Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the “Agreement”), dated September 16, 2014, is between ONCOSEC MEDICAL INCORPORATED (the “Company”) and MAI HOPE LE (“Executive”).

 

I.                                        POSITION AND RESPONSIBILITIES

 

A.                                    Position.  Executive is employed by the Company to render services to the Company in the position of Chief Medical Officer (CMO) reporting directly to the CEO of the Company.  Executive shall perform such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and any additional duties now or hereafter assigned to Executive by the Company. Executive shall abide by the rules, regulations, and practices as adopted or modified from time to time in the Company’s sole discretion.

 

B.                                    Other Activities.  Except upon the prior written consent of the Company, Executive will not, during the term of this Agreement, (i) accept any other employment, or (ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) in either case that might interfere with Executive’s duties and responsibilities hereunder or create a conflict of interest with the Company.

 

C.                                    No Conflict.  Executive represents and warrants that Executive’s execution of this Agreement, employment with the Company, and the performance of Executive’s proposed duties under this Agreement shall not violate any obligations Executive may have to any other employer, person or entity, including any obligations with respect to proprietary or confidential information of any other person or entity.

 

II.                                   COMPENSATION AND BENEFITS

 

A.                                    Base Salary.  In consideration of the services to be rendered under this Agreement, the Company shall pay Executive a salary at the rate of Two Hundred Sixty Thousand Dollars ($260,000) per year (“Base Salary”). The Base Salary shall be paid in accordance with the Company’s regularly established payroll practice.  Executive’s Base Salary will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be adjusted in the sole discretion of the Company.

 

B.                                    Relocation Bonus.  In consideration of Executive’s agreement to relocate Executive’s family to the city in which the Company is headquartered or the environs thereof, and in addition to the Base Salary, the Company shall pay Executive a one-time bonus of Fifty-four Thousand Dollars ($54,000) (“Relocation Bonus”) upon the execution of this Agreement. The Relocation Bonus shall be paid in accordance with the Company’s regularly established payroll practice.

 

C.                                    Discretionary Bonus.  The Company will, within 90 days of the end of each fiscal year, determine the annual bonus (the “Discretionary Bonus”), if any, payable to the Employee for that fiscal year, based on the Employee’s achievement of milestones agreed to by the Board or the Compensation Committee of the Board and the Employee.  Within 60 days of

 

 

the beginning of each fiscal year, the Board or the Compensation Committee or the Board and the Employee shall agree to the Employee’s milestones and the amount of bonus, potentially payable if one or more milestones are achieved.  In the Company’s sole discretion it may pay the Discretionary Bonus in cash, shares of the Company or stock options of the Company, or any combination thereof, and it may pay the Discretionary Bonus in a lump sum or installments, equal or otherwise, over the course of the six months immediately following the fiscal year for which the Discretionary Bonus was earned.  Notwithstanding anything herein to the contrary, the Executive must be employed on the date(s) the Discretionary Bonus is to be paid to be eligible to receive the Discretionary Bonus, or portion thereof.

 

D.                                    Option Grant.  In consideration of the Executive’s entering into this Agreement and as an inducement to join the Company, the Executive shall be granted a stock option (the “Option”) to purchase from the Company 1.7 million shares of the Company’s common stock.  This option shall be approved by the Company’s board of directors and issued to Executive on Executive’s start date (or the date of approval by the Company’s board of directors, if later) with an exercise price equal to the fair market value of a share of the Company’s Common Stock as of such date.  Such award shall be governed by an option award agreement between the Executive and the Company substantially in the form attached hereto as Exhibit A (the “Option Grant”).  Subject to terms of the Plan and the Option Grant, twenty-five percent (25%) of the Options shall vest on the effective date of this Agreement and one thirty-sixth (1/36th) of the remaining seventy-five percent (75%) of the Options shall vest on each monthly anniversary of the effective date of this Agreement.  In the event of any conflict or ambiguity between this Agreement and the Plan or the Option Grant, the Plan and the Option Grant shall govern.

 

E.                                    Benefits.  Executive shall be eligible to participate in the benefits made generally available by the Company to similarly-situated executives, in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion.

 

F.                                     Expenses.  The Company shall reimburse Executive for reasonable business expenses incurred in the performance of Executive’s duties hereunder in accordance with the Company’s expense reimbursement guidelines.

 

III.                              AT-WILL EMPLOYMENT; TERMINATION BY COMPANY

 

A.                                    At-Will Termination by Company.  Executive’s employment with the Company shall be “at-will” at all times.  The Company may terminate Executive’s employment with the Company at any time, without any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary contained in or arising from any statements, policies or practices of the Company relating to the employment, discipline or termination of its employees.  Upon and after such termination, all obligations of the Company under this Agreement shall cease, except as otherwise provided herein.

 

B.                                    Severance.  Except in situations where the employment of Executive is terminated For Cause, By Death or By Disability (as defined in Section IV below), in the event that the Company terminates Executive’s employment (or Executive resigns for Good Cause)  (a) prior to such time as Executive shall have provided services to the Company for twelve (12) months, Executive will be entitled to payment by the Company of an amount equal to nine (9)

 

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months of Executive’s then-current Base Salary plus accrued bonus, less applicable statutory deductions and withholdings, or (b) following such time as Executive shall have provided services to the Company for twelve (12) months, Executive will be entitled to payment by the Company of an amount equal to twelve (12) months of Executive’s then-current Base Salary plus accrued bonus, less applicable statutory deductions and withholdings, (“Severance”), to be paid as salary continuation (and not as a lump sum) over the applicable period and in accordance with the Company’s standard payroll practices.  Executive’s eligibility for the foregoing Severance is conditioned on Executive having first signed a release agreement in the form attached as Exhibit B.  Executive shall not be entitled to any Severance if Executive’s employment is terminated For Cause, By Death or By Disability (as defined in Section IV below) or if Executive’s employment is terminated by Executive (except a resignation for Good Cause as provided in Section V.B. below).

 

IV.                               OTHER TERMINATIONS BY COMPANY

 

A.                                    Termination for Cause.  For purposes of this Agreement, “For Cause” shall mean: (i) Executive commits a crime involving dishonesty, breach of trust, or physical harm to any person; (ii) Executive willfully engages in conduct that is in bad faith and materially injurious to the Company, including but not limited to, misappropriation of trade secrets, fraud or embezzlement; (iii) Executive commits a material breach of this Agreement, which breach is not cured within thirty (30) days after written notice to Executive from the Company; (iv) Executive willfully refuses to implement or follow a reasonable and lawful policy or directive of the Company, which breach is not cured within thirty (30) days after written notice to Executive from the Company; or (v) Executive engages in misfeasance or malfeasance demonstrated by a pattern of failure to perform job duties diligently and professionally which misfeasance or malfeasance is not cured within thirty (30) days after written notice to Executive from the Company.  The Company may terminate Executive’s employment For Cause at any time, without any advance notice.  The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, subject to any other rights or remedies of the Company under law; and thereafter all obligations of the Company under this Agreement shall cease.

 

B.                                    By Death.  Executive’s employment shall terminate automatically upon Executive’s death.  The Company shall pay to Executive’s beneficiaries or estate, as appropriate, any compensation then due and owing.  Thereafter all obligations of the Company under this Agreement shall cease.  Nothing in this Section shall affect any entitlement of Executive’s heirs or devisees to the benefits of any life insurance plan or other applicable benefits.

 

C.                                    By Disability.  If Executive becomes eligible for the Company’s long term disability benefits or if, in the sole opinion of the Company, Executive is unable to carry out the responsibilities and functions of the position held by Executive by reason of any physical or mental impairment for more than ninety consecutive days or more than one hundred and twenty days in any twelve-month period, then, to the extent permitted by law, the Company may terminate Executive’s employment.  The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, and thereafter all obligations of the Company under this Agreement shall cease.  Nothing in this Section shall affect Executive’s rights under any disability plan in which Executive is a participant.

 

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V.                                    TERMINATION BY EXECUTIVE

 

A.                                    At-Will Termination by Executive.  Executive may terminate employment with the Company at any time for any reason or no reason at all, upon six weeks’ advance written notice.  During such notice period Executive shall continue to diligently perform all of Executive’s duties hereunder.  The Company shall have the option, in its sole discretion, to make Executive’s termination effective at any time prior to the end of such notice period as long as the Company pays Executive all compensation to which Executive is entitled up through the last day of the six week notice period.  Thereafter all obligations of the Company shall cease.

 

B.                                    Good Cause.  For purposes of this Agreement, Good Cause means any one or more of the following events, unless Executive consents to such event in writing or by notifying the Company that Executive will not terminate employment on the basis of such event within thirty (30) business days thereafter:

 

(i)                                     A reduction in the amount of Executive’s base compensation in a manner that disproportionately adversely affects Executive, as compared to other senior Company management;

 

(ii)                                  Executive ceases to report directly to the CEO of the Company provided that such change in reporting relationship results in a material reduction in Executive’s authority, duties, or responsibilities;

 

(iii)                               Any other material change in the Executive’s duties, authority or responsibilities with the Company relative to the duties, authority or responsibilities in effect immediately prior to such reduction; or

 

(iv)                              Company’s relocation of Executive’s work site more than 30 miles from Company’s headquarters without Executive’s consent;

 

Provided, however, that in the event that any of the foregoing events is capable of being cured, Executive shall provide written notice to the Company describing the nature of such event and the Company shall have fifteen (15) business days to cure such event, and following such period if the event remains uncured Executive may resign for Good Reason and applicable Severance set forth herein shall be paid.

 

VI.                               TERMINATION OBLIGATIONS

 

A.                                    Return of Property.  Executive agrees that all property (including without limitation all equipment, tangible proprietary information, documents, records, notes, contracts and computer-generated materials) furnished to or created or prepared by Executive incident to Executive’s employment belongs to the Company and shall be promptly returned to the Company upon termination of Executive’s employment.

 

B.                                    Resignation and Cooperation.  Upon termination of Executive’s employment, Executive shall be deemed to have resigned from all offices and directorships then held with the Company.  Following any termination of employment, Executive shall cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees.  Executive shall also cooperate with the Company in the defense of

 

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any action brought by any third party against the Company that relates to Executive’s employment by the Company.

 

VII.                          INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION

 

A.                                    Proprietary Information Agreement.  Executive agrees to enter into and be bound by the terms of the Company’s Proprietary Information and Inventions Agreement (“Proprietary Information Agreement”).

 

B.                                    Non-Solicitation.  Executive acknowledges that because of Executive’s position in the Company, Executive will have access to material intellectual property and confidential information.  During the term of Executive’s employment and for one year thereafter, in addition to Executive’s other obligations hereunder or under the Proprietary Information Agreement, Executive shall not, for Executive or any third party, directly or indirectly (i) solicit, induce, recruit or encourage any person employed by the Company to terminate his or her employment, or (ii) divert or attempt to divert from the Company any business with any customer, client, member, business partner or supplier about which Executive obtained confidential information during her employment with the Company, by using the Company’s trade secrets or by otherwise engaging in conduct that amounts to unfair competition.

 

C.                                    Non-Disclosure of Third Party Information.  Executive represents and warrants and covenants that Executive shall not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others at any time, including but not limited to any proprietary information or trade secrets of any former employer, if any; and Executive acknowledges and agrees that any violation of this provision shall be grounds for Executive’s immediate termination and could subject Executive to substantial civil liabilities and criminal penalties.  Executive further specifically and expressly acknowledges that no officer or other employee or representative of the Company has requested or instructed Executive to disclose or use any such third party proprietary information or trade secrets.

 

VIII.                     LIABILITY COVERAGE

 

The Company agrees to maintain commercially reasonable Director’s and Officer’s insurance as well as commercially reasonable products-work hazard liability insurance (clinical trials insurance) covering the customary potential liabilities of the Executive in her role as officer of the Company.  The coverage shall address customary liabilities specifically stemming from the Company’s involvement in running clinical trials.

 

IX.                              ARBITRATION

 

The Company and Executive agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof shall be settled by arbitration to be held in San Diego, California, in accordance with the Judicial Arbitration and Mediation Service/Endispute, Inc. (“JAMS”) rules for employment disputes then in effect (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator shall award the

 

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prevailing party all reasonable costs and attorneys’ fees incurred during any such proceeding. The arbitrator shall apply California law to the merits of any dispute or claim.  Executive hereby expressly consents to the personal jurisdiction of the state and federal courts located in San Diego, California for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants. The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, without breach of this arbitration agreement and without abridgment of the powers of the arbitrator. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH EXECUTIVE’S EMPLOYMENT OR TERMINATION THEREOF, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION CLAIMS.

 

X.                                   AMENDMENTS; WAIVERS; REMEDIES

 

This Agreement may not be amended or waived except by a writing signed by Executive and by a duly authorized representative of the Company other than Executive.  Failure to exercise any right under this Agreement shall not constitute a waiver of such right.  Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches.  All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.

 

XI.                              ASSIGNMENT; BINDING EFFECT

 

A.                                    Assignment.  The performance of Executive is personal hereunder, and Executive agrees that Executive shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement.  This Agreement may be assigned or transferred by the Company; and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially all of its assets.

 

B.                                    Binding Effect.  Subject to the foregoing restriction on assignment by Executive, this Agreement shall inure to the benefit of and be binding upon each of the parties; the affiliates, officers, directors, agents, successors and assigns of the Company; and the heirs, devisees, spouses, legal representatives and successors of Executive.

 

XII.                         NOTICES

 

All notices or other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered:  (a) by hand; (b) by email, (c) by a nationally recognized overnight courier service; or (d) by United States first class registered or certified mail, return receipt requested, to the principal address of the other party, as set forth below.  The date of notice shall be deemed to be the earlier of (i) actual receipt of notice by any

 

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permitted means, or (ii) five business days following dispatch by overnight delivery service or the United States Mail.  Executive shall be obligated to notify the Company in writing of any change in Executive’s address.  Notice of change of address or email shall be effective only when done in accordance with this Section.

 

	
Company’s   Notice Address:
    	
 
    	
Executive’s   Notice Address and Email:
    
	
 
    	
 
    	
 
    
	
OncoSec   Medical Incorporated
    	
 
    	
Mai   Hope Le
    
	
9810   Summers Ridge Road, Suite 110
    	
 
    	
 
    
	
San   Diego, CA 92121
    	
 
    	
 
    
	
United   States of America
    	
 
    	
 
    
	
Email:
    	
 
    	
 
    	
 
    
				

 

XIII.                    SEVERABILITY

 

If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect.  In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.

 

XIV.                     TAXES

 

All amounts paid under this Agreement shall be paid less all applicable state and federal tax withholdings (if any) and any other withholdings required by any applicable jurisdiction or authorized by Executive.  Notwithstanding any other provision of this Agreement whatsoever, the Company, in its sole discretion, shall have the right to provide for the application and effects of Section 409A of the Code (relating to deferred compensation arrangements) and any related administrative guidance issued by the Internal Revenue Service.  The Company shall have the authority to delay the payment of any amounts under this Agreement to the extent it deems necessary or appropriate to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “key employees” of publicly-traded companies); in such event, the payment(s) at issue may not be made before the date which is six (6) months after the date of Executive’s separation from service, or, if earlier, the date of death.

 

XV.                         GOVERNING LAW

 

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

 

XVI.                     INTERPRETATION

 

This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party.  Sections and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of this Agreement.  Whenever the context requires, references to the singular shall include the plural and the plural the singular.

 

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XVII.                OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT

 

Executive agrees that any and all of Executive’s obligations under this agreement, including but not limited to the Proprietary Information Agreement, shall survive the termination of employment and the termination of this Agreement.

 

XVIII.           COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.

 

XIX.                    AUTHORITY

 

Each party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of the obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of such party and is enforceable in accordance with its terms.

 

XX.                         ENTIRE AGREEMENT

 

This Agreement is intended to be the final, complete, and exclusive statement of the terms of Executive’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the Executive Proprietary Information and Inventions Agreement).  To the extent that the practices, policies or procedures of the Company, now or in the future, apply to Executive and are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control.  Any subsequent change in Executive’s duties, position, or compensation will not affect the validity or scope of this Agreement.

 

XXI.                    EXECUTIVE ACKNOWLEDGEMENT

 

EXECUTIVE ACKNOWLEDGES EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED ON EXECUTIVE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

	
ONCOSEC   MEDICAL INCORPORATED
    	
 
    	
MAI   HOPE LE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Punit Dhillon
    	
 
    	
 
    	
/s/   Mai Hope Le
    
	
Signature
    	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    
	
Punit   Dhillon
    	
 
    	
 
    	
 
    
	
By
    	
 
    	
 
    	
9/16/14
    
	
 
    	
 
    	
 
    	
Date
    
	
CEO
    	
 
    	
 
    
	
Title
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
9/16/14
    	
 
    	
 
    
	
Date
    	
 
    	
 
    

 

 

EXHIBIT A

 

FORM OF OPTION GRANT

 

ONCOSEC MEDICAL INCORPORATED 2011 STOCK INCENTIVE PLAN

 

NOTICE OF STOCK OPTION AWARD

 

	
Grantee’s   Name and Address:
    	
Mai   Hope Le
    

 

You (the “Grantee”) have been granted an option to purchase shares of Common Stock, subject to the terms and conditions of this Notice of Stock Option Award (the “Notice”), the OncoSec Medical Incorporated 2011 Stock Incentive Plan, as amended from time to time (the “Plan”) and the Stock Option Award Agreement (the “Option Agreement”) attached hereto, as follows.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Notice.

 

	
Award   Number
    	
 
    
	
 
    	
 
    
	
Date   of Award
    	
 
    
	
 
    	
 
    
	
Vesting   Commencement Date
    	
 
    
	
 
    	
 
    
	
Exercise   Price per Share
    	
$
    	
 
    
	
 
    	
 
    
	
Total   Number of Shares Subject
    	
 
    
	
to   the Option (the “Shares”)
    	
1,700,000
    
	
 
    	
 
    
	
Total   Exercise Price
    	
$
    	
 
    
	
 
    	
 
    
	
Type   of Option:
    	
Non-Qualified   Stock Option
    
	
 
    	
 
    
	
Expiration   Date:
    	
 
    
	
 
    	
 
    
	
Post-Termination   Exercise Period:
    	
Three   (3) Months
    

 

Vesting Schedule:

 

Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice, the Plan and the Option Agreement, the Option may be exercised, in whole or in part, in accordance with the following schedule:

 

25% of the Shares subject to the Option shall vest on the Grant Date, and 1/36th of the remaining unvested Shares subject to the Option shall vest monthly thereafter.

 

IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option Agreement.

 

	
 
    	
OncoSec   Medical Incorporated
    
	
 
    	
a   Nevada corporation
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

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THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER).  THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE.  THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.

 

The Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Option subject to all of the terms and provisions hereof and thereof.  The Grantee has reviewed this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan and the Option Agreement.  The Grantee hereby agrees that all questions of interpretation and administration relating to this Notice, the Plan and the Option Agreement shall be resolved by the Administrator in accordance with Section 13 of the Option Agreement.  The Grantee further agrees to the venue selection in accordance with Section 14 of the Option Agreement.  The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Notice.

 

	
Dated:
    	
 
    	
 
    	
Signed:
    	
 
    
	
 
    	
 
    	
Grantee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Award Number:
    	
 
    

 

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ONCOSEC MEDICAL INCORPORATED 2011 STOCK INCENTIVE PLAN

 

STOCK OPTION AWARD AGREEMENT

 

1.                                      Grant of Option.  OncoSec Medical Incorporated, a Nevada corporation (the “Company”), hereby grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award (the “Notice”), an option (the “Option”) to purchase the Total Number of Shares of Common Stock subject to the Option (the “Shares”) set forth in the Notice, at the Exercise Price per Share set forth in the Notice (the “Exercise Price”) subject to the terms and provisions of the Notice, this Stock Option Award Agreement (the “Option Agreement”) and the Company’s 2011 Stock Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement.

 

If designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.  However, notwithstanding such designation, the Option will qualify as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.  The $100,000 limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of the Shares subject to options designated as Incentive Stock Options which become exercisable for the first time by the Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company).  For purposes of this calculation, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the shares subject to such options shall be determined as of the grant date of the relevant option.

 

2.                                      Exercise of Option.

 

(a)                                 Right to Exercise.  The Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan and this Option Agreement.  The Option shall be subject to the provisions of Section 11 of the Plan relating to the exercisability or termination of the Option in the event of a Corporate Transaction or Change in Control.  The Grantee shall be subject to reasonable limitations on the number of requested exercises during any monthly or weekly period as determined by the Administrator.  In no event shall the Company issue fractional Shares.

 

(b)                                 Method of Exercise.  The Option shall be exercisable by delivery of an exercise notice (a form of which is attached as Exhibit A) or by such other procedure as specified from time to time by the Administrator which shall state the election to exercise the Option, the whole number of Shares in respect of which the Option is being exercised, and such other provisions as may be required by the Administrator.  The exercise notice shall be delivered in person, by certified mail, or by such other method (including electronic transmission) as determined from time to time by the Administrator to the Company accompanied by payment of the Exercise Price and all applicable income and employment taxes required to be withheld.  The Option shall be deemed to be exercised upon receipt by the Company of such notice accompanied by the Exercise Price and all applicable withholding taxes, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 3(d) below to the extent such procedure is available to the Grantee at the time of exercise and such an exercise would not violate any Applicable Law.

 

(c)                                  Taxes.  No Shares will be delivered to the Grantee or other person pursuant to the exercise of the Option until the Grantee or other person has made arrangements acceptable to the

 

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Administrator for the satisfaction of applicable income tax and employment tax withholding obligations, including, without limitation, such other tax obligations of the Grantee incident to the receipt of Shares.  Upon exercise of the Option, the Company or the Grantee’s employer may offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee) or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding obligations.  Furthermore, in the event of any determination that the Company has failed to withhold a sum sufficient to pay all withholding taxes due in connection with the Option, the Grantee agrees to pay the Company the amount of such deficiency in cash within five (5) days after receiving a written demand from the Company to do so, whether or not the Grantee is an employee of the Company at that time.

 

(d)                                 Section 16(b).  Notwithstanding any provision of this Option Agreement to the contrary, other than termination of the Grantee’s Continuous Service for Cause, if a sale within the applicable time periods set forth in Sections 5, 6 or 7 herein of Shares acquired upon the exercise of the Option would subject the Grantee to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such Shares by the Grantee would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Grantee’s termination of Continuous Service, or (iii) the date on which the Option expires.

 

3.                                      Method of Payment.  Payment of the Exercise Price shall be made by any of the following, or a combination thereof, at the election of the Grantee; provided, however, that such exercise method does not then violate any Applicable Law:

 

(a)                                 cash;

 

(b)                                 check;

 

(c)                                  surrender of Shares held for the requisite period, if any, necessary to avoid a charge to the Company’s earnings for financial reporting purposes, or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised;

 

(d)                                 payment through a “net exercise” such that, without the payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined by the Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market Value per Share (the number of net Shares to be received shall be rounded down to the nearest whole number of Shares); or

 

(e)                                  if the exercise occurs on or after the Registration Date, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (i) shall provide written instructions to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (ii) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction.

 

4.                                      Restrictions on Exercise.  The Option may not be exercised if the issuance of the Shares subject to the Option upon such exercise would constitute a violation of any Applicable Laws.  In

 

4

 

addition, the Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company.  If the exercise of the Option within the applicable time periods set forth in Section 5, 6 and 7 of this Option Agreement is prevented by the provisions of this Section 4, the Option shall remain exercisable until one (1) month after the date the Grantee is notified by the Company that the Option is exercisable, but in any event no later than the Expiration Date set forth in the Notice.

 

5.                                      Termination or Change of Continuous Service.  In the event the Grantee’s Continuous Service terminates, the Grantee may, but only during the Post-Termination Exercise Period, exercise the portion of the Option that was vested at the date of such termination (the “Termination Date”).  The Post-Termination Exercise Period shall commence on the Termination Date.  In no event, however, shall the Option be exercised later than the Expiration Date set forth in the Notice.  In the event of the Grantee’s change in status from Employee, Director or Consultant to any other status of Employee, Director or Consultant, the Option shall remain in effect and the Option shall continue to vest in accordance with the Vesting Schedule set forth in the Notice; provided, however, that with respect to any Incentive Stock Option that shall remain in effect after a change in status from Employee to Director or Consultant, such Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following such change in status.  Except as provided in Sections 6 and 7 below, to the extent that the Option was unvested on the Termination Date, or if the Grantee does not exercise the vested portion of the Option within the Post-Termination Exercise Period, the Option shall terminate.

 

6.                                      Disability of Grantee.  In the event the Grantee’s Continuous Service terminates as a result of his or her Disability, the Grantee may, but only within twelve (12) months commencing on the Termination Date (but in no event later than the Expiration Date), exercise the portion of the Option that was vested on the Termination Date; provided, however, that if such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code and the Option is an Incentive Stock Option, such Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the Termination Date.  To the extent that the Option was unvested on the Termination Date, or if the Grantee does not exercise the vested portion of the Option within the time specified herein, the Option shall terminate.  Section 22(e)(3) of the Code provides that an individual is permanently and totally disabled if he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

 

7.                                      Death of Grantee.  In the event of the termination of the Grantee’s Continuous Service as a result of his or her death, or in the event of the Grantee’s death during the Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s termination of Continuous Service as a result of his or her Disability, the person who acquired the right to exercise the Option pursuant to Section 8 may exercise the portion of the Option that was vested at the date of termination within twelve (12) months commencing on the date of death (but in no event later than the Expiration Date).  To the extent that the Option was unvested on the date of death, or if the vested portion of the Option is not exercised within the time specified herein, the Option shall terminate.

 

8.                                      Transferability of Option.  The Option, if an Incentive Stock Option, may not be transferred in any manner other than by will or by the laws of descent and distribution and may be exercised during the lifetime of the Grantee only by the Grantee.  The Option, if a Non-Qualified Stock Option, may not be transferred in any manner other than by will or by the laws of descent and distribution, provided, however, that a Non-Qualified Stock Option may be transferred during the lifetime

 

5

 

of the Grantee to the extent and in the manner authorized by the Administrator.  Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s Incentive Stock Option or Non-Qualified Stock Option in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator.  Following the death of the Grantee, the Option, to the extent provided in Section 7, may be exercised (a) by the person or persons designated under the deceased Grantee’s beneficiary designation or (b) in the absence of an effectively designated beneficiary, by the Grantee’s legal representative or by any person empowered to do so under the deceased Grantee’s will or under the then applicable laws of descent and distribution.  The terms of the Option shall be binding upon the executors, administrators, heirs, successors and transferees of the Grantee.

 

9.                                      Term of Option.  The Option must be exercised no later than the Expiration Date set forth in the Notice or such earlier date as otherwise provided herein.  After the Expiration Date or such earlier date, the Option shall be of no further force or effect and may not be exercised.

 

10.                               Tax Consequences.  The Grantee may incur tax liability as a result of the Grantee’s purchase or disposition of the Shares.  THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

 

11.                               Entire Agreement: Governing Law.  The Notice, the Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee.  Nothing in the Notice, the Plan and this Option Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties.  The Notice, the Plan and this Option Agreement are to be construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties.  Should any provision of the Notice, the Plan or this Option Agreement be determined to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

 

12.                               Construction.  The captions used in the Notice and this Option Agreement are inserted for convenience and shall not be deemed a part of the Option for construction or interpretation.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

13.                               Administration and Interpretation.  Any question or dispute regarding the administration or interpretation of the Notice, the Plan or this Option Agreement shall be submitted by the Grantee or by the Company to the Administrator.  The resolution of such question or dispute by the Administrator shall be final and binding on all persons.

 

14.                               Venue.  The Company, the Grantee, and the Grantee’s assignees pursuant to Section 8 (the “parties”) agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan or this Option Agreement shall be brought in the United States District Court for the Southern District of California (or should such court lack jurisdiction to hear such action, suit or proceeding, in a California state court in the County of San Diego) and that the parties shall submit to the jurisdiction of such court.  The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to

 

6

 

the laying of venue for any such suit, action or proceeding brought in such court.  If any one or more provisions of this Section 14 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.

 

15.                               Notices.  Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown in these instruments, or to such other address as such party may designate in writing from time to time to the other party.

 

END OF AGREEMENT

 

7

 

EXHIBIT A

 

ONCOSEC MEDICAL INCORPORATED 2011 STOCK INCENTIVE PLAN

 

EXERCISE NOTICE

 

OncoSec Medical Incorporated

9810 Summers Ridge Road, Suite 110

San Diego, CA 92121

Attention: Administration

 

1.                                      Exercise of Option.  Effective as of today,                             ,        the undersigned (the “Grantee”) hereby elects to exercise the Grantee’s option to purchase                        shares of the Common Stock (the “Shares”) of OncoSec Medical Incorporated (the “Company”) under and pursuant to the Company’s 2011 Stock Incentive Plan, as amended from time to time (the “Plan”) and the [  ] Incentive [  ] Non-Qualified Stock Option Award Agreement (the “Option Agreement”) and Notice of Stock Option Award (the “Notice”) dated                             ,                 .  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Exercise Notice.

 

2.                                      Representations of the Grantee.  The Grantee acknowledges that the Grantee has received, read and understood the Notice, the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

 

3.                                      Rights as Stockholder.  Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan.

 

4.                                      Delivery of Payment.  The Grantee herewith delivers to the Company the full Exercise Price for the Shares.

 

5.                                      Tax Consultation.  The Grantee understands that the Grantee may suffer adverse tax consequences as a result of the Grantee’s purchase or disposition of the Shares.  The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection with the purchase or disposition of the Shares and that the Grantee is not relying on the Company for any tax advice.

 

6.                                      Taxes.  The Grantee agrees to satisfy all applicable foreign, federal, state and local income and employment tax withholding obligations and herewith delivers to the Company the full amount of such obligations or has made arrangements acceptable to the Company to satisfy such obligations.  In the case of an Incentive Stock Option, the Grantee also agrees, as partial consideration for the designation of the Option as an Incentive Stock Option, to notify the Company in writing within thirty (30) days of any disposition of any shares acquired by exercise of the Option if such disposition occurs within two (2) years from the Date of Award or within one (1) year from the date the Shares were transferred to the Grantee.

 

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7.                                      Successors and Assigns.  The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this agreement shall inure to the benefit of the successors and assigns of the Company.  This Exercise Notice shall be binding upon the Grantee and his or her heirs, executors, administrators, successors and assigns.

 

8.                                      Construction.  The captions used in this Exercise Notice are inserted for convenience and shall not be deemed a part of this agreement for construction or interpretation.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

 

9.                                      Administration and Interpretation.  The Grantee hereby agrees that any question or dispute regarding the administration or interpretation of this Exercise Notice shall be submitted by the Grantee or by the Company to the Administrator.  The resolution of such question or dispute by the Administrator shall be final and binding on all persons.

 

10.                               Governing Law; Severability.  This Exercise Notice is to be construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties.  Should any provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

 

11.                               Notices.  Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party.

 

12.                               Further Instruments.  The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this agreement.

 

13.                               Entire Agreement.  The Notice, the Plan and the Option Agreement are incorporated herein by reference and together with this Exercise Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the Grantee.  Nothing in the Notice, the Plan, the Option Agreement and this Exercise Notice (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties.

 

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Submitted   by:
    	
 
    	
Accepted   by:
    
	
 
    	
 
    	
 
    
	
GRANTEE:
    	
 
    	
ONCOSEC   MEDICAL INCORPORATED
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Signature)
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
9810   Summers Ridge Road, Suite 110
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
San   Diego, CA 92121
    

 

10

 

EXHIBIT B

 

Form of Separation and Release Agreement

 

This Separation and Release Agreement (“Agreement”) is entered into by and between ONCOSEC MEDICAL INCORPORATED (the “Company”) and MAI HOPE LE (“Employee”), with respect to the following facts:

 

RECITALS

 

A.                                    On September 16, 2014, Employee and the Company entered into that certain Executive Employment Agreement (“Executive Employment Agreement”).

 

B.                                    On                   , Employee’s employment with the Company was terminated and according to the terms and conditions of the Executive Employment Agreement, Employee is entitled to certain severance payments so long as Employee executes this Agreement.  By execution hereof, Employee understands and agrees that this Agreement is a compromise of doubtful and disputed claims, if any, which remain untested; that there has not been a trial or adjudication of any issue of law or fact herein; that the terms and conditions of this Agreement are in no way to be construed as an admission of liability on the part of Releasees (as defined below) and that Releasees deny liability and intend merely to avoid litigation with this Agreement.

 

In consideration of the aforementioned recitals and the mutual covenants and conditions set forth below and in full settlement of any and all claims arising out of the Employee’s employment or the termination of that employment, the Employee and Company hereby agree as follows:

 

AGREEMENT

 

1.              Separation Pay.  In consideration of Employee signing this Agreement, and the covenants and releases given herein, the Company agrees to pay Employee the gross sum of $                        , less federal and state withholdings (“Severance Pay”).  Employee acknowledges that Employee would not be entitled to receive the Severance Pay absent this Agreement and the Executive Employment Agreement.  The Company will pay the Severance Pay to Employee as salary continuation pursuant to the terms of Section III.B. of the Executive Employment Agreement.

 

2.              General Release.  Employee, individually and on behalf of Employee’s heirs, assigns, executors, successors and each of them, hereby unconditionally, irrevocably and absolutely releases and discharges the Company, each of its subsidiaries and each of their respective directors, officers, employees, agents, successors and assigns, and any related corporations and/or entities (“Releasees”) from any and all losses, liabilities, claims, demands, causes of action or suits of any type, known or unknown, including but not limited to claims related directly or indirectly to Employee’s employment with Releasees, and the termination of Employee’s employment with Releasees, including claims for age discrimination in violation of the Age Discrimination and Employment Act and/or California Fair Employment and Housing Act, as well as all claims for wrongful termination, constructive wrongful termination, employment discrimination, harassment,

 

1

 

retaliation, defamation, fraud, misrepresentation, infliction of emotional distress, violation of privacy rights, and any other claims under any state or federal law.  This release also includes any claim for any and all other contractual severance, bonus, commission, other compensation or any other benefits pursuant to any other agreement, policy, and/or procedure.  Employee further represents that Employee has not and will not institute, prosecute or maintain on Employee’s own behalf, before any administrative agency, court or tribunal, any demand or claim of any type related to the matters released herein.

 

3.              Employee expressly waives all of the benefits and rights granted to Employee pursuant to California Civil Code section 1542, and any other applicable state or federal law.  Section 1542 reads as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OF OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Employee certifies that Employee has read all of this Agreement, including the release provisions contained herein and the quoted Civil Code section, and that Employee fully understands all of the same.

 

4.              Confidentiality.  Employee hereby agrees that, except as required by law or court order, Employee will not describe or discuss the Company’s or any of its subsidiaries’ business dealings and/or confidential information with any third party, and will not describe or discuss this Agreement with any third party other than Employee’s tax or legal advisors.  Employee further agrees Employee will comply with any continuing obligations under any employment agreement and/or proprietary information agreement, including but not limited to protection of the Company’s or its subsidiaries’ trade secrets and nonsolicitation obligations.

 

5.              Time for Consideration of This Agreement/Revocation.  Employee acknowledges that Employee is hereby given twenty-one (21) days from receipt of this Agreement to consider signing this Agreement, that Employee is advised to consult with an attorney before signing this Agreement, and that Employee has the right to revoke this Agreement for a period of seven (7) days after it is executed by Employee.  In the event that Employee chooses not to sign this Agreement, or chooses to revoke this Agreement once signed, Employee will not receive the Separation Pay or any other consideration Employee would not be entitled to in the absence of this Agreement.  This Agreement shall become effective eight (8) days after it has been signed by Employee.

 

6.              General Provisions.

 

a.              Employee and the Company acknowledge that they have been given the opportunity to consult with their own legal counsel with respect to the matters referenced in this Agreement, and that they have obtained and considered the

 

2

 

advice of such legal counsel as they deem necessary or appropriate, such that they have voluntarily and freely entered into this Agreement.

 

b.              This Agreement contains the entire agreement between Employee and the Company and there have been no promises, inducements or agreements not expressed in this Agreement.

 

c.               The provisions of this Agreement are contractual, not merely recitals, and shall be considered severable, such that if any provision or part thereof shall at any time be held invalid under any law or ruling, any and all such other provision(s) or part(s) thereof shall remain in full force and effect and continue to be enforceable.

 

d.              This Agreement may be pled as a full and complete defense and may be used as the basis for an injunction against any action, suit, or proceeding that may be prosecuted, instituted, or attempted by Employee in breach thereof.

 

e.               This Agreement shall be interpreted, construed, governed and enforced in accordance with the laws of the State of California.

 

f.                This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.

 

g.               In any action to enforce this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys’ fees and costs it expended in the action.

 

h.              Nothing in this Agreement shall be construed as an admission or any liability or any wrongdoing by any party to this Agreement.

 

i.                  This Agreement shall not be construed against any party on the grounds that such party drafted the Agreement.

 

j.                 Each of the Company’s subsidiaries shall be deemed to be a third party beneficiary of this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

3

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the last date written below.

 

 

	
 
    	
 
    	
MAI   HOPE LE
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ONCOSEC   MEDICAL INCORPORATED
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
Print   Name:
    	
 
    

 

4EX-4.2

 Exhibit 4.2 

EXAGEN DIAGNOSTICS, INC. 

FOURTH AMENDED AND RESTATED 

INVESTORS’ RIGHTS AGREEMENT 

THIS FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made as of October 4, 2013, by
and among Exagen Diagnostics, Inc., a Delaware corporation (the “Corporation”), and the persons listed on Schedule A hereto (the “Holders”). 

RECITALS 
 WHEREAS, the
Holders are party to that certain Third Amended and Restated Investors’ Rights Agreement of the Corporation dated September 4, 2012 (as amended, the “Prior Agreement”); and 

WHEREAS, certain of the Holders and the Corporation have entered into that certain Series D Convertible Preferred Stock Purchase and Exchange
Agreement dated the date hereof (the “Series D Purchase Agreement”), pursuant to which such Holders agreed to purchase from the Corporation, and the Corporation agreed to sell to such Holders, shares of the Corporation’s Series
D Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”); and 
 WHEREAS, the Prior
Agreement permits the Corporation and the record or beneficial Holders owning at least two thirds (2/3) of the issued and outstanding shares of Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred
Stock”), to amend the Prior Agreement; and 
 WHEREAS, as a condition to the consummation of the transactions contemplated by the
Series D Purchase Agreement, the undersigned Holders, who are the record and beneficial Holders owning at least two thirds (2/3) of the shares of Series C Preferred Stock outstanding as of the date hereof, and the Corporation desire to amend
and restate the Prior Agreement in its entirety as set forth herein, to grant each of the Holders the registration rights, information and inspection rights and other rights set forth herein with the intention that this Agreement shall become
effective concurrently with the Initial Closing. 
 AGREEMENT 

NOW THEREFORE, in consideration of the foregoing and of the mutual promises and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
 ARTICLE 1 Certain
Definitions. As used in this Agreement, the following terms shall have the following respective meanings: 
 “Adversely Affected
Holder” shall have the meaning set forth in Section 5.1. 

 “Agreement” shall mean this Investors’ Rights Agreement, as the same may be
amended from time to time. 
 “Blue Sky laws” shall mean applicable state securities laws and the rules and regulations
thereunder, all as the same shall be in effect from time to time. 
 “Certificate of Incorporation” shall mean the
Corporation’s Thirteenth Amended and Restated Certificate of Incorporation, as the same may be amended from time to time. 

“Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the
Securities Act. 
 “Common Stock” shall mean the Corporation’s Common Stock, $0.001 par value per share. 

“Corporation” shall mean Exagen Diagnostics, Inc., a Delaware corporation, its successors and assigns. 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules
and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time. 
 “Form
S-1” shall mean Form S-1 issued by the Commission or any substantially similar form then in effect. 
 “Form S-2”
shall mean Form S-2 issued by the Commission or any substantially similar form then in effect. 
 “Form S-3” shall mean
Form S-3 issued by the Commission or any substantially similar form then in effect. 
 “Holders” shall mean the Holders and
their permitted assigns under Section 2.8. 
 “Indemnitees” shall have the meaning set forth in Section 4.1 

“Major Holder” shall mean, as of the date of determination, a Holder of at least 2,000.000 shares in the aggregate of Series
C Preferred Stock or Series D Preferred Stock (as adjusted for any stock splits, stock dividends, combinations and other similar recapitalizations affecting such shares). 

“Notice” shall have the meaning set forth in Section 5.4. 

“Preferred Stock” shall mean the Series A-3 Preferred Stock, the Series B-3 Preferred Stock, the Series C Preferred Stock and
the Series D Preferred Stock. 
 “Prior Agreement” shall have the meaning set forth in the Recitals. 

“Registrable Securities” shall mean (i) all shares of Common Stock issued or issuable upon conversion of the Preferred
Stock, and (ii) all shares of Common Stock issued as 

  
 -2- 

 
(or issuable upon the conversion, exercise or exchange of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, such securities; provided, however, that shares of Common Stock which are Registrable Securities shall cease to be Registrable Securities at such time, and for so long as, such shares are eligible for sale pursuant to
Rule 144 under the Securities Act or a similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without registration and the Corporation shall have delivered to the Holder an opinion of counsel to such
effect which opinion and counsel shall be reasonably satisfactory to the Holder. 
 “Registration Expenses” shall mean all
expenses (other than Selling Expenses) incurred by the Corporation in complying with Sections 2.1 and 2.2, including without limitation, all federal and state registration, qualification, delivery expenses and filing fees, printing expenses, listing
fees and disbursements of counsel for the Corporation, blue sky fees and expenses, and the fees and disbursements of all independent certified public accountants of the Corporation, and fees and disbursements of underwriters, selling brokers,
dealers, managers or similar securities industry professionals relating to the distribution of Registrable Securities and all fees and expenses of any one special counsel for the Holders. 

“Related Transaction” shall mean a transaction whereby a current or former stockholder, director, officer or employee of the
Corporation or a relative or “associate” (as defined in the rules and regulations promulgated under the Exchange Act) of any such person or entity, directly or indirectly through his or its affiliation with any other person or entity, is a
party to a transaction with the Corporation providing for the furnishing of services (other than employment of such individuals by the Corporation) by or to, or the sale of products by or to, or rental of real or personal property from or to, or
otherwise requiring cash payments to or by, any such person or entity in excess of an aggregate of $1,000. 
 “SBA” shall
mean the United States Small Business Administration. 
 “SBIC” shall mean both vSpring SBIC, L.P. and Wasatch Venture Fund
III, L.L.C. 
 “SBIC Act” shall mean the Small Business Investment Act of 1958, as amended. 

“Securities Act” shall mean the Securities Act of 1933, as amended, or any successor federal statute, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time. 
 “Selling
Expenses” shall mean all underwriting discounts, selling commissions and counsel fees, if any, in excess of the expenses of one special counsel for the Holders paid for by the Corporation as provided in the definition of “Registration
Expenses,” of the selling stockholder applicable to the sale of Registrable Securities pursuant to this Agreement. 
 “Series
A-3 Preferred Stock” shall mean the Corporation’s Series A-3 Preferred Stock, $0.001 par value per share. 
 “Series
B-3 Preferred Stock” shall mean the Corporation’s Series B-3 Preferred Stock, $0.001 par value per share. 

  
 -3- 

 “Series C Preferred Stock” shall have the meaning set forth in the Recitals.

 “Series D Preferred Stock” shall have the meaning set forth in the Recitals. 

“Series D Purchase Agreement” shall have the meaning set forth in the Recitals. 

“Underwriter’s Representative” shall have the meaning set forth in Section 2.1(e)(ii). 

1.1 Restrictions on Transfer. 

(a) No Holder shall transfer or otherwise dispose of in any manner all or any portion of any securities of the Corporation held by such Holder
unless and until the transferee thereof has agreed in writing for the benefit of the Corporation to be bound by this Section 1.1, provided and to the extent such Section is then applicable, and: 

(i) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or 
 (ii)(A) Such Holder shall have notified the Corporation of the proposed disposition
and shall have furnished the Corporation with a detailed statement of the circumstances surrounding the proposed disposition, and (B) if reasonably requested by the Corporation, such Holder shall have furnished the Corporation with an opinion
of counsel, reasonably satisfactory to the Corporation, that such disposition will not require registration of such shares under the Securities Act. It is agreed that the Corporation will not require opinions of counsel for transactions made
pursuant to Rule 144 under the Securities Act except in unusual circumstances. 
 (ii) Notwithstanding the provisions of paragraphs
(i) and (ii) above, no such registration statement or opinion of counsel shall be necessary for a transfer by a Holder which is (A) a partnership to its partners or retired partners in accordance with partnership interests, (B) a
corporation to its shareholders in accordance with their interest in the corporation, (C) a limited liability company to its members or former members in accordance with their interest in the limited liability company, or (D) to the
Holder’s family member or trust for the benefit of an individual Holder, provided the transferee will be subject to the terms of this Section 1.1 to the same extent as if such transferee were an original Holder hereunder. 

(b) Each certificate representing any securities of the Corporation shall (unless otherwise permitted by the provisions of this Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws): 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER
SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A 

  
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VIEW TO DISTRIBUTION OR RESALE. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, OR TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY OTHER APPLICABLE SECURITIES LAWS, UNLESS THE HOLDER SHALL HAVE OBTAINED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED. 
 (c) The Corporation shall be obligated to reissue promptly unlegended certificates at the request of any Holder thereof if
the Holder shall have obtained an opinion of counsel at such Holder’s expense (which counsel may be counsel to the Corporation) reasonably acceptable to the Corporation to the effect that the securities proposed to be disposed of may lawfully
be so disposed of without registration, qualification or legend. 
 ARTICLE 2 Registration Rights. The Corporation covenants and
agrees as follows: 
 2.1 Demand Registration. 

(a) Request for Registration on Form Other Than Form S-3. For a period of three (3) years following the closing of the
Corporation’s initial underwritten public offering of Common Stock pursuant to a registration statement, and in the event that the Corporation shall receive from the Holders of no less than 50% of the outstanding Registrable Securities a
written request that the Corporation effect any registration with respect to Registrable Securities on Form S-1 or Form S-2, the Corporation shall promptly give notice thereof to all Holders of Registrable Securities. Each Holder shall have the
right, by giving notice to the Corporation within 15 days following receipt by it of such notice from the Corporation, to elect to have included in such registration such of its Registrable Securities as such Holders shall request in such notice of
election, subject to Section 2.1(c). The Corporation shall use its best efforts to effect registration of the Registrable Securities specified in such request and notice of election. The Corporation shall not be obligated to effect more than
two (2) registrations pursuant to this Section 2.1(a); provided, that a registration shall not be counted for this purpose if (A) the Corporation elects to sell stock pursuant to a registration at the same time as the
registration requested hereunder and less than all the Registrable Securities for which registration was requested are included, (B) the registration statement does not become effective or (C) the requesting Holders are not able to sell at
least 90% of the Registrable Securities requested to be included in such registration statement. 
 (b) Request for Registration on Form
S-3. If at any time and from time to time after the date which is 180 days after the closing of the Corporation’s initial underwritten public offering of Common Stock pursuant to a registration statement and thereafter, in the event that
the Corporation shall receive from the Holders of outstanding Registrable Securities a 

  
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written request that the Corporation effect any registration with respect to Registrable Securities on Form S-3 (or any successor form to Form S-3 regardless of its designation) at a time when
the Corporation is eligible to register securities on Form S-3 (or any successor form to Form S-3 regardless of its designation) for an offering of Registrable Securities, the Corporation shall promptly give notice thereof to all Holders of
Registrable Securities. Each Holder shall have the right, by giving notice to the Corporation within 15 days following receipt by it of such notice from the Corporation, to elect to have included in such registration such of its Registrable
Securities as such Holders shall request in such notice of election, subject to Section 2.1(c). The Corporation shall use its best efforts to effect registration of the Registrable Securities specified in such request and notice of election;
provided that the Corporation shall not be required to effect a registration pursuant to this Section 2.1(b) unless Holders requesting registration propose to dispose of shares of Registrable Securities having an aggregate price to the
public (before deduction of underwriting discounts and expenses of sale) of at least $1,000,000; and provided, further, that the Corporation shall not be required to effect more than two (2) such registrations pursuant to this
Section 2.1(b) within any twelve-month period. 
 (c) Allocation of Shares in Demand Registration. In the event that the
underwriter’s representative determines in good faith that marketing factors require a limitation of the shares to be included in a registration pursuant to Section 2.1(a) or 2.1(b), each Holder requesting registration shall be entitled to
include a portion of the Registrable Securities requested to be included in such registration pro rata (based on the number of Registrable Securities held). In such event, such registration shall not be counted for the registration for
purposes of Section 2.1(a) or 2.1(b), as the case may be, if such registration does not include at least 90% of the Registrable Securities requested to be included in such registration statement pursuant to Section 2.1(a) or 2.1(b), as the
case may be. 
 (d) Registration of Other Securities in Demand Right. A registration pursuant to Section 2.1(a) or 2.1(b) may
include securities other than Registrable Securities included in such registration only with the prior consent of the Holders of more than 50% of the Registrable Securities requesting such registration; provided, that the Corporation may
include its Common Stock in such registration without such consent so long as such inclusion does not prevent in any manner whatsoever the Holders of Registrable Securities from including in such registration all of the Registrable Securities that
such Holders elected to so include pursuant to Section 2.1(a) or 2.1 (b), as the case may be. 
 (e) Underwriting in Demand
Registration. 
 (i) Notice of Underwriting. If the Holders intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Corporation as a part of their request made pursuant to this Section 2.1, and the Corporation shall include such information in the notice referred to in Section 2.2(a). 

(ii) Selection of Underwriter in Demand Registration. The Corporation shall, together with the Holders engaged in a registration, enter
into an underwriting agreement with the representative (“Underwriter’s Representative”) of the underwriter or underwriters selected for such underwriting by a majority of the Holders engaged in the registration and approved by
the Corporation. 

  
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 (iii) Right of Withdrawal in Demand Registration. If a Holder disapproves of the terms of
the underwriting, it may elect to withdraw therefrom by notice to the Corporation and the Underwriter’s Representative delivered at least 10 days prior to the effective date of the registration statement. The securities so withdrawn shall also
be withdrawn from the registration statement. 
 (iv) Blue Sky in Demand Registration. In the event of any registration pursuant to
Section 2.1, the Corporation will exercise its best efforts to Register and qualify the securities covered by the registration statement under such other securities or Blue Sky laws of such jurisdictions as the Holders shall reasonably request
and as shall be reasonably appropriate for the distribution of such securities; provided, however, that the Corporation shall not be required to qualify to do business or to file a general consent to service of process in any such
states or jurisdictions. 
 (v) Optimal Registration. The Holders agree that, in exercising their rights under Section 2.1, they
will permit the registration of the Registrable Securities on such forms issued by the Commission as will minimize the Corporation’s time and expense in effecting such registration without affecting the liquidity afforded by such registration
or otherwise adversely affecting the Holders, in each case as reasonably determined by the Holders. If, for example, the Holders wish to register Registrable Securities pursuant to Section 2.1(a) at a time when the Corporation is eligible to
use Form S-3 for purposes of registering such Registrable Securities, the Holders will permit the Corporation to fulfill its obligations under Section 2.1(a) by effecting such registration on Form S-3; provided, however, that
nothing in this Section 2.1(e)(v) will permit the Corporation to fulfill such obligation by using Form SB-1, SB-2 or similar forms limited to “Small Business Issuers,” without the consent of the Holders of a majority of the
Registrable Securities to be included in such registration. 
 (vi) Delay of Registration. The Holders agree that for a period of 90
days following the date of the effectiveness of a registration under Section 2.2 pursuant to which the Holders have sold not less than 75% of the aggregate amount of the Registrable Securities that the Holders specified in their notice to the
Corporation pursuant to Section 2.2(a), they will not exercise their right to demand a registration pursuant to Section 2.1(a) or 2.1(b). In addition, the Corporation shall not be required to effect a registration pursuant to this
Section 2.1 if the Corporation shall furnish to the Holders within thirty (30) days of any registration request a certificate signed by the President of the Corporation stating that in the good faith judgment of the Board of Directors of
the Corporation, it would be seriously detrimental to the Corporation and its stockholder for such registration to be effected at such time, in which event the Corporation shall have the right to defer the filing of the registration statement for a
period of not more than ninety (90) days after the receipt of the request of the Holder or Holders under this Section 2.1; provided, however, that the Corporation shall not utilize this right more than once in any twelve
month period. 
 2.2 Piggyback Registration. 

(a) Notice of Piggyback Registration and Inclusion of Registrable Securities. Subject to the terms of this Agreement, in the event
during the period of three (3) years following the closing of the Corporation’s initial underwritten public offering of Common Stock pursuant 

  
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to a registration statement, the Corporation decides to register any of its Common Stock (either for its own account or the account of a Holders or other security holder exercising demand
registration rights) (but without any obligation to do so), other than (i) a registration statement which exclusively relates to the registration of securities under an employee stock option, purchase, bonus or other benefit plan, or
(ii) a registration on any form that does not include substantially the same information (other than information relating specifically to this disposition of the Registrable Securities and the Holders) as would be required to be included in a
registration statement covering the sale of the Registrable Securities, the Corporation will: (A) promptly give the Holders written notice thereof (which shall include a list of the jurisdictions in which the Corporation intends to attempt to
qualify such securities under the applicable Blue Sky laws) and (B) include in such registration (and any related qualification under Blue Sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities
specified in a written request delivered to the Corporation by the Holders within 15 days after delivery of such written notice from the Corporation. 

(b) Underwriting in Piggyback Registration. 

(i) Notice of Underwriting. If the registration of which the Corporation gives notice is a registered public offering involving an
underwriting, the Corporation shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a). In such event the right of the Holders to registration shall be conditioned upon such underwriting and the inclusion of
a Holder’s Registrable Securities in such underwriting to the extent provided in this Section 2.2. The Holders shall, together with the Corporation, enter into an underwriting agreement with the Underwriter’s Representative for such
offering. The Holders shall have no right to participate in the selection of the underwriters for an offering pursuant to this Section 2.2. 

(ii) Marketing Limitation in Piggyback Registration. In the event the Underwriter’s Representative advises the Corporation and the
Holders engaged in a registration under Section 2.2(a) in writing that market factors (including, without limitation, the aggregate number of shares of Common Stock requested to be registered, the general condition of the market, and the status
of the persons proposing to sell securities pursuant to the registration) require a limitation of the number of shares to be underwritten, the Underwriter’s Representative (subject to the allocation priority set forth in clause
(iii) below) may exclude some or all of the Registrable Securities from such registration and underwriting. 
 (iii) Allocation of
Shares in Piggyback Registration. In the event that the Underwriter’s Representative limits the number of shares to be included in a registration pursuant to Section 2.2(a), each Holder, upon requesting registration shall be entitled
to include a portion of the Registrable Securities requested to be included in such registration pro rata (based on the number of Registrable Securities held) with all other requesting Holders. Unless all Registrable Securities and such other
piggybacking shares requested to be included in such registration are so included, no other securities may be included in the registration statement. 

(iv) Withdrawal in Piggyback Registration. If any Holder disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom at no cost to such Holder by written notice to the Corporation and the underwriter delivered at least 10 days prior 

  
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to the effective date of the registration statement. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. 

(v) Blue Sky in Piggyback Registration. In the event of any registration of Registrable Securities pursuant to Section 2.2(a), the
Corporation will exercise its best efforts to register and qualify the securities covered by the registration statement under the Blue Sky laws of such jurisdictions as the Holders shall reasonably request and as shall be reasonably appropriate for
the distribution of such securities; provided, however, that the Corporation shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. 

(vi) Termination or Postponement. Without any obligation to the Holders, upon notice to the Holders, the Corporation may terminate or
postpone any registration commenced by it under Section 2.2. 
 2.3 Expenses of Registration. All Registration Expenses incurred
in connection with any registration hereunder shall be borne by the Corporation. Selling Expenses to be borne by the selling stockholder shall be borne pro rata on the basis of the number of Registrable Securities registered by such selling
stockholder. 
 2.4 Registration Generally. Whenever required under this Article 2 to effect the registration of any Registrable
Securities, the Corporation shall, as expeditiously as reasonably possible: 
 (a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to 120 days; 
 (b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement; 

(c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them; 

(d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Corporation shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions; 
 (e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing 

  
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underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement; 

(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary’ to make the statement therein not misleading in light of the circumstances then existing; 

(g) Cooperate with the selling Holders of Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may
request at least 3 days prior to any sale of Registrable Securities to the underwriters; 
 (h) Cause all such Registrable Securities
registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Corporation are then listed; 

(i) Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such registration; and 
 (j) Use its best efforts to furnish, at
the request of any Holder requesting registration of Registrable Securities pursuant to this Article 2, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this
Article 2, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion,
dated such date, of the counsel representing the Corporation for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter dated such date, from the independent certified public accountants of the Corporation, in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities. 

2.5 Information Furnished by Holders. 

(a) It shall be a condition precedent of the Corporation’s obligations under Article 2 of this Agreement to any Holder that such Holder
furnish to the Corporation such information regarding the Holder, the Registrable Securities held by it and the distribution proposed by the Holder as the Corporation may reasonably request to effect any such registration and as are customarily
provided by selling stockholder. 

  
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 (b) The Corporation shall have no obligation with respect to any registration requested pursuant
to Section 2.1(a) or 2.1(b) hereof if, due to the failure of any Holder or Holders to provide the information requested pursuant to Section 2.5(a), the number of shares or the anticipated aggregate offering price of the Registrable
Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Corporation’s obligation to initiate such registration as specified in
Section 2.1(a) or 2.1(b), as applicable. 
 2.6 Indemnification. 

(a) Indemnification by the Corporation. In the event of the registration of any Registrable Securities under the Securities Act
pursuant to the provisions hereof, the Corporation will, to the extent permitted by law, indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each such person being hereinafter sometimes referred to as an “indemnified person”), from and against any losses, claims,
damages, liabilities or expenses, joint or several, to which such indemnified person may become subject under the Securities Act, the Exchange Act, state securities laws and Blue Sky laws or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of or are based upon (i) any, untrue statement or alleged untrue statement of any material fact contained or incorporated by reference in any registration statement or prospectus
or any amendment or supplement thereto or in any preliminary prospectus, or any document incorporated by reference therein, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (iii) any violation of the Securities Act, the Exchange Act, any “blue sky” or other state securities laws or any regulation promulgated thereunder and the Corporation will reimburse each
such indemnified person for any legal or any other expenses reasonably incurred by such indemnified person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Corporation will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made or incorporated by reference in the registration statement, prospectus, amendment, supplement or in reliance upon and in conformity with written information furnished to the Corporation by such indemnified person stating
specifically that it is for use in preparation thereof; and provided, further, that the Corporation shall have no obligation hereunder nor any liability with respect to any settlement of any action or proceeding effected without its
written consent, which consent shall not be unreasonably withheld, delayed or conditioned, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, the Corporation agrees to
indemnify and hold harmless such indemnified parties from and against any loss or liability by reason of such settlement or judgment. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such
indemnified person and shall survive the transfer of such Registrable Securities by such seller. 
 (b) Indemnification by Holder of
Registrable Securities. In the event of the registration of any Registrable Securities under the Securities Act pursuant to the provisions hereof each Holder on whose behalf such Registrable Securities shall have been registered will,

  
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to the extent permitted by law, indemnify and hold harmless the Corporation, each director of the Corporation, each officer of the Corporation who signs the registration statement, each
underwriter, broker and dealer, if any, who participates in the offering and sale of such Registrable Securities and each other person, if any, who controls the Corporation or any such underwriter, broker or dealer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (each such person being hereinafter sometimes referred to as an “indemnified person”), against any losses, claims, damages or liabilities, joint or
several, to which the Corporation, such director, officer, underwriter, broker or dealer or controlling person may become subject under the Securities Act, the Exchange Act, state securities laws and Blue Sky laws or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in any registration statement
or prospectus or any amendment or supplement thereto or any document incorporated by reference therein, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, which untrue statement or alleged untrue statement or omission or alleged omission has been made or incorporated therein in reliance upon and in conformity with written information furnished to the
Corporation by such Holder stating specifically that it is for use in preparation thereof, and will reimburse the Corporation and each such indemnified person for any legal or any other expenses reasonably incurred by the Corporation or such
indemnified person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the obligations of each holder hereunder shall be limited to an amount equal to the net
proceeds to such Holder of securities sold as contemplated herein; and provided, further, that no holder shall have any obligation hereunder or be liable with respect to any settlement of any action or proceeding effected without its
written consent, which consent shall not be unreasonably withheld, delayed or conditioned. 
 (c) Procedure. Promptly after receipt
by an indemnified party under this Section 2.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this
Section 2.6, deliver to the indemnifying party a written notice of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than
pursuant to the provisions of this Section 2.6 except to the extent materially prejudiced thereby. In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will have the right to participate in, and to the extent that the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. No indemnifying party will consent to the entry of any judgment or enter into any settlement which (I) does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all 

  
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liability in respect to such claim or litigation or (ii) includes a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. 

(d) Contribution. If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be
unavailable to a party that would have been an indemnified party under this Section 2.6 with respect to any losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to therein, then each party that would have
been an indemnifying party thereunder shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and such indemnified party on the other in connection with the statement or omission which resulted in such losses, claims,
damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or such indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action or claim. The Corporation and each holder of Registrable Securities agrees that it would not be just and equitable if contribution pursuant to this Section 2.6(d)
were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 2.6(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above in this Section 2.6 shall include any legal or other expenses reasonably incurred by such indemnified party in connection with investigation
or defending any such action or claim if the indemnifying Party has assumed the defense of any such action in accordance with the provisions thereof). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 
 (e)
Underwriting Agreement to Control. Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering
are in conflict with the foregoing provisions, as between the Corporation and the Holder, on the one hand, and the underwriter, on the other hand, the provisions in the underwriting agreement shall control. 

(f) Limitation on Liability. The liability of any Holder of Registrable Securities pursuant to this Section 2.6 shall not exceed
the net proceeds received by such holder from a sale of Registrable Securities pursuant to a registration hereunder. 
 2.7 Current
Public Information. At all times after the Corporation has filed a registration statement pursuant to the Securities Act, the Corporation will use its best efforts to file all reports required under the Securities Act or the Exchange Act and
will take such further action as may be reasonably required to enable any holder of “restricted securities” (as defined in 

  
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Rule 144 adopted by the Commission under the Securities Act) to sell such securities pursuant to Rule 144, as amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission. 
 2.8 Transfer of Registration Rights. The rights under this Agreement may be assigned by any Holder to the extent of
the Registrable Securities assigned to a transferee or assignee who acquires at least 1,000,000 shares of a Holder’s Preferred Stock or, if a Holder owns less than 1,000,000 shares of Preferred Stock, all of such Holder’s Preferred Stock,
or an equivalent amount of Registrable Securities issued upon conversion thereof (adjusted for any dividends, subdivisions, combinations or reclassifications with respect to such shares), provided that (i) such transfer may otherwise be
effected in accordance with applicable securities laws, (ii) that the Corporation is given written notice by the Holder at the time of or within a reasonable time after said transfer, stating the name and address of said transferee or assignee
and identifying the securities with respect to which such registration rights are being assigned and (iii) that the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Article 2. The foregoing
share limitation shall not apply, however, to transfers by a Holder which is a limited partnership to its partners or retired partners. 

2.9 Limitations on Subsequent Registration Rights. From and after the date hereof, the Corporation shall not, without the prior written
consent of the Holders (which consent will not be unreasonably withheld) of not less than a majority of the Registrable Securities then held by all Holders, enter into any agreement with any prospective holder of any securities of the Corporation
which would allow such prospective holder to demand registration of its securities or to include such securities in any registration filed under Section 2.1 hereof, unless under the terms of such agreement, such prospective holder may include
such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders which are included. 

2.10 “Market Stand-Off” Agreement. Each Holder hereby agrees that, for a period of duration specified by the Corporation and
an underwriter of common stock or other securities of the Corporation (such period not to exceed 180 days) following the effective date of the first registration statement of the Corporation filed under the Securities Act which covers securities to
be sold on the Corporation’s behalf to the public in an underwritten offering, it shall not, to the extent requested by the Corporation and its underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the Corporation held by it at any time during such period except Registrable
Securities included in such registration; provided, however, that such agreement shall not be required unless all officers and directors of the Corporation and all other persons with registration rights (whether or not pursuant to this
Agreement) enter into similar agreements. In order to enforce the foregoing covenant, the Corporation may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period. 
 2.11 Termination of Registration Rights. The right of any
Holder to request registration or inclusion in any registration pursuant to this Agreement shall terminate after the later of: 

  
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 (a) three (3) years following the closing of the Corporation’s initial underwritten
public offering of Common Stock; and 
 (b) such date, on or after the closing of the Corporation’s initial underwritten public
offering of Common Stock, on which such Holder holds less than one percent (1%) of the Corporation’s outstanding Common Stock (treating all shares of Preferred Stock on an as-converted basis) and may immediately sell all shares of its
Registrable Securities under Rule 144 during any ninety-day period. 
 ARTICLE 3 Covenants of the Corporation. The Corporation
covenants and agrees that, as long as any shares of Preferred Stock remain outstanding, it will observe and perform the following covenants and provisions: 

3.1 Inspection. The Corporation will permit each Major Holder or its representative, at such Major Holder’s expense, and examiners
of the SBA, to visit and inspect the properties and assets of the Corporation, to examine its books of account and records, and to discuss the Corporation’s affairs, finances and accounts with the Corporation’s officers, senior management
and accountants, all at such reasonable times as may be requested by such Major Holder or the SBA. The Major Holder shall maintain the confidentiality of any confidential and proprietary information so obtained by it which is not otherwise available
from other sources that are free from similar restrictions; provided, however, that the foregoing, shall in no way limit or otherwise restrict the ability of each Major Holder or its authorized representatives to disclose any such
information concerning the Corporation which it may be required to disclose (a) to its partners, board members or stockholder, to the extent required to satisfy its fiduciary obligations to such persons, or (b) otherwise pursuant to or as
required by law. 
 3.2 Financial Statements. The Corporation will furnish or cause to be furnished: 

(a) Monthly and Quarterly Reports. To each Major Holder, (i) within thirty (30) days after the end of each month, consolidated
monthly unaudited financial statements (including a balance sheet and a statement of operations for the month and year-to-date, each in comparative form with the previous month) for the previous month (all prepared in accordance with generally
accepted accounting principles consistently applied), and (ii) within forty-five (45) days of the end of each quarter, consolidated quarterly unaudited financial statements (including a balance sheet and a statement of operations for the
quarter and year-to-date, each in comparative form with the previous quarter) for the previous quarter, all prepared in accordance with generally accepted accounting principles consistently applied), in each case with management’s analysis of
results and a statement of the Chief Financial Officer explaining any material differences from budget. The foregoing financial statements shall be certified by the Chief Executive Officer or Chief Financial Officer of the Corporation to the effect
that such statements fairly present the financial position and financial results of the Corporation for the fiscal period covered. 
 (b)
Annual Financial Statements. To each Holder, within one hundred twenty (120) days after the end of each fiscal year of the Corporation (i) the consolidated and consolidating balance sheets of the Corporation and its subsidiaries as
at the end of such year, 

  
 -15- 

 
and (ii) the related consolidated and consolidating statements of income, retained earnings and cash flows for such year, setting forth in comparative form with respect to such consolidated
financial statements figures for the previous fiscal year, all in reasonable detail, together with the opinion thereon of the Corporation’s independent certified public accountants, which accountants shall be a nationally recognized accounting
firm reasonably acceptable to the Holders, and which opinion shall state that such financial statements have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding fiscal
year (except for changes, if any, which shall be specified and approved in such opinion) and that the audit by such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards
related to reporting. 
 (c) Budget and Operating Forecast. To each Major Holder, for each fiscal year of the Corporation, at least
thirty (30) days prior to the beginning of each fiscal year, a business plan, projections and monthly budget for the coming year, together with a capital expenditures budget, approved by the Corporation’s Board of Directors; and such
budget shall be accepted as the Corporation’s budget for such fiscal year when it has been approved by a majority vote of the Board of Directors. The approved budget shall be reviewed by the Corporation periodically and all necessary changes or
revisions to such budget shall be resubmitted to the Board of Directors and shall be accepted when approved in accordance with, and the Corporation shall not make any such changes to the budget without such approval in accordance with, the majority
of the Board of Directors. 
 (d) Termination of Certain Provisions. The provisions of paragraph (a), (b) and (c) of this
Section 3.2 shall terminate at the time the Corporation becomes subject to the reporting provisions of the Securities Exchange Act of 1934, as amended. 

(e) Auditor’s Letters. To each Major Holder, promptly following receipt by the Corporation, each audit response letter,
accountant’s management letter and other written report submitted to the Corporation by its independent public accountants in connection with an annual or interim audit of the books of the Corporation. 

(f) Use of Proceeds. The Corporation will deliver to each SBIC from time to time promptly following such SBIC’s request, a written
report, certified as correct by the Corporation’s chief financial officer, verifying the purposes and amounts for which proceeds from the investment in the Preferred Stock have been disbursed. The Corporation will supply to each SBIC such
additional information and documents as such SBIC reasonably requests with respect to its use of proceeds and will permit such SBIC to have access to any and all Corporation records, information and personnel as such SBIC deems necessary to verify
how such proceeds have been or are being used. 
 (g) Information Covenant. Within 60 days after the end of the fiscal year of the
Corporation, the Corporation will furnish or cause to be furnished to each SBIC information required by the SBA on an SBA form provided by each SBIC concerning the economic impact of such SBIC’s investment in the Corporation, for (or as of the
end of) such fiscal year, including but not limited to, information concerning full-time equivalent employees; Federal, state and local income taxes paid; gross revenue; source of revenue growth; after-tax profit or loss; and Federal, state and
local income tax withholding. The Corporation will also furnish or cause to be 

  
 -16- 

 
furnished to each SBIC such other information regarding the business, affairs and condition of the Corporation as such SBIC may from time to time reasonably request. 

3.3 Management Rights. Each Major Holder will be entitled to consult with and advise management of the Corporation on significant
business issues, including management’s proposed annual operating plans, and management will meet with Major Holders regularly during each year at the Corporation’s facilities at mutually agreeable times for such consultation and advice
and to review progress in achieving said plans. 
 3.4 Insurance. The Corporation shall keep its insurable properties insured at all
times to such extent and against such risks, including fire, and other risks insured against by extended coverage, as is customary with companies of comparable size and financial condition in the same or similar businesses; maintain in full force
and effect product liability insurance and public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by the
Corporation, in such amount as the Corporation shall reasonably deem necessary; and maintain workers’ compensation insurance and such other insurance as may be required by law. In addition, all of the foregoing insurance maintained by the
Corporation shall be of types and in amounts such that the Corporation at all times will be in compliance in all respects with all federal, state, local and foreign laws, ordinances, regulations and orders applicable to its business that govern such
insurance. 
 3.5 Obligations and Taxes. The Corporation shall pay all of its indebtedness and obligations promptly and in accordance
with their terms and pay and discharge promptly all taxes imposed upon it or its income or profits or in respect of its property, before the same shall become in default, as well as all lawful claims for labor and supplies or otherwise which, if
unpaid, might become a lien or charge upon such properties or any part thereof; provided, however, that the Corporation shall not be required to pay and discharge or to cause to be paid and discharged any such taxes so long as the
validity or amount thereof shall be contested in good faith by appropriate proceedings, the Corporation, as applicable, shall set aside on its books such reserves as are required by generally accepted accounting principles with respect to any such
taxes and no liens have been assessed against the Corporation or any of its assets. 
 3.6 Existence; Maintenance of Property. The
Corporation shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its corporate existence, material rights, licenses, permits and franchises and comply with all laws and regulations applicable to the
conduct of its business and the ownership of its property; at all times maintain and preserve all material property necessary in the conduct of the business and keep the same in good repair, working order and condition, and from time to time make,
or cause to be made, all needed and proper repairs, renewals and replacements thereto, so that the business carried on in connection therewith may be properly conducted at all times. 

3.7 System of Accounting. The Corporation shall maintain a system of accounting established and administered in accordance with
generally accepted accounting principles. 

  
 -17- 

 3.8 Related Transaction. The Corporation shall not, directly or indirectly, enter into any
Related Transaction other than on an arm’s length basis, on terms no less favorable to the Corporation than could be obtained from non-related persons and with the prior approval of the Board of Directors, including one member appointed by the
Holders of the Preferred Stock. 
 3.9 Loans and Investments. The Corporation will not make any loan or advance (other than advances
in the ordinary course of business consistent with past practice with regard to valid business expenses) or extend credit to any person or entity (other than trade credit in the ordinary course consistent with past practice), or make any investment
in such person or entity, or its securities, except (a) investments in United States Treasury obligations, (b) certificates of deposit, bankers acceptances and other “money market instruments” issued by any bank or trust company
organized under the laws of the United States or any state thereof and having capital and surplus not less than $100,000,000, (c) open market commercial paper bearing Standard & Poor’s highest credit rating or by another similar
nationally recognized firm, and repurchase agreements with any bank or trust company organized under the laws of the United States or any state thereof and having capital and surplus not less than $ 100,000,000 relating to United States government
obligations, in each case maturing in less than one year, and (d) investments in mutual funds registered under the Investment Company Act of 1940), which have net assets of at least $200,000,000 and at least eighty-five percent (85%) of
whose assets consist of obligations having an investment grade credit grading from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc. and/or equity securities of entities that have obligations with such credit
ratings. 
 3.10 Compliance with Laws. The Corporation shall comply with all applicable laws, rules, regulations and orders,
noncompliance with which could adversely affect its business or condition, financial or otherwise. The Corporation will not offer, sell or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act)
that will be integrated with the sale of the Series D Preferred Stock in a manner that would require the registration of the Series D Preferred Stock under the Securities Act. 

3.11 Dividends. Except as otherwise provided for in the Certificate of Incorporation, the Corporation shall not, declare, set aside, or
make any payment of a dividend or make any other distribution in respect of its capital stock, repurchase or redeem any of its capital stock or make any other payments to any holder of its outstanding capital stock. 

3.12 Reservation of Conversion Stock. The Corporation will, upon any increase in the number of shares of Common Stock issuable upon
conversion of the Preferred Stock, reserve additional shares of Common Stock for issuance upon such conversion, so that the number of shares of Common Stock so authorized will not at any time be less than the number of such shares issuable upon such
conversion. 
 3.13 Press Releases. The Corporation agrees to give the Major Holders advanced notice of, and to consult with the
Major Holders concerning the content of, any public announcements that the Corporation intends to make. 

  
 -18- 

 3.14 Internal Revenue Code Section 1202. The Corporation covenants that so long as
any of the Preferred Stock (or Common Stock issued upon conversion thereof) are held by a Major Holder (or a permitted transferee in whose hands such Preferred Stock or Common Stock is eligible to qualify as “qualified small business
stock” as defined in Section 1202(c) of the Internal Revenue Code), it will use its best efforts (including complying with any applicable filing or reporting requirements imposed by the Internal Revenue Code on issuers of “qualified
small business stock”) to cause the Preferred Stock and Common Stock issued upon conversion thereof to qualify as “qualified small business stock”; provided, however, that “best efforts’ as used in this
Section 3.14 shall not be construed to require the Corporation to operate its business in a manner that would adversely affect its business, limit its future prospects, or alter the timing or resource allocation related to its planned
operations or financing activities. When requested by a Major Holder, the Corporation will provide a letter or certificate to the effect that the Preferred Stock and Common Stock issued upon conversion or exercise thereof purchased from the
Corporation are “qualified small business stock.” 
 3.15 SBIC Permitted Activities and Proceeds. Neither the Corporation
nor any of its Affiliates (as defined in the SBIC Act) will engage in any activities or use directly or indirectly the proceeds from the sale of the Preferred Stock for any purpose for which a small business investment company is prohibited from
providing funds by the SBIC Act, including 13 C.F.R. §107. The general categories are (i) relenders or reinvestors, (ii) passive businesses, (iii) real estate businesses, (iv) project financing and (v) foreign
investment. The Corporation will not change within one year of the closing date of such SBIC’s investment in the Corporation, the Corporation’s business activity to a business activity which a small business investment company is
prohibited from providing funds by the SBIC Act. 
 3.16 Termination of this Section 3.16. The provisions of this Section 3
shall terminate immediately upon the closing of the Corporation’s initial underwritten public offering of Common Stock. 
 ARTICLE 4
Indemnification. 
 4.1 The Corporation shall hold harmless and indemnify the Holders and their respective direct and indirect
subsidiaries, Affiliates and corporations, and each of their partners, officers, directors, managers, employees, stockholders, agents, and other representatives (collectively, referred to as the “Indemnitees”) against any and all
expenses (including attorneys’ fees), damages, judgments, fines, amounts paid in settlements, or any other amounts that an Indemnitee incurs as a result of any claim or threatened, pending or completed action, suit, arbitration, investigation
or other proceeding arising out of, or relating to the Indemnitee’s performance of its obligations or the exercise of its rights in accordance with the terms of this Agreement or the Certificate of Incorporation or Indemnitee’s status as a
security holder of the Corporation; provided, however, that no Indemnitee shall be entitled to be held harmless or indemnified by the Corporation for acts, conduct or omissions by any Indemnitee (i) if the Indemnitee failed to act
in good faith or in a manner that such Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, or, (ii) with respect to any criminal action or proceeding, if the Indemnitee’s conduct was unlawful.

  
 -19- 

 4.2 The Corporation shall reimburse within 30 days after the receipt by the Corporation of a
written statement or statements from an Indemnitee requesting such reimbursement all reasonable expenses incurred by an Indemnitee (or any third party indemnitor of such Indemnitee) in connection with any threatened, pending or completed action,
suit, arbitration, investigation or other proceeding for which the Corporation is obligated to indemnify such Indemnitee according to Section 4.1 above. 

ARTICLE 5 Miscellaneous. 

5.1 Waivers and Amendments. This Agreement may not be amended, modified or waived at any time, unless such amendment, modification or
waiver is first approved in writing by (a) the Holders owning at least two thirds (2/3) of the issued and outstanding shares of Series D Preferred Stock, (b) the Holders owning at least two thirds (2/3) of the issued and
outstanding shares of Series C Preferred Stock and (c) the Corporation; provided, however, that if any amendment, modification or waiver would apply to a Holder (each, an “Adversely Affected Holder”) in a fashion
different than how such amendment, modification or waiver applies to all Holders, then such amendment, modification or waiver shall not be effective as to such Adversely Affected Holder unless consented to by such Adversely Affected Holder. Any
amendment, modification or waiver so effected shall be binding upon the Corporation, each of the parties hereto and any assignee of any such party. In addition, the Corporation may waive performance of any obligation owing to it, as to some or all
of the Holders, or agree to accept alternatives to such performance, without obtaining the consent of any Holder. No waiver of any breach of this Agreement extended by any party hereto to any other party shall be construed as a waiver of any rights
or remedies of any other party hereto or with respect to any subsequent breach. Notwithstanding the foregoing, without the written consent of the Major Holders holding at least two thirds (2/3) of the shares of Series C Preferred Stock and
Series D Preferred Stock issued and outstanding held by all such Major Holders, the obligations of the Corporation and the rights of the parties under Sections 3.1, 3.2(a), 3.2(c), 3.2(e), 3.3, 3.14 and 3.15 of this Agreement may not be amended,
modified or waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely). 

5.2 Governing Law. This Agreement shall be governed in all respects by the laws of the State of Delaware, without regards to conflict
of laws principles. 
 5.3 Effectiveness; Entire Agreement. This Agreement shall become effective concurrently with the consummation
of the purchase and sale of the Series D Preferred Stock under the Series D Purchase Agreement at the Initial Closing. This Agreement and the other documents delivered in connection herewith constitute the full and entire understanding of the
parties with regard to the subjects hereof and thereof, and this Agreement shall supersede and cancel all prior agreements between the parties hereto with regard to the subject matter hereof, including the Prior Agreement. 

5.4 Notices, etc. All notices and other communications required or permitted hereunder (each, a “Notice”) shall be in
writing and shall be delivered by overnight courier service or mailed by first class mail, postage prepaid, certified or registered mail, return receipt requested, addressed (a) if to a Holder, at such party’s address as set forth in the
Corporation’s records, or at such other address as such party shall have furnished to the Corporation in writing 

  
 -20- 

 
or (b) if to the Corporation, to it at the address set forth on the Corporation’s signature page hereto or other address as the Corporation shall have furnished to the Holder in
writing. All Notices shall be deemed effectively given: (x) upon personal delivery to the party to be notified, (y) three (3) days after having been sent by first class mail, postage prepaid, certified or registered mail, return
receipt requested and (z) one (1) day after deposit with an overnight courier service. 
 5.5 Severability. In case any
provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby. 

5.6 Title and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. 
 5.7 Attorneys’ Fees. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and disbursements in addition to any other relief to which such party may be entitled. 

5.8 Counterparts; Execution by Facsimile Signature. This Agreement may be executed in any number of counterparts, each of which shall
be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s) which shall be binding on the party delivering same, to be followed by delivery of originally executed signature
pages. 
 5.9 Aggregation of Stock. All shares of Preferred Stock and Common Stock of the Corporation held or acquired by affiliated
entities or persons shall be aggregated for the purpose of determining the availability of any rights under this Agreement. 
 5.10
Additional Investors. Notwithstanding anything to the contrary contained herein, if the Corporation shall issue additional shares of Preferred Stock from time to time, any purchaser of such shares of Preferred Stock may become a party to this
Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed a “Holder” and a party hereunder. 

*  *  *  *  *  *  * 

  
 -21- 

 IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amended and Restated
Investors’ Rights Agreement as of the date first above written. 
  

			
	CORPORATION:
	
	EXAGEN DIAGNOSTICS, INC.
		
	By:	 	

		 	  

	Name:	 	Ron Rocca
	Title:	 	President and Chief Executive Officer
	
	Address:
	
	 Exagen Diagnostics, Inc.
 801
University, S.E. Suite 209
 Albuquerque, NM 87106

	Attention: Scott Glenn
	
	With a copy to:
	
	Brownstein Hyatt Farber Schreck, LLP
	201 Third Street, NW
	Albuquerque, NM 87102
	Attention: Bonnie J. Paisley
	
	HOLDERS:
	
	WASATCH VENTURE FUND III, LLC
		
	By:	 	  

	Name:	 	Kent Madsen
	Title:	 	Managing Director
	
	WASATCH NEW MEXICO FUND, LLC
		
	By:	 	  

	Name:	 	Ken Madsen
	Title:	 	Managing Director

 IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amended and Restated
Investors’ Rights Agreement as of the date first above written. 
  

			
	CORPORATION:
	
	EXAGEN DIAGNOSTICS, INC.
		
	By:	 	  

	Name:	 	Ron Rocca
	Title:	 	President and Chief Executive Officer
	
	Address:
	
	Exagen Diagnostics, Inc.
	801 University, S.E. Suite 209
	Albuquerque, NM 87106
	Attention: Scott Glenn
	
	With a copy to:
	
	Brownstein Hyatt Farber Schreck, LLP
	 201 Third Street, NW

Albuquerque, NM 87102

	Attention: Bonnie J. Paisley
	
	HOLDERS:
	
	WASATCH VENTURE FUND III, LLC
		
	By:	 	

		 	  

	Name:	 	Kent Madsen
	Title:	 	Managing Director
	
	WASATCH NEW MEXICO FUND, LLC
		
	By:	 	

		 	  

	Name:	 	Ken Madsen
	Title:	 	Managing Director

 
					
	VSPRING SBIC, L.P.
		
	By:	 	vSpring SBIC Management, L.L.C.,
		 	its general partner
			
		 	By:	 	  

		 	Name:	 	Dinesh Patel
		 	Title:	 	Managing Director
	
	NMSIC CO-INVESTMENT FUND, L.P.
	
	By: Sun Mountain Capital Partners LLC, its general partner
			
		 	By:	 	

		 		 	  

		 		 	Brian Birk, Managing Partner
			
		 	By:	 	

		 		 	  

		 		 	Sally Corning, Partner
	
	MESA VERDE VENTURE PARTNERS, L.P.
		
	By	 	  

		 	Name:	 	
		 	Title:	 	
	
	JAMES J. SCHWARZ and JEANETTE M.
	SCHWARZ, CO-TRUSTEES OF THE
	SCHWARZ TRUST
		
	By	 	  

		 	James J. Schwarz
		
	By	 	  

		 	Jeanette M. Schwarz

  

	
	  

	LISA DAVIS

 
					
	VSPRING SBIC, L.P.
		
	By:	 	vSpring SBIC Management, L.L.C.,
		 	its general partner
			
		 	By:	 	  

		 	Name:	 	Dinesh Patel
		 	Title:	 	Managing Director
	
	NMSIC CO-INVESTMENT FUND, L.P.
	
	By: Sun Mountain Capital Partners LLC, its general partner
			
		 	By:	 	  

		 		 	Brian Birk, Managing Partner
			
		 	By:	 	  

		 		 	Sally Corning, Partner
	
	MESA VERDE VENTURE PARTNERS, L.P.
		
	By	 	        

		 	  

		 	Name:	 	DANIEL C. WOOD
		 	Title:	 	Member
	
	JAMES J. SCHWARZ and JEANETTE M.
	SCHWARZ, CO-TRUSTEES OF THE
	SCHWARZ TRUST
		
	By	 	  

		 	James J. Schwarz
		
	By	 	  

		 	Jeanette M. Schwarz

  

	
	  

	LISA DAVIS

 
			
	NEW TECH I, L.P.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	  
 PAMELA J.
SULLIVAN

	THOMAS A. TUMOLILLO
	
	QUATRO VENTURES, LLC
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	  
 RAY
RADOSEVICH

	
	SOUTHWEST MEDICAL VENTURES, INC.
		
	By:	 	    

		 	  

	Name:	 	Waneta C Tuttle
	Title:	 	President
	
	TULLIS-DICKERSON CAPITAL FOCUS III, L.P.
	By Tullis-Dickerson Partners III, L.L.C., its general partner
		
	By:	 	  

	Name:	 	James L. L. Tullis
	Title:	 	Manager
	
	 BERGE G. HAGOPIAN AND MARY ANN

 
			
	NEW TECH I, L.P.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	  
 PAMELA J.
SULLIVAN

	THOMAS A. TUMOLILLO
	
	QUATRO VENTURES, LLC
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	  
 RAY
RADOSEVICH

	
	SOUTHWEST MEDICAL VENTURES, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	TULLIS-DICKERSON CAPITAL FOCUS III, L.P.
	By Tullis-Dickerson Partners III, L.L.C., its general partner
		
	By:	 	        

		 	  

	Name:	 	James L. L. Tullis
	Title:	 	Manager
	
	BERGE G. HAGOPIAN AND MARY ANN
	HAGOPIAN, CO-TRUSTEES, HAGOPIAN
	FAMILY TRUST UA DTD 03/25/88

 
			
	By:	 	  

		 	Berge K. Hagopian, Trustee
	
	TIMOTHY M. PENNINGTON AND MELISSA
	PENNINGTON AS TRUSTEES OF THE
	PENNINGTON FAMILY REVOCABLE TRUST
	UA DATED MAY 23, 1984
		
	By:	 	  

		 	Timothy M. Pennington, Trustee
	
	ENDOCHOICE, INC.
		
	By	 	  

	Name:	 	
	Title:	 	
	
	HUNT HOLDINGS LIMITED PARTNERSHIP
	By:	 	Hunt Vest, LLC, its General Partner
	By:	 	Hunt Guaranty Inc., its Sole Member
		
	By:	 	

		 	  

	Matthew O. Hunt, Manager
	
	CCP/EXAGEN, L.P.
		
	By	 	  

	Name:	 	Ebetuel Pallares-Venegas
	Title:	 	Managing Partner
	
	VSPRING, L.P.
		
	By:	 	vSpring Management, LLC
		 	its General partner
		
	By:	 	  

	Name:	 	Dinesh Patel
	Title:	 	Managing Director

 
			
	VSPRING PARTNERS, L.P.
		
	By:	 	vSpring Management, LLC
		 	its General partner
		
	By:	 	  

	Name:	 	Dinesh Patel
	Title:	 	Managing Director
	
	GLENN HOLDINGS, L.P.
		
	By:	 	  

	Name:	 	
	Title:	 	

 SCHEDULE A 

HOLDERS 
 Wasatch Venture Fund III,
LP 
 Wasatch New Mexico Fund, LLC 
 vSpring SBIC, L.P. 

vSpring, L.P. 
 vSpring Partners, L.P. 

NMSIC Co-Investment Fund, L.P. 
 NMSIC Focused, LLC 

James J. Schwarz and Jeanette M. Schwarz, Co-Trustees of the Schwarz Trust 

Jane Hillhouse 
 Lisa Davis 

New Tech I, L.P. 
 Pamela J. Sullivan and Thomas A. Tumolillo

 Quatro Ventures, LLC 
 Ray Radosevich 

Robert and Marcia Cates 
 Robert H. Nath 

Southwest Medical Ventures, Inc. 
 Sheryl A. Johnson 

John P. Alsobrook, II 
 Dale Olson 

Mesa Verde Venture Partners, L.P. 
 CCP/Exagen, L.P. 

Hunt Holdings L.P. 
 Tullis-Dickerson Capital Focus III, L.P.

 Berge K. Hagopian and Mary Ann Hagopian, Co-Trustees, Hagopian Family Trust UA DTD 

03/25/88 
 Timothy M. Pennington and Melissa J. Pennington as
Trustees of the Pennington Family Revocable Trust UA Dated May 23, 1984 
 Endochoice, Inc. 

 Glenn Holdings, L.P. 

[Signature Page to Fourth Amended and Restated Investors’ Rights Agreement]

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