Document:

ex_446517.htm

Exhibit 10.4

 

CONVERTIBLE PROMISSORY NOTE

 

	
			Effective Date: November 7th, 2022. 

				
			U.S. $50,000

			

 

FOR VALUE RECEIVED, FUSE GROUP HOLDING INC., a Nevada corporation (“Borrower”), promises to pay to Liu Marketing (M) SDN BHD, a corporation registered in Malaysia, (“Lender”), $50,000 on the date that is twenty-four (24) months after the Purchase Price Date (the “Maturity Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of three percent (3%) per annum from the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the basis of a 365-day year, shall be payable in accordance with the terms of this Note. This Convertible Promissory Note (this “Note”) is issued and made effective as of November 7th, 2022 (the “Effective Date”). This Note is issued pursuant to that certain Convertible Note Purchase Agreement dated November 7th, 2022, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”). Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.

 

The purchase price for this Note shall be $50,000 (the “Purchase Price”) in original principal balance. The Purchase Price shall be payable by Lender by wire transfer of immediately available funds in U.S. Dollars to the designated account by the Borrower.

 

	 	
			1.

				
			Payment; Prepayment.

			

 

1.1.    Payment. All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as defined below), as provided for herein, and delivered to Lender at the address or bank account furnished to Borrower for that purpose.

 

1.2.    Prepayment. Notwithstanding the foregoing, Borrower shall have the right to prepay all or any portion of the Outstanding Balance.

 

	 	
			2.

				
			Lender Optional Conversion.

			

 

2.1.    Conversions. Lender has the right at any time after the Purchase Price Date until the Outstanding Balance has been paid in full, at its election, to convert (“Conversion”) all or any portion of the Outstanding Balance into shares (“Conversion Shares”) of fully paid and non-assessable common stock, $0.001 par value per share (“Common Stock”), of Borrower as per the following conversion formula: the number of Conversion Shares equals the amount being converted (the “Conversion Amount”) divided by the Conversion Price (as defined below). Conversion notice in the form attached hereto as Exhibit A (each, a “Conversion Notice”) may be effectively delivered to Borrower by any method set forth in the “Notices” Section of the Purchase Agreement. Borrower shall deliver the Conversion Shares from any Conversion to Lender in accordance with Section 6 below.

 

2.2.    Conversion Price. Subject to adjustment as set forth in this Note, the price at which Lender has the right to convert all or any portion of the Outstanding Balance into Common Stock is $0.45 per share of Common Stock (the “Conversion Price”).

 

	 	
			3.

				
			Defaults and Remedies.

			

 

3.1.    Defaults. The following are events of default under this Note (each, an “Event of Default”): (a) Borrower fails to pay any principal or interest when due and payable hereunder; (b) Borrower fails to deliver any Conversion Shares in accordance with the terms hereof; (c) a receiver, trustee or other similar official shall be appointed over Borrower, or a material part of its assets and such appointment shall remain uncontested for 90 days or shall not be dismissed or discharged within 180 days; (d) Borrower files a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); and (e) an involuntary bankruptcy proceeding is commenced or filed against Borrower.

 

1

 

 

3.2.    Remedies. At any time following the occurrence of any Event of Default and upon written notice given by Lender to Borrower, the Borrower has 45 days (the “Grace Period”) from the date of the notice from Lender to cure such default. If the default is not cured after the Grace Period, Lender may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash. For the avoidance of doubt, Lender may continue making Conversions at any time following an Event of Default until such time as the Outstanding Balance is paid in full.

 

4.    Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

 

5.    Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision hereof, if Borrower at any time on or after the Effective Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision hereof, if Borrower at any time on or after the Effective Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 5.1 shall become effective immediately after the effective date of such subdivision or combination.

 

6.    Method of Conversion Share Delivery. On or before the close of business on the tenth (10th) Trading Day following the date of delivery of a Conversion Notice (the “Delivery Date”), Borrower shall deliver to Lender via reputable overnight courier, a certificate representing the number of shares of Common Stock equal to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender. The Conversion Shares shall include a restrictive securities legend on ground that such shares have not been registered with SEC under the Securities Act of 1933 and therefore they cannot be sold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and applicable state securities laws or exemptions from such registration requirements are available.

 

7.    Governing Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of California, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference. Any disputes that arise under this Note, shall be heard only in the state or federal courts located in the City of Los Angeles, State of California.

 

8.    Cancellation. After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.

 

9.    Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.

 

10.    Assignments. Borrower may not assign this Note without the prior written consent of Lender, subject to compliance with securities laws and regulations. This Note may not be offered, sold, assigned or transferred by Lender without the consent of Borrower and in compliance with securities laws and regulations.

 

2

 

 

11.    Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the subsection of the Purchase Agreement titled “Notices.”

 

12.    Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.

 

[Remainder of page intentionally left blank; signature page follows]

 

 

 

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Effective Date.

 

 

BORROWER:

 

FUSE GROUP HOLDING INC.

 

 

 

By: /s/Umesh Patel                            

Name: Umesh Patel

Title: Chief Executive Officer

 

 

ACKNOWLEDGED, ACCEPTED AND AGREED:

LENDER: Liu Marketing (M) SDN BHD

 

 

By:

 

By: /s/Liu Jun                             

Name: Liu Jun

Title: CEO

 

 

Signature Page to Convertible Promissory Note

 

 

 

 

ATTACHMENT 1 

DEFINITIONS

 

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

 

 

1.      “Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant to the terms hereof for payment, Conversion, offset, or otherwise, accrued but unpaid interest under this Note.

 

2.      “Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower.

 

3.       “Trading Day” means any day on which the OTC Markets (or such other principal market for the Common Stock) is open for trading.

 

 

[Remainder of page intentionally left blank]

 

 

Attachment 1 to Convertible Promissory Note

 

 

 

EXHIBIT A

 

 

 

Fuse Group Holding Inc.                                                                       Date:

Attn: Umesh Patel

805 W. Duarte Rd., Suite 102

Arcadia, CA 91007

 

CONVERSION NOTICE

 

The above-captioned Lender hereby gives notice to Fuse Group Holding Inc., a Nevada corporation (the “Borrower”), pursuant to that certain Convertible Promissory Note made by Borrower in favor of Lender on November 7th, 2022 (the “Note”), that Lender elects to convert the portion of the Note balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower as of the date of conversion specified below. Said conversion shall be based on the Conversion Price set forth below. In the event of a conflict between this Conversion Notice and the Note, the Note shall govern. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

 

	 	
			A.

				
			Date of Conversion:                                   

			

 

	 	
			B.

				
			Conversion #:                                   

			

 

	 	
			C.

				
			Conversion Amount:                                   

			

 

	 	
			D.

				
			Conversion Price:                                  

			

 

	 	
			E.

				
			Conversion Shares:                                    (C divided by D)

			

 

	 	
			F.

				
			Remaining Outstanding Balance of Note:                                  

			

 

 

Deliver all such certificated shares to Lender via reputable overnight courier after receipt of this Conversion Promissory Notice (by facsimile transmission or otherwise) to:

 

                                                                              

 

                                                                              

 

                                                                              

 

 

 

Sincerely,

 

 

Lender:

 

 

 

By:                                                                         

Name:

 

 

 

Exhibit A to Convertible Promissory NoteEX-10.1

  Exhibit 10.1

  FORTE BIOSCIENCES, Inc.

  CHANGE IN CONTROL AND SEVERANCE AGREEMENT

  This Change in Control and Severance Agreement (the “Agreement”) is made between Forte Biosciences, Inc. (the “Company”) and [____________] (the “Executive”).

  This Agreement provides certain protections to the Executive in connection with the involuntary termination of the Executive’s employment under the circumstances described in this Agreement.  

  The Company and the Executive agree as follows:

  1.Term of Agreement.  This Agreement will continue indefinitely until terminated by written consent of the parties hereto, or if earlier, upon the date that all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

  2.At-Will Employment.  The Company and the Executive acknowledge that the Executive’s employment is and will continue to be at-will, as defined under applicable law.  

  3.Severance Benefits.

  (a)Qualifying Non-CIC Termination.  On a Qualifying Non-CIC Termination (as defined below), the Executive will be eligible to receive the following payments and benefits from the Company:

  (i)Salary Severance.  Continuing payments of the Executive’s Salary, less applicable withholdings, for a period of [	].

  (ii)Bonus Severance.  A single, lump sum payment equal to [       ] of Executive’s Target Bonus, less applicable withholdings.

  (iii)COBRA Coverage.  Subject to Section 3(d), the Company will pay the premiums for coverage under COBRA (as defined below) for the Executive and the Executive’s eligible dependents, if any, at the rates then in effect, subject to any subsequent changes in rates that are generally applicable to the Company’s active employees (the “COBRA Coverage”) until the earliest of (A) a period of [	] from the date of the Executive’s termination of employment, (B) the date upon which the Executive (and the Executive’s eligible dependents, as applicable) becomes covered under similar plans, or (C) the date upon which the Executive ceases to be eligible for coverage under COBRA.

  (iv)[Equity Vesting Acceleration.  Vesting acceleration (and exercisability, as applicable) as to the shares subject to each of the Executive’s then-outstanding compensatory equity awards issued by the Company which would have vested over the twelve (12) month period following the Qualifying Non-CIC Termination pursuant to time-based vesting conditions had Executive remained an employee through such period.]

   

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  (b)Qualifying CIC Termination.  On a Qualifying CIC Termination, the Executive will be eligible to receive the following payments and benefits from the Company: 

  (i)Salary Severance.  A single, lump sum payment equal to [             ] of the Executive’s Salary, less applicable withholdings.

  (i)Bonus Severance.  A single, lump sum payment equal to [           ] of Executive’s Target Bonus, less applicable withholdings.

  (ii)COBRA Coverage.  Subject to Section 3(d), the Company will pay the premiums for coverage under COBRA (as defined below) for the Executive and the Executive’s eligible dependents, if any, at the rates then in effect, subject to any subsequent changes in rates that are generally applicable to the Company’s active employees (the “COBRA Coverage”) until the earliest of (A) a period of [	] from the date of the Executive’s termination of employment, (B) the date upon which the Executive (and the Executive’s eligible dependents, as applicable) becomes covered under similar plans, or (C) the date upon which the Executive ceases to be eligible for coverage under COBRA.

  (iii)Equity Vesting Acceleration.  Vesting acceleration (and exercisability, as applicable) as to 100% of the then-unvested shares subject to each of the Executive’s then-outstanding compensatory equity awards issued by the Company that are subject to time-based vesting conditions.  In the case of an equity award subject to performance-based vesting conditions, such equity award will be treated as set forth in the applicable agreement evidencing such equity award.  

  (c)Termination Other Than a Qualifying Termination.  If the termination of the Executive’s employment with the Company Group is not a Qualifying Termination, then the Executive will not be entitled to receive severance or other benefits.

  (d)Conditions to Receipt of COBRA Coverage.  The Executive’s receipt of COBRA Coverage is subject to the Executive electing COBRA continuation coverage within the time period prescribed pursuant to COBRA for the Executive and the Executive’s eligible dependents, if any.  If the Company determines in its sole discretion that it cannot provide the COBRA Coverage without potentially violating, or being subject to an excise tax under, applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of any COBRA Coverage, the Company will provide to the Executive a taxable monthly payment payable on the last day of a given month (except as provided by the immediately following sentence), in an amount equal to the monthly COBRA premium that the Executive would be required to pay to continue his or her group health coverage in effect on the date of his or her Qualifying Termination (which amount will be based on the premium rates applicable for the first month of COBRA Coverage for the Executive and any of eligible dependents of the Executive) (each, a “COBRA Replacement Payment”), which COBRA Replacement Payments will be made regardless of whether the Executive elects COBRA continuation coverage and will end on the earlier of (x) the date upon which the Executive obtains other employment or (y) the date the Company has paid an amount totaling the number of COBRA Replacement Payments equal to the number of months in the applicable COBRA Coverage period.  For the avoidance of doubt, the COBRA Replacement Payments may be used for any purpose, including, but not limited to continuation coverage under COBRA, and will be subject to any applicable withholdings.  Notwithstanding anything to the contrary under this Agreement, if the Company determines in its sole discretion at any time that it cannot 

   

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  provide the COBRA Replacement Payments without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Executive will not receive the COBRA Replacement Payments or any further COBRA Coverage.

  (e)Non-Duplication of Payment or Benefits.  For purposes of clarity, in the event of a Qualifying Pre‐CIC Termination, any severance payments and benefits to be provided to the Executive under Section 3(b) will be reduced by any amounts that already were provided to the Executive under Section 3(a).  Notwithstanding any provision of this Agreement to the contrary, if the Executive is entitled to any cash severance, continued health coverage benefits, or vesting acceleration of any equity awards (other than under this Agreement) by operation of applicable law or under a plan, policy, contract, or arrangement sponsored by or to which any member of the Company Group is a party (“Other Benefits”), then the corresponding severance payments and benefits under this Agreement will be reduced by the amount of Other Benefits paid or provided to the Executive. 

  (f)Death of the Executive.  In the event of the Executive’s death before all payments or benefits the Executive is entitled to receive under this Agreement have been provided, the unpaid amounts will be provided to the Executive’s designated beneficiary, if living, or otherwise to the Executive’s personal representative in a single lump sum as soon as possible following the Executive’s death.

  (g)Transfer Between Members of the Company Group.  For purposes of this Agreement, if the Executive is involuntarily transferred from one member of the Company Group to another, the transfer will not be a termination without Cause but may give the Executive the ability to resign for Good Reason.

  (h)Exclusive Remedy.  In the event of a termination of the Executive’s employment with the Company Group, the provisions of this Agreement are intended to be and are exclusive and in lieu of any other rights or remedies to which the Executive may otherwise be entitled, whether at law, tort or contract, or in equity.  The Executive will be entitled to no benefits, compensation or other payments or rights upon termination of employment other than those benefits expressly set forth in this Agreement.

  4.Accrued Compensation.  On any termination of the Executive’s employment with the Company Group, the Executive will be entitled to receive all accrued but unpaid vacation, expense reimbursements, wages, and other benefits due to the Executive under any Company-provided plans, policies, and arrangements.

  5.Conditions to Receipt of Severance.

  (a)Separation Agreement and Release of Claims.  The Executive’s receipt of any severance payments or benefits upon the Executive’s Qualifying Termination under Section 3 is subject to the Executive signing and not revoking the Company’s then-standard separation agreement and release of claims (which may include an agreement not to disparage any member of the Company Group, non-solicit provisions, an agreement to assist in any litigation matters, and other standard terms and conditions) (the “Release”), which must become effective and irrevocable no later than the sixtieth (60th) day following the Executive’s Qualifying Termination (the “Release Deadline”).  If the Release does 

   

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  not become effective and irrevocable by the Release Deadline, the Executive will forfeit any right to severance payments or benefits under Section 3.

  (b)Payment Timing.  Any lump sum payments under Sections 3(a) and 3(b) will be provided, or in the case of installment payments, will commence, on the first regularly scheduled payroll date of the Company following the date the Release becomes effective and irrevocable (the “Severance Start Date”), subject to any delay required by Section 5(d) below.  Any taxable installments of any COBRA-related severance benefits that otherwise would have been made to the Executive on or before the Severance Start Date will be paid on the Severance Start Date, and any remaining COBRA-related severance benefits installments thereafter will be provided as specified in the Agreement.  Any restricted stock units, performance shares, performance units, and/or similar full value awards that accelerate vesting under Section 3 will be settled, as applicable (x) on a date no later than ten (10) days following the date the Release becomes effective and irrevocable, or (y) if later, in the event of a Qualifying Pre‐CIC Termination, on a date no later than the Change in Control.   

  (c)Return of Company Property.  The Executive’s receipt of any severance payments or benefits upon the Executive’s Qualifying Termination under Section 3 is subject to the Executive returning all documents and other property provided to the Executive by any member of the Company Group (with the exception of a copy of the Company employee handbook and personnel documents specifically relating to the Executive), developed or obtained by the Executive in connection with his or her employment with the Company Group, or otherwise belonging to the Company Group.  

  (d)Section 409A.  The Company intends that all payments and benefits provided under this Agreement or otherwise are exempt from, or comply with, the requirements of Section 409A of the Code and any guidance promulgated under Section 409A of the Code (collectively, “Section 409A”) so that none of the payments or benefits will be subject to the additional tax imposed under Section 409A, and any ambiguities in this Agreement will be interpreted in accordance with this intent.  No payment or benefits to be paid to the Executive, if any, under this Agreement or otherwise, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided until the Executive has a “separation from service” within the meaning of Section 409A.  If, at the time of the Executive’s termination of employment, the Executive is a “specified employee” within the meaning of Section 409A, then the payment of the Deferred Payments will be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that the Executive will receive payment on the first payroll date that occurs on or after the date that is six (6) months and one (1) day following the Executive’s termination of employment.  The Company reserves the right to amend this Agreement as it considers necessary or advisable, in its sole discretion and without the consent of the Executive or any other individual, to comply with any provision required to avoid the imposition of the additional tax imposed under Section 409A or to otherwise avoid income recognition under Section 409A prior to the actual payment of any benefits or imposition of any additional tax.  Each payment, installment, and benefit payable under this Agreement is intended to constitute a separate payment for purposes of U.S. Treasury Regulation Section 1.409A-2(b)(2).  In no event will any member of the Company Group reimburse, indemnify, or hold harmless the Executive for any taxes, penalties and interest that may be imposed, or other costs that may be incurred, as a result of Section 409A. 

   

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  (e)Resignation of Officer and Director Positions.  The Executive’s receipt of any severance payments or benefits upon the Executive’s Qualifying Termination under Section 3 is subject to the Executive resigning from all officer and director positions with all members of the Company Group and the Executive executing any documents the Company may require in connection with the same.

  6.Limitation on Payments.  

  (a)Reduction of Severance Benefits.  If any payment or benefit that the Executive would receive from any Company Group member or any other party whether in connection with the provisions in this Agreement or otherwise (the “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Payment will be equal to the Best Results Amount.  The “Best Results Amount” will be either (x) the full amount of the Payment or (y) a lesser amount that would result in no portion of the Payment being subject to the Excise Tax, whichever of those amounts, taking into account the applicable federal, state and local employment taxes, income taxes and the Excise Tax, results in the Executive’s receipt, on an after-tax basis, of the greater amount.  If a reduction in payments or benefits constituting parachute payments is necessary so that the Payment equals the Best Results Amount, reduction will occur in the following order: (A) reduction of cash payments in reverse chronological order (that is, the cash payment owed on the latest date following the occurrence of the event triggering the Excise Tax will be the first cash payment to be reduced); (B) cancellation of equity awards that were granted “contingent on a change in ownership or control” within the meaning of Section 280G of the Code in the reverse order of date of grant of the awards (that is, the most recently granted equity awards will be cancelled first); (C) reduction of the accelerated vesting of equity awards in the reverse order of date of grant of the awards (that is, the vesting of the most recently granted equity awards will be cancelled first); and  (D) reduction of employee benefits in reverse chronological order (that is, the benefit owed on the latest date following the occurrence of the event triggering the Excise Tax will be the first benefit to be reduced).  In no event will the Executive have any discretion with respect to the ordering of Payment reductions.  The Executive will be solely responsible for the payment of all personal tax liability that is incurred as a result of the payments and benefits received under this Agreement, and the Executive will not be reimbursed, indemnified, or held harmless by any member of the Company Group for any of those payments of personal tax liability.

  (b)Determination of Excise Tax Liability.  Unless the Company and the Executive otherwise agree in writing, the Company will select a professional services firm (the “Firm”) to make all determinations required under this Section 6, which determinations will be conclusive and binding upon the Executive and the Company for all purposes.  For purposes of making the calculations required by this Section 6, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and the Executive will furnish to the Firm such information and documents as the Firm reasonably may request in order to make determinations under this Section 6.  The Company will bear the costs and make all payments for the Firm’s services in connection with any calculations contemplated by this Section 6.  The Company will have no liability to the Executive for the determinations of the Firm.

   

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  7.Definitions.  The following terms referred to in this Agreement will have the following meanings:

  (a)“Board” means the Company’s Board of Directors.

  (b)“Cause” means 

  (i)Executive’s material breach of any of Executive’s obligations to the Company or any other member of the Company Group under the terms of Executive’s offer letter or employment agreement with the Company or the Confidentiality Agreement;

  (ii)Executive’s gross negligence or willful failure or refusal to perform Executive’s duties;

  (iii)any material act of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company or any other member of the Company Group;

  (iv)any willful or intentional act by the Executive that could reasonably be expected to injure the reputation, business or business relationships of the Company or any other member of the Company Group;

  (v)perpetration by the Executive of an intentional and knowing fraud against or affecting the Company or any other member of the Company Group or any customer, supplier, client, agent or employee thereof; or

  (vi)Executive’s conviction of a felony or any crime involving fraud, dishonesty or moral turpitude;

  provided that, with respect to any of the foregoing, the Board shall be required to give the Executive written notice of any termination for “Cause” with a detailed description of the alleged conduct constituting Cause, and the Executive shall be given an opportunity, together with legal counsel, to be heard before the Board within a reasonable period after receipt of such notice, together with a thirty (30) day ability to cure any such conduct, unless such conduct is non-curable.

  (c)“Change in Control” means a “Change in Control” as defined in the Company’s 2018 Equity Incentive Plan.

  (d)“Change in Control Period” means the period beginning three (3) months prior to a Change in Control and ending twelve (12) months following a Change in Control. 

  (e)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. 

  (f)“Code” means the Internal Revenue Code of 1986, as amended.

  (g)“Company Group” means the Company and any subsidiaries of the Company.

   

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  (h)“Confidentiality Agreement” means the At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement executed by the Company and the Executive on [	].

  (i)“Disability” means a total and permanent disability as defined in Section 22(e)(3) of the Code.

  (j)“Good Reason” means the Executive’s resignation within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without the Executive’s consent: (i) a material reduction of the Executive’s authority, title, duties or responsibilities relative to the Executive’s authority, title, duties or responsibilities immediately prior to the reduction; (ii) a reduction by the Company (or its successor) in the Executive’s annual base salary or target bonus, each as in effect immediately prior to such reduction, unless the Company also similarly reduces the annual rate of base cash compensation or annual incentive bonus targets of all other similarly situated employees of the Company; (iii) a material breach by the Company of this Agreement or any other material agreement between the Company and the Executive; or (iv) a material change in the geographic location of the Executive’s primary work facility or location; provided, that a relocation of less than fifty (50) miles from the Executive’s then-present location will not be considered a material change in geographic location.  The Executive may not resign for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within ninety (90) days after Executive first learns of the initial existence of the grounds for “Good Reason” and a reasonable cure period of thirty (30) days following the date the Company receives such notice during which such condition must not have been cured.  

  (k)“Qualifying Pre‐CIC Termination” means a Qualifying CIC Termination that occurs prior to the date of the Change in Control.

  (l)“Qualifying Termination” means a termination of the Executive’s employment either (i) by a Company Group member without Cause (excluding by reason of Executive’s death or Disability) or (ii) by the Executive for Good Reason, in either case, during the Change in Control Period (a “Qualifying CIC Termination”) or outside of the Change in Control Period (a “Qualifying Non-CIC Termination”).

  (m)“Salary” means the Executive’s annual base salary as in effect immediately prior to the Executive’s Qualifying Termination (or if the Qualifying Termination is due to a resignation for Good Reason based on a material reduction in base salary, then the Executive’s annual base salary in effect immediately prior to the reduction) or, if the Executive’s Qualifying Termination is a Qualifying CIC Termination and the amount is greater, at the level in effect immediately prior to the Change in Control.

  (n)  “Target Bonus” means Executive’s annual (or annualized, as applicable) target bonus in effect immediately prior to Executive’s Qualifying Termination or, if Executive’s Qualifying Termination occurs during the Change in Control Period and the amount is greater, Executive’s annual (or annualized, if applicable) target bonus in effect immediately prior to the Change in Control.

   

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  8.Successors.  This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors, and legal representatives of the Executive upon the Executive’s death, and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of the Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance, or other disposition of the Executive’s right to compensation or other benefits will be null and void.

  9.Notice. 

  (a)General.  All notices and other communications required or permitted under this Agreement shall be in writing and will be effectively given (i) upon actual delivery to the party to be notified, (ii) upon transmission by email, (iii) twenty-four (24) hours after confirmed facsimile transmission, (iv) one (1) business day after deposit with a recognized overnight courier, or (v) three (3) business days after deposit with the U.S. Postal Service by first class certified or registered mail, return receipt requested, postage prepaid, addressed (A) if to the Executive, at the address the Executive shall have most recently furnished to the Company in writing, (B) if to the Company, at the following address:

  Forte Biosciences, Inc.

  3060 Pegasus Park Dr.

  Building 6

  Dallas, Texas

  Attention: Chief Executive Officer 

  (b)Notice of Termination.  Any termination by a Company Group member for Cause will be communicated by a notice of termination to the Executive, and any termination by the Executive for Good Reason will be communicated by a notice of termination to the Company, in each case given in accordance with Section 9(a) of this Agreement.  The notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30) days after the giving of the notice).  

  10.Resignation.  The termination of the Executive’s employment for any reason will also constitute, without any further required action by the Executive, the Executive’s voluntary resignation from all officer and/or director positions held at any member of the Company Group, and at the Board’s request, the Executive will execute any documents reasonably necessary to reflect the resignations.

   

  	- 8 -	

   

  

   

  11.Miscellaneous Provisions.

  (a)No Duty to Mitigate.  The Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any payment be reduced by any earnings that the Executive may receive from any other source except as specified in Section 3(e).

  (b)Waiver; Amendment.  No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by an authorized officer of the Company (other than the Executive) and by the Executive.  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

  (c)Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

  (d)Entire Agreement.  This Agreement constitutes the entire agreement of the parties and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter of this Agreement, including, for the avoidance of doubt, any other employment letter or agreement, severance policy or program, or equity award agreement.  

  (e)Choice of Law.  This Agreement will be governed by the laws of the State of Texas without regard to Texas’s conflicts of law rules that may result in the application of the laws of any jurisdiction other than Texas.  To the extent that any lawsuit is permitted under this Agreement, Executive hereby expressly consents to the personal and exclusive jurisdiction and venue of the state and federal courts located in Texas for any lawsuit filed against the Executive by the Company.

  (f)Arbitration.  Any and all controversies, claims, or disputes with anyone under this Agreement (including the Company and any employee, officer, director, stockholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from the Executive’s employment with the Company Group, shall be subject to arbitration in accordance with the provisions of the Confidentiality Agreement.

  (g)Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

  (h)Withholding.  All payments and benefits under this Agreement will be paid less applicable withholding taxes.  The Company is authorized to withhold from any payments or benefits all federal, state, local, and/or foreign taxes required to be withheld from the payments or benefits and make any other required payroll deductions.  No member of the Company Group will pay the Executive’s taxes arising from or relating to any payments or benefits under this Agreement.

  (i)Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

   

  	- 9 -	

   

  

   

  By its signature below, each of the parties signifies its acceptance of the terms of this Agreement, in the case of the Company by its duly authorized officer.

   

  COMPANY		FORTE BIOSCIENCES, INC.

  			By: 			

  Title:  	

  Date:  	

   

  EXECUTIVE					

  Date:  	

   

   

  	- 10 -

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