Document:

EX-10.5

 Exhibit 10.5 

TPG Pace IV Holdings Corp. 
 c/o
TPG Global, LLC 
 301 Commerce St., Suite 3300 

Fort Worth, TX 76102 
  

			
	 TPG Pace IV Sponsor (Series S)
	  	 October 16, 2019

	 301 Commerce St., Suite 3300
	  	
	 Fort Worth, TX 76102
	  	

  

	 	RE:	 Securities Subscription Agreement 

Ladies and Gentlemen: 
 This agreement and the
terms hereof (this “Agreement”) memorializes the purchase of 20,000,000 of Class F ordinary shares (the “Shares”), $0.0001 par value per share (the “Class F Shares”) in TPG
Pace IV Holdings Corp., a Cayman Islands exempted company (the “Company”) by TPG Pace IV Sponsor (Series S), a series of TPG Pace IV Sponsor, Series LLC, a Delaware series limited liability company (the “Subscriber”
or “you”), which occurred on August 12, 2019 (the “Effective Date”). For the purposes of this Agreement, references to “Ordinary Shares” are to, collectively, the Class F Shares and the
Company’s Class A ordinary shares, $0.0001 par value per share (the “Class A Shares”). Pursuant to the Company’s memorandum and articles of association, as amended to the date hereof (the
“Articles”), Class F Shares will convert into Class A Shares on a one-for-one basis, subject to adjustment, upon the terms and conditions set
forth in the Articles. Unless the context otherwise requires, as used herein “Shares” shall be deemed to include any Class A Shares issued upon conversion of the Class F Shares comprising the Shares. The terms on which the
Company sold the Shares to the Subscriber on the Effective Date, and the Company and the Subscriber’s agreements regarding such Shares, are as follows: 
  

	 	1.	 Purchase of Shares. 

With effect as of the Effective Date, for the sum of $25,000 (the “Purchase Price”), which the Company acknowledges receiving
in cash, the Company sold and issued the Shares to the Subscriber, and the Subscriber purchased the Shares from the Company, on the terms and subject to the conditions set forth in this Agreement. Concurrently with the Subscriber’s execution of
this Agreement, the Company shall, at its option, deliver to the Subscriber a certificate registered in the Subscriber’s name representing the Shares (the “Original Certificate”) or effect such delivery in book-entry form. Any
future forfeiture of shares of the Company (as agreed between the Subscriber and the Company) shall take effect as surrenders for no consideration of such shares as a matter of Cayman Islands law. 

 

	 	2.	 Representations, Warranties and Agreements. 

2.1     Subscriber’s Representations, Warranties and Agreements. To induce the Company to issue the Shares to
the Subscriber, the Subscriber hereby represents and warrants to the Company and agrees with the Company as follows (such representations being true as of the Effective Date or the date hereof, as applicable): 

2.1.1     No Government Recommendation or Approval. The Subscriber understands that no federal or
state agency has passed upon or made any recommendation or endorsement of the offering of the Shares. 

2.1.2     No Conflicts. The execution, delivery and performance of this Agreement and the
consummation by the Subscriber of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the formation and governing documents of the Subscriber, (ii) any agreement, indenture or instrument to
which the Subscriber is a party or (iii) any law, statute, rule or regulation to which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject. 

2.1.3     Organization and Authority. The Subscriber is a Delaware limited liability company,
validly existing and in good standing under the laws of the State of Delaware and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by you, this Agreement
is a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). 

2.1.4     Experience, Financial Capability and Suitability. Subscriber is: (i) sophisticated
in financial matters and is able to evaluate the risks and benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment in the Shares for an indefinite period of time because the Shares have not been
registered under the Securities Act (as defined below) and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available. Subscriber is capable of evaluating the merits and risks
of its investment in the Company and has the capacity to protect its own interests. Subscriber must bear the economic risk of this investment until the Shares are sold pursuant to: (i) an effective registration statement under the Securities
Act or (ii) an exemption from registration available with respect to such sale. Subscriber is able to bear the economic risks of an investment in the Shares and to afford a complete loss of Subscriber’s investment in the Shares. 

2.1.5     Access to Information; Independent Investigation. Prior to the execution of this
Agreement, the Subscriber has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and
the opportunity to obtain additional information to verify the accuracy of all information so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s own knowledge and understanding of the Company
and its business based upon Subscriber’s own due diligence investigation and the information furnished pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information or to make any representations
which were not furnished pursuant to this Section 2 and Subscriber has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its
prospects. 

  
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 2.1.6     Regulation D Offering. Subscriber
represents that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale contemplated hereby is
being made in reliance on a private placement exemption to “accredited investors” within the meaning of Section 501(a) of Regulation D under the Securities Act or similar exemptions under state law. 

2.1.7     Investment Purposes. The Subscriber is purchasing the Shares solely for investment
purposes, for the Subscriber’s own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber did not decide to enter into this Agreement as a result of
any general solicitation or general advertising within the meaning of Rule 502 under the Securities Act. 

2.1.8     Restrictions on Transfer; Shell Company. Subscriber understands the Shares are being
offered in a transaction not involving a public offering within the meaning of the Securities Act. Subscriber understands the Shares will be “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and
Subscriber understands that the certificates or book-entries representing the Shares will contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer, resell, pledge or otherwise transfer the Shares, such
Shares may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration under the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any transfer of its Shares or any
interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber
agrees not to resell the Shares. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available to the Subscriber for the resale of the Shares until one year following consummation of the initial business
combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions. 

2.1.9     No Governmental Consents. No governmental, administrative or other third party consents
or approvals are required, necessary or appropriate on the part of Subscriber in connection with the transactions contemplated by this Agreement. 

2.2     Company’s Representations, Warranties and Agreements. To induce the Subscriber to purchase the Shares,
the Company hereby represents and warrants to the Subscriber and agrees with the Subscriber as follows: 

  
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 2.2.1     Organization and Corporate Power. The
Company is a Cayman Islands exempted company and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on the financial condition, operating results
or assets of the Company. The Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement. 

2.2.2     No Conflicts. The execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the Memorandum and Articles of Association of the Company, (ii) any agreement, indenture or instrument to
which the Company is a party or (iii) any law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject. 

2.2.3     Title to Shares. Upon issuance in accordance with, and payment pursuant to, the terms
hereof, and registration on the register of members of the Company, the Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof the Subscriber will have or
receive good title to the Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions hereunder and under the other agreements to which the Shares may be subject, (b) transfer restrictions
under federal and state securities laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber. 

2.2.4     No Adverse Actions. There are no actions, suits, investigations or proceedings pending,
threatened against or affecting the Company which: (i) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or (ii) question the validity or legality of any transactions
or seeks to recover damages or to obtain other relief in connection with any transactions. 
 2.2.5    
Authorization. The Class A Shares issuable upon conversion of the Class F Shares have been duly authorized and reserved for issuance upon such conversion. 

2.3     Termination of Rights as Shareholder. If any of the Shares are forfeited, then after such time the
Subscriber (or successor in interest), shall no longer have any rights as a holder of such forfeited Shares, and the Company shall take such action as is appropriate to cancel such forfeited Shares. 

2.4     Share Certificates. In the event an adjustment to the Original Certificate, if any, is required pursuant to
this Section 3, then the Subscriber shall return such Original Certificate to the Company or its designated agent as soon as practicable upon its receipt of notice from the Company advising Subscriber of such adjustment, following which a new
certificate (the “New Certificate”), if any, shall be issued in such amount representing the adjusted number of Shares held by the Subscriber. The New Certificate, if any, shall be returned to the Subscriber as soon as practicable.
Any such adjustment for any uncertificated securities held by the Subscriber shall be made in book-entry form. 

  
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 3.         Waiver of Liquidation Distributions;
Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company from the trust account which
will be established for the benefit of the Company’s public shareholders and into which substantially all of the proceeds of the IPO will be deposited (the “Trust Account”), in the event of a liquidation of the Company upon the
Company’s failure to timely complete an initial business combination. For purposes of clarity, in the event the Subscriber purchases securities in the IPO or in the aftermarket, any Class A Shares so purchased shall be eligible to receive
any liquidating distributions by the Company. However, in no event will the Subscriber have the right to redeem any Ordinary Shares held by it into funds held in the Trust Account upon the successful completion of an initial business combination.

  

	 	4.	 Restrictions on Transfer. 

4.1     Securities Law Restrictions. In addition to any restrictions to be contained in that certain letter
agreement (commonly known as an “Insider Letter”) to be dated on or prior to the closing of the IPO by and between Subscriber and the Company, Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all
or any part of the Shares unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Shares proposed to be transferred shall then be effective or
(b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the
Securities and Exchange Commission thereunder and with all applicable state securities laws. 
 4.2     Restrictive
Legends. All certificates representing the Shares shall have endorsed thereon legends substantially as follows: 
 “THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE.” 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.” 

  
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 4.3     Additional Shares or Substituted Securities. In the event
of the declaration of a share dividend, the declaration of an extraordinary dividend payable in a form other than shares, a spin-off, a share split, an adjustment in conversion ratio, a recapitalization or a
similar transaction affecting the Company’s outstanding Ordinary Shares without receipt of consideration, any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect to any
Shares subject to this Section 5 or into which such Shares thereby become convertible shall immediately be subject to this Section 5 and Section 3. Appropriate adjustments to reflect the distribution of such securities or property
shall be made to the number and/or class of Shares subject to this Section 5 and Section 3. 
 4.4    
Registration Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or they
are registered pursuant to a registration rights agreement to be entered into with the Company prior to the closing of the 
 IPO (the “Registration
Rights Agreement”). 
  

	 	5.	 Other Agreements. 

5.1     Further Assurances. Subscriber agrees to execute such further instruments and to take such further action
as may reasonably be necessary to carry out the intent of this Agreement. 
 5.2     Notices. All notices,
statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic
transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the
electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of
delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after
mailing if sent by mail. 
 5.3     Entire Agreement. This Agreement, the Insider Letter and the Registration
Rights Agreement each, substantially in the form to be filed as an exhibit to the Registration Statement, embodies the entire agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and supersedes
all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret,
change or restrict, the express terms and provisions of this Agreement. 
 5.4     Modifications and Amendments.
The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties hereto. 

  
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 5.5     Waivers and Consents. The terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a
waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent. 
 5.6     Assignment. The rights and obligations under this Agreement
may not be assigned by either party hereto without the prior written consent of the other party. 
 5.7    
Benefit. All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto.
Nothing in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement. 

5.8     Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in
accordance with and governed by the laws of New York applicable to contracts wholly performed within the borders of such state, without giving effect to the conflict of law principles thereof. 

5.9     Severability. In the event that any court of competent jurisdiction shall determine that any provision, or
any portion thereof, contained in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it reasonable and enforceable, and as so limited shall remain in
full force and effect. In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect 

5.10     No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right,
power or remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single or partial exercise of any right, power or remedy under this Agreement
by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The
election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Agreement shall entitle the party receiving
such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice
or demand. 
 5.11     Survival of Representations and Warranties. All representations and warranties made by the
parties hereto in this Agreement or in any other agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any investigations made by or on behalf of the parties. 

  
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 5.12     No Broker or Finder. Each of the parties hereto
represents and warrants to the other that no broker, finder or other financial consultant has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any liability on the other. Each
of the parties hereto agrees to indemnify and save the other harmless from any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf of such
party and to bear the cost of legal expenses incurred in defending against any such claim. 
 5.13     Headings and
Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof. 

5.14     Counterparts. This Agreement may be executed in one or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that
any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and
effect as if such signature page were an original thereof. 
 5.15     Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of
proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. The words “include,” “includes,” and “including” will be deemed to be followed
by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context
otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to
any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will
not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant. 

5.16     Mutual Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision
hereof has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto. 

6.         Voting and Tender of Shares. Subscriber agrees to vote the Shares in favor of an
initial business combination that the Company negotiates and submits for approval to the Company’s shareholders and shall not seek redemption with respect to such Shares. Additionally, the Subscriber agrees not to tender any Shares in
connection with a tender offer presented to the Company’s shareholders in connection with an initial business combination negotiated by the Company. 

  
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 7.         Indemnification. Each party shall
indemnify the other against any loss, cost or damages (including reasonable attorney’s fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement in this Agreement. 

If the foregoing accurately sets forth our understanding and agreement, please sign the enclosed copy of the Agreement and return it to us.

  

			
	Very truly yours,
	
	TPG PACE IV HOLDINGS CORP.
		
	By:	 	 /s/ Michael LaGatta

	Name:	 	Michael LaGatta
	Title:	 	Vice President

 Accepted and agreed this 16th day of October, 2019 

 

			
	TPG Pace IV Sponsor (Series S)
	By its Managing Member
	TPG Pace Governance, LLC
		
	By:	 	 /s/ Ken Murphy

	Name:	 	Ken Murphy
	Title:	 	Vice President

  
 9EXHIBIT 4.1

 

LANTRONIX, INC.

INDUCEMENT STOCK OPTION AGREEMENT

 

As an inducement material
to the hiring of ____________ (the “Optionee”) as ____________ of Lantronix, Inc., a Delaware corporation (the “Company”),
hereby grants to the Optionee an award (the “Award”) of the number of non-qualified stock options set forth below.
This Award is subject to all of the terms and conditions set forth herein and in this Inducement Stock Option Agreement (the “Inducement
Agreement”). This Award is not issued pursuant to the Company’s Amended & Restated 2010 Stock Incentive Plan
or any other equity incentive plan of the Company.

 

1.                 
Grant of Option. The Company hereby grants to the Optionee an option (the “Option”) to purchase the number
of shares (the “Shares”) of the Corporation’s common stock, par value $0.0001 per share (the “Common
Stock”) set forth below, at the exercise price per share set forth below (the “Exercise Price”), subject to the
terms and conditions of this Inducement Agreement, as follows:

 

	Grant Date:	 
	Vesting Commencement Date:	 
	Exercise Price per Share:	 
	Total Number of Shares Granted:	 
	Total Exercise Price:	 
	Type of Option:	 
	Term/Expiration Date:	__ Years from the Grant Date
	Vesting Schedule:	 

 

2.                 
Exercise of Option.

 

(a)              
Right to Exercise. This Option is exercisable during its term in accordance with the Vesting Schedule set out in
Section 1 and the applicable provisions of this Inducement Agreement, subject to Optionee’s remaining a Service Provider
of the Company on each vesting date.

 

(b)              
Post-Termination Exercise Period. If Optionee ceases to be a Service Provider of the Company, then this Option may
be exercised to the extent vested as of the date of termination until the earlier of (i) ninety (90) days after the date
upon which Optionee ceases to be a Service Provider of the Company, or (ii) the original ______-year Option term. If on the
date of termination the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the
Option will terminate. If after termination the Optionee does not exercise his or her Option within ninety (90) days, the
Option will terminate.

 

(c)              
Death or Disability. If the Optionee ceases to be a Service Provider of the Company as a result of the Optionee’s
death or disability, the Optionee or the Optionee’s beneficiary may exercise the Option to the extent vested as of the date
of termination within twelve (12) months following the termination of Optionee’s employment.

 

 

 

    	 	1	 

     

    

 

(d)              
Method of Exercise. This option may be exercised with respect to all or any part of any vested Shares by giving the
Company or any stock option plan administrator designated by the Company written or electronic notice of such exercise, in the
form designated by the Company or the Company’s designated third-party stock option plan administrator, specifying the number
of shares as to which this option is exercised and accompanied by payment of the aggregate Exercise Price as to all exercised shares.
This Option shall be deemed to be exercised upon receipt by the Company or any third-party stock option plan administrator designated
by the Company of such fully executed exercise notice accompanied by such aggregate Exercise Price. No Shares shall be issued pursuant
to the exercise of this Option unless such issuance and exercise complies with applicable laws. Assuming such compliance, for income
tax purposes the exercised shares shall be considered transferred to the Optionee on the date the Option is exercised with respect
to such exercised shares.

 

(e)              
Payment of Exercise Price. Payment of the aggregate exercise price shall be by any of the following, or a combination
thereof, at the election of the Optionee: (i) cash; or (ii) check; or (iii) delivery of a properly executed exercise
notice together with such other documentation as the Administrator and a broker, if applicable, shall require to effect an exercise
of the Option and delivery to the Company of the sale proceeds required to pay the exercise price.

 

3.                 
Term of Option. This Option may be exercised only within the term set out in Section 1, and may be exercised
during such term only in accordance with the terms of this Inducement Agreement.

 

4.                 
Administration of Award; Fair Market Value. Subject to the provisions of this Inducement Agreement, the Compensation
Committee of the Board of Directors of the Company (the “Administrator”) will have the authority, in its discretion:
(i) to construe and interpret the terms of this Inducement Agreement; (ii) to modify or amend each Award (subject to
Section 11 of this Inducement Agreement); and (iii) to make all other determinations deemed necessary or advisable for
administering this Inducement Agreement. For purposes of this Agreement, “Fair Market Value” means, as of any date,
the value of the Common Stock as the Administrator may determine in good faith by reference to the price of such stock on any established
stock exchange or a national market system on the day of determination if the Common Stock is so listed on any established stock
exchange or a national market system. If the Common Stock is not listed on any established stock exchange or a national market
system, the value of the Common Stock will be determined as the Administrator may determine in good faith.

 

5.                 
Tax Consequences. Some of the federal tax consequences relating to this Option, as of the date of this Option, are
set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(a)              
Exercising the Option. The Optionee may incur regular federal income tax liability upon exercise of the Option. The
Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if
any, of the Fair Market Value of the exercised shares on the date of exercise over their aggregate Exercise Price. If the Optionee
is an employee or a former employee, the Company will be required to withhold from his or her compensation or collect from Optionee
and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of
exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the
time of exercise.

 

(b)              
Withholding Requirements. Prior to the delivery of any Shares pursuant to the exercise of the Option, the Company
will have the power and the right to deduct or withhold, or require the Optionee to remit to the Company, an amount sufficient
to satisfy federal, state, local, foreign or other taxes (including the Optionee’s FICA obligation) required to be withheld
with respect to such Award (or exercise thereof).

 

 

 

    	 	2	 

     

    

 

(c)              
Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify
from time to time, may permit the Optionee to satisfy such tax withholding obligation, in whole or in part by (without limitation)
(i) paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the minimum amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair
Market Value equal to the amount required to be withheld, or (iv) selling a sufficient number of Shares otherwise deliverable
to the Optionee through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise)
equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which
the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum
federal, state or local marginal income tax rates applicable to the Optionee with respect to the Award on the date that the amount
of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as
of the date that the taxes are required to be withheld.

 

6.                 
Payments after Death. Any distribution or delivery to be made to the Optionee under this Agreement will, if the Optionee
is then deceased, be made to the administrator or executor of the Optionee’s estate. Any such administrator or executor must
furnish the Company with (i) written notice of his or her status as transferee, and (ii) evidence satisfactory to the
Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

 

7.                 
Rights as Stockholder. Neither the Optionee nor any person claiming under or through the Optionee will have any of
the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates
representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Optionee or Optionee’s broker.

 

8.                 
Adjustments; Merger or Change in Control; Acceleration.

 

(a)              
Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities,
or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of
the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under this Inducement Agreement, will adjust the number and class of Shares that may be
delivered upon exercise of the Options.

 

(b)              
Dissolution or Liquidation. To the extent not previously settled, this Award shall terminate immediately prior to
the dissolution or liquidation of the Company.

 

(c)              
Change in Control. Pursuant to the terms of the Offer Letter dated as of ___________ between the Optionee and the
Company (the “Offer Letter”), if the Optionee’s employment with the Company is terminated by the Optionee for
Good Reason (as defined in the Offer Letter) or by the Company without Cause (as defined in the Offer Letter) within 60 days prior
to or 12 months following a Change in Control (as defined in the Offer Letter), then, subject to the Optionee’s execution
and non-revocation of a release of claims in a form provided by the Company and resignation by the Optionee from any Company-affiliated
board positions, all unvested Options under this Inducement Agreement shall fully vest and be become exercisable.

 

9.                 
No Effect on Employment. The Optionee’s employment with the Company is on an at-will basis only. Accordingly,
nothing in this Inducement Agreement confers upon Optionee any right with respect to continuing the Optionee’s relationship
as an employee of the Company, nor will this Inducement Agreement interfere in any way with the Optionee’s right or the Company’s
right to terminate such relationship at any time, with or without cause, to the extent permitted by applicable laws.

 

10.             
Non-Transferability of Option. This Option may not be transferred in any manner except by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee. The terms of this Inducement
Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. Upon any attempt
to transfer the Award, the Award and the rights and privileges conferred hereby immediately will become null and void.

 

 

 

    	 	3	 

     

    

 

11.             
Amendment. The Administrator may at any time amend this Inducement Agreement; provided, however, that no amendment
of this Inducement Agreement will impair the rights of the Optionee, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by the Optionee and the Company.

 

12.             
Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the
listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the
Optionee (or his estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval
will have been effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable
efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval
of any such governmental authority.

 

13.             
Code Section 409A. Notwithstanding anything in this Inducement Agreement to the contrary, this Inducement Agreement
is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and shall be
interpreted in a manner consistent with such intention.

 

14.             
Governing Law. This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard
to its choice-of-law provisions).

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	4	 

     

    

 

By your signature and
the signature of the Company’s representative below, you and the Company agree that this Award is granted under and governed
by the terms and conditions of this Inducement Agreement. Optionee has reviewed this Inducement Agreement in its entirety, has
had an opportunity to obtain the advice of counsel prior to executing this Inducement Agreement and fully understands all provisions
of this Inducement Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations
of the Administrator upon any questions relating to this Inducement Agreement. Optionee further agrees to notify the Company upon
any change in the residence address indicated below.

 

	OPTIONEE	LANTRONIX, INC.
	 	 
	Signature:     ___________________________	Signature:     ___________________________
	Print Name:     __________________________	Print Name:     __________________________
	Date:     _______________________________	Title:     _______________________________
	 	Date:     _______________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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