Document:

EX-10.13

 Exhibit 10.13 

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 December 24, 2014 (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 ANAPTYSBIO, INC., a Delaware corporation with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121 (individually and collectively, jointly and severally, “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. 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 each Lender, the outstanding principal amount of all Term Loans advanced to Borrower by such 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 Loans. 

(a) Availability. (i) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, to make
term loans to Borrower in a single advance on the Effective Date in an aggregate amount of Five Million Dollars ($5,000,000.00) according to each Lender’s Term A Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are
hereinafter referred to singly as a “Term A Loan”, and collectively as the “Term A Loans”). After repayment, no Term A Loan may be re-borrowed. 

(ii) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the Second Draw Period, to
make term loans to Borrower in a single advance in an aggregate amount of Five Million Dollars ($5,000,000.00) according to each Lender’s Term B Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter
referred to singly as a “Term B Loan”, and collectively as the “Term B Loans”. After repayment, no Term B Loan may be re-borrowed. 

(iii) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the Third Draw Period, to
make term loans to Borrower in a single advance in an aggregate amount of Five Million Dollars ($5,000,000.00) according to each Lender’s Term C Loan Commitment as set forth on Schedule 1.1 hereto (such term loans are hereinafter
referred to singly as a “Term C Loan”, and collectively as the “Term C Loans”; each Term A Loan, Term B Loan or Term C Loan is hereinafter referred to singly as a “Term Loan” and the Term A Loans,
the Term B Loans and the Term C Loans are hereinafter referred to collectively as the “Term Loans”). After repayment, no Term C 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 each 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 each Term Loan, any initial partial monthly interest payment otherwise due for the period between the Funding Date of such Term Loan and the first Payment Date thereof.

  
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Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal and interest, in arrears, to
each Lender, 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 (X) if the Amortization Date is February 1, 2016, thirty six (36) months, (Y) if the Amortization Date is August 1, 2016, thirty (30) months, and
(Z) if the Amortization Date is February 1, 2017, twenty four (24) months. All unpaid principal and accrued and unpaid interest with respect to each Term Loan is due and payable in full on the Maturity Date. Each 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 Lenders, payable to each Lender in accordance with its 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
fixed per annum rate (which rate shall be fixed for the duration of the applicable Term Loan) 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 fixed 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 consisting of twelve
(12) months of thirty (30) days. 
 (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 the respective Lender to which such payments are owed, at such Lender’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 2:00 pm 

  
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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 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) Facility Fee. A fully earned, non-refundable facility fee of up to One Hundred Fifty Thousand Dollars
($150,000.00) to be shared between the Lenders pursuant to their respective Commitment Percentages payable as follows: (i) Fifty Thousand Dollars ($50,000.00) of the facility fee shall be due and payable on the Effective Date, the receipt of
which Collateral Agent and Lenders hereby acknowledge, (ii) Fifty Thousand Dollars ($50,000.00) of the facility fee shall be due and payable on and conditioned upon the Funding Date of the Term B Loan, and (iii) Fifty Thousand Dollars
($50,000.00) of the facility fee shall be due and payable on and conditioned upon the Funding Date of the Term C Loan. 
 (b) Final
Payment. The Final Payment, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares; 

(c) Prepayment Fee. The Prepayment Fee, when due hereunder, to be shared between the Lenders in accordance with their respective Pro
Rata Shares; and 
 (d) Lenders’ Expenses. All reasonable Lenders’ Expenses (including reasonable attorneys’ fees and
expenses for documentation and negotiation of this Agreement) incurred from November 5, 2014 through and after the Effective Date, promptly 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. 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. 

  
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	3.	CONDITIONS OF LOANS 

 3.1. Conditions Precedent to Initial Credit
Extension. Each Lender’s obligation to make a Term A 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; 

(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 A Loan Commitment Percentage; 

(d) 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; 
 (e) a completed Perfection Certificate for Borrower and each of its Subsidiaries; 

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

(g) 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; 
 (h) 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; 
 (i) a landlord’s consent
executed in favor of Collateral Agent in respect of all of Borrower’s and each Subsidiaries’ leased locations; 
 (j) 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 One Hundred Thousand Dollars ($100,000.00); 

(k) a duly executed legal opinion of counsel to Borrower dated as of the Effective Date; 

(l) 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; and 

(m) a copy of the Third Amended and Restated Rights Agreement by and among the Company and the investors party thereto, dated July 15,
2013 (as such agreement may be amended and restated through the Effective Date). 
 (n) payment of the fees and Lenders’ Expenses then
due as specified in Section 2.5 hereof. 

  
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 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; 

(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) (i) to the extent not delivered at the Effective Date, duly executed original Secured Promissory Notes substantially 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) a Warrant substantially in the form attached hereto as
Exhibit E in favor of each Lender; 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 2:00 pm Eastern time three (3) 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 

  
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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. 

(a) Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank. Regardless
of the terms of 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). 

(b) 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 and all rights therein shall revert to Borrower. 

(c) Notwithstanding the provisions of Section 4(b), 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, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in the reasonable and 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. 

 

	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 (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 

  
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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 (it being understood and agreed that Borrower and each of its Subsidiaries may from time to time update certain information in the Perfection Certificates (including the
information set forth in clause (d) above) 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 One Hundred Thousand Dollars ($100,000.00). 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. 
 (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, 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) 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). 

  
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 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 One Hundred Thousand Dollars ($100,000.00). 
 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, 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 and each of its Subsidiaries is 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. 
 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.
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 

  
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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. 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). 
 5.11. 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. 
  

	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 and in a form reasonably acceptable to Collateral Agent;

 (ii) as soon as available, but no later than one hundred eighty (180) days after the last day of Borrower’s fiscal year or
within five (5) days of filing with the SEC, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial 

  
 9 

 
statements from an independent certified public accounting firm acceptable to Collateral Agent in its reasonable discretion; 

(iii) as soon as available after approval thereof by Borrower’s Board of Directors, but no later than ten (10) 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 as originally delivered 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 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) prompt notice of any (A) 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 and (B) material changes to the capitalization table of Borrower or any of its Subsidiaries, provided, however, that (i) no such notice shall be required with
respect to the grant, exercise, cancellation or modification of options to purchase Borrower’s Common Stock outstanding or hereafter issued by Borrower from the option pool set forth on the capitalization table of Borrower delivered to Bank in
connection with the Perfection Certificate or upon exercise of warrants to purchase capital stock of the Borrower reflected upon such capitalization table and (ii) Borrower shall provide Lenders notice with respect to, and copies of, the
current capitalization table no later than thirty (30) days after the end of each quarter to the extent that there have been any amendments of, or changes to, the capitalization table since the last time the same was delivered to Lenders. 

(vii) prompt notice of any event 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, 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 

  
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audit and analysis of its operations and the Collateral. Such audits shall be conducted no more often than once every six months 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 One Hundred Thousand Dollars ($100,000.00) 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 shall 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. 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 One Hundred Thousand Dollars ($100,000.00) with respect to any loss, but not exceeding One Hundred Thousand Dollars ($100,000.00), 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 its primary and its Subsidiaries’ primary Collateral Accounts with Bank or its Affiliates in
accounts which are subject to a Control Agreement in favor of Collateral Agent and which accounts shall represent at least fifty percent (50%) of the dollar value of Borrower’s and such Subsidiaries’ accounts at all financial
institutions. 
 (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, 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 

  
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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. 

(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; 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. Borrower shall obtain Collateral Agent’s and Lenders’ written consent prior to abandoning, modifying or delaying filing, prosecution or issuance of
any Core IP. Borrower shall provide Collateral Agent and Lenders with notice, on a quarterly basis, of any abandonment, modification or delay in the filing, prosecution or issuance of any Non-Core IP during the preceding quarter. 

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, unless an Event of Default has occurred and is continuing, 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. 

6.9. Notices of Litigation and Default. After becoming aware thereof, 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 One
Hundred Thousand Dollars ($100,000.00) 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. Intentionally Omitted. 

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 provide at least thirty (30) days prior written notice to Collateral Agent and, in the event that the Collateral at any new location includes Borrower’s Books or is valued in excess of One Hundred Thousand ($100,000.00) 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 

  
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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, to secure payment and performance of the Obligations a perfected security interest in the
stock, units or other evidence of ownership of each such newly created Subsidiary, provided, however, that in the case of a Foreign Subsidiary, Borrower (or any domestic Subsidiary which is the owner of such Foreign Subsidiary) shall not be required
to pledge or grant a security interest in more than sixty five percent (65%) of the outstanding equity securities of such Foreign Subsidiary and no assets of such Foreign Subsidiary shall be required to be pledged or subject to a security
interest hereunder 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 outstanding equity securities would create a present and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code. Notwithstanding the foregoing, Borrower shall not be required to pledge
or grant a security interest in more than sixty five percent (65%) of the outstanding equity securities of the Australia Subsidiary and no assets of the Australia Subsidiary shall be required to be pledged or subject to a security interest
hereunder. 
 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; and (c) in connection with Permitted Liens, Permitted Investments and Permitted Licenses. 

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) 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 private investors so long as Borrower identifies to Collateral Agent the private 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 contain less than One Hundred
Thousand Dollars ($100,000.00) in assets or property of Borrower or any of its Subsidiaries); (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 

  
 13 

 
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. 

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

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 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 Hundred Thousand Dollars ($100,000.00) in the aggregate per fiscal year) 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 

  
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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, 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), 6.11 (Landlord Waivers; Bailee Waivers), 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 Authority and the same under subclauses (i) and 

  
 15 

 
(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 
 (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 One Hundred Thousand Dollars ($100,000.00) 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 One Hundred Thousand Dollars ($100,000.00) (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 in connection with the transactions contemplated hereby 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. 

  
 16 

 (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 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; 

  
 17 

 (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; 

(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. 

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 the Lien Termination Date. 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 the Lien Termination Date. 
 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. 
 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, 

  
 19 

 
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, provided
however, that if such transmission is not on a Business Day, on the next Business Day after transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) 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:	 	 ANAPTYSBIO, INC.
 10421 Pacific Center Court

Suite 200
 San Diego, CA 92121

Attn: Hamza Suria
 Fax: (858) 366-9055

Email: hsuria@anaptysbio.com

		
	 with a copy (which shall not

constitute notice) to:
	 	 FENWICK & WEST LLP
 555 California
Street
 San Francisco, CA 94104
 Attn: Matthew Rossiter

Email: mrossiter@fenwick.com

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

Alexandria, Virginia 22314
 Attention: Legal Department

Fax: (703) 519-5225
 Email:
LegalDepartment@oxfordfinance.com

		
	with a copy to	 	 SILICON VALLEY BANK
 4370 La Jolla Village
Drive, Suite 1050
 San Diego, CA 92122
 Attn: Michael White

Fax: (858) 784-3310
 Email: mwhite@svb.com

		
	 with a copy (which shall not
 constitute notice)
to:
	 	 Cooley LLP
 4401 Eastgate Mall

San Diego, CA 92121-1909
 Attn: George Samuel

Fax: (858) 550 6420
 Email: gsamuel@cooley.com

  

	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

  
 20 

 
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, 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 

  
 21 

 
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: 
 (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; 

  
 22 

 (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 the Lien Termination Date has occurred. 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. 
 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, 

  
 23 

 
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. 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 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 once every six 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. 
  

	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. 

  
 24 

 “Account Debtor” is any “account debtor” as defined in the Code with
such additions to such term as may hereafter be made. 
 “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 February 1, 2016, but if the Term B Loans are advanced, such date shall be August 1, 2016
and if the Term C Loans are advanced, such date shall be February 1, 2017. 
 “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. 

“Australia Subsidiary” means that certain Subsidiary of Borrower to be formed under the laws of Australia in accordance with
the provisions of this Agreement and based substantially on the terms and conditions as provided to Collateral Agent and Lenders in writing as of the date 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”). 

“Bank” is defined in the preamble hereof. 

“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) six and ninety five hundredths percent (6.95%) and (ii) the sum of (a) the three (3) month U.S. LIBOR rate reported in The Wall Street Journal three (3) Business Days
prior to the Funding Date of such Term Loan (which shall not, in any case, be less than twenty three hundredths percent (0.23%), plus (b) six and seventy two hundredths percent (6.72%). 

“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. 

  
 25 

 “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 maturing no more than one (1) year after its creation and having the highest rating from either
Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., and (c) certificates of deposit maturing no more than one (1) year after issue provided that the account in which any such certificate of deposit is
maintained is subject to a Control Agreement in favor of 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”). 
 “Claims” are defined in Section 12.2. 

“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. 

“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. 

  
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 “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) all obligations from 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. 

“Core IP” means Intellectual Property required to protect Borrower’s (i) existing somatic hypermutation technology
platform as utilized on an on-going basis for antibody development, (ii) antibody product programs actively being pursued as part of the company’s internal or partnered pipeline, including but without limitation the anti-IL-33 and
anti-IL-36R antibody programs, and (iii) future acquired or developed Intellectual Property that is material to Borrower’s then-current business. 

“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 XXXX046061, 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 

  
 27 

 
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. 

“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 five percent (5.00%). 

“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 State or
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, 

  
 28 

 
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. 

“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 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; 
 (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 Patents. 

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

  
 29 

 “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. 
 “Key Person” is each of Borrower’s
(i) Chief Executive Officer, who is Hamza Suria as of the Effective Date and (ii) Chief Development Officer, who is Marco Londei 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. 

“Lien Termination Date” means the date upon which 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 in full, and Collateral Agent and the Lenders are under no further obligation to make Credit Extensions hereunder, and the Collateral Agent is
obligated to terminate the Liens on the Collateral granted under this Agreement pursuant to Section 4.2(b) or 4.2(c). 
 “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,
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, operations or condition (financial or otherwise)
or prospects of Borrower or any Subsidiary; or (c) a material impairment of the prospect of repayment of any portion of the Obligations. 

“Maturity Date” is January 1, 2019. 

“Non-Core IP” means Borrower’s Intellectual Property that is not Core IP. 

“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 

  
 30 

 
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, 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.

 “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. 

“Perfection Certificate” and “Perfection Certificates” is defined in Section 5.1. 

“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); 

(f) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of Borrower’s business; and

 (g) 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. 

  
 31 

 “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 (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 Twenty Five Thousand Dollars ($25,000.00) 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, and (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 or which constitute licenses approved by Borrower’s Board of Directors (whether in the ordinary course of business or otherwise), 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 and there is no breach of this Agreement as a consequence of entering into 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 Core IP 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 Core IP; (iii) in the case of any exclusive license, (x) Borrower delivers written notice within thirty (30) days and a brief summary of the terms of the proposed license to Collateral Agent and the Lenders and
delivers to Collateral Agent 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 with respect to Core IP 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. 

  
 32 

 “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 Twenty Five Thousand Dollars ($25,000.00), 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); 
 (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; and 
 (j) Liens consisting of Permitted Licenses. 

“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. 

  
 33 

 “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 date which is after the second anniversary of the Funding Date 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. 
 “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. 
 “Second Draw Period” is the period commencing on the date of the occurrence of the Term B Draw Event and
ending on the earlier of (i) December 31, 2015 and (ii) the occurrence of an Event of Default; provided, however, that the Second Draw Period shall not commence if on the date of the occurrence of the Term B Draw Event an Event of
Default has occurred and is continuing. 
 “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. 

  
 34 

 “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. 

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

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

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

“Term B Draw Event” means the receipt by Collateral Agent and Lenders of evidence, in form and substance satisfactory to
Collateral Agent and Lenders, of Borrower completing the first multi-dose PK/toxicology study relating to at least two (2) development programs, which may be either two (2) internal development programs or one (1) internal and one
(1) partnered development program. 
 “Term C Draw Event” means the receipt by Collateral Agent and Lenders of
evidence, in form and substance satisfactory to Collateral Agent and Lenders, of Borrower receiving FDA approval on IND submission on at least two (2) development programs, which may be either two (2) internal development programs or one
(1) internal and one (1) partnered development program. 
 “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. 

“Third Draw Period” is the period commencing on the date of the occurrence of the later of (i) the making of Term B
Loans in accordance with the terms of this Agreement and (ii) the Term C Draw Event and ending on the earlier of (i) December 31, 2016 and (ii) the occurrence of an Event of Default; provided, however, that the Third Draw Period
shall not commence if on the date of the occurrence of the later of (i) the advance of the Term B Loans and (ii) the Term C Draw Event, an Event of Default has occurred and is continuing. 

“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] 

  
 35 

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

			
	BORROWER:
	
	ANAPTYSBIO, INC.
		
	By:	 	 /s/ Hamza Suria

	Name:	 	 Hamza Suria

	Title:	 	 President & CEO

	
	COLLATERAL AGENT AND LENDER: OXFORD FINANCE LLC
	
	OXFORD FINANCE LLC
		
	By:	 	 /s/ Mark Davis

	Name:	 	 Mark Davis

	Title:	 	 Vice President – Finance, Secretary & Treasurer

	
	LENDER:
	
	SILICON VALLEY BANK
		
	By:	 	 /s/ Anthony Flores

	Name:	 	 Anthony Flores

	Title:	 	 Vice President

 [Signature Page to Loan and Security Agreement] 

 SCHEDULE 1.1 

Lenders and Commitments 

Term A Loans 
  

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 OXFORD FINANCE LLC
	  	$	2,500,000.00	  	  	 	50.00	% 
	 SILICON VALLEY BANK
	  	$	2,500,000.00	  	  	 	50.00	% 
		  	  
	  
	 	  	  
	  
	 
	 TOTAL
	  	$	5,000,000.00	  	  	 	100.00	% 
		  	  
	  
	 	  	  
	  
	 

 Term B Loans 
  

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 OXFORD FINANCE LLC
	  	$	2,500,000.00	  	  	 	50.00	% 
	 SILICON VALLEY BANK
	  	$	2,500,000.00	  	  	 	50.00	% 
		  	  
	  
	 	  	  
	  
	 
	 TOTAL
	  	$	5,000,000.00	  	  	 	100.00	% 
		  	  
	  
	 	  	  
	  
	 

 Term C Loans 
  

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 OXFORD FINANCE LLC
	  	$	2,500,000.00	  	  	 	50.00	% 
	 SILICON VALLEY BANK
	  	$	2,500,000.00	  	  	 	50.00	% 
		  	  
	  
	 	  	  
	  
	 
	 TOTAL
	  	$	5,000,000.00	  	  	 	100.00	% 
		  	  
	  
	 	  	  
	  
	 

  
 Aggregate (all Term Loans) 

 

									
	 Lender
	  	Term Loan Commitment	 	  	Commitment Percentage	 
	 OXFORD FINANCE LLC
	  	$	7,500,000.00	  	  	 	50.00	% 
	 SILICON VALLEY BANK
	  	$	7,500,000.00	  	  	 	50.00	% 
		  	  
	  
	 	  	  
	  
	 
	 TOTAL
	  	$	15,000,000.00	  	  	 	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 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; (ii) more than sixty five percent (65%) of the total combined voting power of all classes of
stock entitled to vote the shares of capital stock 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) more than sixty five percent (65%) of the total combined voting power of all classes of stock entitled to vote the shares of
capital stock of the Australia Subsidiary; and (iv) any (x) inbound licenses of Intellectual Property in which Borrower is the licensee; or (y) real estate leasehold interests in which Borrower is the lessee; in each case of
(x) and (y), to the extent the grant of a security interest with respect to such property would be prohibited by the agreement with the non-Borrower party or would otherwise constitute a default thereunder, provided that such property will
automatically be deemed to be “Collateral” hereunder if such prohibition is unenforceable or ineffective and/or upon the termination, lapsing or expiration of any such prohibition. 

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 

            , 20     

The undersigned, being the duly elected and acting
                     of ANAPTYSBIO, INC., a Delaware corporation with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121
(“Borrower”), does hereby certify 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 November     , 2014, 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 [A][B][C] Loan shall be disbursed as follows: 

 

					
	 Disbursement from Oxford:
	  			
	 Loan Amount
	  	$	            	  
	 Plus:
	  			
	 --Deposit
Received
	  	$	            	  
		
	 Less:
	  			
	 --Facility
Fee
	  	($	            	) 
	 [--Interim
Interest
	  	($	            	)] 
	 --Lender’s
Legal Fees
	  	($	            	)* 
		
	 Net Proceeds due from Oxford:
	  	$	            	  
		
	 Disbursement from SVB:
	  			
	 Loan Amount
	  	$	            	  
	 Plus:
	  			
	 --Deposit
Received
	  	$	            	  
		
	 Less:
	  			
	 --Facility
Fee
	  	($	            	) 
	 [--Interim
Interest
	  	($	            	)] 
		
	 Net Proceeds due from SVB:
	  	$	            	  
		
	 TOTAL TERM [A][B][C] LOAN NET PROCEEDS FROM LENDERS
	  	$	            	  

 8. The Term [A][B][C] 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:	  	ANAPTYSBIO, 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:
	
	ANAPTYSBIO, 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 [A][B][C] 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: 

ANAPTYSBIO, 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:	  	ANAPTYSBIO, INC.

 The undersigned authorized officer (“Officer”) of ANAPTYSBIO, 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; 
 (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 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 180 days after FYE	  		 	Yes	 	No	 	N/A
							
	3)	 	Annual Financial Projections/Budget (prepared on a monthly basis)	  	Annually (within 10 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)	 	Non-Core IP Report	  	Quarterly	  		 	Yes	 	No	 	N/A
							
	9)	 	Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period	  		  	$            	 	Yes	 	No	 	N/A
							
	10)	 	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

 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 One Hundred Thousand Dollars ($100,000.00)?	 	Yes	 		 	No
					
	4)	 	Have there been any (A) amendments of or other changes to the Operating Documents or (B) material changes to the capitalization table of Borrower and to the Operating Documents of Borrower or any of its Subsidiaries (other than
with respect to the grant, exercise, cancellation or modification of options to purchase Borrower’s Common Stock outstanding or hereafter issued by Borrower from the option pool set forth on the capitalization table of Borrower delivered to
Bank in connection with the Perfection Certificate or upon exercise of warrants to purchase capital stock of the Borrower reflected upon such capitalization table)? 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.) 
  

			
	ANAPTYSBIO, 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 [A][B][C] Loan) 
  

			
	$        	  	Dated: [DATE]

 FOR VALUE RECEIVED, the undersigned, ANAPTYSBIO, INC., a Delaware corporation with offices located at 10421
Pacific Center Court, Suite 200, San Diego, CA 92121 (“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 [A][B][C]
Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term [A][B][C] Loan, at the rates and in accordance with the terms of the Loan and Security Agreement dated December     , 2014
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 [A][B][C] 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 [A][B][C] 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 [A][B][C] Loan, interest on the Term [A][B][C] 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 reasonable 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:
	
	ANAPTYSBIO, INC.
		
	By	 	  

	Name:	 	  

	Title:	 	  

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	  	 Principal

Amount
	  	 Interest Rate
	  	 Scheduled

Payment Amount
	  	 Notation By

		  		  		  		  	
		  		  		  		  	
		  		  		  		  	

 EXHIBIT E 

Form of Warrant 

[see attached] 

 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 

WARRANT TO PURCHASE STOCK 
  

			
	Company:	  	ANAPTYSBIO, INC., a Delaware corporation
		
	Number of Shares:	  	[3.75% of the funded Term Loan/Warrant Price] (Subject to Section 1.7)
		
	Type/Series of Stock:	  	Series C Preferred (Subject to Section 1.7)
		
	Warrant Price:	  	$0.65 per share (Subject to Section 1.7)
		
	Issue Date:	  	[DATE]
		
	Expiration Date:	  	[the date 10 years after the Issue Date] See also Section 5.1(b).
		
	Credit Facility:	  	This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement dated as of December     , 2014 among Oxford Finance LLC, as Lender and Collateral
Agent, the Lenders from time to time party thereto, including Silicon Valley Bank and the Company (as modified, amended and/or restated from time to time, the “Loan Agreement”).

 THIS WARRANT CERTIFIES THAT, for good and valuable consideration, [SILICON VALLEY BANK][OXFORD FINANCE LLC]
([”Oxford” and,] together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and
non-assessable shares (the “Shares”) of the above-stated Type/Series of Stock (the “Class”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and
as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. [for SVB, add: Reference is made to Section 5.4 of this Warrant whereby Silicon Valley Bank
shall transfer this Warrant to its parent company, SVB Financial Group.] 
 SECTION 1. EXERCISE. 

1.1 Method of Exercise. Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the
Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in
Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased. 

1.2 Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified
in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the
Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula: 
 X =
Y(A-B)/A 
 where: 
 X =
the number of Shares to be issued to the Holder; 
 Y = the number of Shares with respect to which this Warrant is being exercised
(inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price); 

 A = the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

 B = the Warrant Price. 

1.3 Fair Market Value. If the Company’s common stock is then traded or quoted on a nationally recognized securities exchange,
inter-dealer quotation system or over-the-counter market (a “Trading Market”) and the Class is common stock, the fair market value of a Share shall be the closing price or last sale price of a share of common stock reported for the
Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is then traded in a Trading Market and the Class is a series of the Company’s
convertible preferred stock, the fair market value of a Share shall be the closing price or last sale price of a share of the Company’s common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant
together with its Notice of Exercise to the Company multiplied by the number of shares of the Company’s common stock into which a Share is then convertible. If the Company’s common stock is not traded in a Trading Market, the Board of
Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment. 
 1.4 Delivery of
Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon
such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired. 

1.5 Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the
Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount. 

1.6 Treatment of Warrant Upon Acquisition of Company. 

(a) Acquisition. For the purpose of this Warrant, “Acquisition” means (i) any consolidation or merger of the
Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such
consolidation, merger or reorganization, continue to hold at least a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after
such consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; provided that an Acquisition shall
not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; or
(iii) a sale of all or substantially all of the assets of the Company or the exclusive license of substantially all of the rights to substantially all of the intellectual property of the Company material to its business. 

(b) Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the
Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either (i) Holder shall exercise this Warrant pursuant to
Section 1.1 and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately
prior to the consummation of such Acquisition. 
 (c) The Company shall provide Holder with written notice of its request relating to the
Cash/Public Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be
delivered to Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition. In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair
market value of one Share (or other security issuable upon the exercise hereof) as 

 
determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be
exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities)
issued upon such exercise to the Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof. 

(d) Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity
shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as
if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant. 

(e) As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements:
(i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all
required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this
Warrant on or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities
that would be received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state
securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition. 
 1.7
Adjustment to Class of Shares; Number of Shares; Warrant Price; Adjustments Cumulative. If, upon the closing of the Next Equity Financing, the Next Equity Financing Price shall be less than the Warrant Price in effect as of immediately prior
thereto, then the “Class” shall be Next Equity Financing Securities from and after such closing, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant and the “Warrant Price” shall
be the Next Equity Financing Price from and after such closing, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant; provided, that upon such date, if any, as the “Class” becomes Next Equity
Financing Securities pursuant to this sentence, this Warrant shall be exercisable for such number of shares of such Class as shall equal (i) the product of (a) the number of shares for which this Warrant was originally exercisable and
(b) the warrant price for which this Warrant was originally exercisable, divided by (ii) the Next Equity Financing Price, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant. As used herein
(i) “Next Equity Financing” means the first sale or issuance by the Company on or after the Issue Date of this Warrant set forth above, in a single transaction or series of related transactions, of shares of its convertible preferred
stock or other senior equity securities to one or more investors for cash for financing purposes; (ii) “Next Equity Financing Securities” means the type, class and series of convertible preferred stock or other senior equity security
sold or issued by the Company in the Next Equity Financing; and (iii) “Next Equity Financing Price” means the lowest price per share for which Next Equity Financing Securities are sold or issued by the Company in the Next Equity
Financing. 
 SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE. 

2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the Class
payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property
which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of
shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise,
into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased. 

 2.2 Reclassification, Exchange, Combinations or Substitution. Upon any event whereby all
of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will
be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in
accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events. 

2.3 Conversion of Preferred Stock. If the Class is a class and series of the Company’s convertible preferred stock, in the event
that all outstanding shares of the Class are converted, automatically or by action of the holders thereof, into common stock pursuant to the provisions of the Company’s Certificate of Incorporation, including, without limitation, in connection
with the Company’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration statement under the Act (the “IPO”), then from and after the date on which all outstanding shares of
the Class have been so converted, this Warrant shall be exercisable for such number of shares of common stock into which the Shares would have been converted had the Shares been outstanding on the date of such conversion, and the Warrant Price shall
equal the Warrant Price in effect as of immediately prior to such conversion divided by the number of shares of common stock into which one Share would have been converted, all subject to further adjustment thereafter from time to time in accordance
with the provisions of this Warrant. 
 2.4 Adjustments for Diluting Issuances. Without duplication of any adjustment otherwise
provided for in this Section 2, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s Articles or Certificate of
Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment. 
 2.5 No Fractional
Share. No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional Share interest arises upon any exercise of the Warrant, the
Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share,
less (ii) the then-effective Warrant Price. 
 2.6 Notice/Certificate as to Adjustments. Upon each adjustment of the Warrant
Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and facts upon which such
adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon
the date of such adjustment. 
 SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 

3.1 Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows: 

(a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the
Class were last sold and issued prior to the Issue Date hereof in an arms-length transaction in which at least Five Hundred Thousand Dollars ($500,000.00) of such shares were sold. 

(b) All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The
Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise
in full of this Warrant and the conversion of the Shares into common stock or such other securities. 

 (c) The Company’s capitalization table attached hereto as Schedule 1 is true and complete,
in all material respects, as of the Issue Date. 
 3.2 Notice of Certain Events. If the Company proposes at any time to: 

(a) declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend; 
 (b) offer for subscription or sale pro rata to the holders of the outstanding
shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights); 

(c) effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the
Class; 
 (d) effect an Acquisition or to liquidate, dissolve or wind up; or 

(e) effect an IPO; 
 then, in connection with
each such event, the Company shall give Holder: 
 (1) at least seven (7) Business Days prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in respect of the
matters referred to in (a) and (b) above; 
 (2) in the case of the matters referred to in (c) and (d) above at least
seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the securities or other
property deliverable upon the occurrence of such event); and 
 (3) with respect to the IPO, at least seven (7) Business Days prior
written notice of the date on which the Company proposes to file its registration statement in connection therewith. 
 Reference is made to
Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof. Company will also provide
information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements. 

SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. 

The Holder represents and warrants to the Company as follows: 

4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being
acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of
acquiring this Warrant or the Shares. 
 4.2 Disclosure of Information. Holder is aware of the Company’s business affairs and
financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. Holder
further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company
possessed such information or could acquire it without 

 
unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access. 

4.3 Investment Experience. Holder understands that the purchase of this Warrant and its underlying securities involves substantial
risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such
knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the
Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons. 

4.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning of Regulation D promulgated under the
Act. 
 4.5 The Act. Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder understands that this Warrant and the Shares
issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available. Holder
is aware of the provisions of Rule 144 promulgated under the Act. 
 4.6 Market Stand-off Agreement. The Holder agrees that the
Shares shall be subject to the Market Standoff provisions in Section 2.11 of that certain Third Amended and Restated Investor Rights Agreement by and among the Company and the investors party thereto, dated July 15, 2013 (as such agreement
may be amended and restated) or similar agreement. 
 4.7 No Voting Rights. Holder, as a Holder of this Warrant, will not have any
voting rights until the exercise of this Warrant and, except as expressly set forth in this Warrant, will not be considered a stockholder for any purpose until the exercise of this Warrant. 

SECTION 5. MISCELLANEOUS. 

5.1 Term; Automatic Cashless Exercise Upon Expiration. 

(a) Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from
time to time on or before 6:00 PM, [for SVB: Pacific][for Oxford: Eastern] time, on the Expiration Date and shall be void thereafter. 

(b) Automatic Cashless Exercise upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or
other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be
exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such
other securities) issued upon such exercise to Holder. 
 5.2 Legends. Each certificate evidencing Shares (and each certificate
evidencing the securities issued upon conversion of any Shares, if any) shall be imprinted with a legend in substantially the following form: 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR THE SECURITIES LAWS OF ANY STATE AND, 

 
EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO [SILICON VALLEY BANK][OXFORD FINANCE LLC] DATED [DATE], MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET STAND-OFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN
THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC
OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES. 
 5.3 Compliance with
Securities Laws on Transfer. This Warrant and the Shares issued upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part
except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company,
as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to [for SVB: SVB Financial Group (Silicon Valley Bank’s parent company) or any other][for Oxford:
an] affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of counsel if there is no material
question as to the availability of Rule 144 promulgated under the Act. 
 5.4 [for SVB: Transfer Procedure. After receipt by
Silicon Valley Bank of the executed Warrant, Silicon Valley Bank will transfer all of this Warrant to its parent company, SVB Financial Group. By its acceptance of this Warrant, SVB Financial Group hereby makes to the Company each of the
representations and warranties set forth in Section 4 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if the original Holder hereof. Subject to the provisions of Section 5.3 and upon providing the
Company with written notice, SVB Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable directly or indirectly, upon conversion of the
Shares, if any) to any transferee, provided, however, in connection with any such transfer, SVB Financial Group or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable); and provided further, that any subsequent transferee other than SVB Financial Group shall
agree in writing with the Company to be bound by all of the terms and conditions of this Warrant (including the representations, warranties and covenants set forth in Section 4 hereof). Notwithstanding any contrary provision herein, at all
times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any exercise hereof, or any shares or other securities issued upon any conversion of any
Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by such a direct competitor.] 

5.5 [for Oxford: Transfer Procedure. After receipt by Oxford of the executed Warrant, Oxford may transfer all or part of this
Warrant to one or more of Oxford’s affiliates (each, an “Oxford Affiliate”), by execution of an Assignment substantially in the form of Appendix 2. Subject to the provisions of Article 5.3 and upon providing the Company with
written notice, Oxford, any such Oxford Affiliate and any subsequent Holder, may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the Shares issuable directly or indirectly, upon conversion of the Shares,
if any) to any other transferee, provided, however, in connection with any such transfer, the Oxford Affiliate(s) or any subsequent Holder will give the Company notice of 

 
the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to
the transferee(s) (and Holder if applicable). Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares
issued upon any exercise hereof, or any shares or other securities issued upon any conversion of any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of
the Company by such a direct competitor.] 
 5.6 Notices. All notices and other communications hereunder from the Company to the
Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual
receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such
address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5. All notices to Holder shall be addressed as
follows until the Company receives notice of a change of address in connection with a transfer or otherwise: 
 [SVB Financial Group 

Attn: Treasury Department 
 3003
Tasman Drive, HA 200 
 Santa Clara, CA 95054 

Telephone: 408-654-7400 

Facsimile: 408-496-2405 
 Email:
warradmi@svb.com] 
 [Oxford Finance LLC 

133 N. Fairfax Street 

Alexandria, VA 22314 
 Attn:
Legal Department 
 Telephone: (703) 519-4900 

Facsimile: (703) 519-5225 

Email: LegalDepartment@oxfordfinance.com] 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address: 

AnaptysBio, Inc. 
 10421 Pacific
Center Court 
 Suite 200 

San Diego, CA 92121 
 Attn:
Hamza Suria 
 Telephone: (858) 362-6383 

Facsimile: (858) 366-9055 

Email: hsuria@anaptysbio.com 
 With a copy
(which shall not constitute notice) to: 
 Fenwick & West LLP 

555 California Street 
 San
Francisco, CA 94104 
 Attn: Matthew Rossiter 

Telephone: (415) 875-2372 

Email: mrossiter@fenwick.com 

5.7 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular
instance and either retroactively or prospectively) only by an 

 
instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 

5.8 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the
party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 

5.9 Counterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall
constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 5.10 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California,
without giving effect to its principles regarding conflicts of law. 
 5.11 Headings. The headings in this Warrant are for purposes
of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant. 
 5.12 Business Days.
“Business Day” is any day that is not a Saturday, Sunday or a day on which [Silicon Valley Bank is][banks in California are] closed. 

[Remainder of page left blank intentionally] 

[Signature page follows:] 

 IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by
their duly authorized representatives effective as of the Issue Date written above. 
  

			
	“COMPANY”
	
	ANAPTYSBIO, INC.
		
	By:	 	  

		
	Name:	 	  

		 	(Print)
		
	Title:	 	  

	
	“HOLDER”
	
	[SILICON VALLEY BANK] [OXFORD FINANCE LLC]
		
	By:	 	  

		
	Name:	 	  

		 	(Print)
		
	Title:	 	  

 [Signature Page to Warrant to Purchase Stock] 

 APPENDIX 1 

NOTICE OF EXERCISE 
 1.
The undersigned Holder hereby exercises its right purchase                  shares of the Common/Series          Preferred
[circle one] Stock of ANAPTYSBIO, INC. (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows: 

 

	 	[    ]	check in the amount of $         payable to order of the Company enclosed herewith 

  

	 	[    ]	Wire transfer of immediately available funds to the Company’s account 

  

	 	[    ]	Cashless Exercise pursuant to Section 1.2 of the Warrant 

  

	 	[    ]	Other [Describe]
                                        

 2. Please issue a certificate or certificates representing the Shares in the name specified below: 

 

			
		 	  

		 	Holder’s Name
		
		 	  

		
		 	  

		 	(Address)

 3. By its execution below and for the benefit of the Company, Holder hereby restates each of the
representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof. 
  

			
	HOLDER:
	
	  

		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

		
	Date:	 	  

  
 Appendix 1 

 [insert Appendix 2 for Oxford Warrants: 

APPENDIX 2 

ASSIGNMENT 
 For
value received, Oxford Finance LLC hereby sells, assigns and transfers unto 
  

			
	Name:	 	[OXFORD TRANSFEREE]
		
	Address:	 	  

		
	Tax ID:	 	  

 that certain Warrant to Purchase Stock issued by ANAPTYSBIO, INC. (the “Company”), on [DATE] (the
“Warrant”) together with all rights, title and interest therein. 
  

			
	OXFORD FINANCE LLC
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

  

			
	Date:	 	  

 By its execution below, and for the benefit of the Company, [OXFORD TRANSFEREE] makes each of the representations and
warranties set forth in Article 4 of the Warrant and agrees to all other provisions of the Warrant as of the date hereof. 
  

			
	OXFORD FINANCE LLC
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

  
 Appendix 2 

 SCHEDULE 1 

Company Capitalization Table 

See attached 

  
 Schedule 1 

			
	DEBTOR:	  	ANAPTYSBIO, 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 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 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 Debtor that are proceeds of the Intellectual Property; (ii) more than sixty five percent (65%) of the total combined voting power of all classes of
stock entitled to vote the shares of capital stock 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) more than sixty five percent (65%) of the total combined voting power of all classes of stock entitled to vote the shares of
capital stock of the Australia Subsidiary; and (iv) any (x) inbound licenses of Intellectual Property in which Borrower is the licensee; or (y) real estate leasehold interests in which Borrower is the lessee; in each case of
(x) and (y), to the extent the grant of a security interest with respect to such property would be prohibited by the agreement with the non-Borrower party or would otherwise constitute a default thereunder, provided that such property will
automatically be deemed to be “Collateral” hereunder if such prohibition is unenforceable or ineffective and/or upon the termination, lapsing or expiration of any such prohibition. 

Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent 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). 

 FIRST AMENDMENT TO 

LOAN AND SECURITY AGREEMENT 

This FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of January 25, 2016, by
and between 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 of the Loan Agreement (as defined below) or otherwise party thereto 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 ANAPTYSBIO, INC., a Delaware corporation with
offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121 (“Borrower”). 

RECITALS 

A. Collateral Agent, Lenders and Borrower have entered into that certain Loan and Security Agreement dated as of December 24, 2014
(as amended from time to time, the “Loan Agreement”). 
 B. Lenders have extended credit to Borrower for the
purposes permitted in the Loan Agreement. 
 C. Borrower has requested that Collateral Agent and Lenders make certain revisions to
the Loan Agreement as more fully set forth herein. 
 D. Collateral Agent and Lenders have agreed to amend certain provisions of the
Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below. 

AGREEMENT 

Now, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 
 1.
Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement. 

2. Amendments to Loan Agreement. 

2.1 Section 2.2 (Term Loans). Sections 2.2(a)(ii)-(iii) of the Loan Agreement are amended and restated as follows: 

“(ii) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the
Second Draw Period, to make term loans to Borrower in a single advance in an aggregate amount of Five Million Dollars ($5,000,000.00) according to each Lender’s Term B Loan Commitment as set forth on Schedule 1.1 hereto (such term loans
are hereinafter referred to singly as a “Term B Loan”, and collectively as the “Term B Loans”, provided that the Term C Loans and the Term B Loans must be funded simultaneously. After repayment, no Term B Loan may
be re-borrowed. 

  
 1. 

 (iii) Subject to the terms and conditions of this Agreement, the Lenders agree,
severally and not jointly, during the Third Draw Period, to make term loans to Borrower in a single advance in an aggregate amount of Five Million Dollars ($5,000,000.00) according to each Lender’s Term C Loan Commitment as set forth on
Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term C Loan”, and collectively as the “Term C Loans”; each Term A Loan, Term B Loan or Term C Loan is hereinafter referred to
singly as a “Term Loan” and the Term A Loans, the Term B Loans and the Term C Loans are hereinafter referred to collectively as the “Term Loans”, provided that the Term B Loans and the Term C Loans must be funded
simultaneously. After repayment, no Term C Loan may be re-borrowed.” 
 2.2 Section 2.2 (Term Loans). Sections
2.2(b)-(d) of the Loan Agreement are amended and restated as follows: 
 “(b) Repayment. Borrower shall make
monthly payments of interest only commencing on the first (1st) Payment Date following the Funding Date of each 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 each Term Loan, any initial partial monthly interest payment otherwise due for the period between the
Funding Date of such 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 and interest, in
arrears, to each Lender, 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 twenty four (24) months. All unpaid principal and accrued and unpaid interest with respect to each Term Loan is due and payable in full on the Maturity Date. Each 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 Lenders, payable to each Lender in accordance with its 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, (iv) the First Amendment Fee, plus (v) 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, (D) the First 

  
 2. 

 
Amendment Fee, plus (E) 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 Section 2.5 (Fees). A new subsection (e) is added to Section 2.5 of the Loan Agreement as follows: 

“(e) First Amendment Fee. The First Amendment Fee, when due hereunder, to be shared between the Lenders in
accordance with their respective Pro Rata Shares.” 
 2.4 Section 3.2 (Conditions Precedent to all Credit Extensions). A
new subsection (f) is added to Section 3.2 of the Loan Agreement as follows: 
 “(f) the Term B Loans and the
Term C Loans must be funded simultaneously.” 
 2.5 Section 6.6 (Operating Accounts). Section 6.6(a) of the Loan
Agreement is amended and restated as follows: 
 “(a) Maintain its primary and its Subsidiaries’ primary Collateral
Accounts with Bank or its Affiliates in accounts which are subject to a Control Agreement in favor of Collateral Agent and the amounts on deposit in such accounts with the Bank or its Affiliates shall represent the greater of Fifteen Million Dollars
($15,000,000.00) or twenty-five percent (25%) of the dollar value of amounts on deposit in all of Borrower’s and such Subsidiaries accounts at all financial institutions; provided that the amounts on deposit in such accounts with Bank or
its Affiliates may represent less than or equal to Fifteen Million Dollars ($15,000,000.00) so long as Borrower and its Subsidiaries do not maintain any Collateral Accounts in the United States other than accounts with Bank or its Affiliates which
are subject to a Control Agreement in favor of Collateral Agent.” 
 2.6 Section 13.1 (Definitions). The following defined
terms and their respective definitions are amended and restated in Section 13.1 of the Loan Agreement as follows: 

“Amortization Date” is February 1, 2017. 

“First Amendment Fee” 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 Two Thousand Five
Hundred Dollars ($2,500), payable to Lenders in accordance with their respective Pro Rata Shares. 

“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest,
Lenders’ Expenses, the Prepayment Fee, the Final Payment, the First Amendment Fee, 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, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of 

  
 3. 

 
Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties under the Loan Documents (other than the Warrants). 

“Second Draw Period” is the period commencing on the later of (i) the date of the occurrence of the Term
B Draw Event and (ii) July 1, 2016 and ending on the earlier of (X) December 31, 2016 and (Y) the occurrence of an Event of Default; provided, however, that the Second Draw Period shall not commence if on the date of the
occurrence of the Term B Draw Event an Event of Default has occurred and is continuing. 
 “Term B Draw
Event” means the receipt by Collateral Agent and Lenders of evidence, in form and substance satisfactory to Collateral Agent and Lenders, of Borrower and/or a partner of Borrower, receiving regulatory approval pertaining to an IND
submission or foreign equivalent with respect to at least two (2) development programs, provided that at least one (1) of which must be an internal development program and only one (1) of which may be a foreign equivalent. An internal
development program shall be a program where commercial rights to potential future products are wholly-owned by the Borrower and its Affiliates. Regulatory approval pertaining to an IND or foreign equivalent shall mean (1) the acceptance by the
FDA, or a foreign competent authority with equivalent oversight in the foreign country or region, of an IND, or equivalent application, to initiate one or more clinical studies and/or (2) dosing of one or more human individuals within that
certain jurisdiction. 
 “Term C Draw Event” means the receipt by Collateral Agent and Lenders of evidence,
in form and substance satisfactory to Collateral Agent and Lenders, of Borrower and/or a partner of Borrower, receiving regulatory approval pertaining to an IND submission or foreign equivalent with respect to at least two (2) development
programs, provided that at least one (1) of which must be an internal development program and only one (1) of which may be a foreign equivalent. An internal development program shall be a program where commercial rights to potential future
products are wholly-owned by the Borrower and its Affiliates. Regulatory approval pertaining to an IND or foreign equivalent shall mean (1) the acceptance by the FDA, or a foreign competent authority with equivalent oversight in the foreign
country or region, of an IND, or equivalent application, to initiate one or more clinical studies and/or (2) dosing of one or more human individuals within that certain jurisdiction. 

3. Limitation of Amendment. 

3.1 The amendments set forth in Section 2 above are effective for the purposes set forth herein and shall be limited
precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Collateral Agent or any
Lender may now have or may have in the future under or in connection with any Loan Document. 
 3.2 This Amendment shall be
construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall
remain in full force and effect. 
 4. Representations and Warranties. To induce Collateral Agent and Lenders to enter into this
Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows: 

  
 4. 

 4.1 Immediately after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as
of such date), and (b) no Event of Default has occurred and is continuing; 
 4.2 Borrower has the power and authority to
execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment; 
 4.3 The
organizational documents of Borrower delivered to Collateral Agent and Lenders on the Effective Date, or subsequent thereto, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full
force and effect; 
 4.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations
under the Loan Agreement, as amended by this Amendment, have been duly authorized; 
 4.5 The execution and delivery by Borrower of
this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

 4.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on Borrower, except as already has been obtained or made; and 
 4.7 This Amendment has been duly executed and
delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other
similar laws of general application and equitable principles relating to or affecting creditors’ rights. 
 5. Counterparts.
This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument. 

6. Effectiveness. This Amendment shall be deemed effective upon the due execution and delivery to Collateral Agent and Lenders of
(i) this Amendment by each party hereto and (ii) Borrower’s payment of all Lenders’ Expenses incurred through the date of this Amendment. 

[Balance of Page Intentionally Left Blank] 

  
 5. 

 IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above. 
  

			
	BORROWER:
	
	 ANAPTYSBIO, INC.

		
	By	 	 /s/ Hamza Suria

	Name:	 	Hamza Suria
	Title:	 	President & CEO

  

			
	COLLATERAL AGENT AND LENDER:
	
	 OXFORD FINANCE LLC

		
	By	 	 /s/ Mark Davis

	Name:	 	Mark Davis
	Title:	 	Vice President of Finance

  

			
	LENDER:
	
	 SILICON VALLEY BANK

		
	By	 	 /s/ Igor DaCruz

	Name:	 	Igor DaCruz
	Title:	 	Vice President

  
 [Signature
Page to First Amendment to Loan and Security Agreement] 

 SECOND AMENDMENT TO 

LOAN AND SECURITY AGREEMENT 

This SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of December 30, 2016,
by and between 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 of the Loan Agreement (as defined below) or otherwise party thereto 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 ANAPTYSBIO, INC., a Delaware corporation
with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121 (“Existing Borrower”), and ANAPTYSBIO PTY LTD, an entity formed under the laws of Australia (“Anaptys Australia” or “New
Borrower” and together with Existing Borrower, individually and collectively, jointly and severally, “Borrower”) . 

RECITALS 

A. Collateral Agent, Lenders and Existing Borrower have entered into that certain Loan and Security Agreement dated as of
December 24, 2014 (as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of January 25, 2016, collectively, the “Loan Agreement”). 

B. Lenders have extended credit to Borrower for the purposes permitted in the Loan Agreement. 

C. Borrower has requested that Collateral Agent and Lenders (i) add New Borrower as a “Borrower” under the Loan
Agreement, (ii) extend the Amortization Date and (iii) make certain other revisions to the Loan Agreement as more fully set forth herein. 

D. Collateral Agent and Lenders have agreed to amend certain provisions of the Loan Agreement, but only to the extent, in accordance
with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below. 

AGREEMENT 

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 

1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

 2. Joinder. 
 2.1
New Borrower. New Borrower hereby is added as a “Borrower” under the Loan Agreement. All references in the Agreement to “Borrower” shall hereafter mean and include the Existing Borrower and New Borrower individually and
collectively, jointly and severally; and New Borrower shall hereafter have all rights, duties and obligations of “Borrower” thereunder. 

2.2 Joinder to Loan Agreement. New Borrower hereby joins the Loan Agreement and each of the Loan Documents (other than the Warrants),
and agrees to comply with and be bound by all of the terms, conditions and covenants of the Loan Agreement and Loan Documents (other than the Warrants), as if it were originally named a “Borrower” therein. Without limiting the generality
of the preceding sentence, New Borrower agrees that it will be jointly and severally liable, together with Existing Borrower, for the payment and performance of all obligations and liabilities of Borrower under the Loan Agreement, including, without
limitation, the Obligations. Either Borrower may, acting singly, request Credit Extensions pursuant to the Loan Agreement. Each Borrower hereby appoints the other as agent for the other for all purposes hereunder, including with respect to

 
requesting Credit Extensions pursuant to the Loan Agreement. Each Borrower hereunder shall be obligated to repay all Credit Extensions made pursuant to the Loan Agreement, regardless of which
Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions. 
 2.3
Subrogation and Similar Rights. Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law and (b) any right to require Collateral Agent or any Lender to: (i) proceed against any
Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Collateral Agent and any Lender may each exercise or not exercise any right or remedy it has against any Borrower or any security
it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability. Notwithstanding any other provision of this Amendment, the Loan Agreement, the Loan Documents or any related documents,
until the Obligations have been paid in full and at such time as each Lender’s obligation to make Credit Extensions has terminated, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation,
any law subrogating Borrower to the rights of Collateral Agent and/or Lenders under this Amendment and the Loan Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or
hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Amendment, the Loan Agreement or otherwise and all rights that it might have to benefit
from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Amendment, the Loan Agreement or otherwise. Borrower agrees that until the Obligations
(other than inchoate indemnity obligations) have been paid in full in cash and at such time as each Lender’s obligation to make Credit Extensions has terminated, Borrower will not enforce any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this section. If any payment is made to a Borrower in contravention of this section, such Borrower shall hold such payment in trust for Collateral Agent, for the ratable benefit of Lenders, and
such payment shall be promptly delivered to Collateral Agent, for the ratable benefit of Lenders, for application to the Obligations, whether matured or unmatured. 

2.4 Grant of Security Interest. To secure the prompt payment and performance of all of the Obligations, New Borrower hereby grants to
Collateral Agent, for the ratable benefit of Lenders, a continuing lien upon and security interest in all of New Borrower’s now existing or hereafter arising rights and interest in the Collateral, whether now owned or existing or hereafter
created, acquired, or arising, and wherever located. New Borrower further covenants and agrees that by its execution hereof it shall provide all such information, complete all such forms, and take all such actions, and enter into all such
agreements, in form and substance reasonably satisfactory to Collateral Agent and each Lender that are reasonably deemed necessary by Collateral Agent or any Lender in order to grant a valid, perfected first priority security interest to Collateral
Agent, for the ratable benefit of Lenders, in the Collateral. New Borrower hereby authorizes Collateral Agent to file financing statements, without notice to Borrower, with all appropriate jurisdictions in order to perfect or protect Collateral
Agent’s and/or any Lender’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Collateral Agent and each Lender under
the Code. 
 2.5 Representations and Warranties. New Borrower hereby represents and warrants to Collateral Agent and each Lender that
all representations and warranties in the Loan Documents made on the part of Existing Borrower are true and correct on the date hereof with respect to Existing Borrower and New Borrower, with the same force and effect as if New Borrower were named
as “Borrower” in the Loan Documents in addition to Existing Borrower. 
 3. Amendments to Loan Agreement. 

3.1 Section 2.2 (Term Loans). Section 2.2(a)(ii) and Section 2.2(a)(iii) of the Loan Agreement hereby are amended and
restated as follows: 
 “(ii) Subject to the terms and conditions of this Agreement, the Lenders
agree, severally and not jointly, on the Second Amendment Effective Date, to make term loans to Borrower in a single advance in an aggregate amount of Five Million Dollars ($5,000,000.00) according to each Lender’s Term B Loan Commitment as set
forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term B Loan”, and collectively as the “Term B 

  
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Loans”, provided that the Term C Loans and the Term B Loans must be funded simultaneously. After repayment, no Term B Loan may be re-borrowed. 

(iii) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, on
the Second Amendment Effective Date, to make term loans to Borrower in a single advance in an aggregate amount of Five Million Dollars ($5,000,000.00) according to each Lender’s Term C Loan Commitment as set forth on Schedule 1.1 hereto (such
term loans are hereinafter referred to singly as a “Term C Loan”, and collectively as the “Term C Loans”; each Term A Loan, Term B Loan or Term C Loan is hereinafter referred to singly as a “Term
Loan” and the Term A Loans, the Term B Loans and the Term C Loans are hereinafter referred to collectively as the “Term Loans”, provided that the Term B Loans and the Term C Loans must be funded simultaneously. After
repayment, no Term C Loan may be re-borrowed.” 
 3.2 Section 2.2 (Term Loans). Section 2.2(b) of the Loan Agreement
hereby is amended and restated as follows: 
 “(b) Repayment. Borrower shall make monthly
payments of interest only commencing on the first (1st) Payment Date following the Second Amendment Effective Date, 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 Second Amendment Effective Date, any initial partial monthly interest payment otherwise due for the period between the Funding Date of such 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 each Lender, 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 twenty four (24) months. All unpaid principal and accrued and unpaid interest with respect to each Term Loan is due and payable in full on the Maturity Date. Each Term Loan may only be prepaid in accordance with
Sections 2.2(c) and 2.2 (d).” 
 3.3 Section 2.3 (Payment of Interest on Credit Extensions). Section 2.3(a)
Section 2.3(b) and Section 2.3(c) of the Loan Agreement hereby are amended and restated as follows: 

“(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.” 

  
 3 

 3.4 Section 2.5 (Fees). New subsection 2.5(e) hereby is added to the Loan Agreement
as follows: 
 “(e) Second Amendment Fee. An amendment fee, due on the Second Amendment
Effective Date, in the amount of One Hundred Thousand Dollars ($100,000.00) (the “Second Amendment Fee”), to be shared between the Lenders in accordance with their respective Pro Rata Shares.” 

3.5 Section 4.3 (Pledge of Collateral). New Section 4.3 hereby is added to the Loan Agreement as follows: 

“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 Second Amendment Effective Date, or, to the extent not certificated as of the Second Amendment 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.” 

3.6 Section 5.12 (Shares). New Section 5.12 hereby is added to the Loan Agreement as follows: 

“5.12 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.” 

3.7 Section 6.12 (Creation/Acquisition of Subsidiaries). Section 6.12 of the Loan Agreement hereby is amended and restated as
follows: 
 “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 

  
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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, to secure payment and
performance of the Obligations a perfected security interest in the stock, units or other evidence of ownership of each such newly created Subsidiary, provided, however, that in the case of a Foreign Subsidiary (excluding Anaptys Australia) Borrower
(or any domestic Subsidiary which is the owner of such Foreign Subsidiary) shall not be required to pledge or grant a security interest in more than sixty five percent (65%) of the outstanding equity securities of such Foreign Subsidiary
(excluding Anaptys Australia) and no assets of such Foreign Subsidiary (excluding Anaptys Australia) shall be required to be pledged or subject to a security interest hereunder 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 outstanding equity securities would create a present
and existing adverse tax consequence to Borrower under the U.S. Internal Revenue Code.” 
 3.8 Section 8.5 (Insolvency).
Section 8.5 of the Loan Agreement hereby is amended and restated as follows: 
 “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; (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) or (d) the appointment of a
liquidator (other than in respect of a solvent liquidation), receiver, receiver and manager, administrator, administrative receiver, compulsory manager or other similar person in respect of Anaptys Australia or any of the property of Anaptys
Australia;” 
 3.9 Section 12.13 (Borrower Liability). New Section 12.13 hereby is added to the Loan Agreement as
follows: 
 “12.13 Borrower Liability. Each Borrower may, acting singly, request Credit
Extensions hereunder. Each Borrower hereby appoints the other as agent for the other for all purposes hereunder, including with respect to requesting Credit Extensions hereunder. Each Borrower hereunder shall be jointly and severally obligated to
repay all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions. Each Borrower waives (a) any suretyship defenses available
to it under the Code or any other applicable law, including, without limitation, the benefit of California Civil Code Section 2815 permitting revocation as to future transactions and the benefit of California Civil Code Sections, 2809, 2810,
2819, 2839, 2845, 2899 and 3433, and until the payment in full in cash of the Obligations (other than inchoate indemnity obligations) and each Lender’s obligation to make Credit Extensions has terminated, California Civil Code Sections 1432,
2847, 2848 and 2849 and (b) any right to require Collateral Agent or any Lender to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Collateral
Agent and or any Lender may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without
affecting any Borrower’s liability. Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives and agrees not to exercise until the payment of the Obligations (other than inchoate indemnity
obligations) in full and each Lender’s obligation to make Credit Extensions has terminated, all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Collateral Agent and the
Lenders under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by
Borrower with respect to the Obligations in connection 

  
 5 

 
with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect
to the Obligations in connection with this Agreement or otherwise. If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Collateral Agent and the Lenders and such payment shall be
promptly delivered to Collateral Agent for application to the Obligations, whether matured or unmatured.” 
 3.10 Section 13
(Definitions). The following terms and their definitions hereby are added or amended and restated in their entirety to Section 13.1 of the Loan Agreement as follows: 

“Amortization Date” February 1, 2018. 

“Anaptys Australia” means ANAPTYSBIO PTY LTD, a Subsidiary of Borrower organized under the
laws of Australia. 
 “Basic Rate” is, with respect to each Term Loan, the per annum rate
of interest (based on a year of three hundred sixty (360) days) equal to the sum of (a) the three (3) month 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 thirty-seven hundredths percent (6.37%). Notwithstanding the foregoing, the Basic Rate for each Term Loan for the period from the Second Amendment Effective Date through and including
December 31, 2016, shall be seven and three tenths percent (7.30%). 
 “General Security
Deed” means that certain General Security Deed dated December 30, 2016, by and between Oxford, as Collateral Agent, for the ratable benefit of the Lenders, and Anaptys Australia. 

“Loan Documents” are, collectively, this Agreement, the Warrants, the General Security Deed,
the Perfection Certificates, each Compliance Certificate, each Disbursement Letter, each Loan Payment/Advance Request Form and any Bank Services Agreement, the Post Closing Letter, 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. 
 “Maturity Date” is January 1, 2020. 

“Second Amendment Effective Date” means December 30, 2016. 

“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; 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 (excluding Anaptys Australia) 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 (excluding Anaptys Australia). 
 “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 and, with respect to Anaptys Australia, means solvent for the purposes of section 95A(1) of the Corporations Act 2001 (Commonwealth).

  
 6 

 3.11 Section 13 (Definitions). The following term and its definition hereby is
deleted from Section 13.1 of the Loan Agreement: 
 “Australian Subsidiary”, “Second Draw Period”,
“Term B Draw Event”, “Term C Draw Event”, “Third Draw Period” 
 3.12 Exhibit A to the Loan
Agreement hereby is replaced with Exhibit A attached hereto. 
 4. Limitation of Joinder and Amendment. 

4.1 The joinder and amendments set forth in Sections 2 and 3 above are effective for the purposes set forth herein and shall be
limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Collateral Agent or
any Lender may now have or may have in the future under or in connection with any Loan Document. 
 4.2 This Amendment shall be
construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall
remain in full force and effect. 
 5. Representations and Warranties. To induce Collateral Agent and Lenders to enter into this
Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows: 
 5.1 Immediately after giving effect
to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an
earlier date, in which case they are true and correct as of such date), and (b) no Event of Default, other than the Existing Event of Default, has occurred and is continuing; 

5.2 Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement,
as amended by this Amendment; 
 5.3 The organizational documents of Borrower delivered to Collateral Agent and Lenders on the
Effective Date, or subsequent thereto, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect; 

5.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, have been duly authorized; 
 5.5 The execution and delivery by Borrower of this Amendment
and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a
Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 

5.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on Borrower, except as already has been obtained or made; and 
 5.7 This Amendment has been duly executed and
delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other
similar laws of general application and equitable principles relating to or affecting creditors’ rights. 

  
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 6. Release by Borrower. 

7.1 FOR GOOD AND VALUABLE CONSIDERATION, Borrower hereby forever relieves, releases, and discharges Collateral Agent and Lenders and
their present or former employees, officers, directors, agents, representatives, attorneys, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes
of action, of every type, kind, nature, description or character whatsoever, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner whatsoever connected with or related to facts, circumstances,
issues, controversies or claims existing or arising from the beginning of time through and including the date of execution of this Amendment (collectively “Released Claims”). Without limiting the foregoing, the Released Claims shall
include any and all liabilities or claims arising out of or in any manner whatsoever connected with or related to the Loan Documents, the Recitals hereto, any instruments, agreements or documents executed in connection with any of the foregoing or
the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing. 
 7.2 By entering into this
release, Borrower recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of
Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if Borrower should subsequently discover that any fact that it relied upon in entering
into this release was untrue, or that any understanding of the facts was incorrect, Borrower shall not be entitled to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances whatsoever.
Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made by Collateral Agent or any Lender with respect to the facts underlying this release or with regard to any of such party’s rights or
asserted rights. 
 7.3 This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim
against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Borrower acknowledges that the release contained herein constitutes a material inducement to Collateral Agent and Lenders to
enter into this Amendment, and that Collateral Agent and Lenders would not have done so but for Collateral Agent and Lenders’ expectation that such release is valid and enforceable in all events. 

7.4 Borrower hereby represents and warrants to Collateral Agent and Lenders, and Collateral Agent and Lenders are relying thereon, as
follows: 
 (a) Except as expressly stated in this Agreement, neither Collateral Agent, Lenders nor any agent, employee or representative of
Collateral Agent or any Lender has made any statement or representation to Borrower regarding any fact relied upon by Borrower in entering into this Amendment. 

(b) Borrower has made such investigation of the facts pertaining to this Amendment and all of the matters appertaining thereto, as it deems
necessary. 
 (c) The terms of this Amendment are contractual and not a mere recital. 

(d) This Amendment has been carefully read by Borrower, the contents hereof are known and understood by Borrower, and this Amendment is signed
freely, and without duress, by Borrower. 
 (e) Borrower represents and warrants that it is the sole and lawful owner of all right, title
and interest in and to every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein
released. Borrower shall indemnify Collateral Agent and Lenders, defend and hold them harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters
released herein. 
 7. Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken
together shall be deemed to constitute one and the same instrument. 

  
 8 

 8. Conditions Subsequent. As a condition subsequent to this Amendment, Borrower shall
deliver to Collateral Agent and Lenders: (i) as soon as possible, but in no event later than seven (7) Business Days after the Second Amendment Effective Date, stock certificates evidencing Existing Borrower’s ownership of Anaptys
Australia, together with Assignments Separate from Certificate (aka Stock Powers) duly executed in duplicate, in blank and (ii) as soon as possible, but in no event later than thirty (30) days after the Second Amendment Effective Date, a
duly executed a bailee waiver executed in favor of Collateral Agent for 10 Lomar Park Dr., Pepperell, MA 01463, in form and substance reasonably acceptable to Collateral Agent. 

9. Effectiveness. This Amendment shall be deemed effective upon the due execution and delivery to Collateral Agent and Lenders of the
following: 
 (i) this Amendment by each party hereto; 

(ii) a Corporate Borrowing Certificate from each Borrower; 

(iii) a duly filed UCC Financing Statement, identifying Anaptys Australia as the Debtor; 

(iv) a duly filed UCC Financing Statement Amendment, modifying the collateral description for the Existing Borrower; 

(v) a fully executed General Security Deed for Anaptys Australia; 

(vi) a fully executed Account Bank Side Deed for Anaptys Australia’s account(s) with Westpac; 

(vii) a duly recorded PPS registration for Anaptys Australia; 

(viii) the Disbursement Letter, substantially in the form of Exhibit B-1 attached hereto; 

(ix) the Loan Payment/Advance Request Form in the form of Exhibit B-2 attached hereto; 

(x) the Warrants, duly executed by ANAPTYSBIO, INC., substantially in the form of Exhibit C attached hereto; 

(xi) a Secured Promissory Note for the Term B Loan, duly executed by each Borrower in favor of Oxford in the amount of Two
Million Five Hundred Thousand Dollars ($2,500,000.00), substantially in the form of Exhibit D attached hereto; 

(xii) a Secured Promissory Note for the Term C Loan, duly executed by each Borrower in favor of Oxford in the amount of Two
Million Five Hundred Thousand Dollars ($2,500,000.00), substantially in the form of Exhibit D attached hereto; 

(xiii) a Secured Promissory Note for the Term B Loan, duly executed by each Borrower in favor of SVB in the amount of Two
Million Five Hundred Thousand Dollars ($2,500,000.00), substantially in the form of Exhibit D attached hereto; 

(xiv) a Secured Promissory Note for the Term C Loan, duly executed by each Borrower in favor of SVB in the amount of Two
Million Five Hundred Thousand Dollars ($2,500,000.00), substantially in the form of Exhibit D attached hereto; 
 (xv)
Amended and Restated Secured Promissory Notes, duly executed by each Borrower, substantially in the form of Exhibit E attached hereto; 

(xvi) a completed Perfection Certificate for Anaptys Australia; 

  
 9 

 (xvii) evidence satisfactory to Collateral Agent and the Lenders that the
insurance policies required by Section 6.5 of the Loan Agreement are in full force and effect with respect to each Borrower, 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; 
 (xviii) Borrower’s payment of the facility fee in an
aggregate amount of One Hundred Thousand Dollars ($100,000.00), as due in accordance with Section 2.5(a) of the Loan Agreement; 

(xix) Borrower’s payment of the Second Amendment fee in an aggregate amount of One Hundred Thousand Dollars ($100,000.00),
as due in accordance with Section 2.5(e) of the Loan Agreement; and 
 (xx) Borrower’s payment of all Lenders’
Expenses incurred through the date of this Amendment. 
 [Balance of Page Intentionally Left Blank] 

 

  
 10 

 IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above. 
  

									
	 BORROWERS:
  

ANAPTYSBIO, INC.
	 		 		 	
					
	By:	 	/s/ Hamza Suria	 		 		 	
	Name:	 	Hamza Suria	 		 		 	
	Title:	 	President & CEO	 		 		 	
				
	ANAPTYSBIO PTY LTD acting by the following persons or, if the seal is affixed, witnessed by the following persons:	 		 		 	
					
	By:	 	/s/ Hamza Suria	 		 	By:	 	/s/ Marco Londei
	Name:	 	Hamza Suria	 		 	Name:	 	Marco Londei
	Title:	 	Director	 		 	Title:	 	Director
				
	 COLLATERAL AGENT AND LENDER:
  

OXFORD FINANCE LLC
	 		 		 	
					
	By:	 	/s/ Mark Davis	 		 		 	
	Name:	 	Mark Davis	 		 		 	
	Title:	 	Vice President – Finance	 		 		 	
				
	 LENDER:
  

SILICON VALLEY BANK
	 		 		 	
					
	By:	 	/s/ Igor DaCruz	 		 		 	
	Name:	 	Igor DaCruz	 		 		 	
	Title:	 	Vice President	 		 		 	

 [Signature Page to Second Amendment to Loan and Security
Agreement] 

 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 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; (ii) more than sixty five percent (65%) of the total combined voting power of all classes of
stock entitled to vote the shares of capital stock of any Foreign Subsidiary (excluding Anaptys Australia), 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; and (iii) any (x) inbound licenses of Intellectual Property in which Borrower is the licensee; or
(y) real estate leasehold interests in which Borrower is the lessee; in each case of (x) and (y), to the extent the grant of a security interest with respect to such property would be prohibited by the agreement with the non-Borrower party
or would otherwise constitute a default thereunder, provided that such property will automatically be deemed to be “Collateral” hereunder if such prohibition is unenforceable or ineffective and/or upon the termination, lapsing or
expiration of any such prohibition. 
 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-l 

Form of Disbursement Letter 

 DISBURSEMENT LETTER 

December 30, 2016 
 The undersigned, being
the duly elected and acting
                                        
of ANAPTYSBIO, INC., a Delaware corporation with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121 (“Borrower”), does hereby certify to OXFORD FINANCE LLC (“Oxford” and
“Lender”), as collateral agent (the “Collateral Agent”) in connection with that certain Second Amendment to Loan and Security Agreement dated as of December 30, 2016, 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 B Loans and Term C Loans shall be disbursed as follows: 

 

					
	 Disbursement from Oxford:
	  			
	 Term B Loan Amount
	  	 	$2,500,000.00	  
	 Term C Loan Amount
	  	 	$2,500,000.00	  
		
	 Less:
	  			
	 --Facility Fee
	  	 	($50,000.00	) 
	 --Second Amendment Fee
	  	 	($50,000.00	) 
	 --Lender’s Legal Fees
	  	 	($________	)* 
	 [--Interest currently owing under outstanding Term A Loans
	  	 	($________	)] 
	 [--Interim Interest for Term A Loans
	  	 	($________	)] 
	 [--Interim Interest for Term B Loans and Term C Loans
	  	 	($________	)] 
		
	 Net Proceeds due from Oxford:
	  	 	$________________	  
		
	 Disbursement from SVB:
	  			
	 Term B Loan Amount
	  	 	$2,500,000.00	  
	 Term C Loan Amount
	  	 	$2,500,000.00	  
		
	 Less:
	  			
	 --Facility Fee
	  	 	($50,000.00	) 
	 --Second Amendment Fee
	  	 	($50,000.00	) 
	 [--Interest currently owing under outstanding Term A Loans
	  	 	($________	)] 
	 [--Interim Interest for Term A Loans
	  	 	($________	)] 
	 [--Interim Interest for Term B Loans and Term C Loans
	  	 	($________	)] 
		
	 Net Proceeds due from SVB:
	  	 	$________________	  
		
	 TOTAL TERM B AND TERM C LOAN NET PROCEEDS FROM LENDERS
	  	 	$________________	  

 8. The Term B Loans and Term C Loans shall amortize in accordance with the Amortization Table attached hereto.

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

  

					
		 	Account Name:	  	ANAPTYSBIO, INC.
			
		 	Bank Name:	  	Silicon Valley Bank
			
		 	Bank Address:	  	 3003 Tasman Drive
 Santa Clara,
California 95054

			
		 	Account Number:	  	3301046061
			
		 	ABA Number:	  	121140399

 [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:
  

ANAPTYSBIO, INC.
	 		 		 	
					
	By:	 	 	 		 		 	
	Name:	 		 		 		 	
	Title:	 		 		 		 	
				
	ANAPTYSBIO PTY LTD acting by the following persons or, if the seal is affixed, witnessed by the following persons:	 		 		 	
					
	By:	 	 	 		 	By:	 	 
	Name:	 		 		 	Name:	 	
	Title:	 	Director	 		 	Title:	 	Director
				
	 COLLATERAL, AGENT AND LENDER:
  

OXFORD FINANCE LLC
	 		 		 	
					
	By:	 	 	 		 		 	
	Name:	 		 		 		 	
	Title:	 		 		 		 	
				
	 LENDER:
  

SILICON VALLEY BANK
	 		 		 	
					
	By:	 	 	 		 		 	
	Name:	 		 		 		 	
	Title:	 		 		 		 	

  

 EXHIBIT B-2 

Loan Payment/Advance Request Form 

DEADLINE FOR SAME DAY PROCESSING IS
NOON PACIFIC TIME* 
  

							
	Fax To:	  	Date:	 	  
	  	

  

  LOAN PAYMENT: 

ANAPTYSBIO, 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:	 	  
	 		 	          Account 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 

Warrants 
 [see attached]

 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 

WARRANT TO PURCHASE STOCK 
  

			
	Company:	  	ANAPTYSBIO, INC., a Delaware corporation
	Number of Shares:	  	144,231 (Subject to Section 1.7 )
	Type/Series of Stock:	  	Series C Preferred (Subject to Section 1.7)
	Warrant Price:	  	$0.65 per share (Subject to Section 1.7)
	Issue Date:	  	December       , 2016
	Expiration Date:	  	December       , 2026 See also Section 5.1(b).
	Credit Facility:	  	This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement dated as of December 24, 2014 among Oxford Finance LLC, as Lender and Collateral Agent, the Lenders
from time to time party thereto, including Silicon Valley Bank, and the Company (as modified, amended and/or restated from time to time, the “Loan Agreement”).

 THIS WARRANT CERTIFIES THAT, for good and valuable consideration, OXFORD FINANCE LLC
(“Oxford” and, together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and
non-assessable shares (the “Shares”) of the above-stated Type/Series of Stock (the “Class”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and
as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. 

SECTION 1. EXERCISE. 
 1.1
Method of Exercise. Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form
attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment
acceptable to the Company for the aggregate Warrant Price for the Shares being purchased. 
 1.2 Cashless Exercise. On any exercise
of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of
this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable Shares as are computed using the following formula: 

 

					
		  	X = Y(A-B)/A
			
	where:	  		 	
			
		  	X =	 	the number of Shares to be issued to the Holder;
			
		  	Y =	 	the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);

					
			
		 	A =	 	the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and
		
	B =	 	the Warrant Price.

 1.3 Fair Market Value. If the Company’s common stock is then traded or quoted on a nationally
recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”) and the Class is common stock, the fair market value of a Share shall be the closing price or last sale price of a share
of common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is then traded in a Trading Market and the Class
is a series of the Company’s convertible preferred stock, the fair market value of a Share shall be the closing price or last sale price of a share of the Company’s common stock reported for the Business Day immediately before the date on
which Holder delivers this Warrant together with its Notice of Exercise to the Company multiplied by the number of shares of the Company’s common stock into which a Share is then convertible. If the Company’s common stock is not traded in
a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment. 

1.4 Delivery of Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in
Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor
representing the Shares not so acquired. 
 1.5 Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation,
on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount. 

1.6 Treatment of Warrant Upon Acquisition of Company. 

(a) Acquisition. For the purpose of this Warrant, “Acquisition” means (i) any consolidation or merger of the
Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such merger,
consolidation or reorganization, continue to hold at least a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such
consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; provided that an Acquisition shall not
include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; or
(iii) a sale of all or substantially all of the assets of the Company or the exclusive license of substantially all of the rights to substantially all of the intellectual property of the Company material to its business. 

(b) Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the Company’s
stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either (i) Holder shall exercise this Warrant pursuant to Section 1.1
and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately prior to the
consummation of such Acquisition. 
 (c) The Company shall provide Holder with written notice of its request relating to the Cash/Public
Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be delivered to
Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition. In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair market value
of one Share (or other security issuable upon the exercise hereof) as 

 
determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be
exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities)
issued upon such exercise to the Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof. 

(d) Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall
assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if
such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant. 

(e) As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements: (i) the
issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports
and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior
to the closing thereof is then traded in Trading Market, and (iii) following the other closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be
received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities
laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition. 
 1.7
Adjustment to Class of Shares; Number of Shares; Warrant Price; Adjustments Cumulative. If, upon the closing of the Next Equity Financing, the Next Equity Financing Price shall be less than the Warrant Price in effect as of immediately prior
thereto, then the “Class” shall be Next Equity Financing Securities from and after such closing, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant and the “Warrant Price” shall
be the Next Equity Financing Price from and after such closing, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant; provided, that upon such date, if any, as the “Class” becomes Next Equity
Financing Securities pursuant to this sentence, this Warrant shall be exercisable for such number of shares of such Class as shall equal (i) product of (a) the number of shares for which this Warrant was originally exercisable and
(b) the warrant price for which this Warrant was originally exercisable, divided by (ii) the Next Equity Financing Price, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant. As used herein
(i) “Next Equity Financing” means the first sale or issuance by the Company on or after the Issue Date of this Warrant set forth above, in a single transaction or series of related transactions, of shares of its convertible preferred
stock or other senior equity securities to one or more investors for cash for financing purposes; (ii) “Next Equity Financing Securities” means the type, class and series of convertible preferred stock or other senior equity security
sold or issued by the Company in the Next Equity Financing; and (iii) “Next Equity Financing Price” means the lowest price per share for which Next Equity Financing Securities are sold or issued by the Company in the Next Equity
Financing. 
 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE. 

2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the
Class payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and
property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater
number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by reclassification or
otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased. 

 2.2 Reclassification, Exchange, Combinations or Substitution. Upon any event
whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this
Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to
time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events. 

2.3 Conversion of Preferred Stock. If the Class is a class and series of the Company’s convertible preferred stock, in the
event that all outstanding shares of the Class are converted, automatically or by action of the holders thereof, into common stock pursuant to the provisions of the Company’s Certificate of Incorporation, including, without limitation, in
connection with the Company’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration statement under the Act (the “IPO”), then from and after the date on which all outstanding
shares of the Class have been so converted, this Warrant shall be exercisable for such number of shares of common stock into which the Shares would have been converted had the Shares been outstanding on the date of such conversion, and the Warrant
Price shall equal the Warrant Price in effect as of immediately prior to such conversion divided by the number of shares of common stock into which one Share would have been converted, all subject to further adjustment thereafter from time to time
in accordance with the provisions of this Warrant. 
 2.4 Adjustments for Diluting Issuances. Without duplication of any
adjustment otherwise provided for in this Section 2, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s
Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment. 
 2.5
No Fractional Share. No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional Share interest arises upon any exercise of
the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above)
of a full Share, less (ii) the then-effective Warrant Price. 
 2.6 Notice/Certificate as to Adjustments. Upon each
adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and
facts upon which such adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of
Shares in effect upon the date of such adjustment. 
 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 

3.1 Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows: 

(a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the
Class were last sold and issued prior to the Issue Date hereof in an arms- length transaction in which at least Five Hundred Thousand Dollars ($500,000.00) of such shares were sold. 

(b) All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The
Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise
in full of this Warrant and the conversion of the Shares into common stock or such other securities. 

 (c) The Company’s capitalization table attached hereto as Schedule 1 is true and complete,
in all material respects, as of the Issue Date. 
 3.2 Notice of Certain Events. If the Company proposes at any time to: 

(a) declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend; 
 (b) offer for subscription or sale pro rata to all holders of the outstanding
shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights); 

(c) effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the
Class; 
 (d) effect an Acquisition or to liquidate, dissolve or wind up; or 

(e) effect an IPO; 
 then, in
connection with each such event, the Company shall give Holder: 
 (i) at least seven (7) Business Days prior written notice of the
date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in
respect of the matters referred to in (a) and (b) above; 
 (ii) in the case of the matters referred to in (c) and
(d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the
securities or other property deliverable upon the occurrence of such event); and 
 (iii) with respect to the IPO, at least seven
(7) Business Days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith. 

Reference is made to Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the
Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof. Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s
accounting or reporting requirements. 
 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. 

The Holder represents and warrants to the Company as follows: 

4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being
acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of
acquiring this Warrant or the Shares. 
 4.2 Disclosure of Information. Holder is aware of the Company’s business affairs
and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities.
Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access. 

 4.3 Investment Experience. Holder understands that the purchase of this Warrant
and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this
Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of
such persons. 
 4.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning of
Regulation D promulgated under the Act. 
 4.5 The Act. Holder understands that this Warrant and the Shares issuable upon
exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder
understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and
qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act. 
 4.6 Market
Stand-off Agreement. The Holder agrees that the Shares shall be subject to the Market Standoff provisions in Section 2.11 of that certain Third Amended and Restated Investor Rights Agreement by and among the Company and the investors party
thereto, dated July 15, 2013 (as such agreement may be amended and restated) or similar agreement. 
 4.7 No Voting
Rights. Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant and, except as expressly set forth in this Warrant, will not be considered a stockholder for any purpose until the exercise of this
Warrant. 
 5. MISCELLANEOUS. 

5.1 Term; Automatic Cashless Exercise Upon Expiration. 

(a) Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from
time to time on or before 6:00 PM, Eastern time, on the Expiration Date and shall be void thereafter. 
 (b) Automatic Cashless Exercise
upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in
effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the
Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder. 

5.2 Legends. Each certificate evidencing Shares (and each certificate evidencing the securities issued upon conversion of any
Shares, if any) shall be imprinted with a legend in substantially the following form: 
 THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO OXFORD FINANCE LLC DATED
DECEMBER __, 2016, MAY NOT BE OFFERED, SOLD, PLEDGED OR 

 
OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER
TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET STAND-OFF
RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED PRIOR TO
180 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES. 

5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issued upon exercise of this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of
counsel if the transfer is to an affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of
counsel if there is no material question as to the availability of Rule 144 promulgated under the Act. 
 5.4 Transfer
Procedure. After receipt by Oxford of the executed Warrant, Oxford may transfer all or part of this Warrant to one or more of Oxford’s affiliates (each, an “Oxford Affiliate”), by execution of an Assignment substantially in
the form of Appendix 2. Subject to the provisions of Article 5.3 and upon providing the Company with written notice, Oxford, any such Oxford Affiliate and any subsequent Holder, may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the Shares issuable directly or indirectly, upon conversion of the Shares, if any) to any other transferee, provided, however, in connection with any such transfer, the Oxford Affiliate(s) or any subsequent Holder will
give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder
if applicable). Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any exercise
hereof, or any shares or other securities issued upon any conversion of any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by such a
direct competitor. 
 5.5 Notices. All notices and other communications hereunder from the Company to the Holder, or vice
versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by
facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have
been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5. All notices to Holder shall be addressed as follows until the Company
receives notice of a change of address in connection with a transfer or otherwise: 

 Oxford Finance LLC 

133 N. Fairfax Street 

Alexandria, VA 22314 
 Attn:
Legal Department 
 Telephone: (703) 519-4900 

Facsimile: (703) 519-5225 

Email: LegalDepartment@oxfordfinance.com 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address: 

AnaptysBio, Inc. 
 10421
Pacific Center Court 
 Suite 200 

San Diego, CA 92121 
 Attn:
Hamza Suria 
 Telephone: (858) 362-6383 

Facsimile: (858) 366-9055 Email: hsuria@anaptysbio.com 

With a copy (which shall not constitute notice) to: 

Fenwick & West LLP 

555 California Street 
 San
Francisco, CA 94104 
 Attn: Matthew Rossiter 

Telephone: (415) 875-2372 

Email: mrossiter@fenwick.com 

5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a
particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 

5.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant,
the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 

5.8 Counterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall
constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 5.9 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California,
without giving effect to its principles regarding conflicts of law. 
 5.10 Headings. The headings in this Warrant are for
purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant. 
 5.11 Business
Days. “Business Day” is any day that is not a Saturday, Sunday or a day on which Banks in California are closed. 

[Remainder of page left blank intentionally] 

[Signature page follows] 
  

 IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by
their duly authorized representatives effective as of the Issue Date written above. 
  

			
	“COMPANY”
	
	ANAPTYSBIO, INC.
		
	By:	 	  

		
	Name:	 	  

		 	(Print)
		
	Title:	 	  

	
	“HOLDER”
	
	OXFORD FINANCE LLC
		
	By:	 	  

		
	Name:	 	  

		 	(Print)
		
	Title:	 	  

 [Signature Page to Warrant to Purchase Stock] 

 

 APPENDIX 1 

NOTICE OF EXERCISE 
 1.
The undersigned Holder hereby exercises its right to purchase                  shares of the Common/Series
             Preferred [circle one] Stock of ANAPTYSBIO, INC. (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the
aggregate Warrant Price for such shares as follows: 
  

	 	[    ]	check in the amount of $             payable to order of the Company enclosed herewith 

 

	 	[    ]	Wire transfer of immediately available funds to the Company’s account 

  

	 	[    ]	Cashless Exercise pursuant to Section 1.2 of the Warrant 

  

	 	[    ]	Other [Describe]
                                        

 2. Please issue a certificate or certificates representing the Shares in the name specified below: 

 

			
		 	  

		 	Holder’s Name
		
		 	  

		
		 	  

		 	(Address)

 3. By its execution below and for the benefit of the Company, Holder hereby restates each of the
representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof. 
  

			
	HOLDER:
	
	  

		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

		
	Date:	 	  

 APPENDIX 2 

ASSIGNMENT 
 For
value received, Oxford Finance LLC hereby sells, assigns and transfers unto 
  

					
		 	Name:	 	[OXFORD TRANSFEREE]
			
		 	Address:	 	  

			
		 	Tax ID:	 	  

 that certain Warrant to Purchase Stock issued by ANAPTYSBIO, INC. (the “Company”), on
December 24, 2014 (the “Warrant”) together with all rights, title and interest therein. 
  

			
	OXFORD FINANCE LLC
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

  

			
	Date:	 	  

 By its execution below, and for the benefit of the Company, [OXFORD TRANSFEREE] makes each of the
representations and warranties set forth in Section 4 of the Warrant and agrees to all other provisions of the Warrant as of the date hereof. 
  

			
	[OXFORD TRANSFEREE]
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 

WARRANT TO PURCHASE STOCK 
  

			
	Company:	  	ANAPTYSBIO, INC., a Delaware corporation
	Number of Shares:	  	144,231 (Subject to Section 1.7 )
	Type/Series of Stock:	  	Series C Preferred (Subject to Section 1.7)
	Warrant Price:	  	$0.65 per share (Subject to Section 1.7)
	Issue Date:	  	December __, 2016
	Expiration Date:	  	December __, 2026 See also Section 5.1(b).
	Credit Facility:	  	This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement dated as of December 24, 2014 among Oxford Finance LLC, as Lender and Collateral Agent, the Lenders
from time to time party thereto, including Silicon Valley Bank, and the Company (as modified, amended and/or restated from time to time, the “Loan Agreement”).

 THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (together with any
successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and non-assessable shares (the
“Shares”) of the above-stated Type/Series of Stock (the “Class”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and as
adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. Reference is made to Section 5.4 of this Warrant whereby Silicon Valley Bank shall transfer this Warrant
to its parent company, SVB Financial Group. 
 SECTION 1. EXERCISE. 

1.8 Method of Exercise. Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the
Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in
Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased. 

1.9 Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in
Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the
Company shall issue to the Holder such number of fully paid and nonassessable Shares as are computed using the following formula: 
 X =
Y(A-B)/A 
 where: 
  

	 	X =	the number of Shares to be issued to the Holder; 

  

	 	Y =	the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price); 

	 	A =	the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and 

 B =
the Warrant Price. 
 1.10 Fair Market Value. If the Company’s common stock is then traded or quoted on a nationally recognized
securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”) and the Class is common stock, the fair market value of a Share shall be the closing price or last sale price of a share of common
stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is then traded in a Trading Market and the Class is a
series of the Company’s convertible preferred stock, the fair market value of a Share shall be the closing price or last sale price of a share of the Company’s common stock reported for the Business Day immediately before the date on which
Holder delivers this Warrant together with its Notice of Exercise to the Company multiplied by the number of shares of the Company’s common stock into which a Share is then convertible. If the Company’s common stock is not traded in a
Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment. 

1.11 Delivery of Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in
Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor
representing the Shares not so acquired. 
 1.12 Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of
mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount. 

1.13 Treatment of Warrant Upon Acquisition of Company. 

(a) Acquisition. For the purpose of this Warrant, “Acquisition” means (i) any consolidation or merger of the
Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such merger,
consolidation or reorganization, continue to hold at least a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such
consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; provided that an Acquisition shall not
include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; or
(iii) a sale of all or substantially all of the assets of the Company or the exclusive license of substantially all of the rights to substantially all of the intellectual property of the Company material to its business. 

(b) Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the Company’s
stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either (i) Holder shall exercise this Warrant pursuant to Section 1.1
and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately prior to the
consummation of such Acquisition. 
 (c) The Company shall provide Holder with written notice of its request relating to the Cash/Public
Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be delivered to
Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition. In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair market value
of one Share (or other security issuable upon the exercise hereof) as 

 
determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be
exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities)
issued upon such exercise to the Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof. 

(d) Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall
assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if
such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant. 

(e) As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements: (i) the
issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports
and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior
to the closing thereof is then traded in Trading Market, and (iii) following the other closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be
received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities
laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition. 
 1.14
Adjustment to Class of Shares; Number of Shares; Warrant Price; Adjustments Cumulative. If, upon the closing of the Next Equity Financing, the Next Equity Financing Price shall be less than the Warrant Price in effect as of immediately prior
thereto, then the “Class” shall be Next Equity Financing Securities from and after such closing, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant and the “Warrant Price” shall
be the Next Equity Financing Price from and after such closing, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant; provided, that upon such date, if any, as the “Class” becomes Next Equity
Financing Securities pursuant to this sentence, this Warrant shall be exercisable for such number of shares of such Class as shall equal (i) product of (a) the number of shares for which this Warrant was originally exercisable and
(b) the warrant price for which this Warrant was originally exercisable, divided by (ii) the Next Equity Financing Price, subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant. As used herein
(i) “Next Equity Financing” means the first sale or issuance by the Company on or after the Issue Date of this Warrant set forth above, in a single transaction or series of related transactions, of shares of its convertible preferred
stock or other senior equity securities to one or more investors for cash for financing purposes; (ii) “Next Equity Financing Securities” means the type, class and series of convertible preferred stock or other senior equity security
sold or issued by the Company in the Next Equity Financing; and (iii) “Next Equity Financing Price” means the lowest price per share for which Next Equity Financing Securities are sold or issued by the Company in the Next Equity
Financing. 
 6. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE. 

6.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the
Class payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and
property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater
number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by reclassification or
otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased. 

 6.2 Reclassification, Exchange, Combinations or Substitution. Upon any event
whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this
Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to
time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events. 

6.3 Conversion of Preferred Stock. If the Class is a class and series of the Company’s convertible preferred stock, in the
event that all outstanding shares of the Class are converted, automatically or by action of the holders thereof, into common stock pursuant to the provisions of the Company’s Certificate of Incorporation, including, without limitation, in
connection with the Company’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration statement under the Act (the “IPO”), then from and after the date on which all outstanding
shares of the Class have been so converted, this Warrant shall be exercisable for such number of shares of common stock into which the Shares would have been converted had the Shares been outstanding on the date of such conversion, and the Warrant
Price shall equal the Warrant Price in effect as of immediately prior to such conversion divided by the number of shares of common stock into which one Share would have been converted, all subject to further adjustment thereafter from time to time
in accordance with the provisions of this Warrant. 
 6.4 Adjustments for Diluting Issuances. Without duplication of any
adjustment otherwise provided for in this Section 2, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s
Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment. 
 6.5
No Fractional Share. No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional Share interest arises upon any exercise of
the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above)
of a full Share, less (ii) the then-effective Warrant Price. 
 6.6 Notice/Certificate as to Adjustments. Upon each
adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and
facts upon which such adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of
Shares in effect upon the date of such adjustment. 
 7. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 

7.1 Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows: 

(a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the
Class were last sold and issued prior to the Issue Date hereof in an arms- length transaction in which at least Five Hundred Thousand Dollars ($500,000.00) of such shares were sold. 

(b) All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The
Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise
in full of this Warrant and the conversion of the Shares into common stock or such other securities. 

 (c) The Company’s capitalization table attached hereto as Schedule 1 is true and complete,
in all material respects, as of the Issue Date. 
 7.2 Notice of Certain Events. If the Company proposes at any time to: 

(a) declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend; 
 (b) offer for subscription or sale pro rata to all holders of the outstanding
shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights); 

(c) effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the
Class; 
 (d) effect an Acquisition or to liquidate, dissolve or wind up; or 

(e) effect an IPO; 
 then, in
connection with each such event, the Company shall give Holder: 
 (i) at least seven (7) Business Days prior written notice of the
date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in
respect of the matters referred to in (a) and (b) above; 
 (ii) in the case of the matters referred to in (c) and
(d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the
securities or other property deliverable upon the occurrence of such event); and 
 (iii) with respect to the IPO, at least seven
(7) Business Days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith. 

Reference is made to Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the
Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof. Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s
accounting or reporting requirements. 
 8. REPRESENTATIONS, WARRANTIES OF THE HOLDER. 

The Holder represents and warrants to the Company as follows: 

8.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being
acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of
acquiring this Warrant or the Shares. 
 8.2 Disclosure of Information. Holder is aware of the Company’s business
affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying
securities. Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the
extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access. 

 8.3 Investment Experience. Holder understands that the purchase of this Warrant
and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this
Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of
such persons. 
 8.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning of
Regulation D promulgated under the Act. 
 8.5 The Act. Holder understands that this Warrant and the Shares issuable upon
exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder
understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and
qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act. 
 8.6 Market
Stand-off Agreement. The Holder agrees that the Shares shall be subject to the Market Standoff provisions in Section 2.11 of that certain Third Amended and Restated Investor Rights Agreement by and among the Company and the investors party
thereto, dated July 15, 2013 (as such agreement may be amended and restated) or similar agreement. 
 8.7 No Voting
Rights. Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant and, except as expressly set forth in this Warrant, will not be considered a stockholder for any purpose until the exercise of this
Warrant. 
 9. MISCELLANEOUS. 

9.1 Term; Automatic Cashless Exercise Upon Expiration. 

(a) Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from
time to time on or before 6:00 PM, Eastern time, on the Expiration Date and shall be void thereafter. 
 (b) Automatic Cashless Exercise
upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in
effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the
Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder. 

9.2 Legends. Each certificate evidencing Shares (and each certificate evidencing the securities issued upon conversion of any
Shares, if any) shall be imprinted with a legend in substantially the following form: 
 THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO OXFORD
FINANCE LLC DATED DECEMBER __, 2016, MAY NOT BE OFFERED, SOLD, PLEDGED OR 

 
OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER
TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET
STAND-OFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED
PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES. 

9.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issued upon exercise of this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of
counsel if the transfer is to an affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of
counsel if there is no material question as to the availability of Rule 144 promulgated under the Act. 
 9.4 Transfer
Procedure. After receipt by Oxford of the executed Warrant, Oxford may transfer all or part of this Warrant to one or more of Oxford’s affiliates (each, an “Oxford Affiliate”), by execution of an Assignment substantially in
the form of Appendix 2. Subject to the provisions of Article 5.3 and upon providing the Company with written notice, Oxford, any such Oxford Affiliate and any subsequent Holder, may transfer all or part of this Warrant or the Shares issuable
upon exercise of this Warrant (or the Shares issuable directly or indirectly, upon conversion of the Shares, if any) to any other transferee, provided, however, in connection with any such transfer, the Oxford Affiliate(s) or any subsequent Holder
will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and
Holder if applicable). Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any
exercise hereof, or any shares or other securities issued upon any conversion of any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by
such a direct competitor. 
 9.5 Notices. All notices and other communications hereunder from the Company to the Holder, or
vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if
given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as
may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5. All notices to Holder shall be addressed as follows until
the Company receives notice of a change of address in connection with a transfer or otherwise: 

 Silicon Valley Bank 

Attn: Treasury Department 
 3003
Tasman Drive, HA 200 
 Santa Clara, CA 95054 

Telephone: (408) 654-7400 

Facsimile: (408) 496-2405 

Email: warradmi@svb.com 
 Notice
to the Company shall be addressed as follows until Holder receives notice of a change in address: 
 AnaptysBio, Inc. 

10421 Pacific Center Court 

Suite 200 
 San Diego, CA 92121

 Attn: Hamza Suria 

Telephone: (858) 362-6383 

Facsimile: (858) 366-9055 Email: hsuria@anaptysbio.com 

With a copy (which shall not constitute notice) to: 

Fenwick & West LLP 

555 California Street 
 San
Francisco, CA 94104 
 Attn: Matthew Rossiter 

Telephone: (415) 875-2372 

Email: mrossiter@fenwick.com 

9.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a
particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 

9.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant,
the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 

9.8 Counterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall
constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 9.9 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of California,
without giving effect to its principles regarding conflicts of law. 
 9.10 Headings. The headings in this Warrant are for
purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant. 
 9.11 Business
Days. “Business Day” is any day that is not a Saturday, Sunday or a day on which Silicon Valley Bank is closed. 

[Remainder of page left blank intentionally] 

[Signature page follows] 
  

 IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by
their duly authorized representatives effective as of the Issue Date written above. 
  

			
	“COMPANY”
	
	ANAPTYSBIO, INC.
		
	By:	 	 
		
	Name:	 	 
		 	(Print)
		
	Title:	 	 
	
	“HOLDER”
	
	SILICON VALLEY BANK
		
	By:	 	 
		
	Name:	 	 
		 	(Print)
		
	Title:	 	 

 [Signature Page to Warrant to Purchase Stock] 

 APPENDIX 1 

NOTICE OF EXERCISE 
 4.
The undersigned Holder hereby exercises its right to purchase                  shares of the Common/Series
             Preferred [circle one] Stock of ANAPTYSBIO, INC. (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the
aggregate Warrant Price for such shares as follows: 
  

	 	[    ]	check in the amount of $             payable to order of the Company enclosed herewith 

 

	 	[    ]	Wire transfer of immediately available funds to the Company’s account 

  

	 	[    ]	Cashless Exercise pursuant to Section 1.2 of the Warrant 

  

	 	[    ]	Other [Describe]
                                        

 5. Please issue a certificate or certificates representing the Shares in the name specified below: 

 

			
		 	  

		 	Holder’s Name
		
		 	  

		
		 	  

		 	(Address)

 6. By its execution below and for the benefit of the Company, Holder hereby restates each of the
representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof. 
  

			
	HOLDER:
	
	  

		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

		
	Date:	 	  

 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 

WARRANT TO PURCHASE STOCK 
  

			
	Company:	  	ANAPTYSBIO, INC., a Delaware corporation
	Number of Shares:	  	144,231 (Subject to Section 1.7 )
	Type/Series of Stock:	  	Series C Preferred (Subject to Section 1.7)
	Warrant Price:	  	$0.65 per share (Subject to Section 1.7)
	Issue Date:	  	December __, 2016
	Expiration Date:	  	December __, 2026 See also Section 5.1(b).
	Credit Facility:	  	This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement dated as of December 24, 2014 among Oxford Finance LLC, as Lender and Collateral Agent, the Lenders
from time to time party thereto, including Silicon Valley Bank, and the Company (as modified, amended and/or restated from time to time, the “Loan Agreement”).

 THIS WARRANT CERTIFIES THAT, for good and valuable consideration, OXFORD FINANCE LLC
(“Oxford” and, together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and
non-assessable shares (the “Shares”) of the above-stated Type/Series of Stock (the “Class”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and
as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. 

SECTION 1. EXERCISE. 

1.15 Method of Exercise. Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the
Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in
Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased. 

1.16 Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified
in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the
Company shall issue to the Holder such number of fully paid and nonassessable Shares as are computed using the following formula: 
  

	 	X  =	Y(A-B)/A 

 where: 
  

	 	X  =	the number of Shares to be issued to the Holder; 

  

	 	Y  =	the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price); 

  

 A = the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and

 B = the Warrant Price. 

1.17 Fair Market Value. If the Company’s common stock is then traded or quoted on a nationally recognized securities exchange,
inter-dealer quotation system or over-the-counter market (a “Trading Market”) and the Class is common stock, the fair market value of a Share shall be the closing price or last sale price of a share of common stock reported for the
Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is then traded in a Trading Market and the Class is a series of the Company’s
convertible preferred stock, the fair market value of a Share shall be the closing price or last sale price of a share of the Company’s common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant
together with its Notice of Exercise to the Company multiplied by the number of shares of the Company’s common stock into which a Share is then convertible. If the Company’s common stock is not traded in a Trading Market, the Board of
Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment. 
 1.18 Delivery of
Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon
such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired. 

1.19 Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the
Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount. 

1.20 Treatment of Warrant Upon Acquisition of Company. 

(a) Acquisition. For the purpose of this Warrant, “Acquisition” means (i) any consolidation or merger of the
Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such merger,
consolidation or reorganization, continue to hold at least a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such
consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; provided that an Acquisition shall not
include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; or
(iii) a sale of all or substantially all of the assets of the Company or the exclusive license of substantially all of the rights to substantially all of the intellectual property of the Company material to its business. 

(b) Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the
Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either (i) Holder shall exercise this Warrant pursuant to
Section 1.1 and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately
prior to the consummation of such Acquisition. 
 (c) The Company shall provide Holder with written notice of its request relating to the
Cash/Public Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be
delivered to Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition. In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair
market value of one Share (or other security issuable upon the exercise hereof) as 

  

 
determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be
exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities)
issued upon such exercise to the Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof. 

(d) Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity
shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as
if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant. 

(e) As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements:
(i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all
required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this
Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) following the other closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other
securities that would be received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under
federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition. 

1.21 Adjustment to Class of Shares; Number of Shares; Warrant Price; Adjustments Cumulative. If, upon the closing of the Next Equity
Financing, the Next Equity Financing Price shall be less than the Warrant Price in effect as of immediately prior thereto, then the “Class” shall be Next Equity Financing Securities from and after such closing, subject to adjustment
thereafter from time to time in accordance with the provisions of this Warrant and the “Warrant Price” shall be the Next Equity Financing Price from and after such closing, subject to adjustment thereafter from time to time in accordance
with the provisions of this Warrant; provided, that upon such date, if any, as the “Class” becomes Next Equity Financing Securities pursuant to this sentence, this Warrant shall be exercisable for such number of shares of such Class as
shall equal (i) product of (a) the number of shares for which this Warrant was originally exercisable and (b) the warrant price for which this Warrant was originally exercisable, divided by (ii) the Next Equity Financing Price,
subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant. As used herein (i) “Next Equity Financing” means the first sale or issuance by the Company on or after the Issue Date of this
Warrant set forth above, in a single transaction or series of related transactions, of shares of its convertible preferred stock or other senior equity securities to one or more investors for cash for financing purposes; (ii) “Next Equity
Financing Securities” means the type, class and series of convertible preferred stock or other senior equity security sold or issued by the Company in the Next Equity Financing; and (iii) “Next Equity Financing Price” means the
lowest price per share for which Next Equity Financing Securities are sold or issued by the Company in the Next Equity Financing. 
 10.
ADJUSTMENTS TO THE SHARES AND WARRANT PRICE. 
 10.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend or distribution on the outstanding shares of the Class payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to
Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Class
by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are
combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased. 

  

 10.2 Reclassification, Exchange, Combinations or Substitution. Upon any event
whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this
Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to
time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events. 

10.3 Conversion of Preferred Stock. If the Class is a class and series of the Company’s convertible preferred stock, in
the event that all outstanding shares of the Class are converted, automatically or by action of the holders thereof, into common stock pursuant to the provisions of the Company’s Certificate of Incorporation, including, without limitation, in
connection with the Company’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration statement under the Act (the “IPO”), then from and after the date on which all outstanding
shares of the Class have been so converted, this Warrant shall be exercisable for such number of shares of common stock into which the Shares would have been converted had the Shares been outstanding on the date of such conversion, and the Warrant
Price shall equal the Warrant Price in effect as of immediately prior to such conversion divided by the number of shares of common stock into which one Share would have been converted, all subject to further adjustment thereafter from time to time
in accordance with the provisions of this Warrant. 
 10.4 Adjustments for Diluting Issuances. Without duplication of any
adjustment otherwise provided for in this Section 2, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s
Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment. 
 10.5
No Fractional Share. No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional Share interest arises upon any exercise of
the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above)
of a full Share, less (ii) the then-effective Warrant Price. 
 10.6 Notice/Certificate as to Adjustments. Upon each
adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and
facts upon which such adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of
Shares in effect upon the date of such adjustment. 
 11. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 

11.1 Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows: 

(a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the
Class were last sold and issued prior to the Issue Date hereof in an arms- length transaction in which at least Five Hundred Thousand Dollars ($500,000.00) of such shares were sold. 

(b) All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The
Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise
in full of this Warrant and the conversion of the Shares into common stock or such other securities. 

 (c) The Company’s capitalization table attached hereto as Schedule 1 is true and complete,
in all material respects, as of the Issue Date. 
 11.2 Notice of Certain Events. If the Company proposes at any time to:

 (a) declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or
other securities and whether or not a regular cash dividend; 
 (b) offer for subscription or sale pro rata to all holders of the
outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights); 

(c) effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the
Class; 
 (d) effect an Acquisition or to liquidate, dissolve or wind up; or 

(e) effect an IPO; 
 then, in
connection with each such event, the Company shall give Holder: 
 (i) at least seven (7) Business Days prior written notice of the
date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in
respect of the matters referred to in (a) and (b) above; 
 (ii) in the case of the matters referred to in (c) and
(d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the
securities or other property deliverable upon the occurrence of such event); and 
 (iii) with respect to the IPO, at least seven
(7) Business Days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith. 

Reference is made to Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the
Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof. Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s
accounting or reporting requirements. 
 12. REPRESENTATIONS, WARRANTIES OF THE HOLDER. 

The Holder represents and warrants to the Company as follows: 

12.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being
acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of
acquiring this Warrant or the Shares. 
 12.2 Disclosure of Information. Holder is aware of the Company’s business
affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying
securities. Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the
extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access. 

 12.3 Investment Experience. Holder understands that the purchase of this Warrant
and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this
Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of
such persons. 
 12.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning of
Regulation D promulgated under the Act. 
 12.5 The Act. Holder understands that this Warrant and the Shares issuable upon
exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder
understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and
qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act. 
 12.6 Market
Stand-off Agreement. The Holder agrees that the Shares shall be subject to the Market Standoff provisions in Section 2.11 of that certain Third Amended and Restated Investor Rights Agreement by and among the Company and the investors party
thereto, dated July 15, 2013 (as such agreement may be amended and restated) or similar agreement. 
 12.7 No Voting
Rights. Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant and, except as expressly set forth in this Warrant, will not be considered a stockholder for any purpose until the exercise of this
Warrant. 
 13. MISCELLANEOUS. 

13.1 Term; Automatic Cashless Exercise Upon Expiration. 

(a) Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from
time to time on or before 6:00 PM, Eastern time, on the Expiration Date and shall be void thereafter. 
 (b) Automatic Cashless Exercise
upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in
effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the
Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder. 

13.2 Legends. Each certificate evidencing Shares (and each certificate evidencing the securities issued upon conversion of any
Shares, if any) shall be imprinted with a legend in substantially the following form: 
 THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO OXFORD
FINANCE LLC DATED DECEMBER __, 2016, MAY NOT BE OFFERED, SOLD, PLEDGED OR 

 
OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER
TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET
STAND-OFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED
PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES. 

13.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issued upon exercise of this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of
counsel if the transfer is to an affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of
counsel if there is no material question as to the availability of Rule 144 promulgated under the Act. 
 13.4 Transfer
Procedure. After receipt by Oxford of the executed Warrant, Oxford may transfer all or part of this Warrant to one or more of Oxford’s affiliates (each, an “Oxford Affiliate”), by execution of an Assignment substantially in
the form of Appendix 2. Subject to the provisions of Article 5.3 and upon providing the Company with written notice, Oxford, any such Oxford Affiliate and any subsequent Holder, may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the Shares issuable directly or indirectly, upon conversion of the Shares, if any) to any other transferee, provided, however, in connection with any such transfer, the Oxford Affiliate(s) or any subsequent Holder will
give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder
if applicable). Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any exercise
hereof, or any shares or other securities issued upon any conversion of any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by such a
direct competitor. 
 13.5 Notices. All notices and other communications hereunder from the Company to the Holder, or vice
versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by
facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have
been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5. All notices to Holder shall be addressed as follows until the Company
receives notice of a change of address in connection with a transfer or otherwise: 

 Oxford Finance LLC 

133 N. Fairfax Street 

Alexandria, VA 22314 
 Attn:
Legal Department 
 Telephone: (703) 519-4900 

Facsimile: (703) 519-5225 

Email: LegalDepartment@oxfordfinance.com 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address: 

AnaptysBio, Inc. 
 10421
Pacific Center Court 
 Suite 200 

San Diego, CA 92121 
 Attn:
Hamza Suria 
 Telephone: (858) 362-6383 

Facsimile: (858) 366-9055 

Email: hsuria@anaptysbio.com 

With a copy (which shall not constitute notice) to: 

Fenwick & West LLP 

555 California Street 
 San
Francisco, CA 94104 
 Attn: Matthew Rossiter 

Telephone: (415) 875-2372 

Email: mrossiter@fenwick.com 

13.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a
particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 

13.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant,
the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 

13.8 Counterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall
constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 13.9 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of
California, without giving effect to its principles regarding conflicts of law. 
 13.10 Headings. The headings in this
Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant. 

13.11 Business Days. “Business Day” is any day that is not a Saturday, Sunday or a day on which Banks in
California are closed. 
 [Remainder of page left blank intentionally] 

[Signature page follows] 

 IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by
their duly authorized representatives effective as of the Issue Date written above. 
  

			
	“COMPANY”
	
	ANAPTYSBIO, INC.
		
	By:	 	 
		
	Name:	 	 
		 	(Print)
		
	Title:	 	 
	
	“HOLDER”
	
	OXFORD FINANCE LLC
		
	By:	 	 
		
	Name:	 	 
		 	(Print)
		
	Title:	 	 

  

  
 [Signature
Page to Warrant to Purchase Stock] 

 APPENDIX 1 

NOTICE OF EXERCISE 
 7.
The undersigned Holder hereby exercises its right to purchase                  shares of the Common/Series
             Preferred [circle one] Stock of ANAPTYSBIO, INC. (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of
the aggregate Warrant Price for such shares as follows: 
  

	 	[    ]	check in the amount of $             payable to order of the Company enclosed herewith 

 

	 	[    ]	Wire transfer of immediately available funds to the Company’s account 

  

	 	[    ]	Cashless Exercise pursuant to Section 1.2 of the Warrant 

  

	 	[    ]	Other [Describe]
                                        

 8. Please issue a certificate or certificates representing the Shares in the name specified below: 

 

			
		 	  

		 	Holder’s Name
		
		 	  

		
		 	  

		 	(Address)

 9. By its execution below and for the benefit of the Company, Holder hereby restates each of the
representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof. 
  

			
	HOLDER:
	
	  

		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

		
	Date:	 	  

  

 APPENDIX 2 

ASSIGNMENT 
 For
value received, Oxford Finance LLC hereby sells, assigns and transfers unto 
  

					
		 	Name:	 	[OXFORD TRANSFEREE]
			
		 	Address:	 	  

			
		 	Tax ID:	 	  

 that certain Warrant to Purchase Stock issued by ANAPTYSBIO, INC. (the “Company”), on
December 24, 2014 (the “Warrant”) together with all rights, title and interest therein. 
  

			
	OXFORD FINANCE LLC
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

  

			
	Date:	 	  

 By its execution below, and for the benefit of the Company, [OXFORD TRANSFEREE] makes each of the
representations and warranties set forth in Section 4 of the Warrant and agrees to all other provisions of the Warrant as of the date hereof. 
  

			
	[OXFORD TRANSFEREE]
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

  

 THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR,
IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 

WARRANT TO PURCHASE STOCK 
  

			
	Company:	  	ANAPTYSBIO, INC., a Delaware corporation
	Number of Shares:	  	144,231 (Subject to Section 1.7 )
	Type/Series of Stock:	  	Series C Preferred (Subject to Section 1.7)
	Warrant Price:	  	$0.65 per share (Subject to Section 1.7)
	Issue Date:	  	December __, 2016
	Expiration Date:	  	December __, 2026 See also Section 5.1(b).
	Credit Facility:	  	This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement dated as of December 24, 2014 among Oxford Finance LLC, as Lender and Collateral Agent, the Lenders
from time to time party thereto, including Silicon Valley Bank, and the Company (as modified, amended and/or restated from time to time, the “Loan Agreement”).

 THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (together with any
successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “Holder”) is entitled to purchase the number of fully paid and non-assessable shares (the
“Shares”) of the above-stated Type/Series of Stock (the “Class”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and as
adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. Reference is made to Section 5.4 of this Warrant whereby Silicon Valley Bank shall transfer this Warrant
to its parent company, SVB Financial Group. 
 SECTION 1. EXERCISE. 

1.22 Method of Exercise. Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the
Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in
Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased. 

1.23 Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified
in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the
Company shall issue to the Holder such number of fully paid and nonassessable Shares as are computed using the following formula: 
  

	 	X  =	Y(A-B)/A 

 where: 
  

	 	X  =	the number of Shares to be issued to the Holder; 

  

	 	Y  =	the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price); 

	 	A	= the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and 

  

	 	B  =	the Warrant Price. 

 1.24 Fair Market Value. If the Company’s common stock is then
traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”) and the Class is common stock, the fair market value of a Share shall be the closing
price or last sale price of a share of common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is then
traded in a Trading Market and the Class is a series of the Company’s convertible preferred stock, the fair market value of a Share shall be the closing price or last sale price of a share of the Company’s common stock reported for the
Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company multiplied by the number of shares of the Company’s common stock into which a Share is then convertible. If the
Company’s common stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment. 

1.25 Delivery of Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in
Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor
representing the Shares not so acquired. 
 1.26 Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of
mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount. 

1.27 Treatment of Warrant Upon Acquisition of Company. 

(a) Acquisition. For the purpose of this Warrant, “Acquisition” means (i) any consolidation or merger of the
Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such merger,
consolidation or reorganization, continue to hold at least a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such
consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; provided that an Acquisition shall not
include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; or
(iii) a sale of all or substantially all of the assets of the Company or the exclusive license of substantially all of the rights to substantially all of the intellectual property of the Company material to its business. 

(b) Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the
Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), either (i) Holder shall exercise this Warrant pursuant
to Section 1.1 and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately
prior to the consummation of such Acquisition. 
 (c) The Company shall provide Holder with written notice of its request relating to the
Cash/Public Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be
delivered to Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition. In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair
market value of one Share (or other security issuable upon the exercise hereof) as 

 
determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be
exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities)
issued upon such exercise to the Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof. 

(d) Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity
shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as
if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant. 

(e) As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements:
(i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all
required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this
Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) following the other closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other
securities that would be received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under
federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition. 

1.28 Adjustment to Class of Shares; Number of Shares; Warrant Price; Adjustments Cumulative. If, upon the closing of the Next
Equity Financing, the Next Equity Financing Price shall be less than the Warrant Price in effect as of immediately prior thereto, then the “Class” shall be Next Equity Financing Securities from and after such closing, subject to adjustment
thereafter from time to time in accordance with the provisions of this Warrant and the “Warrant Price” shall be the Next Equity Financing Price from and after such closing, subject to adjustment thereafter from time to time in accordance
with the provisions of this Warrant; provided, that upon such date, if any, as the “Class” becomes Next Equity Financing Securities pursuant to this sentence, this Warrant shall be exercisable for such number of shares of such Class as
shall equal (i) product of (a) the number of shares for which this Warrant was originally exercisable and (b) the warrant price for which this Warrant was originally exercisable, divided by (ii) the Next Equity Financing Price,
subject to adjustment thereafter from time to time in accordance with the provisions of this Warrant. As used herein (i) “Next Equity Financing” means the first sale or issuance by the Company on or after the Issue Date of this
Warrant set forth above, in a single transaction or series of related transactions, of shares of its convertible preferred stock or other senior equity securities to one or more investors for cash for financing purposes; (ii) “Next Equity
Financing Securities” means the type, class and series of convertible preferred stock or other senior equity security sold or issued by the Company in the Next Equity Financing; and (iii) “Next Equity Financing Price” means
the lowest price per share for which Next Equity Financing Securities are sold or issued by the Company in the Next Equity Financing. 

14. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE. 

14.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the
Class payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and
property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater
number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by reclassification or
otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased. 

 14.2 Reclassification, Exchange, Combinations or Substitution. Upon any event
whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this
Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to
time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events. 

14.3 Conversion of Preferred Stock. If the Class is a class and series of the Company’s convertible preferred stock, in
the event that all outstanding shares of the Class are converted, automatically or by action of the holders thereof, into common stock pursuant to the provisions of the Company’s Certificate of Incorporation, including, without limitation, in
connection with the Company’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration statement under the Act (the “IPO”), then from and after the date on which all outstanding
shares of the Class have been so converted, this Warrant shall be exercisable for such number of shares of common stock into which the Shares would have been converted had the Shares been outstanding on the date of such conversion, and the Warrant
Price shall equal the Warrant Price in effect as of immediately prior to such conversion divided by the number of shares of common stock into which one Share would have been converted, all subject to further adjustment thereafter from time to time
in accordance with the provisions of this Warrant. 
 14.4 Adjustments for Diluting Issuances. Without duplication of any
adjustment otherwise provided for in this Section 2, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s
Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment. 
 14.5
No Fractional Share. No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional Share interest arises upon any exercise of
the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above)
of a full Share, less (ii) the then-effective Warrant Price. 
 14.6 Notice/Certificate as to Adjustments. Upon each
adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and
facts upon which such adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of
Shares in effect upon the date of such adjustment. 
 15. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 

15.1 Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows: 

(a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the
Class were last sold and issued prior to the Issue Date hereof in an arms- length transaction in which at least Five Hundred Thousand Dollars ($500,000.00) of such shares were sold. 

(b) All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares,
shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The
Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise
in full of this Warrant and the conversion of the Shares into common stock or such other securities. 

 (c) The Company’s capitalization table attached hereto as Schedule 1 is true and complete,
in all material respects, as of the Issue Date. 
 15.2 Notice of Certain Events. If the Company proposes at any time to:

 (a) declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or
other securities and whether or not a regular cash dividend; 
 (b) offer for subscription or sale pro rata to all holders of the
outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights); 

(c) effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the
Class; 
 (d) effect an Acquisition or to liquidate, dissolve or wind up; or 

(e) effect an IPO; 
 then, in
connection with each such event, the Company shall give Holder: 
 (i) at least seven (7) Business Days prior written notice of the
date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in
respect of the matters referred to in (a) and (b) above; 
 (ii) in the case of the matters referred to in (c) and
(d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the
securities or other property deliverable upon the occurrence of such event); and 
 (iii) with respect to the IPO, at least seven
(7) Business Days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith. 

Reference is made to Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the
Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof. Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s
accounting or reporting requirements. 
 16. REPRESENTATIONS, WARRANTIES OF THE HOLDER. 

The Holder represents and warrants to the Company as follows: 

16.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being
acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of
acquiring this Warrant or the Shares. 
 16.2 Disclosure of Information. Holder is aware of the Company’s business
affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying
securities. Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the
extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access. 

 16.3 Investment Experience. Holder understands that the purchase of this Warrant
and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this
Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of
such persons. 
 16.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning of
Regulation D promulgated under the Act. 
 16.5 The Act. Holder understands that this Warrant and the Shares issuable upon
exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder
understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and
qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act. 
 16.6 Market
Stand-off Agreement. The Holder agrees that the Shares shall be subject to the Market Standoff provisions in Section 2.11 of that certain Third Amended and Restated Investor Rights Agreement by and among the Company and the investors party
thereto, dated July 15, 2013 (as such agreement may be amended and restated) or similar agreement. 
 16.7 No Voting
Rights. Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant and, except as expressly set forth in this Warrant, will not be considered a stockholder for any purpose until the exercise of this
Warrant. 
 17. MISCELLANEOUS. 

17.1 Term; Automatic Cashless Exercise Upon Expiration. 

(a) Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from
time to time on or before 6:00 PM, Eastern time, on the Expiration Date and shall be void thereafter. 
 (b) Automatic Cashless Exercise
upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in
effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the
Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder. 

17.2 Legends. Each certificate evidencing Shares (and each certificate evidencing the securities issued upon conversion of any
Shares, if any) shall be imprinted with a legend in substantially the following form: 
 THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO OXFORD
FINANCE LLC DATED DECEMBER __, 2016, MAY NOT BE OFFERED, SOLD, PLEDGED OR 

 
OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER
TRANSFER IS EXEMPT FROM SUCH REGISTRATION. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET
STAND-OFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED
PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES. 

17.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issued upon exercise of this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of
counsel if the transfer is to an affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of
counsel if there is no material question as to the availability of Rule 144 promulgated under the Act. 
 17.4 Transfer
Procedure. After receipt by Oxford of the executed Warrant, Oxford may transfer all or part of this Warrant to one or more of Oxford’s affiliates (each, an “Oxford Affiliate”), by execution of an Assignment substantially in
the form of Appendix 2. Subject to the provisions of Article 5.3 and upon providing the Company with written notice, Oxford, any such Oxford Affiliate and any subsequent Holder, may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the Shares issuable directly or indirectly, upon conversion of the Shares, if any) to any other transferee, provided, however, in connection with any such transfer, the Oxford Affiliate(s) or any subsequent Holder will
give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder
if applicable). Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any exercise
hereof, or any shares or other securities issued upon any conversion of any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by such a
direct competitor. 
 17.5 Notices. All notices and other communications hereunder from the Company to the Holder, or vice
versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by
facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have
been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5. All notices to Holder shall be addressed as follows until the Company
receives notice of a change of address in connection with a transfer or otherwise: 

 Silicon Valley Bank 

Attn: Treasury Department 
 3003
Tasman Drive, HA 200 
 Santa Clara, CA 95054 

Telephone: (408) 654-7400 

Facsimile: (408) 496-2405 

Email: warradmi@svb.com 
 Notice
to the Company shall be addressed as follows until Holder receives notice of a change in address: 
 AnaptysBio, Inc. 

10421 Pacific Center Court 

Suite 200 
 San Diego, CA 92121

 Attn: Hamza Suria 

Telephone: (858) 362-6383 

Facsimile: (858) 366-9055 Email: hsuria@anaptysbio.com 

With a copy (which shall not constitute notice) to: 

Fenwick & West LLP 

555 California Street 
 San
Francisco, CA 94104 
 Attn: Matthew Rossiter 

Telephone: (415) 875-2372 

Email: mrossiter@fenwick.com 

17.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a
particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 

17.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant,
the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 

17.8 Counterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall
constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.

 17.9 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of
California, without giving effect to its principles regarding conflicts of law. 
 17.10 Headings. The headings in this
Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant. 

17.11 Business Days. “Business Day” is any day that is not a Saturday, Sunday or a day on which Silicon Valley
Bank is closed. 
 [Remainder of page left blank intentionally] 

[Signature page follows] 

 IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by
their duly authorized representatives effective as of the Issue Date written above. 
  

			
	“COMPANY”
	
	ANAPTYSBIO, INC.
		
	By:	 	 
		
	Name:	 	 
		 	(Print)
		
	Title:	 	 
	
	“HOLDER”
	
	SILICON VALLEY BANK
		
	By:	 	 
		
	Name:	 	 
		 	(Print)
		
	Title:	 	 

 [Signature Page to Warrant to Purchase Stock] 

 APPENDIX 1 

NOTICE OF EXERCISE 
 10.
The undersigned Holder hereby exercises its right to purchase                  shares of the Common/Series
             Preferred [circle one] Stock of ANAPTYSBIO, INC. (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the
aggregate Warrant Price for such shares as follows: 
  

	 	[    ]	check in the amount of $             payable to order of the Company enclosed herewith 

 

	 	[    ]	Wire transfer of immediately available funds to the Company’s account 

  

	 	[    ]	Cashless Exercise pursuant to Section 1.2 of the Warrant 

  

	 	[    ]	Other [Describe]                              

11. Please issue a certificate or certificates representing the Shares in the name specified below: 

 

			
		 	  

		 	Holder’s Name
		
		 	  

		
		 	  

		 	(Address)

 12. By its execution below and for the benefit of the Company, Holder hereby restates each of the
representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof. 
  

			
	HOLDER:
	
	  

		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

		
	Date:	 	  

 EXHIBIT D 

Secured Promissory Notes 

[see attached] 

 SECURED PROMISSORY NOTE 

(Term B Loan) 
  

			
	$2,500,000.00	  	Dated: December       , 2016

 FOR VALUE RECEIVED, the undersigned, ANAPTYSBIO, INC., a Delaware corporation (the “Existing
Borrower”), and ANAPTYSBIO PTY LTD, an entity formed under the laws of Australia (the “New Borrower” and together with Existing Borrower, individually and collectively, jointly and severally, “Borrower”),
both with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121, HEREBY PROMISES TO PAY to the order of OXFORD FINANCE LLC (“Lender”) the principal amount of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000.00) or such lesser amount as shall equal the outstanding principal balance of the Term B Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term B Loan, at the rates and in accordance with the
terms of the Loan and Security Agreement dated December 24, 2014 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 B 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 B 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 B Loan, interest
on the Term B 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 reasonable 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:
	
	ANAPTYSBIO, INC.
		
	By	 	 
	Name:	 	 
	Title:	 	 
	
	ANAPTYSBIO PTY LTD
		
	By	 	 
	Name:	 	 
	Title:	 	 

 Oxford Finance LLC 

Secured Promissory Note 

Term B Loan 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	 	 Principal

Amount
	 	 Interest Rate
	  	Scheduled
Payment Amount	  	Notation By

 SECURED PROMISSORY NOTE 

(Term B Loan) 
  

			
	$2,500,000.00	  	Dated: December       , 2016

 FOR VALUE RECEIVED, the undersigned, ANAPTYSBIO, INC., a Delaware corporation (the “Existing
Borrower”), and ANAPTYSBIO PTY LTD, an entity formed under the laws of Australia (the “New Borrower” and together with Existing Borrower, individually and collectively, jointly and severally, “Borrower”),
both with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121, HEREBY PROMISES TO PAY to the order of SILICON VALLEY BANK (“Lender”) the principal amount of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000.00) or such lesser amount as shall equal the outstanding principal balance of the Term B Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term B Loan, at the rates and in accordance with the
terms of the Loan and Security Agreement dated December 24, 2014 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 B 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 B 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 B Loan, interest
on the Term B 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 reasonable 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:
	
	ANAPTYSBIO, INC.
		
	By	 	 
	Name:	 	 
	Title:	 	 
	
	ANAPTYSBIO PTY LTD
		
	By	 	 
	Name:	 	 
	Title:	 	 

 Silicon Valley Bank 

Secured Promissory Note 

Term B Loan 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	 	 Principal

Amount
	 	 Interest Rate
	  	Scheduled
Payment Amount	  	Notation By

 SECURED PROMISSORY NOTE 

(Term C Loan) 
  

			
	$2,500,000.00	  	Dated: December       , 2016

 FOR VALUE RECEIVED, the undersigned, ANAPTYSBIO, INC., a Delaware corporation (the “Existing
Borrower”), and ANAPTYSBIO PTY LTD, an entity formed under the laws of Australia (the “New Borrower” and together with Existing Borrower, individually and collectively, jointly and severally, “Borrower”),
both with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121, HEREBY PROMISES TO PAY to the order of OXFORD FINANCE LLC (“Lender”) the principal amount of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000.00) or such lesser amount as shall equal the outstanding principal balance of the Term C Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term C Loan, at the rates and in accordance with the
terms of the Loan and Security Agreement dated December 24, 2014 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 C 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 C 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 C Loan, interest
on the Term C 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 reasonable 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:
	
	ANAPTYSBIO, INC.
		
	By	 	 
	Name:	 	 
	Title:	 	 
	
	ANAPTYSBIO PTY LTD
		
	By	 	 
	Name:	 	 
	Title:	 	 

 Oxford Finance LLC 

Secured Promissory Note 

Term C Loan 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	 	 Principal

Amount
	 	 Interest Rate
	  	Scheduled
Payment Amount	  	Notation By

 SECURED PROMISSORY NOTE 

(Term C Loan) 
  

			
	$2,500,000.00	  	Dated: December       , 2016

 FOR VALUE RECEIVED, the undersigned, ANAPTYSBIO, INC., a Delaware corporation (the “Existing
Borrower”), and ANAPTYSBIO PTY LTD, an entity formed under the laws of Australia (the “New Borrower” and together with Existing Borrower, individually and collectively, jointly and severally, “Borrower”),
both with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121, HEREBY PROMISES TO PAY to the order of SILICON VALLEY BANK (“Lender”) the principal amount of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000.00) or such lesser amount as shall equal the outstanding principal balance of the Term C Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term C Loan, at the rates and in accordance with the
terms of the Loan and Security Agreement dated December 24, 2014 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 C 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 C 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 C Loan, interest
on the Term C 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 reasonable 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:
	
	ANAPTYSBIO, INC.
		
	By	 	 
	Name:	 	 
	Title:	 	 
	
	ANAPTYSBIO PTY LTD
		
	By	 	 
	Name:	 	 
	Title:	 	 

 Silicon Valley Bank 

Secured Promissory Note 

Term C Loan 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	 	 Principal

Amount
	 	 Interest Rate
	  	Scheduled
Payment Amount	  	Notation By

 EXHIBIT E 

Amended and Restated Secured Promissory Notes 

[see attached] 

 AMENDED AND RESTATED SECURED PROMISSORY NOTE 

(Term A Loan) 
  

			
	$2,500,000.00	  	Dated: December       , 2016

 FOR VALUE RECEIVED, the undersigned, ANAPTYSBIO, INC., a Delaware corporation (the “Existing
Borrower”), and ANAPTYSBIO PTY LTD, an entity formed under the laws of Australia (the “New Borrower” and together with Existing Borrower, individually and collectively, jointly and severally, “Borrower”),
both with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121, HEREBY PROMISES TO PAY to the order of OXFORD FINANCE LLC (“Lender”), jointly and severally, the principal amount of TWO MILLION FIVE HUNDRED
THOUSAND DOLLARS ($2,500,000.00) or such lesser amount as shall equal the outstanding principal balance of the Term A Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term A Loan, at the rates and in
accordance with the terms of the Loan and Security Agreement dated December 24, 2014, 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 A Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Amended and Restated 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 A 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 A Loan, interest on the Term A 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 reasonable 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. 
 This Note is intended to and does completely amend and restate, without novation, that
certain Secured Promissory Note issued of December 24, 2014, by the Existing Borrower in favor of Lender. 

 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:
	
	ANAPTYSBIO, INC.
		
	By	 	 
	Name:	 	 
	Title:	 	 
	
	ANAPTYSBIO PTY LTD
		
	By	 	 
	Name:	 	 
	Title:	 	 

 Oxford Finance LLC 

Amended and Restated Secured Promissory Note 

Term A Loan 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	 	 Principal

Amount
	 	 Interest Rate
	  	Scheduled
Payment Amount	  	Notation By

 AMENDED AND RESTATED SECURED PROMISSORY NOTE 

(Term A Loan) 
  

			
	$2,500,000.00	  	Dated: December       , 2016

 FOR VALUE RECEIVED, the undersigned, ANAPTYSBIO, INC., a Delaware corporation (the “Existing
Borrower”), and ANAPTYSBIO PTY LTD, an entity formed under the laws of Australia (the “New Borrower” and together with Existing Borrower, individually and collectively, jointly and severally, “Borrower”),
both with offices located at 10421 Pacific Center Court, Suite 200, San Diego, CA 92121, HEREBY PROMISES TO PAY to the order of SILICON VALLEY BANK (“Lender”), jointly and severally, the principal amount of TWO MILLION FIVE HUNDRED
THOUSAND DOLLARS ($2,500,000.00) or such lesser amount as shall equal the outstanding principal balance of the Term A Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term A Loan, at the rates and in
accordance with the terms of the Loan and Security Agreement dated December 24, 2014, 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 A Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Amended and Restated 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 A 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 A Loan, interest on the Term A 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 reasonable 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. 
 This Note is intended to and does completely amend and restate, without novation, that
certain Secured Promissory Note issued of December 24, 2014, by the Existing Borrower in favor of Lender. 

 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:
	
	ANAPTYSBIO, INC.
		
	By	 	 
	Name:	 	 
	Title:	 	 
	
	ANAPTYSBIO PTY LTD
		
	By	 	 
	Name:	 	 
	Title:	 	 

 Silicon Valley Bank 

Amended and Restated Secured Promissory Note 

Term A Loan 

 LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL 

 

									
	 Date
	 	 Principal

Amount
	 	 Interest Rate
	  	Scheduled
Payment Amount	  	Notation ByEX-10.01

 Exhibit 10.01 

 
 STOCK
PURCHASE AGREEMENT 
   

 

BY AND BETWEEN 

DAVID J. JOHN 

AND 

BANKGUAM HOLDING COMPANY 

DATED AS OF MAY 27, 2016 

 STOCK PURCHASE AGREEMENT 

This STOCK PURCHASE AGREEMENT, dated as of May 27, 2016, is made and entered into by and among BANKGUAM HOLDING COMPANY, bank holding
company formed under the laws of the Territory of Guam (hereinafter referred to as, the “Buyer”), and DAVID J. JOHN, (hereinafter referred to as the “Seller”). Each of Seller and Buyer is sometimes referred
to herein, individually, as a “Party” and, collectively, as the “Parties.” 
 RECITALS 

WHEREAS, Seller currently owns 79.25% of the issued and outstanding capital stock outstanding of ASC TRUST CORPORATION (hereinafter
referred to as “ASC” or the “Company”); and whereas Seller has agreements in place to purchase 1% of capital stock shares outstanding from Donald H Clark and 10% of capital stock shares outstanding from the estate
of Pedro P. Ada; and 
 WHEREAS, ASC’s only capital stock authorized, issued and outstanding is common stock (“Common
Stock”); 
 WHEREAS, Buyer desires to purchase and acquire a certain amount of the issued and outstanding Common Stock of ASC
pursuant to the terms and conditions herein; and 
 WHEREAS, Seller desires to sell a certain amount of the issued and outstanding Common
Stock of ASC pursuant to the terms and conditions herein; 
 NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 

Article I 
 Definitions

 Section 1.1     Definitions. The following terms have the following meanings when used herein: 

“Acquired Companies” means, collectively, the Company and the Company Subsidiaries, if any. 

“Affiliate” means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is
under common control with, the first-mentioned person. 
 “Affiliated Group” means an affiliated group as defined in Code
§1504 (or any analogous combined, consolidated or unitary group defined under state, local or foreign income Tax Law). 

“Agreement” shall mean and refer to this Agreement and all Exhibits attached hereto, as such Agreement may from time to time
be amended, supplemented or otherwise modified. 
 “Ancillary Stockholders’ Agreement” means the Stockholders’
Agreement with the terms attached hereto as Exhibit “A”. 

 “Business Day” shall mean and refer to a day of the year on which commercial
banks are open for business in the Territory of Guam. 
 “Buyer Title, Authorization and Brokers’ Warranty” means a
representation and warranty in Sections 5.2 and 5.4. 
 “Closing Date” shall mean and refer to any
date on which a Closing actually occurs. 
 “Code” shall mean and refer to the Internal Revenue Code of 1986, as amended,
or any other legislation of similar purport as may be substituted therefor at any time and any Regulations promulgated pursuant to the provisions hereof. 

“Company Permits” means authorizations, licenses, permits, certificates, approvals and clearances of any Governmental Entity
necessary for the Company and Company Subsidiaries to carry on their respective businesses. 
 “Confidentiality Agreement”
means that certain confidentiality agreement related to the Parties. 
 “Confidential Information” means any information,
in whatever form or medium, concerning the business or affairs of any of the Acquired Companies. 
 “Control” (including
the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the
ownership of stock or as trustee or executor, by contract or otherwise. 
 “Day” shall mean and refer to each and any
calendar day. 
 “Enterprise Value” shall mean the Fair Market Value of ASC determined by Mercer Capital on
November 19, 2015, shown in Exhibit “B”. 
 “Environmental Laws” means any Law relating to the
pollution, protection, investigation or restoration of the environment, including, without limitation, those relating to the use, handling, presence, transportation, treatment, storage, disposal, release, threatened release or discharge of Hazardous
Materials. 
 “Equity Interests” means any share, capital stock, partnership, membership or similar interest in any entity,
and any option, warrant, right or security convertible, exchangeable or exercisable therefore. 
 “Exhibit C Seller’s
Disclosure Schedule” are disclosures set forth on Exhibit C to this Agreement. 
 “Fair Market Value of the
Company” means the price, expressed in terms of cash and cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm’s length in an open
an unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the related facts. 

“GAAP” means generally accepted accounting principles as consistently applied in the United States from time to time. 

  
 2 

 “Governmental Entity” means any domestic or foreign governmental,
administrative, judicial, regulatory, quasi-governmental or arbitral authority. 
 “Group Income Tax Return” means any
federal, state, local or foreign Income Tax Return that any Seller or any of its affiliates (other than any of the Company or the Company Subsidiaries) file with any of the Company or the Company Subsidiaries on a consolidated, combined or unitary
basis. 
 “Income Tax Return” means any Tax Return related to Income Taxes. 

“Income Taxes” means any income, franchise, net profits, excess profits or similar Taxes imposed or measured on the basis of
net income. 
 “Indebtedness” means, with respect to any Person, without duplication, the following: (a) all
obligations of such person for borrowed money; (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of others for borrowed money secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such person, whether or not the obligation secured thereby has been assumed; (d) all guarantees by such person of obligations
of others for borrowed money; and (e) all obligations, contingent or otherwise, of such person as an account party in respect of letters of credit and letters of guaranty. 

“Intellectual Property” means all intellectual property or other proprietary rights, including but not limited to patents,
trademarks, service marks, trade names, domain names, trade dress, copyrights, trade secrets, know-how, computer software (including source and object code) and databases and data collections. 

“IRS” means the United States Internal Revenue Service. 

“Knowledge of Seller” and words of similar import mean, with respect to Seller, the actual knowledge of each Seller,
President of the Company, the Chief Compliance Officer of the Company, Chief Financial Officer, Chief Operating Officer and Chief Information Officer or such similarly situated officers of the Company after due and reasonable inquiry. 

“Law” means any foreign or domestic law, statute, code, ordinance, rule, regulation, order, judgment, writ, stipulation,
award, injunction or decree of a Governmental Entity. 
 “Liabilities” means any direct or indirect Indebtedness,
liability, commitment or other obligation, whether fixed or unfixed, known or unknown, asserted or unasserted, secured or unsecured, matured or unmatured, accrued, incurred, absolute, contingent or otherwise. 

“Lien” means any mortgage, lien, pledge, charge, security interest or other encumbrance. 

“Losses” means, with respect to any person, any demand, claim, action, cause of action, cost, damage, deficiency, Tax,
penalty, fine or other loss or expense, including all interest, penalties, reasonable attorneys’ fees and expenses and reasonable amounts paid or incurred in connection with any action, demand, proceeding, investigation or claim, including any
amounts paid in settlement thereof, against or affecting such person. 

  
 3 

 “Material Adverse Effect” means any change, event, state of facts or development
that is materially adverse to the business of the Company and the Company Subsidiaries, taken as a whole; or on the ability of any Party to consummate timely the transactions contemplated by this Agreement, provided, however, that none
of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (a) any
change, event, state of facts or development generally affecting the general political, economic or business conditions of the United States or regions in which the Company does business or generally affecting the industry of any Company or Company
Subsidiary, and in each case which does not disproportionately affect any Company or Company Subsidiary relative to other companies in the same industry; (b) general financial, credit or capital market conditions, including interest rates or
exchange rates, or any changes therein; and (c) acts of war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, sabotage or terrorism or other international or national calamity or any
material worsening of such conditions. 
 “Material Contract” means each agreement, joint venture agreement, purchase order
and any other purchase and sale agreement, service agreement, license agreement, technology agreement, manufacture or vendor agreement, supply agreement, debt agreement and any other agreement to which any of the Company or Company Subsidiaries is a
party or by which any of them are bound that (a) requires aggregate payments by or to any Company or Company Subsidiary in excess of $50,000 on an annual basis, (b) has a term of one year or more (that cannot be terminated at will by the
applicable Company or Company Subsidiary), (c) grants to any of the Company or Company Subsidiaries the right to use Intellectual Property (other than shrink-wrap, click-wrap and
off-the-shelf software licenses, and other licenses for software that is commercially available on reasonable terms to the public generally), (d) is for capital
expenditures in excess of $50,000; (e) is a mortgage, indenture, guarantee, loan or credit agreement, security agreement or other Contract relating to Indebtedness of an Acquired Company as the debtor, other than accounts receivables and payables in
the Ordinary Course of Business; (f) licenses or otherwise grants rights in any Company Intellectual Property to any person, (g) contains any covenant limiting the right of any Acquired Company to engage in any line of business or to
compete (geographically or otherwise) with any person, or otherwise prohibits or limits the right of any Acquired Company to make, sell or distribute any products or services, and/or (h) was entered into other than in the Ordinary Course of
Business or contains or provides for an express undertaking by an Acquired Company to be responsible for consequential damages. 

“Mercer Capital Valuation” means the valuation of the Company as set forth in Mercer Capital’s November 19, 2015
valuation of the Company attached hereto as Exhibit A to this Agreement. 
 “Occupational Safety and Health Law”
means any Law designed to provide safe and healthful working conditions. 
 “Ordinary Course of Business” means an action
taken by a person if such action is consistent with the past practices of such person (or persons performing similar functions) and is taken in the ordinary course of the normal
day-to-day operations of such person. 
 “Permitted
Liens” means Liens for current Taxes not yet due and payable or Taxes the validity of which are being contested in good faith by appropriate proceedings, in each case for which adequate specific reserves have been recorded in
line items of the relevant Company’s or Company Subsidiaries’ books and records. 
 “Person” or
“person” shall mean and refer to an individual, corporation, limited liability company, partnership, association, trust, joint venture, unincorporated organization, Governmental Entity or other entity or judicial entity. 

  
 4 

 “Representative(s)” means a person’s trustees, directors, officers,
employees, accountants, consultants, legal counsel, advisors, agents, affiliates and other representatives. 
 “Required Minimum
Capital Reserve” means the minimum about of capital the Company is required to hold in its accounts by Law. 

“Seller’s Title, Authorization and Brokers’ Warranty” means a representation and warranty in Sections
4.3, 4.4, 4.5, 4.6, 4.21, 4.27 and 4.30. 
 “Subsidiary”,
“subsidiary”, “Subsidiaries or “subsidiaries” means with respect to any person any corporation, partnership, limited liability company, joint venture or other legal entity of any kind of which such
person (either alone or through or together with any other subsidiary), owns, directly or indirectly, a majority of the stock or other Equity Interests; the holders of which are generally entitled to (a) vote for the election of the board of
directors or other governing body of such corporation or other legal entity or (b) share in the profits or capital of such legal entity. 

“Stock” shall mean the issued and outstanding capital stock of ASC Trust Company. 

“Tax” or “Taxes” means (a) any and all taxes, assessments, levies, tariffs, duties or other charges or
impositions in the nature of a tax (together with any all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including income, estimated income, gross receipts, profits,
business, license, occupation, franchise, capital stock, real or personal property, sales, use, transfer, value added, employment or unemployment, social security, disability, alternative or add-on minimum,
customs, excise, stamp, environmental, commercial rent or withholding taxes; and (b) liability of the Company or any Company Subsidiaries for the payment of any amounts of the type described in clause (a) arising as a result of being (or
ceasing to be) a member of any Affiliated Group (or being included (or required to be included) in any Tax Return relating thereto); and (c) liability of the Company or any Company Subsidiaries for the payment of any amounts of the type
described in clause (a) as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other person. 

“Tax Return” means any return (including any information return), report, statement, schedule, notice, form, election,
estimated Tax filing, claim for refund or other document (including any attachments thereto and amendments thereof) filed with or submitted to, or required to be filed with or submitted to, any Governmental Entity with respect to any Tax. 

“Transfer Taxes” means any and all transfer, documentary, sales, use, gross receipts, stamp, registration, value added,
recording, escrow and other similar Taxes and fees (including any penalties and interest) incurred in connection with the purchase and sale of the Company Common Stock (including any real property or leasehold interest transfer or gains tax and any
similar Tax), or any other transaction contemplated by this Agreement. 
 “Updated Enterprise Value” means the Fair Market
Value of an entity based on and substantially similar to the valuation conducted by Mercer Capital on the Company on November 19, 2015, attached hereto as Exhibit B, that set the Enterprise Value. 

Section 1.2    Terms Defined Elsewhere. The following terms are defined elsewhere in this Agreement, as
indicated below: 

  
 5 

			
	 “2014 Audited Financial Statements”
	  	Section 4.9.1(a)(i)
	 “2015 Interim Balance Sheet”
	  	Section 4.9.1(b)(i)
	 “2015 Interim Income Statement”
	  	Section 4.9.1(c)(i)
	 “Agreement”
	  	Preamble
	 “ASC”
	  	Recitals
	 “Audited Financial Statement”
	  	Section 4.9.1(a)(iii)
	 “Audited Financial Statements”
	  	Section 4.9.1(a)(iii)
	 “Buyer”
	  	Preamble
	 “Buyer Indemnification Deductible”
	  	Section 10.2.3(a)
	 “Buyer Disclosure Schedule”
	  	Article V
	 “Buyer Indemnitee”
	  	Section 10.2.1
	 “Claims Notice”
	  	Section 10.3
	 “Closing”
	  	Section 2.2
	 “Closings”
	  	Section 2.2
	 “Common Stock”
	  	Recitals
	 “Company”
	  	Recitals
	 “Company Benefit Plan”
	  	Section 4.14.1
	 “Company By-laws”
	  	Section 4.4
	 “Company Charter”
	  	Section 4.4
	 “Company Common Stock”
	  	Section 4.5
	 “Company Intellectual Property”
	  	Section 4.19.1
	 “Company Regulatory Agreement”
	  	Section 4.20
	 “Company Subsidiaries”
	  	Section 4.3
	 “Company Subsidiary”
	  	Section 4.3
	 “ERISA”
	  	Section 4.14.1
	 “First Closing”
	  	Section 2.2
	 “First Closing Date”
	  	Section 2.2
	 “First Closing Purchased Stock Purchase Price”
	  	Section 2.3
	 “Indemnified Party”
	  	Section 10.3
	 “Indemnifying Party”
	  	Section 10.3
	 “Interim Balance Sheet”
	  	Section 4.9.1(b)(iii)
	 “Interim Balance Sheets”
	  	Section 4.9.1(b)(iii)
	 “Interim Financial Statements”
	  	Section 4.9.1(c)(iii)
	 “Interim Income Statement”
	  	Section 4.9.1(c)(iii)
	 “Interim Income Statements”
	  	Section 4.9.1(c)(iii)
	 “Parties”
	  	Recitals
	 “Party”
	  	Recitals
	 “Purchase Price”
	  	Section 2.2.3
	 “Second Closing”
	  	Section 2.2
	 “Second Closing Audited Financial Statements”
	  	Section 4.9.1(a)(ii)
	 “Second Closing Date”
	  	Section 2.2
	 “Second Closing Interim Balance Sheet”
	  	Section 4.9.1(b)(ii)
	 “Second Closing Interim Income Statement”
	  	Section 4.9.1(c)(i)
	 “Second Closing Purchased Stock Purchase Price”
	  	Section 2.3.2
	 “Seller”
	  	Preamble
	 “Seller Indemnification Deductible”
	  	Section 10.2.4(a)
	 “Seller Consents”
	  	Section 4.7.1
	 “Seller Indemnitee”
	  	Section 10.2.2
	 “Stockholders Agreement”
	  	Section 7.2.7
	 “Survival Period”
	  	Section 10.1
	 “Third Closing”
	  	Section 2.2
	 “Third Closing Audited Financial Statements”
	  	Section 4.9.1(a)(iii)
	 “Third Closing Date”
	  	Section 2.2
	 “Third Closing Interim Balance Sheet”
	  	Section 4.9.1(b)(iii)
	 “Third Closing Interim Income Statement”
	  	Section 4.9.1(c)(i)
	 “Third Closing Purchased Stock Purchase Price”
	  	Section 2.3.3
	 “Third Party Claim”
	  	Section 10.4.1
	 “Third Party Claimant”
	  	Section 10.4.1

  
 6 

 Section 1.3    Interpretation. In this Agreement, the singular
includes the plural and the plural includes the singular; words importing any gender include all other genders; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute
referred to; references to “writing” include printing, typing, lithography and other means of reproducing words in a tangible, visible form; references to sections (or any subdivision of a section), articles, schedules, annexes and
exhibits are to those of this Agreement unless otherwise indicated; the words “including” and “include” shall be deemed to be followed by the words “without limitation”; the words “herein”, “hereto”,
“hereunder”, “herein below”, and the like shall mean and refer to this Agreement as a whole and not merely to the specific section, clause or paragraph in which the respective work may appear; references to agreements and other
contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments but only to the extent such amendments and other modifications are not prohibited by the terms of this Agreement; references to
money or dollars shall be deemed to be monetary currency of the United States of America unless otherwise specifically stated; and references to Persons include their respective permitted successors and assigns, and in the case of governmental
entities, the Persons succeeding their respective functions and capacities. 
 Article II 

Purchase and Sale of Capital Stock 

Section 2.1     Purchase and Sale of Stock. Subject to and upon the terms and conditions set forth in this
Agreement, Seller hereby agrees to sell, transfer and deliver to Buyer, and Buyer agrees to purchase from Seller Seller’s rights, title and interest in, to or under ceratin Stock free and clear from all liabilities, liens and encumbrances of
agreed upon number of shares of ASC on the dates specified in this agreement. 
 Section 2.2    Closing
Dates. The sale is agreed to be completed over a period of five years and contain three separate closings: the “First Closing”, “Second Closing” and “Third Closing” (each individually a “Closing”
and collectively, the “Closings”). The date on which the First Closing occurs shall be the “First Closing Date,” the date on which the Second Closing occurs shall be the “Second Closing Date” and
the date on which the Third Closing occurs shall be the “Third Closing Date.” 

Section 2.2.1    First Closing. On a date after June 1, 2016 (as mutually agreed to by the Parties), and
subject to the fulfillment of the conditions set forth in this Agreement and the Ancillary Stockholders’ Agreement, Seller shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall purchase and accept from seller 1,000 shares
of Common Stock of ASC which equals twenty-five (25%) of the Stock of ASC. 
 Section 2.2.2    Second
Closing. On April 1, 2019, and subject to the fulfillment of the conditions set forth in this Agreement and the Ancillary Stockholders’ Agreement, Seller shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall
purchase and accept from Seller shares of Stock of ASC which equals twenty (20%) of the Stock of ASC. 

  
 7 

 Section 2.2.3    Third Closing. On April 1, 2021, and
subject to the fulfillment of the conditions set forth in this Agreement and the Ancillary Stockholders’ Agreement, Seller shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall purchase and accept from Seller 1, shares of
Stock of ASC which equals twenty (25%) of the Stock of ASC. 
 Section 2.3     Purchase Price. 

Section 2.3.1    First Closing Purchase Price. The purchase price for the Stock purchased on the First Closing
is the amount of $2,950,000. (the “First Closing Purchased Stock Purchase Price”). The First Closing Purchased Stock Purchase Price is subject to adjustments as set forth in this Agreement. This amount represents 25% of the
Enterprise Value of $11,800,000 pursuant to the valuation completed by Mercer Capital on November 19, 2015 (See Exhibit “B” of this agreement for additional valuation detail). This amount will be paid on the First Closing Date.

 Section 2.3.2    Second Closing Purchase Price. The purchase price for the Stock purchased on the Second
Closing will be such amount that equal twenty percent (20%) of the Updated Enterprise Value of the Company, as reasonably determined based on a valuation to be conducted in Q4 2018 using the same valuation formulas used to set the Enterprise Value
for the First Closing (the “Second Closing Purchased Stock Purchase Price”). The Second Closing Purchased Stock Purchase Price is subject to adjustments as set forth in this Agreement. This amount will be paid in connection with the
Second Closing. 
 Section 2.3.3    Third Closing Purchase Price. The purchase price for the Stock purchased
on the Third Closing will be such amount that equal twenty-five percent (25%) of the Updated Enterprise Value of the Company, as reasonably determined based on a valuation to be conducted in Q4 2020 using the same valuation formulas used to set the
Enterprise Value for the First Closing (the “Third Closing Purchased Stock Purchase Price”). The Third Closing Purchased Stock Purchase Price is subject to adjustments as set forth in this Agreement. This amount will be paid in
connection with the Third Closing. 
 Section 2.4     Final Review. Nothing contained in this Agreement
shall act as a waiver of either Party’s right to terminate this Agreement pursuant to the terms of Section 8.1 herein. 

Section 2.5    Excluded Obligations. It is specifically understood and agreed that Buyer shall not be
responsible for any debts, liabilities, obligations or contracts of Seller of any kind and nature. 

Section 2.6    Reserve Requirements. ASC is a Guam Based Trust Corporation and as such is required to maintain
minimum capital reserves. As of the First Closing, the capital requirement is $500,000. The Buyer will be responsible for their share of the reserve requirement at the time of each closing. For the First Closing the Buyer will be responsible for
$125,000 (25% of $500,000). Such share is based on the ownership percentage of the Company by a stockholder. 

Section 2.7    Excess Reserves. The Enterprise Value computed by Mercer Capital reflects the value of ASC
before considerations of capital structure. At the time of the First Closing, excess reserves (reserves in excess of $500,000) will be paid to the existing shareholders of record of ASC in the form of an
ex-dividend. All other cash and cash equivalents, including but not limited to operational cash, as well as regular accounts payables and receivables will remain in ASC. 

  
 8 

 Article III 

Closing 

Section 3.1     Time and Place of Closing; Effective Date. Upon the terms and subject to the conditions
contained in this Agreement, the consummation of the transactions contemplated hereunder shall take place at each Closing and shall take place as follows. 

Section 3.1.1    Time and Place of First Closing. The First Closing will take place on a date after June 1, 2016
(as mutually agreed to by the Parties), and subject to and following the fulfillment of the conditions set forth in this Agreement and the Ancillary Stockholders’ Agreement, at the offices of ASC Trust Corporation, 120 Father Duenas Avenue,
Suite 110, Capitol Plaza, Hagåtña, Guam, 96910. 
 Section 3.1.2    Time and Place of Second Closing.
The Second Closing will take place on April 1, 2019, and subject to and following the fulfillment of the conditions set forth in this Agreement and the Ancillary Stockholders’ Agreement, at the offices of ASC Trust Corporation, 120 Father
Duenas Avenue, Suite 110, Capitol Plaza, Hagåtña, Guam, 96910. If ASC has moved offices prior to the Second Closing, then the Company’s new address will become the place of the Second Closing. 

Section 3.1.3    Time and Place of third Closing. The Third Closing will take place on April 1, 2021, and
subject to and following the fulfillment of the conditions set forth in this Agreement and the Ancillary Stockholders’ Agreement, at the offices of ASC Trust Corporation, 120 Father Duenas Avenue, Suite 110, Capitol Plaza, Hagåtña,
Guam, 96910. If ASC has moved offices prior to the Third Closing, then the Company’s new address will become the place of the Third Closing. 

Section 3.2    Actions and Deliveries by the Seller. Subject to all of the terms and conditions herein
contained, the Seller shall tender and deliver each of the following instruments and documents to Buyer at or prior to each relevant Closing. 

Section 3.2.1    First Closing. 1,000 shares of ASC Stock representing twenty-five percent (25%) of the issued and
outstanding capital stock of ASC. 
 Section 3.2.2    Second Closing. The number of shares of ASC Stock
representing twenty percent (20%) of the issued and outstanding capital stock of ASC. 
 Section 3.2.3    Third
Closing. The number of shares of ASC Stock representing twenty-five percent (25%) of the issued and outstanding capital stock of ASC. 

Section 3.3    Actions and Deliveries by the Buyer. Subject to all of the terms and conditions herein
contained, the Buyer shall tender and deliver to the Seller each of the following items, instruments and documents at or prior to each relevant Closing. 

Section 3.3.1    First Closing. Cash in the amount of $2,950,000 representing the First Closing Purchased Stock
Purchase Price plus $125,000 representing Buyer’s proportionate share of reserve funds specified under Section 2.6. 

Section 3.3.2    Second Closing. Cash representing the First Closing Purchased Stock Purchase Price and Buyer’s
proportionate share of reserve funds specified under Section 2.6. 

  
 9 

 Section 3.3.3    Third Closing. Cash representing the Third Closing
Purchased Stock Purchase Price and Buyer’s proportionate share of reserve funds specified under Section 2.6. 
 Article IV

 Representations and Warranties of Seller 

As a material inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated herein and in the Exhibits
attached hereto, Seller hereby represents and warrants to and agrees and covenants with Buyer as of the date hereof and as of each Closing Date as follows: 

Section 4.1    Governmental Authorizations and Regulations. No investigation or review by any governmental
entity with respect to Seller or the Company is pending or threatened, nor has any governmental entity indicated an intention to conduct the same. No notice to or consent or approval of any governmental agency, authority or instrumentality is
required to effectuate the transactions contemplated by this Agreement. 
 Section 4.2    Absence of Undisclosed
Liabilities. Except as otherwise provided herein, none of the Stock to be acquired by Buyer hereunder is subject to any liabilities or obligations of any kind or nature whatsoever, secured or unsecured, whether accrued, absolute, contingent or
otherwise, due or to become due, or arising out of any transactions entered into or any state of facts existing prior to each Closing. 

Section 4.3    Organization and Qualification; Subsidiaries. 

Section 4.3.1    The Company is a corporation duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization. The Company has the requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. The Company is duly qualified or licensed to do business, and
is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so
qualified, licensed or in good standing that do not, or would not reasonably be expected to, have a Material Adverse Effect. Section 4.3 of Exhibit C Seller’s Disclosure Schedule sets forth a true and complete list of the
subsidiaries of the Company (each a “Company Subsidiary” and collectively, the “Company Subsidiaries”), together with each Company Subsidiary’s (i) authorized capital stock, and (ii) the number of
issued and outstanding shares of capital stock, the record and beneficial owners thereof and the number of shares held in treasury. Except as set forth on Exhibit C Seller’s Disclosure Schedule, neither the Company nor any Company Subsidiary
holds an Equity Interest in any other person. 
 Section 4.4    Organizational and Governing Documents.
Seller has made available to Buyer correct and complete copies of the articles of incorporation and/or certificates of incorporation of the Company (as amended through the date hereof, the “Company Charter”) and by-laws of the Company (as amended through the date hereof, the “Company By-laws”). Seller has made available to Buyer a complete and correct copy of the
relevant organizational and governing documents, each as amended and in effect on the date hereof, of each of the Company Subsidiaries. Buyer will have the opportunity to review all Company organizational documents prior to each Closing. No Acquired
Company is in default under or in violation of any provision of its organizational and governing documents. 

Section 4.5    Capitalization; Ownership. Except as set forth on Section 4.5.1 of
Exhibit C Disclosure Schedule: 

  
 10 

 Section 4.5.1    The authorized capital stock of the Company consists
solely of the number of shares of Common Stock as set forth on Section 4.5.1 of Exhibit C Seller’s Disclosure Schedule (the “Company Common Stock”). The number of shares of the Company Common Stock that are issued
and outstanding are set forth on Section 4.5.1 of Exhibit C Seller’s Disclosure Schedule. Each outstanding share of the Company Common Stock is validly issued, fully paid and nonassessable and is owned, beneficially and of record,
by Seller free and clear of all Liens, options, rights of first refusal, agreements, limitations on Seller’s voting rights and other encumbrances of any nature whatsoever. There are no other shares of capital stock of the Company other than the
Company Common Stock. 
 Section 4.5.2    There are no options, warrants, contracts, commitments or other rights to
acquire capital stock of the Company, or securities convertible into or exchangeable for capital stock of the Company, or phantom equity, stock appreciation rights or profits interests with respect to the Company. No holder of Indebtedness of the
Company has any right to convert or exchange such Indebtedness for any Equity Interests or other securities of Company, or any right to vote for the election of directors of any Company or to vote on any other matter. 

Section 4.5.3    Each outstanding share of capital stock of each Company Subsidiary is validly issued, fully paid and
nonassessable and is owned, beneficially and of record, by the Company free and clear of all Liens, options, rights of first refusal, agreements, limitations on the Company’s voting rights and other encumbrances of any nature whatsoever. 

Section 4.5.4    There are no options, warrants, contracts, commitments or other rights to acquire capital of any
Company Subsidiary, or securities convertible into or exchangeable for capital stock of any Company Subsidiary or any phantom equity, stock appreciation rights or profits interests with respect to any Company Subsidiary. No holder of Indebtedness of
any Company Subsidiary has any right to convert or exchange such Indebtedness for any Equity Interests or other securities of any Company Subsidiary, or any right to vote for the election of directors of any Company Subsidiary or to vote on any
other matter. 
 Section 4.6    Authority; Enforceability. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and the Ancillary Stockholders’ Agreement, to perform its obligations hereunder and under each such Ancillary Stockholders’ Agreement and to consummate the transactions contemplated by this
Agreement that are to be consummated by Seller. The execution and delivery of this Agreement and the Ancillary Stockholders’ Agreement by Seller and the consummation by Seller of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, and no other corporate proceeding on the part of Seller is necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered
by Seller and, assuming due authorization, execution and delivery by Buyer, constitutes a legally valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity. Upon the execution and delivery by Seller of
the Ancillary Stockholders’ Agreement, the Ancillary Stockholders’ Agreement will, assuming due authorization, execution and delivery by Buyer, constitute legally valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and
by general principles of equity. 

  
 11 

 Section 4.7     No Conflict; Required Filings and Consents. 

Section 4.7.1    The execution and delivery of this Agreement by Seller does not, and the performance of this
Agreement and the transactions contemplated hereby by Seller will not, (a) conflict with or violate any provision of any documents related to Seller, (b) conflict with or violate any provision of the Company Charter or the Company By-laws or the organizational and governing documents of any Company Subsidiary, (c) assuming that all consents, approvals, authorizations and permits described in Section 4.7.2 have been obtained
and all filings and notifications described in Section 4.7.2 have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Law applicable to Seller, the Company or Company Subsidiaries or by
which any property or asset of Seller, the Company or Company Subsidiaries is bound, or (d) except as set forth in Section 4.7.1 of Exhibit C Seller’s Disclosure Schedule (the “Seller Consents”), if any,
require any consent or approval under, result in any breach of or any loss of any benefit under, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any right of
termination, acceleration or cancellation of, or result in the creation of a Lien or other encumbrance on any property or asset of Seller, the Company or Company Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license or Company Permits. 
 Section 4.7.2    The execution and delivery of this Agreement by Seller does
not, and the performance of this Agreement by Seller will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, other than as set forth on Section 4.7.2 of Exhibit C
Seller’s Disclosure Schedule. 
 Section 4.8     Compliance With Law; Permits. 

Section 4.8.1    The operation of the business of the Acquired Companies is, and for the two (2) years prior to
a Closing has been, in compliance in all material respects with all applicable Laws. Each of the Company and the Company Subsidiaries holds, owns or possesses all Company Permits required to conduct its business as currently conducted, which Company
Permits are valid and in full force and effect. Each of the Company and Company Subsidiaries is, and for the two (2) years prior to a Closing has been, in material compliance with its obligations under such Company Permits. 

Section 4.8.2    Except as would not be material to the Acquired Companies, taken as a whole, the Company and each of
its Subsidiaries have properly administered all accounts for which the Company or any of its Subsidiaries acts as a fiduciary, including accounts for which the Company or any of its Subsidiaries serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment adviser, in accordance with the terms of the organizational and governing documents, applicable state and federal law and regulation and common law. None of the Company or any of its Subsidiaries,
or any director, officer or employee of the Company or any of its Subsidiaries, has committed any breach of trust with respect to any such fiduciary account that would be material to the Company and its Subsidiaries, taken as a whole, and the
accountings for each such fiduciary account are true and correct in all material respects and accurately reflect in all material respects the assets of such fiduciary account. 

Section 4.9     Financial Statements. 

Section 4.9.1    Seller has made available to Buyer: 

  
 12 

 (a) (i) with respect to the First Closing, the consolidated audited financial statements
for the Company for the fiscal year ended December 31, 2014 (and including, as applicable, the notes thereto and the reports of the auditors thereon, a “2014 Audited Financial Statements”), (ii) with respect to the Second
Closing, the consolidated audited financial statements for the Company for the fiscal year immediately preceding the Second Closing (and including, as applicable, the notes thereto and the reports of the auditors thereon, a “Second
Closing Audited Financial Statements”) and (iii) with respect to the Third Closing, the consolidated audited financial statements for the Company for the fiscal year immediately preceding the Third Closing (and including, as
applicable, the notes thereto and the reports of the auditors thereon, a “Third Closing Audited Financial Statements” and each of the 2014 Audited Financial Statements, Second Closing Audited Financial Statements and Third
Closing Audited Financial Statements, an “Audited Financial Statement” and collectively the, “Audited Financial Statements”); 

(b) (i) with respect to the First Closing, the unaudited consolidated balance sheet of the Company as of December 31, 2015 (the
“2015 Interim Balance Sheet”), (ii) with respect to the Second Closing, the unaudited consolidated balance sheet of the Company as of the quarter that immediately preceded the Second Closing (the “Second Closing Interim
Balance Sheet”) and (iii) with respect to the Third Closing, the unaudited consolidated balance sheet of the Company as of the quarter that immediately preceded the Third Closing (the “Third Closing Interim Balance
Sheet” and each of the 2015 Interim Balance Sheet, Second Closing Interim Balance Sheet and Third Closing Interim Balance Sheet, an “Interim Balance Sheet” and collectively, the “Interim Balance Sheets” );
and 
 (c) (i) with respect to the First Closing the unaudited consolidated income statements and cash flows of the Company as of
December 31, 2015 (the “2015 Interim Income Statements”), (ii) with respect to the Second Closing the unaudited consolidated income statements and cash flows of the Company as of the quarter that immediately preceded the Second
Closing (the “Second Closing Interim Income Statements”) and (iii) with respect to the Third Closing the unaudited consolidated income statements and cash flows of the Company as of the quarter that immediately preceded the
Third Closing (the “Third Closing Interim Income Statements” and each of the 2015 Interim Income Statements, Second Closing Interim Income Statements and Third Closing Interim Income Statements, an “Interim Income
Statements” and together with the Interim Balance Sheet, the “Interim Financial Statement” and collectively, the “Interim Financial Statements” ). 

Section 4.9.2    Except as set forth on Section 4.9.2 of Exhibit C Seller’s Disclosure Schedule,
each Audited Financial Statement and Unaudited Financial Statement with respect to a Closing have been prepared in accordance with GAAP consistently applied throughout the periods covered by such Audited Financial Statements and Unaudited Financial
Statements, respectively, and present fairly the consolidated financial position of the respective Acquired Companies as of such dates and the results of operations and cash flows for the respective periods then ended, as applicable, except in the
case of the Unaudited Financial Statements, for year-end audit adjustments and the inclusion of footnote disclosures. 

Section 4.10    Books and Records. The books of account, minute books, stock record books and other records of
the Acquired Companies, all of which have been made available to Buyer, are accurate and complete in all material respects and have been maintained in accordance with sound business practices and an adequate system of internal controls. At the time
of each Closing, all of such books and records will be in the possession of the respective Acquired Company representative. The minute books of each Acquired Company contain accurate and complete records of all meetings held of, and corporate action
taken by, the Acquired Company’s stockholders, directors and directors’ committees, and no such meeting has been held for which minutes have not been prepared and are not contained in such minute books. 

  
 13 

 Section 4.11    Accounts Receivable and Accounts Payable. All
notes and accounts receivable are reflected properly on an Audited Financial Statements, the Unaudited Financial Statements or the accounting records of the Acquired Companies as of the relevant Closing Date and represent or will represent valid
obligations arising from sales actually made or services actually performed in the Ordinary Course of Business. The Company has maintained its accounts receivable and accounts payable in the ordinary course. The Company has incurred accounts payable
in the ordinary course of business and not avoided paying accounts payable in the ordinary course since the last Interim Financial Statement. 

Section 4.12    No Undisclosed Liabilities. 

Section 4.12.1    No Acquired Company has any Liability except for (a) Liabilities accrued or expressly reserved
for in line items in the Audited Financial Statements or Unaudited Financial Statements and (b) Liabilities incurred in the Ordinary Course of Business after the date of the Unaudited Financial Statements that immediately preceded the relevant
Closing. 
 Section 4.12.2    The Acquired Companies do not have any Indebtedness (other than trade credit arising
in the Ordinary Course of Business) at each Closing. 
 Section 4.13    Absence of Certain Changes or
Events. Except as disclosed on Section 4.13 of Exhibit C Seller’s Disclosure Schedule, since the date of the relevant Audited Financial Statements that immediately preceded the relevant Closing, the Acquired Companies have conducted
their operations in the Ordinary Course of Business and there has not been any event or occurrence that has had or would reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, since the date of
the Audited Financial Statements that immediately preceded the relevant Closing, there has not been with respect to any Acquired Company any: 

Section 4.13.1    amendment to its articles of incorporation or bylaws or other comparable charter or organizational
and governing documents (except for changes previously consented and agreed to in writing by Buyer, including but not limited to adding an 80% approval for certain actions); 

Section 4.13.2    change in its authorized or issued capital stock, or issuance, sale, grant, repurchase, redemption,
pledge or other disposition of or Lien on any shares of its capital stock or other voting securities or any securities convertible, exchangeable or redeemable for, or any options, warrants or other rights to acquire, any such securities; 

Section 4.13.3    (i) incurrence of any Indebtedness, (ii) issuance, sale or amendment of any debt
securities or warrants or other rights to acquire any debt securities, guarantee of any debt securities of another person, entry into any Contract to maintain any financial statement condition of another person, (iii) loans, advances or capital
contributions to, or investment in, any other person, other than any Acquired Company outside of the Ordinary Course of Business; 

Section 4.13.4    sale, lease, license, pledge or other disposition of or Lien (other than Permitted Liens) on any of
its properties or assets (other than individual sales for an amount not exceeding $50,000); 

Section 4.13.5    acquisition (i) by merger or consolidation with, or by purchase of all or a substantial
portion of the assets or any stock of, or by any other manner, any business or person or (ii) of any assets that are material to any Acquired Company individually or in the aggregate, except purchases in the Ordinary Course of Business; 

  
 14 

 Section 4.13.6    damage to, or destruction or loss of, any of its
assets or properties with an aggregate value to any Acquired Company in excess of $25,000, whether or not covered by insurance; 

Section 4.13.7    (i) increase in the compensation or fringe benefits of, or payment of any bonus to, any director,
officer, employee or consultant or other independent contractor, (ii) amendment or acceleration of the payment, right to payment or vesting of any compensation or benefits, (iii) payment of any benefit not provided for as of the date of
this Agreement under any Company Benefit Plan, (iv) grant of any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock
based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any Company Benefit Plans or Contracts or awards made thereunder or (v) any action other than in the Ordinary Course of Business to
fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; 

Section 4.13.8    settlement or compromise in connection with any legal proceeding; 

Section 4.13.9    capital expenditure or other expenditure with respect to property or equipment in excess of $50,000
in the aggregate for the Acquired Companies taken as a whole; 
 Section 4.13.10    change in accounting
principles, methods or practices or investment practices, including any changes as were necessary to conform with GAAP; 

Section 4.13.11    change in payment or processing practices or policies regarding inter-company transactions; 

Section 4.13.12    acceleration or delay in the payment of accounts payable or other Liabilities or in the collection
of notes or accounts receivable; 
 Section 4.13.13    effect a recapitalization of the Company or its equity; 

Section 4.13.14    make distributions; 

Section 4.13.15    change, amend, revise or adjust dividend policies; and 

Section 4.13.16    authorization of or Contract by any Acquired Company to take any of the actions described in this
Section 4.11. 
 Section 4.14    Employee Benefit Plans. 

Section 4.14.1    Section 4.12.1 of Exhibit C Seller’s Disclosure Schedule sets forth a complete list of each
“employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and any other material plan, policy, program, practice, agreement, understanding or
arrangement (whether written or oral) providing compensation or other benefits to any current or former director, officer, employee or consultant (or to any dependent or beneficiary thereof of the Acquired Companies), which are maintained, sponsored
or contributed to by the Acquired Companies, or under which the Acquired Companies have any material obligation or liability, including, without limitation, all incentive, bonus, deferred compensation, cafeteria, medical, disability, stock purchase
or equity based compensation plans, policies or programs (each a “Company Benefit Plan”). 

  
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 Section 4.14.2    Each Company Benefit Plan has been administered in all
material respects in accordance with its terms and all applicable Laws, including ERISA and the Code. Each Acquired Company has performed all of its obligations under each Company Benefit Plan, in each case in all material respects in accordance
with the terms of such Company Benefit Plan and in material compliance with all applicable Laws, including ERISA and the Code. 

Section 4.14.3    Except as otherwise specifically provided under this Agreement, the consummation of the
transactions contemplated by this Agreement (either alone or in conjunction with any other event) will not cause accelerated vesting, payment or delivery of, or increase the amount or value of any payment or benefit under or in connection with any
Company Benefit Plan or constitute a “deemed severance” or “deemed termination” under any Company Benefit Plan otherwise with respect to, any director, officer, employee, or former director, former officer or former employee of
the Acquired Companies that would be a material liability of the Acquired Companies after Closing. 

Section 4.15    Labor and Other Employment Matters. 

Section 4.15.1    The Acquired Companies are, and have been for each of the three (3) years preceding a Closing,
in compliance in all material respects with all applicable Laws respecting labor, employment, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety, plant closings, and wages and hours. None
of the Acquired Companies is or has been a party to a collective bargaining agreement and no labor union has been certified to represent any employee of the Acquired Companies, or has applied to represent or to the Knowledge of Seller is attempting
to organize so as to represent such employees. In the three (3) years prior to each Closing Date there has been no, and there is no pending or, to the Knowledge of Seller, threatened, work stoppage, slowdown or labor strike against any of the
Acquired Companies. 
 Section 4.15.2    There is no Proceeding pending or, to the Knowledge of Seller, threatened
against or affecting any Acquired Company relating to the alleged violation by any Acquired Company (or its directors or officers) of any Law pertaining to labor relations or employment matters. 

Section 4.16    Material Contracts. 

Section 4.16.1    Set forth in Section 4.16.1 of Exhibit C Seller’s Disclosure Schedule is a correct
and complete list of each Acquired Company’s Material Contracts. 
 Section 4.16.2    Except as set forth in
Section 4.16.1 of Exhibit C Seller’s Disclosure Schedule, each Material Contract is legally valid and binding on the respective Acquired Company party thereto and each other party thereto, and is in full force and effect, except as
may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity regardless of whether
considered in a proceeding in equity or at law, concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which any proceeding therefor may be brought. Each Acquired Company has performed all
obligations required to be performed by it prior to the date hereof under each Material Contract. To the Knowledge of Seller, each other party to each Material Contract has performed in all material respects all obligations required to be performed
by it under such Material Contract prior to the date hereof. None of the Acquired Companies has received notice of any material violation or default under (or any condition which with the passage of time or the giving of notice would cause such a
material violation of or default under) any Material Contract. 

  
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 Section 4.16.3    No event has occurred or circumstance exists that
(with or without notice, lapse of time or both) would constitute a breach or default by any Acquired Company or, to the Knowledge of Seller, by any such other party or permit termination, cancellation, acceleration, suspension or modification of any
obligation or loss of any benefit under, result in any payment becoming due under, result in the imposition of any Liens on any shares of any Acquired Company or any of the properties or assets of any Acquired Company under, or otherwise give rise
to any right on the part of any person to exercise any remedy or obtain any relief under, any Material Contract, nor has any Acquired Company given or received notice or other communication alleging the same. 

Section 4.16.4    None of the Material Contracts is under negotiation (nor has written demand for any renegotiation
been made), no party has repudiated any portion of any Material Contract and the Seller has no Knowledge that any party to a Material Contract does not intend to renew it at the end of its current term. 

Section 4.17    Litigation. None of the Seller nor any of the Acquired Companies is a party to or subject of
any, and there are no pending or, to the Knowledge of Seller, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against Seller or the Acquired Companies.
There is no injunction, order, judgment, regulatory restrictions (other than those of general application that apply to similarly situated banks) or decrees imposed upon Seller or the Acquired Companies, or the assets of the Acquired Companies. 

Section 4.18    Environmental, Health and Safety Matters. 

Section 4.18.1    Each Acquired Company is, and for the two (2) years prior to each Closing, has been, in
compliance in all material respects with applicable Environmental Laws and Occupational Safety and Health Laws. 

Section 4.18.2    None of the Acquired Companies has received any written notice, demand, letter or claim alleging
that such Acquired Company is in violation of, or liable under, any Environmental Law or Occupation Safety and Health Law. 

Section 4.19    Intellectual Property. 

Section 4.19.1    Except as set forth in Section 4.19.1 of Exhibit C Seller’s Disclosure Schedule,
(a) the Acquired Companies own, or are licensed or otherwise possess rights to use, all Intellectual Property used by the Acquired Companies as of the date hereof and on each Closing Date (collectively, the “Company Intellectual
Property”) in the manner that it is currently used by the applicable Acquired Company, (b) neither Company nor any of its Subsidiaries has received written notice from any third party alleging any interference, infringement,
misappropriation or violation of any Intellectual Property rights of any third party and, neither Company nor any of its Subsidiaries has interfered in any respect with, infringed upon, misappropriated or violated any Intellectual Property rights of
any third party; (c) to the Knowledge of Seller, no third party has interfered with, infringed upon, misappropriated or violated any Company Intellectual Property; (d) neither Company nor any of its Subsidiaries licenses to, or has entered
into any exclusive agreements relating to any Company Intellectual Property with, third parties, or permits third parties to use any Company Intellectual Property rights; (e) no Acquired Company owes any material royalties or payments to any
third party for using or licensing to others any Company Intellectual Property and (f) neither the Company nor any of its Subsidiaries is a party to any agreement to indemnify any Person against a claim of infringement of or misappropriation by
any Company Intellectual Property. 

  
 17 

 Section 4.19.2    Except as set forth in Section 4.19.2 of
Exhibit C Seller’s Disclosure Schedule, none of the Acquired Companies has received written notice within two (2) years of a Closing Date that any of the Acquired Companies is infringing any Intellectual Property right of any person.

 Section 4.19.3    Each Acquired Company has obtained from each current and former employee, consultant and other
independent contractor with access to Company Intellectual Property an executed proprietary information and inventions assignment agreement (containing no exceptions or exclusions from the scope of its coverage). To the Knowledge of Seller, none of
those current or former employees, consultants or other independent contractors has violated any of those Contracts. 

Section 4.19.4    The Acquired Companies use commercially reasonable efforts to maintain and protect the Intellectual
Property owned by them that is material to the businesses of the Acquired Companies. 

Section 4.20    Agreements with Regulatory Agencies. Except as is not material, neither the Company nor any
Company Subsidiary, and none of Seller with respect to the business of the Acquired Companies, is subject to any cease-and-desist or other order or enforcement action
issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or since five (5) years
prior to the First Closing and two (2) years prior to the Second Closing and Third Closings, respectively, has been ordered to pay any civil penalty by, or is a recipient of any supervisory letter from, or has outstanding any board resolutions
adopted at the request or suggestion of any Governmental Entity that restricts the conduct of its business or that relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business
(each, whether or not set forth in the Seller’s Disclosure Schedule, a “Company Regulatory Agreement”), nor has the Company nor any of the Company Subsidiaries been advised since five (5) years prior to the First Closing
and two (2) years prior to the Second Closing and Third Closings, respectively, by any Governmental Entity that it is considering issuing or requiring any such Company Regulatory Agreement. 

Section 4.21    Investment Securities. Except as would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect, (a) each of the Company and the Company Subsidiaries has good and marketable title to all securities held by it (except securities sold under repurchase agreements or held in any fiduciary or agency
capacity) free and clear of any Lien, except to the extent such securities are pledged in the Ordinary Course of Business consistent with prudent business practices to secure obligations of the Company or any of the Company Subsidiaries and except
for such defects in title or Liens that would not be material to the Company and the Company Subsidiaries and (b) such securities are valued on the books of the Company and its Subsidiaries in accordance with GAAP. 

Section 4.22    Real Property and Assets. 

Section 4.22.1    Except as set forth in Section 4.22 of Exhibit C Seller’s Disclosure Schedule, the
personal property of the Acquired Companies will, as of the Closing Date, constitute all of the personal property required to conduct the Acquired Companies’ businesses in all material respects as conducted on the date hereof. Each Acquired
Company has good and marketable title to, or in the case of leased assets, valid leasehold interests in, all of its assets, free and clear of any Liens except Permitted Liens. 

  
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 Section 4.22.2    Each Acquired Company’s personal property and the
structural elements of the Leased Real Property are in all material respects in good operating condition and repair, ordinary wear and tear and deferred maintenance excepted. 

Section 4.23    Taxes. Except as set forth on Section 4.23 of Exhibit C Seller’s
Disclosure Schedule: 
 Section 4.23.1    All Income Tax and other material Tax Returns required to be filed
either separately or as a member of an Affiliated Group by or with respect to the Company and the Company Subsidiaries have been timely filed (taking into account applicable extensions of time to file) with the appropriate Governmental Entity and
all such Tax Returns are complete and accurate in all respects. All Taxes due and owing (whether or not shown or required to be shown on any Tax Returns) have been paid. 

Section 4.23.2    All material Taxes required to be withheld by the Company and the Company Subsidiaries have been
withheld and, to the extent required by Law, timely paid to the appropriate Governmental Entity. 

Section 4.23.3    No deficiency for any amount of Taxes has been proposed, asserted or assessed in writing by any
Governmental Entity against any of the Company or the Company Subsidiaries that remains unpaid, except for deficiencies that are being contested in good faith by appropriate proceedings and for which adequate reserves has been taken. There are no
ongoing or pending audits, examinations or other administrative or judicial proceedings with respect to any Taxes of the Company or the Company Subsidiaries. There are no waivers or extensions of any statute of limitations currently in effect with
respect to Taxes of the Company or the Company Subsidiaries. 
 Section 4.23.4    There are no material Liens for
Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company or the Company Subsidiaries. 

Section 4.23.5    None of the Company or the Company Subsidiaries is a party to or has any obligation under any Tax
sharing, Tax indemnity, Tax allocation or similar agreement or arrangement. 
 Section 4.23.6    No claim has been
made by an authority in a jurisdiction where the Company or any Company Subsidiaries do not file Tax Returns that they are or may be subject to taxation by that jurisdiction. 

Section 4.23.7    The Seller has made available to the Buyer correct and complete copies of all applicable income Tax
Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Company or any Company Subsidiaries filed or received since December 31, 2011. 

  
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 Section 4.23.8    Neither the Company or any Company Subsidiaries are a
party to any agreement, contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of any “excess parachute payment” within the meaning of Code §280G (or any corresponding provision
of state, local or foreign Tax law). The Seller is a United States person as defined in Code § 7701(a)(30). The Company and each Company Subsidiary has disclosed on its federal income Tax Returns all positions taken therein that could give rise
to a substantial understatement of federal income Tax within the meaning of Code §6662. Neither the Company nor any Company Subsidiary (a) has been a member of an Affiliated Group filing a combined, consolidated, or unitary Tax Return
(other than a group the common parent of which was the Seller) or (b) has any liability for the Taxes of any Person (other than the Company or any Company Subsidiary) under Treasury Regulation
§1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise. Neither the Company nor any Company Subsidiary has ever been, nor will they
be at a Closing, a United States Real Property Holding Corporation within the meaning of Code §897(c)(2) during the applicable period specified in Code §897(c)(1)(A)(ii). 

Section 4.23.9    The unpaid Taxes of the Company and its Subsidiaries (a) did not, as of the date of the
immediately preceding Interim Financial Statements, exceed the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the immediately
preceding Interim Financial Statements (rather than in any notes thereto) and (b) do not exceed that reserve as adjusted for the passage of time through the immediately preceding Closing Date in accordance with the past custom and practice of
the Company and the Company Subsidiaries in filing their Tax Returns. Since the date of the immediately preceding Interim Financial Statements, neither the Company nor any Company Subsidiary has incurred any liability for Taxes outside the ordinary
course of business. 
 Section 4.23.10    Neither the Company nor any Company Subsidiary will be required to
include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the relevant Closing Date as a result of any: (a) change in method of accounting for a taxable period
ending on or prior to the Closing Date; (b) “closing agreement” as described in Code §7121 (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date;
(c) intercompany transactions occurring at or prior to a Closing or any excess loss account in existence at a Closing described in Treasury Regulations under Code §1502 (or any corresponding or similar provision of state, local or foreign
income Tax law); (d) installment sale or open transaction disposition made on or prior to a relevant Closing Date; or (e) prepaid amount received on or prior to a relevant Closing Date. 

Section 4.23.11    Neither the Company nor any Company Subsidiary has distributed stock of another person, or has had
its stock distributed by another person, in a transaction that was purported or intended to be governed in whole or in part by Code §355 or §361. 

Section 4.23.12    Neither the Company nor any Company Subsidiary are, nor at any time have been, subject to
(i) the dual consolidated loss provisions of Section 1503(d) of the Code, (ii) the overall foreign loss provisions of Section 904(f) of the Code or (iii) the recharacterization provisions of Section 952(c)(2) of the Code. 

Section 4.23.13    Neither the Company nor any Company Subsidiary has entered into any “reportable
transaction” as defined in Treasury Regulation 1.6011-4. 

Section 4.23.14    Neither the Company nor any Company Subsidiary has agreed, and is not required, to make, any
adjustment under section 481(a) of the Code, and no Governmental Entity has proposed in writing any such adjustment or change in accounting method. 

Section 4.23.15    Buyers shall not be liable or responsible for any Taxes of the Seller with respect to the
Purchased Common Stock. 

  
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 Section 4.24    Certain Business Relationships With Affiliates.
Except as set forth in Section 4.22 of Exhibit C Seller’s Disclosure Schedule, (a) no Acquired Company is, or has in the two (2) years prior to a Closing been, a party to any contract with any Seller or any
of Seller’s affiliates, or any current director, officer or employee of any of the Acquired Companies, (b) none of the current directors, officers of employees of the Acquired Companies is, or has in the two (2) years prior to a
Closing been, a party to any contract with a Seller or any Seller’s affiliates (except for the Acquired Companies), (c) neither Seller nor any of their affiliates (except for the Acquired Companies) provide material services to any Acquired
Company or (d) none of the Acquired Companies provides material services to Seller or any of their affiliates. 

Section 4.25    Investment Advisor and Broker Dealer. No Acquired Company is an investment advisor or broker
dealer. 
 Section 4.26    Insurance. All insurance policies of the Acquired Companies have been and are in
full force and effect, all insurance premiums due thereon have been paid in full when due, and no notice of cancellation or termination has been issued or received by any of the Acquired Companies. Excluding insurance policies that have expired and
been replaced in the Ordinary Course of Business, no insurance policy has been canceled within two (2) years of a Closing and, to the Knowledge of Seller no threat has been made to cancel, or to materially increase the premium with respect to,
any insurance policy of any of the Acquired Companies during such period. 
 Section 4.27    Brokers. No
broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or based upon arrangements made by or on behalf of Seller or the Acquired
Companies. 
 Section 4.28    Capital Reserves. The Company has the Required Minimum Capital Reserves in the
accounts of the Company. 
 Section 4.29    Indebtedness. Prior to the First Closing, the only liabilities
the Company has are listed on the financial statements provided for closing. 
 Section 4.30    Rights of First
Refusal and Company Consent. Prior to each Closing, Seller shall have received written waivers of any rights of first refusal with respect to or rights to purchase Seller’s Stock. Seller shall have received any consents of the Company that
may be required, if any. 
 Section 4.31    Purchase of Other Stockholders’ Equity. Prior to the First
Closing, Seller shall have entered into transactions to purchase all of the capital stock of the Company that any other stockholders of the Company hold or own in the Company. 

Section 4.32    Disclosure. No representation or warranty of Seller in this Agreement and no statement in the
Seller’s Disclosure Schedule contains any material untrue statement or omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading. No notice given by
Seller pursuant to Section 6.4 will contain any untrue statement or omit to state a material fact necessary to make the statements therein or in this Agreement, in light of the circumstances in which they were made, not
misleading. Seller has no Knowledge of any fact or circumstance that has specific application to any Acquired Company (other than general economic or industry conditions) that could constitute a Material Adverse Effect that has not been set forth in
this Agreement or the Seller’s Disclosure Schedule. 

  
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 Article V 

Representations and Warranties of Buyer 

Except as set forth in the Disclosure Schedule delivered by Buyer to Seller concurrently with the execution of this Agreement and dated as of
the date of this Agreement (the “Buyer Disclosure Schedule”) (it being agreed that any matter disclosed pursuant to any section of the Buyer Disclosure Schedule shall be deemed disclosed for purposes of any other section of the
Buyer Disclosure Schedule to the extent the applicability of the disclosure to such section is reasonably apparent), Buyer hereby represents and warrants to Seller as of the date hereof and as of each Closing Date as follows: 

Section 5.1     Organization and Qualification. Buyer is a bank holding company duly organized, validly
existing and in good standing under the laws of Guam. Buyer has the requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. Buyer is duly qualified or licensed to do business,
and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so
qualified, licensed or in good standing that would not reasonably be expected to have a Material Adverse Effect. 

Section 5.2     Authority; Enforceability. Buyer has the requisite corporate power and authority to execute
and deliver this Agreement and the Ancillary Stockholders’ Agreement, to perform its obligations hereunder and under each such Ancillary Stockholders’ Agreement and to consummate the transactions contemplated by this Agreement that are to
be consummated by Buyer. The execution and delivery of this Agreement and the Ancillary Stockholders’ Agreement by Buyer and the consummation by Buyer of the transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action, and no other corporate proceeding on the part of Buyer is necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Buyer and,
assuming due authorization, execution and delivery by Seller, constitutes a legally valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general principles of equity. Upon the execution and delivery by Buyer of the
Ancillary Stockholders’ Agreement, the Ancillary Stockholders’ Agreement will, assuming due authorization, execution and delivery by Seller, constitute legally valid and binding obligations of Buyer, enforceable against Buyer in accordance
with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors and by general
principles of equity. 
 Section 5.3     No Conflict; Required Filings and Consents. 

Section 5.3.1    The execution and delivery of this Agreement does not, and the performance of this Agreement and the
consummation of the transactions contemplated hereby, by Buyer will not, (a) conflict with or violate any provision of Buyer’s organizational and governing documents (b) assuming that all consents, approvals, authorizations and
permits described in Section 5.3.2 have been obtained and all filings and notifications described in Section 5.3.2 have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Law
applicable to Buyer or by which any property or asset of Buyer is bound or (c) require any consent or approval under, result in any breach of, or any loss of or any benefit under, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any right of termination, acceleration or cancellation of, or result in the creation of a Lien or other encumbrance on any property or asset of Buyer pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, permit or other legally binding obligation to which Buyer is party. 

  
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 Section 5.3.2    The execution and delivery of this Agreement by Buyer
does not, and the performance of this Agreement by Buyer will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except as may be set forth on Section 5.3.2 of the
Buyer Disclosure Schedule. 
 Section 5.4     Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or based upon arrangements made by or on behalf of Buyer or any affiliate of Buyer. 

Section 5.5     Financing. Buyer will have available to it at each Closing on an unconditional basis, all
funds necessary to consummate the transactions contemplated hereby and to perform its obligations hereunder. 

Section 5.6    Securities. Buyer hereby acknowledges that the Company’s Common Stock are not registered
under the Securities Act of 1933, as amended, or registered or qualified for sale under any applicable securities Law of the United States or any other country or any state or province of the United States or any other country and cannot be resold
without registration thereunder or exemption therefrom. Buyer has sufficient knowledge and experience in financial and business matters to enable it to evaluate the risks of investment in the Company’s Common Stock and has the ability to bear
the economic risks of such investment. 
 Article VI 

Covenants 

Section 6.1    Cooperation; Consents. Seller shall cause the Acquired Companies to and Buyer shall do all
things reasonably practicable and use commercially reasonable efforts to fulfill the conditions precedent to the other Party’s obligations under this Agreement; provided, that neither Buyer, Seller nor the Acquired Companies shall be
required to make or cause to be made any payment to any third party to secure any Seller Consents. Without limiting the generality of the foregoing, the Parties shall cooperate with, and do all things reasonably requested to assist, one another:
(a) in the prompt preparation and filing of any filings required by Law; (b) in determining whether action by or in respect of, or filing with, any Governmental Entity is required, proper or advisable or any actions, Seller Consents or
waivers are required to be obtained from persons to any Material Contract, in connection with the transactions contemplated by this Agreement; and (c) in seeking to obtain any such actions, Seller Consents or waivers or to make any such filings
in a timely fashion. The Parties shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from any other applicable Governmental Entity and shall comply promptly with any such
inquiry or request and shall promptly provide any supplemental information requested in connection with the filings made hereunder pursuant to applicable Law. Any such supplemental information shall be in substantial compliance with the requirements
of the applicable Law. Each Party shall use its commercially reasonable efforts to obtain expiration or termination of the waiting period under Law or any Seller Consent required under such other applicable Law for the consummation of the
transactions contemplated by this Agreement; provided, however, that Seller and Buyer acknowledge and agree that “commercially reasonable efforts” shall in no event include the sale of any assets or divestitures by Seller or Buyer.
Filing fees required in connection with any filings and fees required to be paid to any other Governmental Entity shall be borne by Seller. All other fees, expenses and disbursements incurred in connection with the matters referred to in this
Section 6.1 shall be borne by Seller. In carrying out their obligations under this Section 6.1, each of the Parties shall keep the other Party fully informed of all communications with any
Governmental Entity and shall not submit or otherwise provide any information to such Governmental Entity without first having provided a reasonable opportunity to the other Party to comment upon such information and to participate in any meetings,
telephone calls or other communications with such Governmental Entity. 

  
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 Section 6.2    Access. Subject to the terms of the
Confidentiality Agreement, after receiving written request from Buyer, Seller shall cause the Acquired Companies to afford Buyer reasonable access, at reasonable times during normal business hours, to the personnel, premises, properties, books and
records, and other documents and financing, operating and other data of the Company and Company Subsidiaries that Buyer may reasonably request; provided, however, that (a) any such access shall be conducted in such a manner as not
to interfere unreasonably with the operation of the business conducted by the Company or any Company Subsidiary; and (b) neither Seller nor the Company shall be required to (or cause any Company Subsidiary to) confer, afford such access or
furnish such copies or other information to the extent that doing so would result in the loss of attorney-client privilege (provided, that the Company shall use its reasonable efforts to allow for such access or disclosure in a manner that
does not result in a loss of attorney-client privilege). 
 Section 6.3    Public Announcements;
Confidentiality. 
 Section 6.3.1    The Parties shall consult with each other before issuing any press release
or otherwise making any public statements with respect to this Agreement or the transactions contemplated by this Agreement and, except as may be required by applicable Law or any securities exchange on which the securities of a Party or an
affiliate are listed, neither Party shall issue any such press release or make any such public statement without the prior written approval of the other Party (which approval will not be unreasonably withheld, delayed or conditioned).
Notwithstanding the foregoing or any contrary term contained in the Confidentiality Agreement, except as may be required by applicable Law or any securities exchange on which the securities of a Party or an affiliate are listed and except as
provided in Section 6.3.2, neither Party shall disclose the terms of this Agreement without the prior written approval of the other Party (which approval will not be unreasonably withheld, delayed or conditioned). 

Section 6.3.2    A Party may disclose the terms of this Agreement without the prior written approval of the other
Party to (a) its respective affiliates and its and their respective directors, officers, employees, agents, consultants and other advisors and representatives, (b) in the case of Buyer only, to providers or proposed providers of debt or
equity financing in connection with any financing of the transactions contemplated by this Agreement, and the respective directors, officers, employees, agents, consultants and other advisors and representatives of such financing providers and
proposed financing providers, in the case of (a) and (b) in each case to the extent reasonably required to facilitate the negotiation, execution, delivery or performance of this Agreement and the Ancillary Stockholders’ Agreement or the
financing of the transactions contemplated by this Agreement (the persons set forth in (a) and (b) being, collectively, the “Restricted Persons”), and (c) in the case of Buyer only, any subsequent acquirer or proposed
acquirer of the issued share capital of Buyer or of all or substantially all of the businesses of Buyer. Each Party will advise its respective Restricted Persons with respect to the confidentiality obligations under this Section 6.3 and
will be responsible for any breach or violation of such obligations by its Restricted Persons. 

Section 6.3.3    From and after each Closing, Seller will, and will cause each of its Restricted Persons to, maintain
the confidentiality of, and not use for their own benefit or the benefit of any other person, the Confidential Information, except as may be required by applicable Law or any securities exchange on which the securities of Seller or any of its
Restricted Persons are listed. 

  
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 Section 6.3.4    If a party or any of its respective Restricted Persons
become compelled by applicable Law to make any disclosure that is prohibited or otherwise restricted by this Agreement, then such party will (a) give the other party immediate written notice of such requirement, (b) consult with and assist
the other party in obtaining an injunction or other appropriate remedy to prevent such disclosure and (c) use its commercially reasonable efforts to obtain a protective order or other reliable assurance that confidential treatment will be
accorded to any information so disclosed. Subject to the previous sentence, the disclosing party or such Restricted Persons may make only such disclosure that, in the written opinion of its counsel, in form and substance reasonably acceptable to the
other party, it is legally compelled or otherwise required to make to avoid standing liable for contempt or suffering other material penalty. 

Section 6.4    Notice of Certain Matters. From the date hereof and on each October 1 and April 1
through the Third Closing, each Party (the “Disclosing Party”), upon obtaining knowledge of such matter, shall promptly give notice to the other Party of (a) the occurrence, or failure to occur of any event which occurrence or
failure would be likely to cause any representation or warranty of the Disclosing Party contained in this Agreement to be untrue or inaccurate in a manner reasonably likely to result in the failure of a condition set forth in Article VII, and
(b) any failure of the Disclosing Party to comply with or satisfy any covenant or agreement to be complied with or satisfied by it under this Agreement in a manner reasonably likely to result in the failure of a condition set forth in
Article VII. From time to time prior to the Closing, Seller shall have the right to supplement or amend the Seller’s Disclosure Schedule with respect to any event or matter arising or occurring after the date of this Agreement (the
“Supplemental Disclosures”). In any such event, unless this Agreement is terminated pursuant to Article VIII prior to the Closing, each Supplemental Disclosure shall be deemed to have modified and qualified the
representations and/or warranties made by Seller, insofar only as such representations and/or warranties are made as of the relevant Closing Date. No Supplemental Disclosure or other notice under this Section 6.4 shall be
effective to modify or qualify any representation and/or warranty made by Seller as of the date of this Agreement or any preceding Closing Date and the rights of Buyer in respect of such representations and/or warranties shall survive the relevant
Closing. Notwithstanding the foregoing, no notice under this Section 6.4 shall be deemed to have modified any representation and/or warranty or cured any breach of covenant for purposes of determining the satisfaction of
the conditions set forth in Article VII or a Party’s right to terminate this Agreement pursuant to Article VIII. 

Section 6.5    Investigation by Buyer. Seller acknowledge that Buyer has entered into this Agreement on the
basis of and in reliance upon the representations and warranties made by Seller in this Agreement and has been induced by them to enter into this Agreement. None of the representations and warranties made by Seller in this Agreement shall be deemed
in any way modified or discharged by reason of any review, analysis, investigation or inquiry made or to be made by or on behalf of Buyer. 

Section 6.6    ASC Philippines. Seller shall bear and pay all costs associated with dissolution and
liquidation of ASC Philippines. 
 Article VII 

Closing Conditions 

Section 7.1    Conditions to Obligations of Each Party Under This Agreement. The respective obligations of
each Party to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction at or prior to each Closing of the following conditions, any or all of which may be waived, in whole or in part, to the extent permitted by
Section 11.14 and applicable Law: 

  
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 Section 7.1.1    No Order. No court of competent jurisdiction or
other Governmental Entity shall have enacted, issued, promulgated, enforced or entered any Law, order, decree, judgment, injunction or other ruling (whether temporary, preliminary or permanent), and there must not have been commenced or threatened
any proceeding, in each case that prevents or prohibits, or could prevent or prohibit, consummation of the transactions contemplated by this Agreement; provided, however, that the condition in this Section 7.1.1 shall not
be available to any Party whose failure to fulfill its obligations pursuant to Section 6.1 has been the primary cause of, or has primarily resulted in, such order, decree, judgment, injunction or other ruling. 

Section 7.1.2    Governmental Approvals. All actions by or in respect of or filings with any Governmental Entity
required to permit the consummation of a Closing, if any, shall have been obtained, and all filings required by Law shall have been made and any required waiting period thereunder shall have expired or been earlier terminated. 

Section 7.2    Additional Conditions to Obligations of Buyer. The obligations of Buyer to consummate the
transactions contemplated by this Agreement are also subject to the satisfaction at or prior to each Closing of the following conditions, any or all of which may be waived by Buyer, in whole or in part, to the extent permitted by
Section 11.14 and applicable Law: 
 Section 7.2.1    Representations and
Warranties. Each of the representations and warranties of Seller set forth in this Agreement shall be true and correct at and as of the date of this Agreement and at and as of each Closing Date in all respects. Buyer shall have received a
certificate of Seller, executed by a duly authorized officer of Seller, to that effect. 

Section 7.2.2    Agreements and Covenants. Seller shall have performed or complied in all material respects
with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the Closing. Buyer shall have received a certificate of Seller to that effect. 

Section 7.2.3    Authorizing Resolutions. If any Seller is an entity, such Seller shall have delivered to
Buyer a certified copy of the minutes of a duly convened and held meeting of the directors, managers or similar authority of such Seller or a duly constituted committee of that board resolving to approve and effect the transactions contemplated by
this Agreement. 
 Section 7.2.4    Board Approval. Prior to each Closing, Buyer shall receive the approval
of the board of the directors of the Buyer approving the transactions contemplated by this Agreement to take place at each Closing. 

Section 7.2.5    Consents. Each of the consents listed in Section 7.2.5 of the Seller’s
Disclosure Schedule must have been obtained and must be in full force and effect. 
 Section 7.2.6    No
Material Adverse Effect. On each Closing Date, there must not have been any Material Adverse Effect. 

Section 7.2.7    Stockholders Agreement. A stockholders agreement duly executed by the stockholders, including
the Buyer, of the Company (“Stockholders Agreement”), in accordance with the terms attached hereto as Exhibit “A”. 

  
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 Section 7.2.8    Indebtedness. All Indebtedness, other than trade
credit arising in the Ordinary Course of Business, of the Acquired Companies existing prior to the First Closing has been and will be paid off and terminated. 

Section 7.2.9    ASC Philippines. The Company shall have dissolved and liquidated ASC Philippines, a wholly
owned subsidiary of ASC, prior to the First Closing. In addition, the Company shall have in place agreements that provides that that the Seller shall bear all cost and expense associated with such dissolution and liquidation, in Buyer’s sole
discretion. 
 Section 7.2.10    Key Management. All key management, as determined by Buyer in its sole
discretion, shall be employed by the Company. Donald, Clark, Gabrielle Bamba, Candy Okuhama and David John shall have entered into employment agreements with the Company. 

Section 7.2.11    Directors. Buyer shall nominate a member to the board of directors of the Company to be
appointed to the board of directors of the Company concurrently with the First Closing. 
 Section 7.2.12    Due
Diligence. Buyer has completed and is satisfied, in its sole discretion, with its due diligence with the Company. 

Section 7.2.13    Rights of First Refusal. Any rights of first refusal or restrictions on transfer with
respect to Seller’s Stock shall have been waived and delivered to Buyer. 
 If the conditions in this Section 7.2 are not
satisfied and the Second Closing does not take place due to the failure of such conditions with respect to the Second Closing, Buyer may still effectuate the transactions contemplated by the Third Closing pursuant to the terms of this Agreement or
elect to terminate this Agreement pursuant to Article VIII. 
 Section 7.3    Additional Conditions to
Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement are also subject to the satisfaction at or prior to each Closing of the following conditions, any or all of which may be waived by
Seller, in whole or in part, to the extent permitted by Section 11.14 and applicable Law: 

Section 7.3.1    Representations and Warranties. Each of the representations and warranties of Buyer set forth
in this Agreement shall be true and correct at and as of the date of this Agreement and at and as of each Closing Date in all respects. Seller shall have received a certificate of Buyer, executed by an authorized officer of Buyer, to that effect.

 Section 7.3.2    Agreements and Covenants. Buyer shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the Closing. Seller shall have received a certificate of Buyer, executed by an authorized officer of Buyer, to that effect.

 Section 7.3.3    Closing Payments. Buyer shall have made (or shall have caused to be made) the payments
required to be made pursuant to Section 3.1. 
 Section 7.3.4    Stockholders Agreement. A
Stockholders Agreement duly executed by the stockholders, including the Seller, of the Company. 
 If the conditions in this
Section 7.3 are not satisfied and the Second Closing does not take place due to the failure of such conditions with respect to the Second Closing, Seller may still effectuate the transactions contemplated by the Third
Closing pursuant to the terms of this Agreement or elect to terminate this Agreement pursuant to Article VIII. 

  
 27 

 Article VIII 

Termination, Amendment and Waiver 

Section 8.1    Termination. This Agreement may be terminated at any time prior to the Third Closing by either
the Seller or the Buyer, in their sole discretion. 
 Section 8.2    Effect of Termination. In the event of
termination of this Agreement by either Seller or Buyer as provided in Section 8.1, this Agreement shall forthwith become void and of no further force and effect whatsoever and there shall be no liability or obligation on
the part of Seller or Buyer or their respective affiliates, subsidiaries or Representatives with respect to this Agreement, except (a) with respect to Section 6.3, this Section 8.2 and
Article XI which shall survive any termination or expiration of this Agreement, (b) with respect to any liabilities or damages incurred or suffered by a Party as a result of the willful and material breach by the other
Party of any of its representations, warranties, covenants or other agreements set forth in this Agreement or (c) with respect to any liabilities or damages incurred or suffered by a Party as a breach by the other Party of any of its
representations, warranties, covenants or other agreements set forth in this Agreement with respect to a Closing that was previously consummated. In addition, nothing in this Section 8.1 shall limit or prohibit any Party
from seeking, receiving and enforcing specific performance pursuant to Section 11.12 of this Agreement 

Article IX 
 Tax Matters

 Section 9.1    Transfer Taxes. All Transfer Taxes shall be paid 50% by Buyer and 50% by Seller.
Seller and Buyer shall cooperate in preparing and timely filing all Tax Returns and other documentation relating to such Transfer Taxes as may be required by applicable Law. 

Article X 

Indemnification 

Section 10.1    Survival of Representations and Warranties and Covenants. To the extent that the
representations, warranties, agreements and covenants of the Parties contained in this Agreement are to survive the Closing, they shall survive for the applicable respective periods set forth in this Section 10.1 (each a
“Survival Period”), and any and all claims and causes of action for indemnification under this Article X arising out of the inaccuracy or breach of any representation, warranty, agreement or covenant of a Party must be made
prior to the termination of the applicable Survival Period. The Parties agree that all of the representations, warranties, agreements and covenants of the Parties contained in this Agreement and any and all claims and causes of action for
indemnification under this Article X shall survive as follows: 
 Section 10.1.1    all representations and
warranties of the Parties shall survive until the date falling eighteen (18) months after a Closing Date; provided, however, that (a) any Seller’s Title, Authorization and Brokers’ Warranty and representations and
warranties set forth in Sections 4.23, 4.26 and 4.27 shall survive indefinitely, (b) any fraud or intentional misrepresentation shall survive indefinitely and (c) the representations and warranties set forth in
Sections 4.12, 4.13, 4.16 and 4.21 shall survive until the expiration of the applicable stature of limitations; 

  
 28 

 Section 10.1.2    all covenants, agreements and obligations which by
their terms do not contemplate performance after a Closing, shall terminate at the applicable Closing Date and shall not survive a Closing; and 

Section 10.1.3    all covenants, agreements and obligations which by their terms contemplate performance after a
Closing and expire upon a date certain shall survive until such date certain, and those which do not expire upon a date certain shall survive a Closing in accordance with their terms indefinitely. 

Notwithstanding the foregoing (a) any obligations to indemnify, defend and hold harmless pursuant to Section 10.2 shall not
terminate with respect to any item as to which the Indemnified Party shall have, before the expiration of the applicable Survival Period, previously made a claim by delivering a notice of such claim (stating in reasonable detail, to the extent known
by the Indemnified Party, the basis of such claim) to the Indemnifying Party in accordance with Section 10.3 and (b) this Section 10.1 shall not limit any covenant or agreement of the Parties
which contemplates performance after a Closing. 
 Section 10.2    Obligation to Indemnify. 

Section 10.2.1    Subject to the limitations set forth in this Article X, if a Closing occurs, Seller agree to
jointly and severally indemnify, defend and hold harmless Buyer and its directors, officers, employees, affiliates, successors, permitted assigns, agents and representatives (collectively, the “Buyer Indemnitee”), from and against
all Losses resulting from: 
 Section 10.2.1.1    any inaccuracy in or breach of any of the representations and
warranties in Article IV; 
 Section 10.2.1.2    any breach of any of the covenants and agreements of
Seller contained in this Agreement, 
 Section 10.2.1.3    any cost and expense incurred by the Buyer or the
Company with respect to the dissolution or liquidation of ASC Philippines; and 
 Section 10.2.1.4    any
proceedings, demands or assessment incidental to any of the matters set forth in Sections 10.2.1.1 or 10.2.1.2 above. 
 For
purposes of this Section 10.2.1, any inaccuracy in, or breach of any representation or warranty, or nonfulfillment, nonperformance or other breach of any covenant or agreement by Seller, and the amount of any Losses
associated therewith, will be determined without regard to any materiality, material adverse effect or similar qualification. 

Section 10.2.2    Subject to the limitations set forth in this Article X, if the Closing occurs, Buyer agrees
to indemnify, defend and hold harmless Seller and its stockholders, directors, officers, employees, affiliates, heirs, successors, permitted assigns, agents and representatives (collectively, the “Seller Indemnitee”), from and
against all Losses resulting from: 
 Section 10.2.2.1    any inaccuracy in or breach of any of the
representations and warranties contained in Article V; 
 Section 10.2.2.2    any breach of any of the
covenants and agreements of Buyer contained in this Agreement; and 

  
 29 

 Section 10.2.2.3    any proceedings, demands or assessment incidental
to any of the matters set forth in Sections 10.2.2.1 or 10.2.2.2 above. 
 For purposes of this
Section 10.2.2, any inaccuracy in, or breach of any representation or warranty, or nonfulfillment, nonperformance or other breach of any covenant or agreement by Buyer, and the amount of any Losses associated therewith,
will be determined without regard to any materiality, material adverse effect or similar qualification. 
 Section 10.2.3 

(a)    The Buyer Indemnitee shall be indemnified pursuant to Sections 10.2.1.1 to the extent that the aggregate
Losses incurred by the Buyer Indemnitee in connection with such clause exceeds $10,000 (the “Buyer Indemnification Deductible”) and, in such event, indemnification shall be made by Seller only to the extent of such excess, except
with respect to indemnification claims related to (i) Seller’s Title, Authorization and Brokers’ Warranty, (ii) any fraud or intentional misrepresentation and (iii) the representations and warranties set forth in
Sections 4.6, 4.19, 4.21, 4.23, 4.26 and 4.27 each of which shall not be subject to the Buyer Indemnification Deductible. 

(b)    The aggregate cumulative and total amount for which Seller shall be liable under Sections 10.2.1.1 shall in
no event exceed the Purchase Price, except with respect to indemnification claims related to (i) Buyer Title, Authorization and Brokers’ Warranty and (ii) any fraud or intentional misrepresentation which shall not have any limit. 

Section 10.2.4 

(a)    The Seller Indemnitee shall be indemnified pursuant to Sections 10.2.2.1 to the extent that the aggregate
Losses incurred by the Seller Indemnitee in connection with such clause exceeds $10,000 (“Seller Indemnification Deductible”) and, in such event, indemnification shall be made by Buyer only to the extent of such excess, except with
respect to indemnification claims related to (i) Seller’s Title, Authorization and Brokers’ Warranty, (ii) any fraud or intentional misrepresentation and (iii) the representations and warranties set forth in any Buyer Title,
Authorization and Brokers’ Warranty, each of which shall not be subject to the Seller Indemnification Deductible. 

(b)    The aggregate cumulative and total amount for which Buyer shall be liable under Sections 10.2.2.1 shall in
no event exceed the Purchase Price. 
 Section 10.2.5    Notwithstanding anything herein to the contrary, no person
shall, in any event, be liable under this Article X to any other person for, and the term “Losses” shall not include, any punitive damages of such other person relating to the breach or alleged breach hereof; provided,
however, this Section 10.2.5 does not limit the right of the Buyer Indemnitee or Seller Indemnitee (as the case may be) to obtain indemnity hereunder to the extent that claims of third persons, for which the Buyer Indemnitee or Seller
Indemnitee (as the case may be) is otherwise entitled to indemnity under this Article X, have been resolved by judgment, settlement or other obligation to pay any of the types of damages listed in the first part of this sentence 

Section 10.2.6    No Party shall be entitled to indemnification under this Article X for any Losses with
respect to any covenant or condition waived by the other Party on or prior to the Closing. 

  
 30 

 Section 10.2.7    The amount of any Losses under Article X
sustained by a Buyer Indemnitee or a Seller Indemnitee shall be reduced by any amount received by such Buyer Indemnitee or Seller Indemnitee with respect thereto under any insurance coverage or from any other person, and by the amount of any Tax
benefit actually recognized within two (2) years of an applicable Closing Date by the Indemnified Party with respect to the Loss. If a Buyer Indemnitee or Seller Indemnitee recognizes a Tax benefit or receives an amount under insurance coverage
or from such other person with respect to Losses sustained at any time subsequent to any indemnification payment pursuant to this Article X, then such Buyer Indemnitee or Seller Indemnitee shall promptly reimburse the applicable Indemnifying
Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification up to such amount realized or received by the Buyer Indemnitee or Seller Indemnitee, as applicable (less any reasonable costs
of recovery in respect thereof). 
 Section 10.2.8    Neither Seller, on the one hand, nor Buyer, on the other
hand, shall have any right to set-off any Losses under this Article X against any payments to be made by such Party pursuant to this Agreement or any other agreement among the Parties. 

Section 10.3    Claims Notice. In the event that either a Buyer Indemnitee or a Seller Indemnitee wishes to
assert a claim for indemnification hereunder, such Party seeking indemnification (the “Indemnified Party”) shall deliver written notice (a “Claims Notice”) to the other Party (the “Indemnifying
Party”), specifying the facts constituting the basis for, and the amount (if known) of, the claim asserted. 

Section 10.4    Right to Contest Claims of Third Parties. 

Section 10.4.1    The Indemnifying Party shall have the right, but not the obligation, upon written notice to be
provided to the Indemnified Party within thirty (30) after the Indemnifying Party’s receipt of the relevant Claims Notice, to investigate, contest, assume the defense of or settle any claim or demand made, or any action, proceeding or
investigation instituted, by any person not a party to this Agreement (a “Third Party Claimant”) that may result in a Loss with respect to which the Indemnified Party would be entitled to indemnification pursuant to this Article
X (a “Third Party Claim”); provided, that the Indemnifying Party (a) acknowledges in writing to the Indemnified Party that any Losses that may be assessed in connection with the Third Party Claim constitute Losses
for which the Indemnified Party will be indemnified pursuant to this Article X without contest or objection, and (b) appoints counsel for the defense of the Third Party Claim reasonably satisfactory to the Indemnified Party; provided
further, that the Indemnified Party may, at its option and at its own expense, participate in the investigation, contesting, defense or settlement of any such Third Party Claim through Representatives and counsel of its own choosing, cost and
expense; and provided further, that the Indemnifying Party shall not settle any Third Party Claim unless (i) such settlement is on exclusively monetary terms, or (ii) the Indemnified Party shall have consented to the terms of such
settlement, which consent shall not be unreasonably withheld or delayed. The Indemnified Party will have no Liability with respect to any compromise or settlement of, or the entry of any judgment arising from, any settlement effected without its
consent. If requested by the Indemnifying Party, the Indemnified Party will cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim or, if appropriate and related to the Third Party Claim in question, in making at
the sole cost and expense of the Indemnifying Party any counterclaim against the Third Party Claimant, or any cross complaint against any person. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnified
Party for any period during which the Indemnifying Party has failed to assume the defense thereof (other than during the period prior to the time the Indemnified Party shall have given notice of the Third Party Claim as provided above). Provided the
Indemnifying Party shall have assumed the defense of such Third Party Claim, the Indemnified Party shall not settle, compromise or pay any Third Party Claim for which it seeks indemnification hereunder without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or delayed. If the Indemnified Party is controlling the defense of a Third Party Claim, the Indemnified Party has the right in good faith to settle, compromise or pay any Third
Party Claim for which it seeks indemnification hereunder without prior notice to or consent of the Indemnifying Party. 

  
 31 

 Section 10.4.2    The Indemnifying Party shall be entitled to
participate in (but not to control) the defense of any Third Party Claim which it has not elected to assume the defense of with its own counsel and at its own expense. 

Section 10.4.3    Notwithstanding the foregoing, in no event may the Indemnifying Party assume, maintain control of
or participate in the defense of any Third Party Claim involving criminal liability, Taxes or in which any relief other than monetary damages is sought against the Indemnified Party. 

Section 10.5    Indemnification Payments. Any payment under this Article X shall be treated as an
adjustment to the Purchase Price for all Tax purposes unless otherwise required by applicable Tax Law and shall be made by wire transfer of immediately available funds to such account or accounts as the Indemnified Party shall designate to the
Indemnifying Party in writing. Any indemnification of a Buyer Indemnitee pursuant to this Article X will be jointly and severally satisfied directly by Seller. 

Section 10.6    Exclusive Remedy. Following the Closing, except as otherwise set forth in this Agreement, the
indemnities provided for in this Article X shall be the exclusive remedies of the Parties and their respective officers, directors, employees, affiliates, agents, representatives, successors and permitted assigns for any breach of or
inaccuracy in any representation or warranty, any breach, non-fulfillment or default in the performance of any of the covenants or agreements contained in this Agreement, and the Parties shall not be entitled
to rescission of this Agreement or to any further contract, tort or indemnification rights or claims of any nature whatsoever in respect thereof, all of which the Parties hereby waive. Notwithstanding the foregoing, the parties shall have, in
addition, to the indemnities provided for in this Article X, such equitable remedies to which such parties may be otherwise entitled, including without limitation the ability to apply to any court of competent jurisdiction for specific
performance or injunctive relief. 
 Article XI 

Miscellaneous and General Provisions 

Section 11.1    Fees and Expenses. Subject to Section 8.2 of this Agreement, all
costs and expenses incurred by the Parties hereto in connection with this Agreement shall be borne solely and entirely by the Party which has incurred the same. 

Section 11.2    Notices. Any notices or other communications required or permitted under, or otherwise in
connection with this Agreement, shall be in writing and shall be deemed to have been duly given when delivered in person or upon electronic confirmation of receipt when transmitted by facsimile transmission (but only if followed by transmittal by
national overnight courier or hand for delivery on the next Business Day) or on receipt after dispatch by registered or certified mail, postage prepaid, addressed, or on the next Business Day if transmitted by national overnight courier, in each
case as follows: 

  
 32 

 If to Seller, addressed Seller at: 

David J. John 

120 Father Duenas Avenue, Suite 110 

Hagatna, Guam 96910 

Tel: (671) 477-2724 

E-Mail: David.John@ASCTrust.com 

with a copy to: 
 Dooley
Roberts & Fowler LLP 
 Suite 201, Orlean Pacific Plaza 

866 South Marine Corp. Drive 

Tamuning, Guam 96913 
 Tel: (671) 646-1222 
 Fax: (671) 646-1223 

E-Mail: dooley@guamlawoffice.com 

Attention: David Dooley 
 If to
Buyer, addressed to it at: 
 BankGuam Holding Company 

Attn: Lourdes A. Leon Guerrero and Danilo M. Rapadas 

111 W. Chalan Santo Papa 

Hagatna, Guam 96910 
 Tel: (671) 472-5300 
 E-Mail: drapadas@bankguam.com 

with a copy to: 
 Clark Hill PLC

 150 North Michigan Ave. 

Chicago, Illinois, 60601 
 Tel:
(312) 985-5900 
 Fax: (312) 985-5999 

E-Mail: tsouthwell@clarkhill.com and tbrooks@clarkhill.com 

Attention: Todd R. Southwell and Thomas A. Brooks 

Section 11.3    Headings. Section headings herein are established for convenience of reference only and shall
not be control or affect the meaning, interpretation or construction of this Agreement. 

Section 11.4    Severability. If any provision of this Agreement, as applied to any part or to any
circumstances, shall be adjudged by a court to be void, invalid or unenforceable, the same shall in no way affect any other provision of this Agreement, the application of such provision in any other circumstance or the validity or enforceability of
this Agreement. 
 Section 11.5    Entire Agreement. This Agreement and the Exhibits hereto and all
documents delivered pursuant hereto constitute the final, entire, complete and exclusive agreement between the parties hereto pertaining to the subject matter hereof and expressly supersede any and all prior written and oral agreements and
understandings between the parties hereto with respect to the subject matter hereof and thereof. 

  
 33 

 Section 11.6    Assignment. Neither Party hereto may assign any
of his respective duties or obligations under this Agreement without the express written consent of the other Party; except that Buyer may, without the consent of Seller but after providing notice to Seller, assign any of its rights and delegate any
of its obligations under this Agreement to any entity that is an Affiliate of Buyer, or to any subsequent acquirer of all or substantially all of the assets of Buyer and may assign any of its rights under this Agreement as collateral security for
any lender providing financing to Buyer. Subject to the foregoing, this Agreement shall inure to the benefit of and shall be binding upon the respective successors and assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other Person any right or remedy under or by reason of this Agreement. 

Section 11.7    Parties in Interest. Except as set forth in Article X, nothing in this Agreement is
intended or shall be construed to give any person, other than the Parties, their successors and permitted assigns, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. 

Section 11.8    Mutual Drafting. Each Party has participated in the drafting of this Agreement, which each
party acknowledges is the result of extensive negotiations between the Parties. 
 Section 11.9    Governing
Law; Consent to Jurisdiction; Waiver of Trial by Jury. 
 Section 11.9.1    This Agreement (including any claim
or controversy arising out of or relating to this Agreement) shall be governed by, and construed in accordance with, the laws of the Territory of Guam, without giving effect to conflicts of laws principles that would result in the application of the
law of any other country, territory or state. 
 Section 11.9.2    Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the local courts of Guam or federal court of the United States of America, sitting in the District of Guam, and any appellate court from any thereof, in any
actions arising out of or relating to this Agreement and any transactions contemplated hereby for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby irrevocably and unconditionally (a) agrees not to
commence any such action except in such courts, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any action in the federal courts located in the
Territory of Guam, and (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action in the federal courts located in the Territory of Guam. Each of the parties hereto agrees that a
final judgment in any such action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 11.2. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law. 

Section 11.9.3    EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND
(D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.9.3. 

  
 34 

 Section 11.10    Disclosure. The fact that any item of
information is disclosed in a disclosure schedule to this Agreement shall not be construed to mean that such information is required to be disclosed by this Agreement. Such information and the dollar thresholds set forth herein shall not be used as
a basis for interpreting the terms “material” or “Material Adverse Effect” or other similar terms in this Agreement. Nothing disclosed in any disclosure schedule is intended to or shall be deemed to broaden the scope of any
representation or warranty contained in this Agreement. 
 Section 11.11    Counterparts. This Agreement may
be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. The
exchange of a fully executed Agreement (in counterparts or otherwise) by facsimile or by electronic delivery in .pdf format shall be sufficient to bind the Parties to the terms and conditions of this Agreement. 

Section 11.12    Specific Performance. The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, prior to any valid termination of this Agreement as provided in
Section 8.1, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any local or federal court in the Territory of
Guam having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. 

Section 11.13    Amendment. No amendment of this Agreement or any provision of this Agreement shall be valid
unless such amendment is in writing and signed by Seller and Buyer. 
 Section 11.14    Waiver. Any
agreement on the part of a Party to any extension or waiver of any provision hereof shall be valid only if set forth in an instrument in writing signed on behalf of such Party. A waiver by a Party of the performance of any covenant, agreement,
obligation, condition, representation or warranty shall not be construed as a waiver of any other covenant, agreement, obligation, condition, representation or warranty. A waiver by a Party of the performance of any act shall not constitute a waiver
of the performance of any other act or an identical act required to be performed at a later time. 

Section 11.15    Further Assurances. From and after the Closing, each of the parties hereto shall use their
commercially reasonable efforts to deliver or cause to be delivered such additional documents and other papers and to take or cause to be taken such further actions as may be necessary, proper or advisable to make effective the transactions
contemplated hereby and to carry out the provisions hereof. 
 Section 11.16    Other Definitional
Provisions. Section 11.16.1    When a reference is made in this Agreement to an Article, Section, Annex, Exhibit or Schedule, such reference is to an Article or Section of, or an Annex, Exhibit or Schedule to, this
Agreement unless otherwise indicated. 

  
 35 

 Section 11.16.2    Whenever the words “include,”
“includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”. 

Section 11.16.3    The words “hereof,” “herein,” “hereto” and “hereunder” and
words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. 

Section 11.16.4    All terms defined in this Agreement have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto, unless otherwise defined therein. 
 Section 11.16.5    The terms
defined in the singular have comparable meanings when used in the plural, and vice versa. 

Section 11.16.6    Words of one gender include the other gender. 

Section 11.16.7    Any Law defined or referred to herein or in any agreement or instrument that is referred to herein
means such Law or statute as from time to time amended, modified or supplemented, including by succession of comparable successor Laws. 

Section 11.16.8    References to a person are also to its successors and permitted assigns. 

Section 11.16.9    The term “dollars” and “$” means United States dollars. 

Section 11.16.10    The term “or” has, except where otherwise indicated, the inclusive meaning represented
by the phrase “and/or”. 
 Section 11.17    Time is of Essence. Time is of the essence of this
Agreement and all of the respective obligations of the Parties hereto. 
 [Signature page follows] 

  
 36 

 IN WITNESS WHEREOF, each of the Parties hereto have caused this Agreement to be duly executed as
of the date first above written. 
  

			
	BankGuam Holding Company
	“Buyer”
		
	By:	 	 /s/ Lourdes Leon Guerrero

		 	Lourdes A. Leon Guerrero
		 	President & Chair
	
	David J. John
	“Seller”
	
	 /s/ David J. John

  
 37 

					
	GUAM, U.S.A.	  	            )	  	
		  	            )	  	ss:
	CITY OF HAGATNA	  	            )	  	

 ON THIS 27th day of May, 2016, before me, a Notary Public in and for Guam, U.S.A., personally appeared
LOURDES A. LEON GUERRERO, known to me to be the person whose name is subscribed to the foregoing instrument, and he acknowledged to me that he executed the same as his free and voluntary act for the uses and purposes therein set forth. 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written. 

 

	
	 /s/ Racine M. Santos

	RACINE M. SANTOS
	NOTARY PUBLIC

  

					
	GUAM, U.S.A.	  	            )	  	
		  	            )	  	ss:
	CITY OF HAGATNA	  	            )	  	

 ON THIS 27th day of May, 2016,
before me, a Notary Public in and for Guam, U.S.A., personally appeared DAVID J. JOHN, known to me to be the person whose name is subscribed to the foregoing instrument, and he acknowledged to me that he executed the same as his free and
voluntary act for the uses and purposes therein set forth. 
 IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written. 
  

	
	 /s/ Racine M. Santos

	RACINE M. SANTOS
	NOTARY PUBLIC

  
 38 

 EXHIBIT “A” 

Stockholders Agreement Terms 

In connection with the Stock Purchase Agreement between David J. John (“Seller” )and BankGuam Holding Company (“Buyer” and
“BGHC”), who together (“Parties”) will control in excess of 50% of Capital Stock of ASC Trust Corporation (“Parties”) outstanding agree to the following provisions meant to govern the actions and relationship among the
parties after the First Closing. This governing document will be a stockholders agreement (“Stockholders Agreement”). 
  

	 	•	 	Board of Directors. Parties agree to elect: 

  

	 	•	 	At least one BGHC representative to the Board; 

  

	 	•	 	David J. John or his selected representative to the board. 

  

	 	•	 	Employment Contracts. Key management of ASC shall agree to continue with the company after the first closing. A five year employment contract will be offered to: 

 

	 	•	 	David J. John 

  

	 	•	 	Donald H. Clark 

  

	 	•	 	Gabrielle Bamba 

  

	 	•	 	Candy Okuhama 

  

	 	•	 	Financial Compensation. Mercer Capital’s Enterprise Value includes a structured bonus program for David John, in the amount of 12.5% of EBITDA. This amount will be covered in his employment
contract. 

  

	 	•	 	ASC Philippines. Current management of ASC has agreed to shut down ASC Philippines. The target date for the shutdown of operations is March 31, 2016. However, loose ends will carry past
the April 1, 2016 execution date. The existing shareholders of ACS, prior to the First Closing Date,will be responsible for any expenses associated with the office shutdown that occurs past the execution date. This would also hold true for any
excess assets to be paid out and or tax deductions computed which would transfer to the existing shareholders. 

  

	 	•	 	Dividend Policy. The parties have agreed to implement a dividend policy equal to 80% of earnings paid to shareholders of record. The final policy will be implemented by the board after the First Closing.

  

	 	•	 	Protective Provisions. The parties have agreed to modify ASC’s By Laws to require 80% shareholder approval to change any of the following: 

 

	 	•	 	Any borrowing, 

  

	 	•	 	Changes in the dividend policy, 

	 	•	 	Sale of material assets, 

  

	 	•	 	Issuance of additional shares, 

  

	 	•	 	Recapitalization of the Company, 

  

	 	•	 	Sale of Company Stock, 

  

	 	•	 	Change in compensation of key employees, and 

  

	 	•	 	Dissolution of the Company. 

  
 2 

 EXHIBIT “B” 

Mercer Capital Valuation of Enterprise Value of ASC Trust Corporation 

 

 
 VALUATION OF 100% EQUITY INTEREST IN 
ASC Trust
Corporation 
Hagatna, Guam 
AS OF November 1, 2015 REPORT DATED November 19,
2015 
MERCER CAPITAL 5100 Poplar Avenue, Suite 2600 901.685.2120 (p) www.mercercapital.com 
Memphis, Tennessee 38137 901.685.2199 (f) 

 

 
 November 19, 2015 

Mr. Francisco M. Atalig 
 Chief Financial Officer 

BankGuam Holding Company 
 111 Chalan Santo Papa 

Hagatna, Guam 96932 
 Dear Mr. Atalig: 

The enclosed analysis has been developed for the exclusive and confidential use of BankGuam Holding Company and its representatives. The report has been
prepared by Mercer Capital Management, Inc. (“Mercer Capital”) and was made by and/or under the direct supervision of the undersigned. No one provided significant business or intangible asset appraisal assistance to those signing this
report. 
 The reported analyses and calculations are limited only by the reported assumptions and limiting conditions, and represent our personal,
impartial, and unbiased professional analyses and opinions. Estimates of value presented in this analysis apply only to the specific engagement, client, purpose, business interest, and time period described in the
“Introduction.”     
 This analysis was prepared for the exclusive use of the client for the purpose, business interest, and
time period described in the “Introduction.”     
 Only the client and its agents are entitled to rely upon this analysis;
and said reliance is limited to the purpose, business interest, and time period described in the “Introduction.” No third party shall rely upon this work product, except as contemplated by the purpose indicated in the
“Introduction.” 
 This analysis shall remain confidential except as disclosure is required to effect the purpose and intended use indicated in
the “Introduction.” Possession of the original or copies of this work product does not carry with it right of publication. Copies of this analysis will be furnished to persons other than the client at the sole discretion of Mercer Capital
and only with the client’s specific permission or direction, unless ordered by a court of competent jurisdiction. 
 Should this work product be
presented or questioned in any proceeding, including, but not limited to any civil, criminal, governmental, regulatory, tax, or arbitration proceeding, client shall provide written notice to Mercer Capital. 

No officer or employee of Mercer Capital is required to give testimony in court or be in attendance during any hearings or depositions with reference to this
engagement. Professional fees for such services are independent of this engagement and are subject to arrangements made satisfactory to the client and Mercer Capital. 
  

							
	        MERCER CAPITAL	  	5100 Poplar Avenue, Suite 2600	  	901.685.2120 (P)	  	www.mercercapital.com
		  	Memphis, Tennessee 38137	  	901.685.2199 (F)	  	

 Mercer Capital, its officers, and its staff have no present or prospective business interest in the subject
entity and have no personal interest or bias with respect to the subject property or the parties involved. Mercer Capital’s engagement in this assignment was not contingent upon developing or reporting predetermined results. No benefits will
accrue to Mercer Capital as a result of this engagement other than the professional fees previously agreed to by the client. Fees paid to Mercer Capital for the preparation of this report are neither dependent nor contingent upon the development or
reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of
this analysis. 
 Sincerely, 
 MERCER CAPITAL 

 
 

 
 Jeff K. Davis, CFA 
 Managing
Director 
  
 

 
 Brooks K. Hamner, CFA 
 Vice
President 

  
 

 

 TABLE OF CONTENTS 

 

					
	 INTRODUCTION
	  	 	1	  
		
	 ASSIGNMENT DEFINITION
	  	 	1	  
	 SUMMARY BUSINESS DESCRIPTION
	  	 	2	  
	 CONTEMPLATED TRANSACTION
	  	 	2	  
	 RANGE OF FAIR MARKET
VALUE
	  	 	3	  
	 STANDARD OF VALUE
	  	 	3	  
	 LEVEL OF VALUE
	  	 	4	  
		
	 OVERVIEW OF THE COMPANY
	  	 	5	  
		
	 BUSINESS DESCRIPTION
	  	 	5	  
		
	 HISTORICAL FINANCIAL STATEMENTS 
	  	 	7	  
		
	 SOURCES OF FINANCIAL STATEMENT
DATA
	  	 	7	  
	 NON-PUBLIC PEER GROUP
FOR FINANCIAL PERFORMANCE COMPARISON
	  	 	7	  
	 FINANCIAL STATEMENT REVIEW AND
EARNING POWER DEVELOPMENT
	  	 	8	  
		
	 DETERMINATION OF VALUE
	  	 	11	  
		
	 ASSET-BASED APPROACH
	  	 	11	  
	 INCOME APPROACH
	  	 	11	  
	 Capitalization of Cash Flow Earning Power Method (using ACAPM)
	  	 	11	  
	 Discounted Cash Flow Method
	  	 	14	  
	 Cash Flow Forecast – Scenario 1 (no Government Contract)
	  	 	15	  
	 Discount Rate- Scenario 1
	  	 	15	  
	 Terminal Value – Scenario 1
	  	 	15	  
	 Indicated Value - Discounted Cash Flow Method (Scenario 1)
	  	 	16	  
	 Cash Flow Forecast – Scenario 2 (New Government Contract)
	  	 	16	  
	 Discount Rate- Scenario 2
	  	 	16	  
	 Terminal Value – Scenario 2
	  	 	16	  
	 Indicated Value - Discounted Cash Flow Method (New Government Contract Scenario)
	  	 	17	  
	 MARKET APPROACH
	  	 	17	  
	 Transactions Method - Internal
	  	 	17	  
	 Guideline Public Company Method
	  	 	17	  
	 Guideline Transaction Method
	  	 	18	  
	 Selected Market Transactions
	  	 	18	  
	 RANGE OF FAIR MARKET VALUE
	  	 	18	  

 EXHIBITS 

  
 i 

			
	

	  	Page 1

  

 Introduction     

ASSIGNMENT DEFINITION 
 Mercer Capital Management,
Inc. (“Mercer Capital”) has been engaged to render the following valuation opinion: 
  

			
	 Client Name
	  	 BankGuam Holding Company

		
	 Entity to be Valued
	  	 ASC Trust Corporation

		
	 Type of Entity
	  	 S Corporation

		
	 Principal Business Location
	  	 Hagatna, Guam

		
	
Business Interest Under Consideration          
      
	  	 100% Equity Interest

		
	 Standard of Value
	  	 Fair Market Value

		
	 Premise of Value
	  	 Going Concern

		
	 Level of Value
	  	 Controlling Interest Basis1 

		
	 Effective Date
	  	 November 1, 2015

		
	 Purpose & Intended Use
	  	 Potential Acquisition of ~75% of ASC’s Common

Shares by BankGuam Holding Company

		
	 Scope of Work2 
	  	 Calculations

  

	1 	As presently contemplated, the transaction would entail a phased cash acquisition in which the Company would initially acquire 25% of ASC followed by two separate transactions that would increase the ownership to
approximately 75% on or about five years after the initial transaction. Since the ultimate goal is to acquire a majority of the Company’s equity, this analysis is being performed on a controlling interest basis. 

	2 	American Society of Appraisers, ASA Business Valuation Standards© as revised (Revision published November 2009), “BVS-I, General Requirements for Developing a Business Valuation©,” pp. 5-7. As defined in BVS-I, there are three scopes of work which include: 1) Appraisal; 2) Limited Appraisal; and 3) Calculations. The objective of calculations is to provide an approximate indication of value based upon the performance
of limited procedures agreed upon by the appraiser and the client.” Calculations have the following qualities: Their results may be expressed as either a single dollar amount or a range; they may be based upon consideration of only limited
relevant information; the appraiser performs only limited information and analysis procedures; the calculations may be based upon conceptual approaches agreed upon with the client. 

  
 

 

			
	

	  	Page 2

  

 We have relied upon the referenced information, including management supplied projections, without
independent verification. The valuation is therefore dependent upon the information provided. A material change in critical information relied upon in this analysis would be cause for a reassessment to determine the effect, if any, upon our opinion.

 SUMMARY BUSINESS DESCRIPTION 
 ASC Trust
Corporation (“ASC” or “the Company”) is an independently owned trust company headquartered in Hagatna, Guam. The Company provides retirement plan administration and consulting services both to Fortune 500 companies and small- and
mid-sized businesses primarily in Guam and other areas of Micronesia. In addition to functioning as a third party administrator for plan design, compliance, and the like, ASC offers diversified investment
options through Raymond James and Fidelity Investments. ASC reported $6.0 million in revenue for the latest twelve months (“LTM”) ended September 30, 2015. Assets under management (“AUM”) were $496 million as of
September 30, 2015 while LTM management-related fees equated to 0.93% of average AUM. As discussed below, we developed a measure of ongoing earning power of $1.3 million from adjusted earnings before interest, depreciation, taxes and
amortization (“EBITDA”). The earning power measure equates to an operating margin of about 21%. 
 CONTEMPLATED TRANSACTION 

It is our understanding that management of BankGuam Holding Company (“BGHC”) has entered into discussions with ASC management regarding the potential
acquisition of ASC by BGHC. As presently contemplated BGHC would acquire a controlling interest in ASC over five years via a three-step transaction that would entail the sequential purchase of about 25%, 24% and 25% of existing common shares. ASC
would remain a separately chartered subsidiary of BGHC rather than become a subsidiary of BGHC’s primary subsidiary, Bank of Guam (“Bank”). ASC’s existing management would continue to run the company during the five-year
transition period. 

  
 

 

			
	

	  	Page 3

  

 RANGE OF FAIR MARKET VALUE 

The conclusions of enterprise value and common equity value are summarized below and in Exhibit 1. Enterprise value reflects the value of the Company before
consideration of the capital structure (i.e., debt and equity), net working capital, and any non-operating assets. The conclusion of value for the common shares is derived by adjusting the enterprise value for
cash, debt (minimal), required capital to maintain a separate charter ($500,000) and net working capital. The adjustments do not include a parcel of land that is carried on the balance sheet for $585 thousand that will be excluded from the
transaction. 
 Range of Fair Market Value 

Controlling Interest Basis 
  

					
	 Enterprise Value3 
	  	$	11,000,000 to $11,800,000	  
	 Equity Value
	  	$	11,500,000 to $12,300,000	  

 STANDARD OF VALUE 

Fair market value is defined as follows: 
 The price,
expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is
under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.4 
 The
willing seller and the willing buyer are hypothetical parties. Each is assumed to be well informed about the subject interest and the market context in which it might be transacted. 

Fair market value is similarly defined in various sections of the Internal Revenue Code, related regulations and interpretations, including Revenue Ruling 59-60, Section 20.2031-1(b) of the Estate Tax Regulations, and Section 25.2512.1 of the Gift Tax Regulations. 

 

	3 	Enterprise value is total equity value and interest-bearing debt balance less cash and marketable securities. Enterprise value is often described as a theoretical price for a potential target since many transactions
include debt purchases without the accompanying payment for cash or excess assets. 

	4 	American Society of Appraisers, ASA Business Valuation Standards© (Revision published November 2009), “Definitions,”
p. 27. 

  
 

 

			
	

	  	Page 4

  

 LEVEL OF VALUE 

Valuation theory suggests that there are various “levels” of value applicable to a business or business ownership interest. The levels of value can
be described as:5 
  

	 	•	 	Controlling interest basis (levels) refers to the value of the enterprise as a whole. The controlling interest level of value is considered to include two components, the financial control level and the
strategic control level. 

  

	 	•	 	Marketable minority interest basis (level) refers to the value of a minority interest, lacking control, but enjoying the benefit of liquidity as if it were freely tradable in an active market. The marketable
minority level of value is also on an enterprise level of value, meaning that it is developed based on 100% of the expected cash flows of the enterprise.  

  

	 	•	 	Nonmarketable minority interest basis (level) refers to the value of a minority interest, lacking both control and market liquidity. 

The relationship between these three levels of value is depicted in the following chart. Traditionally, valuation professionals did not distinguish between
financial control and strategic control concepts. The traditional levels of value chart is shown on the left. The updated chart showing the four levels of value is on the right. The valuation of ASC is prepared on the controlling interest basis
given the contemplated transaction in which ~75% of the Company’s shares will be acquired by BGHC. 
  
 

 
  

	5 	Mercer, Z. Christopher and Travis W. Harms. Business Valuation: An Integrated Theory, Second Edition. John Wiley & Sons, Inc. 2008. See Chapter 3. 

  
 

 

			
	

	  	Page 5

  

 Overview of the Company 

BUSINESS DESCRIPTION 
 The Company was founded in
1990 as a transaction advisory firm called Administrative Services Corporation. A few years after its formation, ASC’s leadership saw a need for retirement plan services on Guam and began focusing more on asset management and related consulting
services for pension plans and their participants. As of the valuation date the Company managed approximately $520 million in client assets for over 300 pension plans and 20,000 participants, making it the largest retirement fund manager in
Guam. 
 The Company is currently managed by its President and Director of Asset Management, David John, along with a team of seasoned professionals each
tasked with heading up a particular department. Mr. John owns 79.3% of the Company’s 4,000 outstanding common shares. ASC’s management team is young but experienced with no immediate plans for retirement or named successors. The
Company employs over 60 people across its three locations in Hagatna, Guam, Manilia, Philippines, and Saipan with most of its staff working from its corporate headquarters in Hagatna. Management noted that ASC is adequately staffed for current
operations. 
 As a third party administrative and recordkeeping firm, the Company provides plan design and compliance services, trustee services, asset
allocation, and performance reporting. ASC outsources its custodial and investment consulting services to Fidelity and Raymond James, respectively, so it can focus on providing quality administrative services to its clients. The current fee
structure entails a sliding scale of 0.30% to 1.00% of plan assets for administration and 0.80% for asset allocation within the collective investment trust. Management noted that it has reduced fees since 2010 to strengthen the Company’s
competitive position by making it less attractive for stateside competitors to enter the market in addition to normal pricing pressure from clients. In 2012, the stated fee structure entailed 0.60% to 1.00% for plan administration and 1.00% for
asset allocation services. 
 The Company has some customer concentrations with its top ten client relationships comprising nearly half of its AUM but only
25% of revenue because many of these larger accounts have negotiated fees. (Bank of Guam accounted for 2.4% of revenues.) Management noted that the Company maintains good relations with these clients and believes it has little risk of losing these
accounts in the foreseeable future. 

  
 

 

			
	

	  	Page 6

  

 The Company has a relatively low amount of competition on Guam and has significant market share in
administering the island’s retirement assets. Management noted that ASC’s competitive strengths include its strong ties to the local community, plan expertise, and superior customer service. Despite its high market share, management sees
significant opportunity in regional governments realigning their retirement plans into defined contribution arrangements in addition to some economic tailwind from tourism and military spending in the local economy. Management indicated there was
some risk of a larger pension provider entering the market, but the size of the market and ASC’s competitive fee structure would likely preclude this from happening. 

Table 1—Client Asset Flows and Demographics 
  

																									
	 	  	Budget
2015	 	 	For the Fiscal Years Ended December 31	 
	 	  	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 
	 Beginning AUM
	  	 	498,821	  	 	 	464,496	  	 	 	410,488	  	 	 	344,816	  	 	 	314,440	  	 	 	na	  
	 Contributions
	  	 	80,000	  	 	 	70,987	  	 	 	66,755	  	 	 	58,419	  	 	 	56,355	  	 	 	49,118	  
	 Distributions
	  	 	-55,000	  	 	 	-47,916	  	 	 	-53,456	  	 	 	-41,508	  	 	 	-32,723	  	 	 	-29,004	  
	 Net Takeovers
	  	 	-2,750	  	 	 	-2,030	  	 	 	4,632	  	 	 	24,765	  	 	 	20,815	  	 	 	0	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Net Flows
	  	 	22,250	  	 	 	21,041	  	 	 	17,931	  	 	 	41,677	  	 	 	44,447	  	 	 	20,114	  
	 Change in Market Value
	  	 	-1,071	  	 	 	13,283	  	 	 	36,077	  	 	 	23,996	  	 	 	-14,071	  	 	 	na	  
	 Ending AUM
	  	 	520,000	  	 	 	498,821	  	 	 	464,496	  	 	 	410,488	  	 	 	344,816	  	 	 	314,440	  
	 Approx Average AUM
	  	 	505,000	  	 	 	481,659	  	 	 	437,492	  	 	 	377,652	  	 	 	329,628	  	 	 	314,440	  
	 Effective Realized Fee
	  	 	0.93	% 	 	 	0.93	% 	 	 	1.00	% 	 	 	1.10	% 	 	 	1.08	% 	 	 	na	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Management Fee
	  	 	4,690	  	 	 	4,478	  	 	 	4,384	  	 	 	4,153	  	 	 	3,561	  	 	 	2,854	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Participants
	  	 	22,984	  	 	 	21,547	  	 	 	20,583	  	 	 	19,755	  	 	 	17,424	  	 	 	16,045	  
	 Average Balance
	  	$	21,972	  	 	$	22,354	  	 	$	21,255	  	 	$	19,117	  	 	$	18,918	  	 	$	19,597	  
	 Plans
	  	 	333	  	 	 	307	  	 	 	274	  	 	 	238	  	 	 	206	  	 	 	201	  
	 Participants Per Plans
	  	 	69	  	 	 	70	  	 	 	75	  	 	 	83	  	 	 	85	  	 	 	80	  

 Source: Company reports 

  
 

 

			
	

	  	Page 7

  

 Historical Financial Statements 

Schedules 1-6 present historical financial statements and related analyses for the fiscal years ended December 31,
2010 to 2014 and the nine months ended September 30, 2015. The exhibits are summarized below for ease of reference. 
  

			
	Schedule 1	  	Historical Balance Sheets
		
	Schedule 1a	  	Supplemental Notes to Balance Sheets
		
	Schedule 2	  	Historical Percentage Balance Sheets
		
	Schedule 3	  	Historical Income Statements
		
	Schedule 3a	  	Supplemental Notes to Income Statement
		
	Schedule 4	  	Historical Percentage Income Statements
		
	Schedule 4a	  	Year-to-Year Growth in Income Statement Components
		
	Schedule 5	  	Reconciliation of Shareholders’ Equity
		
	Schedule 6	  	Historical Cash Flow Statements

 SOURCES OF FINANCIAL STATEMENT DATA 

The Company’s financial statements were audited by Ernst & Young LLP in Tamuning, Guam for the 2010 to 2014 fiscal years and prepared by
management for the nine months ended September 30, 2014 and 2015. 
 NON-PUBLIC PEER GROUP FOR FINANCIAL
PERFORMANCE COMPARISON 
 A comparison with industry financial measures available from non-public company
sources was obtained through review of Annual Statement Studies published by Risk Management Association (“RMA”). RMA compiled average percentage income statements and balance sheets and key financial ratios of investment advisors.
The RMA data provides a limited comparative perspective; strict comparisons should be made with caution. 

  
 

 

			
	

	  	Page 8

  

 FINANCIAL STATEMENT REVIEW AND EARNING POWER DEVELOPMENT 

Balance Sheets. Excluding participant assets and mirror liabilities, the balance sheet can be described as liquid and nearly debt-free. As
discussed in the valuation section, not all of the liquidity constitutes a non-operating asset because $500 thousand is needed to meet capital requirements. The Company’s liquidity cycle reflects a build-up in cash during the year, then a reduction at or near year-end when bonus payments and tax-related distributions are made. 

Included in net fixed assets of $827 thousand as of September 30, 2015, is a parcel of land located in Hagatna that was acquired several years ago
for $585 thousand in anticipation of development; however, management elected not to proceed with development in 2014, which resulted in the write-off of $185 thousand of capitalized costs
(classified as construction-in-progress). 
 Income
Statements. Table 1 reflects summary operating metrics from historical and adjusted income statements (Exhibit 2 and Schedule 3). Revenues increased 47% between 2010 and the LTM period-ended September 30, 2015 to $6.0 million.
Although period-end AUM increased 59% over this period to $499 million, realized fees declined due to management’s decision to reduce fees to improve the Company’s competitive
position.    Management’s 2015 budget projects a 2% increase in revenues to $5.8 million due to asset growth. 
 Reported
pretax income ranged between $581 thousand (2013) and $896 thousand (2010). Management’s 2015 budget projects unadjusted pretax income of $975 thousand. In Exhibit 2 we adjusted the historical financial statements and the
2015 budget for unusual items and compensation that will be impacted by the transaction in order to examine trends in core earnings and to develop a measure of earning power. These adjustments include: 

 

	 	a)	100% of CEO John’s bonus was deducted from reported operating expenses in order to make a normalizing adjustment once initial EBITDA is derived; 

 

	 	b)	$75 thousand of non-recurring legal expense incurred in the LTM period and budgeted for 2015 was deducted given the limited period
step-up in the expense; and 

  

	 	c)	$185 thousand of expense incurred in 4Q14 to write-off of capitalized costs associated with the parcel of land that will not be developed was eliminated because it is a non-cash, non-recurring charge. 

 As shown in Table 1 and Exhibit
2, adjusted pretax income excluding unusual items and CEO John’s bonuses was $1.3 million in 2010, declined to $978 thousand in 2012 as expenses rose with expansion of the business, and has since climbed to $1.3 million in the
LTM period as both revenues and operating leverage increased. The adjusted budget reflects further improvement to $1.5 million. 

  
 

 

			
	

	  	Page 9

  

 In order to develop adjusted EBITDA we made the following additional adjustments: 

 

	 	d)	Interest expense and income were respectively, added and subtracted, from adjusted pre-tax income; 

 

	 	e)	Depreciation expense was added to adjusted pre-tax income; and 

  

	 	f)	Management’s bonus compensation was adjusted to 12.5% of EBITDA before the owner’s bonus for each period based upon our understanding that the agreement will have a variable bonus structure based on the
referenced percentage. 

 Adjusted EBITDA followed a similar trajectory as adjusted pretax income, declining from $1.3 million in 2010 to
$1.0 million in 2012, and then rebounding to $1.2 million in the LTM period. Management’s 2015 budget as adjusted projects improvement to $1.4 million. The adjusted EBITDA margins of 20.5% for the LTM period and 23.3% for the
2015 budget compare to 26.2% for the peer group margin. 
 Table 2–Income Summary and Operating Metrics 

 

																																	
	 	  	Ongoing	 	 	Budget
2015	 	 	LTM
09/30/15	 	 	For the Fiscal Years Ended December 31	 
	  	 	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 
	 Income Summary ($000)
	  				 				 				 				 				 				 				 			
	 Reported AUM (Year-End)
	  	$	521,000	  	 	$	521,000	  	 	$	496,174	  	 	$	498,821	  	 	$	464,496	  	 	$	410,488	  	 	$	344,816	  	 	$	314,440	  
	 Approximate Average AUM
	  	 	510,000	  	 	 	513,000	  	 	 	505,156	  	 	 	481,659	  	 	 	437,492	  	 	 	377,652	  	 	 	329,628	  	 	 	314,440	  
	 Effective Realized Fee
	  	 	0.90	% 	 	 	0.92	% 	 	 	0.93	% 	 	 	0.93	% 	 	 	1.00	% 	 	 	1.10	% 	 	 	1.08	% 	 	 	na	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Reported Management Fee
	  	 	4,590	  	 	 	4,694	  	 	 	4,690	  	 	 	4,478	  	 	 	4,384	  	 	 	4,153	  	 	 	3,561	  	 	 	2,854	  
	 Total Revenue
	  	 	5,855	  	 	 	5,843	  	 	 	5,955	  	 	 	5,800	  	 	 	5,657	  	 	 	5,690	  	 	 	4,910	  	 	 	4,042	  
	 Adj Operating Expense
	  	 	4,525	  	 	 	4,358	  	 	 	4,646	  	 	 	4,530	  	 	 	4,562	  	 	 	4,657	  	 	 	3,677	  	 	 	2,816	  
	 Adj Pre-Tax Income
	  	 	1,323	  	 	 	1,460	  	 	 	1,272	  	 	 	1,268	  	 	 	1,057	  	 	 	978	  	 	 	1,249	  	 	 	1,331	  
	 Reported Pre-Tax Income
	  				 	 	848	  	 	 	732	  	 	 	804	  	 	 	582	  	 	 	758	  	 	 	629	  	 	 	896	  
	 Adj EBITDA bef Mng’t Bonus
	  	 	1,420	  	 	 	1,557	  	 	 	1,398	  	 	 	1,409	  	 	 	1,222	  	 	 	1,156	  	 	 	1,409	  	 	 	1,458	  
	 - Adj Bonus per Mng’t @ 12.5%
	  	 	-177	  	 	 	-195	  	 	 	-175	  	 	 	-176	  	 	 	-153	  	 	 	-145	  	 	 	-176	  	 	 	-182	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adj EBITDA after Owner’s Bonus
	  	$	1,242	  	 	$	1,362	  	 	$	1,223	  	 	$	1,233	  	 	$	1,069	  	 	$	1,012	  	 	$	1,233	  	 	$	1,275	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Margin Analysis
	  				 				 				 				 				 				 				 			
	 Reported EBITDA Margin
	  				 	 	16.2	% 	 	 	17.5	% 	 	 	19.5	% 	 	 	13.2	% 	 	 	16.5	% 	 	 	16.1	% 	 	 	25.3	% 
	 Adj EBITDA bef Mng’t Bonus
	  	 	24.3	% 	 	 	26.6	% 	 	 	23.5	% 	 	 	24.3	% 	 	 	21.6	% 	 	 	20.3	% 	 	 	28.7	% 	 	 	36.1	% 
	 Adj EBITDA after Owner’s Bonus
	  	 	21.2	% 	 	 	23.3	% 	 	 	20.5	% 	 	 	21.3	% 	 	 	18.9	% 	 	 	17.8	% 	 	 	25.1	% 	 	 	31.6	% 
	 Y/Y Growth Analysis
	  				 				 				 				 				 				 				 			
	 Year-End AUM
	  				 	 	4.4	% 	 	 	-0.5	% 	 	 	7.4	% 	 	 	13.2	% 	 	 	19.0	% 	 	 	9.7	% 	 			
	 Revenue
	  				 	 	0.7	% 	 	 	2.7	% 	 	 	2.5	% 	 	 	-0.6	% 	 	 	15.9	% 	 	 	21.5	% 	 			
	 Adj EBITDA bef Mng’t Bonus
	  				 	 	10.5	% 	 	 	-0.8	% 	 	 	15.3	% 	 	 	5.7	% 	 	 	-18.0	% 	 	 	-3.3	% 	 			
	 Adj EBITDA after Owner’s Bonus
	  				 	 	10.5	% 	 	 	-0.8	% 	 	 	15.3	% 	 	 	5.7	% 	 	 	-18.0	% 	 	 	-3.3	% 	 			

 Source: Company 2010-2014 audits, internal financial statements as of September 30, 2015 and the 2015
budget     

  
 

 

			
	

	  	Page 10

  

 Ongoing Earning Power. For purposes of the valuation we have derived ongoing earning power. It
is not a specific forecast of any subsequent period’s net income; rather, it only represents one component of a single-period capitalization of earnings valuation method. An asset manager’s ongoing earnings power is a function of its
current AUM balance, expected fee pricing, and operating expense structure at the valuation date. 
 As shown in Exhibit 2, we assume base revenues of
$5.9 million given current average AUM of about $510 million and a slightly lower AUM fee of 0.90%. After deducting operating expenses and making adjustments for compensation and the non-recurring
legal expense, ongoing earning power as measured by EBITDA is $1.2 million (21.2% margin). 

  
 

 

			
	

	  	Page 11

  

 Determination of Value 

The American Society of Appraisers recognizes three general approaches to valuation.6 Within each approach
the appraiser may apply various appraisal methods. The valuation methods used are considered by the appraiser to be those most appropriate to the present valuation. The selected methods are summarized in Exhibits 1 through 12 (“the valuation
exhibits”) and discussed in the following sections. 
 ASSET-BASED APPROACH 

The asset-based approach is a general way of determining a value indication of a business, business ownership interest, or security using one or more methods
based on the value of the assets net of liabilities. Asset-based valuation methods include those methods that seek to write up (or down) or otherwise adjust the various tangible and intangible assets of an enterprise. Methodologies employed under
the asset-based approach are not relevant to the valuation of a professional services enterprise such as the Company. 
 INCOME APPROACH 

The income approach is a general way of determining a value indication of a business, business ownership interest, security or intangible asset using one or
more methods that convert anticipated economic benefits into a present single amount. 
 Valuation methods under the income approach include those methods
that provide for the direct capitalization of earnings estimates, as well as valuation methods calling for the forecasting of future benefits (earnings or cash flows) and then discounting those benefits to the present at an appropriate discount
rate. 
 Capitalization of Cash Flow Earning Power Method (using ACAPM) 

Capitalization of earnings is an income approach that requires estimates of ongoing earning power and a capitalization rate (or multiple). Conceptually, the
method entails deriving a risk-adjusted rate (or multiple) appropriate for the subject company, adjusted for long-term growth that an investor would target for the subject. 

 

	6 	American Society of Appraisers, ASA Business Valuation Standards© (Revision published November 2009). 

  
 

 

			
	

	  	Page 12

  

 After-Tax Earning Power. As discussed above, we developed
ongoing earning power as measured by EBITDA of $1.2 million. In Exhibit 4 we derive ongoing earning power on an after-tax basis because BGHC as the prospective owner is taxed as a “C”
corporation. The adjustments include deducting depreciation and taxes based upon an assumed marginal rate of 40% to derive net operating profit after tax (“NOPAT”). In addition, we assume a minimal investment in working capital is
necessary to support growth. The result is ongoing (cash flow) earning power on an after-tax basis of approximately $673,000. Assuming a long-term growth rate of 5.0%, earning power is adjusted
to $707,000 for purposes of capitalization within the context of the perpetuity formula.7 

Capitalization Rate. The derivation of a capitalization factor using ACAPM requires summation of the components followed by the subtraction of the
expected long-term earnings growth rate.8 The appropriate capitalization rate components for the Company include the following (see Exhibit 6): 

Risk-Free Rate. This is measured as the yield to maturity on 20-year U.S. Treasury bonds, which
was 2.54% as of the valuation date, according to Federal Reserve Statistical Release H.15. 
  

	 	•	 	Common Stock Premium. Historically, investments in large capitalization stocks (as represented by the companies in the Standard & Poor’s 500 index) have yielded a premium investment return
over the yield on long-term Treasuries. This risk premium is estimated to be 5.50%.9 

Beta. The beta statistic is a measure of the degree to which returns on a specific investment move in relationship to overall market
returns. A beta of 1.0 has been applied under the assumption that, to the extent returns on an investment in the subject company are correlated with returns in the broad equity markets, returns on the subject investment are expected to display
volatility equal to the market over time. The beta-adjusted common stock premium is 5.50%. 
  

	7 	The perpetuity formula, which calculates the present value of a constantly growing cash flow stream, is based upon year one cash flow (i.e., next year’s cash flow) divided by the capitalization rate (or multiplied
by the capitalization factor). 

	8 	The capitalization rate (CR%) is the required rate (or discount rate) of return (r) minus the growth rate (g). The earnings valuation multiple is the reciprocal of the capitalization rate (1/CR%).
“Capitalization” of earnings effectively determines the present value of the earning power, growing perpetually (at g%) and discounted at the required rate of return (r%). 

	9 	Mercer Capital conducts an ongoing analysis of the average annual market return data published in Ibbotson Stocks, Bonds, Bills & Inflation (SBBI) by Morningstar. The average annual
returns are calculated based upon data from 1926 to the present. Mercer Capital’s analysis indicates that the average returns for multi-year holding periods differ somewhat from those published in SBBI. We have estimated multi-year returns to
reflect historical premium returns achieved by large capitalization common stocks (the S&P 500) over long-term Treasuries (the common stock premium) and also by smaller capitalization common stocks over the S&P 500 (the small cap premium).
For a description of the methodology, see Julius, J. Michael, “Market Returns in Rolling Multi-Year Holding Periods: An Alternative Interpretation of the Ibbotson Data,” Business Valuation Review, Vol. 15, No. 2, June, 1996.

  
 

 

			
	

	  	Page 13

  

	 	•	 	Small Capitalization Stock Premium. Historically, investments in smaller capitalization common stocks have achieved a premium investment return over the returns of the S&P 500, or the large capitalization
stocks. The small capitalization common stock premium is estimated to be 3.84% and is added to the beta-adjusted common stock premium for a total equity premium of 8.84%.10 

 

	 	•	 	Specific Company Risk Premium. Returns on publicly traded stocks typically display some degree of volatility which cannot be correlated with movements in the broad equity indices, that is, cannot be explained by
the beta statistic. In addition, privately owned businesses often have specific risks that would not pertain to larger, publicly traded companies from which Ibbotson & Associates’ return data is derived. Specific factors pertaining to
the Company include the following: 

  

	 	•	 	ASC is significantly smaller than the companies from which the Ibbotson data are derived; 

  

	 	•	 	The Company is dependent upon its CEO and to a lesser extent certain members of its management team; and 

  

	 	•	 	ASC has some customer concentrations with its top ten client relationships possessing roughly half of the Company’s total AUM and 25% of revenues. 

Based upon these additional risk elements, an incremental specific company risk premium of 3.00% is added to the other
build-up components. 
 Cost of Equity. The equity discount rate is the sum of the components
above, 14.90%. 
 Cost of Debt. The cost of debt is assumed to equal the yield on corporate bonds rated Baa at the valuation date.

 Weighted Average Cost of Capital (“WACC”). The weighted average cost of capital is a discount rate applicable to future
cash flows to all capital (debt and equity) providers. With no assumed debt in the Company’s capital structure, its WACC equals the equity discount rate of 14.90% in this analysis. 

 

	10 	Ibid. 

  
 

 

			
	

	  	Page 14

  

 Short-Term vs. Long-Term Earnings Growth Rate. Converting a discount rate to a
capitalization rate requires the subtraction of the expected long-term growth rate from the discount rate. In the case of ASC, management has forecasted a level of growth through 2020 that if realized likely will prove to be higher than a
sustainable, long-term growth rate would be. Perspective on historical and projected growth in revenues and EBITDA are shown in Exhibit 4. For purposes of the analysis we assumed above trend growth of 12.0% over the next five years and long-term
growth thereafter of 5.0%. 
 Capitalization Rate. Derivation of the base capitalization rate of 9.90% reflects subtraction of the long-term growth
rate of 5.0% from the WACC of 14.90%. The inverse of the capitalization rate (i.e., 1/9.90%) is the capitalization factor (or multiple) of 10.1x; however, the multiple is adjusted for the five-year “high-to-normalized” growth factor of 1.23, which produces a capitalization multiple of 12.35x (rounded).11 This product of this capitalization
multiple and our estimate of cash flow to be capitalized ($707,000) developed in Exhibit 4 yields the indicated value of $8.7 million (rounded).     
  

					
	 Indicated Value – Direct Capitalization of Earnings (ACAPM)
	  	$	8,700,000	  

 Discounted Cash Flow Method 

The discounted cash flow (“DCF”) method is an income approach utilized to determine the net present value of all expected future cash
flows flowing to a respective ownership interest. The discounted cash flow methodology requires three basic elements: 
  

	 	•	 	Forecast of Expected Future Cash Flow. Generally, analysts develop forecasts of cash flow for discrete periods ranging from three to ten years. While the most popular period for such forecasts is five years, this
may not be appropriate in all cases. Conceptually, one would forecast discrete cash flows for as many periods as necessary until a stabilized cash flow stream could be anticipated. 

 

	 	•	 	Selection of Appropriate Discount Rate. The discount rate is used to “discount’ the forecasted cash flows to the present. The sum of the present values of all the forecasted cash flows (both the
discretely forecasted periods and the terminal value) is the indication of value for a specific set of forecast assumptions. 

 

	11 	The high-to-normalized growth adjustment factor reflects the following formula: [(1+long-term growth) + (Transition years / 2) x (Limited
high growth period less long-term growth)] 

  
 

 

			
	

	  	Page 15

  

	 	•	 	Determination of Terminal Value. The terminal value is the value of all cash flows beyond the immediate, discrete forecast period. The terminal value is typically determined by capitalizing cash flow (or other
performance metric) at the end of the forecast period. Capitalization methods for the terminal value vary from single-period capitalizations utilizing variations of the Gordon model to the application of current or projected market multiples.

 For purposes of this analysis, two sets of projections were prepared to model future cash flows under two distinct scenarios. Scenario 1
(Exhibits 5-7) assumes that the Company does not obtain a contract with the government of Guam to manage approximately $450 million in pension assets, but continues to grow its existing AUM. Scenario 2
(Exhibits 8-10) assumes ASC develops this relationship at the end of 2016 while also growing its core business as well. Both sets of projections were prepared by management. 

Cash Flow Forecast – Scenario 1 (no Government Contract) 

As shown in Exhibit 5, revenues are projected to increase from the ongoing base of $5.7 million to $7.8 million in year five via growth in AUM from
$521 million to $827 million, which in turn is partially offset by a reduction in AUM fees from 0.90% to 0.82%. Adjusted EBITDA for owner’s compensation (@ 12.5% of pre-bonus EBITDA) is
projected to increase from $1.3 million to $2.4 million. Scenario 1 entails operating leverage such that the EBITDA margin expands from 22.5% to 30.6%. 

Discount Rate- Scenario 1 
 The
appropriate rate to discount the projected cash flows to the present is the weighted average cost of capital of 14.90% as discussed above and presented in Exhibit 6. 

Terminal Value – Scenario 1 
 The
terminal (or residual) value represents the value of all of the cash flows received after the end of the forecast period. As indicated in Exhibit 7, the product of the projected net operating profit after tax (“NOPAT”) in the terminal year
and the applicable capitalization factor of 10.1x yields the terminal value. 

  
 

 

			
	

	  	Page 16

  

 Indicated Value - Discounted Cash Flow Method (Scenario 1) 

The indicated value is determined by discounting the projected annual cash flows and terminal value to the present at the weighted average cost of capital.
The financial projection used in the valuation analysis measures free cash flows to all capital providers. 
  

					
	 Indicated Value – Discounted Cash Flow Method (Scenario 1)
	  	$	11,200,000	  

 Cash Flow Forecast – Scenario 2 (New Government Contract) 

Scenario 2 as developed by management assumes the Company obtains a contract from the government of Guam to administer the employees’ retirement assets.
As shown in Exhibit 8, Scenario 2 results in a higher level of projected revenues ($10.1 million) and EBITDA ($3.7 million) than in Scenario 1, although the increase is limited by the lower fees (0.40% vs. 0.80%). 

Discount Rate- Scenario 2 
 Given the
lower likelihood of Scenario 2 as of the valuation date vis-à-vis the baseline in Scenario 1, we increased the WACC by 200bps to 16.90%. 

Terminal Value – Scenario 2 
 The
terminal (or residual) value represents the value of all of the cash flows received after the end of the forecast period. The capitalization factor of 8.40x is lower than Scenario 1 because the WACC is higher. As indicated in Exhibit 10, the
terminal value is the product of the terminal year net operating profit after tax (“NOPAT”) in the terminal year and the applicable capitalization factor. 

  
 

 

			
	

	  	Page 17

  

 Indicated Value - Discounted Cash Flow Method (New Government Contract Scenario) 

The indicated value is determined by discounting the projected annual cash flows and terminal value to the present at the weighted average cost of capital of
16.90%. The financial projection used in the valuation analysis measures free cash flows to all capital providers. 
  

					
	 Indicated Value – Discounted Cash Flow Method (Scenario 2)
	  	$	13,700,000	  

 MARKET APPROACH 

The market approach is a general way of determining a value indication of a business, business ownership interest, security or intangible asset by using one or
more methods that compare the subject to similar businesses, business ownership interests, securities or intangible assets that have been sold. 
 Market
methods include a variety of methods that compare the subject with transactions involving similar investments, including publicly traded guideline companies and sales involving controlling interests in public or private guideline companies.
Consideration of prior transactions in interests of a valuation subject is also a method under the market approach. 
 Transactions Method - Internal

 The internal transactions method is a market approach that develops an indication of value based upon actual transactions in the stock of a subject
company or acquisition offers to the extent there have been recent substantive discussions. It is our understanding that ASC management has not received nor solicited an acquisition offer from any institution or individual(s). 

Guideline Public Company Method 
 Guideline public
companies can provide a reasonable basis to develop applicable multiples (e.g., EV/EBITDA, P/E, etc.). Guideline companies are used to develop valuation indications under the presumption that a similar market exists for the subject company and the
guideline companies. In the case of ASC, public companies are not directly relevant for two reasons. One is that the valuation is prepared on a controlling interest basis given the contemplated acquisition of upwards of 75% of the existing shares by
BGHC. Also, the Company is very small in relation to most publicly traded asset managers. 

  
 

 

			
	

	  	Page 18

  

 Guideline Transaction Method 

Acquisition transactions of both publicly and privately held companies in the same or similar business may provide a reasonable basis for valuation of the
subject company. In the case of the asset management and administration industry, a sizable number of transactions typically occur each year; however, the frequency in which pricing and/or key metrics (e.g., AUM, EBITDA and revenues) is reported is
less robust than announced acquisitions. 
 Selected Market Transactions 

Using the SNL Financial database and Mercer Capital’s proprietary research, we developed a group of transactions to provide perspective on current
acquisition pricing for asset managers. Exhibit 11 contains recent transactions involving U.S.-based asset management firms and trust companies that with the exception of one transaction were acquired for less than $200 million. The median
enterprise value in relation to EBITDA, AUM and revenue were 9.6x, 2.0% and 2.2x. The indicated values from this methodology are displayed in Exhibit 12. 
  

					
	 Indicated Value –Transactions Method (AUM Capitalization)
	  	$	10,300,000	  
	 Indicated Value – Transactions Method (EBITDA Capitalization)
	  	$	12,000,000	  
	 Indicated Value –Transactions Method (Revenue Capitalization)
	  	$	12,700,000	  

 RANGE OF FAIR MARKET VALUE 

In Exhibit 1, weights have been assigned to the values indicated by the various methods to develop a range of value. The weights reflect our opinion of the
relative importance or reliability of the methods and serve as a means of simulating the thinking of hypothetical investors in establishing a reasonable range of value for ASC at the valuation date. They do not represent a rigid mathematical
formula. The indicated range of enterprise values represents the Company’s operating value before consideration of excess assets or capital structure. ASC’s total equity value incorporates excess assets and interest-bearing debt
obligations. 

  
 

 

			
	

	  	Page 19

  

 As shown in Exhibit 1, we applied 50% of the weight to the income approaches and 50% to the market
(transaction) approaches. The range of fair market value was developed by adjusting the weights among the indicated values. The midpoint of the $11.0 million to $11.8 million range is $ 11.4 million; or, stated differently, +/- ~4%
from the mid-point. 
 The indicated range of fair market value for the Company’s common equity is $
11.5 million to $ 12.3 million. The equity value reflects adjustments to the enterprise value for cash and securities, less debt, net working capital (net liabilities) and required capital ($500,000). As noted, it is our understanding ASC will
retain its charter as a separate subsidiary of BGHC and therefore will continue to be subject to stand-alone capital requirements. 

Range of Fair Market Value 

Controlling Interest Basis 
  

					
	 Enterprise Value
	  	$	11,000,000 to $11,800,000	  
	 Equity Value
	  	$	11,500,000 to $12,300,000	  

 The estimated range of enterprise value as a percentage or multiple of AUM, revenue, and EBITDA is in line with the
corresponding metrics from the guideline transaction group of 2.0%, 2.2x and 9.6x. We believe these relative value measures substantiate the reasonableness of our opinion. 

  
 

 

			
	

	  	Page 20

  

 Table 3—Relative Value 
  

																					
	 	  	Indicated Value	 	  	Weight	 	 	Low	 	 	Weight	 	 	High	 
	 Correlated Indication of Value
	  				  				 				 				 			
	 Correlated Indication of Value (Enterprise Value)
	  				  	 	100.0	% 	 	$	11,000,000	  	 	 	100.0	% 	 	$	11,800,000	  
	 (Controlling Interest Basis)
	  				  				 				 				 			
	 Adjustments for Balance Sheet @ September 30:
	  				  				 				 				 			
	 + Cash
	  				  				 	 	126,557	  	 				 	 	126,557	  
	 + Marketable Securities
	  				  				 	 	1,384,076	  	 				 	 	1,384,076	  
	 - Capital Requirement for Separate Charter
	  				  				 	 	(500,000	) 	 				 	 	(500,000	) 
	 - Debt
	  				  				 	 	(173,102	) 	 				 	 	(173,102	) 
	 +/- Other Working Capital
	  				  				 	 	(294,384	) 	 				 	 	(294,384	) 
		  				  				 	  
	  
	 	 				 	  
	  
	 
	 Correlated Indication of Value (Total Equity Value)
	  				  				 	$	11,500,000	  	 				 	$	12,300,000	  
		  				  				 	  
	  
	 	 				 	  
	  
	 
	 Relative Value Summary
	  				  				 				 				 			
	 Enterprise Value / AUM
	  	$	510,000,000	  	  				 	 	2.2	% 	 				 	 	2.3	% 
	 Enterprise Value / LTM Revenue
	  	 	5,955,180	  	  				 	 	1.8	x 	 				 	 	2.0	x 
	 Enterprise Value / LTM EBITDA
	  	 	1,043,458	  	  				 	 	10.5	x 	 				 	 	11.3	x 
	 Enterprise Value / LTM Adjusted EBITDA
	  	 	1,223,445	  	  				 	 	9.0	x 	 				 	 	9.6	x 
	 Enterprise Value / Ongoing EBITDA
	  	 	1,242,411	  	  				 	 	8.9	x 	 				 	 	9.5	x 
	 Enterprise Value / 2015B EBITDA - Adjusted
	  	 	1,361,947	  	  				 	 	8.1	x 	 				 	 	8.7	x 
	 Enterprise Value / Ongoing NOPAT
	  	 	691,447	  	  				 	 	15.9	x 	 				 	 	17.1	x 

 Source: Mercer Capital 

  
 

 

 Worksheet Table of Contents & Sources of Information 

ASC Trust Corporation and Subsidiary 
 Valuation
Analysis as of October 25, 2015 
  

					
	 Schedule Listing
	  		  	
		
	 Schedule
	  	 Title

	Schedule 1	  	Historical Balance Sheets
	Schedule 1a	  	Supplemental Notes to Balance Sheets
	Schedule 2	  	Historical Percentage Balance Sheets
	Schedule 3	  	Historical Income Statements
	Schedule 3a	  	Supplemental Notes to Income Statements
	Schedule 4	  	Historical Percentage Income Statements
	Schedule 4a	  	Year-to-Year Growth of Income Statement Components
	Schedule 5	  	Reconciliation of Shareholders’ Equity
	Schedule 6	  	Historical Cash Flow Statements
	
	 Sources of Financial Statement Information

			
	 Financial Reporting Period
	  	 Scope
	  	 Provider

	YTD 9-30-14, 9-30-15	  	Interal	  	Management
	FYE 12-31-14	  	Audit	  	Ernst & Young LLP
	FYE 12-31-13	  	Audit	  	Ernst & Young LLP
	FYE 12-31-12	  	Audit	  	Ernst & Young LLP
	FYE 12-31-11	  	Audit	  	Ernst & Young LLP
	FYE 12-31-10	  	Audit	  	Ernst & Young LLP
	
	RMA Peer Group Information
	
	Data from Annual Statement Studies by The Risk Management Association
	Edition	  	2014-2015	  	
	NAICS Code	  	523920	  	
	Type of Companies	  	Portfolio Management
	Sales	  	Between $5 million and $10 million
	Number of Companies	  	23	  	
	Average Assets	  	$16,855,391	  	
	Average Sales	  	$7,461,696	  	
			
	Exhibit Listing	  		  	
		
	 Exhibit
	  	 Title

	Exhibit 1	  	Summary and Conclusion
	Exhibit 2	  	Derivation of Adjusted Income Statements
	Exhibit 3	  	Margin and Growth Analysis
	Exhibit 4	  	ACAPM Method - Earning Power Capitalization
	Exhibit 5	  	Income Statement Projection - Base w/o Government Contract
	Exhibit 6	  	Weighted Average Cost of Capital - Base Scenario w/o Government Contract
	Exhibit 7	  	DCF Method - w/o New Government Contract
	Exhibit 8	  	Income Statement Projection - with New Government Contract
	Exhibit 9	  	Weighted Average Cost of Capital - Base w/o Government Contract
	Exhibit 10	  	DCF Method - with New Government Contract
	Exhibit 11	  	Guideline Transactions
	Exhibit 12	  	Guideline Transactions Method - Indicated Values
	
	 Guideline Transaction Information

	
	Data from SNL Financial and Mercer Capital Research

 Schedule 1 

ASC Trust Corporation and Subsidiary 
 Historical
Balance Sheets 
  

																																					
	 	 	 	 	 	 	 	 	For the Fiscal Years Ended December 31	 	 	 	 	 	 	 	 	Annualized Growth Rates	 
	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	Notes	 	 	2010-14	 	 	2013-14	 
	 Assets
	 				 				 				 				 				 				 				 				 			
	 Cash & Equivalents
	 	$	126,557	  	 	$	173,241	  	 	$	166,250	  	 	$	166,557	  	 	$	197,269	  	 	$	66,605	  	 				 	 	27.0	% 	 	 	4.2	% 
	 Accounts Receivable-Trade
	 	 	233,346	  	 	 	116,033	  	 	 	133,675	  	 	 	252,267	  	 	 	229,337	  	 	 	202,677	  	 	 	(1)	  	 	 	-13.0	% 	 	 	-13.2	% 
	 Accounts Receivable-Other
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  
	 Prepaid Expenses & Other
	 	 	1,384,076	  	 	 	567,631	  	 	 	495,118	  	 	 	645,098	  	 	 	504,870	  	 	 	1,107,792	  	 	 	(2)	  	 	 	-15.4	% 	 	 	14.6	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Total Current Assets
	 	 	1,743,979	  	 	 	856,905	  	 	 	795,043	  	 	 	1,063,922	  	 	 	931,476	  	 	 	1,377,074	  	 				 	 	-11.2	% 	 	 	7.8	% 
	 Property and Equipment
	 	 	826,889	  	 	 	1,822,157	  	 	 	1,946,075	  	 	 	1,686,816	  	 	 	1,695,178	  	 	 	896,549	  	 	 	(3)	  	 	 	19.4	% 	 	 	-6.4	% 
	 Accumulated Depreciation
	 	 	0	  	 	 	(961,766	) 	 	 	(839,342	) 	 	 	(707,031	) 	 	 	(589,911	) 	 	 	(495,864	) 	 				 	 	nm	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Net Fixed Assets
	 	 	826,889	  	 	 	860,391	  	 	 	1,106,733	  	 	 	979,785	  	 	 	1,105,267	  	 	 	400,685	  	 				 	 	21.1	% 	 	 	-22.3	% 
	 Goodwill & Intangibles
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  
	 Other Assets
	 	 	497,415,222	  	 	 	483,135,328	  	 	 	449,648,012	  	 	 	395,457,619	  	 	 	329,290,545	  	 	 	301,347,397	  	 	 	(4)	  	 	 	12.5	% 	 	 	7.4	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Total Assets
	 	$	499,986,090	  	 	$	484,852,624	  	 	$	451,549,788	  	 	$	397,501,326	  	 	$	331,327,288	  	 	$	303,125,156	  	 				 	 	12.5	% 	 	 	7.4	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Liabilities
	 				 				 				 				 				 				 				 				 			
	 Notes Payable
	 	$	80,000	  	 	$	25,000	  	 	$	100,000	  	 	$	0	  	 	$	100,000	  	 	$	55,000	  	 	 	(5)	  	 	 	-17.9	% 	 	 	-75.0	% 
	 Accounts Payable
	 	 	256,677	  	 	 	198,961	  	 	 	228,268	  	 	 	154,440	  	 	 	36,092	  	 	 	129,751	  	 				 	 	11.3	% 	 	 	-12.8	% 
	 Current Portion Long-Term Debt
	 	 	0	  	 	 	100,717	  	 	 	100,717	  	 	 	85,504	  	 	 	102,143	  	 	 	25,849	  	 				 	 	40.5	% 	 	 	0.0	% 
	 Income Taxes Payable
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  
	 Accrued Expenses & Other
	 	 	271,053	  	 	 	158,948	  	 	 	153,099	  	 	 	193,685	  	 	 	265,976	  	 	 	163,692	  	 	 	(6)	  	 	 	-0.7	% 	 	 	3.8	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Total Current Liabilities
	 	 	607,730	  	 	 	483,626	  	 	 	582,084	  	 	 	433,629	  	 	 	504,211	  	 	 	374,292	  	 				 	 	6.6	% 	 	 	-16.9	% 
	 Long-Term Debt
	 	 	85,169	  	 	 	59,587	  	 	 	148,874	  	 	 	185,721	  	 	 	268,779	  	 	 	43,411	  	 	 	(7)	  	 	 	8.2	% 	 	 	-60.0	% 
	 Deferred Income Taxes
	 				 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  
	 Other Liabilities
	 	 	497,415,222	  	 	 	483,078,832	  	 	 	449,574,711	  	 	 	395,397,419	  	 	 	329,254,256	  	 	 	301,324,894	  	 	 	(8)	  	 	 	12.5	% 	 	 	7.5	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Total Liabilities
	 	$	498,108,120	  	 	$	483,622,045	  	 	$	450,305,669	  	 	$	396,016,769	  	 	$	330,027,246	  	 	$	301,742,597	  	 				 	 	12.5	% 	 	 	7.4	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Shareholders’ Equity
	 				 				 				 				 				 				 				 				 			
	 Common Stock
	 	$	100,000	  	 	$	100,000	  	 	$	100,000	  	 	$	100,000	  	 	$	100,000	  	 	$	100,000	  	 				 	 	0.0	% 	 	 	0.0	% 
	 Paid-In Capital
	 	 	500,000	  	 	 	500,000	  	 	 	500,000	  	 	 	500,000	  	 	 	500,000	  	 	 	500,000	  	 				 	 	0.0	% 	 	 	0.0	% 
	 Retained Earnings
	 	 	1,277,970	  	 	 	630,579	  	 	 	644,119	  	 	 	884,557	  	 	 	700,042	  	 	 	782,559	  	 				 	 	-5.3	% 	 	 	-2.1	% 
	 Treasury Stock
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Total Equity
	 	 	1,877,970	  	 	 	1,230,579	  	 	 	1,244,119	  	 	 	1,484,557	  	 	 	1,300,042	  	 	 	1,382,559	  	 	 	(9)	  	 	 	-2.9	% 	 	 	-1.1	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Total Liabilities & Equity
	 	$	499,986,090	  	 	$	484,852,624	  	 	$	451,549,788	  	 	$	397,501,326	  	 	$	331,327,288	  	 	$	303,125,156	  	 				 	 	12.5	% 	 	 	7.4	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 

 Notes 
 Numbers in
parentheses refer to supplemental notes in Schedule 1a. 

 Schedule 1a 

ASC Trust Corporation and Subsidiary 
 Supplemental
Notes to Balance Sheets 
  

																																	
	 	 	 	 	 	 	 	 	For the Fiscal Years Ended December 31	 	 	 	 	 	NAICS #	 	  	 	 
	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	523920	 	  	Notes	 
	Notes to Balance Sheets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 
	 (1): Accounts Receivable-Trade detail:
	 				 				 				 				 				 				 				  			
	 Accounts Receivable
	 	$	244,273	  	 	$	122,418	  	 	$	141,293	  	 	$	258,652	  	 	$	235,722	  	 	$	209,062	  	 				  			
	 Allowance for Doubtful Accounts
	 	 	(10,927	) 	 	 	(6,385	) 	 	 	(7,618	) 	 	 	(6,385	) 	 	 	(6,385	) 	 	 	(6,385	) 	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Total Accounts Receivable-Trade
	 	$	233,346	  	 	$	116,033	  	 	$	133,675	  	 	$	252,267	  	 	$	229,337	  	 	$	202,677	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Average Days Outstanding
	 	 	nm	  	 	 	7.9	  	 	 	12.5	  	 	 	15.4	  	 	 	16.1	  	 	 	nm	  	 	 	2.0	  	  	 
 
 
 
 
 	Average
Accounts
Receivable
÷
Revenues
× 365	  
  
  
  
  
  
	 (2): Prepaid Expenses & Other detail:
	 				 				 				 				 				 				 				  			
	 Trading Securities
	 	$	1,384,076	  	 	$	546,397	  	 	$	424,261	  	 	$	576,494	  	 	$	322,824	  	 	$	782,991	  	 				  			
	 Available-for-Sale
Securities
	 				 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	31,631	  	 				  			
	 Prepaid Expenses & Other
	 				 	 	21,234	  	 	 	36,394	  	 	 	59,874	  	 	 	77,474	  	 	 	58,140	  	 				  			
	 Notes Receivable
	 				 	 	0	  	 	 	34,463	  	 	 	8,730	  	 	 	104,572	  	 	 	235,030	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Total Prepaid Expenses & Other
	 	$	1,384,076	  	 	$	567,631	  	 	$	495,118	  	 	$	645,098	  	 	$	504,870	  	 	$	1,107,792	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 (3): Property and Equipment detail:
	 				 				 				 				 				 				 				  			
	 Vehicles
	 	$	83,230	  	 	$	422,433	  	 	$	422,433	  	 	$	352,624	  	 	$	390,601	  	 	$	240,352	  	 				  			
	 Leasehold Improvements
	 	 	110,314	  	 	 	241,674	  	 	 	209,592	  	 	 	205,827	  	 	 	201,001	  	 	 	148,578	  	 				  			
	 Computer
	 	 	28,639	  	 	 	208,994	  	 	 	213,848	  	 	 	220,653	  	 	 	207,211	  	 	 	177,456	  	 				  			
	 Furniture & Fixtures
	 	 	12,939	  	 	 	163,035	  	 	 	216,275	  	 	 	203,177	  	 	 	198,651	  	 	 	192,947	  	 				  			
	 Software
	 	 	6,524	  	 	 	135,247	  	 	 	103,559	  	 	 	103,559	  	 	 	103,559	  	 	 	128,261	  	 				  			
	 Office Equipment
	 	 	0	  	 	 	65,531	  	 	 	10,535	  	 	 	15,733	  	 	 	9,812	  	 	 	8,955	  	 				  			
	 Construction in Progress
	 	 	0	  	 	 	0	  	 	 	184,590	  	 	 	0	  	 	 	0	  	 	 	0	  	 				  			
	 Land
	 	 	585,243	  	 	 	585,243	  	 	 	585,243	  	 	 	585,243	  	 	 	584,343	  	 	 	0	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Total Property and Equipment
	 	 	826,889	  	 	 	1,822,157	  	 	 	1,946,075	  	 	 	1,686,816	  	 	 	1,695,178	  	 	 	896,549	  	 				  			
	 Accumulated Depreciation
	 				 	 	(961,766	) 	 	 	(839,342	) 	 	 	(707,031	) 	 	 	(589,911	) 	 	 	(495,864	) 	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Net Fixed Assets
	 	$	826,889	  	 	$	860,391	  	 	$	1,106,733	  	 	$	979,785	  	 	$	1,105,267	  	 	$	400,685	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Fixed Asset Turnover
	 	 	nm	  	 	 	5.9	  	 	 	5.4	  	 	 	5.5	  	 	 	6.5	  	 	 	nm	  	 	 	107.6	  	  	 
 
 
 	Revenues
÷ Average
Net Fixed
Assets	  
  
  
  
	 (4): Other Assets detail:
	 				 				 				 				 				 				 				  			
	 Funds Held for Clients:
	 				 				 				 				 				 				 				  			
	 401(k) Trust
	 	$	374,568,635	  	 	$	373,524,553	  	 	$	346,559,286	  	 	$	308,103,243	  	 	 	252,964,761	  	 	 	214,082,737	  	 				  			
	 CMI Trust
	 	 	118,824,550	  	 	 	105,645,217	  	 	 	99,016,292	  	 	 	83,947,667	  	 	 	73,779,046	  	 	 	75,625,384	  	 				  			
	 Government Trust
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	9,140,473	  	 				  			
	 Offshore Trust
	 	 	2,894,749	  	 	 	2,330,212	  	 	 	2,017,360	  	 	 	1,476,999	  	 	 	1,309,426	  	 	 	1,345,645	  	 				  			
	 Distribution/Contribution Accounts
	 	 	1,046,954	  	 	 	1,534,651	  	 	 	1,913,531	  	 	 	1,821,335	  	 	 	1,154,244	  	 	 	1,018,604	  	 				  			
	 Cafeteria Plans
	 	 	80,334	  	 	 	44,199	  	 	 	68,242	  	 	 	46,087	  	 	 	44,629	  	 	 	94,713	  	 				  			
	 Seventh-Day Adventist Non Qualified Trust
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	2,088	  	 	 	2,150	  	 	 	17,338	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Total Funds Held for Clients
	 	 	497,415,222	  	 	 	483,078,832	  	 	 	449,574,711	  	 	 	395,397,419	  	 	 	329,254,256	  	 	 	301,324,894	  	 				  			
	 Deferred Tax Assets
	 				 	 	10,189	  	 	 	22,954	  	 	 	28,368	  	 	 	17,976	  	 	 	22,503	  	 				  			
	 Other Assets
	 				 	 	46,307	  	 	 	50,347	  	 	 	31,832	  	 	 	18,313	  	 	 	0	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Total Other Assets
	 	$	497,415,222	  	 	$	483,135,328	  	 	$	449,648,012	  	 	$	395,457,619	  	 	$	329,290,545	  	 	$	301,347,397	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 (5): Notes Payable detail:
	 				 				 				 				 				 				 				  			
	 Line of Credit
	 	$	80,000	  	 	$	25,000	  	 	$	100,000	  	 	$	0	  	 	$	100,000	  	 	$	55,000	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Total Notes Payable
	 	$	80,000	  	 	$	25,000	  	 	$	100,000	  	 	$	0	  	 	$	100,000	  	 	$	55,000	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 (6): Accrued Expenses & Other detail:
	 				 				 				 				 				 				 				  			
	 Accrued Expenses
	 	$	271,053	  	 	$	158,948	  	 	$	153,099	  	 	$	193,685	  	 	$	265,976	  	 	$	163,692	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			
	 Total Accrued Expenses & Other
	 	$	271,053	  	 	$	158,948	  	 	$	153,099	  	 	$	193,685	  	 	$	265,976	  	 	$	163,692	  	 				  			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				  			

 Schedule 1a continued 

ASC Trust Corporation and Subsidiary 
 Supplemental
Notes to Balance Sheets 
  

																																	
	 	 	 	 	 	 	 	 	For the Fiscal Years Ended December 31	 	 	 	 	 	NAICS #	 	 	 	 
	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	523920	 	 	Notes	 
	Notes to Balance Sheets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 (7): Long-Term Debt detail:
	 				 				 				 				 				 				 				 			
	 Notes Payable, vehicles
	 	$	63,435	  	 	$	78,158	  	 	$	114,941	  	 	$	82,115	  	 	$	129,809	  	 	$	69,260	  	 				 			
	 Note Payable to ANZ Bank, property
	 	 	29,666	  	 	 	82,146	  	 	 	134,650	  	 	 	189,110	  	 	 	241,113	  	 	 	0	  	 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 			
	 Total Long-Term Debt
	 	 	93,102	  	 	 	160,304	  	 	 	249,591	  	 	 	271,225	  	 	 	370,922	  	 	 	69,260	  	 				 			
	 Current Portion Long-Term Debt
	 	 	(7,933	) 	 	 	(100,717	) 	 	 	(100,717	) 	 	 	(85,504	) 	 	 	(102,143	) 	 	 	(25,849	) 	 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 			
	 Non-Current Portion Long-Term Debt
	 	$	85,169	  	 	$	59,587	  	 	$	148,874	  	 	$	185,721	  	 	$	268,779	  	 	$	43,411	  	 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 			
	 (8): Other Liabilities detail:
	 				 				 				 				 				 				 				 			
	 Client Funds Obligations:
	 				 				 				 				 				 				 				 			
	 401(k) Trust
	 	$	374,568,635	  	 	$	373,524,553	  	 	$	346,559,286	  	 	$	308,103,243	  	 	 	252,964,761	  	 	 	214,082,737	  	 				 			
	 CMI Trust
	 	 	118,824,550	  	 	 	105,645,217	  	 	 	99,016,292	  	 	 	83,947,667	  	 	 	73,779,046	  	 	 	75,625,384	  	 				 			
	 Government Trust
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	9,140,473	  	 				 			
	 Offshore Trust
	 	 	2,894,749	  	 	 	2,330,212	  	 	 	2,017,360	  	 	 	1,476,999	  	 	 	1,309,426	  	 	 	1,345,645	  	 				 			
	 Distribution/Contribution Accounts
	 	 	1,046,954	  	 	 	1,534,651	  	 	 	1,913,531	  	 	 	1,821,335	  	 	 	1,154,244	  	 	 	1,018,604	  	 				 			
	 Cafeteria Plans
	 	 	80,334	  	 	 	44,199	  	 	 	68,242	  	 	 	46,087	  	 	 	44,629	  	 	 	94,713	  	 				 			
	 Seventh-Day Adventist Non Qualified Trust
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	2,088	  	 	 	2,150	  	 	 	17,338	  	 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 			
	 Total Funds Held for Clients
	 	 	497,415,222	  	 	 	483,078,832	  	 	 	449,574,711	  	 	 	395,397,419	  	 	 	329,254,256	  	 	 	301,324,894	  	 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 			
	 Total Other Liabilities
	 	$	497,415,222	  	 	$	483,078,832	  	 	$	449,574,711	  	 	$	395,397,419	  	 	$	329,254,256	  	 	$	301,324,894	  	 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 			
	 (9): See Schedule 5 for reconciliation of shareholders’ equity.
	 				 				 				 				 				 				 				 			
	 Other Balance Sheet Analysis
	 				 				 				 				 				 				 				 			
	 Liquidity & Working Capital
	 				 				 				 				 				 				 				 			
	 Working Capital
	 	$	1,136,250	  	 	$	373,279	  	 	$	212,959	  	 	$	630,293	  	 	$	427,265	  	 	$	1,002,782	  	 				 	 
 
 
 
 
 	Total
Current
Assets -
Total
Current
Liabilities	  
  
  
  
  
  
	 Working Capital as a % of Revenues
	 	 	19.08	% 	 	 	6.44	% 	 	 	3.76	% 	 	 	11.08	% 	 	 	8.70	% 	 	 	24.81	% 	 	 	11.2	% 	 	 
 
 	Working
Capital ÷
Revenues	  
  
  
	 Current Ratio
	 	 	2.9	  	 	 	1.8	  	 	 	1.4	  	 	 	2.5	  	 	 	1.8	  	 	 	3.7	  	 	 	2.5	  	 	 
 
 
 
 
 	Total
Current
Assets ÷
Total
Current
Liabilities	  
  
  
  
  
  
	 Capitalization
	 				 				 				 				 				 				 				 			
	 Book Value of Equity
	 	$	1,877,970	  	 	$	1,230,579	  	 	$	1,244,119	  	 	$	1,484,557	  	 	$	1,300,042	  	 	$	1,382,559	  	 				 	 
 	Total
Equity	  
  
	 Total Interest-Bearing Debt
	 	 	165,169	  	 	 	185,304	  	 	 	349,591	  	 	 	271,225	  	 	 	470,922	  	 	 	124,260	  	 				 	 
 
 
 
 
 
 
 	Notes
Payable +
Current
Portion
Long-
Term Debt
+ Long-
Term Debt	  
  
  
  
 
  
 
  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 			
	 Book Value of Invested Capital
	 	$	2,043,139	  	 	$	1,415,883	  	 	$	1,593,710	  	 	$	1,755,782	  	 	$	1,770,964	  	 	$	1,506,819	  	 				 	 
 
 
 
 
 
 	Book
Value of
Equity +
Total
Interest-
Bearing
Debt	  
  
  
  
 
  
  
	 Leverage
	 				 				 				 				 				 				 				 			
	 Long-Term Debt as a % of Equity
	 	 	4.5	% 	 	 	4.8	% 	 	 	12.0	% 	 	 	12.5	% 	 	 	20.7	% 	 	 	3.1	% 	 	 	59.2	% 	 			
	 Total Interest-Bearing Debt as a % of Equity
	 	 	8.8	% 	 	 	15.1	% 	 	 	28.1	% 	 	 	18.3	% 	 	 	36.2	% 	 	 	9.0	% 	 	 	150.0	% 	 			
	 Total Interest-Bearing Debt as a % of Assets
	 	 	0.0	% 	 	 	0.0	% 	 	 	0.1	% 	 	 	0.1	% 	 	 	0.1	% 	 	 	0.0	% 	 	 	45.6	% 	 			
	 Total Liabilities (x-Client AUA as a % of Equity)
	 	 	36.9	% 	 	 	44.1	% 	 	 	58.8	% 	 	 	41.7	% 	 	 	59.5	% 	 	 	30.2	% 	 	 	228.6	% 	 			
	 Average Assets ÷ Average Equity
	 	 	137.9	% 	 	 	146.2	% 	 	 	144.6	% 	 	 	146.5	% 	 	 	142.2	% 	 	 	128.6	% 	 	 	328.9	% 	 			
	 Times Interest Earned:
	 				 				 				 				 				 				 				 			
	 EBIT / Interest Expense
	 	 	1,316.2	  	 	 	72.4	  	 	 	39.7	  	 	 	45.4	  	 	 	54.4	  	 	 	117.5	  	 	 	21.7	  	 			
	 EBITDA / Interest Expense
	 	 	1,874.0	  	 	 	100.2	  	 	 	49.7	  	 	 	54.9	  	 	 	67.1	  	 	 	132.9	  	 				 			

 Schedule 2 

ASC Trust Corporation and Subsidiary 
 Historical
Percentage Balance Sheets 
  

																													
	 	  	 	 	 	 	 	 	For the Fiscal Years Ended December 31	 	 	 	 	 	NAICS #	 
	 	  	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	523920	 
	 Assets
	  				 				 				 				 				 				 			
	 Cash & Equivalents
	  	 	0.03	% 	 	 	0.04	% 	 	 	0.04	% 	 	 	0.04	% 	 	 	0.06	% 	 	 	0.02	% 	 	 	32.5	% 
	 Accounts Receivable-Trade
	  	 	0.05	% 	 	 	0.02	% 	 	 	0.03	% 	 	 	0.06	% 	 	 	0.07	% 	 	 	0.07	% 	 	 	17.6	% 
	 Accounts Receivable-Other
	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	na	  
	 Prepaid Expenses & Other
	  	 	0.28	% 	 	 	0.12	% 	 	 	0.11	% 	 	 	0.16	% 	 	 	0.15	% 	 	 	0.37	% 	 	 	10.4	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Current Assets
	  	 	0.35	% 	 	 	0.18	% 	 	 	0.18	% 	 	 	0.27	% 	 	 	0.28	% 	 	 	0.45	% 	 	 	60.5	% 
	 Property and Equipment
	  	 	0.17	% 	 	 	0.38	% 	 	 	0.43	% 	 	 	0.42	% 	 	 	0.51	% 	 	 	0.30	% 	 	 	na	  
	 Accumulated Depreciation
	  	 	0.00	% 	 	 	-0.20	% 	 	 	-0.19	% 	 	 	-0.18	% 	 	 	-0.18	% 	 	 	-0.16	% 	 	 	na	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Fixed Assets
	  	 	0.17	% 	 	 	0.18	% 	 	 	0.25	% 	 	 	0.25	% 	 	 	0.33	% 	 	 	0.13	% 	 	 	14.6	% 
	 Goodwill & Intangibles
	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	6.6	% 
	 Other Assets
	  	 	99.49	% 	 	 	99.65	% 	 	 	99.58	% 	 	 	99.49	% 	 	 	99.39	% 	 	 	99.41	% 	 	 	18.3	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Assets
	  	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.0	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Liabilities
	  				 				 				 				 				 				 			
	 Notes Payable
	  	 	0.02	% 	 	 	0.01	% 	 	 	0.02	% 	 	 	0.00	% 	 	 	0.03	% 	 	 	0.02	% 	 	 	24.9	% 
	 Accounts Payable
	  	 	0.05	% 	 	 	0.04	% 	 	 	0.05	% 	 	 	0.04	% 	 	 	0.01	% 	 	 	0.04	% 	 	 	3.6	% 
	 Current Portion Long-Term Debt
	  	 	0.00	% 	 	 	0.02	% 	 	 	0.02	% 	 	 	0.02	% 	 	 	0.03	% 	 	 	0.01	% 	 	 	2.7	% 
	 Income Taxes Payable
	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.0	% 
	 Accrued Expenses & Other
	  	 	0.05	% 	 	 	0.03	% 	 	 	0.03	% 	 	 	0.05	% 	 	 	0.08	% 	 	 	0.05	% 	 	 	16.2	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Current Liabilities
	  	 	0.12	% 	 	 	0.10	% 	 	 	0.13	% 	 	 	0.11	% 	 	 	0.15	% 	 	 	0.12	% 	 	 	47.4	% 
	 Long-Term Debt
	  	 	0.02	% 	 	 	0.01	% 	 	 	0.03	% 	 	 	0.05	% 	 	 	0.08	% 	 	 	0.01	% 	 	 	18.0	% 
	 Deferred Income Taxes
	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.0	% 
	 Other Liabilities
	  	 	99.49	% 	 	 	99.63	% 	 	 	99.56	% 	 	 	99.47	% 	 	 	99.37	% 	 	 	99.41	% 	 	 	4.1	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Liabilities
	  	 	99.62	% 	 	 	99.75	% 	 	 	99.72	% 	 	 	99.63	% 	 	 	99.61	% 	 	 	99.54	% 	 	 	69.5	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Shareholders’ Equity
	  				 				 				 				 				 				 			
	 Common Stock
	  	 	0.02	% 	 	 	0.02	% 	 	 	0.02	% 	 	 	0.03	% 	 	 	0.03	% 	 	 	0.03	% 	 	 	na	  
	 Paid-In Capital
	  	 	0.10	% 	 	 	0.10	% 	 	 	0.11	% 	 	 	0.13	% 	 	 	0.15	% 	 	 	0.16	% 	 	 	na	  
	 Retained Earnings
	  	 	0.26	% 	 	 	0.13	% 	 	 	0.14	% 	 	 	0.22	% 	 	 	0.21	% 	 	 	0.26	% 	 	 	na	  
	 Treasury Stock
	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	na	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Equity
	  	 	0.38	% 	 	 	0.25	% 	 	 	0.28	% 	 	 	0.37	% 	 	 	0.39	% 	 	 	0.46	% 	 	 	30.4	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Liabilities & Equity
	  	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.0	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 Schedule 3 

ASC Trust Corporation and Subsidiary 
 Historical Income
Statements 
  

																																																	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Interim Financial Detail	 	 	 	 
	 	 	Last 12 mos.	 	 	 	 	 	For the Fiscal Years Ended December 31	 	 	 	 	 	 	 	 	Annualized Growth Rates	 	 	9 mos.	 	 	9 mos.	 	 	 	 
	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	Notes	 	 	2010-14	 	 	2013-14	 	 	9/30/2015	 	 	9/30/2014	 	 	% Change	 
	 Income Statements
	 				 				 				 				 				 				 				 				 				 				 				 			
	 Revenues
	 	$	5,955,180	  	 	$	5,799,617	  	 	$	5,656,605	  	 	$	5,689,964	  	 	$	4,909,590	  	 	$	4,041,773	  	 	 	(1	) 	 	 	9.4	% 	 	 	2.5	% 	 	$	4,399,222	  	 	$	4,243,659	  	 	 	3.7	% 
	 Operating Expense
	 	 	5,000,984	  	 	 	4,809,542	  	 	 	5,036,649	  	 	 	4,876,577	  	 	 	4,297,104	  	 	 	3,251,048	  	 	 	(2	) 	 	 	10.3	% 	 	 	-4.5	% 	 	 	3,708,334	  	 	 	3,516,892	  	 	 	5.4	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating Income
	 	 	954,196	  	 	 	990,075	  	 	 	619,956	  	 	 	813,387	  	 	 	612,486	  	 	 	790,725	  	 				 	 	5.8	% 	 	 	59.7	% 	 	 	690,888	  	 	 	726,767	  	 	 	-4.9	% 
	 Other Income/(Expense)
	 				 				 				 				 				 				 				 				 				 				 				 			
	 Interest Income
	 	 	(118	) 	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  	 	 	0	  	 	 	118	  	 	 	-100.0	% 
	 Interest Expense
	 	 	(557	) 	 	 	(11,265	) 	 	 	(15,050	) 	 	 	(17,060	) 	 	 	(11,770	) 	 	 	(7,697	) 	 				 	 	nm	  	 	 	nm	  	 	 	0	  	 	 	(10,708	) 	 	 	nm	  
	 Other, Net
	 	 	(221,302	) 	 	 	(175,001	) 	 	 	(23,052	) 	 	 	(38,048	) 	 	 	28,277	  	 	 	113,307	  	 	 	(3	) 	 	 	nm	  	 	 	nm	  	 	 	(27,377	) 	 	 	18,924	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Other Income/(Expense)
	 	 	(221,976	) 	 	 	(186,266	) 	 	 	(38,102	) 	 	 	(55,108	) 	 	 	16,507	  	 	 	105,610	  	 				 	 	nm	  	 	 	nm	  	 	 	(27,377	) 	 	 	8,333	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Pre-Tax Income
	 	 	732,220	  	 	 	803,809	  	 	 	581,854	  	 	 	758,279	  	 	 	628,993	  	 	 	896,335	  	 				 	 	-2.7	% 	 	 	38.1	% 	 	 	663,511	  	 	 	735,100	  	 	 	-9.7	% 
	 Income Tax Expense/(Benefit)
	 	 	13,560	  	 	 	13,560	  	 	 	3,817	  	 	 	(6,331	) 	 	 	7,919	  	 	 	16,717	  	 				 	 	-5.1	% 	 	 	255.3	% 	 	 	0	  	 	 	0	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Income from Continuing Operations
	 	 	718,660	  	 	 	790,249	  	 	 	578,037	  	 	 	764,610	  	 	 	621,074	  	 	 	879,618	  	 				 	 	-2.6	% 	 	 	36.7	% 	 	 	663,511	  	 	 	735,100	  	 	 	-9.7	% 
	 Extraordinary Income/(Expense)
	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  	 	 	0	  	 	 	0	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Income
	 	$	718,660	  	 	$	790,249	  	 	$	578,037	  	 	$	764,610	  	 	$	621,074	  	 	$	879,618	  	 				 	 	-2.6	% 	 	 	36.7	% 	 	$	663,511	  	 	$	735,100	  	 	 	-9.7	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Memo: EBITDA Derivation
	 				 				 				 				 				 				 				 				 				 				 				 			
	 Pre-Tax Income
	 	$	732,220	  	 	$	803,809	  	 	$	581,854	  	 	$	758,279	  	 	$	628,993	  	 	$	896,335	  	 				 	 	-2.7	% 	 	 	38.1	% 	 	$	663,511	  	 	$	735,100	  	 	 	-10	% 
	 - Interest Income
	 	 	118	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  	 	 	0	  	 	 	(118	) 	 	 	nm	  
	 + Interest Expense
	 	 	557	  	 	 	11,265	  	 	 	15,050	  	 	 	17,060	  	 	 	11,770	  	 	 	7,697	  	 				 	 	10.0	% 	 	 	-25.1	% 	 	 	0	  	 	 	10,708	  	 	 	-100	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 EBIT
	 	 	732,895	  	 	 	815,074	  	 	 	596,904	  	 	 	775,339	  	 	 	640,763	  	 	 	904,032	  	 				 	 	-2.6	% 	 	 	36.6	% 	 	 	663,511	  	 	 	745,691	  	 	 	-11	% 
	 + Write-Off of Construction in Progress
	 	 	184,590	  	 	 	184,590	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 	 	nm	  	 	 	nm	  	 	 	0	  	 	 	0	  	 			
	 + Depreciation & Amortization
	 	 	125,973	  	 	 	129,169	  	 	 	150,343	  	 	 	160,930	  	 	 	148,683	  	 	 	118,564	  	 				 	 	2.2	% 	 	 	-14.1	% 	 	 	79,463	  	 	 	82,659	  	 	 	-4	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 EBITDA
	 	$	1,043,458	  	 	$	1,128,833	  	 	$	747,247	  	 	$	936,269	  	 	$	789,446	  	 	$	1,022,596	  	 				 	 	2.5	% 	 	 	51.1	% 	 	$	742,975	  	 	$	828,350	  	 	 	-10	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 + Owners Comp in Excess of Salary
	 	 	280,000	  	 	 	280,000	  	 	 	475,000	  	 	 	220,000	  	 	 	620,000	  	 	 	435,000	  	 				 				 				 	 	0	  	 	 	0	  	 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 				 	  
	  
	 	 	  
	  
	 	 			
	 Adjusted EBITDA
	 	$	1,323,458	  	 	$	1,408,833	  	 	$	1,222,247	  	 	$	1,156,269	  	 	$	1,409,446	  	 	$	1,457,596	  	 				 	 	-0.8	% 	 	 	15.3	% 	 	$	742,975	  	 	$	828,350	  	 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
													
	 	 	 	 	 	Est. Bonus /	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Base Pay	 	 	Commissions	 	 	Retirement	 	 	Benefit $	 	 	Total Comp	 	 	% LTM Rev	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Memo: Current Executive Comp.
	 				 				 				 				 				 				 				 				 				 				 				 			
	 David John
	 	$	200,000	  	 	$	400,000	  	 	$	55,000	  	 	$	6,000	  	 	$	661,000	  	 	 	11.1	% 	 				 				 				 				 				 			
	 Donald Clark
	 	 	110,000	  	 	 	16,500	  	 	 	16,500	  	 	 	6,000	  	 	 	149,000	  	 	 	2.5	% 	 				 				 				 				 				 			
	 Gabrielle Bamba
	 	 	105,000	  	 	 	16,000	  	 	 	15,750	  	 	 	6,000	  	 	 	142,750	  	 	 	2.4	% 	 				 				 				 				 				 			
	 Candy Okuhama
	 	 	85,000	  	 	 	50,000	  	 	 	12,750	  	 	 	6,000	  	 	 	153,750	  	 	 	2.6	% 	 				 				 				 				 				 			
	 Eloida Battung
	 	 	85,000	  	 	 	12,750	  	 	 	12,750	  	 	 	6,000	  	 	 	116,500	  	 	 	2.0	% 	 				 				 				 				 				 			
	 Michelle Quichocho
	 	 	75,000	  	 	 	11,250	  	 	 	11,250	  	 	 	6,000	  	 	 	103,500	  	 	 	1.7	% 	 				 				 				 				 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 				 				 				 			
	 Total
	 	$	660,000	  	 	$	506,500	  	 	$	124,000	  	 	$	36,000	  	 	$	1,326,500	  	 	 	22.3	% 	 				 				 				 				 				 			
	 Percentage of LTM Revenue
	 	 	11.1	% 	 	 	8.5	% 	 	 	2.1	% 	 	 	0.6	% 	 	 	22.3	% 	 				 				 				 				 				 				 			
	 Memo:
	 				 				 				 				 				 				 				 				 				 				 				 			
	 Interest Expense
	 	$	557	  	 	$	11,265	  	 	$	15,050	  	 	$	17,060	  	 	$	11,770	  	 	$	7,697	  	 				 				 				 				 				 			
	 ÷ Average Interest-Bearing Debt Balance
	 	 	175,236	  	 	 	267,448	  	 	 	310,408	  	 	 	371,074	  	 	 	297,591	  	 	 	124,260	  	 				 				 				 				 				 			
	 = Implied Cost of Debt
	 	 	0.32	% 	 	 	4.21	% 	 	 	4.85	% 	 	 	4.60	% 	 	 	3.96	% 	 	 	6.19	% 	 				 				 				 				 				 			

 Notes 
 Numbers in
parentheses refer to supplemental notes in Schedule 3a. 

 Schedule 3a 

ASC Trust Corporation and Subsidiary 
 Supplemental
Notes to Income Statements 
  

																																													
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Interim Financial Detail	 	 	 	 
	 	 	Last 12 mos.	 	 	 	 	 	For the Fiscal Years Ended December 31	 	 	 	 	 	Annualized Growth Rates	 	 	9 mos.	 	 	9 mos.	 	 	 	 
	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	2010-14	 	 	2013-14	 	 	9/30/2015	 	 	9/30/2014	 	 	% Change	 
	 Notes to Income Statements
	 				 				 				 				 				 				 				 				 				 				 			
	 (1): Revenues detail:
	 				 				 				 				 				 				 				 				 				 				 			
	 Investment Management Fees
	 	$	4,690,281	  	 	$	4,477,794	  	 	$	4,384,075	  	 	$	4,153,275	  	 	$	3,561,445	  	 	$	2,854,170	  	 	 	11.92	% 	 	 	2.14	% 	 	$	3,538,657	  	 	$	3,326,170	  	 	 	6.4	% 
	 Benefits Plan Administration
	 	 	424,887	  	 	 	440,053	  	 	 	429,450	  	 	 	497,871	  	 	 	469,476	  	 	 	541,112	  	 	 	-5.04	% 	 	 	2.47	% 	 	 	317,597	  	 	 	332,763	  	 	 	-4.6	% 
	 Processing Revenue
	 	 	316,094	  	 	 	321,613	  	 	 	304,624	  	 	 	268,624	  	 	 	197,737	  	 	 	235,431	  	 	 	8.11	% 	 	 	5.58	% 	 	 	243,429	  	 	 	248,948	  	 	 	-2.2	% 
	 GRT Income
	 	 	171,271	  	 	 	220,238	  	 	 	214,899	  	 	 	211,009	  	 	 	188,653	  	 	 	152,382	  	 	 	9.65	% 	 	 	2.48	% 	 	 	117,184	  	 	 	166,150	  	 	 	-29.5	% 
	 Loan Maintenance Fee
	 	 	240,522	  	 	 	227,795	  	 	 	213,799	  	 	 	198,920	  	 	 	170,952	  	 	 	104,502	  	 	 	21.51	% 	 	 	6.55	% 	 	 	182,356	  	 	 	169,629	  	 	 	7.5	% 
	 Non-Operating / Other Income
	 	 	0	  	 	 	14,725	  	 	 	(53,485	) 	 	 	(27,509	) 	 	 	26,653	  	 	 	110,986	  	 				 				 				 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Revenues
	 	$	5,843,056	  	 	$	5,702,218	  	 	$	5,493,362	  	 	$	5,302,190	  	 	$	4,614,916	  	 	$	3,998,583	  	 	 	9.28	% 	 	 	3.80	% 	 	$	4,399,222	  	 	$	4,243,659	  	 	 	3.7	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Memo: Asset Flows & Realized Fees
	 	 	2015 Budget	  	 				 				 				 				 				 				 				 				 				 			
	 Beginning Assets Under Management (AUM)
	 	$	498,821,041	  	 	$	464,496,496	  	 	$	410,488,123	  	 	$	344,815,545	  	 	$	314,439,720	  	 	 	na	  	 				 				 	$	498,821,041	  	 	$	464,496,496	  	 			
	 Contributions
	 	 	80,000,000	  	 	 	70,987,006	  	 	 	66,755,441	  	 	 	58,419,434	  	 	 	56,354,528	  	 	 	49,117,615	  	 				 				 	 	na	  	 	 	na	  	 			
	 Distributions
	 	 	(55,000,000	) 	 	 	(47,915,939	) 	 	 	(53,456,193	) 	 	 	(41,507,806	) 	 	 	(32,722,823	) 	 	 	(29,003,684	) 	 				 				 	 	na	  	 	 	na	  	 			
	 Net Takeovers
	 	 	(2,750,000	) 	 	 	(2,030,000	) 	 	 	4,632,000	  	 	 	24,765,000	  	 	 	20,815,000	  	 	 	0	  	 				 				 	 	na	  	 	 	na	  	 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 				 				 			
	 Total Net Flows
	 	 	22,250,000	  	 	 	21,041,067	  	 	 	17,931,248	  	 	 	41,676,628	  	 	 	44,446,705	  	 	 	20,113,931	  	 				 				 	 	na	  	 	 	na	  	 			
	 Change in Market Value
	 	 	(1,071,041	) 	 	 	13,283,478	  	 	 	36,077,125	  	 	 	23,995,950	  	 	 	(14,070,880	) 	 	 	na	  	 				 				 	 	na	  	 	 	na	  	 			
	 Ending AUM
	 	 	520,000,000	  	 	 	498,821,041	  	 	 	464,496,496	  	 	 	410,488,123	  	 	 	344,815,545	  	 	 	314,439,720	  	 				 				 	 	496,174,000	  	 	 	489,366,000	  	 			
		 	 	LTM Avg	  	 				 				 				 				 				 				 				 	 
 	LTM avg ~$505M based upon
month end $s	  
  	 			
	 Approximate Average AUM
	 	$	505,000,000	  	 	$	481,658,769	  	 	$	437,492,310	  	 	$	377,651,834	  	 	$	329,627,633	  	 	$	314,439,720	  	 				 				 				 			
	 Effective Realized Fee
	 	 	0.93	% 	 	 	0.93	% 	 	 	1.00	% 	 	 	1.10	% 	 	 	1.08	% 	 	 	na	  	 				 				 				 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 				 				 			
	 Management Fee
	 	$	4,690,281	  	 	$	4,477,794	  	 	$	4,384,075	  	 	$	4,153,275	  	 	$	3,561,445	  	 	$	2,854,170	  	 				 				 				 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 				 				 			
	 Memo: Customer Detail
	 				 				 				 				 				 				 				 				 				 				 			
	 Participants
	 	 	22,984	  	 	 	21,547	  	 	 	20,583	  	 	 	19,755	  	 	 	17,424	  	 	 	16,045	  	 				 				 				 				 			
	 Average Balance
	 	$	21,972	  	 	$	22,354	  	 	$	21,255	  	 	$	19,117	  	 	$	18,918	  	 	$	19,597	  	 				 				 				 				 			
	 Plans
	 	 	333	  	 	 	307	  	 	 	274	  	 	 	238	  	 	 	206	  	 	 	201	  	 				 				 				 				 			
	 Participants Per Plans
	 	 	69	  	 	 	70	  	 	 	75	  	 	 	83	  	 	 	85	  	 	 	80	  	 				 				 				 				 			
	 (2): Operating Expense detail:
	 				 				 				 				 				 				 				 				 				 				 			
	 Salaries & Wages
	 	$	1,850,499	  	 	$	1,765,388	  	 	$	1,789,866	  	 	$	1,811,820	  	 	$	1,562,509	  	 	$	1,170,011	  	 	 	10.83	% 	 	 	-1.37	% 	 	$	1,805,806	  	 	$	1,720,695	  	 	 	4.9	% 
	 Employee Benefits
	 	 	1,051,877	  	 	 	940,168	  	 	 	1,088,406	  	 	 	943,060	  	 	 	668,564	  	 	 	522,909	  	 	 	15.80	% 	 	 	-13.62	% 	 	 	391,478	  	 	 	279,769	  	 	 	39.9	% 
	 Professional Fees
	 	 	430,088	  	 	 	317,147	  	 	 	331,979	  	 	 	186,808	  	 	 	204,429	  	 	 	155,904	  	 	 	19.43	% 	 	 	-4.47	% 	 	 	335,426	  	 	 	222,485	  	 	 	50.8	% 
	 Occupancy
	 	 	267,550	  	 	 	257,669	  	 	 	298,525	  	 	 	355,077	  	 	 	292,437	  	 	 	189,746	  	 	 	7.95	% 	 	 	-13.69	% 	 	 	210,704	  	 	 	200,824	  	 	 	4.9	% 
	 Gross Receipts Tax
	 	 	177,359	  	 	 	226,326	  	 	 	218,224	  	 	 	211,009	  	 	 	188,653	  	 	 	152,677	  	 	 	10.34	% 	 	 	3.71	% 	 	 	117,184	  	 	 	166,150	  	 	 	-29.5	% 
	 Information Systems Expense
	 	 	184,957	  	 	 	176,898	  	 	 	191,404	  	 	 	222,485	  	 	 	174,272	  	 	 	142,456	  	 	 	5.56	% 	 	 	-7.58	% 	 	 	141,361	  	 	 	133,302	  	 	 	6.0	% 
	 Travel & Entertainment
	 	 	130,821	  	 	 	150,364	  	 	 	112,149	  	 	 	112,043	  	 	 	111,699	  	 	 	146,830	  	 	 	0.60	% 	 	 	34.08	% 	 	 	89,931	  	 	 	109,474	  	 	 	-17.9	% 
	 Payroll Taxes
	 	 	37,017	  	 	 	142,116	  	 	 	149,583	  	 	 	150,508	  	 	 	104,576	  	 	 	80,848	  	 	 	15.14	% 	 	 	-4.99	% 	 				 	 	105,099	  	 	 	-100.0	% 
	 Depreciation & Amortization
	 	 	125,973	  	 	 	129,169	  	 	 	150,343	  	 	 	160,930	  	 	 	148,683	  	 	 	118,564	  	 	 	2.16	% 	 	 	-14.08	% 	 	 	79,463	  	 	 	82,659	  	 	 	-3.9	% 
	 Advertising & Promotion
	 	 	118,581	  	 	 	123,085	  	 	 	134,954	  	 	 	146,746	  	 	 	145,540	  	 	 	142,165	  	 	 	-3.54	% 	 	 	-8.79	% 	 	 	95,432	  	 	 	99,936	  	 	 	-4.5	% 
	 Miscellaneous
	 	 	90,537	  	 	 	99,601	  	 	 	132,616	  	 	 	102,523	  	 	 	142,694	  	 	 	114,108	  	 	 	-3.34	% 	 	 	-24.90	% 	 	 	86,760	  	 	 	95,824	  	 	 	-9.5	% 
	 Communications
	 	 	98,385	  	 	 	90,368	  	 	 	100,367	  	 	 	123,802	  	 	 	146,245	  	 	 	80,301	  	 	 	3.00	% 	 	 	-9.96	% 	 	 	79,340	  	 	 	71,323	  	 	 	11.2	% 
	 Insurance
	 	 	111,417	  	 	 	76,118	  	 	 	66,452	  	 	 	57,920	  	 	 	67,013	  	 	 	45,662	  	 	 	13.63	% 	 	 	14.55	% 	 	 	61,324	  	 	 	26,026	  	 	 	135.6	% 
	 Training & Staff Development
	 	 	63,278	  	 	 	65,363	  	 	 	50,241	  	 	 	29,082	  	 	 	66,446	  	 	 	0	  	 	 	nm	  	 	 	30.10	% 	 	 	35,664	  	 	 	37,748	  	 	 	-5.5	% 
	 Printing & Reproduction
	 	 	65,152	  	 	 	63,848	  	 	 	52,788	  	 	 	32,183	  	 	 	24,352	  	 	 	38,734	  	 	 	13.31	% 	 	 	20.95	% 	 	 	36,604	  	 	 	35,300	  	 	 	3.7	% 
	 Office Supplies
	 	 	65,915	  	 	 	56,079	  	 	 	55,050	  	 	 	118,917	  	 	 	138,452	  	 	 	69,759	  	 	 	-5.31	% 	 	 	1.87	% 	 	 	59,652	  	 	 	49,816	  	 	 	19.7	% 
	 Donations & Contributions
	 	 	47,986	  	 	 	45,865	  	 	 	41,951	  	 	 	48,295	  	 	 	40,724	  	 	 	34,210	  	 	 	7.60	% 	 	 	9.33	% 	 	 	34,040	  	 	 	31,919	  	 	 	6.6	% 
	 Automobile
	 	 	28,858	  	 	 	34,586	  	 	 	49,303	  	 	 	33,619	  	 	 	31,134	  	 	 	0	  	 	 	nm	  	 	 	-29.85	% 	 	 	21,367	  	 	 	27,095	  	 	 	-21.1	% 
	 Repairs & Maintenance
	 	 	32,435	  	 	 	33,675	  	 	 	0	  	 	 	7,302	  	 	 	4,860	  	 	 	0	  	 	 	nm	  	 	 	nm	  	 	 	8,041	  	 	 	9,281	  	 	 	-13.4	% 
	 Dues & Subscriptions
	 	 	22,299	  	 	 	15,709	  	 	 	22,448	  	 	 	22,448	  	 	 	33,822	  	 	 	35,232	  	 	 	-18.28	% 	 	 	-30.02	% 	 	 	18,756	  	 	 	12,166	  	 	 	54.2	% 
	 Bad Debt Expense
	 	 	(0	) 	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	10,932	  	 	 	-100.00	% 	 	 	nm	  	 	 	0	  	 	 	0	  	 	 	-100.0	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Operating Expense
	 	$	5,000,984	  	 	$	4,809,542	  	 	$	5,036,649	  	 	$	4,876,577	  	 	$	4,297,104	  	 	$	3,251,048	  	 	 	10.29	% 	 	 	-4.51	% 	 	$	3,708,334	  	 	$	3,516,892	  	 	 	5.4	% 
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 Schedule 3a continued     

ASC Trust Corporation and Subsidiary     

Supplemental Notes to Income Statements     
  

																																													
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Interim Financial Detail	 	 	 	 
	 	 	Last 12 mos.	 	 	For the Fiscal Years Ended December 31	 	 	Annualized Growth Rates	 	 	9 mos.	 	 	9 mos.	 	 	 	 
	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	2010-14	 	 	2013-14	 	 	9/30/2015	 	 	9/30/2014	 	 	% Change	 
	 Notes to Income Statements
	 				 				 				 				 				 				 				 				 				 				 			
	 Percentage of Revenues:
	 				 				 				 				 				 				 				 				 				 				 			
	 Salaries & Wages
	 	 	31.07	% 	 	 	30.44	% 	 	 	31.64	% 	 	 	31.84	% 	 	 	31.83	% 	 	 	28.95	% 	 				 				 	 	41.05	% 	 	 	40.55	% 	 			
	 Employee Benefits
	 	 	17.66	% 	 	 	16.21	% 	 	 	19.24	% 	 	 	16.57	% 	 	 	13.62	% 	 	 	12.94	% 	 				 				 	 	8.90	% 	 	 	6.59	% 	 			
	 Professional Fees
	 	 	7.22	% 	 	 	5.47	% 	 	 	5.87	% 	 	 	3.28	% 	 	 	4.16	% 	 	 	3.86	% 	 				 				 	 	7.62	% 	 	 	5.24	% 	 			
	 Occupancy
	 	 	4.49	% 	 	 	4.44	% 	 	 	5.28	% 	 	 	6.24	% 	 	 	5.96	% 	 	 	4.69	% 	 				 				 	 	4.79	% 	 	 	4.73	% 	 			
	 Gross Receipts Tax
	 	 	2.98	% 	 	 	3.90	% 	 	 	3.86	% 	 	 	3.71	% 	 	 	3.84	% 	 	 	3.78	% 	 				 				 	 	2.66	% 	 	 	3.92	% 	 			
	 Information Systems Expense
	 	 	3.11	% 	 	 	3.05	% 	 	 	3.38	% 	 	 	3.91	% 	 	 	3.55	% 	 	 	3.52	% 	 				 				 	 	3.21	% 	 	 	3.14	% 	 			
	 Travel & Entertainment
	 	 	2.20	% 	 	 	2.59	% 	 	 	1.98	% 	 	 	1.97	% 	 	 	2.28	% 	 	 	3.63	% 	 				 				 	 	2.04	% 	 	 	2.58	% 	 			
	 Payroll Taxes
	 	 	0.62	% 	 	 	2.45	% 	 	 	2.64	% 	 	 	2.65	% 	 	 	2.13	% 	 	 	2.00	% 	 				 				 	 	0.00	% 	 	 	2.48	% 	 			
	 Depreciation & Amortization
	 	 	2.12	% 	 	 	2.23	% 	 	 	2.66	% 	 	 	2.83	% 	 	 	3.03	% 	 	 	2.93	% 	 				 				 	 	1.81	% 	 	 	1.95	% 	 			
	 Advertising & Promotion
	 	 	1.99	% 	 	 	2.12	% 	 	 	2.39	% 	 	 	2.58	% 	 	 	2.96	% 	 	 	3.52	% 	 				 				 	 	2.17	% 	 	 	2.35	% 	 			
	 Miscellaneous
	 	 	1.52	% 	 	 	1.72	% 	 	 	2.34	% 	 	 	1.80	% 	 	 	2.91	% 	 	 	2.82	% 	 				 				 	 	1.97	% 	 	 	2.26	% 	 			
	 Communications
	 	 	1.65	% 	 	 	1.56	% 	 	 	1.77	% 	 	 	2.18	% 	 	 	2.98	% 	 	 	1.99	% 	 				 				 	 	1.80	% 	 	 	1.68	% 	 			
	 Insurance
	 	 	1.87	% 	 	 	1.31	% 	 	 	1.17	% 	 	 	1.02	% 	 	 	1.36	% 	 	 	1.13	% 	 				 				 	 	1.39	% 	 	 	0.61	% 	 			
	 Training & Staff Development
	 	 	1.06	% 	 	 	1.13	% 	 	 	0.89	% 	 	 	0.51	% 	 	 	1.35	% 	 	 	0.00	% 	 				 				 	 	0.81	% 	 	 	0.89	% 	 			
	 Printing & Reproduction
	 	 	1.09	% 	 	 	1.10	% 	 	 	0.93	% 	 	 	0.57	% 	 	 	0.50	% 	 	 	0.96	% 	 				 				 	 	0.83	% 	 	 	0.83	% 	 			
	 Office Supplies
	 	 	1.11	% 	 	 	0.97	% 	 	 	0.97	% 	 	 	2.09	% 	 	 	2.82	% 	 	 	1.73	% 	 				 				 	 	1.36	% 	 	 	1.17	% 	 			
	 Donations & Contributions
	 	 	0.81	% 	 	 	0.79	% 	 	 	0.74	% 	 	 	0.85	% 	 	 	0.83	% 	 	 	0.85	% 	 				 				 	 	0.77	% 	 	 	0.75	% 	 			
	 Automobile
	 	 	0.48	% 	 	 	0.60	% 	 	 	0.87	% 	 	 	0.59	% 	 	 	0.63	% 	 	 	0.00	% 	 				 				 	 	0.49	% 	 	 	0.64	% 	 			
	 Repairs & Maintenance
	 	 	0.54	% 	 	 	0.58	% 	 	 	0.00	% 	 	 	0.13	% 	 	 	0.10	% 	 	 	0.00	% 	 				 				 	 	0.18	% 	 	 	0.22	% 	 			
	 Dues & Subscriptions
	 	 	0.37	% 	 	 	0.27	% 	 	 	0.40	% 	 	 	0.39	% 	 	 	0.69	% 	 	 	0.87	% 	 				 				 	 	0.43	% 	 	 	0.29	% 	 			
	 Bad Debt Expense
	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.27	% 	 				 				 	 	0.00	% 	 	 	0.00	% 	 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 	  
	  
	 	 	  
	  
	 	 			
	 Total Operating Expense
	 	 	83.98	% 	 	 	82.93	% 	 	 	89.04	% 	 	 	85.70	% 	 	 	87.52	% 	 	 	80.44	% 	 				 				 	 	84.30	% 	 	 	82.87	% 	 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 	  
	  
	 	 	  
	  
	 	 			
	 (3): Other, Net detail:
	 				 				 				 				 				 				 				 				 				 				 			
	 Investment Gain (Loss),net
	 	($	4,326	) 	 	$	14,557	  	 	 	(55,201	) 	 	 	(33,236	) 	 	$	29,428	  	 	$	114,470	  	 	 	-40.28	% 	 	 	nm	  	 	$	0	  	 	$	18,883	  	 	 	-100.00	% 
	 Write-Off of Construction in Progress
	 	 	(184,590	) 	 	 	(184,590	) 	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	nm	  	 	 	nm	  	 	 	0	  	 	 	0	  	 	 	nm	  
	 Other Income (Expense), net
	 	 	(30,449	) 	 	 	(3,031	) 	 	 	1,295	  	 	 	2,513	  	 	 	9,093	  	 	 	950	  	 	 	nm	  	 	 	nm	  	 	 	(27,377	) 	 	 	41	  	 	 	nm	  
	 Foreign Exchange Gain (Loss), net
	 	 	(1,937	) 	 	 	(1,937	) 	 	 	30,854	  	 	 	(7,325	) 	 	 	(10,244	) 	 	 	(2,113	) 	 	 	nm	  	 	 	nm	  	 	 	0	  	 	 	0	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Other, Net
	 	($	221,302	) 	 	($	175,001	) 	 	($	 23,052	) 	 	 	38,048	) 	 	$	28,277	  	 	$	113,307	  	 	 	nm	  	 	 	nm	  	 	($	27,377	) 	 	$	18,924	  	 	 	nm	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Percentage of Revenues:
	 				 				 				 				 				 				 				 				 				 				 			
	 Investment Gain (Loss),net
	 	 	-0.07	% 	 	 	0.25	% 	 	 	-0.98	% 	 	 	-0.58	% 	 	 	0.60	% 	 	 	2.83	% 	 				 				 	 	0.00	% 	 	 	0.44	% 	 			
	 Write-Off of Construction in Progress
	 	 	-3.10	% 	 	 	-3.18	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 				 				 	 	0.00	% 	 	 	0.00	% 	 			
	 Other Income (Expense), net
	 	 	-0.51	% 	 	 	-0.05	% 	 	 	0.02	% 	 	 	0.04	% 	 	 	0.19	% 	 	 	0.02	% 	 				 				 	 	-0.62	% 	 	 	0.00	% 	 			
	 Foreign Exchange Gain (Loss), net
	 	 	-0.03	% 	 	 	-0.03	% 	 	 	0.55	% 	 	 	-0.13	% 	 	 	-0.21	% 	 	 	-0.05	% 	 				 				 	 	0.00	% 	 	 	0.00	% 	 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 	  
	  
	 	 	  
	  
	 	 			
	 Total Other, Net
	 	 	-3.72	% 	 	 	-3.02	% 	 	 	-0.41	% 	 	 	-0.67	% 	 	 	0.58	% 	 	 	2.80	% 	 				 				 	 	-0.62	% 	 	 	0.45	% 	 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 				 	  
	  
	 	 	  
	  
	 	 			

 Schedule 4     

ASC Trust Corporation and Subsidiary     

Historical Percentage Income Statements     
  

																																					
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Interim Financial Detail	 
	 	  	Last 12 mos.	 	 	For the Fiscal Years Ended December 31	 	 	NAICS #	 	 	9 mos.	 	 	9 mos.	 
	 	  	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	523920	 	 	9/30/2015	 	 	9/30/2014	 
	 Percentage Income Statements
	  				 				 				 				 				 				 				 				 			
	 Revenues
	  	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 
	 Operating Expense
	  	 	84.0	% 	 	 	82.9	% 	 	 	89.0	% 	 	 	85.7	% 	 	 	87.5	% 	 	 	80.4	% 	 	 	74.6	% 	 	 	84.3	% 	 	 	82.9	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating Income
	  	 	16.0	% 	 	 	17.1	% 	 	 	11.0	% 	 	 	14.3	% 	 	 	12.5	% 	 	 	19.6	% 	 	 	25.4	% 	 	 	15.7	% 	 	 	17.1	% 
	 Other Income/(Expense)
	  				 				 				 				 				 				 				 				 			
	 Interest Income
	  	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	na	  	 	 	0.0	% 	 	 	0.0	% 
	 Interest Expense
	  	 	0.0	% 	 	 	-0.2	% 	 	 	-0.3	% 	 	 	-0.3	% 	 	 	-0.2	% 	 	 	-0.2	% 	 	 	na	  	 	 	0.0	% 	 	 	-0.3	% 
	 Other, Net
	  	 	-3.7	% 	 	 	-3.0	% 	 	 	-0.4	% 	 	 	-0.7	% 	 	 	0.6	% 	 	 	2.8	% 	 	 	na	  	 	 	-0.6	% 	 	 	0.4	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Other Income/(Expense)
	  	 	-3.7	% 	 	 	-3.2	% 	 	 	-0.7	% 	 	 	-1.0	% 	 	 	0.3	% 	 	 	2.6	% 	 	 	-1.1	% 	 	 	-0.6	% 	 	 	0.2	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Pre-Tax Income
	  	 	12.3	% 	 	 	13.9	% 	 	 	10.3	% 	 	 	13.3	% 	 	 	12.8	% 	 	 	22.2	% 	 	 	24.3	% 	 	 	15.1	% 	 	 	17.3	% 
	 Income Tax Expense/(Benefit)
	  	 	0.2	% 	 	 	0.2	% 	 	 	0.1	% 	 	 	-0.1	% 	 	 	0.2	% 	 	 	0.4	% 	 	 	na	  	 	 	0.0	% 	 	 	0.0	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Income from Continuing Operations
	  	 	12.1	% 	 	 	13.6	% 	 	 	10.2	% 	 	 	13.4	% 	 	 	12.7	% 	 	 	21.8	% 	 	 	na	  	 	 	15.1	% 	 	 	17.3	% 
	 Extraordinary Income/(Expense)
	  	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	na	  	 	 	0.0	% 	 	 	0.0	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Income
	  	 	12.1	% 	 	 	13.6	% 	 	 	10.2	% 	 	 	13.4	% 	 	 	12.7	% 	 	 	21.8	% 	 	 	na	  	 	 	15.1	% 	 	 	17.3	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Memo: EBITDA Derivation
	  				 				 				 				 				 				 				 				 			
	 Pre-Tax Income
	  	 	12.3	% 	 	 	13.9	% 	 	 	10.3	% 	 	 	13.3	% 	 	 	12.8	% 	 	 	22.2	% 	 	 	24.3	% 	 	 	15.1	% 	 	 	17.3	% 
	 - Interest Income
	  	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	0.0	% 	 	 	na	  	 	 	0.0	% 	 	 	0.0	% 
	 + Interest Expense
	  	 	0.0	% 	 	 	0.2	% 	 	 	0.3	% 	 	 	0.3	% 	 	 	0.2	% 	 	 	0.2	% 	 	 	na	  	 	 	0.0	% 	 	 	0.3	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 EBIT
	  	 	12.3	% 	 	 	14.1	% 	 	 	10.6	% 	 	 	13.6	% 	 	 	13.1	% 	 	 	22.4	% 	 	 	25.4	% 	 	 	15.1	% 	 	 	17.6	% 
	 + Depreciation & Amortization
	  	 	2.1	% 	 	 	2.2	% 	 	 	2.7	% 	 	 	2.8	% 	 	 	3.0	% 	 	 	2.9	% 	 	 	0.8	% 	 	 	1.8	% 	 	 	1.9	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 EBITDA
	  	 	17.5	% 	 	 	19.5	% 	 	 	13.2	% 	 	 	16.5	% 	 	 	16.1	% 	 	 	25.3	% 	 	 	26.2	% 	 	 	16.9	% 	 	 	19.5	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 + Owners Comp in Excess of Salary
	  	 	4.7	% 	 	 	4.8	% 	 	 	8.4	% 	 	 	3.9	% 	 	 	12.6	% 	 	 	10.8	% 	 				 	 	0.0	% 	 	 	0.0	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 
	 Adjusted EBITDA
	  	 	22.2	% 	 	 	24.3	% 	 	 	21.6	% 	 	 	20.3	% 	 	 	28.7	% 	 	 	36.1	% 	 				 	 	16.9	% 	 	 	19.5	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 	 	  
	  
	 

 Schedule 4a     

ASC Trust Corporation and Subsidiary     

Year-to-Year Growth of Income Statement Components    

  

																					
	 	  	2014-9/15	 	 	2013-14	 	 	2012-13	 	 	2011-12	 	 	2010-11	 
	 Income Statements
	  				 				 				 				 			
	 Revenues
	  	 	2.7	% 	 	 	2.5	% 	 	 	-0.6	% 	 	 	15.9	% 	 	 	21.5	% 
	 Operating Expense
	  	 	4.0	% 	 	 	-4.5	% 	 	 	3.3	% 	 	 	13.5	% 	 	 	32.2	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating Income
	  	 	-3.6	% 	 	 	59.7	% 	 	 	-23.8	% 	 	 	32.8	% 	 	 	-22.5	% 
	 Other Income/(Expense)
	  				 				 				 				 			
	 Interest Income
	  	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  
	 Interest Expense
	  	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  
	 Other, Net
	  	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	-75.0	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Other Income/(Expense)
	  	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	-84.4	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Pre-Tax Income
	  	 	-8.9	% 	 	 	38.1	% 	 	 	-23.3	% 	 	 	20.6	% 	 	 	-29.8	% 
	 Income Tax Expense/(Benefit)
	  	 	0.0	% 	 	 	255.3	% 	 	 	nm	  	 	 	nm	  	 	 	-52.6	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Income from Continuing Operations
	  	 	-9.1	% 	 	 	36.7	% 	 	 	-24.4	% 	 	 	23.1	% 	 	 	-29.4	% 
	 Extraordinary Income/(Expense)
	  	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net Income
	  	 	-9.1	% 	 	 	36.7	% 	 	 	-24.4	% 	 	 	23.1	% 	 	 	-29.4	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Memo: EBITDA Derivation
	  				 				 				 				 			
	 EBIT
	  	 	-10.1	% 	 	 	36.6	% 	 	 	-23.0	% 	 	 	21.0	% 	 	 	-29.1	% 
	 EBITDA
	  	 	-7.6	% 	 	 	51.1	% 	 	 	-20.2	% 	 	 	18.6	% 	 	 	-22.8	% 
	 Adjusted EBITDA
	  	 	-6.1	% 	 	 	15.3	% 	 	 	5.7	% 	 	 	-18.0	% 	 	 	-3.3	% 

 Schedule 5     

ASC Trust Corporation and Subsidiary     

Reconciliation of Shareholders’ Equity     
  

																																	
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Interim Financial Detail	 
	 	  	Last 12 mos.	 	 	For the Fiscal Years Ended December 31	 	 	9 mos.	 	 	9 mos.	 
	 	  	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	9/30/2015	 	 	9/30/2014	 
	 Shareholders’ Equity
	  				 				 				 				 				 				 				 			
	 Beginning Shareholders’ Equity
	  	$	0	  	 	$	1,244,119	  	 	$	1,484,557	  	 	$	1,300,042	  	 	$	1,382,559	  	 	$	691,055	  	 	$	1,230,579	  	 	$	1,244,119	  
	 + Net Income
	  	 	718,660	  	 	 	790,249	  	 	 	578,037	  	 	 	764,610	  	 	 	621,074	  	 	 	879,618	  	 	 	663,511	  	 	 	735,100	  
	 - Dividends or Distributions Paid
	  	 	(800,000	) 	 	 	(800,000	) 	 	 	(800,000	) 	 	 	(600,000	) 	 	 	(700,000	) 	 	 	(400,000	) 	 				 			
	 + Additional Paid-in Capital
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	200,000	  	 				 			
	 - Foreign Currency Translation Gain (Loss)
	  	 	(3,789	) 	 	 	(3,789	) 	 	 	(18,475	) 	 	 	19,905	  	 	 	(3,591	) 	 	 	10,533	  	 				 			
	 + Unrealized Gain on
Available-for-Sale Securities
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	1,353	  	 				 			
	 +/- Prior Period Adjustments
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 				 			
	 +/- Other Restatements, Net
	  	 	1,963,099	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	(16,120	) 	 	 	(1,979,219	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Ending Shareholders’ Equity
	  	$	1,877,970	  	 	$	1,230,579	  	 	$	1,244,119	  	 	$	1,484,557	  	 	$	1,300,042	  	 	$	1,382,559	  	 	$	1,877,970	  	 	$	0	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Dividend Payout Ratio
	  	 	111.32	% 	 	 	101.23	% 	 	 	138.40	% 	 	 	78.47	% 	 	 	112.71	% 	 	 	45.47	% 	 				 			
	 Common Shares Outstanding
	  				 				 				 				 				 				 				 			
	 Beginning Shares Outstanding
	  	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  
	 - Treasury Share Purchases
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  
	 + Treasury Share Sales
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  
	 + New Shares Issued
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Common Shares Outstanding
	  	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  
	 + Shares in Treasury
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Common Shares Issued
	  	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  	 	 	4,000	  
	 + Other Unissued Shares
	  	 	6,000	  	 	 	6,000	  	 	 	6,000	  	 	 	6,000	  	 	 	6,000	  	 	 	6,000	  	 	 	6,000	  	 	 	6,000	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Shares Authorized
	  	 	10,000	  	 	 	10,000	  	 	 	10,000	  	 	 	10,000	  	 	 	10,000	  	 	 	10,000	  	 	 	10,000	  	 	 	10,000	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Book Value per Common Share
	  	$	469.49	  	 	$	307.64	  	 	$	311.03	  	 	$	371.14	  	 	$	325.01	  	 	$	345.64	  	 	$	469.49	  	 	$	0.00	  

 Schedule 6     

ASC Trust Corporation and Subsidiary     

Historical Cash Flow Statements     
  

																									
	 	  	 	 	 	For the Fiscal Years Ended December 31	 	 	 	 	 	Cumulative	 
	 	  	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	2010-14	 
	 Operating Activities
	  				 				 				 				 				 			
	 Net Income/(Loss)
	  	$	790,249	  	 	$	578,037	  	 	$	764,610	  	 	$	621,074	  	 	$	879,618	  	 	$	3,633,588	  
	 + Depreciation & Amortization
	  	 	129,169	  	 	 	150,343	  	 	 	160,930	  	 	 	148,683	  	 	 	118,564	  	 	 	707,689	  
	 +/- (Gain)/Loss on Sale of Assets
	  	 	0	  	 	 	0	  	 	 	(2,513	) 	 	 	5,167	  	 	 	(110,297	) 	 	 	(107,643	) 
	 +/- Foreign Currency Gain (Loss)
	  	 	(3,789	) 	 	 	(18,475	) 	 	 	19,905	  	 	 	0	  	 	 	0	  	 	 	(2,359	) 
	 + Loss on Write-Off of Construction in Progress
	  	 	184,590	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	184,590	  
	 +/- Change in Working Capital
	  	 	(33,630,909	) 	 	 	(53,850,978	) 	 	 	(220,639	) 	 	 	423,053	  	 	 	(452,215	) 	 	 	(87,731,688	) 
	 +/- Change in Other Assets & Liabilities
	  	 	33,534,922	  	 	 	54,165,424	  	 	 	(16,215	) 	 	 	(13,786	) 	 	 	32,275	  	 	 	87,702,620	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Cash Flow from Operating Activities
	  	$	1,004,232	  	 	$	1,024,351	  	 	$	706,078	  	 	$	1,184,191	  	 	$	467,945	  	 	$	4,386,797	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Investing Activities
	  				 				 				 				 				 			
	 - Capital Expenditures
	  	($	68,485	) 	 	($	277,291	) 	 	($	56,298	) 	 	($	862,278	) 	 	($	136,495	) 	 	($	1,400,847	) 
	 + Proceeds from Sale of Fixed Assets
	  	 	1,068	  	 	 	0	  	 	 	23,363	  	 	 	0	  	 	 	0	  	 	 	24,431	  
	 +/- Other Assets
	  	 	34,463	  	 	 	(25,733	) 	 	 	95,842	  	 	 	162,089	  	 	 	4,112	  	 	 	270,773	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Cash Flow from Investing Activities
	  	($	32,954	) 	 	($	303,024	) 	 	$	62,907	  	 	($	700,189	) 	 	($	132,383	) 	 	($	1,105,643	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Financing Activities
	  				 				 				 				 				 			
	 - Long-Term Debt Payments
	  	($	89,287	) 	 	($	84,443	) 	 	($	123,515	) 	 	($	80,198	) 	 	($	113,341	) 	 	($	490,784	) 
	 + Long-Term Debt Proceeds
	  	 	0	  	 	 	62,809	  	 	 	23,818	  	 	 	381,860	  	 	 	0	  	 	 	468,487	  
	 - Short-Term Debt Payments
	  	 	(75,000	) 	 	 	0	  	 	 	(100,000	) 	 	 	0	  	 	 	(25,000	) 	 	 	(200,000	) 
	 + Short-Term Debt Proceeds
	  	 	0	  	 	 	100,000	  	 	 	0	  	 	 	45,000	  	 	 	0	  	 	 	145,000	  
	 - Common Stock Purchases
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  
	 + Common Stock Proceeds
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  
	 + Additional Paid-in Capital
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	200,000	  	 	 	200,000	  
	 - Dividends or Distributions Paid
	  	 	(800,000	) 	 	 	(800,000	) 	 	 	(600,000	) 	 	 	(700,000	) 	 	 	(400,000	) 	 	 	(3,300,000	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Cash Flow from Financing Activities
	  	($	964,287	) 	 	($	721,634	) 	 	($	799,697	) 	 	($	353,338	) 	 	($	338,341	) 	 	($	3,177,297	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Cash Flow Summary
	  				 				 				 				 				 			
	 Beginning Cash
	  	$	166,250	  	 	$	166,557	  	 	$	197,269	  	 	$	66,605	  	 	$	69,384	  	 			
	 Net Cash Flow
	  	 	6,991	  	 	 	(307	) 	 	 	(30,712	) 	 	 	130,664	  	 	 	(2,779	) 	 			
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
	 Ending Cash
	  	$	173,241	  	 	$	166,250	  	 	$	166,557	  	 	$	197,269	  	 	$	66,605	  	 			
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			

 Exhibit 1     

ASC Trust Corporation and Subsidiary     

Valuation Analysis as of October 25, 2015     

Summary and Conclusion     
  

																							
	 	  	 	 	  	Range of Value	 	 	 
	 	  	Indicated Value	 	  	Weight	 	 	Low	 	 	Weight	 	 	High	 	 	 References and Comments

	 Correlated Indication of Value
	  				  				 				 				 				 	
	 Asset-Based Approach:
	  				  				 				 				 				 	
	 None
	  				  				 				 				 				 	
	 Income Approach:
	  				  				 				 				 				 	
	 ACAPM Method - Earning Power Capitalization
	  	$	8,700,000	  	  	 	25.0	% 	 	$	2,175,000	  	 	 	25.0	% 	 	$	2,175,000	  	 	Exhibit 4
	 DCF Method - w/o New Government Contract
	  	 	11,200,000	  	  	 	25.0	% 	 	 	2,800,000	  	 	 	0.0	% 	 	 	0	  	 	Exhibit 7
	 DCF Method - with New Government Contract
	  	 	13,700,000	  	  	 	0.0	% 	 	 	0	  	 	 	25.0	% 	 	 	3,425,000	  	 	Exhibit 10
	 Market Approach:
	  				  				 				 				 				 	
	 Company Transactions Method
	  	 	No Relevant Offers	  	  	 	0.0	% 	 	 	0	  	 	 	0.0	% 	 	 	0	  	 	Per ASC management (only BGH)
	 Guideline Transactions Method - EBITDA
	  	 	12,000,000	  	  	 	50.0	% 	 	 	6,000,000	  	 	 	25.0	% 	 	 	3,000,000	  	 	Exhibit 12
	 Guideline Transactions Method - Revenue
	  	 	12,700,000	  	  	 	0.0	% 	 	 	0	  	 	 	25.0	% 	 	 	3,175,000	  	 	Exhibit 12
	 Guideline Transactions Method - AUM
	  	 	10,300,000	  	  	 	0.0	% 	 	 	0	  	 	 	0.0	% 	 	 	0	  	 	Exhibit 12
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Correlated Indication of Value (Enterprise Value)
	  				  	 	100.0	% 	 	$	11,000,000	  	 	 	100.0	% 	 	$	11,800,000	  	 	 Rounded to: $100,000

	 (Controlling Interest Basis)
	  				  				 				 				 				 	
	 Adjustments for Balance Sheet @ September 30:
	  				  				 				 				 				 	
	 + Cash
	  				  				 	 	126,557	  	 				 	 	126,557	  	 	
	 + Marketable Securities
	  				  				 	 	1,384,076	  	 				 	 	1,384,076	  	 	Majority of net fixed assets consist of
	 - Capital Requirement for Separate Charter
	  				  				 	 	(500,000	) 	 				 	 	(500,000	) 	 	$585k land parcel that will be excluded 
	 - Debt
	  				  				 	 	(173,102	) 	 				 	 	(173,102	) 	 	from the transaction 
	 +/- Other Working Capital
	  				  				 	 	(294,384	) 	 				 	 	(294,384	) 	 	
		  				  				 	  
	  
	 	 				 	  
	  
	 	 	
	 Correlated Indication of Value (Total Equity Value)
	  				  				 	$	11,500,000	  	 				 	$	12,300,000	  	 	Rounded to: $100,000
		  				  				 	  
	  
	 	 				 	  
	  
	 	 	
							
	 	  	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	Transaction Medians
	 Relative Value Summary
	  				  				 				 				 				 	
	 Enterprise Value / AUM
	  	$	510,000,000	  	  				 	 	2.2	% 	 				 	 	2.3	% 	 	2.0%
	 Enterprise Value / LTM Revenue
	  	 	5,955,180	  	  				 	 	1.8x	  	 				 	 	2.0x	  	 	2.2x
	 Enterprise Value / LTM EBITDA
	  	 	1,043,458	  	  				 	 	10.5x	  	 				 	 	11.3x	  	 	9.6x
	 Enterprise Value / LTM Adjusted EBITDA
	  	 	1,223,445	  	  				 	 	9.0x	  	 				 	 	9.6x	  	 	 na

	 Enterprise Value / Ongoing EBITDA
	  	 	1,242,411	  	  				 	 	8.9x	  	 				 	 	9.5x	  	 	 na

	 Enterprise Value / 2015B EBITDA - Adjusted
	  	 	1,361,947	  	  				 	 	8.1x	  	 				 	 	8.7x	  	 	 na

	 Enterprise Value / Ongoing NOPAT
	  	 	691,447	  	  				 	 	15.9x	  	 				 	 	17.1x	  	 	 na

	 Conclusion of Value per Common Share
	  				  				 				 				 				 	
	 Conclusion of Value - Enterprise Value
	  				  				 	$	11,000,000	  	 				 	$	11,800,000	  	 	
	 Conclusion of Value - Total Common Equity
	  				  				 	$	11,500,000	  	 				 	$	12,300,000	  	 	 From above

	 Common Shares Outstanding
	  				  				 	 	4,000	  	 				 	 	4,000	  	 	 Schedule 5

		  				  				 	  
	  
	 	 				 	  
	  
	 	 	
	 Enterprise Value Per Share
	  				  				 	$	2,750	  	 				 	$	2,950	  	 	
	 Conclusion of Value per Common Share
	  				  				 	$	2,875	  	 				 	$	3,075	  	 	
	 Conclusion of Value per Common Share -Enterprise Value
	  				  				 	$	2,750	  	 				 	$	2,950	  	 	 Rounded to: $1

	 Conclusion of Value per Common Share -Equity Value
	  				  				 	$	2,875	  	 				 	$	3,075	  	 	 Rounded to: $1

 Exhibit 2     

ASC Trust Corporation and Subsidiary     

Valuation Analysis as of October 25, 2015     

Derivation of Adjusted Income Statements     
  

																																			
	 	  	 	 	 	Budget	 	 	Last 12 mos.	 	 	For the Fiscal Years Ended December 31	 	 	 
	 	  	Ongoing	 	 	2015	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	 References and Comments

	 Assets Under Management
	  				 				 				 				 				 				 				 				 	
	 Reported AUM (Year-End)
	  	$	521,000,000	  	 	$	521,000,000	  	 	$	496,174,000	  	 	$	498,821,041	  	 	$	464,496,496	  	 	$	410,488,123	  	 	$	344,815,545	  	 	$	314,439,720	  	 	Schedule 3a; Budget per management
	 Approximate Average AUM
	  	$	510,000,000	  	 	$	513,000,000	  	 	$	505,156,000	  	 	$	481,658,769	  	 	$	437,492,310	  	 	$	377,651,834	  	 	$	329,627,633	  	 	$	314,439,720	  	 	Schedule 3a
	 Effective Realized Fee
	  	 	0.90	% 	 	 	0.92	% 	 	 	0.93	% 	 	 	0.93	% 	 	 	1.00	% 	 	 	1.10	% 	 	 	1.08	% 	 	 	na	  	 	Schedule 3a
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Reported Management Fee
	  	$	4,590,000	  	 	$	4,694,470	  	 	$	4,690,281	  	 	$	4,477,794	  	 	$	4,384,075	  	 	$	4,153,275	  	 	$	3,561,445	  	 	$	2,854,170	  	 	Schedule 3a
	 Income Statements
	  				 				 				 				 				 				 				 				 	
	 Reported Management Fee
	  	$	4,590,000	  	 	$	4,694,470	  	 	$	4,690,281	  	 	$	4,477,794	  	 	$	4,384,075	  	 	$	4,153,275	  	 	$	3,561,445	  	 	$	2,854,170	  	 	From above
	 Adjustment: None
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted Investment Management Fees
	  	 	4,590,000	  	 	 	4,694,470	  	 	 	4,690,281	  	 	 	4,477,794	  	 	 	4,384,075	  	 	 	4,153,275	  	 	 	3,561,445	  	 	 	2,854,170	  	 	
	 Reported Other Revenue
	  	 	1,264,899	  	 	 	1,148,143	  	 	 	1,264,899	  	 	 	1,321,823	  	 	 	1,272,530	  	 	 	1,536,689	  	 	 	1,348,145	  	 	 	1,187,603	  	 	Schedule 3a
	 Adjustment: None
	  	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted Other Income
	  	 	1,264,899	  	 	 	1,148,143	  	 	 	1,264,899	  	 	 	1,321,823	  	 	 	1,272,530	  	 	 	1,536,689	  	 	 	1,348,145	  	 	 	1,187,603	  	 	Includes BP Admin., Processing, GRT, and Other
	 Adjusted Revenues
	  	$	5,854,899	  	 	$	5,842,613	  	 	$	5,955,180	  	 	$	5,799,617	  	 	$	5,656,605	  	 	$	5,689,964	  	 	$	4,909,590	  	 	$	4,041,773	  	 	
	 Reported Operating Expense
	  	 	5,000,000	  	 	 	4,833,189	  	 	 	5,000,984	  	 	 	4,809,542	  	 	 	5,036,649	  	 	 	4,876,577	  	 	 	4,297,104	  	 	 	3,251,048	  	 	Schedule 3
	 Adjustment (1): Reduce Owners’ Bonus by 100%
	  	 	(400,000	) 	 	 	(400,000	) 	 	 	(280,000	) 	 	 	(280,000	) 	 	 	(475,000	) 	 	 	(220,000	) 	 	 	(620,000	) 	 	 	(435,000	) 	 	$400,000 Owner’s Projected 2015 Bonus
	 Adjustment (2): Eliminate Non-Recurring Legal
Expenses
	  	 	(75,000	) 	 	 	(75,000	) 	 	 	(75,000	) 	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	Per Management
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted Operating Expense
	  	 	4,525,000	  	 	 	4,358,189	  	 	 	4,645,984	  	 	 	4,529,542	  	 	 	4,561,649	  	 	 	4,656,577	  	 	 	3,677,104	  	 	 	2,816,048	  	 	
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted Operating Income
	  	 	1,329,899	  	 	 	1,484,424	  	 	 	1,309,196	  	 	 	1,270,075	  	 	 	1,094,956	  	 	 	1,033,387	  	 	 	1,232,486	  	 	 	1,225,725	  	 	
	 Reported Other Income/(Expense)
	  	 	(6,607	) 	 	 	(24,877	) 	 	 	(221,976	) 	 	 	(186,266	) 	 	 	(38,102	) 	 	 	(55,108	) 	 	 	16,507	  	 	 	105,610	  	 	Cost of Debt - 4.00%
	 Adjustment (3): Eliminate
Work-In-Progress Write-Off
	  	 	0	  	 	 	0	  	 	 	184,590	  	 	 	184,590	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	Schedule 3
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted Other Income/(Expense)
	  	 	(6,607	) 	 	 	(24,877	) 	 	 	(37,386	) 	 	 	(1,676	) 	 	 	(38,102	) 	 	 	(55,108	) 	 	 	16,507	  	 	 	105,610	  	 	
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted Pre-Tax Income
	  	$	1,323,292	  	 	$	1,459,547	  	 	$	1,271,810	  	 	$	1,268,399	  	 	$	1,056,854	  	 	$	978,279	  	 	$	1,248,993	  	 	$	1,331,335	  	 	
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Memo
	  				 				 				 				 				 				 				 				 	
	 Adjusted Pre-Tax Income
	  	$	1,323,292	  	 	$	1,459,547	  	 	$	1,271,810	  	 	$	1,268,399	  	 	$	1,056,854	  	 	$	978,279	  	 	$	1,248,993	  	 	$	1,331,335	  	 	
	 - Interest Income
	  	 	0	  	 	 	0	  	 	 	(118	) 	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	 	0	  	 	Schedule 3
	 + Interest Expense
	  	 	6,607	  	 	 	0	  	 	 	557	  	 	 	11,265	  	 	 	15,050	  	 	 	17,060	  	 	 	11,770	  	 	 	7,697	  	 	Schedule 3
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted EBIT
	  	 	1,329,899	  	 	 	1,459,547	  	 	 	1,272,250	  	 	 	1,279,664	  	 	 	1,071,904	  	 	 	995,339	  	 	 	1,260,763	  	 	 	1,339,032	  	 	
	 + Depreciation & Amortization
	  	 	90,000	  	 	 	96,963	  	 	 	125,973	  	 	 	129,169	  	 	 	150,343	  	 	 	160,930	  	 	 	148,683	  	 	 	118,564	  	 	Schedule 3
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted EBITDA before Owner’s Bonus
	  	 	1,419,899	  	 	 	1,556,510	  	 	 	1,398,223	  	 	 	1,408,833	  	 	 	1,222,247	  	 	 	1,156,269	  	 	 	1,409,446	  	 	 	1,457,596	  	 	
	 - Normalized Bonus % of EBITDA per Mng’t 12.5%
	  	 	(177,487	) 	 	 	(194,564	) 	 	 	(174,778	) 	 	 	(176,104	) 	 	 	(152,781	) 	 	 	(144,534	) 	 	 	(176,181	) 	 	 	(182,200	) 	 	
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Adjusted EBITDA after Owner’s Bonus
	  	$	1,242,411	  	 	$	1,361,947	  	 	$	1,223,445	  	 	$	1,232,729	  	 	$	1,069,466	  	 	$	1,011,735	  	 	$	1,233,265	  	 	$	1,275,397	  	 	
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	

 Exhibit 3     

ASC Trust Corporation and Subsidiary     

Valuation Analysis as of October 25, 2015     

Margin and Growth Analysis     
  

																																					
	 	  	 	 	 	 	 	 	Budget	 	 	Last 12 mos.	 	 	For the Fiscal Years Ended December 31	 
	 	  	 	 	 	Ongoing	 	 	2015	 	 	9/30/2015	 	 	2014	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 
	 Reported Margins
	  				 				 				 				 				 				 				 				 			
	 Reported Revenues
	  				 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 
	 Reported Operating Expense
	  				 	 	85.4	% 	 	 	82.7	% 	 	 	84.0	% 	 	 	82.9	% 	 	 	89.0	% 	 	 	85.7	% 	 	 	87.5	% 	 	 	80.4	% 
		  				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Reported Operating Income
	  				 	 	14.6	% 	 	 	17.3	% 	 	 	16.0	% 	 	 	17.1	% 	 	 	11.0	% 	 	 	14.3	% 	 	 	12.5	% 	 	 	19.6	% 
	 Reported Other Income/(Expense)
	  				 	 	-0.1	% 	 	 	-0.4	% 	 	 	-3.7	% 	 	 	-3.2	% 	 	 	-0.7	% 	 	 	-1.0	% 	 	 	0.3	% 	 	 	2.6	% 
		  				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Reported Pre-Tax Income
	  				 	 	14.5	% 	 	 	16.9	% 	 	 	12.3	% 	 	 	13.9	% 	 	 	10.3	% 	 	 	13.3	% 	 	 	12.8	% 	 	 	22.2	% 
		  				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Reported EBIT
	  				 	 	14.6	% 	 	 	16.9	% 	 	 	12.3	% 	 	 	14.1	% 	 	 	10.6	% 	 	 	13.6	% 	 	 	13.1	% 	 	 	22.4	% 
	 Reported EBITDA
	  				 	 	16.1	% 	 	 	18.5	% 	 	 	17.5	% 	 	 	19.5	% 	 	 	13.2	% 	 	 	16.5	% 	 	 	16.1	% 	 	 	25.3	% 
										
	 	  	RMA Peer	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Adjusted Margins
	  				 				 				 				 				 				 				 				 			
	 Adjusted Revenues
	  	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 	 	 	100.0	% 
	 Adjusted Operating Expense
	  	 	74.6	% 	 	 	77.3	% 	 	 	74.6	% 	 	 	78.0	% 	 	 	78.1	% 	 	 	80.6	% 	 	 	81.8	% 	 	 	74.9	% 	 	 	69.7	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted Operating Income
	  	 	25.4	% 	 	 	22.7	% 	 	 	25.4	% 	 	 	22.0	% 	 	 	21.9	% 	 	 	19.4	% 	 	 	18.2	% 	 	 	25.1	% 	 	 	30.3	% 
	 Adjusted Other Income/(Expense)
	  	 	-1.1	% 	 	 	-0.1	% 	 	 	-0.4	% 	 	 	-0.6	% 	 	 	0.0	% 	 	 	-0.7	% 	 	 	-1.0	% 	 	 	0.3	% 	 	 	2.6	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted Pre-Tax Income
	  	 	24.3	% 	 	 	22.6	% 	 	 	25.0	% 	 	 	21.4	% 	 	 	21.9	% 	 	 	18.7	% 	 	 	17.2	% 	 	 	25.4	% 	 	 	32.9	% 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted EBIT
	  	 	25.4	% 	 	 	22.7	% 	 	 	25.0	% 	 	 	21.4	% 	 	 	22.1	% 	 	 	18.9	% 	 	 	17.5	% 	 	 	25.7	% 	 	 	33.1	% 
	 Adjusted EBITDA after Owner’s Bonus
	  	 	26.2	% 	 	 	21.2	% 	 	 	23.3	% 	 	 	20.5	% 	 	 	21.3	% 	 	 	18.9	% 	 	 	17.8	% 	 	 	25.1	% 	 	 	31.6	% 
										
	 	  	 	 	 	 	 	 	 	 	 	2014-9/15	 	 	2013-14	 	 	2012-13	 	 	2011-12	 	 	2010-11	 	 	 	 
	
Period-to-Period
Growth
	  				 				 				 				 				 				 				 				 			
	 Adjusted Revenues
	  				 				 				 	 	2.7	% 	 	 	2.5	% 	 	 	-0.6	% 	 	 	15.9	% 	 	 	21.5	% 	 			
	 Adjusted Operating Expense
	  				 				 				 	 	2.6	% 	 	 	-0.7	% 	 	 	-2.0	% 	 	 	26.6	% 	 	 	30.6	% 	 			
		  				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
	 Adjusted Operating Income
	  				 				 				 	 	3.1	% 	 	 	16.0	% 	 	 	6.0	% 	 	 	-16.2	% 	 	 	0.6	% 	 			
	 Adjusted Other Income/(Expense)
	  				 				 				 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	-84.4	% 	 			
		  				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
	 Adjusted Pre-Tax Income
	  				 				 				 	 	0.3	% 	 	 	20.0	% 	 	 	8.0	% 	 	 	-21.7	% 	 	 	-6.2	% 	 			
		  				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
	 Adjusted EBIT
	  				 				 				 	 	-0.6	% 	 	 	19.4	% 	 	 	7.7	% 	 	 	-21.1	% 	 	 	-5.8	% 	 			
	 Adjusted EBITDA after Owner’s Bonus
	  				 				 				 	 	-0.8	% 	 	 	15.3	% 	 	 	5.7	% 	 	 	-18.0	% 	 	 	-3.3	% 	 			
										
	 	  	 	 	 	 	 	 	 	 	 	2014-9/15	 	 	2013-9/15	 	 	2012-9/15	 	 	2011-9/15	 	 	2010-9/15	 	 	 	 
	 Annualized Growth
	  				 				 				 				 				 				 				 				 			
	 Adjusted Revenues
	  				 				 				 	 	3.6	% 	 	 	3.0	% 	 	 	1.7	% 	 	 	5.3	% 	 	 	8.5	% 	 			
	 Adjusted Operating Expense
	  				 				 				 	 	3.4	% 	 	 	1.1	% 	 	 	-0.1	% 	 	 	6.4	% 	 	 	11.1	% 	 			
		  				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
	 Adjusted Operating Income
	  				 				 				 	 	4.1	% 	 	 	10.8	% 	 	 	9.0	% 	 	 	1.6	% 	 	 	1.4	% 	 			
	 Adjusted Other Income/(Expense)
	  				 				 				 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 	 	nm	  	 			
		  				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
	 Adjusted Pre-Tax Income
	  				 				 				 	 	0.4	% 	 	 	11.2	% 	 	 	10.0	% 	 	 	0.5	% 	 	 	-1.0	% 	 			
		  				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 			
	 Adjusted EBIT
	  				 				 				 	 	-0.8	% 	 	 	10.3	% 	 	 	9.3	% 	 	 	0.2	% 	 	 	-1.1	% 	 			
	 Adjusted EBITDA after Owner’s Bonus
	  				 				 				 	 	-1.0	% 	 	 	8.0	% 	 	 	7.2	% 	 	 	-0.2	% 	 	 	-0.9	% 	 			

 Exhibit 4 

ASC Trust Corporation and Subsidiary 
 Valuation
Analysis as of October 25, 2015 
 ACAPM Method - Earning Power Capitalization 

 

											
	 	  	 	 	 	 	 	 	 References and Comments

	 Ongoing Earning Power
	  				 				 	
	 Ongoing EBITDA - after Owner's Bonus
	  				 	$	1,242,411	  	 	Exhibit 2
	 Depreciation & Amortization
	  				 	 	90,000	  	 	              "
		  				 	  
	  
	 	 	
	 Ongoing EBIT
	  				 	 	1,152,411	  	 	
	 - Estimated Taxes
	  	 	40.00	% 	 	 	(460,965	) 	 	Blended ongoing rate
		  				 	  
	  
	 	 	
	 Net Operating Profit After Tax (NOPAT)
	  				 	 	691,447	  	 	
	 + Depreciation & Amortization
	  				 	 	90,000	  	 	
	 - Capital Expenditures
	  				 	 	(90,000	) 	 	
	 +/- Investment in Working Capital
	  				 	 	(18,768	) 	 	
	 +/- Other Items
	  				 	 	0	  	 	
		  				 	  
	  
	 	 	
	 Net Operating Cash Flow After Tax (NOCFAT)
	  				 	$	673,000	  	 	Rounded to: $1,000
				
	 Capitalization of Earning Power
	  				 				 	
	 Net Operating Cash Flow After Tax (NOCFAT)
	  				 	$	673,000	  	 	
	 + Capital Expenditures in Excess of Depreciation
	  				 	 	0	  	 	
		  				 	  
	  
	 	 	
	 Normalized Net Operating Cash Flow After Tax (NOCFAT)
	  				 	 	673,000	  	 	
	 Long-Term Growth Rate
	  				 	 	5.00	% 	 	Applicable to terminal period (Ex.7)
		  				 	  
	  
	 	 	
	 Cash Flow (to be Capitalized)
	  				 	$	707,000	  	 	Rounded to: $1,000
	 Weighted Avg Cost of Capital
	  	 	14.90	% 	 				 	Exhibit 6
	 - Long-Term Growth Rate
	  	 	-5.00	% 	 				 	From above
		  	  
	  
	 	 				 	
	 = Capitalization Rate
	  	 	9.90	% 	 				 	
	 = Cap Factor (1/Cap Rate)
	  				 	 	10.10x	  	 	Rounded to: 0.05
	 High Growth (Gh)
	  	 	12.0	% 	 				 	
	 Transition Years (T; '15-'20)
	  	 	5.0	  	 				 	
	 High-to-Normalized Growth Adjustment Factor
	  				 	 	1.23	  	 	
	 = Cap Factor Adjusted for Growth Transition
	  				 	 	12.35x	  	 	Rounded to: 0.05 
		  				 	  
	  
	 	 	
	 Terminal Value
	  				 	 	8,731,450	  	 	
	 Indicated Value: ACAPM Capitalized Earning Power
	  				 	$	8,700,000	  	 	
		  				 	 	Rounded to: $100,000
	 Relative Value Analysis
	  				 				 	
	 Ongoing EBITDA
	  				 	$	1,242,411	  	 	Exhibit 5
	 Capitalized Earning Power / LTM EBITDA
	  				 	 	7.0x	  	 	
	 AUM @ October 25, 2015
	  				 	$	521,000,000	  	 	Exhibit 5
	 Capitalized Earning Power / AUM
	  				 	 	1.67	% 	 	
	 Ongoing Revenue
	  				 	$	4,590,000	  	 	
	 Capitalized Earning Power / LTM Revenue
	  				 	 	1.9x	  	 	

  

																	
	Growth Rate Perspective	 
	 	  	2010	 	  	2014	 	 	2015	 	 	2020	 
	 Revenue x-Gov
	  	$	4,042	  	  	$	5,800	  	 	$	5,843	  	 	$	7,757	  
	 CAGR
	  				  	 	9.4	% 	 	 	0.7	% 	 	 	5.8	% 
	 Adj EBITDA
	  	$	1,275	  	  	$	1,233	  	 	$	1,223	  	 	$	2,370	  
		  				  	 	-0.8	% 	 	 	-0.8	% 	 	 	14.1	% 
	 Revenue w-Gov
	  	$	4,042	  	  	$	5,800	  	 	$	5,843	  	 	$	10,141	  
	 CAGR
	  				  	 	9.4	% 	 	 	0.7	% 	 	 	11.7	% 
	 Adj EBITDA
	  	$	1,275	  	  	$	1,233	  	 	$	1,223	  	 	$	3,685	  
		  				  	 	-0.8	% 	 	 	-0.8	% 	 	 	24.7	% 

  

																					
	 Sensitivity Analysis: EBITDA vs.
WACC
	 
		  	$	1,083,000	  	  	$	1,183,000	  	  	$	1,283,000	  	  	$	1,383,000	  	  	$	1,483,000	  
	 12.9%
	  	$	9,400,000	  	  	$	10,400,000	  	  	$	11,300,000	  	  	$	12,300,000	  	  	$	13,300,000	  
	 13.9%
	  	$	8,400,000	  	  	$	9,200,000	  	  	$	10,100,000	  	  	$	11,000,000	  	  	$	11,800,000	  
	 14.9%
	  	$	7,500,000	  	  	$	8,300,000	  	  	$	9,000,000	  	  	$	9,800,000	  	  	$	10,600,000	  
	 15.9%
	  	$	6,800,000	  	  	$	7,500,000	  	  	$	8,200,000	  	  	$	8,900,000	  	  	$	9,600,000	  
	 16.9%
	  	$	6,200,000	  	  	$	6,900,000	  	  	$	7,500,000	  	  	$	8,200,000	  	  	$	8,800,000	  
	
	 Sensitivity Analysis: EBITDA vs.
Long-Term Growth
	 
		  	$	1,083,000	  	  	$	1,183,000	  	  	$	1,283,000	  	  	$	1,383,000	  	  	$	1,483,000	  
	 7.0%
	  	$	9,300,000	  	  	$	10,300,000	  	  	$	11,300,000	  	  	$	12,200,000	  	  	$	13,200,000	  
	 6.0%
	  	$	8,300,000	  	  	$	9,200,000	  	  	$	10,100,000	  	  	$	10,900,000	  	  	$	11,800,000	  
	 5.0%
	  	$	7,500,000	  	  	$	8,300,000	  	  	$	9,000,000	  	  	$	9,800,000	  	  	$	10,600,000	  
	 4.0%
	  	$	6,800,000	  	  	$	7,500,000	  	  	$	8,200,000	  	  	$	8,900,000	  	  	$	9,600,000	  
	 3.0%
	  	$	6,300,000	  	  	$	6,900,000	  	  	$	7,600,000	  	  	$	8,200,000	  	  	$	8,900,000	  

 Exhibit 5 

ASC Trust Corporation and Subsidiary 
 Valuation
Analysis as of October 25, 2015 
 Income Statement Projection - Base w/o Government Contract 

 

																											
	 	 	 	 	 	Projected(2) 	 	 	 
	 	 	Ongoing(1) 	 	 	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 	 	Year 5	 	 	 References and Comments

	 Income Statements
	 				 				 				 				 				 				 	
	 AUM (Year-End)
	 	$	521,000,000	  	 	$	572,906,250	  	 	$	629,803,125	  	 	$	690,957,422	  	 	$	756,652,641	  	 	$	827,189,988	  	 	 Per mgmt; includes investment returns plus contributions net of
distributions

	 Approximate Average AUM
	 	$	510,000,000	  	 	$	546,953,125	  	 	$	601,354,688	  	 	$	660,380,274	  	 	$	723,805,032	  	 	$	791,921,315	  	 	
	 Effective Realized Fee
	 	 	0.90	% 	 	 	0.90	% 	 	 	0.88	% 	 	 	0.86	% 	 	 	0.84	% 	 	 	0.82	% 	 	 Per management; assumes continued decline in realized fees on core AUM

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Management Fees
	 	$	4,590,000	  	 	$	4,922,578	  	 	$	5,291,921	  	 	$	5,679,270	  	 	$	6,079,962	  	 	$	6,493,755	  	 	
	 Other Revenue
	 	 	1,264,899	  	 	 	1,166,925	  	 	 	1,190,264	  	 	 	1,214,069	  	 	 	1,238,350	  	 	 	1,263,117	  	 	 Per management; inflationary growth assumed

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Total Revenue
	 	$	5,854,899	  	 	$	6,089,503	  	 	$	6,482,185	  	 	$	6,893,339	  	 	$	7,318,312	  	 	$	7,756,872	  	 	
	 Operating Expenses Excluding Depreciation and Owner’s Bonu
	 	 	4,435,000	  	 	 	4,485,250	  	 	 	4,619,808	  	 	 	4,758,402	  	 	 	4,901,154	  	 	 	5,048,188	  	 	 Per management; primarily fixed costs

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 EBITDA Before Owner Bonus
	 	$	1,419,899	  	 	$	1,604,253	  	 	$	1,862,377	  	 	$	2,134,937	  	 	$	2,417,159	  	 	$	2,708,684	  	 	
	 Owner Bonus -% of Pre-Bonus EBITDA -12.50%
	 	 	177,487	  	 	 	200,532	  	 	 	232,797	  	 	 	266,867	  	 	 	302,145	  	 	 	338,585	  	 	 Per management; CEO incentive comp. to be negotiated

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 EBITDA
	 	$	1,242,411	  	 	$	1,403,721	  	 	$	1,629,580	  	 	$	1,868,070	  	 	$	2,115,014	  	 	$	2,370,098	  	 	
	 Depreciation & Amortization
	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 Per management; straightline depreciation assumed

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 EBIT
	 	$	1,152,411	  	 	$	1,313,721	  	 	$	1,539,580	  	 	$	1,778,070	  	 	$	2,025,014	  	 	$	2,280,098	  	 	
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Other Cash Flow Items
	 				 				 				 				 				 				 	
	 Capital Expenditures
	 	$	68,485	  	 	$	90,000	  	 	$	90,000	  	 	$	90,000	  	 	$	90,000	  	 	$	90,000	  	 	 CapEx and depreciation assumed to be in equilibrium over forecast period

	 Investment in Working Capital
	 				 				 				 				 				 				 	
	 Change in Total Revenue
	 				 	$	234,604	  	 	$	392,682	  	 	$	411,154	  	 	$	424,973	  	 	$	438,560	  	 	
	 Required Incremental Working Capital
	 				 	 	8.0	% 	 	 	8.0	% 	 	 	8.0	% 	 	 	8.0	% 	 	 	8.0	% 	 	 Assumed one month of incremental revenue tied up in working capital

		 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Investment in Working Capital
	 				 	$	18,768	  	 	$	31,415	  	 	$	32,892	  	 	$	33,998	  	 	$	35,085	  	 	
	 Growth Rates
	 				 				 				 				 				 				 	
	 AUM
	 				 	 	10.0	% 	 	 	9.9	% 	 	 	9.7	% 	 	 	9.5	% 	 	 	9.3	% 	 	 Per management

	 Management Fees
	 				 	 	7.2	% 	 	 	7.5	% 	 	 	7.3	% 	 	 	7.1	% 	 	 	6.8	% 	 	
	 Other Revenue
	 				 	 	-7.7	% 	 	 	2.0	% 	 	 	2.0	% 	 	 	2.0	% 	 	 	2.0	% 	 	 Per management

	 Total Revenue
	 				 	 	4.0	% 	 	 	6.4	% 	 	 	6.3	% 	 	 	6.2	% 	 	 	6.0	% 	 	
	 Operating Expenses Excluding Depreciation and Owner’s Bonus
	 				 	 	1.1	% 	 	 	3.0	% 	 	 	3.0	% 	 	 	3.0	% 	 	 	3.0	% 	 	 Per management

	 EBITDA
	 				 	 	13.0	% 	 	 	16.1	% 	 	 	14.6	% 	 	 	13.2	% 	 	 	12.1	% 	 	
	 Margins
	 				 				 				 				 				 				 	
	 EBITDA Before Owner Bonus
	 	 	24.3	% 	 	 	26.3	% 	 	 	28.7	% 	 	 	31.0	% 	 	 	33.0	% 	 	 	34.9	% 	 	
	 EBITDA
	 	 	21.2	% 	 	 	23.1	% 	 	 	25.1	% 	 	 	27.1	% 	 	 	28.9	% 	 	 	30.6	% 	 	
	 EBIT
	 	 	19.7	% 	 	 	21.6	% 	 	 	23.8	% 	 	 	25.8	% 	 	 	27.7	% 	 	 	29.4	% 	 	

 Notes 

	(1):	See Exhibit 2. 

	(2):	Projected figures per management assuming no new government related business. Year 1 is set equal to management’s projections for 2016. 

 Exhibit 6     

ASC Trust Corporation and Subsidiary     

Valuation Analysis as of October 25, 2015     

Weighted Average Cost of Capital - Base Scenario w/o Government Contract     

 

																					
	 	  	 	 	 	 	 	 	References and Comments	 
	 Cost of Equity
	  				 				 				 				 			
	 Risk-Free Rate
	  				 	 	2.54	% 	 	 	Note (1)	  	 				 			
	 Equity Risk Premium
	  	 	5.50	% 	 				 	 	Note (2)	  	 				 			
	 Market Beta
	  	 	1.00	  	 				 	 	Note (3)	  	 				 			
		  	  
	  
	 	 				 				 				 			
	 Beta Adjusted Common Stock Premium
	  				 	 	5.50	% 	 				 				 			
	 Size Premium
	  				 	 	3.84	% 	 	 	Note (4)	  	 				 			
	 Specific Company Risk Premium
	  				 	 	3.00	% 	 	 	Note (5)	  	 				 			
		  				 	  
	  
	 	 				 				 			
	 Equity Discount Rate (Required Rate of Return)
	  				 	 	14.90	% 	 	  
	 Rounded to: 0.10%
	   

	 Cost of Debt
	  				 				 				 				 			
	 Base Cost of Debt
	  				 	 	5.50	% 	 	 	Note (6)	  	 				 			
	 Applicable Spread Over Base Cost
	  				 	 	0.00	% 	 	 	Note (7)	  	 				 			
		  				 	  
	  
	 	 				 				 			
	 Total Pre-tax Cost of Debt
	  				 	 	5.50	% 	 				 				 			
	 Estimated Tax Rate
	  	 	40.00	% 	 	 	-2.20	% 	 				 				 			
		  				 	  
	  
	 	 				 				 			
	 After-Tax Cost of Debt Capital
	  				 	 	3.30	% 	 	  
	 Rounded to: 0.10%
	   

	 Weighted Average Cost of Capital (WACC)
	  				 				 				 				 			
						
	 Capital Component
	  	 	 	 	Cost	 	 	Weight(8)	 	 	Product	 	 	 	 
	 Equity
	  				 	 	14.90	% 	 	 	100.00	% 	 	 	14.90	% 	 			
	 Debt
	  				 	 	3.30	% 	 	 	0.00	% 	 	 	0.00	% 	 			
		  				 				 				 	  
	  
	 	 			
	 Weighted Average Cost of Capital (WACC)
	  				 				 				 	 	14.90	% 	 	 	Rounded to: 0.10%	  
						
	 Memo: Implied Capital
Structure(9) 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 Equity
	  				 	$	11,212,798	  	 				 				 			
	 Debt
	  				 	 	0	  	 				 				 			
		  				 	  
	  
	 	 				 				 			
	 Total Capital
	  				 	$	11,212,798	  	 				 				 			

 Notes 
  

	(1):	Yield on 20-year Treasury securities per Federal Reserve Statistical Release H.15. 

	(2):	Investors demand higher expected returns on equity investments relative to risk-free alternatives. This is supported by market evidence, as investments in large capitalization stocks (as represented by the companies in
the Standard & Poor’s 500 index), historically, have yielded higher total returns relative to long-term U.S. Treasury securities. The equity risk premium has been a topic of regular conversation and debate among academics, market
analysts, valuation practitioners, and the like for decades. Mercer Capital regularly reviews a spectrum of studies on the equity risk premium, as well as conducting its own study. Most of these studies suggest that the appropriate large
capitalization equity risk premium lies in the range of 4.0% to 7.0%. The chosen equity risk premium represents a composite assumption which is consistent with this range. 

	(3):	A beta of 1.0 has been applied under the assumption that, to the extent returns on an investment in the subject company are correlated with returns in the broad equity markets, returns on the subject investment are
expected to display volatility equal to the market over time. 

	(4):	Historically, investments in smaller capitalization common stocks have achieved a higher investment return compared to the S&P 500, or the large capitalization stocks, due to the higher level of risk associated with
smaller companies. We have applied a size premium based on the observed size premium for publicly traded companies in the ninth and tenth deciles (with market capitalizations under $633 million), per the 2014 Ibbotson SBBI Valuation
Yearbook. 

	(5):	Returns on publicly traded stocks typically display some degree of volatility which cannot be correlated with movements in the broad equity indices, that is, cannot be explained by the beta statistic. In addition,
privately owned businesses often have specific risks that would not pertain to larger, publicly traded companies from which Ibbotson SBBI Valuation Yearbook return data is derived. Specific factors pertaining to the Company include the
following: 

 - Factor 1: Small size (~$500M of AUM) 

- Factor 2: Key Man Dependency on David John 

- Factor 3: Customer concentrations with top ten client’s owning 50% of AUM 

 

	(6):	ASC debt consists of $25K draw on $100K revolver (P+200bps), $78K of bank debt secured with Company vehicles (7.75%), and $82k note secured with property (3.43%) 

	(7):	No applicable spread given minimal levels of interest-bearing debt in capital structure. 

	(8):	The selected capital structure is based on the Company’s existing capital structure. 

	(9):	Based on the concluded total capital value calculated in the following exhibit. 

 Exhibit 7 

ASC Trust Corporation and Subsidiary 
 Valuation
Analysis as of October 25, 2015 
 DCF Method -w/o New Government Contract 

 

																											
	 	 	 	 	 	Projected	 	 	 
	 	 	 	 	 	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 	 	Year 5	 	 	 References and Comments

	 Projected Cash Flows
	 				 				 				 				 				 				 	
	 EBIT
	 				 	$	1,313,721	  	 	$	1,539,580	  	 	$	1,778,070	  	 	$	2,025,014	  	 	$	2,280,098	  	 	Exhibit 5
	 - Estimated Taxes
	 	 	40.00	% 	 	 	(525,489	) 	 	 	(615,832	) 	 	 	(711,228	) 	 	 	(810,006	) 	 	 	(912,039	) 	 	
		 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Net Operating Profit After Tax (NOPAT)
	 				 	 	788,233	  	 	 	923,748	  	 	 	1,066,842	  	 	 	1,215,008	  	 	 	1,368,059	  	 	
	 + Depreciation and Amortization
	 				 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	Exhibit 5
	 - Capital Expenditures
	 				 	 	(90,000	) 	 	 	(90,000	) 	 	 	(90,000	) 	 	 	(90,000	) 	 	 	(90,000	) 	 	Exhibit 5
	 +/- Investment in Working Capital
	 				 	 	(18,768	) 	 	 	(31,415	) 	 	 	(32,892	) 	 	 	(33,998	) 	 	 	(35,085	) 	 	Exhibit 5
		 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Free Cash Flow to Firm
	 				 	 	769,465	  	 	 	892,334	  	 	 	1,033,950	  	 	 	1,181,010	  	 	 	1,332,974	  	 	
	 Discounting Periods
	 				 	 	0.5	  	 	 	1.5	  	 	 	2.5	  	 	 	3.5	  	 	 	4.5	  	 	Mid-year convention
	 Discount Factor
	 	 	14.90	% 	 	 	0.9329	  	 	 	0.8119	  	 	 	0.7066	  	 	 	0.6150	  	 	 	0.5353	  	 	Exhibit 6
		 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Present Value of Free Cash Flow
	 				 	$	717,842	  	 	$	724,515	  	 	$	730,633	  	 	$	726,329	  	 	$	713,480	  	 	
	 Present Value of Discrete Cash Flows
	 				 	$	3,612,798	  	 				 				 				 				 	
	 + Present Value of Terminal Value
	 				 	 	7,600,000	  	 	 	Calculated below	  	 				 				 				 	
		 				 	  
	  
	 	 				 				 				 				 	
	 Indicated Enterprise Value
	 				 	 	11,212,798	  	 				 				 				 				 	
		 				 	  
	  
	 	 				 				 				 				 	
	 Indicated Enterprise Value: DCF Method - Base Case
	 				 	$	11,200,000	  	 	 	Rounded to: $100,000	  	 				 				 				 	
	 Terminal Value Calculation
	 				 				 				 				 				 				 	
	 Year 5 Free Cash Flow
	 				 	$	1,332,974	  	 				 				 				 				 	
	 + Capital Expenditures in Excess of Depreciation
	 				 	 	0	  	 				 				 				 				 	
		 				 	  
	  
	 	 				 				 				 				 	
	 Normalized Year 5 Free Cash Flow
	 				 	 	1,332,974	  	 				 				 				 				 	
	 Terminal Growth Rate
	 				 	 	5.00	% 	 	 	Long-term sustainable growth rate in terminal period
		 				 	  
	  
	 	 				 				 				 				 	
	 Terminal Year Free Cash Flow
	 				 	$	1,400,000	  	 	 	Rounded to: $1,000
	 WACC
	 	 	14.90	% 	 				 	 	Exhibit 6
	 - Terminal Growth Rate
	 	 	-5.00	% 	 				 	 	From above
		 	  
	  
	 	 				 				 				 				 				 	
	 Terminal Capitalization Rate
	 	 	9.90	% 	 				 				 				 				 				 	
	 Terminal Capitalization Factor
	 				 	 	10.10x	  	 	 	Rounded to: 0.05
		 				 	  
	  
	 	 				 				 				 				 	
	 Terminal Value
	 				 	 	14,140,000	  	 				 				 				 				 	
	 Discounting Periods
	 				 	 	4.5	  	 				 				 				 				 	
	 Discount Factor
	 	 	14.90	% 	 	 	0.5353	  	 	 	From above
		 				 	  
	  
	 	 				 				 				 				 	
	 Present Value of Terminal Value
	 				 	$	7,600,000	  	 	 	Rounded to: $100,000
	 Relative Value Analysis
	 				 				 				 				 				 				 	
	 Year 5 EBITDA
	 				 	$	2,370,098	  	 	 	Exhibit 5
	 Implied Terminal MVIC/Year 5 EBITDA
	 				 	 	5.97x	  	 				 				 				 				 	
	 Year 5 AUM (Year-End)
	 				 	$	827,189,988	  	 	 	Exhibit 5
	 Implied Terminal MVIC/Year 5 AUM (Year-End)
	 				 	 	1.71	% 	 				 				 				 				 	

 Sensitivity Analysis 

																									
	 	  	 	 	 	Terminal Growth Rate	 
	WACC	  	 	 	 	3.00%	 	  	4.00%	 	  	5.00%	 	  	6.00%	 	  	7.00%	 
	  	 	12.90	% 	 	$	11,610,791	  	  	$	12,610,791	  	  	$	13,910,791	  	  	$	15,510,791	  	  	$	17,610,791	  
	  	 	13.90	% 	 	$	10,527,669	  	  	$	11,327,669	  	  	$	12,327,669	  	  	$	13,527,669	  	  	$	15,027,669	  
	  	 	14.90	% 	 	$	9,647,630	  	  	$	10,247,630	  	  	$	11,047,630	  	  	$	11,947,630	  	  	$	13,147,630	  
	  	 	15.90	% 	 	$	8,870,526	  	  	$	9,370,526	  	  	$	9,970,526	  	  	$	10,670,526	  	  	$	11,670,526	  
	  	 	16.90	% 	 	$	8,196,219	  	  	$	8,596,219	  	  	$	9,096,219	  	  	$	9,696,219	  	  	$	10,396,219	  

 Exhibit 8 

ASC Trust Corporation and Subsidiary 
 Valuation
Analysis as of October 25, 2015 
 Income Statement Projection - with New Government Contract 

 

																											
	 	 	 	 	 	Projected(2) 	 	 	 
	 	 	Ongoing(1) 	 	 	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 	 	Year 5	 	 	 References and Comments

	 Income Statements
	 				 				 				 				 				 				 	
	 Core AUM (Year-End)
	 	$	521,000,000	  	 	$	572,906,250	  	 	$	629,803,125	  	 	$	690,957,422	  	 	$	756,652,641	  	 	$	827,189,988	  	 	 Per mgmt; includes investment returns plus contributions net of distributions

	 Approximate Average Core AUM
	 	$	510,000,000	  	 	$	546,953,125	  	 	$	601,354,688	  	 	$	660,380,274	  	 	$	723,805,032	  	 	$	791,921,315	  	 	
	 Effective Realized Fee on Core AUM
	 	 	0.90	% 	 	 	0.90	% 	 	 	0.80	% 	 	 	0.80	% 	 	 	0.80	% 	 	 	0.80	% 	 	 Per management; assumes additional decline in fees with new business

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Management Fees on Core AUM
	 	$	4,590,000	  	 	$	4,922,578	  	 	$	4,810,838	  	 	$	5,283,042	  	 	$	5,790,440	  	 	$	6,335,371	  	 	
	 New Government-Related AUM (Year-End)
	 				 	$	450,000,000	  	 	$	491,462,500	  	 	$	545,699,766	  	 	$	604,132,102	  	 	$	667,043,422	  	 	
	 Average New Business AUM
	 				 				 	$	470,731,250	  	 	$	518,581,133	  	 	$	574,915,934	  	 	$	635,587,762	  	 	
	 Effective Realized Fee on New Business AUM
	 	 	0.40	% 	 	 	0.40	% 	 	 	0.40	% 	 	 	0.40	% 	 	 	0.40	% 	 	 	0.40	% 	 	 Per management; average realized fees on new business

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Management Fees on New Business AUM
	 	$	0	  	 	$	0	  	 	$	1,882,925	  	 	$	2,074,325	  	 	$	2,299,664	  	 	$	2,542,351	  	 	
	 Total AUM
	 	$	510,000,000	  	 	$	1,022,906,250	  	 	$	1,121,265,625	  	 	$	1,236,657,188	  	 	$	1,360,784,743	  	 	$	1,494,233,410	  	 	
	 Total Management Fees
	 	$	4,590,000	  	 	$	4,922,578	  	 	$	6,693,763	  	 	$	7,357,367	  	 	$	8,090,104	  	 	$	8,877,722	  	 	
	 Other Revenue
	 	 	1,264,899	  	 	 	1,166,925	  	 	 	1,190,264	  	 	 	1,214,069	  	 	 	1,238,350	  	 	 	1,263,117	  	 	 Per management; inflationary growth assumed

		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Total Revenue
	 	$	5,854,899	  	 	$	6,089,503	  	 	$	7,884,026	  	 	$	8,571,435	  	 	$	9,328,454	  	 	$	10,140,839	  	 	
	 Base OpEx Excluding Depreciation and Owner’s Bonus
	 	 	4,435,000	  	 	 	4,485,250	  	 	 	4,619,808	  	 	 	4,758,402	  	 	 	4,901,154	  	 	 	5,048,188	  	 	 Per management; primarily fixed costs

	 Incremental Expenses Associated with New Gov. Business
	 	 	0	  	 	 	0	  	 	 	806,000	  	 	 	830,180	  	 	 	855,085	  	 	 	880,738	  	 	
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 EBITDA Before Owner Bonus
	 	$	1,419,899	  	 	$	1,604,253	  	 	$	2,458,219	  	 	$	2,982,854	  	 	$	3,572,215	  	 	$	4,211,912	  	 	 Per management; CEO incentive comp. to be negotiated

	 Owner Bonus - % of Pre-Bonus EBITDA - 12.50%
	 	 	177,487	  	 	 	200,532	  	 	 	307,277	  	 	 	372,857	  	 	 	446,527	  	 	 	526,489	  	 	
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 EBITDA
	 	$	1,242,411	  	 	$	1,403,721	  	 	$	2,150,941	  	 	$	2,609,997	  	 	$	3,125,688	  	 	$	3,685,423	  	 	 Per management; straightline depreciation assumed

	 Depreciation & Amortization
	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 EBIT
	 	$	1,152,411	  	 	$	1,313,721	  	 	$	2,060,941	  	 	$	2,519,997	  	 	$	3,035,688	  	 	$	3,595,423	  	 	
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Other Cash Flow Items
	 				 				 				 				 				 				 	
	 Capital Expenditures
	 	$	68,485	  	 	$	90,000	  	 	$	90,000	  	 	$	90,000	  	 	$	90,000	  	 	$	90,000	  	 	 CapEx and depreciation assumed to be in equilibrium over forecast period

	 Investment in Working Capital
	 				 				 				 				 				 				 	
	 Change in Total Revenue
	 				 	$	234,604	  	 	$	1,794,523	  	 	$	687,409	  	 	$	757,019	  	 	$	812,385	  	 	
	 Required Incremental Working Capital
	 				 	 	8.0	% 	 	 	8.0	% 	 	 	8.0	% 	 	 	8.0	% 	 	 	8.0	% 	 	 Assumed one month of incremental revenue tied up in working capital

		 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Investment in Working Capital
	 				 	$	18,768	  	 	$	143,562	  	 	$	54,993	  	 	$	60,561	  	 	$	64,991	  	 	
	 Growth Rates
	 				 				 				 				 				 				 	
	 AUM
	 				 	 	10.0	% 	 	 	9.9	% 	 	 	9.7	% 	 	 	9.5	% 	 	 	9.3	% 	 	
	 Management Fees on Core AUM
	 				 	 	7.2	% 	 	 	-2.3	% 	 	 	9.8	% 	 	 	9.6	% 	 	 	9.4	% 	 	
	 Other Revenue
	 				 	 	-7.7	% 	 	 	2.0	% 	 	 	2.0	% 	 	 	2.0	% 	 	 	2.0	% 	 	
	 Total Revenue
	 				 	 	4.0	% 	 	 	29.5	% 	 	 	8.7	% 	 	 	8.8	% 	 	 	8.7	% 	 	
	 Base OpEx Excluding Depreciation and Owner’s Bonus
	 				 	 	1.1	% 	 	 	3.0	% 	 	 	3.0	% 	 	 	3.0	% 	 	 	3.0	% 	 	
	 Incremental Expenses Associated with New Gov. Business
	 				 				 				 	 	3.0	% 	 	 	3.0	% 	 	 	3.0	% 	 	
	 EBITDA
	 				 	 	13.0	% 	 	 	53.2	% 	 	 	21.3	% 	 	 	19.8	% 	 	 	17.9	% 	 	
	 Margins
	 				 				 				 				 				 				 	
	 EBITDA Before Owner Bonus
	 	 	24.3	% 	 	 	26.3	% 	 	 	31.2	% 	 	 	34.8	% 	 	 	38.3	% 	 	 	41.5	% 	 	
	 EBITDA
	 	 	21.2	% 	 	 	23.1	% 	 	 	27.3	% 	 	 	30.4	% 	 	 	33.5	% 	 	 	36.3	% 	 	
	 EBIT
	 	 	19.7	% 	 	 	21.6	% 	 	 	26.1	% 	 	 	29.4	% 	 	 	32.5	% 	 	 	35.5	% 	 	

 Notes 

	(1):	See Exhibit 2. 

	(2):	Projected figures per management assuming no new government related business. Year 1 is set equal to management’s projections for 2016.     

 Exhibit 9 

ASC Trust Corporation and Subsidiary 
 Valuation
Analysis as of October 25, 2015 
 Weighted Average Cost of Capital - Base w/o Government Contract 

 

																					
	 	  	 	 	 	 	 	 	References and Comments	 
	 Cost of Equity
	  				 				 				 				 			
	 Risk-Free Rate
	  				 	 	2.54	% 	 	 	Note (1)	  
	 Equity Risk Premium
	  	 	5.50	% 	 				 	 	Note (2)	  
	 Market Beta
	  	 	1.00	  	 				 	 	Note (3)	  
		  	  
	  
	 	 				 				 				 			
	 Beta Adjusted Common Stock Premium
	  				 	 	5.50	% 	 			
	 Size Premium
	  				 	 	3.84	% 	 	 	Note (4)	  
	 Specific Company Risk Premium
	  				 	 	5.00	% 	 	 	Note (5)	  
		  				 	  
	  
	 	 				 				 			
	 Equity Discount Rate (Required Rate of Return)
	  				 	 	16.90	% 	 	 	Rounded to: 0.10%	  
	 Cost of Debt
	  				 				 				 				 			
	 Base Cost of Debt
	  				 	 	5.50	% 	 	 	Note (6)	  
	 Applicable Spread Over Base Cost
	  				 	 	0.00	% 	 	 	Note (7)	  	 			
		  				 	  
	  
	 	 				 				 			
	 Total Pre-tax Cost of Debt
	  				 	 	5.50	% 	 				 				 			
	 Estimated Tax Rate
	  	 	40.00	% 	 	 	-2.20	% 	 				 				 			
		  				 	  
	  
	 	 				 				 			
	 After-Tax Cost of Debt Capital
	  				 	 	3.30	% 	 	 	Rounded to: 0.10%	  
	 Weighted Average Cost of Capital (WACC)
	  				 				 				 				 			
						
	 Capital Component
	  	 	 	 	Cost	 	 	Weight(8)	 	 	Product	 	 	 	 
	 Equity
	  				 	 	16.90	% 	 	 	100.00	% 	 	 	16.90	% 	 			
	 Debt
	  				 	 	3.30	% 	 	 	0.00	% 	 	 	0.00	% 	 			
		  				 				 				 	  
	  
	 	 			
	 Weighted Average Cost of Capital (WACC)
	  				 				 				 	 	16.90	% 	 	 	Rounded to: 0.10%	  
						
	 Memo: Implied Capital Structure(9)

	  				 				 				 				 			
	 Equity
	  				 	$	13,718,233	  	 				 				 			
	 Debt
	  				 	 	0	  	 				 				 			
		  				 	  
	  
	 	 				 				 			
	 Total Capital
	  				 	$	13,718,233	  	 				 				 			

 Notes 

	(1):	Yield on 20-year Treasury securities per Federal Reserve Statistical Release H.15. 

	(2):	Investors demand higher expected returns on equity investments relative to risk-free alternatives. This is supported by market evidence, as investments in large capitalization stocks (as represented by the companies in
the Standard & Poor’s 500 index), historically, have yielded higher total returns relative to long-term U.S. Treasury securities. The equity risk premium has been a topic of regular conversation and debate among academics, market
analysts, valuation practitioners, and the like for decades. Mercer Capital regularly reviews a spectrum of studies on the equity risk premium, as well as conducting its own study. Most of these studies suggest that the appropriate large
capitalization equity risk premium lies in the range of 4.0% to 7.0%. The chosen equity risk premium represents a composite assumption which is consistent with this range. 

	(3):	A beta of 1.0 has been applied under the assumption that, to the extent returns on an investment in the subject company are correlated with returns in the broad equity markets, returns on the subject investment are
expected to display volatility equal to the market over time. 

	(4):	Historically, investments in smaller capitalization common stocks have achieved a higher investment return compared to the S&P 500, or the large capitalization stocks, due to the higher level of risk associated with
smaller companies. We have applied a size premium based on the observed size premium for publicly traded companies in the ninth and tenth deciles (with market capitalizations under $633 million), per the 2014 Ibbotson SBBI Valuation
Yearbook. 

	(5):	Returns on publicly traded stocks typically display some degree of volatility which cannot be correlated with movements in the broad equity indices, that is, cannot be explained by the beta statistic. In addition,
privately owned businesses often have specific risks that would not pertain to larger, publicly traded companies from which Ibbotson SBBI Valuation Yearbook return data is derived. Specific factors pertaining to the Company include the
following: 

 - Factor 1: Small size (~$500M of AUM) 

- Factor 2: Key Man Dependency on David John 

- Factor 3: Customer concentrations with top ten client’s owning 50% of AUM 

- Factor 4: Risk that new business opportunities may not materialize 
  

	(6):	ASC debt consists of $25K draw on $100K revolver (P+200bps), $78K of bank debt secured with Company vehicles (7.75%), and $82k note secured with property (3.43%) 

	(7):	No applicable spread given minimal levels of interest-bearing debt in capital structure. 

	(8):	The selected capital structure is based on the Company’s existing capital structure. 

	(9):	Based on the concluded total capital value calculated in the following exhibit. 

 Exhibit 10     

ASC Trust Corporation and Subsidiary     

Valuation Analysis as of October 25, 2015     

DCF Method - with New Government Contract     
  

																											
	 	  	 	 	 	Projected	 	 	 
	 	  	 	 	 	Year 1	 	 	Year 2	 	 	Year 3	 	 	Year 4	 	 	Year 5	 	 	 References and Comments

	 Projected Cash Flows
	  				 				 				 				 				 				 	
	 EBIT
	  				 	$	1,313,721	  	 	$	2,060,941	  	 	$	2,519,997	  	 	$	3,035,688	  	 	$	3,595,423	  	 	Exhibit 8 
	 - Estimated Taxes
	  	 	40.00	% 	 	 	(525,489	) 	 	 	(824,376	) 	 	 	(1,007,999	) 	 	 	(1,214,275	) 	 	 	(1,438,169	) 	 	
		  				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Net Operating Profit After Tax (NOPAT)
	  				 	 	788,233	  	 	 	1,236,565	  	 	 	1,511,998	  	 	 	1,821,413	  	 	 	2,157,254	  	 	
	 + Depreciation and Amortization
	  				 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	 	90,000	  	 	Exhibit 8
	 - Capital Expenditures
	  				 	 	(90,000	) 	 	 	(90,000	) 	 	 	(90,000	) 	 	 	(90,000	) 	 	 	(90,000	) 	 	Exhibit 8
	 +/- Investment in Working Capital
	  				 	 	(18,768	) 	 	 	(143,562	) 	 	 	(54,993	) 	 	 	(60,561	) 	 	 	(64,991	) 	 	Exhibit 8
		  				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Free Cash Flow to Firm
	  				 	 	769,465	  	 	 	1,093,003	  	 	 	1,457,005	  	 	 	1,760,851	  	 	 	2,092,263	  	 	
	 Discounting Periods
	  				 	 	0.5	  	 	 	1.5	  	 	 	2.5	  	 	 	3.5	  	 	 	4.5	  	 	Mid-year convention 
	 Discount Factor
	  	 	16.90	% 	 	 	0.9249	  	 	 	0.7912	  	 	 	0.6768	  	 	 	0.5790	  	 	 	0.4953	  	 	Exhibit 9 
		  				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	
	 Present Value of Free Cash Flow
	  				 	$	711,674	  	 	$	864,768	  	 	$	986,109	  	 	$	1,019,464	  	 	$	1,036,218	  	 	
	 Present Value of Discrete Cash Flows
	  				 	$	4,618,233	  	 				 				 				 				 	
	 + Present Value of Terminal Value
	  				 	 	9,100,000	  	 	 	Calculated below	  	 	
		  				 	  
	  
	 	 				 				 				 				 	
	 Indicated Enterprise Value
	  				 	 	13,718,233	  	 				 				 				 				 	
		  				 	  
	  
	 	 				 				 				 				 	
		  				 				 	 	Schedule 1	  	 	
	 Indicated Enterprise Value: DCF Method - Scenario 2
	  				 	$	13,700,000	  	 	 	Rounded to: $100,000	  	 	
	 Terminal Value Calculation
	  				 				 				 				 				 				 	
	 Year 5 Free Cash Flow
	  				 	$	2,092,263	  	 				 				 				 				 	
	 + Capital Expenditures in Excess of Depreciation
	  				 	 	0	  	 				 				 				 				 	
		  				 	  
	  
	 	 				 				 				 				 	
	 Normalized Year 5 Free Cash Flow
	  				 	 	2,092,263	  	 				 				 				 				 	
	 Terminal Growth Rate
	  				 	 	5.00	% 	 	 	Long-term sustainable growth rate in terminal period	  	 	
		  				 	  
	  
	 	 				 				 				 				 	
	 Terminal Year Free Cash Flow
	  				 	$	2,197,000	  	 	 	Rounded to: $1,000	  	 	
	 WACC
	  	 	16.90	% 	 				 	 	Exhibit 9	  	 	
	 - Terminal Growth Rate
	  	 	-5.00	% 	 				 	 	From above	  	 	
		  	  
	  
	 	 				 				 				 				 				 	
	 Terminal Capitalization Rate
	  	 	11.90	% 	 				 				 				 				 				 	
	 Terminal Capitalization Factor
	  				 	 	8.40x	  	 	 	Rounded to: 0.05	  	 	
		  				 	  
	  
	 	 				 				 				 				 	
	 Terminal Value
	  				 	 	18,454,800	  	 				 				 				 				 	
	 Discounting Periods
	  				 	 	4.5	  	 				 				 				 				 	
	 Discount Factor
	  	 	16.90	% 	 	 	0.4953	  	 	 	From above	  	 	
		  				 	  
	  
	 	 				 				 				 				 	
	 Present Value of Terminal Value
	  				 	$	9,100,000	  	 	 	Rounded to: $100,000	  	 	
	 Relative Value Analysis
	  				 				 				 				 				 				 	
	 Year 5 EBITDA
	  				 	$	3,685,423	  	 	 	Exhibit 8	  	 	
	 Implied Terminal MVIC/Year 5 EBITDA
	  				 	 	5.01x	  	 				 				 				 				 	
	 Year 5 Total AUM (Year-End)
	  				 	$	1,494,233,410	  	 	 	Exhibit 8	  	 	
	 Implied Terminal MVIC/Year 5 Total AUM (Year-End)
	  				 	 	1.24	% 	 				 				 				 				 	

  

																									
	 Sensitivity Analysis
	   

	 	  	 	 	 	 	 	  	Terminal Growth Rate	 	  	 	 	  	 	 
	 WACC
	  	 	 	 	3.00%	 	  	4.00%	 	  	5.00%	 	  	6.00%	 	  	7.00%	 
	  	 	14.90	% 	 	$	 14,372,527	  	  	$	15,372,527	  	  	$	16,572,527	  	  	$	18,072,527	  	  	$	19,872,527	  
	  	 	15.90	% 	 	$	13,160,717	  	  	$	13,960,717	  	  	$	14,860,717	  	  	$	16,060,717	  	  	$	17,560,717	  
	  	 	16.90	% 	 	$	12,153,064	  	  	$	12,853,064	  	  	$	13,553,064	  	  	$	14,553,064	  	  	$	15,653,064	  
	  	 	17.90	% 	 	$	11,249,372	  	  	$	11,849,372	  	  	$	12,449,372	  	  	$	13,249,372	  	  	$	14,149,372	  
	  	 	18.90	% 	 	$	10,449,454	  	  	$	10,949,454	  	  	$	11,549,454	  	  	$	12,149,454	  	  	$	12,849,454	  

 Exhibit 11     

ASC Trust Corporation and Subsidiary     

Valuation Analysis as of October 25, 2015     

Guideline Transactions     
  

																																															
	 	  	 	 	AUM
($M)	 	 	 	 	 	 	 	 	Initial
Consideration
($)	 	 	Total Deal
Val
($M)	 	 	Deal Value (Excl.
Earn-out) ÷	 	 	Revenue
($M)	 	 	EBITDA
($M)	 	 	EBITDA
Margin	 
	 Buyer
	  	 Seller
	 	 	Announce	 	 	Closed	 	 	 	 	EBITDA	 	 	AUM (%)	 	 	Rev	 	 	 	 
	 Simmons First National Corp.
	  	 Ozark Trust & Investment Company
	 	 	1,029	  	 	 	4/29/2015	  	 	 	EQ3-2015	  	 	 	20.7	  	 	 	20.7	  	 	 	10.35x	  	 	 	2.01	% 	 	 	3.51x	  	 	 	5.9	  	 	 	2.00	  	 	 	33.9	% 
	 Boston Private Financial
	  	 Banyan Partners LLC
	 	 	4,581	  	 	 	7/16/2014	  	 	 	10/2/2014	  	 	 	65.0	  	 	 	80.0	  	 	 	9.29x	  	 	 	1.42	% 	 	 	2.60x	  	 	 	25.0	  	 	 	7.00	  	 	 	28.0	% 
	 Legg Mason Inc.
	  	 Martin Currie (Holdings) Ltd.
	 	 	9,800	  	 	 	7/24/2014	  	 	 	10/1/2014	  	 	 	NA	  	 	 	427.8	  	 	 	NA	  	 	 	4.37	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Henderson Group
	  	 Geneva Capital Mgmt Ltd.
	 	 	6,300	  	 	 	6/30/2014	  	 	 	10/1/2014	  	 	 	130.0	  	 	 	200.0	  	 	 	NA	  	 	 	2.06	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Affiliated Managers Group Inc.
	  	 SouthernSun Asset Mgmt LLC
	 	 	5,317	  	 	 	12/19/2013	  	 	 	3/31/2014	  	 	 	NA	  	 	 	109.9	  	 	 	NA	  	 	 	2.07	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 TriState Capital Holdings Inc.
	  	 Chartwell Investment Partners
	 	 	7,500	  	 	 	1/7/2014	  	 	 	3/5/2014	  	 	 	45.0	  	 	 	60.0	  	 	 	7.50x	  	 	 	0.60	% 	 	 	1.74x	  	 	 	25.9	  	 	 	6.0	  	 	 	23.2	% 
	 KKR & Co. L.P.
	  	 Avoca Capital Holdings
	 	 	8,000	  	 	 	10/18/2013	  	 	 	2/19/2014	  	 	 	NA	  	 	 	102.3	  	 	 	NA	  	 	 	1.28	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 AXA
	  	 W.P. Stewart & Co. Ltd.
	 	 	2,000	  	 	 	8/15/2013	  	 	 	12/12/2013	  	 	 	NA	  	 	 	78.4	  	 	 	NA	  	 	 	3.92	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Fiera Capital Corp.
	  	 Bel Air
	 	 	5,975	  	 	 	9/3/2013	  	 	 	10/31/2013	  	 	 	115.0	  	 	 	125.0	  	 	 	9.62x	  	 	 	1.92	% 	 	 	NA	  	 	 	NA	  	 	 	12.0	  	 	 	NA	  
	 Fiera Capital Corp.
	  	 Wilkinson O’Grady & Co.
	 	 	2,086	  	 	 	9/3/2013	  	 	 	10/31/2013	  	 	 	29.7	  	 	 	31.3	  	 	 	12.04x	  	 	 	1.42	% 	 	 	NA	  	 	 	NA	  	 	 	2.5	  	 	 	NA	  
	 Standard Life Plc
	  	 Newton’s private client bus.
	 	 	3,000	  	 	 	2/27/2013	  	 	 	9/27/2013	  	 	 	NA	  	 	 	126.4	  	 	 	NA	  	 	 	4.21	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Legg Mason Inc.
	  	 Fauchier Partners Mgmt Ltd.
	 	 	5,400	  	 	 	12/13/2012	  	 	 	3/13/2013	  	 	 	80.0	  	 	 	136.0	  	 	 	NA	  	 	 	1.48	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 First Republic Bank
	  	 Luminous Capital Holdings LLC
	 	 	5,891	  	 	 	11/2/2012	  	 	 	12/28/2012	  	 	 	NA	  	 	 	125.0	  	 	 	NA	  	 	 	2.12	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Tamco Holdings, LLC
	  	 Titanium Asset Mgmt Corp.
	 	 	8,713	  	 	 	12/18/2012	  	 	 	12/18/2012	  	 	 	NA	  	 	 	36.0	  	 	 	NA	  	 	 	0.41	% 	 	 	1.62x	  	 	 	22.3	  	 	 	NA	  	 	 	NA	  
	 Charles Schwab Corp.
	  	 ThomasPartners Inc.
	 	 	2,200	  	 	 	10/15/2012	  	 	 	12/14/2012	  	 	 	NA	  	 	 	85.0	  	 	 	NA	  	 	 	3.86	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Hennessy Advisors Inc.
	  	 FBR Fund Advisers Inc.
	 	 	2,200	  	 	 	6/6/2012	  	 	 	10/26/2012	  	 	 	19.7	  	 	 	28.8	  	 	 	NA	  	 	 	0.90	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 City National Corp.
	  	 Acebes D’Alessandro & Assoc.
	 	 	4,890	  	 	 	4/25/2012	  	 	 	7/2/2012	  	 	 	NA	  	 	 	100.0	  	 	 	NA	  	 	 	2.04	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Principal Financial Group Inc.
	  	 Origin Asset Management LLP
	 	 	2,600	  	 	 	7/7/2011	  	 	 	10/3/2011	  	 	 	NA	  	 	 	66.0	  	 	 	NA	  	 	 	2.54	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
	 Wintrust Financial Corp.
	  	 Great Lakes Advisors Inc.
	 	 	2,400	  	 	 	5/4/2011	  	 	 	7/1/2011	  	 	 	NA	  	 	 	20.2	  	 	 	NA	  	 	 	0.84	% 	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  
		  		 				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 MEDIAN
	  		 	 	4,890	  	 				 				 	 	55.0	  	 	 	85.0	  	 	 	9.62x	  	 	 	2.01	% 	 	 	2.17x	  	 	 	23.7	  	 	 	6.0	  	 	 	28.0	% 
	 AVERAGE
	  		 	 	4,731	  	 				 				 	 	63.1	  	 	 	103.1	  	 	 	9.76x	  	 	 	2.08	% 	 	 	2.37x	  	 	 	19.8	  	 	 	5.9	  	 	 	28.4	% 
		  		 				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 ASC Trust Corporation
	  		 	 	510	  	 				 				 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	NA	  	 	 	5.9	  	 	 	1.2	  	 	 	21.2	% 
		  		 				 				 				 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 Screen: Announced deals with AUM > $10 billion 
  

			
	Source: SNL Financial	  	Guideline Transactions

 Exhibit 12     

ASC Trust Corporation and Subsidiary     

Valuation Analysis as of October 25, 2015     

Guideline Transactions Method - Indicated Values     
  

															
	 	  	Activity Metrics	 	  	Profitability Metric	 	  	 
	 	  	Enterprise Value to:	 	  	Enterprise Value to:	 	  	 
	 	  	AUM	 	 	Revenue	 	  	EBITDA	 	  	 References and Comments

	 Derivation of Value
	  				 				  				  	
	 Ongoing Performance Measure
	  	$	510,000,000	  	 	$	5,854,899	  	  	$	1,242,411	  	  	Exhibit 2
	 Guideline Transaction Capitalization Factor
	  	 	2.01	% 	 	 	2.17x	  	  	 	9.62x	  	  	Exhibit 11
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	
	 Capitalized Enterprise Value
	  	 	10,259,475	  	 	 	12,702,781	  	  	 	11,951,997	  	  	
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	
	 Guideline Transaction Indicated Enterprise Values
	  	$	10,300,000	  	 	$	12,700,000	  	  	$	12,000,000	  	  	Rounded to: $100,000

 EXHIBIT “C” 

Seller’s Disclosure Statement 

Section 4.3.1 and Section 4.5 Ownership Structure and Capitalization: 

 

							
		 	ASC Trust Corporation:
		 		  	Common Stock:	    	4,000 shares
		 		  		    	$25 Par Value
		 		  		    	$100,000 authorized capitalization
		 		  	Additional Paid in Capital:	    	$500,000

  

							
		 		  	Owners as of May 27, 2016:	  	
		 		  	 David John
	  	3,170 shares
		 		  	 Ada’s Trust & Investment
	  	   557 shares
		 		  	 Donald Harvey Clark
	  	   273 shares
			
		 	ASC Micronesia:	  	
		 		  	100% owned by ASC Trust Corporation	  	
		 		  	 Capital Stock
	  	  250,000 shares
		 		  		  	$1.00 Par Value
		 		  		  	$250,000 authorized capitalization

  

							
	Section 4.14 Employee Benefit Plans:
				
		 		 	401k Retirement –Savings Plan	  	
		 		 	Section 125 Flexible Benefit Plan	  	
		 		 	Term Life Insurance	  	
		 		 	Vacation / Sick Leave	  	
		 		 	Medical & Dental Insurance	  	
		 		 	Group Life Insurance	  	
		 		 	Group Disability Insurance	  	

  

									
	Section 4.16.1 Material Contracts:
					
		 		 	Description:	  	Vendor:	  	Status
		 		 	Lease	  	Ada’s Trust & Invest.	  	Good standing
		 		 	Investment Custody	  	Fidelity	  	Good standing
		 		 	Investment Advisory	  	Raymond James	  	Good standing
		 		 	Computer Software	  	FIS (Sungard)	  	Good standing
		 		 	SOC Audit	  	Ernst & Yong	  	Good standing

 None for all others.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}]]