),
then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of your
termination date (the “Specified Employee Payment Date”) or, if earlier, on the date of your death. The aggregate of
any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to you in a lump sum
on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their
original schedule. To the extent necessary to avoid application of any tax under Section 409A applying to any compensation or benefit
included herein that constitutes nonqualified deferred compensation, the definition of “Change in Control” shall be
reformed such that a transaction will only qualify as a Change in Control if it also constitutes a “change in control event”
as defined under Section 409A.

 

SECTION 280G:

 

Notwithstanding any other
provision of this letter or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided
or to be provided by the Company or its affiliates to you or for your benefit pursuant to the terms of this letter or otherwise
(“Covered Payments”) constitute parachute payments (“Parachute Payments”) within the meaning of Section
280G of the Internal Revenue Code (“Section 280G”) and would, but for this section be subject to the excise tax imposed
under Section 4999 of the Internal Revenue Code (or any successor provision thereto) (“Section 4999”) or any similar
tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”),
then prior to making the Covered Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to you
of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to you if the Covered Payments are limited to the
extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under (i) above is less than the amount
under (ii) above will the Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered
Payments is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit” shall mean the
present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes.

 

Any such reduction shall
be made in accordance with Section 409A and the following: (i) the Covered Payments which do not constitute nonqualified deferred
compensation subject to Section 409A shall be reduced first; and (ii) all other Covered Payments shall then be reduced as follows:

 

(A) cash
payments shall be reduced before non-cash payments; and (B) payments to be made on a later payment date shall be reduced
before payments to be made on an earlier payment date.

 

 

 

 

    	 	6	 

     

    

Any determination required
under this section shall be made in writing in good faith by the accounting firm that was the Company’s independent registered
public accounting firm immediately before the change in control (the “Accountants”), which shall provide detailed supporting
calculations to the Company and you as requested by the Company or you. The Company and you shall provide the Accountants with
such information and documents as the Accountants may reasonably request in order to make a determination under this section. For
purposes of making the calculations and determinations required by this section, the Accountants may rely on reasonable, good faith
assumptions and approximations concerning the application of Section 280G and Section 4999. The Accountants’ determinations
shall be final and binding on

 

the Company and you. The
Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required
by this section.

 

CLAWBACK:

 

Any amounts payable hereunder
are subject to any policy (whether currently in existence or later adopted) established by the Company providing for clawback or
recovery of amounts that were paid to you. The Company will make any determination for clawback or recovery in its sole discretion
and in accordance with any applicable law or regulation.

 

CONTINGENT OFFER:

 

This offer is contingent upon:

 

(a)   
Verification of your right to work in the United States, as demonstrated by your completion of an I-9 form upon hire and
your submission of acceptable documentation (as noted on the I-9 form) verifying your identity and work authorization within three
days of your Start Date.

 

(b)    Satisfactory completion of a background investigation.

 

This offer is
valid until January 10, 2020 and will be withdrawn if any of the above conditions are not satisfied.

 

REPRESENTATIONS:

 

By accepting this offer,
you represent that you are able to accept this job and carry out the work that it would involve without breaching any legal restrictions
on your activities, such as non- competition, non-solicitation or other work-related restrictions imposed by a current or former
employer. You also represent that you will inform the Company about any such restrictions and provide the Company with as much
information about them as possible, including any agreements between you and your current or former employer describing such restrictions
on your activities. You further confirm that you will not remove or take any documents or proprietary data or materials of any
kind, electronic or otherwise, with you from your current or former employer to the Company without written authorization from
your current or former employer, nor will you use or disclose any such confidential information during the course and scope of
your employment with the Company. If you have any questions about the ownership of particular documents or other information, you
should discuss such questions with your former employer before removing or copying the documents or information.

 

ARBITRATION:

 

To the fullest extent allowed
by law, any controversy, claim or dispute between you and the Company (and/or any of its affiliates, owners, shareholders, directors,
officers, employees, volunteers or agents) relating to or arising out of your employment or cessation of that employment will be
submitted to final and binding arbitration as provided in Attachment A hereto.

 

 

 

 

    	 	7	 

     

    

 

ACCEPTANCE:

 

To indicate your acceptance of this offer, please initial
each page, and complete and sign the At- Will Acceptance Statement.

 

The offer letter and attachments need to be returned
via email to the Company’s Vice President, HR and Legal at David.Goren@lantronix.com.

 

We are excited at the prospect of you joining our team.
If you have any questions about the above details, please call me immediately.

 

Very truly yours,

 

LANTRONIX, INC.

 

/s/ David Goren

 

David Goren

Vice President, HR & Legal

 

 

 

 

 

 

 

 

    	 	8	 

     

    

 

 

At-Will Acceptance
Statement

 

I, Roger Holliday,
do hereby accept the above employment offer, and agree with the terms as outlined above. I understand that there are no other terms
expressed or implied. My expected start date will be January 20, 2020.

 

I understand that Lantronix
is an “At-Will Employer,” and agree that my employment is for no definite period and may, regardless
of the date of payment of wages and salary, be terminated by me or by Lantronix at any time without any previous notice. Subject
to the rights under the section entitled “Severance,” I also understand and agree that Lantronix may hire, fire, demote,
promote, and change or alter any terms of my employment at any time.

 

 

 

	/s/ Roger Holliday                             	 	1/9/20                      
	Signature	 	Date

 

 

 

Nondisclosure of Former
Employer’s Trade Secret Information

 

 

I understand and agree that
the Company expects me to respect any trade secret information of any of my former employers, business associates, or others. I
agree to respect the Company’s express direction to me not to disclose to the Company, its officers, or employees, any such
trade secret information so long as it remains confidential. In addition, I also represent to the Company that my commencement
of work for the Company does not (a) conflict with any other contractual commitments on my part to any former employer or third
party, (b) result in the misappropriation of trade secrets of any former employer or third party, or (c) otherwise violate or interfere
with any rights of any third party

 

 

 

	/s/ Roger Holliday                             	 	1/9/20                      
	Signature	 	Date

 

 

 

 

 

 

    	 	9	 

     

    

 

ATTACHMENT A

 

MUTUAL AGREEMENT TO
ARBITRATE

 

To the fullest extent allowed
by law, any controversy, claim or dispute between Executive and the Company (and/or any of its affiliated, subsidiary, or related
entities, owners, directors, officers, employees, volunteers or agents) relating to or arising out of this Agreement or Executive’s
employment (or the cessation thereof), will be submitted to final and binding arbitration in Orange County, California, for determination
in accordance with the American Arbitration Association’s (“AAA”) Employment Arbitration Rules as the exclusive
remedy for such controversy, claim or dispute. In any such arbitration, the parties may conduct discovery to the same extent as
would be permitted in a court of law. The arbitrator shall issue a reasoned, written decision, and shall have full authority to
award all remedies which would be available in court. The Company shall pay the arbitrator’s fees and any AAA administrative
expenses. Any judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Possible
disputes covered by the above include (but are not limited to) unpaid wages, breach of contract (including this Agreement), torts,
violation of public policy, discrimination, harassment, or any other employment-related claims under laws including, but not limited
to, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the California Labor Code, the California Fair
Employment and Housing Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and any other statutes
or laws relating to Executive’s relationship with the Company regardless of whether such dispute is initiated by Executive
or the Company. Thus, this bilateral arbitration agreement fully applies to any and all claims that the Company may have against
Executive, including but not limited to claims for misappropriation of Company property, disclosure of proprietary information
or trade secrets, interference with contracts, trade libel, gross negligence, or any other claim for alleged wrongful conduct or
breach of the duty of loyalty. However, claims for workers’ compensation benefits, unemployment insurance and those arising
under the National Labor Relations Act (or any other claims where mandatory arbitration is prohibited by law) are not covered by
this arbitration agreement, and such claims may be presented to the appropriate court or government agency. BY AGREEING TO THIS
BINDING ARBITRATION PROVISION, BOTH YOU AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY.

 

This mutual arbitration agreement
is to be construed as broadly as is permissible under applicable law.

 

	 	 	LANTRONIX INC. (the “Company”)
	 	 	 
	/s/ David Goren                          	 	By: /s/ Paul Pickle                     
	David Goren	 	Name: Paul Pickle
	 	 	Title: President & CEO
	 	 	 
	Dated: 1/9/20	 	Dated:  1/9/20
	 	 	 
	 	 	 
	 	 	 

 

 

 

 

    	 	10	 

     

    

 

BENEFITS SUMMARY INSURANCE:

Lantronix recognizes the need for financial protection
in the event of illness or injury that may result in medical expenses. Therefore, the Company offers group insurance plans designed
to meet those needs to all active regular full-time employees.

 

Regular full-time employees
are eligible to enroll in group insurance benefits on the first of the month following their first day of employment. Based on
your hire date of January 6, 2020, you will be eligible for benefits on February 1, 2020. If your start date is extended,
it may affect the date you will be eligible for benefits.

 

Group medical, dental
and prescription coverage is presently offered through Aetna. You have a choice among these medical and dental plan
options: PPO and HMO (California employees only). Vision coverage is offered through VSP. The Company currently pays
a significant portion of the premium, with the employee contributing the difference through a bi-weekly payroll deduction.

 

Lantronix has in place a
FSA (Flexible Spending Account) Plan that allows pre-tax deductions for dependent care costs, eligible un-reimbursed medical
expenses, and health insurance premiums.

 

Basic Life and Accidental
Death & Dismemberment coverage is provided by Principal Insurance at the rate of two time’s annual total targeted
compensation, up to a maximum

$500,000. Voluntary Life
insurance can be purchased by the employee. Supplemental life insurance can also be purchased by the employee to cover spouse and
children.

 

Short-term Disability
for CA residents is provided through the State. Benefit coverage is up to a maximum of 52 weeks. Benefits amount vary depending
on the employee’s weekly base or wage rate. Maximum benefit is $840 per week. To qualify you must be unable to perform your
duties for 8 consecutive days. To claim a disability, please call 800-480-3287 for plan requirements, restrictions, and forms.

 

Long-term Disability
is provided by Principal Insurance and provides up to 60% of your basic monthly earnings (not to exceed $12,500) when
you meet the disability requirements. Benefits can be paid out as early as 90 days after you have been declared disabled. California
employees would become eligible when the state disability payments cease (typically 12 months).

 

PROGRAMS:

 

EAP

 

Lantronix offers an Employee
Assistance Program to provide you with support when you need guidance or information regarding Management resources, Conflict management,
Financial or Legal issues, Child or Dependent care, Relationship issues, Co-dependency and many other issues involving modern life.

 

 

 

 

    	 	11	 

     

    

 

TUITION REIMBURSEMENT

 

Lantronix believes in education
and will reimburse employees for their efforts when a course of study is related to their job. Undergraduate and Certificate programs
are reimbursed at the rate of $500 per course, up to 6 courses per calendar year. Graduate programs are reimbursed at the rate
of $1,500 per course, up to 6 courses per calendar year. Employees do have to obtain approval to participate in the plan before
they enroll at an Institution of higher learning in order to be eligible.

 

COMPANY EVENTS

 

Lantronix offers fun themed
events at least 5+ times per year. They range from taco parties to having the In-N-Out truck for lunch.

 

HOLIDAYS:

 

Lantronix offers an average of
11 paid holidays per year.

 

VACATION:

 

Vacation will be as stated in
your offer letter.

 

401(K) PLAN:

 

Lantronix offers a 401K
plan to full time employees. The Plan allows employees to contribute any whole percentage of their salary on a pre-tax basis, not
to exceed the annual maximum set by the IRS. The company matches 25% of the first 6% of employee contributions. Employees are eligible
to enroll in the 401K program, effective the first of the month following completion of 30 days of employment. Employees who have
a 401K plan through a prior employer may rollover their funds into Lantronix’ Plan immediately, however, they may not begin
making contributions to the Plan until their enrollment eligibility date. Lantronix reserves the right to change the plan at any
time.

 

EMPLOYEE STOCK PURCHASE PLAN

 

Lantronix’s Employee
Stock Purchase Plan allows employees to purchase shares of company stock at a 15% discount on the lower of the offering price or
purchase date price through convenient payroll deductions.

 

 

 

 

 

 

    	 	12

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