Document:

EXHIBIT 10.4

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR SATISFACTORY ASSURANCES TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED WITH RESPECT TO SUCH SALE, OFFER, PLEDGE OR HYPOTHECATION.

 

WARRANT TO PURCHASE COMMON
STOCK

 

OF

 

XENETIC BIOSCIENCES,
INC.

 

Void after
December 30, 2019

 

Date of
Issuance: December 31, 2014

 

This certifies that, for value
received, Firdaus Jal Dastoor, or his registered assigns (the “Holder”) is entitled, subject to the terms set
forth below, to purchase from Xenetic Biosciences, Inc. (the “Company”), a Nevada corporation, one million and
six hundred thousand (1,600,000) shares of the Common Stock of the Company, par value $0.01 per share, (the “Warrant Shares”),
upon surrender hereof, at the principal office of the Company referred to below and simultaneous payment therefor in lawful money
of the United States, at the Exercise Price as set forth in Section 1 below.

 

Subject to the terms and conditions
set forth herein, this Warrant shall be exercisable, in whole or in part, during the term commencing at December 31, 2016 and ending
at December 30, 2019.

 

		1.	Exercise Price. The Exercise Price per share of Common Stock at which this Warrant
may be exercised shall be equal to the higher of $0.77 per share or the Fair Market Value on the date of issuance, as adjusted
from time to time pursuant to Section 11 below (the “Exercise Price”). For purposes of this Section 1, the “Fair
Market Value” of one share of Common Stock on the date of issuance shall have one of the following meanings:

 

		a.	if the Common Stock is listed on a recognized national stock exchange, such as The Nasdaq Stock
Market LLC, the Fair Market Value shall be the Closing Price of the Common Stock on such recognized national stock exchange on
the most recent trading day prior to the date of issuance of this Warrant; for the purposes of this Warrant, “Closing Price”
means the final price at which one share of Common Stock is traded during any trading day;

 

		b.	if the Common Stock is not listed on a recognized national stock exchange but quoted in an over-the-counter
market, the Fair Market Value shall be deemed to be the volume weighted average price per share of Common Stock for the 20 trading
days ending on the day prior to the date of issuance of this Warrant;

 

		c.	if section (a) or (b) above is not applicable, the Fair Market Value shall equal the highest
price per share which the Company could obtain on the date of issuance from a willing buyer (not a current employee or director)
for shares of Common Stock sold by the Company, from authorized but unissued shares, as determined in good faith by the Company’s
Board of Directors.

 

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		2.	Exercise of
                                         Warrant.

 

		a.	Subject to the terms and conditions set forth herein, the purchase rights represented by this
Warrant are exercisable by the Holder in whole or in part, from time to time, by the surrender of this Warrant and the Notice of
Exercise attached hereto as Exhibit A duly completed and executed on behalf of the Holder, at the office of the Company
(or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company), upon payment in cash or by check acceptable to the Company of an amount equal to the aggregate
Exercise Price of the Warrant Shares being purchased.

 

		b.	This Warrant shall be deemed to have been exercised immediately prior to the close of business
on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable
upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such
date. As promptly as practicable on or after such date, the Company shall issue and deliver to the person or persons entitled to
receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company will execute and deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.

 

		3.	No Fractional Shares or Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

 

		4.	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 and substance to the Company or, in the case of mutilation, on surrender
and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant
of like tenor and amount.

 

		5.	Rights of Stockholders. Until the Holder exercises this Warrant and the Company
issues the Holder Warrant Shares purchasable upon the exercise hereof, as provided herein, the Holder shall not be entitled to
vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as
such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent or assert dissenter’s rights with respect to any corporate
action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock
to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise.

 

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		6.	Market Stand-off. The Holder agrees that the Holder shall not sell or otherwise
transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the
same economic effect as a sale, of any shares of the Company’s capital stock acquired through the exercise of this Warrant
during the 180 day period following the commencement of the Company’s public offerings (or such other period as may be requested
by the Company or an underwriter
to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations
and opinions). The Holder further agrees that to the extent that the executive officers and directors of the Company are subject
to a longer market stand-off period, the Holder shall be subject to such longer market stand-off period as well. The Company may
impose stop transfer instructions and may stamp each certificate with a legend with respect to the shares subject to the foregoing
restriction until the end of such 180 day (or other) period. The Holder agrees to execute a market stand-off agreement with the
underwriters in the offerings in customary form consistent with the provisions of this section.

 

		7.	Representations and Warranties of the Holder. By acceptance of this Warrant, the
Holder represents and warrants to the Company as follows:

 

a.                  
Authority. The Holder represents that it has full power and authority to enter into this Warrant. This Warrant constitutes
the Holder’s valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors’
rights and (ii) laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

b.                  
No Conflicts. The execution, delivery and performance by the Holder of this Warrant and the consummation by the Holder of
the transactions contemplated hereby will not (i) result in a violation of the organizational documents of the Holder, (ii) conflict
with, 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 rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the
Holder is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to the Holder, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect
on the ability of the Holder to perform its obligations hereunder.

 

c.                  
Investment Intent. The Holder understands that this Warrant and the Warrant Shares (the “Securities”)
are “restricted securities” and have not been and will not be registered under the Securities Act of 1933, as amended
(the “Securities Act”) or any applicable state securities law and is acquiring the Securities as principal for
its own account and not with a view to, or for distributing or reselling such Securities or any part thereof in violation of the
Securities Act or any applicable state securities laws. The Holder is acquiring the Securities hereunder in the ordinary course
of its business. The Holder does not presently have any agreement, plan or understanding, directly or indirectly, with any person
to distribute or effect any distribution of any of the Securities (or any securities which are derivatives thereof) to or through
any person or entity; the Holder is not a registered broker-dealer under Section 15 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or an entity engaged in a business that would require it to be so registered as
a broker-dealer.

 

d.                  
Investor Status. At the time the Holder was offered the Securities, it was, and at the date hereof it is, either (i) an
“accredited investor” as defined in Rule 501(a) under the Securities Act or (ii) not a “U.S. person” as
defined in Rule 902 of Regulation S of the Securities Act.

 

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e.                   General
Solicitation. The Holder is not acquiring the Securities as a result of any advertisement, article, notice or
other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general advertisement.

 

f.                   
Investment Experience. The Holder, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

g.                   
Access to Information. The Holder acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its subsidiaries and
their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can
acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.
The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect
to its acquisition of the Securities.

 

h.                  
Brokers and Finders. No person will have, as a result of the transactions contemplated by this Warrant, any valid right,
interest or claim against or upon the Company or the Holder for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of the Holder.

 

i.                   
Independent Investment Decision. The Holder has independently evaluated the merits of its decision to purchase Securities
pursuant to this Warrant. The Holder understands that nothing in this Warrant or any other materials presented by or on behalf
of the Company to it in connection with the purchase of the Securities constitutes legal, tax or investment advice. The Holder
has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Securities.

 

j.                   
Reliance on Exemptions. The Holder understands that the Securities being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgements
and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility
of the Holder to acquire the Securities.

 

k.                  
No Governmental Review. The Holder understands that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of
the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

l.                   
Regulation M. The Holder is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales
of the Securities and other activities with respect to the Securities by the Holder.

 

m.                
Residency. The residency of the Holder (or, in the case of a partnership or corporation, such entity’s principal place
of business) is correctly set forth on the signature page hereto.

 

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		8.	Transfer of
                                         Warrant.

 

		a.	Warrant Register. The Company will maintain a register (the “Warrant Register”)
containing the names and addresses of the Holder. The Holder may change its address as shown on the Warrant Register by written
notice to the Company requesting such change. Any notice or written communication required or permitted to be given to the Holder
may be delivered or given by mail to the Holder as shown on the Warrant Register and at the address shown on the Warrant Register.
Until this Warrant is transferred on the Warrant Register, the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.

 

		b.	Warrant Agent. The Company may, by written notice to the Holder, appoint an agent for the
purpose of maintaining the Warrant Register referred to in Section 8(a) above, issuing the Common Stock or other securities then
issuable upon the exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the foregoing. Thereafter,
any such registration, issuance, exchange, or replacement, as the case may be, shall be made at the office of such agent.

 

		c.	Compliance with Securities Laws.

 

		i.	The Warrant and the Warrant Shares are characterized as “restricted securities” under
the Securities Act inasmuch as they are being acquired from the Company in a transaction not involving a public offering, and that
under the Securities Act and applicable regulations thereunder, such securities may be resold without registration under the Securities
Act only in certain limited circumstances. In this connection, the Holder represents that it is familiar with the Securities and
Exchange Commission (“SEC”) Rule 144, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. The Company is under no obligation to register any of the securities sold hereunder. No public
market now exists for this Warrant or the Warrant Shares and that it is uncertain whether a public market will ever exist for this
Warrant or the Warrant Shares.

 

		ii.	This Warrant and all certificates for the Warrant Shares issued upon exercise hereof shall be
stamped or imprinted with legends in substantially the following form (in addition to any legend required by state securities laws):

 

“THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SUCH ACT, (B) A “NO ACTION” LETTER
OF THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH SALE OR OFFER OR (C) SATISFACTORY ASSURANCES TO THE CORPORATION
THAT REGISTRATION UNDER SUCH ACT IS NOT REQUIRED WITH RESPECT TO SUCH SALE OR OFFER.

 

THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC
OFFERING, AS SET FORTH IN THE WARRANT PURSUANT TO WHICH THESE SHARES WERE ISSUED, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF THE COMPANY.”

 

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		d.	Disposition of the Holder's Rights.

 

		i.	Transferability. This Warrant shall not be transferred or assigned in whole or in part by
Holder and any attempt by Holder to transfer or assign any rights, duties or obligations that arise under this Warrant shall be
void. Any transfer of the Warrant Shares issuable upon exercise of this Warrant (the “Securities”) must be in
compliance with all applicable securities laws. The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition
of all or any portion of the Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed
in writing for the benefit of the Company to take and hold such Securities subject to, and to be bound by, the terms and conditions
set forth in this Warrant to the same extent as if the transferee were the original Holder hereunder, and (A) such Holder shall
have given prior written notice to the Company of such Holder’s intention to make such disposition and shall have furnished
the Company with a detailed description of the manner and circumstances of the proposed disposition, (B) the transferee shall have
confirmed to the satisfaction of the Company in writing, substantially in the form of Exhibit A-1, that the Securities are
being acquired (i) solely for the transferee’s own account and not as a nominee for any other party, (ii) for investment
and (iii) not with a view toward distribution or resale, and shall have confirmed such other matters related thereto as may be
reasonably requested by the Company, and (C) such Holder shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, to the effect that such disposition will not require registration of such Securities under applicable
securities laws.

 

		9.	Reservation of Stock. The Company covenants that during the term this Warrant is
exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for
the issuance of Common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to amend its
Articles of Incorporation, as amended and/or amended and restated from time to time (the “Certificate”) as the
same may be amended from time to time to provide sufficient reserves of shares of Common Stock issuable upon exercise of the Warrant.

 

		10.	Amendments.

 

		a.	Any term of this Warrant may be amended, and any waiver of any term of this Warrant may be granted,
with the written consent of the Company and the holder of this Warrant. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each future holder of the Warrant and the Company, notwithstanding the fact that such future holder
did not consent to such amendment or waiver.

 

		b.	No waivers of or exceptions to any term, condition or provision of the Warrant, in any one or
more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

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		11.	Adjustments. The Exercise Price and the number of shares purchasable hereunder
are subject to adjustment from time to time as follows:

 

		a.	Reclassification, etc. If the Company at any time while this Warrant, or any portion thereof,
remains outstanding and unexpired shall, by reclassification of securities or otherwise, change any of the securities as to which
purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result
of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to
such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment
as provided in this Section 11.

 

		b.	Split, Subdivision or Combination of Warrant Shares. If the Company at any time while
this Warrant, or any portion thereof, remains outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for
such securities shall be proportionately decreased in the case of a split or subdivision or proportionately increased in the case
of a combination.

 

		c.	Merger or Reorganization. If at any time there shall be any reorganization, recapitalization,
merger or consolidation (a “Reorganization”) involving the Company (other than as otherwise provided for herein)
in which the Company’s equity securities are converted into or exchanged for securities, cash or other property, then, as
a part of such Reorganization, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise
of this Warrant the kind and amount of securities, cash or other property of the successor corporation resulting from such Reorganization,
equivalent in value to that which a holder of the Warrant Shares deliverable upon exercise of this Warrant would have been entitled
in such Reorganization if the right to purchase the Warrant Shares hereunder had been exercised immediately prior to such Reorganization.
In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the successor corporation) shall
be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after such
Reorganization to the end that the provisions of this Warrant shall be applicable after the event, as near as reasonably may be,
in relation to any shares or other securities deliverable after that event upon the exercise of this Warrant.

 

		d.	Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment
pursuant to this Section 11, the Company shall promptly compute such adjustment or readjustment in accordance with the terms hereof
and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon the written request, at any time, of the Holder, furnish or cause
to be furnished to the Holder a like certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price
at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received
upon the exercise of the Warrant.

 

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		12.	Miscellaneous.

 

		a.	Additional Undertaking. The Holder hereby agrees to take whatever additional action and
execute whatever additional documents the Company may deem necessary or advisable in order to carry out or effect one or more of
the obligations or restrictions imposed on either the Holder or the shares of Common Stock issued upon exercise hereof pursuant
to the provisions of this Warrant.

 

		b.	Governing Law. This Warrant shall be governed by, and construed in accordance with, the
laws of the State of New York without resort to its conflict-of-laws rules.

 

		c.	Jurisdiction. The Holder and the Company irrevocably consents to the exclusive jurisdiction
of, and venue in, the state courts in the State of New York (or in the event of exclusive federal jurisdiction, the federal district
courts in the State of New York), in connection with any action based upon, arising out of or in connection with this Warrant or
the matters contemplated herein, and agrees that process may be served upon them in any manner authorized by the law of the State
of New York for such persons.

 

		d.	Successors and Assigns. The provisions of this Warrant shall inure to the benefit of, and
be binding upon, the Company and its successors and assigns and upon the Holder and its successors, whether or not any such person
shall have become a party to this Warrant and have agreed in writing to join herein and be bound by the terms hereof.

 

		e.	Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor
and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

		f.	Notices. All notices and other communications required or permitted hereunder shall be
in writing and shall be sent by facsimile or electronic mail or otherwise delivered by hand, messenger or courier service addressed:

 

		i.	if to the Holder, to the Holder at the Holder’s address, facsimile number or electronic
mail address as shown in the Company’s records, as may be updated in accordance with the provisions hereof, or until the
Holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address, facsimile
number or electronic mail address of the last holder of this Warrant for which the Company has contact information in its records;
or

 

		ii.	if to the Company, to the attention of the Chief Executive Officer of the Company at 99 Hayden
Ave, Suite 230, Lexington, Massachusetts 02421, United States or at such other current address as the Company shall have furnished
to the Holder or at s.maguire@xeneticbio.com.

 

Each
such notice or other communication shall for all purposes of this Warrant be treated as effective or having been given (i)
if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier
service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if
sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of delivery
when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent
during normal business hours of the recipient, then on the recipient’s next business day. In the event of any conflict
between the Company’s books and records and this Warrant or any notice delivered hereunder, the Company’s books
and records will control absent fraud or error.

 

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		g.	Severability. If any provision of this Warrant becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent
necessary, shall be severed from this Warrant, and such illegal, unenforceable or void provision shall be replaced with a valid
and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal,
unenforceable or void provision. The balance of this Warrant shall be enforceable in accordance with its terms.

 

		h.	Rights and Obligations Survive Exercise of the Warrant. Except as otherwise provided herein,
the rights and obligations of the Company and the Holder under this Warrant shall survive exercise of this Warrant.

 

		i.	Entire Agreement. Except as expressly set forth herein, this Warrant (including the exhibits
attached hereto) constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to the subject matter hereof.

 

 

[signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

XENETIC BIOSCIENCES, INC.

 

 

By: ________________________

       Name:

       Title:

 

 

AGREED AND ACKNOWLEDGED

 

 

 

________________________

Firdaus Jal Dastoor

 

Address:

 

Email:

Fax:

 

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EXHIBIT A

 

NOTICE
OF EXERCISE

 

To: Xenetic
Biosciences, Inc.

 

(1)         The
undersigned hereby elects to purchase  ________ shares of Common Stock (the “Shares”) of Xenetic
Biosciences, Inc., pursuant to the terms of the attached Warrant as follows:

 

		(a)	The undersigned herewith makes payment of the full purchase price for the Shares at the Exercise
Price per share provided for in the Warrant of $ ________, for an aggregate Exercise Price of $ ________, by delivery to the Company
of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to
an account designated in writing by the Company, in the amount of the aggregate Exercise Price.

 

(2)         In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”), and are restricted securities
under the Securities Act and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock
except under circumstances that will not result in a violation of the Securities Act or any state securities laws.

 

(3)         The undersigned represents and warrants that the shares of Common Stock being purchased are being acquired for investment
for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof,
and that the undersigned has no present intention of selling, granting any participation in, or otherwise distributing the shares,
nor does it have any contract, undertaking, agreement or arrangement for the same, and all representations and warranties of the
undersigned set forth in Section 7 of the attached Warrant are true and correct as of the date hereof.

 

(4)         The undersigned has executed, and delivers herewith, an Investment Representation Statement and Market Stand-Off Agreement
in a form substantially similar to the form attached to the Warrant as Exhibit A-1.

 

(5)         Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned as is
specified below:

 

Name ________________________________

 

(6)         Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned as is specified
below:

 

Name ________________________________

 

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	 	________________________________________

(Print name of the warrant holder)

 

 

________________________________________

(Signature)

 

 

________________________________________

(Name and title of signatory, if applicable)

 

 

________________________________________

(Date)

 

 

________________________________________

(Fax number)

 

 

________________________________________

(Email address)

 

 

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EXHIBIT A-l

 

INVESTMENT REPRESENTATION
STATEMENT

AND

MARKET STAND-OFF AGREEMENT

 

 

	INVESTOR:	___________________________________
	 	 
	COMPANY:	XENETIC BIOSCIENCES, INC.
	 	 
	SECURITIES:	THE WARRANT ISSUED ON DECEMBER 31, 2014 (THE  “WARRANT”) AND THE SECURITIES ISSUED OR ISSUABLE UPON EXERCISE THEREOF (INCLUDING UPON SUBSEQUENT CONVERSION OF THOSE SECURITIES)
	 	 
	DATE:	___________________________________

 

In connection with the purchase
or acquisition of the above-listed Securities, the undersigned Investor represents and warrants to, and agrees with, the Company
as follows:

 

		1.	Investment Intent. The Investor understands that the Warrant and
Warrant Shares (the “Securities”) are “restricted securities” and have not been and will not be
registered under the Securities Act of 1933, as amended (the “Securities Act”) or any applicable state securities
law and is acquiring the Securities as principal for its own account and not with a view to, or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any applicable state securities laws. The Investor is acquiring
the Securities hereunder in the ordinary course of its business. The Investor does not presently have any agreement, plan or understanding,
directly or indirectly, with any person to distribute or effect any distribution of any of the Securities (or any securities which
are derivatives thereof) to or through any person or entity; the Investor is not a registered broker-dealer under Section 15 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or an entity engaged in a business that
would require it to be so registered as a broker-dealer.

 

		2.	Investor Status. At the time the Investor was offered the Securities,
it was, and at the date hereof it is, either (i) an “accredited investor” as defined in Rule 501(a) under the Securities
Act or (ii) not a “U.S. person” as defined in Rule 902 of Regulation S of the Securities Act.

 

		3.	General Solicitation. The Investor is not acquiring the Securities
as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine
or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

 

		4.	Investment Experience. The Investor, either alone or together with
its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such
investment. The Investor is able to bear the economic risk of an investment in the Securities and, at the present time, is able
to afford a complete loss of such investment.

 

    	13

    	 

    

 

		5.	Access to Information. The Investor acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its subsidiaries and their respective financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the investment. The Investor has sought such accounting,
legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Securities.

 

		6.	Brokers and Finders. No person will have, as a result of the transactions
contemplated by the Warrant, any valid right, interest or claim against or upon the Company or the Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Investor.

 

		7.	Independent Investment Decision. The Investor has independently evaluated
the merits of its decision to purchase Securities pursuant to the Warrant. The Investor understands that nothing in the Warrant
or any other materials presented by or on behalf of the Company to it in connection with the purchase of the Securities constitutes
legal, tax or investment advice. The Investor has consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the Securities.

 

		8.	Reliance on Exemptions. The Investor understands that the Securities
being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Investor’s compliance
with, the representations, warranties, agreements, acknowledgements and understandings of the Investor set forth herein in order
to determine the availability of such exemptions and the eligibility of the Investor to acquire the Securities.

 

		9.	No Governmental Review. The Investor understands that no United States
federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement
of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed
the merits of the offering of the Securities.

 

		10.	Regulation M. The Investor is aware that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of the Securities and other activities with respect to the Securities
by the Investor.

 

		11.	Residency. The residency of the Investor (or, in the case of a partnership
or corporation, such entity’s principal place of business) is correctly set forth on the signature page hereto.

 

		12.	Market Stand-off. The Investor agrees that the Investor shall not
sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, of any shares of the Company’s capital stock acquired through the exercise
of the Warrant during the 180 day period following the commencement of the Company’s public offerings (or such other period
as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution
of research reports and (ii) analyst recommendations and opinions). The Investor further agrees that to the extent that the executive
officers and directors of the Company are subject
to a longer market stand-off period, the Investor shall be subject to such longer market stand-off period as well. The Company
may impose stop transfer instructions and may stamp each certificate with a legend with respect to the shares subject to the foregoing
restriction until the end of such 180 day (or other) period. The Investor agrees to execute a market stand-off agreement with the
underwriters in the offerings in customary form consistent with the provisions of this section.

 

[signature page follows]

 

    	14

    	 

    

 

The Investor is signing this
Investment Representation Statement and Market Stand-Off Agreement on the date first written above.

 

	 	INVESTOR
	 	 
	 	________________________________________

(Print name of the investor)

 

 

________________________________________

(Signature)

 

 

________________________________________

(Name and title of signatory,
if applicable)

 

 

________________________________________

(Street address)

 

 

________________________________________

(City, state and ZIP)

 

    	15EX-10.16

 Exhibit 10.16 

CREDIT AGREEMENT 
 THIS CREDIT
AGREEMENT (this “Agreement”) is entered into as of May 1, 2012, by and between PFENEX INC,, a Delaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”). 

RECITALS 
 Borrower has
requested that Bank extend or continue credit to Borrower as described below, and Bank has agreed to provide such credit to Borrower on the terms and conditions contained herein. 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as
follows: 
 ARTICLE I 

CREDIT TERMS 

SECTION 1.1. LINE OF CREDIT. 

(a) Line of Credit. Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances to Borrower from time to
time up to and including April 2, 2015, not to exceed at any time the aggregate principal amount of One Million Five Hundred Thousand Dollars ($1,500,000.00) (“Line of Credit”), the proceeds of which shall be used to finance
Borrower’s working capital requirements. Borrower’s obligation to repay advances under the Line of Credit shall be evidenced by a promissory note dated as of May 1, 2012 (“Line of Credit Note”), all terms of which are
incorporated herein by this reference. 
 (b) Borrowing and Repayment. Borrower may from time to time during the term of the Line of
Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein or in the Line of Credit Note; provided however, that the total outstanding borrowings under
the Line of Credit shall not at any time exceed the maximum principal amount available thereunder, as set forth above. 
 SECTION 1.2.
INTEREST/FEES. 
 (a) Interest. The outstanding principal balance of each credit subject hereto shall bear Interest at the rate of
interest set forth in each promissory note or other instrument or document executed in connection therewith. 
 (b) Computation and
Payment. Interest shall be computed on the basis of a 360-day year, actual days elapsed. Interest shall be payable at the times and place set forth in each promissory note or other instrument or document required hereby. 

SECTION 1.3. COLLATERAL. 

As security for all indebtedness and other obligations of Borrower to Bank subject hereto, Borrower hereby grants to Bank security interests
of first priority in all Borrower’s funds deposited in Borrower’s Money Market Account #[*]. All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, deeds or mortgages, and
other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall pay to Bank immediately upon demand the full amount of all charges, costs and expenses (to include fees paid to third parties and all
allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals, audits and title insurance. 

 ARTICLE II 

REPRESENTATIONS AND WARRANTIES 

Borrower makes the following representations and warranties to Bank, which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final payment, and satisfaction and discharge, of all obligations of Borrower to Bank subject to this Agreement. 

SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized and existing and in good standing under the laws of Delaware, and is
qualified or licensed to do business (and is in good standing as a foreign corporation, if applicable) in all jurisdictions in which such qualification or licensing is required or in which the failure to so qualify or to be so licensed could have a
material adverse effect on Borrower. 
 SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract,
instrument and other document required hereby or at any time hereafter delivered to Bank in connection herewith (collectively, the “Loan Documents”) have been duly authorized, and upon their execution and delivery in accordance with the
provisions hereof will constitute legal, valid and binding agreements and obligations of Borrower or the party which executes the same, enforceable in accordance with their respective terms. 

SECTION 2.3. NO VIOLATION. The execution, delivery and performance by Borrower of each of the Loan Documents do not violate any provision
of any law or regulation, or contravene any provision of the Articles of Incorporation or By-Laws of Borrower, or result in any breach of or default under any contract, obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound. 
 SECTION 2.4. LITIGATION. There are no pending, or to the best of Borrower’s knowledge threatened,
actions, claims, investigations, suits or proceedings by or before any governmental authority, arbitrator, court or administrative agency which could have a material adverse effect on the financial condition or operation of Borrower other than those
disclosed by Borrower to Bank in writing prior to the date hereof. 
 SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The annual
financial statement of Borrower dated December 31, 2010, and all interim financial statements delivered to Bank since said date, true copies of which have been delivered by Borrower to Bank prior to the date hereof, (a) are complete and
correct and present fairly the financial condition of Borrower, (b) disclose all liabilities of Borrower that are required to be reflected or reserved against under generally accepted accounting principles, whether liquidated or unliquidated,
fixed or contingent, and (c) have been prepared in accordance with generally accepted accounting principles consistently applied. Since the dates of such financial statements there has been no material adverse change in the financial condition
of Borrower, nor has Borrower mortgaged, pledged, granted a security interest in or otherwise encumbered any of its assets or properties except in favor of Bank or as otherwise permitted by Bank in writing. 

SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any pending assessments or adjustments of its income tax payable with
respect to any year. 
 SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture, contract or instrument to which Borrower is a
party or by which Borrower may be bound that requires the subordination in right of payment of any of Borrower’s obligations subject to this Agreement to any other obligation of Borrower. 

SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter possess, all permits, consents, approvals, franchises and
licenses required and rights to all trademarks, trade names, patents, and fictitious names, if any, necessary to enable it to conduct the business in which it is now engaged in compliance with applicable law. 

  
 -2- 

 SECTION 2.9. ERISA. Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from time to time (“ERISA”); Borrower has not violated any provision of any defined employee pension benefit plan (as defined in ERISA) maintained
or contributed to by Borrower (each, a “Plan”); no Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with
respect to each Plan; and each Plan will be able to fulfill its benefit obligations as they come due in accordance with the Plan documents and under generally accepted accounting principles. 

SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any
other material lease, commitment, contract, Instrument or obligation. 
 SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by
Borrower to Bank in writing prior to the date hereof, Borrower is in compliance in all material respects with all applicable federal or state environmental, hazardous waste, health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower’s operations and/or properties, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of
1986, the Federal Resource Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any of the same may be amended, modified or supplemented from time to time. None of the operations of Borrower is the subject of any
federal or state investigation evaluating whether any remedial action involving a material expenditure is needed to respond to a release of any toxic or hazardous waste or substance into the environment. Borrower has no material contingent liability
in connection with any release of any toxic or hazardous waste or substance into the environment. 
 ARTICLE III 

CONDITIONS 

SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any credit contemplated by this Agreement Is
subject to the fulfillment to Bank’s satisfaction of all of the following conditions: 
 (a) Approval of Bank Counsel. All legal
matters incidental to the extension of credit by Bank shall be satisfactory to Bank’s counsel. 
 (b) Documentation. Bank shall
have received, in form and substance satisfactory to Bank, each of the following, duty executed: 
  

	 	(i)	This Agreement and each promissory note or other instrument or document required hereby. 

  

	 	(ii)	Corporate Resolution: Borrowing. 

  

	 	(iii)	Certificate of Incumbency. 

  

	 	(iv)	Security Agreement: Specific Rights to Payment. 

  

	 	(v)	Such other documents as Bank may require under any other Section of this Agreement. 

 (c)
Financial Condition. There shall have been no material adverse change, as determined by Bank, in the financial condition or business of Borrower, nor any material decline, as determined by Bank, in the market value of any collateral required
hereunder or a substantial or material portion of the assets of Borrower. 
 (d) Insurance. Borrower shall have delivered to Bank
evidence of insurance coverage on all Borrower’s property, in form, substance, amounts, covering risks and issued by companies satisfactory to Bank, and where required by Bank, with loss payable endorsements in favor of Bank. 

  
 -3- 

 SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each
extension of credit requested by Borrower hereunder shall be subject to the fulfillment to Bank’s satisfaction of each of the following conditions: 

(a) Compliance. The representations and warranties contained herein and in each of the other Loan Documents shall be true on and as of
the date of the signing of this Agreement and on the date of each extension of credit by Bank pursuant hereto, with the same effect as though such representations and warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with the giving of notice or the passage of time or both would constitute such an Event of Default, shall have occurred and be continuing or shall exist. 

(b) Documentation. Bank shall have received all additional documents which may be required in connection with such extension of credit.

 ARTICLE IV 

AFFIRMATIVE COVENANTS 

Borrower covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in writing: 

SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other liabilities due under any of the Loan Documents at
the times and place and in the manner specified therein. 
 SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied, and permit any representative of Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies of the same, and to inspect the
properties of Borrower. 
 SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and detail satisfactory to
Bank: 
 (a) not later than 90 days after and as of the end of each fiscal year, a compiled financial statement of Borrower, prepared by a
certified public accountant acceptable to Bank, to include balance sheet, income statement and statement of cash flows; 
 (b) not later
than 45 days after and as of the end of each fiscal quarter, a financial statement of Borrower, prepared by Borrower, to include balance sheet and income statement; 

(c) from time to time such other information as Bank may reasonably request. 

SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits, governmental approvals, rights, privileges and franchises necessary
for the conduct of its business; and comply with the provisions of all documents pursuant to which Borrower is organized and/or which govern Borrower’s continued existence and with the requirements of all laws, rules, regulations and orders of
any governmental authority applicable to Borrower and/or its business. 
 SECTION 4.5. INSURANCE. Maintain and keep in force, for each
business in which Borrower is engaged, insurance of the types and in amounts customarily carried in similar lines of business, including but 

  
 -4- 

 
not limited to fire, extended coverage, public liability, flood, property damage and workers’ compensation, with all such insurance carried with companies and in amounts satisfactory to
Bank, and deliver to Bank from time to time at Bank’s request schedules setting forth all insurance then in effect. 

SECTION 4.6. FACILITIES. Keep all properties useful or necessary to Borrower’s business in good repair and condition, and from time
to time make necessary repairs, renewals and replacements thereto so that such properties shall be fully and efficiently preserved and maintained. 

SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all indebtedness, obligations, assessments and taxes, both
real or personal, including without limitation federal and state income taxes and state and local property taxes and assessments, except (a) such as Borrower may in good faith contest or as to which a bona fide dispute may arise, and
(b) for which Borrower has made provision, to Bank’s satisfaction, for eventual payment thereof in the event Borrower is obligated to make such payment. 

SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any litigation pending or threatened against Borrower. 

SECTION 4.9. NOTICE TO BANK. Promptly (but in no event more than five (5) days after the occurrence of each such event or matter)
give written notice to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or any condition, event or act which with the giving of notice or the passage of time or both would constitute an Event of Default; (b) any
change in the name or the organizational structure of Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any funding deficiency with respect to any Plan; or (d) any
termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss through liability or property damage, or through fire, theft or any other cause affecting Borrower’s
property. 
 ARTICLE V 

NEGATIVE COVENANTS 

Borrower further covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether
direct or contingent, liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower will not without Bank’s prior written
consent: 
 SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended hereunder except for the purposes stated in
Article I hereof. 
 SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in fixed assets in any fiscal year. 

SECTION 5.3. LEASE EXPENDITURES. Incur operating lease expense in any fiscal year. 

SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings,
loans or advances, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, joint or several, except (a) the liabilities of Borrower to Bank, and (b) any other liabilities of Borrower existing as of, and disclosed to
Bank prior to, the date hereof. 
 SECTION 5.5. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any other
entity; make any substantial change in the nature of Borrower’s business as conducted as of the date hereof; acquire all or substantially all of the assets of any other entity; nor sell, lease, transfer or otherwise dispose of all or a
substantial or material portion of Borrower’s assets except in the ordinary course of its business. 

  
 -5- 

 SECTION 5.6. GUARANTIES. Guarantee or become liable in any way as surety, endorser (other
than as endorser of negotiable instruments for deposit or collection in the ordinary course of business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of Borrower as security for, any liabilities or obligations of
any other person or entity, except any of the foregoing in favor of Bank. 
 SECTION 5.7. LOANS, ADVANCES, INVESTMENTS. Make any loans
or advances to or investments in any person or entity, except any of the foregoing existing as of, and disclosed to Bank prior to, the date hereof. 

SECTION 5.8. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or distribution either in cash, stock or any other property on
Borrower’s stock now or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of any class of Borrower’s stock now or hereafter outstanding. 

SECTION 5.9. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a security interest in, or lien upon, all or any portion of
Borrower’s assets now owned or hereafter acquired, except any of the foregoing in favor of Bank or which is existing as of, and disclosed to Bank in writing prior to, the date hereof. 

ARTICLE VI 
 EVENTS
OF DEFAULT 
 SECTION 6.1. The occurrence of any of the following shall constitute an “Event of Default” under this
Agreement: 
 (a) Borrower shall fail to pay when due any principal, interest, fees or other amounts payable under any of the Loan
Documents. 
 (b) Any financial statement or certificate furnished to Bank in connection with, or any representation or warranty made by
Borrower or any other party under this Agreement or any other Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or made. 

(c) Any default in the performance of or compliance with any obligation, agreement or other provision contained herein or in any other Loan
Document (other than those specifically described as an “Event of Default” in this section 6.1), and with respect to any such default that by its nature can be cured, such default shall continue for a period of twenty (20) days from
the earlier of (1) the date an executive officer of Borrower learns of such default, or (2) the date written notice thereof is given by Bank to Borrower. 

(d) Any default in the payment or performance of any obligation, or any defined event of default, under the terms of any contract, instrument
or document (other than any of the Loan Documents) pursuant to which Borrower, any guarantor hereunder or any general partner or joint venturer in Borrower if a partnership or joint venture (with each such guarantor, general partner and/or joint
venturer referred to herein as a “Third Party Obligor”) has incurred any debt or other liability to any person or entity, including Bank; provided however, that any cure period applicable thereto has expired, and in the case of a default
or defined event of default to a person or entity other than Bank or an affiliate of Bank, (1) such indebtedness is in excess of $50,000.00, individually or in the aggregate for all such defaults by Borrower and each Third Party Obligor
combined, and (2) such default or defined event of default is not being contested in good faith by Borrower or such Third Party Obligor, as the case may be, or, if being so contested, they have not made provision to Bank’s reasonable
satisfaction for payment thereof in the event they were to lose such contest. 
 (e) Borrower or any Third Party Obligor shall become
insolvent, or shall suffer or consent to or apply for the appointment of a receiver, trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts as they become due, or shall make a general assignment
for the benefit of creditors; Borrower or any Third Party Obligor shall file a voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform
Act, Title 11 of the United States Code, as amended or recodified from time to time 

  
 -6- 

 
(“Bankruptcy Code”), or under any state or federal law granting relief to debtors, whether now or hereafter in effect; or Borrower or any Third Party Obligor shall file an answer
admitting the jurisdiction of the court and the material allegations of any involuntary petition; or Borrower or any Third Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be entered against Borrower or any Third Party
Obligor by any court of competent Jurisdiction under the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors. 

(f) The filing of a notice of judgment lien against Borrower or any Third Party Obligor; or the recording of any abstract of judgment against
Borrower or any Third Party Obligor in any county in which Borrower or such Third Party Obligor has an interest in real property; or the service of a notice of levy and/or of a writ of attachment or execution, or other like process, against the
assets of Borrower or any Third Party Obligor; or the entry of a judgment against Borrower or any Third Party Obligor; provided, however, that such judgments, liens, levies, writs, executions and other process involve debts of or claims against
Borrower or any Third Party Obligor in excess of $50,000.00, individually or in the aggregate for all such judgments, liens, levies, writs, executions and other process combined, and within thirty (20 days after the creation thereof, or at least ten
(10) days prior to the date on which any assets could be lawfully sold in satisfaction thereof, such debt or claim is not satisfied or stayed pending appeal and insured against in a manner satisfactory to Bank; or any involuntary petition or
proceeding pursuant to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors is filed or commenced against Borrower or any Third Party Obligor. 

(g) There shall exist or occur any event or condition that Bank in good faith believes impairs, or is substantially likely to impair, the
prospect of payment or performance by Borrower, any Third Party Obligor, or the general partner of either if such entity is a partnership, of its obligations under any of the Loan Documents, and such event or condition is not cured to the reasonable
satisfaction of Bank within thirty (30) days after Bank gives Borrower written notice thereof. 
 (h) The death or incapacity of
Borrower or any Third Party Obligor if an individual. The dissolution or liquidation of Borrower or any Third Party Obligor if a corporation, partnership, joint venture or other type of entity; or Borrower or any such Third Party Obligor, or any of
its directors, stockholders or members, shall take action seeking to effect the dissolution or liquidation of Borrower or such Third Party Obligor. 

(i) Any change in control of Borrower or any entity or combination of entities that directly or indirectly control Borrower, with
“control” defined as ownership of an aggregate of twenty-five percent (25%) or more of the common stock, members’ equity or other ownership interest (other than a limited partnership interest). 

SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) all indebtedness of Borrower under each of the Loan
Documents, any term thereof to the contrary notwithstanding, shall at Bank’s option and without notice become immediately due and payable without presentment, demand, protest or notice of dishonor, all of which are hereby expressly waived by
Borrower; (b) the obligation, if any, of Bank to extend any further credit under any of the Loan Documents shall immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available under each of the Loan
Documents, or accorded by law, including without limitation the right to resort to any or all security for any credit subject hereto and to exercise any or all of the rights of a beneficiary or secured party pursuant to applicable law. All rights,
powers and remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or
equity. 

  
 -7- 

 ARTICLE VII 

MISCELLANEOUS 

SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in exercising any right, power or remedy under any of the Loan
Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of
any other right, power or remedy. Any waiver, permit, consent or approval of any kind by Bank of any breach of or default under any of the Loan Documents must be in writing and shall be effective only to the extent set forth in such writing. 

SECTION 7.2. NOTICES. All notices, requests and demands which any party is required or may desire to give to any other party under any
provision of this Agreement must be in writing delivered to each party at the following address: 
  

			
	BORROWER:		PFENEX INC.
			10790 Roselle Street
			San Diego, CA 92121
		
	BANK:		WELLS FARGO BANK, NATIONAL ASSOCIATION
			San Diego RCBO
			401 B Street, Suite 2201
			San Diego, CA 92101

 or to such other address as any party may designate by written notice to all other parties. Each such notice, request and
demand shall be deemed given or made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3) days after deposit in the U.S. mail, first class and postage
prepaid; and (c) if sent by telecopy, upon receipt. 
 SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay
to Bank within twenty (20) days of written demand by Bank (which demand shall include a reasonably detailed summary of the amounts which are the subject thereof) the full amount of all reasonable payments, advances, charges, costs and expenses,
including reasonable attorneys’ fees (excluding allocated costs of Bank’s in-house counsel), expended or incurred by Bank in connection with (a) the preparation of any amendments and waivers to this Agreement and the other Loan
Documents, (b) the enforcement of Bank’s rights and/or the collection of any amounts which become due to Bank under any of the Loan Documents, and (c) the prosecution or defense of any action in any way related to any of the Loan
Documents, Including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other party to any of the Loan Documents. Notwithstanding anything herein to the
contrary, the prevailing party in any action to enforce this Agreement or any of the other Loan Documents shall be entitled to recover from the non-prevailing party in such action all reasonable costs and expenses, including without limitation
reasonable attorneys’ fees, expended or incurred by the prevailing party in such action. 
 SECTION 7.4. SUCCESSORS, ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties; provided however, that Borrower may not assign or transfer its interests or rights
hereunder without Bank’s prior written consent. Bank reserves the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, Bank’s rights and benefits under each of the Loan Documents. In
connection therewith, Bank may disclose all documents and information which Bank now has or may hereafter acquire relating to any credit subject hereto, Borrower or its business, or any collateral required hereunder. 

SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute the entire agreement between Borrower
and Bank with respect to each credit subject hereto and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof. This Agreement may be amended or modified only in writing signed by each
party hereto. 

  
 -8- 

 SECTION 7.6. NO THIRD PARTY BENEFICIARIES, This Agreement is made and entered into for the
sole protection and benefit of the parties hereto and their respective permitted successors and assigns, and no other person or entity shall be a third party beneficiary of, or have any direct or indirect cause of action or claim in connection with,
this Agreement or any other of the Loan Documents to which it is not a party. 
 SECTION 7.7. TIME. Time is of the essence of each and
every provision of this Agreement and each other of the Loan Documents. 
 SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of
this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this
Agreement. 
 SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when executed and
delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same Agreement. 

SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

 SECTION 7.11. ARBITRATION. 

(a) Arbitration. The parties hereto agree, upon demand by any party, to submit to binding arbitration all claims, disputes and
controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise in any way arising out of or relating to (i) any credit subject hereto, or any of the
Loan Documents, and their negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit. 

(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in California selected by the American Arbitration
Association (“AAA”); (ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be
conducted by the AAA, or such other administrator as the parties shall mutually agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed
interest, arbitration fees and costs in which case the arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to herein, as applicable, as the “Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control. Any
party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a
waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law. 
 (c)
No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating
to collateral or proceeds of collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after the pendency of
any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in
sections (i), (ii) and (iii) of this paragraph. 

  
 -9- 

 (d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which the amount
in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00
shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed in the State of
California or a neutral retired judge of the state or federal judiciary of California, in either case with a minimum of ten years experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will
determine whether or not an issue Is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator’s
discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the substantive law of California and may
grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award. The arbitrator shall also have the power to award recovery of all costs and
fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the California Rules of Civil Procedure or other applicable law. Judgment
upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief. 

(e) Discovery. In any arbitration proceeding, discovery will be permitted in accordance with the Rules. All discovery shall be
expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date. Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to
final determination by the arbitrator upon a showing that the request for discovery is essential for the party’s presentation and that no alternative means for obtaining information is available. 

(f) Class Proceedings and Consolidations. No party hereto shall be entitled to join or consolidate disputes by or against others in any
arbitration, except parties who have executed any Loan Document, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney
general capacity. 
 (g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and expenses of the arbitration
proceeding. 
 (h) Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no dispute shall be
submitted to arbitration if the dispute concerns indebtedness secured directly or indirectly, In whole or in part, by any real property unless (i) the holder of the mortgage, lien or security interest specifically elects in writing to proceed
with the arbitration, or (Ii) all parties to the arbitration waive any rights or benefits that might accrue to them by virtue of the single action rule statute of California, thereby agreeing that all indebtedness and obligations of the parties, and
all mortgages, liens and security interests securing such indebtedness and obligations, shall remain fully valid and enforceable. If any such dispute is not submitted to arbitration, the dispute shall be referred to a referee in accordance with
California Code of Civil Procedure Section 638 et seq., and this general reference agreement is intended to be specifically enforceable in accordance with said Section 638. A referee with the qualifications required herein for arbitrators
shall be selected pursuant to the AAA’s selection procedures. Judgment upon the decision rendered by a referee shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure
Sections 644 and 645. 
 (i) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall
take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or

  
 -10- 

 
results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one agreement for arbitration by
or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the dispute shall control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties. 
 (j) Small Claims Court. Notwithstanding anything
herein to the contrary, each party retains the right to pursue in Small Claims Court any dispute within that court’s jurisdiction. Further, this arbitration provision shall apply only to disputes in which either party seeks to recover an amount
of money (excluding attorneys’ fees and costs) that exceeds the jurisdictional limit of the Small Claims Court. 
 IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the day and year first written above. 
  

									
	PFENEX INC.				WELLS FARGO BANK, NATIONAL ASSOCIATION
					
	By:		 /s/ Bertrand Liang
				By:		 /s/ Linda K. Schneider

	Title:		CEO						 Linda K. Schneider,
 Relationship
Manager

  
 -11- 

			
	WELLS FARGO		CERTIFICATE OF INCUMBENCY

  
 TO: WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Bank”) 
 The undersigned, Bertrand Liang, Secretary of PFENEX INC., a corporation created and
existing under the laws of Delaware, hereby certifies to Bank that: (a) the following named persons are duly elected officers of this corporation and presently hold the titles specified below; (b) said officers are authorized to act
on behalf of this Corporation in transactions with Bank; and (c) the signature opposite each officer’s name is his or her true signature: 
  

					
	TITLE		NAME		SIGNATURE
			
	Chief Executive Officer		Bertrand Liang		 /s/ Bertrand Liang

 The undersigned further certifies that if any of the above-named officers change, or if, at any time, any of
said officers are no longer authorized to act on behalf of this corporation in transactions with Bank, this corporation shall immediately provide to Bank a new Certificate of Incumbency. Bank is hereby authorized to rely on this Certificate of
Incumbency until a new Certificate of Incumbency certified by the Secretary of this corporation is received by Bank. 
 IN TESTIMONY
WHEREOF, I have hereunto set my hand, and if required by Bank affixed the corporate seal of said corporation, as of May 17, 2012. 
  

	
	 /s/ Bertrand Liang

	Secretary

 (SEAL) 

			
	WELLS FARGO		CORPORATE RESOLUTION: BORROWING

  
 TO: WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Bank”) 
 RESOLVED: That this corporation, PFENEX INC., proposes to obtain credit from time to
time, or has obtained credit, from Bank. 
 BE IT FURTHER RESOLVED, that any one of the following officers (use titles only): 

Chief Executive Officer 
 of this
corporation be and they are hereby authorized and empowered for and on behalf of and in the name of this corporation and as its corporate act and deed: 

(a) To borrow money from Bank and to assume any liabilities of any other person or entity to Bank, in such form and on such terms and
conditions as shall be agreed upon by those authorized above and Bank, and to sign and deliver to Bank such promissory notes and other evidences of indebtedness for money borrowed or advanced and/or for indebtedness assumed as Bank shall require;
such promissory notes or other evidences of indebtedness may provide that advances be requested by telephone communication and by any officer, employee or agent of this corporation so long as the advances are deposited into any deposit account of
this corporation with Bank; this corporation shall be bound to Bank by, and Bank may rely upon, any communication or act, including telephone communications, purporting to be done by any officer, employee or agent of this corporation provided that
Bank believes, in good faith, that the same is done by such person. 
 (b) To contract for the issuance by Bank of letters of credit, to
discount with Bank notes, acceptances and evidences of indebtedness payable to or due this corporation, to endorse the same and execute such contracts and instruments for repayment thereof to Bank as Bank shall require, and to enter into any swap,
derivative, foreign exchange, hedge or other similar transaction or arrangement with or through Bank. 
 (c) To mortgage, encumber, pledge,
convey, grant, assign or otherwise transfer all or any part of this corporation’s real or personal property for the purpose of securing the payment of any of the promissory notes, contracts, instruments and other evidences of indebtedness
authorized hereby, and to execute and deliver to Bank such deeds of trust, mortgages, pledge agreements, security agreements and/or other related documents as Bank shall require. 

(d) To perform all acts and to execute and deliver all documents described above and all other contracts and instruments which Bank deems
necessary or convenient to accomplish the purposes of this resolution and/or to perfect or continue the rights, remedies and security interests to be given to Bank pursuant hereto, including without limitation, any modifications, renewals and/or
extensions of any of this corporation’s obligations to Bank, however evidenced; provided that the aggregate principal amount of all sums borrowed and credits established pursuant to this resolution shall not at any time exceed the sum of
$1,500,000.00 outstanding and unpaid. 
 Loans made pursuant to a special resolution and loans made by offices of Bank other than the office
to which this resolution is delivered shall be in addition to foregoing limitation. 
 BE IT FURTHER RESOLVED, that the authority hereby
conferred is in addition to that conferred by any other resolution heretofore or hereafter delivered by this corporation to Bank and shall continue in full force and effect until Bank shall have received notice in writing, certified by the Secretary
of this corporation, of the revocation hereof by a resolution duly adopted by the Board of Directors of this corporation. Any such revocation shall be effective only as to credit which is extended or committed by Bank, or actions which are taken by
this corporation pursuant to the resolutions contained herein, subsequent to Bank’s receipt of such notice. The authority hereby conferred shall be deemed retroactive, and any and all acts authorized herein which were performed prior to the
passage of this resolution are hereby approved and ratified. 
 SEE FOLLOWING PAGE FOR CERTIFICATION 

 CERTIFICATION 

I, Bertrand Liang, Secretary of PFENEX INC., a corporation created and existing under the laws of Delaware, do hereby certify
and declare that the foregoing is a full, true and correct copy of the resolutions duly passed and adopted by the Board of Directors of said corporation, by written consent of all Directors of said corporation or at a meeting of said Board duly and
regularly called, noticed and held on May 17, 2012, at which meeting a quorum of the Board of Directors was present and voted in favor of said resolutions; that said resolutions are now in full force and effect; that there is no provision in
the Articles of Incorporation or Bylaws of said corporation, or any shareholder agreement, limiting the power of the Board of Directors of said corporation to pass the foregoing resolutions and that such resolutions are in conformity with the
provisions of such Articles of Incorporation and Bylaws; and that no approval by the shareholders of, or of the outstanding shares of, said corporation is required with respect to the matters which are the subject of the foregoing resolutions. 

IN WITNESS WHEREOF, I have hereunto set my hand, and if required by Bank affixed the corporate seal of said corporation, as of May 17,
2012 
  

	
	/s/ Bertrand Liang, Secretary

 (SEAL) 

 FIRST AMENDMENT TO CREDIT AGREEMENT 

THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of June 24, 2013, by and between PFENEX INC., a
Delaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”). 
 RECITALS 

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and
Bank dated as of May 1, 2012, as amended from time to time (“Credit Agreement”). 
 WHEREAS, Bank and Borrower have agreed to
certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes. 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the
Credit Agreement shall be amended as follows: 
 1. The following is hereby added to the Credit Agreement as Section 1.1.1.: 

“SECTION 1.1.1. LINE OF CREDIT A. 

(a) Line of Credit A. Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances to Borrower from time
to time up to and including April 2, 2015, not to exceed at any time the aggregate principal amount of Two Million Four Hundred Thousand Dollars ($2,400,000.00) (“Line of Credit A”), the proceeds of which shall be used to finance
Borrower’s working capital requirements. Borrower’s obligation to repay advances under the Line of Credit A shall be evidenced by a promissory note dated as of May 1, 2013 (“Line of Credit Note A”), all terms of which are
incorporated herein by this reference. 
 (b) Borrowing and Repayment. Borrower may from time to time during the term of the Line of
Credit A borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein or in the Line of Credit Note A; provided however, that the total outstanding borrowings
under the Line of Credit A shall not at any time exceed the maximum principal amount available thereunder, as set forth above.” 

  
 -1- 

 2. Section 1.3. is hereby deleted in its entirety, and the following substituted therefor:

 “SECTION 1.3. COLLATERAL. 

As security for all indebtedness and other obligations of Borrower to Bank under the Line of Credit, Borrower shall grant to
Bank security interests of first priority in all Borrower’s funds deposited in Borrower’s Money Market Account #*. 

As security for all indebtedness and other obligations of Borrower to Bank under the Line of Credit A, Borrower shall grant to
Bank security interests of first priority in all Borrower’s securities account # [*] held with Wells Fargo Institutional Securities, LLC. 

All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, deeds or mortgages, and
other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall pay to Bank immediately upon demand the full amount of all charges, costs and expenses (to include fees paid to third parties and all
allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals, audits and title insurance.” 

3. Section 3.1. (b) is hereby deleted in its entirety, and the following substituted thereof: 

“(b) Documentation. Bank shall have received, in form and substance satisfactory to Bank, each of the following, duly
executed: 
 (i) This Agreement and each promissory note or other instrument or document required hereby. 

(ii) Corporate Resolution: Borrowing. 

(iii) Certificate of Incumbency. 

(iv) Security Agreement: Specific Rights to Payment. 

(v) Security Agreement (Financial Assets). 

(vi) Statement of Purpose (Reg. U). 

(vii) Securities Account Control Agreement. 

(viii) Such other documents as Bank may require under any other Section of this Agreement.” 

4. Section 4.3. (a) and (b) are hereby deleted in their entirety, and the following is substituted therefor: 

“(a) not later than each July 15 after and as of the end of each fiscal year, an audited financial statement of
Borrower, prepared by a certified public accountant acceptable to Bank, to include balance sheet, income statement and statement of cash flows; 

(b) not later than 90 days after and as of the end of each fiscal quarter, a financial statement of Borrower, prepared by
Borrower, to include balance sheet and income statement;” 

  
 -2- 

 5. The following is hereby added to the Credit Agreement as Section 6.1. (aa): 

“(aa) The “Margin Value of the Collateral” set forth in the Security Agreement (Financial Assets) executed by
Borrower and delivered to Bank in connection herewith at any time is less than the required amount and Borrower fails to restore such value to the required amount within the period of time specified in said Security Agreement (Financial
Assets).” 
 6. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and
effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document. 

7. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein.
Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any
such Event of Default. 
 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first
written above. 
  

									
	PFENEX INC.				WELLS FARGO BANK, NATIONAL ASSOCIATION
					
	By:		 /s/ Bertrand Liang
				By:		 /s/ Linda K. Schneider

			Bertrand Liang, Chief Executive Officer						Linda K. Schneider,
									Relationship Manager

  
 -3- 

 

 
 April 2, 2014 
 Linda
Schneider 
 Senior Relationship Manager 
 Wells Fargo Bank,
National Association 
 San Diego RCB 
 401 B Street, Suite 2201

 San Diego, CA 92101 
  

	RE:	Status of Covenants in regards to revolving line of credit agreement 

 Dear Linda: 

This letter is to confirm the current status of compliance by Pfenex Inc. (“Pfenex”) with the Affirmative and Negative Covenants contained within
the Credit Agreement between Pfenex and Wells Fargo Bank, National Association (“Wells Fargo”), dated May 1, 2012 (the “Agreement”). 

Currently Pfenex is in compliance with all Affirmative and Negative Covenants contained within the Agreement except as specified below: 

 

	 	1)	Pfenex is currently out of compliance in regards to its 2012 audit report (the “2012 Audit Report”), but Pfenex and Wells Fargo agree that if Pfenex provides the 2012 Audit Report and the 2013 audit report to
Wells Fargo on or before May 15, 2014 it will be in compliance with this covenant; 

  

	 	2)	Pfenex has made capital expenditures in the approximate amounts and in the specified periods listed below, which were not pre-approved by Wells Fargo. Wells Fargo is now aware of these capital expenditures and approves
of these capital purchases and Wells Fargo agrees that Pfenex is now in compliance with this covenant 

  

					
	 Period
	  	Amount	  	 
	 May 1, 2012 – December 31, 2012
	  	$310 thousand	  	
	 January 1, 2013 – January 31, 2013
	  	$115 thousand	  	
	 January 1, 2014 – December 31, 2014

budget
	  	$50 thousand	  	

  

	 	3)	Pfenex has entered into a copier lease that was not pre-approved by Wells Fargo. Wells Fargo is now aware of these leases and approves of these leases and Wells Fargo agrees that Pfenex is now in compliance with this
covenant. The relevant information surrounding this copier lease is as follows: 

  

					
	a.	  	Lessor:	  	Canon Financial Services, Inc.
	b.	  	Equipment:	  	Canon IRC Advance 2030 copier
	c.	  	Signed:	  	6.12.2012
	d.	  	First payment due:	  	7.23.2012
	e.	  	Term:	  	60 months
	f.	  	Payment/mo:	  	$140
	g.	  	Total obligation:	  	$8,400
	h.	  	Purchase price:	  	$5,360

 One further point to clarify is that there is an affirmative covenant requiring Wells Fargo’s prior approval
before Pfenex repurchases any of its shares of stock. Pfenex is in the process of repurchasing shares of its stock but this repurchase is required by its Articles of Incorporation. Pfenex’s Articles of Incorporation had been provided to Wells
Fargo prior to entering into the Agreement and therefore Pfenex understood that this acted as an approval of this future repurchase of its stock. However, Pfenex is willing to agree to a threshold wherein if exceeded, Wells Fargo’s prior
approval is obtained. The cumulative threshold for the repurchase of common stock is set at $500,000. 
 If Wells Fargo is in agreement with the compliance
status of the covenants contained within the Agreement please have an authorized representative of Wells Fargo sign in the space provided below. Please feel free to contact me if you have any questions. 

Sincerely, 
 /s/ Bertrand C. Liang 

Bertrand C. Liang, M.D., M.B.A. 
 Chief Executive Officer 

Pfenex Inc. 
 Acknowledged and Agreed: 

Wells Fargo Bank, National Association 
  

	
	/s/ Linda Schneider

 Name: Linda Schneider 
 Title:
Vice President and Relationship Manager 

 WAIVER OF NEGATIVE COVENANT AND EVENT OF DEFAULT 

THIS WAIVER OF NEGATIVE COVENANT AND EVENT OF DEFAULT (the “Waiver”) is given as of May 2, 2014, in favor of Pfenex
Inc., a Delaware corporation (the “Company”), by Wells Fargo Bank, National Association (“Wells Fargo”). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed such terms in the
Credit Agreement. 
 WHEREAS, the Company and Wells Fargo are parties to that certain credit agreement dated as of May 1, 2012, as
amended (the “Credit Agreement”), by and among the Company and Wells Fargo; 
 WHEREAS, pursuant to Section 5.8 of the
Credit Agreement, the Company shall not, without the prior written consent of Wells Fargo, declare or pay any dividend or distribution either in cash, stock or any other property; 

WHEREAS, pursuant to Section 6.1(i) of the Credit Agreement, any change of control of the Company or any entity or combination of
entities that directly or indirectly control the Company may constitute an Event of Default; 
 WHEREAS, the Company is currently
contemplating an initial public offering of its common stock (an “IPO”); 
 WHEREAS, Section (C)4(c) of Article FOURTH of
the Company’s amended and restated certificate of incorporation dated December 1, 2009, as amended, (the “A&R Certificate”) provides that upon the conversion of the Company’s preferred stock to common stock in
connection with an IPO, all accrued but unpaid dividends shall be due and payable (i) in shares of common stock at the fair market value in effect at the time of the conversion, or (ii) in cash, as determined in good faith by the
Company’s board of directors; 
 WHEREAS, in connection with the IPO, the Company intends to issue shares of its common stock to
satisfy all accrued and unpaid dividends upon the conversion of the preferred stock to common stock; 
 WHEREAS, Wells Fargo has agreed to
consent to the issuance of shares of common stock to satisfy the payment of these accrued and unpaid dividends and waive the covenant that Company obtain the prior written consent of Wells Fargo with respect to such dividends; and 

WHEREAS, Wells Fargo has further agreed to waive any Event of Default under Section 6.1(i) arising out of or related to the IPO. 

NOW, THEREFORE, for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows: 
 1. Waiver of Covenant. Wells Fargo hereby waives the negative covenant set forth in Section 5.8 of the
Credit Agreement with respect to the Company’s obligation to obtain the prior written consent of Wells Fargo for the issuance of the Company’s common stock in connection with the IPO in satisfaction of all accrued and unpaid dividends.

 2. Consent to Payment of Accrued and Unpaid Dividends. Wells Fargo hereby consents to the
issuance of common stock in satisfaction of all accrued but unpaid dividends in connection with the Company’s IPO. 
 3. Waiver of
Event of Default. Wells Fargo hereby waives any Event of Default under Section 6.1(i) of the Credit Agreement arising out of or related to the IPO. 

4. Miscellaneous. Except as set forth herein, the Credit Agreement shall remain in full force and effect. This Waiver may be executed
in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 
 IN WITNESS
WHEREOF, the Parties hereto have duly executed this Waiver to be effective as of the date first above written. 
  

			
	 WELLS FARGO:
  

WELLS FARGO BANK, NA.

		
	By:		/s/ Linda Schneider
	Name:  Linda Schneider
	Title:    Vice President
	
	 Agreed and acknowledged:
  

 
 COMPANY:
  

PFENEX INC.
 a Delaware corporation

		
	By:		/s/ Bertrand Liang
	Name:  Bertrand Liang
	Title:    Chief Executive Officer

 SECOND AMENDMENT TO CREDIT AGREEMENT 

THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) Is entered into as of June 24, 2014, by and between PFENEX INC., a
Delaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”). 
 RECITALS 

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and
Bank dated as of May 1, 2012, as amended from time to time (“Credit Agreement”). 
 WHEREAS, Bank and Borrower have agreed to
certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes. 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the
Credit Agreement shall be amended as follows: 
 1. Section 1.3. is hereby deleted in its entirety, and the following substituted
therefor: 
 “SECTION 1.3. COLLATERAL. 

As security for all indebtedness and other obligations of Borrower to Bank under the Line of Credit, Borrower shall grant to Bank security
interest of first priority in all Borrower’s funds deposited in Borrower’s Money Market Account #[*]. 
 As security for all
indebtedness and other obligation of Borrower to Bank under the Line of Credit A, Borrower shall grant to Bank security interest of first priority in all Borrower’s funds deposited in Borrower’s Money Market Account #[*]. 

All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, deeds or mortgages, and
other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall pay to Bank immediately upon demand the full amount of all charges, costs and expenses (to include fees paid to third parties and all
allocated costs of Bank personnel), expended or incurred by Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals, audits and title insurance.” 

2. Section 4.3 is hereby deleted in its entirety, and the following substituted therefor: 

“SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and detail satisfactory to Bank: 

(a) not later than each July 15 and as of the end of each fiscal year, an audited financial statement of Borrower,
prepared by a certified public accountant acceptable to Bank, to include balance sheet, income statement and statement of cash flows; 

  
 -1- 

 (b) not later than July 15, 2014, Borrower’s 2012 fiscal year end
audited financial statement of Borrower, prepared by a certified public accountant acceptable to Bank, to include balance sheet, income statement and statement of cash flows; 

(c) not later than 90 days after and as of the end of each fiscal quarter, a financial statement of Borrower, prepared by
Borrower, to include balance sheet and income statement. 
 (d) from time to time such other information as Bank may
reasonably request.” 
 3. Section 5.2. is hereby deleted in its entirety, and the following substituted therefor: 

“SECTION 5.2. INTENTIONALLY OMITTED.” 

4. Section 5.3 is hereby deleted in its entirety, and the following substituted therefor: 

“SECTION 5.3. LEASE EXPENDITURES. Incur operating lease expense in any fiscal year in excess of an aggregate of $600,000.00.” 

5. Section 5.8. is hereby deleted in its entirety, and the following substituted therefor: 

“SECTION 5.8. INTENTIONALLY OMITTED.” 

6. In consideration of the changes set forth herein and as a condition to the effectiveness hereof, immediately upon signing this Amendment
Borrower shall pay to Bank a non-refundable fee of $250.00. 
 7. Except as specifically provided herein, all terms and conditions of the
Credit Agreement remain in full force and effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as
one document. 
 8. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants
set forth therein. Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both
would constitute any such Event of Default. 

  
 -2- 

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

									
	PFENEX INC.				WELLS FARGO BANK, NATIONAL ASSOCIATION
					
	By:		 /s/ Bertrand Liang
				By:		 /s/ Linda K. Schneider

			Bertrand Liang, Chief Executive Officer						 Linda K. Schneider,
 Relationship
Manager

  
 -3- 

 WAIVER OF NEGATIVE COVENANT AND EVENT OF DEFAULT 

THIS WAIVER (the “Waiver”) is given as of April 9, 2015, in favor of Pfenex Inc., a Delaware corporation (the
“Company”), by Wells Fargo Bank, National Association (“Wells Fargo”). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed such terms in the Credit Agreement. 

WHEREAS, the Company and Wells Fargo are parties to that certain Credit Agreement dated as of May 1, 2012 (as amended, the
“Credit Agreement”), by and among the Company and Wells Fargo; 
 WHEREAS, the Company wishes to register certain of its
common stock under the Securities Act of 1933, as amended, in connection with a public offering of such securities by the Company and/or certain selling stockholders on or before September 30, 2015 (such registration, offering and sale, the
“Follow-On Offering”); and 
 WHEREAS, Wells Fargo has agreed to waive any Event of Default under Section 6.1(i)
arising out of or related to the Follow-On Offering. 
 NOW, THEREFORE, for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Wells Fargo agree as follows: 
 1. Waiver of Event of Default. Wells
Fargo hereby waives any Event of Default under Section 6.1(i) of the Credit Agreement arising out of or related to the Follow-On Offering. 

2. Miscellaneous. Except as set forth herein, the Credit Agreement shall remain in full force and effect. This Waiver may be executed
in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 
 [signature
page follows] 

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

			
	WELLS FARGO:
	
	WELLS FARGO BANK, NA.
		
	By:		 /s/ Linda Schneider

	Name:		Linda Schneider
	Title:		Vice President
	
	Agreed and acknowledged:
	
	COMPANY:
	
	 PFENEX INC.
 a Delaware
corporation

		
	By:		 /s/ Bertrand Liang

	Name:		Bertrand Liang
	Title:		Chief Executive Officer

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