Document:

EX-10.14

 EXHIBIT 10.14 

LOAN AND SECURITY AGREEMENT 

THIS LOAN AND SECURITY AGREEMENT (as the same may from time to time be amended, modified, supplemented or restated, this
“Agreement”) dated as of August 4, 2017 (the “Effective Date”) among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 133 North Fairfax Street, Alexandria, Virginia 22314
(“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Oxford in its
capacity as a Lender and SILICON VALLEY BANK, a California corporation with an office located at 3003 Tasman Drive, Santa Clara, CA 95054 (“Bank” or “SVB”) (each a “Lender” and collectively, the
“Lenders”), and SUTRO BIOPHARMA, INC., a Delaware corporation with offices located at 310 Utah Street, Suite 150, South San Francisco, CA 94080 (“Borrower”), provides the terms on which the Lenders shall lend to
Borrower and Borrower shall repay the Lenders. The parties agree as follows: 
  

	1.	ACCOUNTING AND OTHER TERMS 

 1.1 Accounting terms not defined in this
Agreement shall be construed in accordance with GAAP. Calculations and determinations must be made in accordance with GAAP, as applicable. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in
Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. All references to “Dollars” or “$”
are United States Dollars, unless otherwise noted. 
  

	2.	LOANS AND TERMS OF PAYMENT 

 2.1 Promise to Pay. Borrower hereby
unconditionally promises to pay Collateral Agent (for the benefit of the Lenders), the outstanding principal amount of all Term Loans advanced to Borrower by each Lender and accrued and unpaid interest thereon and any other amounts due hereunder as
and when due in accordance with this Agreement. 
 2.2 Term Loan. 

(a) Availability. Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make term
loans to Borrower on the Effective Date in an aggregate amount of Fifteen Million Dollars ($15,000,000) according to each Lender’s Term Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are
hereinafter referred to singly as a “Term Loan”, and collectively as the “Term Loans”). After repayment, no Term Loan may be re-borrowed. 

(b) Repayment. Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following the Funding Date of the Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the
Amortization Date. Borrower agrees to pay, on the Funding Date of the Term Loan, any initial partial monthly interest payment otherwise due for the period between the Funding Date of the Term Loan and the first Payment Date thereof. Commencing on
the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to Collateral Agent (for the benefit of the
Lenders), as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in
Section 2.3(a), and (3) a repayment schedule equal to thirty (30) months; provided, however, if the Amortization Date is extended upon completion of the Additional Capital Event, then such thirty (30) month period shall be
reduced to twenty-four (24) months. All unpaid principal and accrued and unpaid interest with respect to the Term Loan is due and payable in full on the Maturity Date. The Term Loan may only be prepaid in accordance with Sections
2.2(c) and 2.2(d). 
 (c) Mandatory Prepayments. If the Term Loans are accelerated following the occurrence of an Event of
Default, Borrower shall immediately pay to Collateral Agent (for the benefit of the Lenders), payable to Collateral Agent in accordance with each Lender’s respective Pro Rata Share, an amount equal to the sum of: (i) all outstanding
principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, 

 
(ii) the Final Payment, (iii) the Prepayment Fee, plus (iv) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the Default Rate with
respect to any past due amounts. Notwithstanding (but without duplication with) the foregoing, on the Maturity Date, if the Final Payment had not previously been paid in full in connection with the prepayment of the Term Loans in full, Borrower
shall pay to Collateral Agent, for payment to each Lender in accordance with its respective Pro Rata Share, the Final Payment in respect of the Term Loan(s). 

(d) Permitted Prepayment of Term Loans. Borrower shall have the option to prepay all, but not less than all, of the Term Loans advanced
by the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least thirty (30) days prior to such prepayment, and (ii) pays to the Lenders on the
date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment
date, (B) the Final Payment, (C) the Prepayment Fee, plus (D) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts. 

2.3 Payment of Interest on the Credit Extensions. 

(a) Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at a
floating per annum rate equal to the Basic Rate, determined by Collateral Agent on the Funding Date of the applicable Term Loan, which interest shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e). Interest shall
accrue on each Term Loan commencing on, and including, the Funding Date of such Term Loan, and shall accrue on the principal amount outstanding under such Term Loan through and including the day on which such Term Loan is paid in full. 

(b) Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue interest
at a floating per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%) (the “Default Rate”). Payment or acceptance of the increased interest rate provided in this
Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent. 

(c) 360-Day Year. Interest shall be computed on the basis of a three hundred sixty
(360) day year, and the actual number of days elapsed. 
 (d) Debit of Accounts. Collateral Agent and each Lender may debit (or
ACH) any deposit accounts, maintained by Borrower or any of its Subsidiaries, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes the Lenders under the Loan Documents when due. Any such
debits (or ACH activity) shall not constitute a set-off. 
 (e) Payments. Except as otherwise
expressly provided herein, all payments by Borrower under the Loan Documents shall be made to Collateral Agent for the benefit of the respective Lender to which such payments are owed, at Collateral Agent’s office in immediately available funds
on the date specified herein. Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal and/or interest received after 3:00 PM Eastern time are considered received at the opening of business on
the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue until paid. All payments to be made by Borrower
hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment or counterclaim, in
lawful money of the United States and in immediately available funds. 
 2.4 Secured Promissory Notes. The Term Loans shall be
evidenced by a Secured Promissory Note or Notes in the form attached as Exhibit D hereto (each a “Secured Promissory Note”), and shall be repayable as set forth in this Agreement. Borrower irrevocably
authorizes each Lender to make or cause to be made, on or about the Funding Date of any Term Loan or at the time of receipt of any payment of principal on such Lender’s Secured Promissory Note, an appropriate notation on such Lender’s
Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment. The outstanding amount of each Term Loan 

  
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set forth on such Lender’s Secured Promissory Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any
error in so recording, any such amount on such Lender’s Secured Promissory Note Record shall not limit or otherwise affect the obligations of Borrower under any Secured Promissory Note or any other Loan Document to make payments of principal of
or interest on any Secured Promissory Note when due. Upon receipt of an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note, Borrower shall issue, in lieu thereof, a replacement
Secured Promissory Note in the same principal amount thereof and of like tenor. 
 2.5 Fees. Borrower shall pay to Collateral
Agent: 
 (a) Final Payment. The Final Payment, when due hereunder, to be shared between the Lenders in accordance with their
respective Pro Rata Shares; 
 (b) Prepayment Fee. The Prepayment Fee, when due hereunder, to be shared between the Lenders in
accordance with their respective Pro Rata Shares; and 
 (c) Good Faith Deposit. An amount of Thirty-Five Thousand Dollars
($35,000) has been received by Collateral Agent as a good faith deposit from Borrower on or about November 2, 2016, and will be applied towards Lenders’ Expenses for the documentation and negotiation of this Agreement that are payable by
the Borrower pursuant to Section 2.5(d) hereof. For the purposes of clarity, Borrower shall be responsible for all Lender’s Expenses payable pursuant to Section 2.5(d) hereof. 

(d) Lenders’ Expenses. All out-of-pocket
Lenders’ Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due. 

2.6 Withholding. Payments received by the Lenders from Borrower hereunder will be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any governmental authority (including any interest, additions to tax or penalties applicable thereto).
Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to the Lenders,
Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction,
each Lender receives a net sum equal to the sum which it would have received had no withholding or deduction been required and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority; provided, that Borrower
shall not be required to make such increased payment to a Lender who is not a United States Person (as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended) or who has not provided a duly executed original IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax. Borrower will, upon request, furnish the Lenders with proof reasonably satisfactory to the Lenders indicating that Borrower has
made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in
full is bonded or reserved against by Borrower. The agreements and obligations of Borrower contained in this Section 2.6 shall survive the termination of this Agreement. 
  

	3.	CONDITIONS OF LOANS 

 3.1 Conditions Precedent to Initial Credit
Extension. Each Lender’s obligation to make a Term Loan is subject to the condition precedent that Collateral Agent and each Lender shall consent to or shall have received, in form and substance satisfactory to Collateral Agent and
each Lender, such documents, and completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate, including, without limitation: 

(a) original Loan Documents, each duly executed by Borrower and each Subsidiary, as applicable; 

  
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 (b) duly executed original Control Agreements with respect to any Collateral Accounts maintained
by Borrower or any of its Subsidiaries; 
 (c) duly executed original Secured Promissory Notes in favor of each Lender according to its
Term Loan Commitment Percentage; 
 (d) [Reserved]; 

(e) the Operating Documents and good standing certificates of Borrower and its Subsidiaries certified by the Secretary of State (or equivalent
agency) of Borrower’s and such Subsidiaries’ jurisdiction of organization or formation and each jurisdiction in which Borrower and each Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days
prior to the Effective Date; 
 (f) a completed Perfection Certificate for Borrower and each of its Subsidiaries; 

(g) the Annual Projections, for the current calendar year; 

(h) duly executed original officer’s certificate for Borrower and each Subsidiary that is a party to the Loan Documents, in a form
acceptable to Collateral Agent and the Lenders; 
 (i) certified copies, dated as of date no earlier than thirty (30) days prior to the
Effective Date, of financing statement searches, as Collateral Agent shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted
Liens or have been or, in connection with the initial Credit Extension, will be terminated or released; 
 (j) to the extent requested by
the Lenders, a landlord’s consent executed in favor of Collateral Agent in respect of all of Borrower’s and each Subsidiaries’ leased locations; 

(k) a bailee waiver executed in favor of Collateral Agent in respect of each third party bailee where Borrower or any Subsidiary maintains
Collateral having a book value in excess of Two Hundred Fifty Thousand Dollars ($250,000.00); 
 (l) a duly executed legal opinion of
counsel to Borrower dated as of the Effective Date; 
 (m) evidence satisfactory to Collateral Agent and the Lenders that the insurance
policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit of the
Lenders; 
 (n) a copy of any applicable Registration Rights Agreement or Investors’ Rights Agreement and any amendments thereto; 

(o) a copy of the Celgene Negative Pledge and Amendment Agreement; 

(p) a subordination agreement, duly executed by each holder of Subordinated Debt; and 

(q) payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof. 

3.2 Conditions Precedent to all Credit Extensions. The obligation of each Lender to make each Credit Extension, including the
initial Credit Extension, is subject to the following conditions precedent: 
 (a) receipt by (i) the Lenders of an executed
Disbursement Letter in the form of Exhibit B-1 attached hereto; and (ii) SVB of an executed Loan Payment/Advance Request Form in the form of
Exhibit B-2 attached hereto; 

  
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 (b) the representations and warranties in Section 5 hereof shall be true, accurate and
complete in all material respects on the date of the Disbursement Letter (and the Loan Payment/Advance Request Form) and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and
warranties in Section 5 hereof are true, accurate and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; 

(c) in such Lender’s sole but reasonable discretion, there has not been any Material Adverse Change; 

(d) to the extent not delivered at the Effective Date, (i) duly executed original Secured Promissory Notes in the form attached hereto as
Exhibit D in favor of each Lender according to its Commitment Percentage, with respect to each Credit Extension made by such Lender after the Effective Date and (ii) Warrants, in number, form and content acceptable to each Lender, and in
favor of each Lender to purchase a certain number of shares of the Preferred Stock (as defined in the Warrant) as set forth therein; and 

(e) payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof. 

3.3 Covenant to Deliver. Borrower agrees to deliver to Collateral Agent and the Lenders each item required to be
delivered to Collateral Agent under this Agreement as a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Collateral Agent or any Lender of any such item shall not constitute
a waiver by Collateral Agent or any Lender of Borrower’s obligation to deliver such item, and any such Credit Extension in the absence of a required item shall be made in each Lender’s sole discretion. 

3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan
set forth in this Agreement, to obtain a Term Loan, Borrower shall notify the Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 3:00 PM Eastern time five (5) Business Days prior to the date the Term Loan
is to be made. Together with any such electronic, facsimile or telephonic notification, Borrower shall deliver to the Lenders by electronic mail or facsimile a completed Disbursement Letter (and the Loan Payment/Advance Request Form, with respect to
SVB) executed by a Responsible Officer or his or her designee. The Lenders may rely on any telephone notice given by a person whom a Lender reasonably believes is a Responsible Officer or designee. On the Funding Date, each Lender shall credit
and/or transfer (as applicable) to the Designated Deposit Account, an amount equal to its Term Loan Commitment. 
  

	4.	CREATION OF SECURITY INTEREST 

 4.1 Grant of Security Interest.
Borrower hereby grants Collateral Agent, for the ratable benefit of the Lenders, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent, for the ratable benefit of
the Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all
times continue to be a first priority perfected security interest in the Collateral, subject only to Permitted Liens that are permitted by the terms of this Agreement to have priority to Collateral Agent’s Lien. If Borrower shall acquire a
commercial tort claim (as defined in the Code), Borrower, shall promptly notify Collateral Agent in a writing signed by Borrower, as the case may be, of the general details thereof (and further details as may be required by Collateral Agent) and
grant to Collateral Agent, for the ratable benefit of the Lenders, in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory
to Collateral Agent. 

  
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 Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank
Services Agreements with Bank. Unless otherwise provided in any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to
have all such Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Permitted Liens that may have superior priority to Bank’s Lien in this Agreement). 

If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than inchoate
indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to make Credit Extensions has terminated, Collateral
Agent shall, at the sole cost and expense of Borrower, release its Liens in the Collateral (including by filing any appropriate termination statements and executing such other documents reasonably requested by Borrower, and at the sole cost and
expense of Borrower, to effect and/or evidence the termination of its Liens in the Collateral) and all rights therein shall revert to Borrower. In the event (x) all Obligations (other than inchoate indemnity obligations), except for Bank
Services, are satisfied in full, and (y) this Agreement is terminated, Collateral Agent shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment for Bank
Services, if any. In the event such Bank Services consist of outstanding Letters of Credit, it shall be sufficient cash collateral acceptable to Bank for securing such Bank Services in applying the provisions of clause (y) with respect to Bank
Services that consist of Letters of Credit, if Borrower provides, to Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then one hundred five percent (105%); and (y) if such Letters of
Credit are denominated in a Foreign Currency, then one hundred ten percent (110%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as
estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to such Letters of Credit. 
 4.2
Authorization to File Financing Statements. Borrower hereby authorizes Collateral Agent to file financing statements or take any other action required to perfect Collateral Agent’s security interests in the Collateral, without notice to
Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent’s interest or rights under the Loan Documents, including a notice that any disposition of the Collateral, except to the extent permitted by the terms of this
Agreement, by Borrower, or any other Person, shall be deemed to violate the rights of Collateral Agent under the Code. 
 4.3
Pledge of Collateral. Borrower hereby pledges, assigns and grants to Collateral Agent, for the ratable benefit of the Lenders, a security interest in all the Shares, together with all proceeds and substitutions thereof, all cash, stock and
other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the Obligations. On the
Effective Date, or, to the extent not certificated as of the Effective Date, within ten (10) days of the certification of any Shares, the certificate or certificates for the Shares will be delivered to Collateral Agent, accompanied by an
instrument of assignment duly executed in blank by Borrower. To the extent required by the terms and conditions governing the Shares, Borrower shall cause the books of each entity whose Shares are part of the Collateral and any transfer agent to
reflect the pledge of the Shares. Upon the occurrence and during the continuance of an Event of Default hereunder, Collateral Agent may effect the transfer of any securities included in the Collateral (including but not limited to the Shares) into
the name of Collateral Agent and cause new (as applicable) certificates representing such securities to be issued in the name of Collateral Agent or its transferee. Borrower will execute and deliver such documents, and take or cause to be taken such
actions, as Collateral Agent may reasonably request to perfect or continue the perfection of Collateral Agent’s security interest in the Shares. Unless an Event of Default shall have occurred and be continuing, Borrower shall be entitled to
exercise any voting rights with respect to the Shares and to give consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken which would be inconsistent with
any of the terms of this Agreement or which would constitute or create any violation of any of such terms. All such rights to vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance of an Event of
Default. 

  
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	5.	REPRESENTATIONS AND WARRANTIES 

 Borrower represents and warrants to Collateral
Agent and the Lenders as follows: 
 5.1 Due Organization, Authorization: Power and Authority. Borrower and each of its
Subsidiaries is duly existing and in good standing as a Registered Organization in its jurisdictions of organization or formation and Borrower and each of its Subsidiaries is qualified and licensed to do business and is in good standing in any
jurisdiction in which the conduct of its businesses or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a Material Adverse Change. In connection with this Agreement,
Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed perfection certificate signed by an officer of Borrower or such Subsidiary (each a “Perfection Certificate” and collectively, the
“Perfection Certificates”). Borrower represents and warrants that as of the Effective Date (a) Borrower and each of its Subsidiaries’ exact legal name is that which is indicated on its respective Perfection Certificate and
on the signature page of each Loan Document to which it is a party; (b) Borrower and each of its Subsidiaries is an organization of the type and is organized in the jurisdiction set forth on its respective Perfection Certificate; (c) each
Perfection Certificate accurately sets forth each of Borrower’s and its Subsidiaries’ organizational identification number or accurately states that Borrower or such Subsidiary has none; (d) each Perfection Certificate accurately sets
forth Borrower’s and each of its Subsidiaries’ place of business, or, if more than one, its chief executive office as well as Borrower’s and each of its Subsidiaries’ mailing address (if different than its chief executive
office); (e) Borrower and each of its Subsidiaries (and each of its respective predecessors) have not, in the past five (5) years, changed its jurisdiction of organization, organizational structure or type, or any organizational number
assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificates pertaining to Borrower and each of its Subsidiaries, is accurate and complete as of the Effective Date and as of any date that such Perfection
Certificates may be updated after the Effective Date to the extent permitted by one or more specific provisions in this Agreement; such updated Perfection Certificates subject to the review and approval of Collateral Agent. If Borrower or any of its Subsidiaries is not now a Registered Organization but later becomes one, Borrower shall notify Collateral Agent of such occurrence and provide Collateral Agent with such
Person’s organizational identification number within five (5) Business Days of receiving such organizational identification number. 

The execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is a party have been duly
authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’ organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any
material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or such Subsidiary, or any of
their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been
obtained and are in full force and effect) or are being obtained pursuant to Section 6.1(b), or (v) constitute an event of default under any material agreement by which Borrower or any of such Subsidiaries, or their respective properties,
is bound. Neither Borrower nor any of its Subsidiaries is in default under any agreement to which it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to have a Material Adverse Change. 

5.2 Collateral. 
 (a)
Borrower and each of its Subsidiaries have good title to, have rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted
Liens, and neither Borrower nor any of its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the Collateral Accounts or the other investment accounts, if any, described in the
Perfection Certificates delivered to Collateral Agent in connection herewith with respect of which Borrower or such Subsidiary has given Collateral Agent notice and taken such actions as are necessary to give Collateral Agent a perfected security
interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. 
 (b) On the Effective Date, and except as
disclosed on the Perfection Certificate (i) the Collateral is not in the possession of any third party bailee (such as a warehouse), and (ii) no such third party bailee possesses components of the Collateral in excess of Two Hundred Fifty
Thousand Dollars ($250,000.00). None of the components of the Collateral shall be maintained at locations other than as disclosed in the Perfection Certificates on the Effective Date or as permitted pursuant to Section 6.11. 

  
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 (c) All Inventory is in all material respects of good and marketable quality, free from material
defects. 
 (d) Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free
and clear of all Liens other than Permitted Liens. Except as noted on the Perfection Certificates or otherwise notified to Collateral Agent in writing after the Effective Date, neither Borrower nor any of its Subsidiaries is a party to, nor is bound
by, any material license or other material agreement with respect to which Borrower or such Subsidiary is the licensee that (i) prohibits or otherwise restricts Borrower or its Subsidiaries from granting a security interest in Borrower’s
or such Subsidiaries’ interest in such material license or material agreement or any other property, or (ii) for which a default under or termination of could interfere with Collateral Agent’s or any Lender’s right to sell any
Collateral. Borrower shall provide written notice to Collateral Agent and each Lender within ten (10) Business Days of Borrower or any of its Subsidiaries entering into or becoming bound by any material license or other material agreement with
respect to which Borrower or any Subsidiary is the licensee (other than over-the-counter software that is commercially available to the public). 

5.3 Litigation. Except as disclosed (i) on the Perfection Certificates, or (ii) in accordance with Section 6.9
hereof, there are no actions, suits, investigations, or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than Two Hundred Fifty Thousand
Dollars ($250,000.00). 
 5.4 No Material Deterioration in Financial Condition; Financial Statements. All consolidated
financial statements for Borrower and its Subsidiaries, delivered to Collateral Agent fairly present, in conformity with GAAP, as applicable, in all material respects the consolidated financial condition of Borrower and its Subsidiaries, and the
consolidated results of operations of Borrower and its Subsidiaries. There has not been any material deterioration in the consolidated financial condition of Borrower and its Subsidiaries since the date of the most recent financial statements
submitted to any Lender. 
 5.5 Solvency. Borrower is, and Borrower and each of its Subsidiaries, taken as a whole, are,
Solvent. 
 5.6 Regulatory Compliance. Neither Borrower nor any of its Subsidiaries is an “investment company” or a
company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock
(under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower and each of its Subsidiaries has complied in all material respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries is a
“holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005. Neither
Borrower nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Change. Neither Borrower’s nor any of its Subsidiaries’ properties or assets
has been used by Borrower or such Subsidiary or, to Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with applicable laws. Borrower
and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as
currently conducted. 
 None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of
their respective agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or
conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a
Blocked Person. None of Borrower, any of its Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement,
(x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or
interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law. 

  
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 5.7 Investments. Neither Borrower nor any of its Subsidiaries owns any stock,
shares, partnership interests or other equity securities except for Permitted Investments. 
 5.8 Tax Returns and Payments;
Pension Contributions. Borrower and each of its Subsidiaries has timely filed all required tax returns and reports, and Borrower and each of its Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits
and contributions owed by Borrower and such Subsidiaries, in all jurisdictions in which Borrower or any such Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in accordance with the following sentence
or unless such unpaid state and/or local taxes do not exceed $25,000 in the aggregate. Borrower and each of its Subsidiaries, may defer payment of any contested taxes, provided that Borrower or such Subsidiary, (a) in good faith contests its
obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Collateral Agent in writing of the commencement of, and any material development in, the proceedings, and (c) posts bonds
or takes any other steps required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.” Neither Borrower nor any of its
Subsidiaries is aware of any claims or adjustments proposed for any of Borrower’s or such Subsidiaries’, prior tax years which could result in additional taxes becoming due and payable by Borrower or its Subsidiaries. Borrower and each of
its Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and neither Borrower nor any of its Subsidiaries have, withdrawn from participation in, and
have not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower or its Subsidiaries, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority. 
 5.9 Use of
Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements in accordance with the provisions of this Agreement, and not for personal, family, household or
agricultural purposes. 
 5.10 Shares. Borrower has full power and authority to create a first lien on the Shares and no
disability or contractual obligation exists that would prohibit Borrower from pledging the Shares pursuant to this Agreement. To Borrower’s knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on
transfer relative to, or options exercisable with respect to the Shares. The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable. To Borrower’s
knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and Borrower knows of no reasonable grounds for the institution of any such proceedings. 

5.11 Full Disclosure. No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any
certificate or written statement given to Collateral Agent or any Lender in connection with the transactions contemplated hereby, as of the date such representation, warranty, or other statement was made, taken together with all such written
certificates and written statements given to Collateral Agent or any Lender with respect to the transactions contemplated hereby, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements
contained in the certificates or statements not misleading (it being recognized that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the
period or periods covered by such projections and forecasts may differ from the projected or forecasted results).  
 5.12
Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar
qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers. 

  
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	6.	AFFIRMATIVE COVENANTS 

 Borrower shall, and shall cause each of its Subsidiaries
to, do all of the following: 
 6.1 Government Compliance. 

(a) Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization and
maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change. Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject,
the noncompliance with which could reasonably be expected to have a Material Adverse Change. 
 (b) Obtain and keep in full force and
effect, all of the material Governmental Approvals necessary for the performance by Borrower and its Subsidiaries of their respective businesses and obligations under the Loan Documents and the grant of a security interest to Collateral Agent for
the ratable benefit of the Lenders, in all of the Collateral. Borrower shall promptly provide copies to Collateral Agent of any material Governmental Approvals obtained by Borrower or any of its Subsidiaries. 

6.2 Financial Statements, Reports, Certificates. 

(a) Deliver to each Lender: 
 (i)
as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated and consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of
Borrower and its Subsidiaries for such month certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end GAAP and audit adjustments and the absence of
footnotes) and in a form reasonably acceptable to Collateral Agent; 
 (ii) as soon as available, but no later than two hundred ten
(210) days after the last day of Borrower’s fiscal year (and three hundred sixty-five (365) days after the last day of Borrower’s fiscal year ending December 31, 2016) or within five (5) days of filing with the SEC,
audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion (other than a going-concern qualification typical for venture backed companies similar to Borrower) on the financial statements
from an independent certified public accounting firm; 
 (iii) as soon as available after approval thereof by Borrower’s Board of
Directors, but no later than thirty (30) days after the last day of each of Borrower’s fiscal years, Borrower’s annual financial projections for the entire current fiscal year as approved by Borrower’s Board of Directors,
which such annual financial projections shall be set forth in a month-by-month format (such annual financial projections delivered under this Section 6.3(a)(iii) to
Collateral Agent and the Lenders are referred to herein as the “Annual Projections”; provided that, any revisions of the Annual Projections approved by Borrower’s Board of Directors shall be delivered to Collateral Agent and
the Lenders no later than seven (7) days after such approval); 
 (iv) within five (5) days of delivery, copies of all
statements, reports and notices made available to Borrower’s security holders or holders of Subordinated Debt; 
 (v) in the event
(and during the period) that Borrower becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission, 

(vi) Borrower shall prompt notice of any material amendments of or other material changes to the capitalization table of Borrower and any
amendments of or other changes to the Operating Documents of Borrower or any of its Subsidiaries, together with any copies reflecting such amendments or changes with respect thereto; 

  
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 (vii) prompt notice of any event (other than with respect to any third party) that could
reasonably be expected to materially and adversely affect the value of the Intellectual Property; 
 (viii) as soon as available, but no
later than thirty (30) days after the last day of each month, copies of the month-end account statements for each Collateral Account maintained by Borrower or its Subsidiaries, which statements may be
provided to Collateral Agent and each Lender by Borrower or directly from the applicable institution(s), and 
 (ix) other information as
reasonably requested by Collateral Agent or any Lender. 
 Notwithstanding the foregoing, documents required to be delivered pursuant to the terms hereof
(to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a
link thereto, on Borrower’s website on the internet at Borrower’s website address. 
 (b) Concurrently with the delivery of the
financial statements specified in Section 6.2(a)(i) above but no later than thirty (30) days after the last day of each month, deliver to each Lender, a duly completed Compliance Certificate signed by a Responsible Officer. 

(c) Keep proper books of record and account in accordance with GAAP in all material respects (except for interim and unaudited financial
statements), in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities. Borrower shall, and shall cause each of its Subsidiaries to, allow, at the sole cost of Borrower,
Collateral Agent or any Lender, during regular business hours upon reasonable prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing), to visit and inspect any of its properties, to examine
and make abstracts or copies from any of its books and records, and to conduct a collateral audit and analysis of its operations and the Collateral. Such audits shall be conducted no more often than twice every year unless (and more frequently if)
an Event of Default has occurred and is continuing. 
 6.3 Inventory; Returns. Keep all Inventory in good and marketable
condition, free from material defects. Returns and allowances between Borrower, or any of its Subsidiaries, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s, customary practices as they exist at the
Effective Date. Borrower must promptly notify Collateral Agent and the Lenders of all returns, recoveries, disputes and claims that involve more than Two Hundred Fifty Thousand Dollars ($250,000.00) individually or in the aggregate in any calendar
year. 
 6.4 Taxes; Pensions. Timely file and require each of its Subsidiaries to timely file, all required tax returns and
reports and timely pay, and require each of its Subsidiaries to timely file, all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower or its Subsidiaries, except for deferred payment of any taxes
contested pursuant to the terms of Section 5.8 hereof, and shall deliver to Lenders, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with the terms of such plans. 
 6.5 Insurance. Keep Borrower’s and its
Subsidiaries’ business and the Collateral insured for risks and in amounts standard for companies in Borrower’s and its Subsidiaries’ industry and location and as Collateral Agent may reasonably request. Insurance policies shall be in
a form, with companies, and in amounts that are reasonably satisfactory to Collateral Agent and Lenders. All property policies shall have a lender’s loss payable endorsement showing Collateral Agent as lender loss payee and waive subrogation
against Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral Agent, as additional insured. The Collateral Agent shall be named as lender loss payee and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and each provider of any such insurance agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Collateral Agent, that it will give the
Collateral Agent thirty (30) days prior written notice before any such policy or policies shall be materially altered or canceled; provide that in the event that any provider of any such insurance refuses to give the Collateral Agent thirty
(30) days prior written notice before any such policy or policies shall be materially altered or canceled, then Borrower shall (i) give the Collateral Agent twenty (20) days prior written notice before Borrower initiates any material
alteration or cancels any such policy or policies, and (ii) immediately give the Collateral Agent written 

  
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notice upon obtaining knowledge that any such policy or policies shall be materially altered or canceled by a provider of any such insurance. At Collateral Agent’s request, Borrower shall
deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Collateral Agent’s option, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the
Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Two Hundred Fifty Thousand Dollars ($250,000.00)
with respect to any loss, but not exceeding Five Hundred Thousand Dollars ($500,000.00), in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that
any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority security interest, and
(b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders, on
account of the Obligations. If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons, Collateral Agent and/or any Lender
may make, at Borrower’s expense, all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Collateral Agent or such Lender deems prudent.  
 6.6 Operating Accounts. 

(a) Maintain all of Borrower’s and its Subsidiaries’ Collateral Accounts with Bank or its Affiliates in accounts which are subject to
a Control Agreement in favor of Collateral Agent. 
 (b) Borrower shall provide Collateral Agent five (5) days’ prior written
notice before Borrower or any of its Subsidiaries establishes any Collateral Account at or with any Person other than Bank or its Affiliates. In addition, subject to the terms of the Post Closing Letter for each Collateral Account that Borrower or
any of its Subsidiaries, at any time maintains, Borrower or such Subsidiary shall cause the applicable bank or financial institution at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other
appropriate instrument with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account in accordance with the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement
may not be terminated without prior written consent of Collateral Agent. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of Borrower’s, or any of its Subsidiaries’, employees and identified to Collateral Agent by Borrower as such in the Perfection Certificates as may be updated after the Effective Date subject to the review and approval of
Collateral Agent. 
 (c) Neither Borrower nor any of its Subsidiaries shall maintain any Collateral Accounts except Collateral Accounts
maintained in accordance with Sections 6.6(a) and (b). 
 6.7 Protection of Intellectual Property Rights. Borrower and
each of its Subsidiaries shall: (a) use commercially reasonable efforts consistent with current business practices to protect, defend and maintain the validity and enforceability of its Intellectual Property that is material to Borrower’s
business; (b) promptly after Borrower becomes aware thereof advise Collateral Agent in writing of material infringement by a third party of its Intellectual Property that is material to Borrower’s business; and (c) not allow any
Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Collateral Agent’s prior written consent, provided, however, Borrower may abandon, modify or delay filing, prosecution or
issuance of any immaterial Intellectual Property without Collateral Agent’s prior written consent if Borrower determines in its reasonable discretion that further prosecution of such application is not commercially reasonable, and provides
Collateral Agent with prompt written notice of the same. 
 6.8 Litigation Cooperation. Commencing on the Effective Date and
continuing through the termination of this Agreement, make available to Collateral Agent and the Lenders, without expense to Collateral Agent or the Lenders at reasonable times and with reasonable advance notice, Borrower and each of Borrower’s
officers, employees and agents and Borrower’s Books, to the extent that Collateral Agent or any Lender may reasonably deem them necessary to prosecute or defend any third-party suit or proceeding
instituted by or against Collateral Agent or any Lender with respect to any Collateral or relating to Borrower. In such event, Collateral Agent and the Lenders shall work cooperatively with Borrower to minimize disruption, to the extent reasonably
possible, of Borrower’s ongoing operations. 

  
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 6.9 Notices of Litigation and Default. Borrower will give prompt written notice to
Collateral Agent and the Lenders of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably be expected to result in damages or costs to Borrower or any of its
Subsidiaries of Two Hundred Fifty Thousand Dollars ($250,000.00) or more or which could reasonably be expected to have a Material Adverse Change. Without limiting or contradicting any other more specific provision of this Agreement, promptly (and in
any event within three (3) Business Days) upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, Borrower shall give
written notice to Collateral Agent and the Lenders of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute
an Event of Default. 
 6.10 Financial Covenant. For so long as the Celgene Negative Pledge and Amendment Agreement remains in
effect, Borrower shall maintain at all times a minimum aggregate available cash balance of Seven Million Five Hundred Thousand Dollars ($7,500,000) in Collateral Accounts (excluding any restricted accounts) with Bank or its Affiliates which are
subject to Control Agreements in favor of Collateral Agent. 
 6.11 Landlord Waivers; Bailee Waivers. In the event that
Borrower or any of its Subsidiaries, after the Effective Date, intends to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver any portion of the Collateral to, a bailee,
in each case pursuant to Section 7.2, then Borrower or such Subsidiary will first receive the written consent of Collateral Agent (unless the new location is not the chief executive office of Borrower or such Subsidiary or the Collateral at
such new location is not valued in excess of Two Hundred Fifty Thousand ($250,000.00) in the aggregate, and then Borrower or such Subsidiary shall only be required to provide Collateral Agent with written notice of such new location with thirty
(30) days of the addition of such new location as an office or business location) and, in the event that the new location is the chief executive office of Borrower or such Subsidiary or the Collateral at any such new location is valued in
excess of Two Hundred Fifty Thousand ($250,000.00) in the aggregate, such bailee or landlord, as applicable, must execute and deliver a bailee waiver or landlord waiver, as applicable, in form and substance reasonably satisfactory to Collateral
Agent prior to the addition of any new offices or business locations, or any such storage with or delivery to any such bailee, as the case may be. 

6.12 Creation/Acquisition of Subsidiaries. In the event Borrower, or any of its Subsidiaries creates or acquires any Subsidiary,
Borrower shall provide prior written notice to Collateral Agent and each Lender of the creation or acquisition of such new Subsidiary and take all such action as may be reasonably required by Collateral Agent or any Lender to cause each such
Subsidiary to become a co-Borrower hereunder or to guarantee the Obligations of Borrower under the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the assets of such
Subsidiary (substantially as described on Exhibit A hereto); and Borrower (or its Subsidiary, as applicable) shall grant and pledge to Collateral Agent, for the ratable benefit of the Lenders, a perfected security interest
in the Shares of each such newly created Subsidiary; provided, however, that solely in the circumstance in which Borrower or any Subsidiary creates or acquires a Foreign Subsidiary in an acquisition permitted by Section 7.7 hereof or otherwise
approved by the Required Lenders, (i) such Foreign Subsidiary shall not be required to become a co-Borrower hereunder, guarantee the Obligations of Borrower under the Loan Documents and grant a continuing
pledge and security interest in and to the assets of such Foreign Subsidiary, and (ii) Borrower shall not be required to grant and pledge to Collateral Agent, for the ratable benefit of Lenders, a perfected security interest in more than sixty-five percent (65%) of the Shares of such Foreign Subsidiary, if Borrower demonstrates to the reasonable satisfaction of Collateral Agent that such Foreign Subsidiary providing such guarantee or pledge and
security interest or Borrower providing a perfected security interest in more than sixty-five percent (65%) of the Shares would create a present and existing adverse tax consequence to Borrower under the U.S.
Internal Revenue Code. 

  
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 6.13 Further Assurances. 

(a) Execute any further instruments and take further action as Collateral Agent or any Lender reasonably requests to perfect or continue
Collateral Agent’s Lien in the Collateral or to effect the purposes of this Agreement. 
 (b) Deliver to Collateral Agent and Lenders,
within five (5) days after the same are sent or received, copies of all material correspondence, reports, documents and other filings with any Governmental Authority that could reasonably be expected to have a material adverse effect on any of
the Governmental Approvals material to Borrower’s business or otherwise could reasonably be expected to have a Material Adverse Change. 
  

	7.	NEGATIVE COVENANTS 

 Borrower shall not, and shall not permit any of its
Subsidiaries to, do any of the following without the prior written consent of the Required Lenders: 
 7.1 Dispositions.
Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the
ordinary course of business; (b) of worn out or obsolete Equipment; (c) of property by the Borrower to a Subsidiary that is a Guarantor; (d) in connection with Permitted Assignments, Permitted Liens, Permitted Investments
and Permitted Licenses; and (e) Transfers in the ordinary course of business of Borrower, or its Subsidiaries, in addition to those specifically enumerated above, to the extent the same are specifically reflected in the Annual Projections
and not otherwise prohibited by the terms of this Agreement or any other Loan Document. 
 7.2 Changes in Business, Management,
Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses engaged in by Borrower as of the Effective Date or reasonably related thereto; (b) liquidate
or dissolve; or (c) (i) any Key Person shall cease to be actively engaged in the management of Borrower unless written notice thereof is provided to Collateral Agent within five (5) Business Days of such change, or (ii) enter
into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty nine percent (49%) of the voting stock of Borrower immediately
after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower’s equity securities in a public offering, a private placement of public equity or to venture capital investors so long as
Borrower identifies to Collateral Agent the venture capital investors prior to the closing of the transaction). Borrower shall not, without at least thirty (30) days’ prior written notice to Collateral Agent: (A) add any new offices
or business locations, including warehouses (unless such new offices or business locations (i) contain less than Two Hundred Fifty Thousand Dollars ($250,000.00) in assets or property of Borrower or any of its Subsidiaries and (ii) are not
Borrower’s or its Subsidiaries’ chief executive office); (B) change its jurisdiction of organization, (C) change its organizational structure or type, (D) change its legal name, or (E) change any organizational number (if
any) assigned by its jurisdiction of organization. 
 7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, shares or property of another Person. A Subsidiary may merge or consolidate into
another Subsidiary (provided such surviving Subsidiary is a “co-Borrower” hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder) or with (or into) Borrower provided
Borrower is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises as a result therefrom. Without limiting the foregoing, Borrower shall not, without Collateral Agent’s prior written consent, enter
into any binding contractual arrangement with any Person to attempt to facilitate a merger or acquisition of Borrower, unless (i) no Event of Default exists when such agreement is entered into by Borrower, (ii) such agreement does not give
such Person the right to claim any fees, payments or damages from Borrower in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), and (iii) Borrower notifies Collateral Agent in advance of entering into such an agreement. 

7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than
Permitted Indebtedness. 

  
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 7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property,
or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted
herein (except for Permitted Liens that are permitted by the terms of this Agreement to have priority over Collateral Agent’s Lien), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral
Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a security interest in or
upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein or in the Celgene Negative
Pledge and Amendment Agreement. 
 7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to
the terms of Section 6.6 hereof. 
 7.7 Distributions; Investments. (a) Pay any dividends (other than dividends
payable solely in capital stock) or make any distribution or payment in respect of or redeem, retire or purchase any capital stock (other than repurchases (x) made pursuant to the terms of employee stock purchase plans, employee restricted
stock agreements, stockholder rights plans, director or consultant stock option plans, or similar plans, provided such repurchases do not exceed One Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate per fiscal year, (y) that are
deemed to occur upon exercise of stock options or warrants if such equity interests represents a portion of the exercise price or such options or warrants, or (z) that are deemed to occur upon the withholding of a portion of the equity
interests granted or awarded to a current or former officer, director, employee or consultant to pay for the taxes payable by such Person upon such grant or award (or upon vesting thereof), or (b) directly or indirectly make any Investment
other than Permitted Investments, or permit any of its Subsidiaries to do so. 
 7.8 Transactions with Affiliates. Directly or
indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower or any of its Subsidiaries, except for (a) transactions that are in the ordinary course of Borrower’s or such Subsidiary’s business, upon
fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non-affiliated Person, and (b) Subordinated Debt or
equity investments by Borrower’s investors in Borrower or its Subsidiaries. 
 7.9 Subordinated Debt. (a) Make or
permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to the Lenders. 

7.10 Compliance. Become an “investment company” or a company controlled by an “investment company”, under
the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the
proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act
or violate any other law or regulation, if the violation could reasonably be expected to have a Material Adverse Change, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial
or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower or any of its
Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority. 

7.11 Compliance with Anti-Terrorism Laws. Collateral Agent hereby notifies
Borrower and each of its Subsidiaries that pursuant to the requirements of Anti-Terrorism Laws, and Collateral Agent’s policies and practices, Collateral Agent is required to obtain, verify and record
certain information and documentation that identifies Borrower and each of its Subsidiaries and their principals, which information includes the name and address of Borrower and each of its Subsidiaries and their principals and such other
information that will allow Collateral Agent to identify such party in accordance with Anti-Terrorism Laws. Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries
permit any Affiliate to, directly or indirectly, 

  
 15 

 
knowingly enter into any documents, instruments, agreements or contracts with any Person listed on the OFAC Lists. Borrower and each of its Subsidiaries shall immediately notify Collateral Agent
if Borrower or such Subsidiary has knowledge that Borrower, or any Subsidiary or Affiliate of Borrower, is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is
arraigned and held over on charges involving money laundering or predicate crimes to money laundering. Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries, permit any Affiliate to, directly or
indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked
Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order or other
Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth
in Executive Order No. 13224 or other Anti-Terrorism Law. 
  

	8.	EVENTS OF DEFAULT 

 Any one of the following shall constitute an event of default
(an “Event of Default”) under this Agreement: 
 8.1 Payment Default. Borrower fails to (a) make any
payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period shall not
apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 9.1 (a) hereof). During the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made
during the cure period); 
 8.2 Covenant Default. 

(a) Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections 6.2 (Financial Statements, Reports,
Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Notice of Litigation and Default), 6.10 (Financial Covenant), 6.12 (Creation/Acquisition of Subsidiaries) or 6.13 (Further
Assurances) or Borrower violates any covenant in Section 7; or 
 (b) Borrower, or any of its Subsidiaries, fails or neglects to
perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or
cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty
(30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Grace periods provided
under this Section shall not apply, among other things, to financial covenants or any other covenants set forth in subsection (a) above; 

8.3 Material Adverse Change. A Material Adverse Change occurs; 

8.4 Attachment; Levy; Restraint on Business. 

(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Subsidiaries or of
any entity under control of Borrower or its Subsidiaries on deposit with any Lender or any Lender’s Affiliate or any bank or other institution at which Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a notice of
lien, levy, or assessment is filed against Borrower or any of its Subsidiaries or their respective assets by any government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence
thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; and 

  
 16 

 (b) (i) any material portion of Borrower’s or any of its Subsidiaries’ assets is
attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries from conducting any part of its business; 

8.5 Insolvency. (a) Borrower or any of its Subsidiaries is or becomes Insolvent; (b) Borrower or any of its
Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and not dismissed or stayed within forty-five (45) days (but no
Credit Extensions shall be made while Borrower or any Subsidiary is Insolvent and/or until any Insolvency Proceeding is dismissed); 

8.6 Other Agreements. There is a default in any agreement to which Borrower or any of its Subsidiaries is a party with a third
party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) or that could reasonably be
expected to have a Material Adverse Change; 
 8.7 Judgments. One or more judgments, orders, or decrees for the payment of
money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000.00) (not covered by independent third-party insurance as to which liability has been accepted by
such insurance carrier) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided that no Credit Extensions will be made
prior to the satisfaction, vacation, or stay of such judgment, order or decree); 
 8.8 Misrepresentations. Borrower or any of
its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or Lenders or
to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made; 

8.9 Subordinated Debt. A default or breach occurs under any agreement between Borrower or any of its Subsidiaries and any
creditor of Borrower or any of its Subsidiaries that signed a subordination, intercreditor, or other similar agreement with Collateral Agent or the Lenders, or any creditor that has signed such an agreement with Collateral Agent or the Lenders
breaches any terms of such agreement; 
 8.10 Guaranty. (a) Any Guaranty terminates or ceases for any reason to be in
full force and effect; (b) any Guarantor does not perform any obligation or covenant under any Guaranty; (c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor, or (d) the
liquidation, winding up, or termination of existence of any Guarantor; 
 8.11 Governmental Approvals. Any Governmental
Approval shall have been revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term and such revocation, rescission, suspension, modification or
non-renewal has resulted in or could reasonably be expected to result in a Material Adverse Change; or 

8.12 Lien Priority. Any Lien created hereunder or by any other Loan Document shall at any time fail to constitute a valid and
perfected Lien on any of the Collateral purported to be secured thereby, subject to no prior or equal Lien, other than Permitted Liens which are permitted to have priority in accordance with the terms of this Agreement. 

 

	9.	RIGHTS AND REMEDIES 

 9.1 Rights and Remedies. 

(a) Upon the occurrence and during the continuance of an Event of Default, Collateral Agent may, and at the written direction of Required
Lenders shall, without notice or demand, do any or all of the following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an Event of
Default described in Section 8.5 occurs all Obligations shall be 

  
 17 

 
immediately due and payable without any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the obligations, if any, of the Lenders to advance
money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders (but if an Event of Default described in Section 8.5 occurs all obligations, if any,
of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately terminated without any action by Collateral
Agent or the Lenders). 
 (b) Without limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a) above,
upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any or all of the following: 

(i) foreclose upon and/or sell or otherwise liquidate, the Collateral; 

(ii) apply to the Obligations any (a) balances and deposits of Borrower that Collateral Agent or any Lender holds or controls, or
(b) any amount held or controlled by Collateral Agent or any Lender owing to or for the credit or the account of Borrower; and/or 

(iii) commence and prosecute an Insolvency Proceeding or consent to Borrower commencing any Insolvency Proceeding. 

(c) Without limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a) and (b) above, upon the occurrence
and during the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any or all of the following: 

(i) settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent considers
advisable, notify any Person owing Borrower money of Collateral Agent’s security interest in such funds, and verify the amount of such account; 

(ii) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the
Collateral. Borrower shall assemble the Collateral if Collateral Agent requests and make it available in a location as Collateral Agent reasonably designates. Collateral Agent may enter premises where the Collateral is located, take and maintain
possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Collateral Agent a license to enter and occupy
any of its premises, without charge, to exercise any of Collateral Agent’s rights or remedies; 
 (iii) ship, reclaim, recover, store,
finish, maintain, repair, prepare for sale, and/or advertise for sale, the Collateral. Collateral Agent is hereby granted a non-exclusive, royalty-free license or other
right to use, without charge, Borrower’s and each of its Subsidiaries’ labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any similar
property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Collateral Agent’s exercise of its rights under this Section 9.1, Borrower’s and each of
its Subsidiaries’ rights under all licenses and all franchise agreements inure to Collateral Agent, for the benefit of the Lenders; 

(iv) place a “hold” on any account maintained with Collateral Agent or the Lenders and/or deliver a notice of exclusive control,
any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral; 

(v) demand and receive possession of Borrower’s Books; 

(vi) appoint a receiver to seize, manage and realize any of the Collateral, and such receiver shall have any right and authority as any
competent court will grant or authorize in accordance with any applicable law, including any power or authority to manage the business of Borrower or any of its Subsidiaries; 

  
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 (vii) subject to clauses 9.1(a) and (b), exercise all rights and remedies available to
Collateral Agent and each Lender under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof); 

(viii) for any Letters of Credit, demand that Borrower (i) deposit cash with Bank in an amount equal to (x) if such Letters of
Credit are denominated in Dollars, then one hundred five percent (105%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then one hundred ten percent (110%), of the Dollar Equivalent of the aggregate face amount of all
Letters of Credit remaining undrawn (plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as
collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the
remaining term of any Letters of Credit; and 
 (ix) terminate any FX Contracts. 

Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default, Collateral Agent shall have the right to
exercise any and all remedies referenced in this Section 9.1 without the written consent of Required Lenders following the occurrence of an Exigent Circumstance. As used in the immediately preceding sentence, “Exigent
Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently threatens the ability of Collateral Agent to realize upon all or any material portion of the Collateral, such as, without
limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or reinstate adequate casualty insurance coverage, or
which, in the judgment of Collateral Agent, could reasonably be expected to result in a material diminution in value of the Collateral. Notwithstanding any provision of this Agreement or any of the Loan Documents to the contrary, for so long as
Celgene Corporation’s existing collaboration and license agreement (referring specifically to the agreement in effect since September 26, 2014) with Borrower remains in effect, Collateral Agent shall not exercise any of its rights or
remedies with respect to any Collateral located at 870 and 894 Industrial Road, San Carlos, CA 94070, for a period of five (5) Business Days following the occurrence of any Event of Default (other than an Event of Default described in
Section 8.5). 
 9.2 Power of Attorney. Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s or any of its Subsidiaries’ name
on any checks or other forms of payment or security; (b) sign Borrower’s or any of its Subsidiaries’ name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and
claims about the Accounts directly with Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any
Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Collateral
Agent or a third party as the Code or any applicable law permits. Borrower hereby appoints Collateral Agent as its lawful attorney-in-fact to sign Borrower’s or any
of its Subsidiaries’ name on any documents necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than
inchoate indemnity obligations) have been satisfied in full and Collateral Agent and the Lenders are under no further obligation to make Credit Extensions hereunder. Collateral Agent’s foregoing appointment as Borrower’s or any of its
Subsidiaries’ attorney in fact, and all of Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and
Collateral Agent’s and the Lenders’ obligation to provide Credit Extensions terminates. 
 9.3 Protective Payments.
If Borrower or any of its Subsidiaries fail to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower or any of its Subsidiaries is obligated to pay under this
Agreement or any other Loan Document, Collateral Agent may obtain such insurance or make such payment, and all amounts so paid by Collateral Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the Default Rate, and
secured by the Collateral. Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance or making such payment at the time it is obtained or paid or within a reasonable time thereafter.
No such payments by Collateral Agent are deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event of Default. 

  
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 9.4 Application of Payments and Proceeds. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by
Collateral Agent from or on behalf of Borrower or any of its Subsidiaries of all or any part of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on the other, Collateral Agent shall have the continuing and
exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent, and (b) the proceeds of any sale
of, or other realization upon all or any part of the Collateral shall be applied: first, to the Lenders’ Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the United
States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount of the Obligations outstanding; and fourth, to any other indebtedness or obligations of Borrower owing to Collateral Agent or any Lender under the Loan
Documents. Any balance remaining shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out the foregoing, (x) amounts received shall be
applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (y) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata
share of amounts available to be applied pursuant thereto for such category. Any reference in this Agreement to an allocation between or sharing by the Lenders of any right, interest or obligation “ratably,” “proportionally” or
in similar terms shall refer to Pro Rata Share unless expressly provided otherwise. Collateral Agent, or if applicable, each Lender, shall promptly remit to the other Lenders such sums as may be necessary to ensure the ratable repayment of each
Lender’s portion of any Term Loan and the ratable distribution of interest, fees and reimbursements paid or made by Borrower. Notwithstanding the foregoing, a Lender receiving a scheduled payment shall not be responsible for determining whether
the other Lenders also received their scheduled payment on such date; provided, however, if it is later determined that a Lender received more than its ratable share of scheduled payments made on any date or dates, then such Lender shall remit to
Collateral Agent or other Lenders such sums as may be necessary to ensure the ratable payment of such scheduled payments, as instructed by Collateral Agent. If any payment or distribution of any kind or character, whether in cash, properties or
securities, shall be received by a Lender in excess of its ratable share, then the portion of such payment or distribution in excess of such Lender’s ratable share shall be received by such Lender in trust for and shall be promptly paid over to
the other Lender for application to the payments of amounts due on the other Lenders’ claims. To the extent any payment for the account of Borrower is required to be returned as a voidable transfer or otherwise, the Lenders shall contribute to
one another as is necessary to ensure that such return of payment is on a pro rata basis. If any Lender shall obtain possession of any Collateral, it shall hold such Collateral for itself and as agent and bailee for Collateral Agent and other
Lenders for purposes of perfecting Collateral Agent’s security interest therein. 
 9.5 Liability for Collateral. So long
as Collateral Agent and the Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders shall not be liable
or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other
Person. Borrower bears all risk of loss, damage or destruction of the Collateral. 
 9.6 No Waiver; Remedies Cumulative.
Failure by Collateral Agent or any Lender, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Collateral Agent or any Lender
thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and purpose for
which it is given. The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents are cumulative. Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable
law, by law, or in equity. The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver. Collateral Agent’s
or any Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence. 

  
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 9.7 Demand Waiver. Borrower waives, to the fullest extent permitted by law, demand,
notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by
Collateral Agent or any Lender on which Borrower or any Subsidiary is liable. 
  

	10.	NOTICES 

 All notices, consents, requests, approvals, demands, or other
communication (collectively, “Communication”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual
receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission; (c) upon
delivery, when sent by email mail, (d) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (e) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Any of Collateral Agent, Lender or Borrower may change its mailing address or facsimile number by giving the other
party written notice thereof in accordance with the terms of this Section 10. 
  

					
		 	If to Borrower:	  	 Sutro Biopharma, Inc.
 310 Utah Street, Suite
150
 South San Francisco, CA 94080
 Attn: Edward Albini

Email:

			
		 	with a copy (which shall not constitute notice) to:	  	 Fenwick & West LLP
 555 California
Street
 San Francisco, CA 94104
 Attn: Matthew Rossiter

Fax:
 Email:

			
		 	If to Collateral Agent:	  	 OXFORD FINANCE LLC
 133 North Fairfax Street

Alexandria, Virginia 22314
 Attention: Legal Department

Fax:
 Email:

			
		 	with a copy to	  	 SILICON VALLEY BANK
 3003 Tasman Drive

Santa Clara, CA 95054
 Attn: Derek Scalf

Fax:
 Email:

			
		 	with a copy (which shall not constitute notice) to:	  	 Troutman Sanders LLP
 401 9th Street, NW, Suite 1000
 Washington, DC 20004

Attn: Charles Charpentier
 Fax:

Email:

  
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	11.	CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER, AND JUDICIAL REFERENCE 

 California
law governs the Loan Documents without regard to principles of conflicts of law. Borrower, Collateral Agent and each Lender each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided,
however, that nothing in this Agreement shall be deemed to operate to preclude Collateral Agent or any Lender from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of Collateral Agent or any Lender. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby
waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby
waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the
address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three
(3) days after deposit in the U.S. mails, proper postage prepaid. 
 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, COLLATERAL AGENT
AND EACH LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.
THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 
 WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies
of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in
accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County,
California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1,
inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such
proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that
point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before
a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial
proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall
have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the
right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability,
interpretation, and enforceability of this paragraph. 
  

	12.	GENERAL PROVISIONS 

 12.1 Successors and Assigns. This Agreement
binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent’s and each Lender’s prior written
consent (which may be granted or withheld in Collateral Agent’s and each Lender’s discretion, subject to Section 12.6). The Lenders have the right, 

  
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without the consent of or notice to Borrower, to sell, transfer, assign, pledge, negotiate, or grant participation in (any such sale, transfer, assignment, negotiation, or grant of
a participation, a “Lender Transfer”) all or any part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement and the other Loan Documents; provided, however, that any such
Lender Transfer (other than a transfer, pledge, sale or assignment to an Eligible Assignee) of its obligations, rights, and benefits under this Agreement and the other Loan Documents shall require the prior written consent of the Required Lenders
(such approved assignee, an “Approved Lender”). Borrower and Collateral Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned until Collateral Agent shall have
received and accepted an effective assignment agreement in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible
Assignee or Approved Lender as Collateral Agent reasonably shall require. Notwithstanding anything to the contrary contained herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other than a Lender Transfer
(i) in respect of the Warrants or (ii) in connection with (x) assignments by a Lender due to a forced divestiture at the request of any regulatory agency; or (y) upon the occurrence of a default, event of default or similar
occurrence with respect to a Lender’s own financing or securitization transactions) shall be permitted, without Borrower’s consent, to any Person which is an Affiliate or Subsidiary of Borrower, a direct competitor of Borrower or a vulture
hedge fund, each as determined by Collateral Agent. 
 12.2 Indemnification. Borrower agrees to indemnify, defend and hold
Collateral Agent and the Lenders and their respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Collateral Agent or the Lenders (each, an “Indemnified Person”) harmless
against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with; related to; following; or arising from, out of or under, the transactions contemplated by
the Loan Documents; and (b) all losses or Lenders’ Expenses incurred, or paid by Indemnified Person in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents between
Collateral Agent, and/or the Lenders and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct. Borrower hereby
further indemnifies, defends and holds each Indemnified Person harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be
designated a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or
compensation claimed by any broker (other than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated hereby which may be imposed on, incurred by or asserted against such Indemnified
Person as a result of or in connection with the transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements directly caused by such Indemnified Person’s gross negligence or willful misconduct. 
 12.3
Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement. 
 12.4 Severability of
Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision. 

12.5 Correction of Loan Documents. Collateral Agent and the Lenders may correct patent errors and fill in any blanks in this Agreement
and the other Loan Documents consistent with the agreement of the parties. 
 12.6 Amendments in Writing; Integration.
(a) No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, or any consent to any departure by Borrower or any of its Subsidiaries therefrom, shall in
any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the Required Lenders provided that: 

  
 23 

 (i) no such amendment, waiver or other modification that would have the effect of increasing or
reducing a Lender’s Term Loan Commitment or Commitment Percentage shall be effective as to such Lender without such Lender’s written consent; 

(ii) no such amendment, waiver or modification that would affect the rights and duties of Collateral Agent shall be effective without
Collateral Agent’s written consent or signature; 
 (iii) no such amendment, waiver or other modification shall, unless signed by all
the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Term Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to
any Term Loan (B) postpone the date fixed for, or waive, any payment of principal of any Term Loan or of interest on any Term Loan (other than default interest) or any fees provided for hereunder (other than late charges or for any termination
of any commitment); (C) change the definition of the term “Required Lenders” or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially all of any
material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any material portion of the Collateral or release any Guarantor of all or any portion of the Obligations or its guaranty obligations
with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive
or otherwise modify this Section 12.6 or the definitions of the terms used in this Section 12.6 insofar as the definitions affect the substance of this Section 12.6; (F) consent to the assignment, delegation or other transfer by
Borrower of any of its rights and obligations under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted
pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for the Lenders to receive their Pro Rata Shares of
any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions of Section 12.10. It is hereby understood and
agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the preceding sentence; 

(iv) the provisions of the foregoing clauses (i), (ii) and (iii) are subject to the provisions of any interlender or agency
agreement among the Lenders and Collateral Agent pursuant to which any Lender may agree to give its consent in connection with any amendment, waiver or modification of the Loan Documents only in the event of the unanimous agreement of all Lenders.

 (b) Other than as expressly provided for in Section 12.6(a)(i)-(iii), Collateral Agent
may, if requested by the Required Lenders, from time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower. 

(c) This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or
agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents. 

12.7 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement. 
 12.8
Survival. All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. Without limiting the foregoing, except as otherwise provided in Section 4.1, the grant of security interest by Borrower in
Section 4.1 shall survive until the termination of all Bank Services Agreements. The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well as the confidentiality provisions in Section 12.9
below, shall survive until the statute of limitations with respect to such claim or cause of action shall have run. 

  
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 12.9 Confidentiality. In handling any confidential information of Borrower, the
Lenders and Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary information, but disclosure of information may be made: (a) subject to the terms and conditions of this Agreement, to the
Lenders’ and Collateral Agent’s Subsidiaries or Affiliates, or in connection with a Lender’s own financing or securitization transactions and upon the occurrence of a default, event of default or similar occurrence with respect to
such financing or securitization transaction; (b) to prospective transferees (other than those identified in (a) above) or purchasers of any interest in the Credit Extensions (provided, however, the Lenders and Collateral Agent shall,
except upon the occurrence and during the continuance of an Event of Default, obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision or to similar confidentiality terms); (c) as required by law,
regulation, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s regulators or as otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers appropriate in exercising
remedies under the Loan Documents; and (f) to third party service providers of the Lenders and/or Collateral Agent so long as such service providers have executed a confidentiality agreement with the Lenders and Collateral Agent with terms no
less restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the Lenders and/or
Collateral Agent, or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the Lenders and/or Collateral Agent does not know
that the third party is prohibited from disclosing the information. Collateral Agent and the Lenders may use confidential information for any purpose, including, without limitation, for the development of client databases, reporting purposes, and
market analysis. The provisions of the immediately preceding sentence shall survive the termination of this Agreement. The agreements provided under this Section 12.9 supersede all prior agreements, understanding, representations, warranties,
and negotiations between the parties about the subject matter of this Section 12.9. 
 12.10 Right of Set Off. Borrower
hereby grants to Collateral Agent and to each Lender, a lien, security interest and right of set off as security for all Obligations to Collateral Agent and each Lender hereunder, whether now existing or hereafter arising upon and against all
deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Collateral Agent or the Lenders or any entity under the control of Collateral Agent or the Lenders (including a Collateral Agent
affiliate) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Collateral Agent or the Lenders may set off the same or any part thereof and apply the same to any
liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations, provided that Collateral Agent shall use commercially reasonable efforts to promptly notify Borrower in
writing of any such set-off. Notwithstanding the foregoing, in no event shall Collateral Agent’s failure to notify Borrower pursuant to the foregoing sentence cause or result in any breach of this
Agreement, subject Collateral Agent or any Lender to any liability or in any way limit or restrict any rights or remedies available to Collateral Agent or any Lender pursuant to this Agreement, any other Loan Document or otherwise. ANY AND ALL
RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. 
 12.11 Silicon Valley Bank as Agent. Collateral Agent hereby
appoints Silicon Valley Bank (“SVB”) as its agent (and SVB hereby accepts such appointment) for the purpose of perfecting Collateral Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of
the Code can be perfected by possession or control, including without limitation, all deposit accounts maintained at SVB. 
 12.12
Cooperation of Borrower. If necessary, Borrower agrees to (i) execute any documents (including new Secured Promissory Notes) reasonably required to effectuate and acknowledge each assignment of a Term Loan Commitment or Loan to an
assignee in accordance with Section 12.1, (ii) make Borrower’s management available to meet with Collateral Agent and prospective participants and assignees of Term Loan Commitments or Credit Extensions (which meetings shall be
conducted no more often than twice every twelve months unless an Event of Default has occurred and is continuing), and (iii) assist Collateral Agent or the Lenders in the preparation of information relating to the financial affairs of Borrower
as any prospective participant or assignee of a Term Loan Commitment or Term Loan reasonably may request. Subject to the provisions of Section 12.9, Borrower authorizes each Lender to disclose to any prospective participant or assignee of a
Term Loan Commitment, any and all information in such Lender’s possession concerning Borrower and its financial affairs which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered
to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower prior to entering into this Agreement. 

  
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	13.	DEFINITIONS 

 13.1 Definitions. As used in this Agreement, the
following terms have the following meanings: 
 “Account” is any “account” as defined in the Code with such
additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower. 

“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter
be made. 
 “Additional Capital Event” is the receipt by Borrower after the Effective Date and prior to the Amortization
Date of unrestricted net cash proceeds of not less than Forty Five Million Dollars ($45,000,000) from (i) the issuance and sale by Borrower of its unsecured subordinated convertible debt and/or equity securities and/or (ii) a payment from
Celgene Corporation specifically related to Celgene’s election to extend its option to acquire Borrower. 

“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is
controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members. 

“Agreement” is defined in the preamble hereof. 

“Amortization Date” is, with respect to a Term Loan, March 1, 2019; provided that such date shall be extended to
September 1, 2019 upon the occurrence of the Additional Capital Event. 
 “Annual Projections” is defined in
Section 6.2(a). 
 “Anti-Terrorism Laws” are any laws relating to
terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC. 

“Approved Fund” is any (i) investment company, fund, trust, securitization vehicle or conduit that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business or (ii) any Person (other than a natural person) which temporarily warehouses loans for
any Lender or any entity described in the preceding clause (i) and that, with respect to each of the preceding clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person
(other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender. 

“Approved Lender” is defined in Section 12.1. 

“Bank” is defined in the preamble hereof. 

“Bank Services” are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to
Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards,
and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “Bank Services Agreement”).

  
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 “Basic Rate” is, with respect to a Term Loan, the per annum rate of interest
(based on a year of three hundred sixty (360) days) equal to the greater of (i) seven and thirty-nine one hundredths of one percent (7.39%) and (ii) the sum of (a) the thirty (30) day U.S. LIBOR rate reported in the Wall
Street Journal on the last Business Day of the month that immediately precedes the month in which the interest will accrue, plus (b) six and four tenths of one percent (6.40%). Notwithstanding the foregoing, the Basic Rate for the Term Loan
for the period from the Effective Date through and including August 31, 2017 shall be seven and sixty-three one hundredths of one percent (7.63%). 

“Blocked Person” is any Person: (a) listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with
which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list. 

“Borrower” is defined in the preamble hereof. 

“Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal,
and state tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

 “Business Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is closed. 

“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or
any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper or other debt securities maturing no more than one (1) year after the date of acquisition and a rating
of at least A (or the equivalent) from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) time deposits, certificates of deposit and bankers’ acceptances maturing no more than one
(1) year after the date of acquisition, provided that the account in which any such time deposit, certificate of deposit or bankers’ acceptance is maintained is subject to a Control Agreement in favor of Collateral Agent, (d) demand
deposits and overnight bank deposits, provided that the account in which any such deposit is maintained is subject to a Control Agreement in favor of Collateral Agent, (e) money market funds that invest in short term investment grade
investments, provided that the account in which any such money market funds are maintained is subject to a Control Agreement in favor of Collateral Agent, and (f) investments similar to those described in clauses (a) through (e) above that
are permitted pursuant to Borrower’s investment policy as approved by the Board of Directors of Borrower from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Collateral Agent.
For the avoidance of doubt, the direct purchase by Borrower or any of its Subsidiaries of any Auction Rate Securities, or purchasing participations in, or entering into any type of swap or other derivative transaction, or otherwise holding or
engaging in any ownership interest in any type of Auction Rate Security by Borrower or any of its Subsidiaries shall be conclusively determined by the Lenders as an ineligible Cash Equivalent, and any such transaction shall expressly violate each
other provision of this Agreement governing Permitted Investments. Notwithstanding the foregoing, Cash Equivalents does not include and Borrower, and each of its Subsidiaries, are prohibited from purchasing, purchasing participations in, entering
into any type of swap or other equivalent derivative transaction, or otherwise holding or engaging in any ownership interest in any type of debt instrument, including, without limitation, any corporate or municipal bonds with a long-term nominal maturity for which the interest rate is reset through a dutch auction and more commonly referred to as an auction rate security (each, an “Auction Rate Security”). 

“Celgene Negative Pledge and Amendment Agreement” means that certain Negative Pledge and Amendment Agreement effective as of
June 8, 2017, by and between the Borrower and Celgene Corporation. 
 “Claims” are defined in Section 12.2. 

  
 27 

 “Code” is the Uniform Commercial Code, as the same may, from time to time, be
enacted and in effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to,
Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in
such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions. 

“Collaboration Agreement” means that certain Amended and Restated Collaboration and License Agreement to be entered into by
the Borrower and Celgene Corporation on or after the Effective Date; provided that the terms relating to Permitted Assignments and Permitted Licenses (a) are consistent in all material respects with the draft provided by Borrower to Collateral
Agent and the Lenders on July 26, 2017 or (b) otherwise are approved in writing by the Collateral Agent and the Required Lenders. 

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A. 

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account, or any other bank account maintained
by Borrower or any Subsidiary at any time. 
 “Collateral Agent” is, Oxford, not in its individual capacity, but solely in
its capacity as agent on behalf of and for the benefit of the Lenders. 
 “Commitment Percentage” is set forth in
Schedule 1.1, as amended from time to time. 
 “Commodity Account” is any “commodity
account” as defined in the Code with such additions to such term as may hereafter be made. 
 “Communication” is
defined in Section 10. 
 “Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit C. 
 “Contingent Obligation” is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made,
discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) the net obligations in respect of any
interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but
“Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if
not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement. 

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower or any of its
Subsidiaries maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower or any of its Subsidiaries maintains a Securities Account or a Commodity Account, Borrower and such Subsidiary, and Collateral Agent
pursuant to which Collateral Agent obtains control (within the meaning of the Code) for the benefit of the Lenders over such Deposit Account, Securities Account, or Commodity Account. 

“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each
work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret. 

  
 28 

 “Credit Extension” is any Term Loan or any other extension of credit by
Collateral Agent or Lenders for Borrower’s benefit. 
 “Default Rate” is defined in Section 2.3(b). 

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter
be made. 
 “Designated Deposit Account” is Borrower’s deposit account, account number *****, maintained with Bank.

 “Disbursement Letter” is that certain form attached hereto as Exhibit B-1. 
 “Dollar Equivalent” is, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the
then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency. 

“Dollars,” “dollars” and “$” each mean lawful money of the United States. 

“Effective Date” is defined in the preamble of this Agreement. 

“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund and (iv) any
commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) and which extends credit or buys loans as one of
its businesses, including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating
of Baa2 or higher from Moody’s Investors Service, Inc. at the date that it becomes a Lender or (B) has total assets in excess of Five Billion Dollars ($5,000,000,000.00), and in each case of clauses (i) through (iv), which, through
its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include, unless an Event of Default has
occurred and is continuing, (i) Borrower or any of Borrower’s Affiliates or Subsidiaries or (ii) a direct competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent. Notwithstanding the foregoing,
(x) in connection with assignments by a Lender due to a forced divestiture at the request of any regulatory agency, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party and (y) in
connection with a Lender’s own financing or securitization transactions, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party providing such financing or formed to undertake such securitization
transaction and any transferee of such Person or party upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; provided that no such sale, transfer, pledge or assignment
under this clause (y) shall release such Lender from any of its obligations hereunder or substitute any such Person or party for such Lender as a party hereto until Collateral Agent shall have received and accepted an effective assignment
agreement from such Person or party in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee as Collateral
Agent reasonably shall require. 
 “Equipment” is all “equipment” as defined in the Code with such additions to
such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing. 

“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations. 

“Event of Default” is defined in Section 8. 

  
 29 

 “Final Payment” is a payment (in addition to and not a substitution for the
regular monthly payments of principal plus accrued interest) due on the earliest to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or (c) the prepayment of a Term Loan pursuant to Section 2.2(c) or
(d), equal to the original principal amount of such Term Loan multiplied by the Final Payment Percentage, payable to Lenders in accordance with their respective Pro Rata Shares. 

“Final Payment Percentage” is three and eighty three one hundredths of one percent (3.83%). 

“Foreign Currency” means lawful money of a country other than the United States. 

“Foreign Subsidiary” is a Subsidiary that is not an entity organized under the laws of the United States or any territory
thereof. 
 “Funding Date” is any date on which a Credit Extension is made to or on account of Borrower which shall be a
Business Day. 
 “FX Contract” is any foreign exchange contract by and between Borrower and Bank under
which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency on a specified date. 

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the
accounting profession in the United States, which are applicable to the circumstances as of the date of determination. 
 “General
Intangibles” are all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright
applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications
therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone
numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise),
insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind. 

“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate,
accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority. 

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization. 
 “Guarantor” is any Person providing a Guaranty in favor
of Collateral Agent. 
 “Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to
time be amended, restated, modified or otherwise supplemented. 
 “Indebtedness” is (a) indebtedness for borrowed
money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations. 
 “Indemnified Person” is defined in Section 12.2. 

  
 30 

 “Insolvency Proceeding” is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 “Insolvent” means not Solvent. 

“Intellectual Property” means (i) from the Effective Date until September 26, 2017, all of Borrower’s or any
Subsidiary’s right, title and interest in and to the following: 
 (a) its Copyrights, Trademarks and Patents and licenses therefor,
whether arising under the United States, multinational or foreign laws or otherwise; 
 (b) any and all trade secrets, trade secret licenses
and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals, domain names and intangible rights in software and databases; 

(c) any and all source code; 

(d) any and all design rights which may be available to Borrower; 

(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and 

(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents or licenses therefore; and 

(ii) from September 27, 2017 and thereafter, all of Borrower’s or any Subsidiary’s right, title and interest in and to the
following: 
 (a) its Copyrights, Trademarks and Patents; 

(b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals, and domain names; 
 (c) any and all source code; 

(d) any and all design rights which may be available to Borrower; 

(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and 

(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents. 

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term
as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of
any Person’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities),
and any loan, advance, payment or capital contribution to any Person. 

  
 31 

 “Key Person” is each of Borrower’s (i) Chief Executive Officer, who is
William Newell as of the Effective Date, and (ii) Chief Financial Officer, who is Ed Albini as of the Effective Date. 

“Lender” is any one of the Lenders. 

“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party
to this Agreement pursuant to Section 12.1. 
 “Lenders’ Expenses” are all audit fees and expenses, costs, and
expenses (including reasonable attorneys’ fees and expenses, as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending, negotiating, administering, defending and enforcing
the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan Documents. 

“Letter of Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an
application, guarantee, indemnity, or similar agreement. 
 “Lien” is a claim, mortgage, deed of trust, levy, charge,
pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property. 

“Loan Documents” are, collectively, this Agreement, the Warrants, the Perfection Certificates, each Compliance Certificate,
each Disbursement Letter, each Loan Payment/Advance Request Form and any Bank Services Agreement, the Post Closing Letter, each Guaranty, any subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, and
any other present or future agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent in connection with this Agreement; all as amended, restated, or otherwise modified. 

“Loan Payment/Advance Request Form” is that certain form attached hereto as Exhibit B-2. 
 “Material Adverse Change” is (a) a material impairment in the perfection
or priority of Collateral Agent’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, or operations or condition (financial or otherwise) of Borrower or, Borrower and each of its
Subsidiaries, taken as a whole; or (c) a material impairment of the prospect of repayment of any portion of the Obligations. 

“Maturity Date” is, for each Term Loan, August 1, 2021. 

“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses,
the Prepayment Fee, the Final Payment, and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents (other than the Warrants), or
otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, unless otherwise
provided in any applicable Bank Services Agreement, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent, and
the performance of Borrower’s duties under the Loan Documents (other than the Warrants). 
 “OFAC” is the U.S.
Department of Treasury Office of Foreign Assets Control. 
 “OFAC Lists” are, collectively, the Specially Designated
Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and
regulations of OFAC or pursuant to any other applicable Executive Orders. 

  
 32 

 “Operating Documents” are, for any Person, such Person’s formation
documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a
corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar
agreement), each of the foregoing with all current amendments or modifications thereto. 
 “Patents” means all patents,
patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of
the same. 
 “Payment Date” is the first (1st) calendar day of each
calendar month, commencing on September 1, 2017. 
 “Perfection Certificate” and “Perfection
Certificates” is defined in Section 5.1. 
 “Permitted Assignment” means an assignment (i) to Celgene
Corporation by Borrower, or any of its Subsidiaries, of the composition of matter, methods of use, and formulation of each Nominated Development Candidate (as defined in the Collaboration Agreement) and corresponding Licensed Product (as defined in
the Collaboration Agreement); provided that (a) in no event shall the foregoing include any SUTRO IP (as defined in the Collaboration Agreement); and (b) all upfront payments, milestone payments or other proceeds arising from the
assignment that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement; and (ii) to a third party (other than Celgene Corporation) by Borrower, or any of its Subsidiaries, of the
composition of matter, methods of use, and formulation of any protein drug, antibody, antibody fragment, or antibody-drug conjugate identified as a development candidate or licensed product, in connection with such license and/or collaboration
agreement with such third party; provided that (a) in no event shall the foregoing include any of Borrower’s, or any of its Subsidiaries’ background Intellectual Property and/or core technology (as such terms are to be defined in such
license and/or collaboration agreement); and (b) all upfront payments, milestone payments or other proceeds arising from the assignment that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a
Control Agreement. In order for an assignment under the preceding sub-clause (ii) to meet the requirements of a “Permitted Assignment”, Borrower shall obtain Collateral Agent’s and the
Required Lenders’ prior written approval (such approval shall be in Collateral Agent’s or the Required Lenders’ sole but reasonable discretion) of (A) the proposed definitive license and/or collaboration agreement evidencing the
final material terms of such assignment, or (B) in the event such assignment relates to a protein drug, antibody, antibody fragment, or antibody-drug conjugate or other candidate to be identified as part of a discovery program conducted by
Borrower pursuant to a licensing and/or collaboration agreement with such third party, the proposed final term sheet for such license and/or collaboration, provided that the final definitive license and/or collaboration agreement is consistent in
all material respects with such term sheet. 
 “Permitted Indebtedness” is: 

(a) Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents; 

(b) Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate(s); 

(c) Subordinated Debt; 
 (d)
unsecured Indebtedness to trade creditors incurred in the ordinary course of business; 
 (e) Indebtedness consisting of capitalized lease
obligations and purchase money Indebtedness, in each case incurred by Borrower or any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person, provided that (i) the aggregate
outstanding principal amount of all such Indebtedness does not exceed Two Hundred Fifty Thousand Dollars ($250,000.00) at any time and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of
the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition, repair, improvement or construction is made); 

  
 33 

 (f) Indebtedness incurred as a result of endorsing negotiable instruments received in the
ordinary course of Borrower’s business; 
 (g) Indebtedness owed in respect of any obligations (including, without limitation,
overdrafts and related liabilities) arising under the Bank Services Agreement; and 
 (h) extensions, refinancings, modifications,
amendments and restatements of any items of Permitted Indebtedness (a) through (e) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon
Borrower, or its Subsidiary, as the case may be. 
 “Permitted Investments” are: 

(a) Investments disclosed on the Perfection Certificate(s) and existing on the Effective Date; 

(b) (i) Investments consisting of cash and Cash Equivalents, and (ii) any other Investments permitted by Borrower’s investment
policy, as amended from time to time, provided that such investment policy as approved by the Board of Directors of Borrower (and any such amendment thereto) has been approved in writing by Collateral Agent; 

(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of Borrower; 
 (d) Investments consisting of deposit accounts in which Collateral Agent has a perfected security interest; 

(e) Investments in connection with Transfers permitted by Section 7.1; 

(f) Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary
course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of
Directors; not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate for (i) and (ii) in any fiscal year; 
 (g)
Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary
course of business; 
 (h) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and
suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (h) shall not apply to Investments of Borrower in any Subsidiary; and 

(i) non-cash Investments in joint ventures or strategic alliances in the ordinary course of
Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support. 

“Permitted Licenses” are (A) licenses of
over-the-counter software that is commercially available to the public, (B) non-exclusive and exclusive licenses for the use
of the Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary course of business, provided, that, with respect to each such license described in clause (B), (i) no Event of Default has occurred or is
continuing at the time of such license; (ii) the license constitutes an arms-length transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and
do not restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property; (iii) in the case of any exclusive license,
(x) Borrower delivers ten (10) days’ prior written notice and a brief summary of the terms of the proposed license to Collateral Agent and the Lenders and delivers to Collateral Agent 

  
 34 

 
and the Lenders copies of the final executed licensing documents in connection with the exclusive license promptly upon consummation thereof, and (y) any such license could not result in a
legal transfer of title of the licensed property but may be exclusive in respects other than territory and may be exclusive as to territory only as to discrete geographical areas outside of the United States; and (iv) all upfront payments,
royalties, milestone payments or other proceeds arising from the licensing agreement that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement, (C) licenses to Celgene
Corporation pursuant to the Collaboration Agreement; provided, that, with respect to each such license described in clause (C), (i) no Event of Default has occurred or is continuing at the time of such license; (ii) such license
could not result in a legal transfer of title of the licensed property (other than with respect to any Permitted Assignment); and (iii) all upfront payments, royalties, milestone payments or other proceeds arising from the licensing agreement
that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement, and (D) licenses to any third party of any protein drug, antibody, antibody fragment or antibody-drug conjugate or
other candidate, provided, that, with respect to each such license described in clause (D), (i) no Event of Default has occurred or is continuing at the time of such license; (ii) the license constitutes an arms-length transaction, the terms of which, on their face, do not provide for a sale or assignment of the applicable candidate (or any Intellectual Property associated therewith), other than with respect to any
Permitted Assignment; (iii) (x) Borrower delivers to Collateral Agent and the Lenders copies of the final executed licensing documents in connection with the license promptly upon consummation thereof, and (y) any such license could not
result in a legal transfer of title of the licensed property (other than with respect to any Permitted Assignment); and (iv) all upfront payments, royalties, milestone payments or other proceeds arising from the licensing agreement that are
payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement. In order for a license under the preceding clause (D) to meet the requirements of a “Permitted License”, Borrower
shall obtain Collateral Agent’s and the Required Lenders’ prior written approval (such approval shall be in Collateral Agent’s or the Required Lenders’ sole but reasonable discretion) of (1) the proposed definitive license
and/or collaboration agreement evidencing the final material terms of such license, or (2) in the event such license relates to a protein drug, antibody, antibody fragment, or antibody-drug conjugate to be identified as part of a discovery
program conducted by Borrower pursuant to a licensing and/or collaboration agreement with such third party, the proposed final term sheet for such license and/or collaboration, provided that the final definitive license and/or collaboration
agreement is consistent in all material respects with such term sheet. 
 “Permitted Liens” are: 

(a) Liens existing on the Effective Date and disclosed on the Perfection Certificates or arising under this Agreement and the other Loan
Documents; 
 (b) Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or
(ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations adopted thereunder; 
 (c) liens securing Indebtedness permitted under clause (e) of the definition of “Permitted
Indebtedness,” provided that (i) such liens exist prior to the acquisition of, or attach substantially simultaneous with, or within twenty (20) days after the, acquisition, lease, repair, improvement or construction of, such
property financed or leased by such Indebtedness and (ii) such liens do not extend to any property of Borrower other than the property (and proceeds thereof) acquired, leased or built, or the improvements or repairs, financed by such
Indebtedness; 
 (d) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary
course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00), and which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto; 

(e) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions,
social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA); 

  
 35 

 (f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens
described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase; 

(g) leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in
the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of
Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a security interest
therein; 
 (h) banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of
business arising in connection with Borrower’s deposit accounts or securities accounts held at such institutions solely to secure payment of fees and similar costs and expenses and provided such accounts are maintained in compliance with
Section 6.6(b) hereof; 
 (i) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of
Default under Section 8.4 or 8.7; 
 (j) Liens consisting of Permitted Licenses, or of intercompany licenses to which only Borrower and
Subsidiaries of Borrower that are Guarantors of the Obligations are party; and 
 (k) Liens constituting deposits to secure real property
lease obligations as a lessee incurred by Borrower or any Subsidiary in the ordinary course of business, including cash and Cash Equivalents deposited as collateral in support of a letter of credit issued on behalf of Borrower or any Subsidiary in
connection with the same, provided that the aggregate amount of all such deposits does not exceed Six Hundred Fifty Thousand Dollars ($650,000.00) at any time. 

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust,
unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency. 

“Post Closing Letter” is that certain Post Closing Letter dated as of the Effective Date by and between Collateral Agent and
Borrower. 
 “Prepayment Fee” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether
by mandatory or voluntary prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to: 
 (i) for a
prepayment made on or after the Funding Date of such Term Loan through and including the first anniversary of the Funding Date of such Term Loan, three percent (3.00%) of the principal amount of such Term Loan prepaid; 

(ii) for a prepayment made after the date which is after the first anniversary of the Funding Date of such Term Loan through and including
the second anniversary of the Funding Date of such Term Loan, two percent (2.00%) of the principal amount of the Term Loans prepaid; and 

(iii) for a prepayment made after the second anniversary of the Funding Date of such Term Loan and prior to the Maturity Date, one percent
(1.00%) of the principal amount of the Term Loans prepaid. 
 “Pro Rata Share” is, as of any date of determination, with
respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender by the aggregate outstanding principal amount of all Term
Loans. 

  
 36 

 “Registered Organization” is any “registered organization” as defined
in the Code with such additions to such term as may hereafter be made. 
 “Required Lenders” means (i) for so long as
all of the Persons that are Lenders on the Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests in their Term Loan, Lenders holding one hundred percent (100%) of the aggregate
outstanding principal balance of the Term Loan, or (ii) at any time from and after any Original Lender has assigned or transferred any interest in its Term Loan, Lenders holding at least sixty six percent (66%) of the aggregate outstanding
principal balance of the Term Loan and, in respect of this clause (ii), (A) each Original Lender that has not assigned or transferred any portion of its Term Loan, (B) each assignee or transferee of an Original Lender’s interest in the
Term Loan, but only to the extent that such assignee or transferee is an Affiliate or Approved Fund of such Original Lender, and (C) any Person providing financing to any Person described in clauses (A) and (B) above; provided, however,
that this clause (C) shall only apply upon the occurrence of a default, event of default or similar occurrence with respect to such financing. 

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is
subject. 
 “Responsible Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower
acting alone. 
 “Secured Promissory Note” is defined in Section 2.4. 

“Secured Promissory Note Record” is a record maintained by each Lender with respect to the outstanding Obligations owed by
Borrower to Lender and credits made thereto. 
 “Securities Account” is any “securities account” as defined in
the Code with such additions to such term as may hereafter be made. 
 “Shares” is one hundred percent (100%) of the issued
and outstanding capital stock, membership units or other securities owned or held of record by Borrower or Borrower’s Subsidiary, in any Subsidiary and/or in any other entity; provided that, in the event Borrower, demonstrates to Collateral
Agent’s reasonable satisfaction, that a pledge of more than sixty five percent (65%) of the Shares of such Subsidiary which is a Foreign Subsidiary, creates a present and existing adverse tax consequence to Borrower under the U.S. Internal
Revenue Code, “Shares” shall mean sixty-five percent (65%) of the issued and outstanding capital stock, membership units or other securities owned or held of record by Borrower or its Subsidiary in
such Foreign Subsidiary; provided, further, that the “Shares” shall not include any capital stock of SutroVax, Inc. for so long as such capital stock is subject to (a) a right of first refusal of the other equityholders of SutroVax,
Inc., or (b) call options awarded to employees and other service providers of Borrower pursuant to the Sutro Biopharma, Inc. 2017 Call Option Plan adopted by Borrower’s Board of Directors on February 6, 2017, provided that upon the
termination, lapsing or expiration of both such rights of first refusal and such call options, such capital stock shall automatically become part of the “Shares.” 

“Solvent” is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including
goodwill minus disposition costs) exceeds the fair value of such Person’s liabilities; such Person is not left with unreasonably small capital after the transactions in this Agreement; and such Person is able to pay its debts (including trade
debts) as they mature. 
 “Subordinated Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated
to all Indebtedness of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Collateral Agent and the Lenders entered into between Collateral
Agent, Borrower, and/or any of its Subsidiaries, and the other creditor), on terms acceptable to Collateral Agent and the Lenders. 

  
 37 

 “Subsidiary” is, with respect to any Person, any Person of which more than fifty
percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries. 

“Term Loan” is defined in Section 2.2(a) hereof. 

“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount
shown on Schedule 1.1. “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders. 

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and
registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks. 

“Transfer” is defined in Section 7.1. 

“Warrants” are those certain Warrants to Purchase Stock dated as of the Effective Date, or any date thereafter, issued by
Borrower in favor of each Lender or such Lender’s Affiliates. 
 [Balance of Page Intentionally Left
Blank] 

  
 38 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date. 
  

			
	BORROWER:
	
	SUTRO BIOPHARMA, INC.

			
		
	By	 	/s/ William J. Newell

			
	Name:	 	 William J. Newell

			
	Title:	 	 CEO

  

			
	COLLATERAL AGENT AND LENDER:
	
	OXFORD FINANCE LLC

			
		
	By	 	/s/ Colette H. Featherly

			
	Name:	 	Colette H. Featherly

			
	Title:	 	Senior Vice President

  

			
	LENDER:
	
	SILICON VALLEY BANK

			
		
	By	 	/s/ Derek Scalf

			
	Name:	 	Derek Scalf

			
	Title:	 	Vice President

 [Signature Page to Loan and Security Agreement] 

 SCHEDULE 1.1 

Lenders and Commitments 

Term Loans 
  

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 OXFORD FINANCE LLC
	  	$	10,000,000	 	  	 	66.67	% 
	 SILICON VALLEY BANK
	  	$	5,000,000	 	  	 	33.33	% 
	 TOTAL
	  	$	15,000,000	 	  	 	100.00	% 

 EXHIBIT A 

Description of Collateral 
 The
Collateral consists of all of Borrower’s right, title and interest in and to the following personal property: 
 All goods, Accounts
(including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below),
commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights
(whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and 

All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions
for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. 

Notwithstanding the foregoing, the Collateral does not include (i) any Intellectual Property; provided, however, the Collateral shall
include all Accounts and all proceeds of Intellectual Property; provided, further, that if a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a
security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit
perfection of Collateral Agent’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property; and (ii) more than 65% of the total combined voting power of all classes of stock
entitled to vote the shares of capital stock (the “Shares”) of any Foreign Subsidiary, if Borrower demonstrates to Collateral Agent’s reasonable satisfaction that a pledge of more than sixty five percent (65%) of the Shares of such
Subsidiary creates a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code; (iii) any license, lease or contract, in each case if the granting of a Lien in such license, lease or contract is prohibited by
or would constitute a default under the agreement governing such license, lease or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than to the extent that any such term would be
rendered ineffective pursuant to Sections 9-406, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that
upon the termination, lapsing or expiration of any such prohibition, such license, lease or contract, as applicable, shall automatically be subject to the security interest granted in favor of Collateral Agent hereunder and become part of the
“Collateral”; and (iv) any capital stock of SutroVax, Inc. for so long as such capital stock is subject to (a) a right of first refusal of the other equityholders of SutroVax, Inc., or (b) call options awarded to employees
and other service providers of Borrower pursuant to the Sutro Biopharma, Inc. 2017 Call Option Plan adopted by Borrower’s Board of Directors on February 6, 2017, provided that upon the termination, lapsing or expiration of both such rights
of first refusal and such call options, such capital stock shall automatically be subject to the security interest granted in favor of Collateral Agent hereunder and become part of the “Collateral.” 

Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and the Lenders, Borrower has agreed not to encumber any
of its Intellectual Property. 

 EXHIBIT B[-1] 

Form of Disbursement Letter 

[see attached] 

 DISBURSEMENT LETTER 

August 4, 2017 
 The undersigned, being the
duly elected and acting                                     
of Sutro Biopharma, Inc., a Delaware corporation with offices located at 310 Utah Street, Suite 150, South San Francisco, CA 94080 (“Borrower”), does hereby certify, solely in his or her capacity as an officer of the Borrower, and
not in any personal capacity, to OXFORD FINANCE LLC (“Oxford” and “Lender”), as collateral agent (the “Collateral Agent”) in connection with that certain Loan and Security Agreement dated as
of August 4, 2017, by and among Borrower, Collateral Agent and the Lenders from time to time party thereto (the “Loan Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Loan
Agreement) that: 
 1. The representations and warranties made by Borrower in Section 5 of the Loan Agreement and in the other Loan
Documents are true and correct in all material respects as of the date hereof. 
 2. No event or condition has occurred that would
constitute an Event of Default under the Loan Agreement or any other Loan Document. 
 3. Borrower is in compliance with the covenants and
requirements contained in Sections 4, 6 and 7 of the Loan Agreement. 
 4. All conditions referred to in Section 3 of the Loan
Agreement to the making of the Loan to be made on or about the date hereof have been satisfied or waived by Collateral Agent. 
 5. No
Material Adverse Change has occurred. 
 6. The undersigned is a Responsible Officer. 

[Balance of Page Intentionally Left Blank] 

 7. The proceeds of the Term Loan shall be disbursed as follows: 

 

					
	 Disbursement from Oxford:
	  			
	 Loan Amount
	  	 	$15,000,000	 
	 Plus:
	  			
	 —Deposit Received
	  	 	$35,000	 
	 Less:
	  			
	 —Interim Interest
	  	 	($_________	) 
	 —Lender’s Legal Fees
	  	 	($_________	)* 
	 Net Proceeds due from Oxford:
	  	$	_______________	 
	 TOTAL TERM LOAN NET PROCEEDS FROM LENDERS
	  	$	_______________	 

 8. The Term Loan shall amortize in accordance with the Amortization Table attached hereto. 

9. The aggregate net proceeds of the Term Loans shall be transferred to the Designated Deposit Account as follows: 

 

			
	
Account Name:                

	  	 Sutro Biopharma, Inc.

	 Bank Name:
	  	 [Silicon Valley Bank]

	 Bank Address:
	  	 [3003 Tasman Drive Santa Clara, California 95054]

	 Account Number:
	  	                                     
                                         
                  
	 ABA Number:
	  	 [_____________]

 [Balance of Page Intentionally Left Blank] 

	 	 	

  

	* 	Legal fees and costs are through the Effective Date. Post-closing legal fees and costs, payable after the Effective Date, to be invoiced and paid
post-closing. 

 Dated as of the date first set forth above. 

 

			
	 BORROWER:

	
	 SUTRO BIOPHARMA, INC.

			
		
	 By
	 	 

			
	 Name:
	 	 

			
	 Title:
	 	 

			
	
	 COLLATERAL AGENT AND LENDER:

	
	 OXFORD FINANCE LLC

			
		
	 By
	 	 

			
	 Name:
	 	 

			
	 Title:
	 	 

			
	
	 LENDER:

	
	 SILICON VALLEY BANK

			
		
	 By
	 	 

			
	 Name:
	 	 

			
	 Title:
	 	 

 [Signature Page to Disbursement Letter] 

 AMORTIZATION TABLE 

(Term Loan) 
 [see attached]

 EXHIBIT B-2 

Loan Payment/Advance Request Form 

DEADLINE FOR SAME DAY PROCESSING IS
NOON PACIFIC TIME* 
  

			
	Fax To:	  	Date: ____________________        

  

LOAN PAYMENT: 

Sutro Biopharma, Inc. 
 From Account
#______________________________            To Account #_________________________________ 

                          
              (Deposit Account
#)                                         
                                (Loan Account #) 

Principal $__________________________________            and/or Interest
$________________________________ 
 Authorized
Signature:                                       
                                     Phone Number:
_________________________ 
 Print Name/Title:
                                         
                      

 

LOAN ADVANCE: 

Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire. 

From Account #_____________________________            To Account
#___________________________________ 

                          
          (Loan Account
#)                                         
                                    (Deposit Account #) 

Amount of Advance $________________________ 
 All
Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true,
accurate and complete in all material respects as of such date: 
 Authorized
Signature:                                       
                                     Phone Number:
_________________________ 
 Print Name/Title:
                                         
                      

 

OUTGOING WIRE REQUEST: 

Complete only if all or a portion of funds from the loan advance above is to be wired. 

Deadline for same day processing is noon, Pacific Time 

Beneficiary Name: ______________________________                Amount of
Wire: $______________________________________ 
 Beneficiary Bank: ______________________________
                Account Number: ______________________________________ 

City and State: _________________________________ 
 Beneficiary
Bank Transit (ABA) #:_________________        Beneficiary Bank Code (Swift, Sort, Chip, etc.): __________________ 

                          
                                         
                                         
    (For International Wire Only) 
 Intermediary Bank:
_____________________________         Transit (ABA) #: __________________________________________ 
 For Further
Credit to: ________________________________________________________________________________________ 
 Special Instruction:
__________________________________________________________________________________________ 
 By signing below, I (we) acknowledge and
agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by
me (us). 
 Authorized Signature: ___________________________        2nd Signature (if required): ___________________________ 
 Print Name/Title:
______________________________         Print Name/Title: __________________________________ 

Telephone #: ___________
                                         
             Telephone #: __________________________] 

 EXHIBIT C 

Compliance Certificate 
  

			
	 TO:
	  	OXFORD FINANCE LLC, as Collateral Agent and Lender
SILICON VALLEY BANK, as Lender
		
	 FROM:
	  	SUTRO BIOPHARMA, INC.

 The undersigned authorized officer (“Officer”) of Sutro Biopharma, Inc. (“Borrower”), hereby
certifies that in accordance with the terms and conditions of the Loan and Security Agreement by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings given them in the Loan Agreement), 
 (a) Borrower is in complete compliance for the
period ending                      with all required covenants except as noted below; 

(b) There are no Events of Default, except as noted below; 

(c) Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material
respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; 

(d) Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of
Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan
Agreement; and 
 (e) No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee
payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders. 
 Attached are the required
documents, if any, supporting our certification(s). The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently
applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year-end
GAAP and audit adjustments as to the interim financial statements. 
 Please indicate compliance status since the last Compliance Certificate by circling
Yes, No, or N/A under “Complies” column. 
  

													
	 	  	Reporting Covenant	  	Requirement	  	Actual	  	Complies
	1)	  	Financial statements	  	Monthly within 30 days	  		  	Yes	  	No	  	N/A
							
	2)	  	Annual (CPA Audited) statements	  	Within 210 days after FYE (and 12/31/2017 for the Annual (CPA Audited) statements for FYE 2016)	  		  	Yes	  	No	  	N/A
							
	3)	  	Annual Financial Projections/Budget (prepared on a monthly basis)	  	Annually (within 30 days of FYE), and when revised	  		  	Yes	  	No	  	N/A

													
	4)	  	A/R & A/P agings	  	If applicable	  		  	Yes	  	No	  	N/A
							
	5)	  	8-K, 10-K and 10-Q Filings	  	If applicable, within 5 days of filing	  		  	Yes	  	No	  	N/A
							
	6)	  	Compliance Certificate	  	Monthly within 30 days	  		  	Yes	  	No	  	N/A
							
	7)	  	IP Report	  	When required	  		  	Yes	  	No	  	N/A
							
	8)	  	Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period	  		  	$                	  	Yes	  	No	  	N/A
							
	9)	  	Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period	  		  	$                	  	Yes	  	No	  	N/A

 Deposit and Securities Accounts 

(Please list all accounts; attach separate sheet if additional space needed) 

 

													
	 	  	Institution Name	  	Account Number	  	New Account?	  	Account Control Agreement in place?
	1)	  		  		  	Yes	  	No	  	Yes	  	No
							
	2)	  		  		  	Yes	  	No	  	Yes	  	No
							
	3)	  		  		  	Yes	  	No	  	Yes	  	No
							
	4)	  		  		  	Yes	  	No	  	Yes	  	No

 Financial Covenants 
  

											
	 	  	Covenant	  	Requirement	  	Actual	  	Compliance
	1)	  	Minimum Aggregate Available Unrestricted Cash Balance in Collateral Accounts at Bank or its Affiliates	  	$7,500,000	  	[$                ]	  	Yes	  	No

 Other Matters 
  

							
	1)	  	Have there been any changes in management since the last Compliance Certificate?	  	Yes	  	No
				
	2)	  	Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?	  	Yes	  	No
				
	3)	  	Have there been any new or pending claims or causes of action against Borrower that involve more than Two Hundred Fifty Thousand Dollars ($250,000.00)?	  	Yes	  	No
				
	4)	  	Have there been any material amendments of or other material changes to the capitalization table of Borrower and any amendments of or other changes to the Operating Documents of Borrower or any of its Subsidiaries? If yes, provide
copies of any such amendments or changes with this Compliance Certificate.	  	Yes	  	No

 Exceptions 

Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.” Attach separate sheet if
additional space needed.) 
  

			
	SUTRO BIOPHARMA, INC.

			
		
	By	 	 

			
	Name:	 	 

			
	Title:	 	 

 Date: 
  

											
	 LENDER USE ONLY

				
	Received by:	 	 	 	   Date:
	 	 

 
											
				
	Verified by:	 	 	 	   Date:
	 	 

 
											
					
	Compliance Status:	 	Yes	 	No	 		 	

 EXHIBIT D 

Form of Secured Promissory Note 

[see attached] 

 SECURED PROMISSORY NOTE 

(Term Loan) 
  

	
$                    
     
	Dated: [DATE] 

 FOR VALUE RECEIVED, the undersigned, Sutro Biopharma, Inc., a Delaware corporation with
offices located at 310 Utah Street, Suite 150, South San Francisco, CA 94080 (“Borrower”) HEREBY PROMISES TO PAY to the order of [OXFORD FINANCE LLC][SILICON VALLEY BANK] (“Lender”) the principal amount of
[                    ] MILLION DOLLARS
($                    ) or such lesser amount as shall equal the outstanding principal balance of the Term Loan made to Borrower by
Lender, plus interest on the aggregate unpaid principal amount of such Term Loan, at the rates and in accordance with the terms of the Loan and Security Agreement dated August 4, 2017 by and among Borrower, Lender, Oxford Finance LLC, as
Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount and all
accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement. Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement. 

Principal, interest and all other amounts due with respect to the Term Loan, are payable in lawful money of the United States of America to Lender as set
forth in the Loan Agreement and this Secured Promissory Note (this “Note”). The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and,
prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note. 
 The Loan Agreement, among other things, (a) provides
for the making of a secured Term Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events. 

This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement. 

This Note and the obligation of Borrower to repay the unpaid principal amount of the Term Loan, interest on the Term Loan and all other amounts due
Lender under the Loan Agreement is secured under the Loan Agreement. 
 Presentment for payment, demand, notice of protest and all other demands and notices
of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived. 
 Borrower shall pay all out-of-pocket fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of
Borrower’s obligations hereunder not performed when due. 
 This Note shall be governed by, and construed and interpreted in accordance with, the
internal laws of the State of California. 
 The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or
its agent. Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is
identified as the owner of an interest in the obligation. Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in this Note on the part of any other person or entity. 
 [Balance of Page
Intentionally Left Blank] 

 IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers
thereunto duly authorized on the date hereof. 
  

			
	BORROWER:
	
	SUTRO BIOPHARMA, INC.

 
			
		
	By	 	 

 
			
	Name:	 	 

 
			
	Title:	 	 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	  	 Principal

Amount
	  	 Interest Rate
	  	 Scheduled

Payment Amount
	  	 Notation By

 CORPORATE BORROWING CERTIFICATE 

 

					
	BORROWER:	  	SUTRO BIOPHARMA, INC.	  	DATE: August 4, 2017
	LENDERS:	  	OXFORD FINANCE LLC, as Collateral Agent and Lender
		  	SILICON VALLEY BANK, as Lender

 I hereby certify, solely in my capacity as an officer of the Borrower, and not in any personal capacity, as follows, as of the
date set forth above: 
 1. I am the Secretary, Assistant Secretary or other officer of Borrower. My title is as set forth below. 

2. Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the laws of the State of Delaware. 

3. Attached hereto as Exhibit A and Exhibit B, respectively, are true, correct and complete copies of
(i) Borrower’s Sixth Amended and Restated Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph 2 above; and
(ii) Borrower’s Amended and Restated Bylaws (including amendments). Neither such Certificate of Incorporation nor such Bylaws have been further amended, annulled, rescinded, revoked or supplemented, and such Certificate of Incorporation
and such Bylaws remain in full force and effect as of the date hereof. 
 4. The following resolutions were duly and validly adopted pursuant to a unanimous
written consent of the Borrower’s Board of Directors. Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until
each Lender receives written notice of revocation from Borrower. 
 [Balance of Page Intentionally Left
Blank] 

 RESOLVED, that any one of the following officers or employees of
Borrower, whose names, titles and signatures are below, may act on behalf of Borrower: 
  

											
	 Name
	  	 	 	 Title
	  	 	 	 Signature
	  	 Authorized to

Add or Remove

Signatories

	William Newell	  		 	Chief Executive Officer	  		 	 	  	X
	Ed Albini	  		 	Chief Financial Officer	  		 	 	  	X
	 	  		 	 	  		 	 	  	☐
	 	  		 	 	  		 	 	  	☐

 RESOLVED FURTHER, that any one of the persons designated above with a checked box
beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower. 

RESOLVED FURTHER, that such individuals may, on behalf of Borrower: 

Borrow Money. Borrow money from the Lenders. 
 Execute
Loan Documents. Execute any loan documents any Lender requires. 
 Grant Security. Grant Collateral Agent a security interest in any of
Borrower’s assets. 
 Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which
Borrower has an interest and receive cash or otherwise use the proceeds. 
 Issue Warrants. Issue warrants for Borrower’s capital stock. 

Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or
agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions. 
 RESOLVED
FURTHER, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified. 

[Balance of Page Intentionally Left Blank] 

 5. The persons listed above are Borrower’s officers or employees with their titles and signatures shown next
to their names. 
  

			
		
	By:	 	 

 
			
	Name:	 	
	Title:	 	Secretary

 [Signature Page to Corporate Borrowing Certificate]

 EXHIBIT A 

Sixth Amended and Restated Certificate of Incorporation (including amendments) 

[see attached] 

 EXHIBIT B 

Amended and Restated Bylaws (including amendments) 

[see attached] 

			
	DEBTOR:	  	SUTRO BIOPHARMA, INC.
	SECURED PARTY:	  	OXFORD FINANCE LLC,
		  	as Collateral Agent

 EXHIBIT A TO UCC FINANCING STATEMENT 

Description of Collateral 
 The
Collateral consists of all of Debtor’s right, title and interest in and to the following personal property: 
 All goods, Accounts
(including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below),
commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights
(whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and 

All Debtor’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for,
additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. 

Notwithstanding the foregoing, the Collateral does not include (i) any Intellectual Property; provided, however, the Collateral shall
include all Accounts and all proceeds of Intellectual Property; provided, further, that if a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a
security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit
perfection of Secured Party’s security interest in such Accounts and such other property of Debtor that are proceeds of the Intellectual Property; and (ii) more than 65% of the total combined voting power of all classes of stock entitled
to vote the shares of capital stock (the “Shares”) of any Foreign Subsidiary, if Debtor demonstrates to Secured Party’s reasonable satisfaction that a pledge of more than sixty five percent (65%) of the Shares of such Subsidiary
creates a present and existing adverse tax consequence to Debtor under the U.S. Internal Revenue Code; (iii) any license, lease or contract, in each case if the granting of a Lien in such license, lease or contract is prohibited by or would
constitute a default under the agreement governing such license, lease or contract (but (A) only to the extent such prohibition is enforceable under applicable law and (B) other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-408 or 9-409 (or any other Section) of Division 9 of the Code); provided that upon the
termination, lapsing or expiration of any such prohibition, such license, lease or contract, as applicable, shall automatically be subject to the security interest granted in favor of Secured Party hereunder and become part of the
“Collateral”; and (iv) any capital stock of SutroVax, Inc. for so long as such capital stock is subject to (a) a right of first refusal of the other equityholders of SutroVax, Inc., or (b) call options awarded to employees
and other service providers of Borrower pursuant to the Sutro Biopharma, Inc. 2017 Call Option Plan adopted by Debtor’s Board of Directors on February 6, 2017, provided that upon the termination, lapsing or expiration of both such rights
of first refusal and such call options, such capital stock shall automatically be subject to the security interest granted in favor of Secured Party hereunder and become part of the “Collateral.” 

Pursuant to the terms of a certain negative pledge arrangement with Secured Party and the Lenders, Debtor has agreed not to encumber any of
its Intellectual Property. 
 Capitalized terms used but not defined herein have the meanings ascribed in the Uniform Commercial Code in
effect in the State of California as in effect from time to time (the “Code”) or, if not defined in the Code, then in the Loan and Security Agreement by and between Debtor, Secured Party and the other Lenders party thereto (as modified,
amended and/or restated from time to time).Exhibit 4.1

 

 

 

 

 

 

RIGHTS
AGREEMENT

 

by
and between

 

TSR,
INC.

 

and

 

CONTINENTAL
STOCK TRANSFER & TRUST COMPANY

 

as
Rights Agent

 

 

 

 

 

Dated
as of

 

August
29, 2018

 

 

 

 

 

 

 

 

     

     

    

 

TABLE
OF CONTENTS

 

	 	Page
	Section
    1. Certain Definitions.	1
	Section
    2. Appointment of Rights Agent.	6
	Section
    3. Issuance of Rights Certificates.	6
	Section
    4. Form of Rights Certificates.	9
	Section
    5. Countersignature and Registration.	9
	Section
    6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.	10
	Section
    7. Exercise of Rights; Exercise Price; Expiration Date of Rights.	11
	Section
    8. Cancellation and Destruction of Rights Certificates.	12
	Section
    9. Reservation and Availability of Shares of Preferred Stock.	12
	Section
    10. Preferred Stock Record Date.	14
	Section
    11. Adjustment of Exercise Price, Number of Shares or Number of Rights.	14
	Section
    12. Certification of Adjusted Exercise Price or Number of Shares.	20
	Section
    13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.	20
	Section
    14. Fractional Rights and Fractional Shares.	23
	Section
    15. Rights of Action.	25
	Section
    16. Agreement of Right Holders.	25
	Section
    17. Rights Certificate Holder Not Deemed a Stockholder.	26
	Section
    18. Concerning the Rights Agreement.	26
	Section
    19. Merger or Consolidation of, or Change in Name of, the Rights Agent.	27
	Section
    20. Duties of Rights Agent.	27
	Section
    21. Change of Rights Agent.	30
	Section
    22. Issuance of New Rights Certificates.	30
	Section
    23. Redemption.	31
	Section
    24. Notice of Proposed Actions.	32
	Section
    25. Notices.	33
	Section
    26. Supplements and Amendments.	33
	Section
    27. Exchange.	34
	Section
    28. Successors.	35
	Section
    29. Benefits of this Rights Agreement.	35
	Section
    30. Delaware Contract.	35
	Section
    31. Counterparts.	35
	Section
    32. Descriptive Headings.	35
	Section
    33. Severability.	35
	Section
    34. Determinations and Actions By the Board of Directors, Etc.	35

 

	Exhibit A	Summary of Rights	A - 1
	Exhibit B	Form of Rights Certificate	B - 1
	Exhibit C	Form of Certificate of Designations Relating to the Terms of the Class A Preferred Stock, Series One	C - 1

 

     

     

    

 

RIGHTS
AGREEMENT

 

This
RIGHTS AGREEMENT is dated as of August 29, 2018, by and between TSR, INC., a Delaware corporation (the “Corporation”),
and CONTINENTAL STOCK TRANSFER & TRUST COMPANY (the “Rights Agent”).

 

W
I T N E S S E T H:

 

WHEREAS,
on August 29, 2018, the Board of Directors of the Corporation authorized the issuance of, and declared a dividend payable
in, one right (a “Right”) for each share of Common Stock, $0.01 par value per share, of the Corporation
outstanding as of the close of business on August 29, 2018 (the “Record Date”), each such Right representing
the right to purchase one one-hundredth of a share of Class A Preferred Stock, Series One of the Corporation (the “Preferred
Stock”) having the rights and preferences set forth in the Certificate of Designations attached hereto as Exhibit
C, authorized by the Board of Directors on August 29, 2018, upon the terms and subject to the conditions hereinafter set forth;
and

 

WHEREAS,
the Board of Directors of the Corporation further authorized the issuance of one Right (subject to adjustment) with respect
to each share of Common Stock which may be issued between the Record Date and the earlier to occur of the Distribution Date or
the Expiration Date (as such terms are hereinafter defined);

 

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

 

Section
1.Certain Definitions.

 

For
purposes of this Agreement, the following terms shall have the meanings indicated:

 

(a) “Acquiring
Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person and any other
Person with whom such Person is Acting in Concert, shall be the Beneficial Owner of 5% or more of the Corporation’s Common
Stock then outstanding, but shall not include (i) an Exempt Person or (ii) any Person who or which, at the time of the
first public announcement of this Rights Agreement, is a Beneficial Owner of 5% or more of the Corporation’s Common Stock
then outstanding (a “Grandfathered Stockholder”); provided, however, that if a Grandfathered
Stockholder becomes, after such time, the Beneficial Owner of any additional shares of the Corporation’s Common Stock (regardless
of whether, thereafter or as a result thereof, there is an increase, decrease or no change in the percentage of shares of the
Corporation’s Common Stock then outstanding beneficially owned by such Grandfathered Stockholder) then such Grandfathered
Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional shares
of the Corporation’s Common Stock, such Person is not the Beneficial Owner of 5% or more of the Corporation’s Common
Stock then outstanding; provided, further, that upon the first decrease of a Grandfathered Stockholder’s Beneficial
Ownership below 5%, such Grandfathered Stockholder shall cease to be a Grandfathered Stockholder and this clause (ii) shall
have no further force or effect with respect to such Person. For the avoidance of doubt, in the event that after the time of the
first public announcement of this Rights Agreement, any agreement, arrangement or understanding pursuant to which any Grandfathered
Stockholder is deemed to be the Beneficial Owner of shares of the Corporation’s Common Stock expires, terminates or no longer
confers any benefit to or imposes any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension
or substitution of such agreement, arrangement or understanding with respect to the same or different shares of the Corporation’s
Common Stock that confers Beneficial Ownership of shares of the Corporation’s Common Stock shall be considered the acquisition
of Beneficial Ownership of additional shares of the Corporation’s Common Stock by the Grandfathered Stockholder and render
such Grandfathered Stockholder an Acquiring Person for purposes of this Rights Agreement unless, upon such acquisition of Beneficial
Ownership of additional shares of the Corporation’s Common Stock, such Person is not the Beneficial Owner of 5% or more
of the Corporation’s Common Stock then outstanding.

 

    	 	1	 

     

    

 

Notwithstanding
the foregoing, no Person shall become an Acquiring Person as the result of an acquisition of shares of the Corporation’s
Common Stock which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned
by such Person to 5% (or such other percentage as would otherwise result in such Person becoming an Acquiring Person) or more
of the Corporation’s Common Stock then outstanding; provided, however, that if a Person would, but for the
provisions of this paragraph, become an Acquiring Person by reason of an acquisition of shares of the Corporation’s Common
Stock by the Corporation and shall, after such share purchases by the Corporation, become the Beneficial Owner of any additional
shares of the Corporation’s Common Stock at any time such that the Person is or thereby becomes the Beneficial Owner of
5% (or such other percentage as would otherwise result in such Person becoming an Acquiring Person) or more of the Corporation’s
Common Stock then outstanding (other than shares of Common Stock acquired solely as a result of corporate action of the Corporation
not caused, directly or indirectly, by such Person), then such Person shall be deemed to be an Acquiring Person.

 

Notwithstanding
the foregoing paragraphs of this Section 1(a), if the Board of Directors determines in good faith that a Person who
would otherwise be an Acquiring Person has become such inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of the Corporation’s Common Stock so that such Person would no longer be an Acquiring Person, then such
Person shall not be deemed to have become an Acquiring Person. Notwithstanding the foregoing, if a bona fide swaps dealer who
would otherwise be an “Acquiring Person” has become so as a result of its actions in the ordinary course of its business
that the Board of Directors determines, in its sole discretion, were taken without the intent or effect of evading or assisting
any other Person to evade the purposes and intent of this Rights Agreement, or otherwise seeking to control or influence the management
or policies of the Corporation, then, and unless and until the Board of Directors shall otherwise determine, such Person shall
not be deemed to be an “Acquiring Person.”

 

(b) A
Person shall be deemed to be “Acting in Concert” with another Person if such Person knowingly acts (whether
or not pursuant to an express agreement, arrangement or understanding) in concert or in parallel with such other Person, or towards
a common goal with such other Person, relating to (i) acquiring, holding, voting or disposing of voting securities of the
Corporation or (ii) changing or influencing the control of the Corporation or in connection with or as a participant in any
transaction having that purpose or effect, where (A) each Person is conscious of the other Person’s conduct or intent
and this awareness is an element in their decision-making processes and (B) at least one additional factor supports a determination
by the Board of Directors that such Persons intended to act in concert or in parallel, which such additional factors may include,
without limitation, exchanging information, attending meetings, conducting discussions, or making or soliciting invitations to
act in concert or in parallel. A Person who is Acting in Concert with another Person shall also be deemed to be Acting in Concert
with any third Person who is also Acting in Concert with such other Person.

 

    	 	2	 

     

    

 

(c) 
“Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on the date of this Rights
Agreement.

 

(d) “Associate”
of a Person (as such term is hereinafter defined) shall mean (i) with respect to a corporation, any officer or director thereof
or of any Subsidiary (as such term is hereinafter defined) thereof, or any Beneficial Owner (as such term is hereinafter defined)
of 10% or more of any class of equity security thereof, (ii) with respect to an association, joint venture or other unincorporated
organization, any officer or director thereof or of a Subsidiary thereof or any Beneficial Owner of 10% or more ownership interest
therein, (iii) with respect to a partnership, any general partner thereof or any limited partner thereof who is, directly or indirectly,
the Beneficial Owner of a 10% or greater ownership interest therein, (iv) with respect to a limited liability company, any officer,
director or manager thereof or of a Subsidiary thereof or any member thereof who is, directly or indirectly, the Beneficial Owner
of a 10% or greater ownership interest therein, (v) with respect to a business trust, any officer or trustee thereof or of any
Subsidiary thereof, (vi) with respect to any other trust or an estate, any trustee, executor or similar fiduciary or any Person
who has a 10% or greater interest as a beneficiary in the income from or principal of such trust or estate, (vii) with respect
to a natural person, any relative or spouse of such person, or any relative of such spouse, who has the same home as such person,
and (viii) any Affiliate of such Person.

 

(e) A
Person shall be deemed the “Beneficial Owner” of, or to “Beneficially Own,”
any securities (and correlative terms shall have correlative meanings):

 

(i) which
such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly, within the meaning
of Rules 13d-3 or 13d-5 promulgated under the Exchange Act, as in effect on the date of this Agreement;

 

(ii) which
such Person or any of such Person’s Affiliates or Associates has (A) the right or ability to vote, cause to be voted
or control or direct the voting of pursuant to any agreement, arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (x) arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (y) is not also then reportable on a statement on Schedule 13D under the Exchange
Act (or any comparable or successor report) or (B) the right or the obligation to become the Beneficial Owner (whether such
right is exercisable or such obligation is required to be performed immediately or only after the passage of time, the occurrence
of conditions or the satisfaction of regulatory requirements) pursuant to any agreement, arrangement or understanding, whether
or not in writing (other than customary agreements with and between underwriters and selling group members with respect to a bona
fide public offering of securities), written or otherwise, or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise, through conversion of a security, pursuant to the power to revoke
a trust, discretionary account or similar arrangement, pursuant to the power to terminate a repurchase or similar so-called “stock-borrowing”
agreement or arrangement, or pursuant to the automatic termination of a trust, discretionary account or similar arrangement; provided,
however, that a Person shall not be deemed to be the Beneficial Owner of, or to beneficially own, securities tendered pursuant
to a tender or exchange offer made pursuant to, and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act until such tendered securities are accepted for purchase or exchange; or

 

    	 	3	 

     

    

 

(iii) which
are beneficially owned (within the meaning of the preceding subsections of this Section 1(e), directly or indirectly,
by any other Person with which such Person or any of such Person’s Affiliates or Associates (A) has any agreement,
arrangement or understanding, whether or not in writing, for the purpose of acquiring, holding, voting or disposing of any securities
of the Corporation or cooperating in obtaining, changing or influencing the control of the Corporation or (B) is Acting in
Concert; or

 

(iv) which
are the subject of, or the reference securities for, or that underlie, any Derivative Position of such Person or any of such Person’s
Affiliates or Associates or any other Person with whom such Person is Acting in Concert, with the number of shares of Common Stock
deemed beneficially owned in respect of a Derivative Position being the notional or other number of shares of Common Stock in
respect of such Derivative Position (without regard to any short or similar position) that is specified in (A) one or more
filings with the Securities and Exchange Commission by such Person or any of such Person’s Affiliates or Associates or any
other Person with whom such Person is Acting in Concert or (B) the documentation evidencing such Derivative Position as the
basis upon which the value or settlement amount of such Derivative Position, or the opportunity of the holder of such Derivative
Position to profit or share in any profit, is to be calculated in whole or in part (whichever of (A) or (B) is greater),
or if no such number of shares of Common Stock is specified in such filings or documentation (or such documentation is not available
to the Board of Directors ), as determined by the Board of Directors in its reasonable discretion.

 

Notwithstanding
anything in this paragraph (e) to the contrary, a Person engaged in the business of underwriting securities shall not be deemed
the “Beneficial Owner” of, or to “Beneficially Own,” any securities acquired in good faith in a firm commitment
underwriting, until the expiration of forty days after the date of such acquisition.

 

(f) “Book-Entry”
shall mean an uncertificated book-entry for the Corporation's Common Stock.

 

(g) “Business
Day” shall mean any day other than a Saturday, Sunday, or day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.

 

    	 	4	 

     

    

 

(h) “Close
of Business” on any given date shall mean 5:00 p.m., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 p.m., New York City time, on the next succeeding Business Day.

 

(i) “Common
Stock,” when used with reference to the Corporation, shall mean the common stock, $0.01 par value, of the Corporation.
“Common Stock,” when used with reference to any Person other than the Corporation which shall be organized in corporate
form, shall mean the capital stock or other equity security with the greatest voting power of such Person. “Common Stock,”
when used with reference to any Person other than the Corporation which shall not be organized in corporate form, shall mean units
of beneficial interest which shall represent the right to participate in profits, losses, deductions and credits of such Person
and which shall be entitled to exercise the greatest voting power of such Person.

 

(j) “Derivative
Position” shall mean any option, warrant, convertible security, stock appreciation right, or other security, contract
right or derivative position or similar right (including any “swap” transaction with respect to any security, other
than a broad based market basket or index), whether or not presently exercisable, that has an exercise or conversion privilege
or a settlement payment or mechanism at a price related to the value of the Common Stock or a value determined in whole or in
part with reference to, or derived in whole or in part from, the value of the Common Stock and that increases in value as the
market price or value of the Common Stock increases or that provides an opportunity, directly or indirectly, to profit or share
in any profit derived from any increase in the value of the Common Stock, in each case regardless of whether (i) it conveys
any voting rights in such Common Stock to any Person, (ii) it is required to be, or capable of being, settled through delivery
of Common Stock or (iii) any Person (including the holder of such Derivative Position) may have entered into other transactions
that hedge its economic effect.

 

(k) 
“Distribution Date” shall have the meaning set forth in Section 3(b) hereof.

 

(l) “Exchange
Act” shall have the meaning set forth in Section 1(b) hereof.

 

(m) “Exempt
Person” shall mean (i) the Corporation, (ii) any Subsidiary of the Corporation, or (iii) any employee benefit plan
or employee stock plan of the Corporation or any Subsidiary of the Corporation, or any trust or other entity organized, appointed,
established or holding Common Stock for or pursuant to the terms of any such plan.

 

(n) “Exercise
Price” shall have the meaning set forth in Section 4 and Section 7(b) hereof.

 

(o) “Expiration
Date” shall have the meaning set forth in Section 7(a) hereof.

 

(p) “Fair
Market Value” of any property shall mean the fair market value of such property as determined in accordance with
Section 11(b) hereof.

 

(q) “Person”
shall mean any individual, firm, corporation or other entity.

 

(r) “Principal
Party” shall have the meaning set forth in Section 13(b) hereof.

 

    	 	5	 

     

    

 

(s) “Record
Date” shall have the meaning set forth in the first Recital hereof.

 

(t) “Redemption
Price” shall have the meaning set forth in Section 23(a) hereof.

 

(u) “Rights
Certificate” shall have the meaning set forth in Section 3(d) hereof.

 

(v) “Stock
Acquisition Date” shall mean the first date on which there shall be a public announcement by the Corporation or
an Acquiring Person that an Acquiring Person has become such (which, for purposes of this definition, shall include, without limitation,
a report filed pursuant to Section 13(d) of the Exchange Act) or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person.

 

(w) “Subsidiary”
of a Person shall mean any corporation or other entity of which such Person Beneficially Owns at least 50% of the outstanding
voting securities.

 

(x) “Summary
of Rights” shall have the meaning set forth in Section 3(a) hereof.

 

(y) “Trading
Day” shall have the meaning set forth in Section 11(b) hereof.

 

(z) “Transfer
Tax” shall mean any tax or charge, including any documentary stamp tax, imposed or collected by any governmental
or regulatory authority, in respect of any transfer of any security, instrument or right, including Rights, shares of Common Stock
and shares of Preferred Stock.

 

Any
determination required to be made by the Board of Directors of the Corporation for purposes of applying the definitions contained
in this Section 1 shall be made by the Board of Directors in its good faith judgment, and such determination shall be binding
on the Rights Agent and the holders of the Rights.

 

Section
2.Appointment of Rights Agent.

 

The
Corporation hereby appoints the Rights Agent to act as agent for the Corporation and the holders of the Rights in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Corporation may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable, upon ten (10) days’ prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such
co-rights agent. In the event the Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights Agent
and any Co-Rights Agent shall be as the Corporation shall reasonably determine, provided that such duties and determination are
consistent with the terms and provisions of this Agreement and that contemporaneously with such appointment, if any, the Corporation
shall notify the Rights Agent in writing thereof.

 

Section
3.Issuance of Rights Certificates.

 

(a) On
the Record Date (or as soon as practicable thereafter), the Corporation or the Rights Agent shall send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit A (the “Summary of Rights”), by
first class mail, postage prepaid, to each record holder of the Common Stock as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Corporation.

 

    	 	6	 

     

    

 

(b) Until
the Close of Business on the day which is the earlier of (i) the tenth day after the Stock Acquisition Date or such earlier or
later date (not beyond the thirtieth day after the Stock Acquisition Date) as the Board of Directors may from time to time fix
by resolution adopted prior to the Distribution Date that otherwise would have occurred or (ii) the tenth business day (or such
later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than an Exempt Person) of, or the first public announcement of the intent
of any Person (other than an Exempt Person) to commence, a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates and Persons with whom such Person is Acting in Concert, would be the
Beneficial Owner of 5% or more of the then-outstanding shares of the Corporation’s Common Stock (irrespective of whether
any shares are actually purchased pursuant to any such offer) (the earlier of such dates being herein referred to as the “Distribution
Date”); provided, however, that if such tender or exchange offer is terminated prior to the occurrence
of a Distribution Date, then no Distribution Date shall occur as a result of such tender or exchange offer, (x) the Rights shall
be evidenced by the Book-Entries, or certificates for, Common Stock registered in the name of the holders of Common Stock (together
with, in the case of Book-Entries representing, or the certificates for, Common Stock outstanding as of the Record Date, the Summary
of Rights) and not by separate Book-Entries or Rights Certificates and the record holders of the Common Stock represented by such
Book-Entries or certificates shall be the record holders of the Rights represented thereby and (y) each Right shall be transferable
only simultaneously and together with the transfer of shares of Common Stock (subject to adjustment as hereinafter provided).
Until the Distribution Date (or, if earlier, the Expiration Date), transfer on the Corporation’s direct registration system
of any Common Stock represented by a Book-Entry or the surrender for transfer of any certificate for Common Stock shall constitute
the surrender for transfer of the Right or Rights associated with the Common Stock evidenced thereby, whether or not accompanied
by a copy of the Summary of Rights.

 

(c) Rights
shall be issued in respect of all shares of Common Stock that become outstanding after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date and, in certain circumstances provided in Section 22 hereof, may be issued
in respect of shares of Common Stock that become outstanding after the Distribution Date. Certificates for Common Stock (including,
without limitation, certificates issued upon original issuance, dispensation from the Corporation’s treasury or transfer
or exchange of Common Stock) after the Record Date but prior to the earliest of the Distribution Date or the Expiration Date (or,
in certain circumstances as provided in Section 22 hereof, after the Distribution Date) shall have impressed, printed,
written or stamped thereon or otherwise affixed thereto the following legend:

 

This
certificate also evidences and entitles the holder hereof to the same number of Rights (subject to adjustment) as the number of
shares of Common Stock represented by this certificate, such Rights being on the terms provided under the Rights Agreement between
TSR, Inc. (the “Corporation”) and Continental Stock Transfer & Trust Company (the “Rights Agent”),
dated as of August 29, 2018, as it may be amended from time to time (the “Rights Agreement”), the terms of which are
incorporated herein by reference and a copy of which is on file at the principal executive offices of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights shall be evidenced by separate certificates and shall no longer
be evidenced by this certificate. The Corporation shall mail to the registered holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a written request therefor. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED
IN SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT, RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES
OR ASSOCIATES OR PERSONS WITH WHOM SUCH PERSONS ARE ACTING IN CONCERT (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.

 

    	 	7	 

     

    

 

(d) As
soon as practicable after the Distribution Date, the Corporation will prepare and execute, the Rights Agent will countersign,
and the Corporation will send or cause to be sent (and the Rights Agent will, if requested, send), by first class mail, postage
prepaid, to each record holder of the Common Stock as of the Close of Business on the Distribution Date, as shown by the records
of the Corporation, at the address of such holder shown on such records, a certificate in the form provided by Section 4
hereof (a “Rights Certificate”), evidencing one Right (subject to adjustment as provided herein) for
each share of Common Stock so held; provided, however, that the Rights may instead be recorded in Book-Entry or
other uncertificated form, in which case such Book-Entries or other evidence of ownership shall be deemed to be Rights Certificates
for all purposes of this Rights Agreement ; provided, further, that all procedures relating to actions to be taken
or information to be provided with respect to such Rights recorded in Book-Entry or other uncertificated forms, and all requirements
with respect to the form of any Rights Certificate set forth in this Rights Agreement, may be modified as necessary or appropriate
to reflect Book-Entry or other uncertificated ownership. As of and after the Distribution Date, the Rights shall be evidenced
solely by such Rights Certificates and may be transferred by the transfer of the Rights Certificate as permitted hereby, separately
and apart from any transfer of one or more shares of Common Stock.

 

(e) In
addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the Expiration
Date, the Corporation (i) shall, with respect to shares of Common Stock so issued or sold (x) pursuant to the exercise of stock
options or under any employee plan or arrangement or (y) upon the exercise, conversion or exchange of other securities issued
by the Corporation prior to the Distribution Date and (ii) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Corporation, issue Rights certificates representing the appropriate number of Rights in connection with such
issuance or sale; provided that no such Rights Certificate shall be issued if, and to the extent that, (i) the Corporation
shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Corporation
or the Person to whom such Rights Certificate would be issued or (ii) appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.

 

    	 	8	 

     

    

 

Section
4.Form of Rights Certificates.

 

(a) The
Rights Certificates (and the forms of election to purchase shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Common Stock or the
Rights may from time to time be listed or as the Corporation may deem appropriate to conform to usage or otherwise and as are
not inconsistent with the provisions of this Rights Agreement (but which do not affect the rights, duties, liabilities or responsibilities
of the Rights Agent). Subject to the provisions of Section 22 hereof, Rights Certificates evidencing Rights whenever issued,
(i) shall be dated as of the date of issuance of the Rights they represent and (ii) subject to adjustment from time to time as
provided herein, on their face shall entitle the holders thereof to purchase such number of shares (including fractional shares
which are integral multiples of one one-hundredth of a share) of Preferred Stock as shall be set forth therein at the price payable
upon exercise of a Right provided by Section 7(b) hereof as the same may from time to time be adjusted as provided herein
(the “Exercise Price”).

 

(b) Notwithstanding
any other provision of this Rights Agreement, any Rights Certificate that represents Rights Beneficially Owned by an Acquiring
Person or any Affiliate or Associate thereof or any other Person whose Rights shall become void pursuant to Section 11(a)(ii)
shall have impressed on, printed on, written on or otherwise affixed to it (if the Corporation or the Rights Agent has knowledge
that such Person is an Acquiring Person or an Associate or Affiliate or a nominee of any of the foregoing) the following legend:

 

The
Beneficial Owner of the Rights represented by this Rights Certificate is an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person. Accordingly, this Rights Certificate and the Rights represented hereby shall become void in the circumstances
specified in Section 11(a)(ii) of the Rights Agreement.

 

Section
5.Countersignature and Registration.

 

(a) Each
Rights Certificate shall be executed on behalf of the Corporation by its Chairman of the Board, Chef Executive Officer, President
or any Vice President, either manually or by facsimile signature, and have affixed thereto the Corporation’s seal or a facsimile
thereof which shall be attested to by the Secretary or an Assistant Secretary of the Corporation, either manually or by facsimile
signature. Each Rights Certificate shall be countersigned by the Rights Agent either manually or by facsimile signature and shall
not be valid for any purpose unless so countersigned. In case any officer of the Corporation who shall have signed any Rights
Certificate shall cease to be such officer of the Corporation before countersignature by the Rights Agent and issuance and delivery
of the certificate by the Corporation, such Rights Certificate, nevertheless, may be countersigned by the Rights Agent and issued
and delivered with the same force and effect as though the person who signed such Rights Certificate had not ceased to be such
officer of the Corporation. Any Rights Certificate may be signed on behalf of the Corporation by any person who, on the date of
the execution of such Rights Certificate, shall be a proper officer of the Corporation to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such person was not such an officer.

 

    	 	9	 

     

    

 

(b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or one or more offices designated
as the appropriate place for the surrender of Rights Certificates upon exercise or transfer, and in such other locations as may
be required by law, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of
the Rights Certificates and the date of each of the Rights Certificates and any Rights Certificates that have a legend printed
thereon pursuant to Section 4(b).

 

Section
6.Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.

 

(a) Subject
to the provisions of Section 11(a)(ii), Section 7(e) and Section 14(b) hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close of Business on the Expiration Date, any Rights Certificate
(other than a Rights Certificate representing Rights that have become void pursuant to Section 11(a)(ii) or that have been
exchanged pursuant to Section 27) may be (i) transferred or (ii) split up, combined or exchanged for one or more other
Rights Certificates, entitling the registered holder to purchase a like number of shares of Preferred Stock as the Rights Certificate
or Rights Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer any Rights
Certificate shall surrender the Rights Certificate at the office of the Rights Agent designated for the surrender of Rights Certificates
with the form of certificate and assignment on the reverse side thereof duly endorsed (or, enclosed with such Rights Certificate,
a written instrument of transfer in a form satisfactory to the Corporation and the Rights Agent), duly executed by the registered
holder thereof or his attorney duly authorized in writing, and with such signature duly guaranteed. Any registered holder desiring
to split up, combine or exchange any Rights Certificate shall make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate to be split up, combined or exchanged at the office of the Rights Agent. Thereupon, the
Rights Agent shall countersign and deliver to the person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Corporation or the Rights Agent may require payment from the holders of the Rights Certificates
of a sum sufficient to cover any Transfer Tax that may be imposed in connection with any transfer, split up, combination or exchange
of any Rights Certificates. The Rights Agent shall not have any duty or obligation to take any action under any section of this
Rights Agreement that requires payment of taxes and/or charges unless and until it is satisfied that all such payments have been
made.

 

(b) Subject
to the provisions of Section 11(a)(ii), Section 7(e) and Section 14(b) hereof, upon receipt by the Corporation
and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate
and the identity of the Beneficial Owner (or former Beneficial Owner) thereof including a signature guarantee and such other documentation
as the Rights Agent may reasonably request), and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory
to them and, if requested by the Corporation, reimbursement to the Corporation and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Corporation
shall issue and deliver a new Rights Certificate of like tenor to the Rights Agent for delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.

 

    	 	10	 

     

    

 

Section
7.Exercise of Rights; Exercise Price; Expiration Date of Rights.

 

(a) The
Rights shall not be exercisable until, and shall become exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in Section 11(a)(ii) and Section 23(a)
hereof). Except as otherwise provided herein, the Rights may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase and certificate on the reverse
side thereof duly executed (with signatures duly guaranteed), to the Rights Agent at the principal office of the Rights Agent
in New York, New York together with payment of the Exercise Price for each Right exercised, subject to adjustment as hereinafter
provided, at or prior to the Close of Business on the earlier of (i) August 29, 2021 (or if the Distribution Date shall have occurred
before August 29, 2021, at the Close of Business on the 90th day following the Distribution Date) or (ii) the date on which the
Rights are redeemed as provided in Section 23 hereof (such earlier date being herein referred to as the “Expiration
Date”).

 

(b) The
Exercise Price shall initially be $24.78 for each one one-hundredth (1/100th) of a share of Preferred Stock issued pursuant to
the exercise of a Right. The Exercise Price and the number of shares of Preferred Stock or other securities to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided in Section 11 and Section 13 hereof.
The Exercise Price shall be payable in lawful money of the United States of America, in accordance with paragraph (c) below.

 

(c) Except
as otherwise provided herein, upon receipt of a Rights Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment by certified check, cashier’s check, bank draft or money order payable to
the Corporation or the Rights Agent of the Exercise Price for the shares to be purchased and an amount equal to any applicable
Transfer Tax required to be paid by the holder of the Rights Certificate in accordance with Section 9(e) hereof, the Rights
Agent shall thereupon promptly (i)(A) requisition from any registrar or transfer agent (as may be appropriate) of the Preferred
Stock of the Corporation one or more certificates representing the number of shares of Preferred Stock to be so purchased, and
the Corporation hereby authorizes and directs such registrar or transfer agent (as may be appropriate) to comply with all such
requests or (B) requisition from any depositary agent for the Preferred Stock of the Corporation depositary receipts representing
such number of shares of Preferred Stock to be so purchased (in which case certificates for the shares of Preferred Stock represented
by such receipts shall be deposited by the transfer agent with the depositary agent), and the Corporation hereby directs any such
depositary agent to comply with such request, (ii) as provided in Section 14(b), at the election of the Corporation, cause
depositary receipts to be issued in lieu of fractional shares of Preferred Stock, (iii) if the election provided for in the immediately
preceding clause (ii) has not been made, requisition from the Corporation the amount of cash to be paid in lieu of the issuance
of fractional shares in accordance with Section 14(b) hereof, (iv) after receipt of such Preferred Stock certificates and,
if applicable, depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such holder and (v) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Rights Certificate; provided, however, that
in the case of a purchase of securities, other than Preferred Stock, pursuant to Section 13 hereof, the Rights Agent shall
promptly take the appropriate actions corresponding in such case to that referred to in the foregoing clauses (i) through (v)
of this Section 7(c). Notwithstanding the foregoing provisions of this Section 7(c), the Corporation may suspend
the issuance of shares of Preferred Stock upon exercise of a Right for a reasonable period, not in excess of 120 days, during
which the Corporation seeks to register under the Securities Act of 1933, as amended (the “Act”), and
any applicable securities law of any other jurisdiction, the shares of Preferred Stock to be issued pursuant to the Rights; provided,
however, that nothing contained in this Section 7(c) shall relieve the Corporation of its obligations under Section
9(c) hereof.

 

    	 	11	 

     

    

 

(d) In
case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder
of such Rights Certificate or his assignee, subject to the provisions of Section 14(b) hereof.

 

(e) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Corporation shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate following the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof or a Person referred to in clause
(y) or (z) of Section 11(a)(ii) and such other information as the Corporation shall reasonably request.

 

Section
8.Cancellation and Destruction of Rights Certificates.

 

All
Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered
to the Corporation or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered
to the Rights Agent, shall be canceled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Corporation shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall cancel and retire, any Rights Certificate purchased or acquired by the Corporation otherwise than upon
the exercise thereof. The Rights Agent shall deliver all canceled Rights Certificates to the Corporation, or shall, at the written
request of the Corporation, destroy such canceled Rights Certificates, and in such case shall deliver a certificate of destruction
thereof to the Corporation.

 

Section
9.Reservation and Availability of Shares of Preferred Stock.

 

(a) The
Corporation covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares
of Preferred Stock or out of authorized and issued shares of Preferred Stock held in its treasury, such number of shares of Preferred
Stock as will from time to time be sufficient to permit the exercise in full of all outstanding Rights. The Corporation shall
take such action as may be required for it to comply with the foregoing sentence of this Section 9(a).

 

    	 	12	 

     

    

 

(b) The
Corporation shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares of Preferred
Stock issued or reserved for issuance in accordance with this Rights Agreement to be listed, upon official notice of issuance,
on the NASDAQ Capital Market or successor thereto or, if the principal market for the Common Stock is not the NASDAQ Capital Market,
to be eligible for quotation on any other national securities exchange or other comparable quotation system.

 

(c) The
Corporation covenants and agrees that it will take all such actions as may be necessary to insure that all shares of Preferred
Stock delivered upon exercise of Rights shall, at the time of delivery of the certificates, for such shares (subject to payment
of the Exercise Price in respect thereof), be duly and validly authorized and issued and fully paid and nonassessable shares.

 

(d) The
Corporation shall use its best efforts to (i) file, as soon as practicable following the occurrence of the event described in
Section 11(a)(ii), or as soon as is required by law following the Distribution Date, as the case may be, a registration statement
under the Act, with respect to the shares of Preferred Stock purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for Preferred Stock, or (B) the Expiration Date. The Corporation may temporarily
suspend, for a period of time not to exceed 120 days, the issuance of shares of Preferred Stock upon exercise of a Right in order
to prepare and file a registration statement under the Act and permit it to become effective. The Corporation will also take such
action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various
states in connection with the exercisability of the Rights. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained
and until a registration statement under the Act (if required) shall have been declared effective.

 

(e) The
Corporation covenants and agrees that it will pay when due and payable any and all federal and state Transfer Taxes which may
be payable in respect of the issuance or delivery of the Rights Certificates or of any shares of Preferred Stock issued or delivered
upon the exercise of Rights. The Corporation shall not, however, be required to pay any Transfer Tax which may be payable in respect
of any transfer or delivery of a Rights Certificate to a Person other than, or the issuance or delivery of certificates or depositary
receipts for Preferred Stock upon exercise of Rights in a name other than that of, the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise, and the Corporation shall not be required to or issue or deliver a Rights Certificate
or certificate or depositary receipt for Preferred Stock to a Person other than such registered holder until any such Transfer
Tax shall have been paid (any such Transfer Tax being payable by the holder of such Rights Certificate at the time of surrender)
or until it has been established to the Corporation’s satisfaction that no such Transfer Tax is due.

 

    	 	13	 

     

    

 

Section
10.Preferred Stock Record Date.

 

Each
Person in whose name any certificate for shares of Preferred Stock is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the Preferred Stock represented thereby on, and such certificate shall be dated
as of, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Exercise Price
(and any applicable Transfer Taxes) was made; provided, however, that, if the date of such surrender and payment
is a date upon which the Preferred Stock transfer books of the Corporation are closed, such Person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated as of, the next succeeding Business Day on which the
Preferred Stock transfer books of the Corporation are open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Rights Certificate, as such, shall not be entitled to any rights of a stockholder of the Corporation with respect to shares
for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Corporation, except
as provided herein.

 

Section
11.Adjustment of Exercise Price, Number of Shares or Number of Rights.

 

The
Exercise Price and the number of shares of Preferred Stock which may be purchased upon exercise of a Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.

 

(a)(i)In
the event the Corporation shall at any time after the date of this Rights Agreement (i) declare a dividend on the shares
of Preferred Stock payable in shares of Preferred Stock, (ii) subdivide the outstanding shares of Preferred Stock, (iii) combine
the outstanding shares of Preferred Stock into a smaller number of shares of Preferred Stock or (iv) issue any shares of
its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation
or merger in which the Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a),
the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination
or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares
of capital stock which, if such Right had been exercised immediately prior to such date, the holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Corporation issuable upon exercise of one Right.

 

(ii) Subject
to the second paragraph of this Section 11(a)(ii) and to Section 27, from and after the Stock Acquisition
Date, each holder of a Right shall have a right to receive, upon exercise of each Right, in accordance with the terms of this
Rights Agreement and in lieu of shares of Preferred Stock, such number of shares of the Corporation’s Common Stock as shall
equal the result obtained by dividing the current Exercise Price by 50% of the then Current Per Share Market Price of the Corporation’s
Common Stock (determined pursuant to Section 11(d)) on the Stock Acquisition Date.

 

    	 	14	 

     

    

 

From
and after the Stock Acquisition Date, any Rights that are or were acquired or beneficially owned by (1) an Acquiring Person
(or any Associate or Affiliate of such Acquiring Person or any other Person with whom such Person is Acting in Concert), (2) a
transferee of any Acquiring Person (or of any such Associate or Affiliate or any other Person with whom such Person is Acting
in Concert) who becomes such a transferee after the Acquiring Person becomes an Acquiring Person or (3) a transferee of an
Acquiring Person (or of any such Associate or Affiliate or any other Person with whom such Person is Acting in Concert) who becomes
such a transferee prior to or concurrently with the Acquiring Person becoming an Acquiring Person and who receives such Rights
(I) with actual knowledge that the transferor is or was an Acquiring Person or (II) pursuant to either (x) a transfer
(whether or not for consideration) from the Acquiring Person (or any such Associate or Affiliate or any other Person with whom
such Person is Acting in Concert) to holders of equity interests in such Acquiring Person (or any such Associate or Affiliate
or any other Person with whom such Person is Acting in Concert) or to any Person with whom the Acquiring Person (or such Associate
or Affiliate or any other Person with whom such Person is Acting in Concert) has any continuing agreement, arrangement, understanding
or relationship (whether or not in writing) regarding the transferred Rights or (y) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding (whether or not in writing) which has as a primary purpose or effect
of the avoidance of this Section 11(a)(ii), (each such Person described in (1)-(3) above, an “Excluded
Person”) shall, in each such case, be null and void, and any holder of such Rights (whether or not such holder is
an Acquiring Person or an Associate or Affiliate of an Acquiring Person or any other Person with whom such Person is Acting in
Concert) shall thereafter have no right to exercise such Rights under any provision of this Rights Agreement. No Rights Certificates
shall be issued pursuant to Section 3, Section 6, Section 7(d) or Section 11 or otherwise hereof that
represents Rights that are or have become null and void pursuant to the provisions of this paragraph and any Rights Certificate
delivered to the Rights Agent that represents Rights that are or have become null and void pursuant to the provisions of this
paragraph shall, upon receipt of written notice directing it to do so, be canceled by the Rights Agent.

 

(iii) If
there are not sufficient authorized but unissued shares of the Corporation’s Common Stock to permit the exercise in full
of the Rights in accordance with Section 11(a)(ii), or should the Board of Directors so elect, the Corporation shall
with respect to such deficiency, to the extent permitted by applicable law and any material agreements to which the Corporation
is a party, (i) determine the excess (the “Spread”) of (A) the value of the shares of the
Corporation’s Common Stock issuable upon the exercise of a Right as provided in Section 11(a)(ii) (the “Current
Value”) over (B) the Exercise Price, and (ii) with respect to each Right, make adequate provision to substitute
for such shares of Common Stock, upon payment of the applicable Exercise Price, any one or more of the following having an aggregate
value determined by the Board of Directors to be equal to the Current Value: (A) cash, (B) a reduction in the Exercise
Price, (C) shares of the Corporation’s Common Stock or other equity securities of the Corporation (including, without
limitation, shares, or units of shares, of preferred stock which the Board of Directors has determined to have the same value
as the Corporation’s Common Stock (“Common Stock Equivalents”)), (D) debt securities of the
Corporation or (E) other assets; provided, however, that if the Corporation shall not have made adequate provision
to deliver value pursuant to clause (ii) above within thirty days following the Stock Acquisition Date, then the Corporation
shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price,
shares of the Corporation’s Common Stock (to the extent available) and then, if necessary, cash, which shares and cash shall
have an aggregate value equal to the Spread.

 

    	 	15	 

     

    

 

(b) If
the Board of Directors shall determine in good faith that it is likely that sufficient additional shares of the Corporation’s
Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30-day period set forth above may be extended
to the extent necessary, but not more than 180 days after the Stock Acquisition Date, in order that the Corporation may seek
stockholder approval for the authorization of such additional shares (such period, as it may be extended, the “Substitution
Period”). If the Corporation determines that action need be taken pursuant to this Section 11(a)(iii),
the Corporation (x) shall provide, subject to Section 7(f) and the last paragraph of Section 11(a)(ii),
that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of additional shares, decide the appropriate form
of distribution to be made and determine the value thereof. If the exercisability of the Rights is suspended pursuant to this
Section 11(a)(iii), the Corporation shall make a public announcement, and shall deliver to the Rights Agent a statement,
stating that the exercisability of the Rights has been temporarily suspended. When the suspension is no longer in effect, the
Corporation shall make another public announcement, and deliver to the Rights Agent a statement, so stating. For purposes of this
Section 11(a)(iii), the value of the Corporation’s Common Stock shall be the Current Per Share Market Price
(as determined pursuant to Section 11(d)(i)) of the Corporation’s Common Stock as of the Stock Acquisition Date,
and the value of any Common Stock Equivalent shall be deemed to have the same value as the Corporation’s Common Stock on
such date.

 

(c) If
the Corporation fixes a record date for the making of a distribution to all holders of the Preferred Stock (including any distribution
made in connection with a consolidation or merger in which the Corporation is the continuing or surviving corporation) of evidences
of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in shares of Preferred Stock ) or
subscription rights or warrants (excluding those referred to in Section 11(b)), the Exercise Price to be in effect
after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by
a fraction, (i) the numerator of which shall be the then Current Per Share Market Price of the Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness to be distributed or of
such subscription rights or warrants applicable to one share of Preferred Stock and (ii) the denominator of which shall be
the then Current Per Share Market Price of the Preferred Stock; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares of Preferred Stock to be issued upon
exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed. If such distribution
is not so made, the Exercise Price shall again be adjusted to be the Exercise Price that would then be in effect if such record
date had not been fixed.

 

    	 	16	 

     

    

 

(d) Current
Per Share Market Price.

 

(i) For
the purpose of any computation hereunder, the “Current Per Share Market Price” of any security on any
date shall be deemed to be the average of the daily closing prices per share of such security for the thirty consecutive Trading
Days immediately prior to such date; provided, however, that if the Current Per Share Market Price of the security
is determined during a period (i) following the announcement by the issuer of such security of (A) a dividend or distribution
on such security payable in shares of such security or other securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such security, and (ii) prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in
each such case, the Current Per Share Market Price shall be appropriately adjusted to reflect the current market price per share
equivalent of such security. The closing price for each day shall be the last sale price or, if no such sale takes place on such
day, the average of the closing bid and asked prices, in either case as reported by NASDAQ, or, if on any such date the security
is not listed on NASDAQ, the average of the closing bid and asked prices as furnished by a professional market maker making a
market in the security selected by the Board of Directors. If on any such date no such market maker is making a market in the
security, the fair value of the security on such date as determined in good faith by the Board of Directors shall be used.

 

(ii) For
the purpose of any computation hereunder, the “Current Per Share Market Price” of the Preferred Stock
shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Stock is not publicly
traded, the “Current Per Share Market Price” of the Preferred Stock shall be conclusively deemed to
be the Current Per Share Market Price of the Corporation’s Common Stock as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof)
multiplied by one hundred. If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, “Current
Per Share Market Price” means the fair value per share as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent.

 

(e) No adjustment
in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise
Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a share of Preferred Stock or one ten-thousandth
of any other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than three years from the date of the transaction which requires
such adjustment.

 

(f) If,
as a result of an adjustment made pursuant to Section 11(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Corporation other than Preferred Stock, the number of such other shares
so receivable upon exercise of any Right shall thereafter be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Section 11(a)-(c),
inclusive, and the provisions of Section 7, Section 9, Section 10 and Section 13 with respect
to the Preferred Stock shall apply on like terms to any such other shares.

 

    	 	17	 

     

    

 

(g) All
Rights originally issued by the Corporation subsequent to any adjustment made to the Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of shares of Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided herein.

 

(h) Unless
the Corporation exercises its election as provided in Section 11(i), upon each adjustment of the Exercise Price as
a result of the calculations made in Section 11(b) and Section 11(c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number
of one one-hundredth of a share of Preferred Stock (calculated to the nearest one one-thousandth of a share of Preferred Stock)
obtained by (i) multiplying the number of one one-hundredth of a shares of Preferred Stock covered by a Right immediately
prior to this adjustment by the Exercise Price in effect immediately prior to such adjustment of the Exercise Price and (ii) dividing
the product by the Exercise Price in effect immediately after such adjustment of the Exercise Price.

 

(i) The
Corporation may elect on or after the date of any adjustment of the Exercise Price to adjust the number of Rights in substitution
for any adjustment in the number of shares of Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the number of shares of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one hundred-thousandth) obtained by dividing the Exercise Price
in effect immediately prior to adjustment of the Exercise Price by the Exercise Price in effect immediately after adjustment of
the Exercise Price. The Corporation shall make a public announcement (with prompt written notice thereof to the Rights Agent)
of its election to adjust the number of Rights, indicating the record date for the adjustment and, if known at the time, the amount
of the adjustment to be made. The record date may be the date on which the Exercise Price is adjusted or any day thereafter but,
if the Rights Certificates have been distributed, shall be at least 10 days after the date of the public announcement. If
Rights Certificates have been distributed, upon each adjustment of the number of Rights pursuant to this Section 11(i),
the Corporation shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14, the additional Rights to which such holders shall
be entitled as a result of such adjustment or, at the option of the Corporation, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof if required by the Corporation, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates to be so distributed shall be issued, executed and countersigned
in the manner provided for herein and shall be registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.

 

(j) Irrespective
of any adjustment or change in the Exercise Price or the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise Price and the number of
shares of Preferred Stock which were expressed in the initial Rights Certificates issued hereunder.

 

    	 	18	 

     

    

 

(k) Before
taking any action that would cause an adjustment reducing the Exercise Price below the then par value of the Preferred Stock issuable
upon exercise of the Rights, the Corporation shall take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Preferred Stock at such adjusted
Exercise Price.

 

(l) If
this Section 11 requires that an adjustment in the Exercise Price be made effective as of a record date for a specified
event, the Corporation may defer, until the occurrence of such event, issuing to the holder of any Right exercised after such
record date shares of Preferred Stock and other capital stock or securities of the Corporation, if any, issuable upon such exercise
over and above the Preferred Stock and other capital stock or securities of the Corporation, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional
shares upon the occurrence of the event requiring adjustment.

 

(m) Anything
in this Section 11 to the contrary notwithstanding, the Corporation shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that
it in its sole discretion shall determine to be advisable in order that any (i) combination or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the Current Per Share Market Price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares
of Preferred Stock, (iv) dividends on the Preferred Stock payable in shares of Preferred Stock, or (v) issuance of any
rights, options or warrants referred to in Section 11(b) made by the Corporation after the date of this Rights Agreement
to holders of its Preferred Stock shall not be taxable to such stockholders.

 

(n) If,
at any time after the date of this Rights Agreement and prior to the Distribution Date, the Corporation (i) declares or pays
any dividend on the Corporation’s Common Stock payable in shares of Common Stock or (ii) effects a subdivision, combination
or consolidation of the Corporation’s Common Stock (by reclassification or otherwise other than by payment of dividends
in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in any such case (x) the number
of one one-hundredths of a share of Preferred Stock purchasable after such event upon exercise of each Right shall be determined
by multiplying the number of one one-thousandths of a share of Preferred Stock so purchasable immediately prior to such event
by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (y) each share
of the Corporation’s Common Stock outstanding immediately after such event shall have issued with respect to it that number
of Rights which each share of Common Stock outstanding immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.

 

    	 	19	 

     

    

 

Section
12.Certification of Adjusted Exercise Price or Number of Shares.

 

Whenever
an adjustment is made as provided in Section 11, Section 13 or Section 23(c), the Corporation shall (a) promptly
prepare a certificate setting forth such adjustment, and a brief statement of the facts giving rise to such adjustment and the
computation, methodology and accounting for such adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Rights Certificate
in accordance with Section 25. Notwithstanding the foregoing sentence, the failure of the Corporation to make such certification
or give such notice shall not affect the validity of or the force or effect of the requirement for such adjustment. Any adjustment
to be made pursuant to Section 11, Section 13 or Section 23(c) of this Rights Agreement shall be effective
as of the date of the event giving rise to such adjustment. The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed to have knowledge of any adjustment unless and until it shall
have received such certificate.

 

Section
13.Consolidation, Merger or Sale or Transfer of Assets or Earning Power.

 

(a) In
the event that, at any time after the time that any Person becomes an Acquiring Person, (x) the Corporation shall, directly or
indirectly, consolidate with, or merge with and into, any other Person or Persons (other than an Exempt Person or Persons) and
the Corporation shall not be the surviving or continuing corporation of such consolidation or merger, or (y) any Person or Persons
(other than an Exempt Person) shall, directly or indirectly, consolidate with, or merge with and into, the Corporation, and the
Corporation shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation
or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities
of any other Person (other than an Exempt Person) or of the Corporation or cash or any other property, or (z) the Corporation
or one or more of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer to any other Person or any Affiliate
or Associate of such Person, in one or more transactions, or the Corporation or one or more of its Subsidiaries shall sell or
otherwise transfer to any Persons in one or a series of related transactions, assets or Earning Power (as defined herein) aggregating
more than 50% of the assets or Earning Power of the Corporation and its Subsidiaries (taken as a whole), then, on the first occurrence
of any such event, proper provision shall be made so that (i) each holder of record of a Right, except as provided in Section
11(a)(ii) hereof, shall thereafter have the right to receive, upon the exercise thereof and payment of the Exercise Price
in accordance with the terms of this Rights Agreement and in lieu of shares of Preferred Stock, such number of shares of validly
issued, fully paid, non-assessable and freely tradable Common Stock of the Principal Party (as defined herein), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as shall equal the result obtained by dividing the Exercise
Price by 50% of the Fair Market Value of the Common Stock of the Principal Party on the date of the consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Corporation pursuant to this Rights Agreement; (iii) the term
“Corporation” for all purposes of this Rights Agreement shall thereafter be deemed to refer to such Principal Party;
(iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock in accordance with the provisions of Section 9 hereof applicable to the reservation of Preferred Stock)
in connection with such consummation as may be necessary to insure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger, consolidation, sale of all or substantially
all of the assets, recapitalization, reclassification of shares, reorganization or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of
the Exercise Price, such cash, shares, rights, warrants and other property which such holder would have been entitled to receive
had it, at the time of such transaction, owned the shares of Common Stock of the Principal Party purchasable upon the exercise
of a Right, and such Principal Party shall take such steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property; and (v) the provisions of Section 11 (a)(ii) hereof shall be of no effect following the occurrence
of any event described in clause (x), (y) or (z) above of this Section 13(a).

 

    	 	20	 

     

    

 

(b) “Earning
Power” of the Corporation and its Subsidiaries shall be determined in good faith by the Corporation’s Board
of Directors on the basis of the operating earnings of each business operated by the Corporation and its Subsidiaries during the
three fiscal years preceding the date of such determination (or, in the case of any business not operated by the Corporation or
any Subsidiary during three full fiscal years preceding such date, during the period such business was operated by the Corporation
or any Subsidiary).

 

(c) 
“Principal Party” shall mean:

 

(i) in
the case of any transaction described in (x) or (y) of the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of the securities into which shares of Common Stock of the Corporation are changed or otherwise exchanged or converted
in such merger or consolidation, or, if there is more than one such issuer, the issuer of the Common Stock of which has the greatest
market value or (B) if no securities are so issued, (x) the Person that is the other party to the merger or consolidation and
that survives such merger or consolidation, or, if there is more than one such Person, the Person the Common Stock of which has
the greatest market value or (y) if the Person that is the other party to the merger or consolidation does not survive the merger
or consolidation, the Person that does survive the merger or consolidation (including the Corporation if it survives); and

 

(ii) in
the case of any transaction described in (z) of the first sentence in Section 13(a), the Person that is the party receiving
the greatest portion of the assets or Earning Power transferred pursuant to such transaction or transactions, or, if each Person
that is a party to such transaction or transactions receives the same portion of the assets or Earning Power so transferred or
if the Person receiving the greatest portion of the assets or Earning Power cannot be determined, whichever of such Persons as
is the issuer of Common Stock having the greatest market value of shares outstanding;

 

    	 	21	 

     

    

 

provided,
however, that in any case, (1) if the Common Stock of such Person is not at such time and has not been continuously over
the preceding 12-month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has been so registered, the term “Principal Party” shall refer
to such other Person; (3) if such Person is a Subsidiary, directly or indirectly, or Affiliate of more than one Person, the Common
Stock of two or more of which are and have been so registered, the term “Principal Party” shall refer to whichever
of such Persons is the issuer of the Common Stock having the greatest market value of shares outstanding; and (3) if such
Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly,
by the same Person, the rules set forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a “Subsidiary” of both or all of such joint venturers and
the Principal Parties in each such chain shall bear the obligations set forth in this Section 13 in the same ratio
as their direct or indirect interests in such Person bear to the total of such interests.

 

(d) The
Corporation shall not consummate any consolidation, merger or sale or transfer of assets or Earning Power referred to in Section
13(a) unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Corporation and each Principal Party and each other Person that may become a Principal Party as a result of
such consolidation, merger, sale or transfer shall have executed and delivered to the Rights Agent an agreement confirming that
the Principal Party shall, upon consummation of such consolidation, merger or sale or transfer of assets or Earning Power, assume
this Rights Agreement in accordance with Section 13(a) hereof and that all rights of first refusal or preemptive rights
in respect of the issuance of shares of Common Stock of the Principal Party upon exercise of outstanding Rights have been waived
and that such transaction shall not result in a default by the Principal Party under this Rights Agreement, and further providing
that, as soon as practicable after the date of any consolidation, merger or sale or a transfer of assets or Earning Power referred
to in Section 13(a) hereof, the Principal Party will:

 

(i) prepare
and file a registration statement under the Act with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the date of expiration of the Rights, and similarly comply with applicable state
securities laws;

 

(ii) use
its best efforts to (1) list (or continue the listing of) the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility requirements for quotation on the NASDAQ Capital Market, and (2)
qualify or register the Rights and the securities purchasable upon exercise of the Rights under the blue sky laws of such jurisdictions
as may be necessary or appropriate; and

 

(iii) deliver
to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act. In the event that any
of the transactions described in Section 13(a) hereof shall occur at any time after the occurrence of a transaction described
in Section 11(a)(ii) hereof, the Rights which have not theretofore been exercised shall, subject to the provisions of Section
11(a)(ii) hereof, thereafter be exercisable in the manner described in Section 13(a).

 

    	 	22	 

     

    

 

(e) In
case the Principal Party which is to be a party to a transaction referred to in this Section 13 has a provision in any
of its authorized securities or in its Certificate of Incorporation, as amended, or Amended and Restated By-laws, as amended,
or other instrument governing its corporate affairs, which provision would have the effect of (i) causing such Principal Party
to issue, in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13,
shares of Common Stock of such Principal Party at less than the then Fair Market Value per share (determined pursuant to Section
11(b) hereof) or securities exercisable for, or convertible into, Common Stock of such Principal Party at less than such then
Fair Market Value (other than to holders of Rights pursuant to this Section 13) or (ii) providing for any special or similar
payment in connection with the issuance to any holder of a Right of Common Stock of such Principal Party pursuant to the provisions
of this Section 13, then, in such event, the Corporation shall not consummate any such transaction unless prior thereto
the Corporation and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities
shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation
of the proposed transaction.

 

Section
14.Fractional Rights and Fractional Shares.

 

(a) The
Corporation shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional
Rights (i.e., Rights to acquire less than one one-hundredth of a share of Preferred Stock). If the Corporation shall determine
not to issue such fractional Rights, then, in lieu of such fractional Rights, there shall be paid to the holders of record of
the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the Fair Market Value of a whole Right. For the purposes of this Section 14(a), the Fair Market Value
of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable.  The closing price for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on
NASDAQ, or, if the Rights are not listed or admitted to trading on NASDAQ, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed
or admitted to trading, or, if the Rights are not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported
by such other system then in use, or, if on any such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of
Directors, or, if on any such date no professional market maker is making a market in the Rights, the Fair Market Value of a whole
Right shall be determined by an independent investment banking firm experienced in the valuation of securities selected in good
faith by the Board of Directors of the Corporation, or, if no such investment banking firm is, in the good faith judgment of the
Board of Directors, available to make such determination, the Fair Market Value of a whole Right on such date shall be determined
in good faith by the Board of Directors.

 

    	 	23	 

     

    

 

(b) The
Corporation shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples
of one-hundredth of a share) upon exercise of the Rights or to distribute certificates which evidence fractional shares (other
than fractions which are integral multiples of one-hundredth of a share). In lieu of issuing fractions of shares of Preferred
Stock, the Corporation may, at its election, issue depositary receipts evidencing fractions of shares pursuant to an appropriate
agreement between the Corporation and a depositary selected by it, provided that such agreement shall provide that the holders
of such depositary receipts shall have all of the rights, privileges and preferences to which they would be entitled as owners
of the Preferred Stock. With respect to fractional shares that are not integral multiples of one-hundredth of a share, if the
Corporation does not issue such fractional shares or depositary receipts in lieu thereof, there shall be paid to the holders of
record of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction
of the Fair Market Value of a share of Preferred Stock.

 

(c) Following
the occurrence of one of the transactions or events specified in Section 11 hereof giving rise to the right to receive
shares of Common Stock, capital stock equivalents (other than shares of Preferred Stock) or other securities upon the exercise
of a Right, the Corporation shall not be required to issue fractions of shares of Common Stock or units of such Common Stock,
capital stock equivalents or other securities upon exercise of the Rights or to distribute certificates that evidence fractional
shares of Common Stock, capital stock equivalents or other securities.  In lieu of fractional shares of Common Stock,
capital stock equivalents or other securities, the Corporation shall pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of
one share of Common Stock or unit of such Common Stock, capital stock equivalents or other securities.  For purposes of this
Section 14(c), the Fair Market Value shall be the current closing price for the Trading Day immediately prior to the
date of such exercise and, if such capital stock equivalent is not traded, each such capital stock equivalent shall have the value
of one one-hundredth of a share of Preferred Stock.

 

(d) Whenever
a payment for fractional Rights or fractional shares is to be made by the Rights Agent under any section of this Rights Agreement,
the Corporation shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail
the facts related to such payments and the prices and formulas utilized in calculating such payments, and (ii) provide sufficient
monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected
in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of, any payment
for fractional Rights or fractional shares under any section of this Rights Agreement relating to the payment of fractional Rights
or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.

 

(e) The
holder of a Right by the acceptance of a Right expressly waives his, her or its right to receive any fractional Right or any fractional
shares of Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share) upon exercise of
a Right.

 

    	 	24	 

     

    

 

Section
15.Rights of Action.

 

All
rights of action in respect of this Rights Agreement, except the rights of action given to the Rights Agent in Section 18
and Section 20 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution
Date, the holders of record of the Common Stock); and any holder of record of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Corporation to enforce, or otherwise act in respect of, his, her or its right
to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Rights
Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Rights Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief against actual or threatened violations of, the obligations
of any Person subject to this Rights Agreement.

 

Section
16.Agreement of Right Holders.

 

Each
holder of a Right, by accepting the same, consents and agrees with the Corporation and the Rights Agent and with every other holder
of a Right that:

 

(a) Prior
to the Distribution Date, the Rights shall be evidenced by the Book-Entries representing, or the certificates for, Common Stock
registered in the name of the holders of Common Stock (together, as applicable, with the Summary of Rights), which Book Entries
representing, or the certificates for, Common Stock shall also constitute certificates for Rights, and not by separate Rights
Certificates, and each Right shall be transferable only simultaneously and together with the transfer of shares of Common Stock;

 

(b) After
the Distribution Date, the Rights Certificates are transferable (subject to the provisions of this Rights Agreement) only on the
registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purpose, duly endorsed
or accompanied by a proper instrument of transfer;

 

(c) The
Corporation and the Rights Agent may deem and treat the person in whose name the Rights Certificate (or, prior to the Distribution
Date, the associated Book Entry representing, or certificate for, Common Stock) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated
Common Stock certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither
the Corporation nor the Rights Agent shall be affected by any notice to the contrary;

 

(d) Notwithstanding
anything in this Rights Agreement to the contrary, neither the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Corporation must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible; and

 

    	 	25	 

     

    

 

(e) Rights
Beneficially Owned by certain persons will under certain circumstances set forth in this Rights Agreement become null and void
pursuant to Section 11(a)(ii) hereof; and

 

(f) This
Rights Agreement may be supplemented or amended from time to time pursuant to Section 26 hereof.

 

Section
17.Rights Certificate Holder Not Deemed a Stockholder.

 

No
holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder
of Preferred Stock or any other securities which may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a stockholder of the Corporation or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided in Section 26 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised
in accordance with the provisions hereof.

 

Section
18.Concerning the Rights Agreement.

 

(a) The
Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration
and execution of this Rights Agreement and the exercise and performance of its duties hereunder. The Corporation also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense (including, without limitation,
the reasonable fees and expenses of legal counsel) incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or failed to be done by the Rights Agent in connection with the acceptance and administration
of this Rights Agreement, including the costs and expenses of defending against any claim of liability relating to the Rights
or this Rights Agreement. The provisions under this Section 18 and Section 20 below shall survive the
expiration of the Rights and the termination of this Agreement and the resignation, replacement or removal of the Rights Agent.
The reasonable costs and expenses incurred in enforcing this right of indemnification shall be paid by the Corporation to the
extent that the Rights Agent is successful in so enforcing its right of indemnification.

 

(b) The
Rights Agent shall be protected against, and shall incur no liability for or in respect of, any action taken, suffered or omitted
by it in connection with its administration of this Rights Agreement in reliance upon any Rights Certificate or certificate for
Preferred Stock or for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent certificate, statement or other paper or document believed by it to be genuine and
to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.  In no case will the Rights Agent be liable for special,
indirect, incidental or consequential or consequential loss or damage at any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of such loss or damage.

 

    	 	26	 

     

    

 

Section
19.Merger or Consolidation of, or Change in Name of, the Rights Agent.

 

(a) Any
Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person
succeeding to the corporate trust or stock transfer business of the Rights Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Rights Agreement without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided that such Person would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created
by this Rights Agreement any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and
in case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Rights Agreement.

 

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

 

Section
20.Duties of Rights Agent.

 

The
Rights Agent undertakes to perform only the duties and obligations expressly set forth in this Rights Agreement and no implied
duties or obligations shall be read into this Rights Agreement against the Rights Agent. The Rights Agent shall perform its duties
and obligations hereunder upon the following terms and conditions, by all of which the Corporation and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

 

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

 

    	 	27	 

     

    

 

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

 

(c) The
Rights Agent shall be liable hereunder to the Corporation and any other Person only for its own gross negligence, bad faith or
willful misconduct.

 

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

 

(e) The
Rights Agent shall not be under any responsibility in respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any breach by the Corporation of any covenant or condition
contained in this Rights Agreement or in any Rights Certificate; nor shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment required
under the provisions of Section 11 or Section 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after receipt of a certificate describing any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred
Stock to be issued pursuant to this Rights Agreement or any Rights Certificate or as to whether any shares of Preferred Stock
will, when issued, be validly authorized and issued, fully paid and nonassessable.

 

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

 

(g) The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, Chief Executive Officer, President or any Vice President or the Secretary or the Treasurer of
the Corporation, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions. Any application by the Rights Agent for written instructions from the Corporation
may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Rights Agreement and the date on and/or after which such action shall be taken
or omitted and the Rights Agent shall not be liable for any action taken or omitted in accordance with a proposal included in
any such application on or after the date specified therein (which date shall not be less than three Business Days after the date
indicated in such application unless any such officer shall have consented in writing to an earlier date) unless, prior to taking
or omitting any such action, the Rights Agent has received written instructions in response to such application specifying the
action to be taken or omitted.

 

    	 	28	 

     

    

 

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

 

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

 

(j) No provision
of this Rights Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if the Rights Agent believes that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

(k) The
Rights Agent shall not be required to take notice or be deemed to have notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Rights Agreement or the designation of any Person as an Acquiring Person,
Affiliate or Associate or Person with whom another Person is Acting in Concert) under this Rights Agreement unless and until the
Rights Agent shall be specifically notified in writing by the Corporation of such fact, event or determination.

 

(l) If,
with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has not been executed, the Rights Agent shall not take
any further action with respect to such requested exercise of transfer without first consulting with the Corporation.

 

    	 	29	 

     

    

 

Section
21.Change of Rights Agent.

 

The
Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Rights Agreement upon 30 days
notice in writing mailed to the Corporation and to each transfer agent of the Common Stock and the Preferred Stock by registered
or certified mail. The Corporation may remove the Rights Agent or any successor Rights Agent (with or without cause) upon 30 days
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and the Preferred Stock by registered or certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Corporation shall appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If the Corporation shall fail to make such appointment
within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Corporation), then the incumbent Rights Agent or the holder of record of any Rights Certificate
may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Corporation or by such a court, shall be (a) a Person organized and doing business under the laws of the United
States or of any state thereof, in good standing, which is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination in the conduct of its corporate trust or stock transfer business by federal
or state authorities and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000
or (b) an Affiliate controlled by a Person described in clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without
further act or deed, but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Corporation shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock and Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be. Notwithstanding the foregoing provisions, in the event of resignation, removal or
incapacity of the Rights Agent, the Corporation shall have the authority to act as the Rights Agent until a successor Rights Agent
shall have assumed the duties of the Rights Agent hereunder.

 

Section
22.Issuance of New Rights Certificates.

 

Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this Rights Agreement. In addition, in connection with
the issuance or sale of shares of Common Stock following the Distribution Date and prior to the earlier of the Redemption Date
(as defined herein) and the Close of Business on the Expiration Date, the Corporation may, with respect to shares of Common Stock
so issued or sold (a) pursuant to the exercise of stock options; (b) under any employment plan or arrangement; (c) upon
the exercise, conversion or exchange of securities, notes or debentures issued by the Corporation; or (d) pursuant to a contractual
obligation of the Corporation, in each case existing prior to the Distribution Date, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) the Corporation
shall not be obligated to issue any such Rights Certificates if, and to the extent that, the Corporation shall be advised by counsel
that such issuance would create a significant risk of material adverse tax consequences to the Corporation or the Person to whom
such Rights Certificate would be issued, and (ii) no Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.

 

    	 	30	 

     

    

 

Section
23.Redemption.

 

(a) The
Corporation may, at its option, but only by the vote of a majority of the Board of Directors, redeem all but not less than all
of the then outstanding Rights, at any time prior to the Close of Business on the earlier of (i) the tenth day following the Stock
Acquisition Date (subject to extension by the Corporation as provided in Section 26 hereof) or (ii) the Expiration Date,
at a redemption price of $0.01 per Right, subject to adjustments as provided in subsection (c) below (the “Redemption
Price”). The redemption of the Rights by the Board of Directors may be made effective at such time, on such basis
and subject to such conditions as the Board of Directors in its sole discretion may establish.

 

(b) Immediately
upon the action of the Board of Directors ordering the redemption of the Rights pursuant to Section 23(a) hereof,
and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price.  The Corporation shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after the effective time of the action of the Board of Directors ordering the
redemption of the Rights, the Corporation shall give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock; provided, however,
that failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each notice of redemption
will state the method by which the payment of the Redemption Price will be made. At the option of the Board of Directors, the
Redemption Price may be paid in cash to each Rights holder or by the issuance of shares (and, at the Corporation’s election
pursuant to Section 14(b) hereof, cash or depositary receipts in lieu of fractions of shares other than fractions which
are integral multiples of one one-hundredth (1/100th) of a share) of Preferred Stock or Common Stock having a Fair Market Value
equal to such cash payment.

 

(c) In
the event the Corporation shall at any time after the date of this Rights Agreement (i) pay any dividend on Common Stock in shares
of Common Stock; (ii) subdivide or split the outstanding shares of Common Stock into a greater number of shares; (iii) combine
or consolidate the outstanding shares of Common Stock into a smaller number of shares or effect a reverse split of the outstanding
shares of Common Stock; or (iv) combine or consolidate the outstanding shares of Common Stock into a smaller number of shares
of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation
or merger in which the Corporation is the continuing or surviving corporation), then, and in each such event, the Redemption Price
shall be appropriately adjusted to reflect the foregoing.

 

    	 	31	 

     

    

 

(d) The
Corporation may, at its option, discharge all of its obligations with respect to any redemption of the Rights by (i) issuing
a press release announcing the manner of redemption of the Rights and (ii) mailing payment of the Redemption Price to the
registered holders of the Rights at their last addresses as they appear on the registry books of the Rights Agent or, prior to
the Distribution Date , on the registry books of the transfer agent for the Common Stock, and upon such action, all outstanding
Rights Certificates shall be null and void without any further action by the Corporation.

 

Section
24.Notice of Proposed Actions.

 

(a) If
the Corporation shall after the Distribution Date propose (i) to pay any dividend payable in stock of any class to the holders
of its Preferred Stock or to make any other distribution to the holders of its Preferred Stock (other than a regular quarterly
cash dividend); (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options; (iii) to
effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding
Preferred Stock ); (iv) to effect any consolidation or merger into or with any other Person, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of
50% or more of the assets or Earning Power of the Corporation and its Subsidiaries (taken as a whole) to any other Person; (v) to
effect the liquidation, dissolution or winding-up of the Corporation; or (vi) to declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification
or otherwise than by payment of dividends in shares of Common Stock), then, in each such case, the Corporation shall give to each
holder of a Rights Certificate and the Rights Agent, in accordance with Section 25, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up is to take place
and the date of participation therein by the holders of the Common Stock or Preferred Stock or both, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least ten
days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein
by the holders of the Common Stock or Preferred Stock or both, whichever shall be the earlier. The failure to give notice required
by this Section 24 or any defect therein shall not affect the legality or validity of the action taken by the Corporation
or the vote upon any such action.

 

(b) The
Corporation shall, as soon as practicable after a Stock Acquisition Date, give to each holder of a Rights Certificate, in accordance
with Section 25, a notice that describes the transaction in which the a Person became an Acquiring Person and the
consequences of the transaction to holders of Rights under Section 11(a)(ii).

 

    	 	32	 

     

    

 

Section
25.Notices.

 

Notices
or demands authorized by this Rights Agreement to be given or made by the Rights Agent or by the holder of record of any Rights
Certificate or Right to or on the Corporation shall be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as follows:

 

TSR,
Inc.

400 Oser Avenue, Suite 150

Hauppauge, NY 11788

(631) 231-0333

Attention: Christopher Hughes

 

Subject
to the provisions of Section 21, any notice or demand authorized by this Rights Agreement to be given or made by the Corporation
or by the holder of record of any Rights Certificate or Right to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Corporation) as follows:

 

Continental
Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

(212) 845-3218 

Attention:
Erika Young, Vice President & Account Administrator

 

Notices
or demands authorized by this Rights Agreement to be given or made by the Corporation or the Rights Agent to the holder of record
of any Rights Certificate or Right shall be sufficiently given or made if sent by first class mail, postage prepaid, addressed
to such holder at the address of such holder as shown on the registry books of the Corporation.

 

Section
26.Supplements and Amendments.

 

For
as long as the Rights are then redeemable, the Corporation may in its sole and absolute discretion, and the Rights Agent shall
if the Corporation so directs, supplement or amend any provision of this Agreement without the approval of any holders of the
Rights. At any time when the Rights are not then redeemable, the Corporation may, and the Rights Agent shall if the Corporation
so directs, supplement or amend this Rights Agreement without the approval of any holders of Rights Certificates (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained, herein which may be defective or inconsistent with any other
provisions herein or (iii) to change or supplement the provisions hereunder in any manner which the Corporation may deem necessary
or desirable, provided that no such supplement or amendment pursuant to this clause (iv) shall materially adversely affect the
interest of the holders of Rights Certificates. Upon the delivery of a certificate from an appropriate officer of the Corporation
which states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment.

 

    	 	33	 

     

    

 

Section
27.Exchange.

 

(a) The
Board of Directors of the Corporation may, at its option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of one share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter
referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Person (other than an Exempt Person), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Corporation’s Common Stock then-outstanding.

 

(b) Immediately
upon the action of the Board of Directors of the Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 and without any further action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The Corporation shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Corporation promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

 

(c) In
the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 27, the Corporation shall take all such action as
may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights.

 

(d) The
Corporation shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional
shares. In lieu of such fractional shares, the Corporation shall pay to the registered holders of the Rights Certificates with
regard to which such fractional shares of Common Stock would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common Stock for the Trading Day immediately prior to
the date of exchange pursuant to this Section 27.

 

    	 	34	 

     

    

 

Section
28.Successors.

 

All
of the covenants and provisions of this Rights Agreement by or for the benefit of the Corporation or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

 

Section
29.Benefits of this Rights Agreement.

 

Nothing
in this Rights Agreement shall be construed to give to any Person or corporation other than the Corporation, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the holders of Common Stock in their
capacity as holders of the Rights) any legal or equitable right, remedy or claim under this Rights Agreement; but this Rights
Agreement shall be for the sole and exclusive benefit of the Corporation, the Rights Agent and the holders of record of the Rights
Certificates (and, prior to the Distribution Date, the holders of Common Stock in their capacity as holders of the Rights).

 

Section
30.Delaware Contract.

 

This
Rights Agreement and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State
of Delaware and for all purposes shall be governed by and construed and enforced in accordance with the laws of such state applicable
to contracts to be made and performed entirely within such state.

 

Section
31.Counterparts.

 

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

 

Section
32.Descriptive Headings.

 

Descriptive
headings of the several Sections of this Rights Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

 

Section
33.Severability.

 

If
any term, provision, covenant or restriction of this Rights Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Rights Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

Section
34.Determinations and Actions By the Board of Directors, Etc.

 

The
Board of Directors of the Corporation shall have the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors or to the Corporation, or as may be necessary or advisable
in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of
this Rights Agreement and (ii) make all determinations deemed necessary or advisable for the administration of this Rights Agreement
(including a determination to redeem or not redeem the Rights or to amend this Rights Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors in good faith shall (x) be final, conclusive and binding on the Corporation,
the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board of Directors to any liability
to the holders of the Rights.

 

    	 	35	 

     

    

 

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

 

	 	TSR, INC.
	 	 
	 	By:	 /s/ Christopher Hughes
	 	Name: 	Christopher Hughes
	 	Title:	Chief Executive Officer
	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	 	 
	 	By:	 /s/ Erika Young
	 	Name:	Erika Young
	 	Title:	Vice President & Account Administrator

 

    	 	36	 

     

    

 

EXHIBIT
A

 

TO
RIGHTS AGREEMENT

 

UNDER
CERTAIN CIRCUMSTANCES AS PROVIDED IN THE 

RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS

 ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING

PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS

 SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)

 OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS SHALL 

BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO

 ANY PERSON.

 

TSR,
INC.

 

SUMMARY
OF RIGHTS TO PURCHASE CLASS A PREFERRED STOCK, SERIES ONE

 

On
August 29, 2018, the Board of Directors of TSR, INC. (the “Corporation”) declared a dividend distribution
of one preferred stock purchase right for each outstanding share of Common Stock, par value $0.01 per share (the “Common
Stock”), of the Corporation held by stockholders of record on August 29, 2018 (the “Record Date”).
Each Right entities the registered holder to purchase from the Corporation one one-hundredth (1/100th) of a share of preferred
stock of the Corporation, designated as Class A Preferred Stock, Series One (the “Preferred Stock”)
at a price of $24.78 per one one-hundredth (1/100th) of a share (the “Exercise Price”). The description
and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”), dated as of August
29, 2018, between the Corporation and Continental Stock Transfer & Trust Company, as Rights Agent (the “Rights
Agent”).

 

As
discussed below, initially the Rights will not be exercisable, certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.

 

The
Rights, unless earlier redeemed by the Board of Directors, become exercisable upon the close of business on the day (the “Distribution
Date”) which is the earlier of (i) the tenth day following the first date (the “Stock Acquisition Date”)
on which there is a public announcement that a person or group of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 5% or more of the Corporation’s outstanding Common Stock (an “Acquiring
Person”) or such earlier or later date (not beyond the thirtieth day after the Stock Acquisition Date) as the Board
of Directors may determine or (ii) the tenth business day (or such later date as may be determined by the Board of Directors prior
to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) after the date of the commencement
or announcement of a person’s or group’s intention to commence a tender or exchange offer the consummation of which
would result in the ownership of 5% or more of the Corporation’s outstanding Common Stock (even if no shares are actually
purchased pursuant to such offer); prior thereto, the Rights will not be exercisable, will not be represented by a separate certificate,
and will not be transferable apart from the Common Stock, but will instead be evidenced, (i) with respect to any of the shares
of Common Stock held in uncertificated book-entry form (a “Book-Entry”) outstanding as of the Record
Date, by such Book-Entry and (ii) with respect to the shares of Common Stock evidenced by Common Stock certificates outstanding
as of the Record Date, by such Common Stock certificate, together with a copy of this Summary of Rights.

 

    	 	A - 1	 

     

    

 

An
Acquiring Person does not include (A) the Corporation, (B) any Subsidiary of the Corporation, (C) any employee benefit plan or
employee stock plan of the Corporation or any Subsidiary of the Corporation, or any trust or other entity organized, appointed,
established or holding Common Stock for or pursuant to the terms of any such plan, (D) any person or group whose ownership of
5% or more of the Corporation’s then-outstanding shares of Common Stock results solely from (i) any action or transaction
or transactions approved by the Corporation’s Board of Directors before such person or group became an Acquiring Person
or (ii) a reduction in the number of issued and outstanding shares of the Corporation’s Common Stock pursuant to a transaction
or transactions approved by the Corporation’s Board of Directors (provided that any person or group that does not become
an Acquiring Person by reason of clause (i) or (ii) above shall become an Acquiring Person upon acquisition of any additional
shares of the Corporation’s Common Stock unless such acquisition of additional Common Stock will not result in such person
or group becoming an Acquiring Person by reason of such clause (i) or (ii)), (E) any Person that the Board of Directors determines
is exempt from the Rights Agreement, which determination shall be made in the sole and absolute discretion of the Board of Directors,
or (F) any Person who or which, at the time of the first public announcement of the Rights Agreement, is a Beneficial Owner of
5% or more of the Corporation’s Common Stock then outstanding (a “Grandfathered Stockholder”);
provided, however, that if a Grandfathered Stockholder becomes, after such time, the Beneficial Owner of any additional
shares of the Corporation’s Common Stock (regardless of whether, thereafter or as a result thereof, there is an increase,
decrease or no change in the percentage of shares of the Corporation’s Common Stock then outstanding beneficially owned
by such Grandfathered Stockholder) then such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon
such acquisition of Beneficial Ownership of additional shares of the Corporation’s Common Stock, such Person is not the
Beneficial Owner of 5% or more of the Corporation’s Common Stock then outstanding; provided, further, that
upon the first decrease of a Grandfathered Stockholder’s Beneficial Ownership below 5%, such Grandfathered Stockholder shall
cease to be a Grandfathered Stockholder and this clause (ii) shall have no further force or effect with respect to such Person.
For the avoidance of doubt, in the event that after the time of the first public announcement of this Rights Agreement, any agreement,
arrangement or understanding pursuant to which any Grandfathered Stockholder is deemed to be the Beneficial Owner of shares of
the Corporation’s Common Stock expires, terminates or no longer confers any benefit to or imposes any obligation on the
Grandfathered Stockholder, any direct or indirect replacement, extension or substitution of such agreement, arrangement or understanding
with respect to the same or different shares of the Corporation’s Common Stock that confers Beneficial Ownership of shares
of the Corporation’s Common Stock shall be considered the acquisition of Beneficial Ownership of additional shares of the
Corporation’s Common Stock by the Grandfathered Stockholder and render such Grandfathered Stockholder an Acquiring Person
for purposes of this Rights Agreement unless, upon such acquisition of Beneficial Ownership of additional shares of the Corporation’s
Common Stock, such Person is not the Beneficial Owner of 5% or more of the Corporation’s Common Stock then outstanding.

 

    	 	A - 2	 

     

    

 

“Beneficial
Ownership” shall include any securities such Person or any of such Person’s Affiliates or Associates (a) beneficially
owns, directly or indirectly, within the meaning of Rules 13d-3 or 13d-5 promulgated under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), (b) has the right to acquire or vote pursuant to any agreement,
arrangement or understanding (except under limited circumstances), (c) which are directly or indirectly beneficially owned
by any other Person with which such Person has any agreement, arrangement or understanding for the purpose of acquiring, holding
or voting such securities, or obtaining, changing or influencing control of the Company, or with whom such Person is acting in
concert or (d) in respect of which such Person has a derivative position.

 

Until
the Distribution Date (or earlier redemption or expiration of the Rights), new Common Stock certificates issued after August 29,
2018 will contain a legend incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), transfer on the Corporation’s direct registration system of any Common Stock represented by
a Book-Entry or a certificate outstanding as of August 29, 2018, and, in each case, with or without a copy of this Summary of
Rights attached thereto, will also constitute the transfer of the Rights associated with the Common Stock represented by such
Book-Entry or certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights
(“Rights Certificates”) will be mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Rights Certificates alone will evidence the Rights from and after the Distribution
Date.

 

The
Rights are not exercisable until the Distribution Date. Unless earlier redeemed by the Corporation as described below, the Rights
will expire at the close of business on August 29, 2021 (the “Expiration Date”) (or, if the Distribution Date shall
have occurred before August 29, 2021, at the close of business on the 90th day following the Distribution Date).

 

The
Preferred Stock is non-redeemable and, unless otherwise provided in connection with the creation of a subsequent series of preferred
stock (i) subordinate to any other series of the Corporation’s preferred stock and (ii) senior to the Common Stock. The
Preferred Stock may not be issued except upon exercise of Rights. Each outstanding share of Preferred Stock will be entitled to
receive when, as and if declared, a quarterly dividend in an amount equal to (i) 100 times the cash dividends declared on the
Corporation’s Common Stock, and (ii) a preferential cash dividend, if any, in preference to holders of Common Stock in an
amount equal to $50.00 per share of Preferred Stock less the per share amount of all cash dividends declared on the Preferred
Stock pursuant to clause (i) since the immediately preceding quarterly dividend payment date. In addition, Preferred Stock is
entitled to 100 times any noncash dividends (other than dividends payable in equity securities) declared on the Common Stock,
in like kind. In the event of the liquidation of the Corporation, the holders of Preferred Stock will be entitled to receive,
for each share of Preferred Stock, a payment in an amount equal to the greater of $1.00 per one one-hundredth of a share plus
accrued and unpaid dividends and distributions thereon or 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with the Common Stock. In the event of any merger, consolidation or other
transaction in which Common Stock is exchanged, each share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. The rights of Preferred Stock as to dividends, liquidation and voting are protected by anti-dilution
provisions. If the dividends accrued on the Preferred Stock for four or more quarterly dividend periods, whether consecutive or
not, shall not have been declared and paid or irrevocably set aside for payment, the holder of record of the Preferred Stock of
the Corporation of all series (including the Preferred Stock) will have the right to elect two members to the Corporation’s
Board of Directors.

 

    	 	A - 3	 

     

    

 

The
number of shares of Preferred Stock issuable upon exercise of the Rights is subject to certain adjustments from time to time in
the event of a stock dividend on, or a subdivision or combination of, the Common Stock. The Exercise Price for the Rights is subject
to adjustment in the event of extraordinary distributions of cash or other property to holders of Common Stock.

 

Unless
the Rights are earlier redeemed, in the event that, after the time that a Person becomes an Acquiring Person, the Corporation
were to be acquired in a merger or other business combination (in which any shares of Common Stock are changed into or exchanged
for other securities or assets) or more than 50% of the assets or Earning Power (as defined in the Rights Agreement) of the Corporation
and its subsidiaries (taken as a whole) were to be sold or transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each holder of record, other than the Acquiring Person, of a Right
will from and after such date have the right to receive, upon payment of the Exercise Price, that number of shares of common stock
of the acquiring company having a market value at the time of such transaction equal to two times the Exercise Price.

 

In
addition, unless the Rights are earlier redeemed, in the event that a person or group becomes an Acquiring Person, the Rights
Agreement provides that proper provision will be made so that each holder of record of a Right, other than the Acquiring Person
(whose Rights will thereupon become null and void), will thereafter have the right to receive, upon payment of the Exercise Price,
that number of one one-hundredths of a share of Preferred Stock having a market value at the time of the transaction equal to
two times the Exercise Price (such market value to be determined with reference to the market value of the Corporation’s
Common Stock as provided in the Rights Agreement).

 

At
any time after any person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or
more of the outstanding voting stock, the Board of Directors of the Corporation may exchange the Rights (other than Rights owned
by such person or group which will have become void), in whole or in part, at an exchange ratio of one share of Common Stock per
Right (subject to adjustment).

 

Fractions
of shares of Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share) may, at the election
of the Corporation, be evidenced by depositary receipts. The Corporation may also issue cash in lieu of fractional shares which
are not integral multiples of one one-hundredth of a share.

 

At
any time on or prior to the close of business on the earlier of (i) the tenth day after the Stock Acquisition Date (or such later
date as a majority of the Board of Directors may determine) or (ii) the Expiration Date, the Corporation may redeem the Rights
in whole, but not in part, at a price of $0.01 per Right (the “Redemption Price”). Immediately upon
the effective time of the action of the Board of Directors of the Corporation authorizing redemption of the Rights, the right
to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

 

For
as long as the Rights are then redeemable, the Corporation may, amend the Rights in any manner, including an amendment to extend
the time period in which the Rights may be redeemed. At any time when the Rights are not then redeemable, the Corporation may
amend the Rights in any manner that does not materially adversely affect the interests of holders of the Rights as such. Amendments
to the Rights Agreement from and after the time that any Person becomes an Acquiring Person and amendments to the redemption price
or expiration date of the Rights require the approval of a majority of the Continuing Directors (as defined and provided in the
Rights Agreement).

 

Until
a Right is exercised, the holder, as such, will have no rights as a stockholder of the Corporation, including, without limitation,
the right to vote or to receive dividends.

 

A
copy of the Rights Agreement will be filed with the Securities and Exchange Commission as an exhibit to a current report on Form
8-K. A copy of the Rights Agreement is available free of charge from the Corporation. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the Rights Agreement which is incorporated in this
summary description herein by reference.

    	 	A - 4	 

     

    

 

EXHIBIT
B

 

TO
RIGHTS AGREEMENT

 

[Form
of Rights Certificate]

 

	Certificate No.
W	_________Rights

 

NOT
EXERCISABLE AFTER (I) ___________, 2021, OR (II) IF THE DISTRIBUTION DATE (AS DEFINED BELOW) SHALL HAVE OCCURRED BEFORE THE DATE
SPECIFIED IN CLAUSE (I), THE DATE WHICH IS NINETY (90) DAYS AFTER ______________, 2021, OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $0.01 PER RIGHT (SUBJECT TO ADJUSTMENT),
ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT
(AS REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED
TO ANY PERSON.

 

Rights
Certificate

 

This
certifies that _______________, or registered assigns, is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of August 29,
2018 (the “Rights Agreement”) between TSR, Inc. (the “Corporation”) and Continental Stock Transfer &
Trust Company, (the “Rights Agent”), to purchase from the Corporation at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and prior to 5:00 p.m. (New York City time) on August 29, 2021 (or if the Distribution
Date shall have occurred before August 29, 2021, at the close of business on the 90th day following the Distribution Date) at
the office of the Rights Agent designated in the Rights Agreement for such purpose, or its successor as Rights Agent, in New York,
New York, one one-hundredth (1/100th) of a fully paid nonassessable share of Class A Preferred Stock, Series One, $1.00 par value
per share, of the Corporation (the “Preferred Stock”) at a purchase price of $24.78, as the same may from time to
time be adjusted in accordance with the Rights Agreement (the “Exercise Price”), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase attached hereto duly executed.

 

As
provided in the Rights Agreement, the Exercise Price and the number of shares of Preferred Stock which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain
events and, upon the happening of certain events, securities other than shares of Preferred Stock, or other property, may be acquired
upon exercise of the Rights evidenced by this Rights Certificate, as provided in the Rights Agreement.

 

    	 	B - 1	 

     

    

 

This
Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made
for a full description of the rights, limitations of rights, obligations, duties and immunities of the Rights Agent, the Corporation
and the holders of record of Rights Certificates. Copies of the Rights Agreement are on file at the principal executive office
of the Corporation.

 

This
Rights Certificate, with or without other Rights Certificates, upon surrender at the office of the Rights Agent designated in
the Rights Agreement for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Rights Certificate, or, Rights Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof, another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.

 

Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Corporation at its
option or under certain other circumstances at a redemption price of $0.01 per Right. No fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth (1/100th) of a share) are required to be issued upon the
exercise of any Right or Rights evidenced hereby, and in lieu thereof the Corporation may cause depositary receipts to be issued
and/or a cash payment may be made, as provided in the Rights Agreement.

 

No
holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder
of Preferred Stock or of any other securities of the Corporation which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to
stockholders at a meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights
Agreement. This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by
the Rights Agent.

 

    	 	B - 2	 

     

    

 

WITNESS
the facsimile signature of the proper officers of the Corporation and its corporate seal. Dated as of _____________________.

 

	ATTEST:	 	 	 
	 	 	 	 	 
	 	 	By:	 
	Secretary	 	 	Title:
	 	 	 	 	 
	Countersigned:	 	 	 
	 	 	 	 	 
	[RIGHTS AGENT]	 	 	 
	 	 	 	 	 
	By:	                 	 	 	 

 

 

 

    	 	B - 3	 

     

    

 

[Form
of Reverse Side of Rights Certificate]

 

FORM
OF ASSIGNMENT

 

(To
be executed by the registered holder if such holder desires to transfer the Rights Certificates.)

 

FOR
VALUE RECEIVED ________________________________hereby sells, assigns and transfers unto _________________________(Please print
name and address of transferee) _____________________________________Rights evidenced by this Rights Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute and appoint ______________________________ Attorney
to transfer the within Rights Certificate on the books of the within-named Corporation, with full power of substitution.

 

	Dated:
    _______________________	 
	 	 
	 	______________________________________
		Signature

 

Signature
Guaranteed:

 

    	 	B - 4	 

     

    

 

Certificate

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

(1) this
Rights Certificate [___] is [___] is not being sold, assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined in the Rights Agreement); and

 

(2) after
due inquiry and to the best knowledge of the undersigned, it [___] did [___] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement).

 

	Dated:
    _______________________	 
	 	 
	 	______________________________________
		Signature

 

NOTICE

 

The
signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.

 

    	 	B - 5	 

     

    

 

FORM
OF ELECTION TO PURCHASE

 

(To
be executed if registered holder

desires to exercise the Rights Certificate.)

 

TO:
___________________

 

The
undersigned hereby irrevocably elects to exercise Rights represented by this Rights Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of such Rights and requests that certificates for such share(s) be issued in the following name:

 

Please
insert social security or other identifying number: _________________________

____________________________________________________________________________

(Please print name and address)

 

If
such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance
remaining of such Rights shall be registered in the name of and delivered to:

 

Please
insert social security or other identifying number: _________________________

____________________________________________________________________________

(Please print name and address)

 

	Dated:
    _______________________	 
	 	 
	 	______________________________________
		Signature
	 	 
	 	(Signature must conform in all respects to name of holder as specified on the face of this Rights Certificate)

 

Signature
Guaranteed

 

    	 	B - 6	 

     

    

 

EXHIBIT C

 

TO
RIGHTS AGREEMENT

 

FORM
OF CERTIFICATE OF DESIGNATIONS

OF

CLASS A PREFERRED STOCK, SERIES ONE

OF

TSR, INC.

 

I,
Christopher Hughes, President and Chief Executive Officer of TSR, Inc. (the “Corporation”), a corporation organized
and existing under the General Corporation Law of the State of Delaware (the “Act”), in accordance with provision
103 of the Act, DO HEREBY CERTIFY that: pursuant to the authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Corporation, as amended, and pursuant to the Act the Board of Directors on August 29, 2018 adopted the following
resolution which creates a series of thirty thousand (30,000) shares of Preferred Stock designated as Class A Preferred Stock,
Series One.

 

RESOLVED,
that pursuant to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of its Certificate
of Incorporation, as amended, a series of Preferred Stock of the Corporation be, and hereby is, created and that the designation
and amount thereof and the voting powers, preferences and relative, participating, optional or other special rights of the shares
of such series, and the qualifications, limitations or restrictions thereof are as follows:

 

Section
1.  Designation and Amount. The
shares of such series shall be designated as “Class A Preferred Stock, Series One” (the “Series One Preferred
Stock”) and the number of shares constituting such series shall be thirty thousand (30,000).

 

    	 	C - 1	 

     

    

 

Section
2.  Dividends and Distributions.

 

(A) Subject
to the provisions for adjustment hereinafter set forth, the holders of shares of Series One Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, (i) cash dividends
in an amount per share (rounded to the nearest cent) equal to 100 times the aggregate per share amount of all cash dividends declared
or paid on the Common Stock, $0.01 par value per share, of the Corporation (the “Common Stock”) and (ii) a preferential
cash dividend (the “Preferential Dividends”), if any, on the first day of March, June, September and December of each
year (each a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series One Preferred Stock, in an amount (except in the case of the first
Quarterly Dividend Payment Date if the date of the first issuance of Series One Preferred Stock is a date other than a Quarterly
Dividend Payment Date, in which case such payment shall be a prorated amount of such amount) equal to $50.00 per share of Series
One Preferred Stock less the per share amount of all cash dividends declared on the Series One Preferred Stock pursuant to clause
(i) of this sentence since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of Series One Preferred Stock. In the event the Corporation
shall, at any time after the issuance of any share or fraction of a share of Series One Preferred Stock, make any distribution
on the shares of Common Stock of the Corporation, whether by way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Corporation or otherwise, which is payable in cash or any debt security, debt instrument,
real or personal property or any other property (other than cash dividends subject to the immediately preceding sentence, a distribution
of shares of Common Stock or other capital stock of the Corporation or a distribution of rights or warrants to acquire any such
share, including any debt security convertible into or exchangeable for any such share, at a price less than the Fair Market Value
(as hereinafter defined) of such share), then, and in each such event the Corporation shall simultaneously pay on each then outstanding
share of Series One Preferred Stock of the Corporation a distribution, in like kind, of 100 times such distribution paid on a
share of Common Stock (subject to the provisions for adjustment hereinafter set forth). The dividends and distributions on the
Series One Preferred Stock to which holders thereof are entitled pursuant to clause (i) of the first sentence of this paragraph
and pursuant to the second sentence of this paragraph are hereinafter referred to as “Participating Dividends” and
the multiple of such cash and noncash dividends on the Common Stock applicable to the determination of the Participating Dividends,
which shall be 100 initially but shall be adjusted from time to time as hereinafter provided, is hereinafter referred to as the
“Dividend Multiple.” In the event the Corporation shall at any time after August 29, 2018 (the “Effective Date”)
declare or pay any dividend or make any distribution on Common Stock payable in shares of Common Stock, or effect a subdivision
or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater or lesser number
of shares of Common Stock, or issue any of its capital stock in a reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Corporation is the continuing or surviving corporation), then in each
such case the Dividend Multiple thereafter applicable to the determination of the amount of Participating Dividends which holders
of shares of Series One Preferred Stock shall be entitled to receive shall be the Dividend Multiple applicable immediately prior
to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior
to such event.

 

(B) The
Corporation shall declare each Participating Dividend at the same time it declares any cash or non-cash dividend or distribution
on the Common Stock in respect of which a Participating Dividend is required to be paid. No cash or noncash dividend or distribution
on the Common Stock in respect of which a Participating Dividend is required to be paid shall be paid or set aside for payment
on the Common Stock unless a Participating Dividend in respect of such dividend or distribution on the Common Stock shall be simultaneously
paid, or set aside for payment, on the Series One Preferred Stock.

 

(C) Preferential
Dividends shall begin to accrue on outstanding shares of Series One Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series One Preferred Stock. Accrued but unpaid Preferential Dividends shall cumulate
but shall not bear interest. Preferential Dividends paid on the shares of Series One Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding.

 

    	 	C - 2	 

     

    

 

Section
3.  Voting Rights. The holders
of shares of Series One Preferred Stock shall have the following voting rights:

 

(A) Subject
to the provisions for adjustment hereinafter set forth, each share of Series One Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. The number of votes which a holder of
Series One Preferred Stock is entitled to cast, as the same may be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the “Vote Multiple.” In the event the Corporation shall at any time after the Effective Date declare
or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or split or a combination, consolidation
or reverse split of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, or issue
any of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation
or merger in which the Corporation is the continuing or surviving corporation), then in each such case the Vote Multiple thereafter
applicable to the determination of the number of votes per share to which holders of shares of Series One Preferred Stock shall
be entitled after such event shall be the Vote Multiple immediately prior to such event multiplied by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such event.

 

(B) Except
as otherwise provided herein, in the Certificate of Incorporation, as amended, or Amended and Restated By-Laws, as amended, the
holders of shares of Series One Preferred Stock and the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.

 

(C) In
the event that the Preferential Dividends accrued on the Series One Preferred Stock for four or more quarterly dividend periods,
whether consecutive or not, shall not have been declared and paid or set apart for payment, the holders of record of Preferred
Stock of the Corporation of all series (including the Series One Preferred Stock), other than any series in respect of which such
right is expressly withheld by the Certificate of Incorporation, as amended, or the authorizing resolutions included in the Certificate
of Designations therefor, shall have the right, at the next meeting of stockholders called for the election of directors, to elect
two members to the Board of Directors, which directors shall be in addition to the number required by the Amended and Restated
By-Laws prior to such event, to serve until the next Annual Meeting and until their successors are elected and qualified or their
earlier resignation, removal or incapacity or until such earlier time as all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series One Preferred Stock shall have been paid (or irrevocably set aside for payment) in full. The holders
of shares of Series One Preferred Stock shall continue to have the right to elect directors as provided by the immediately preceding
sentence until all accrued and unpaid Preferential Dividends upon the outstanding shares of Series One Preferred Stock shall have
been paid (or set aside for payment) in full. Such directors may be removed and replaced by such stockholders, and vacancies in
such directorships may be filled only by such stockholders (or by the remaining directors elected by such stockholders, if there
be any) in the manner permitted by law; provided, however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.

 

    	 	C - 3	 

     

    

 

(D) Except
as otherwise required by the Certificate of Incorporation, as amended, or the Amended and Restated By-laws, as amended, or set
forth herein, holders of Series One Preferred Stock shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for the taking of any corporate
action.

 

Section
4.  Certain Restrictions.

 

(A) Whenever
Preferential Dividends or Participating Dividends are in arrears or the Corporation shall be in default of payment thereof, thereafter
and until all accrued and unpaid Preferential Dividends and Participating Dividends, whether or not declared, on shares of Series
One Preferred Stock outstanding shall have been paid or set aside for payment in full, and in addition to any and all other rights
which any holder of shares of Series One Preferred Stock may have in such circumstances, the Corporation shall not:

 

(i) declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration, any shares
of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series One Preferred Stock;

 

(ii) declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity as to dividends with the Series
One Preferred Stock, unless dividends are paid ratably on the Series One Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled if the
full dividends accrued thereon were to be paid;

 

(iii) except
as permitted by subparagraph (iv) of this paragraph 4(A), redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series One Preferred
Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (both as to dividends and upon liquidation, dissolution or
winding up) to the Series One Preferred Stock; or

 

(iv) purchase
or otherwise acquire for consideration any shares of Series One Preferred Stock, or any shares of stock ranking on a parity with
the Series One Preferred Stock (either as to dividends or upon liquidation, dissolution or winding up), except in accordance with
a purchase offer made to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or classes.

 

(B) The
Corporation shall not permit any Subsidiary (as hereinafter defined) of the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner. A “Subsidiary” of the Corporation shall mean any corporation
or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect a majority of
the Board of Directors or other persons performing similar functions are Beneficially Owned, directly or indirectly, by the Corporation
or by any corporation or other entity that is otherwise controlled by the Corporation.

 

    	 	C - 4	 

     

    

 

(C) The
Corporation shall not issue any shares of Series One Preferred Stock except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of August 29, 2018 between the Corporation and Continental Stock Transfer & Trust Company, a copy
of which is on file with the Secretary of the Corporation at its principal executive office and shall be made available to stockholders
of record without charge upon written request therefor addressed to said Secretary. Notwithstanding the foregoing sentence, nothing
contained in the provisions hereof shall prohibit or restrict the Corporation from issuing for any purpose, any series of Preferred
Stock with rights and privileges similar to, different from, or greater than, those of the Series One Preferred Stock.

 

Section
5.  Reacquired Shares. Any shares
of Series One Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares upon their retirement and cancellation shall become authorized
but unissued shares of Preferred Stock, without designation as to series, and such shares may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of Directors.

 

Section
6.  Liquidation, Dissolution or Winding
Up. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, no distribution shall be
made (i) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series One Preferred Stock unless the holders of shares of Series One Preferred Stock shall have received, subject
to adjustment as hereinafter provided, (A) $100 ($1.00 per one one-hundredth of a share) plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of such payment, or (B) if greater than the amount specified
in clause (i)(A) of this sentence, an amount equal to 100 times the aggregate amount to be distributed per share to holders of
Common Stock, as the same may be adjusted as hereinafter provided, and (ii) to the holders of stock ranking on a parity upon liquidation,
dissolution or winding up with the Series One Preferred Stock, unless simultaneously therewith distributions are made ratably
on the Series One Preferred Stock and all other shares of such parity stock in proportion to the total amounts to which the holders
of shares of Series One Preferred Stock are entitled under clause (i)(A) of this sentence and to which the holders of such parity
shares are entitled, in each case upon such liquidation, dissolution or winding up. The amount to which holders of Series One
Preferred Stock may be entitled upon liquidation, dissolution or winding up of the Corporation pursuant to clause (i)(B) of the
foregoing sentence is hereinafter referred to as the “Participating Liquidation Amount” and the multiple of the amount
to be distributed to holders of shares of Common Stock upon the liquidation, dissolution or winding up of the Corporation applicable
pursuant to said clause to the determination of the Participating Liquidation Amount, as said multiple may be adjusted from time
to time as hereinafter provided, is hereinafter referred to as the “Liquidation Multiple.” In this event the Corporation
shall at any time after the Effective Date declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect
a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater
or lesser number of shares of Common Stock, or issue any of its capital stock in a reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing or surviving
corporation, then in each such case the Liquidation Multiple thereafter applicable to the determination of the Participating Liquidation
Amount to which holders of Series One Preferred Stock shall be entitled after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

 

    	 	C - 5	 

     

    

 

Section
7.  Certain Reclassifications and
Other Events.

 

(A) In
the event that holders of shares of Common Stock of the Corporation receive after the Effective Date, in respect of their shares
of Common Stock any share of capital stock of the Corporation (other than any share of Common Stock of the Corporation), whether
by way of reclassification, recapitalization, reorganization, dividend or other distribution or otherwise (a “Transaction”),
then, and in each such event the dividend rights, voting rights and rights upon the liquidation, dissolution or winding up of
the Corporation of the shares of Series One Preferred Stock shall be adjusted so that after such event the holders of Series One
Preferred Stock shall be entitled, in respect of each share of Series One Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately prior to such adjustment, to (i) such additional dividends as equal
the Dividend Multiple in effect immediately prior to such Transaction multiplied by the additional dividends which the holder
of a share of Common Stock shall be entitled to receive by virtue of the receipt in the Transaction of such capital stock, (ii)
such additional voting rights as equal the Vote Multiple in effect immediately prior to such Transaction multiplied by the additional
voting rights which the holder of a share of Common Stock shall be entitled to receive by virtue of the receipt in the Transaction
of such capital stock and (iii) such additional distributions upon liquidation, dissolution or winding up of the Corporation as
equal the Liquidation Multiple in effect immediately prior to such Transaction multiplied by the additional amount which the holder
of a share of Common Stock shall be entitled to receive upon liquidation, dissolution or winding up of the Corporation by virtue
of the receipt in the Transaction of such capital stock, as the case may be, all as provided by the terms of such capital stock.

 

(B) In
the event that holders of shares of Common Stock of the Corporation receive after the Effective Date, in respect of their shares
of Common Stock any right or warrant to purchase Common Stock (including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for Common Stock) at a purchase price per share less than the Fair Market Value
(as hereinafter defined) of a share of Common Stock on the date of issuance of such right or warrant, then and in each such event
the dividend rights, voting rights and rights upon the liquidation, dissolution or winding up of the Corporation of the shares
of Series One Preferred Stock shall each be adjusted so that after such event the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple shall each be the product of the Dividend Multiple, the Vote Multiple and the Liquidation Multiple, as the
case may be, in effect immediately prior to such event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the maximum number of shares of
Common Stock which could be acquired upon exercise in full of all such rights or warrants and the denominator of which shall be
the number of shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common Stock at the time of such issuance, by the maximum
aggregate consideration payable upon exercise in full of all such rights or warrants.

 

    	 	C - 6	 

     

    

 

(C) In
the event that holders of shares of Common Stock of the Corporation receive after the Effective Date in respect of their shares
of Common Stock any right or warrant to purchase capital stock of the Corporation (other than shares of Common Stock), including
as such a right, for all purposes of this paragraph, any security convertible into or exchangeable for capital stock of the Corporation,
(other than Common Stock), at a purchase price per share less than the Fair Market Value of such shares of capital stock on the
date of issuance of such right or warrant, then and in each such event the dividend rights, voting rights and rights upon liquidation,
dissolution or winding up of the Corporation of the shares of Series One Preferred Stock shall each be adjusted so that after
such event each holder of a share of Series One Preferred Stock shall be entitled, in respect of each share of Series One Preferred
Stock held, in addition to such rights in respect thereof to which such holder was entitled immediately prior to such event, to
receive (i) such additional dividends as equal the Dividend Multiple in effect immediately prior to such event multiplied, first,
by the additional dividends to which the holder of a share of Common Stock shall be entitled upon exercise of such right or warrant
by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount Fraction (as hereinafter
defined) and (ii) such additional voting rights as equal the Vote Multiple in effect immediately prior to such event multiplied,
first, by the additional voting rights to which the holder of a share of Common Stock shall be entitled upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount
Fraction and (iii) such additional distribution upon liquidation, dissolution or winding up of the Corporation as equal the Liquidation
Multiple in effect immediately prior to such event multiplied, first, by the additional amount which the holder of a share of
Common Stock shall be entitled to receive upon liquidation, dissolution or winding up of the Corporation upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount
Fraction. For purposes of this paragraph, the “Discount Fraction” shall be a fraction the numerator of which shall
be the difference between the Fair Market Value of a share of the capital stock subject to a right or wan-ant distributed to holders
of shares of Common Stock of the Corporation as contemplated by this paragraph immediately after the distribution thereof and
the purchase price per share for such share of capital stock pursuant to such right or warrant and the denominator of which shall
be the Fair Market Value of a share of such capital stock immediately after the distribution of such right or warrant.

 

    	 	C - 7	 

     

    

 

(D) For
purposes of this Certificate of Designations, the “Fair Market Value” of a share of capital stock of the Corporation
(including a share of Common Stock) on any date shall be deemed to be the average of the daily closing price per share thereof
over the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however,
that, in the event that such Fair Market Value of any such share of capital stock is determined during a period which includes
any date that is within 30 Trading Days after (i) the ex-dividend date for a dividend or distribution on stock payable in shares
of such stock or securities convertible into shares of such stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and in each such case, the Fair Market Value shall
be appropriately adjusted by the Board of Directors of the Corporation to take into account ex-dividend or post-effective date
trading. The closing price for any day shall be the last sale price, regular way, or, in case, no such sale takes place on such
day, the average of the closing bid and asked prices, regular way as reported in the applicable transaction reporting system with
respect to securities listed on the principal national securities exchange on which the shares are listed or admitted to trading
or, if the shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the., over-the counter market, as reported by the NASDAQ Capital
Market or such other system then in use, or if on any such date the shares are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker making a market in the shares selected by the
Board of Directors of the Corporation. The term “Trading Day” shall mean a day in which the principal national securities
exchange on which the shares are listed or admitted to trading is open for the transaction of business or, if the shares are not
listed or admitted to trading on any national securities exchange, on which the any such national securities exchange as may be
selected by the Board of Directors of the Corporation is open. If the shares are not publicly held or not so listed or traded
on any day within the period of 30 Trading Days applicable to the determination of Fair Market Value thereof as aforesaid, “Fair
Market Value” shall mean the fair market value thereof per share as determined in good faith by the Board of Directors of
the Corporation. In either case referred to in the foregoing sentence, the determination of Fair Market Value shall be described
in a statement filed with the Secretary of the Corporation.

 

Section
8.  Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each
outstanding share of Series One Preferred Stock shall at the same time be similarly exchanged for or changed into the aggregate
amount of stock, securities, cash and/or other property (payable in like kind), as the case may be, for which or into which each
share of Common Stock is changed or exchanged multiplied by the highest of the Vote Multiple, the Dividend Multiple or the Liquidation
Multiple in effect immediately prior to such event.

 

Section
9.  Effective Time of Adjustments.

 

(A) Adjustments
to the Series One Preferred Stock required by the provisions hereof shall be effective as of the time at which the event requiring
such adjustments occurs.

 

(B) The
Corporation shall give prompt written notice to each holder of a share of Series One Preferred Stock of the effect of any adjustment
to the voting rights, dividend rights or rights upon liquidation, dissolution or winding up of the Corporation of such shares
required by the provisions hereof. Notwithstanding the foregoing sentence, the failure of the Corporation to give such notice
shall not affect the validity of or the force or effect of or the requirement for such adjustment.

 

    	 	C - 8	 

     

    

 

Section
10.  No Redemption. The shares of Series One Preferred
Stock shall not be redeemable at the option of the Corporation or any holder thereof. Notwithstanding the foregoing sentence of
this Section, the Corporation may acquire shares of Series One Preferred Stock in any other manner permitted by law, the provisions
hereof and the Certificate of Incorporation, as amended, of the Corporation.

 

Section
11.  Ranking. Unless otherwise provided in the Certificate
of Incorporation, as amended, of the Corporation or a Certificate of Designations relating to a series of preferred stock of the
Corporation established after the issuance of any share of Series One Preferred Stock or any right, warrant, or option providing
for the issuance thereof, the Series One Preferred Stock shall rank, as to the payment of dividends and the distribution of assets
on liquidation, dissolution or winding up, (i) junior to all other series of the Corporation's Preferred Stock and (iv) senior
to the Common Stock.

 

Section
12.  Amendment. The provisions hereof and the Certificate
of Incorporation, as amended, of the Corporation shall not be amended in any manner which would adversely affect the rights, privileges
or powers of the Series One Preferred Stock without, in addition to any other vote of stockholders required by law, the affirmative
vote of the holders of two-thirds or more of the outstanding shares of Series One Preferred Stock, voting together as a single
class.

 

Section
13.  Fractional Shares. Series One Preferred Stock may
be issued in fractions of a share (in one one-hundredths (1/100th) of a share and integral multiples thereof) that shall entitle
the holder thereof, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate
in distributions and have the benefit of all other rights of holders of shares of Series One Preferred Stock.

 

IN
WITNESS WHEREOF, I have executed and subscribed this Certificate of Designations and do affirm the foregoing as true under
the penalties of perjury this 29th day of August, 2018.

 

	 	 	 
	 	Name: 	Christopher
                                         Hughes
		Title:	Chief
                                         Executive Officer

 

    	 	C - 9

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