This agreement evidences the grant by Argos Therapeutics, Inc., a
Delaware corporation (the “Company”), on July 11, 2016 (the “Grant Date”) to Richard Katz, an employee
of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein, a
total of 300,000 shares (the “Shares”) of common stock, $0.001 par value per share, of the Company (“Common Stock”)
at $6.30 per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on July 10, 2026 (the “Final
The option evidenced by this agreement was granted to the Participant
pursuant to the inducement grant exception under NASDAQ Stock Market Rule 5635(c)(4), and not pursuant to the Company’s 2014
Stock Incentive Plan (the “Plan”) or any equity incentive plan of the Company, as an inducement that is material to
the Participant’s employment with the Company.
It is intended that the option evidenced by this agreement shall
not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant”,
as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its
This option will become exercisable (“vest”) as to 25%
of the original number of Shares on the first anniversary of the Grant Date and as to an additional 2.0833% of the original number
of Shares at the end of each successive one-month period following the first anniversary of the Grant Date until the fourth anniversary
of the Grant Date.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part,
with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option.
Exercise of Option.
Form of Exercise. Each election to exercise this option shall be in writing, signed by the Participant, and received
by the Company at its principal office, accompanied by this agreement and payment in full as follows:
in cash or by check payable to the order of the Company;
by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company
of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price and any required tax withholding;
to the extent approved by the Board of Directors of the Company (the “Board”), in its sole discretion, by delivery
(either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their fair market value
per share as determined by (or in a manner approved by) the Board (the “Fair Market Value”), provided (i) such method
of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by
the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common
Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
to the extent approved by the Board, in its sole discretion, by delivery of a notice of “net exercise” to the
Company, as a result of which the Participant would receive (i) the number of shares underlying the portion of this option being
exercised, less (ii) such number of shares as is equal to (A) the aggregate exercise price for the portion of this option being
exercised divided by (B) the Fair Market Value on the date of exercise;
to the extent permitted by applicable law and approved by the Board, in its sole discretion, by payment of such other lawful
consideration as the Board may determine; or
by any combination of the above permitted forms of payment.
The Participant may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any fractional share.
Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option
may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all times since the
Grant Date, an employee, officer or a director of, or consultant or advisor to, the Company or any other entity the employees,
officers, directors, consultants, or advisors of which are eligible to receive option grants under the Plan (an “Eligible
Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason,
then, except as provided in paragraphs (d) or (e) below, the right to exercise this option shall terminate three months after
such cessation (but in no event after the Final Exercise Date), providedthat this option shall be exercisable only
to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing,
if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment
contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to
exercise this option shall terminate immediately upon such violation.
Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3)
of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such
relationship for “cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized
transferee), providedthat this option shall be exercisable only to the extent that this option was exercisable by
the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after
the Final Exercise Date.
Termination for Cause. If, prior to the Final Exercise Date, the Participant’s employment or other relationship
with the Company is terminated by the Company for Cause (as defined below), the right to exercise this option shall terminate immediately
upon the effective date of such termination of employment or other relationship. If, prior to the Final Exercise Date, the Participant
is given notice by the Company of the termination of his or her employment or other relationship by the Company for Cause, and
the effective date of such employment or other termination is subsequent to the date of the delivery of such notice, the right
to exercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time
as it is determined or otherwise agreed that the Participant’s employment or other relationship shall not be terminated for
Cause as provided in such notice or (ii) the effective date of such termination of employment or other relationship (in which
case the right to exercise this option shall, pursuant to the preceding sentence, terminate immediately upon the effective date
of such termination of employment or other relationship). If the Participant is party to an employment, consulting or severance
agreement with the Company that contains a definition of “cause” for termination of employment or other relationship,
“Cause” shall have the meaning ascribed to such term in such agreement. Otherwise, “Cause” shall mean willful
misconduct by the Participant or willful failure by the Participant to perform his or her responsibilities to the Company (including,
without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition
or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be
conclusive. The Participant shall be considered to have been terminated for “Cause” if the Company determines, within
30 days after the Participant’s resignation, that termination for Cause was warranted.
Transfer Restrictions. This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the Participant.
Adjustments for Changes in Common Stock and Certain Other Events.
Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend
or distribution to holders of Common Stock other than an ordinary cash dividend, the number and class of securities and exercise
price per share of this option shall be equitably adjusted by the Company (or substituted options may be granted, if applicable)
in the manner determined by the Board. Without limiting the generality of the foregoing, in the event the Company effects a split
of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to this option are
adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then the Participant,
if he exercises this option between the record date and the distribution date for such stock dividend, shall be entitled to receive,
on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon exercise of this option,
notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.
Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation of the Company with
or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right
to receive cash, securities or other property or is cancelled, (b) any transfer or disposition of all of the Common Stock of the
Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution
of the Company.
Consequences of a Reorganization Event.
In connection with a Reorganization Event, the Board may take any one or more of the following actions with respect to this
option (or any portion of this option) on such terms as the Board determines (except to the extent specifically provided otherwise
in another agreement between the Company and the Participant): (i) provide that this option shall be assumed, or a substantially
equivalent option shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written
notice to the Participant, provide that the unexercised portion of this option will terminate immediately prior to the consummation
of such Reorganization Event unless exercised by the Participant (to the extent then exercisable) within a specified period following
the date of such notice, (iii) provide that this option shall become exercisable in whole or in part prior to or upon such Reorganization
Event, (iv) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation
thereof a cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), make or provide
for a cash payment to the Participant with respect to this option equal to (A) the number of shares of Common Stock subject to
the vested portion of this option (after giving effect to any acceleration of vesting that occurs upon or immediately prior to
such Reorganization Event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise price of this
option and any applicable tax withholdings, in exchange for the termination of this option, (v) provide that, in connection with
a liquidation or dissolution of the Company, this option shall convert into the right to receive liquidation proceeds (if applicable,
net of the exercise price hereof and any applicable tax withholdings) and (vi) any combination of the foregoing.
For purposes of Section 5(b)(2)(A)(i), this option shall be considered assumed if, following consummation of the Reorganization
Event, this option confers the right to purchase, for each share of Common Stock subject to this option immediately prior to the
consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of
the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of
the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders
of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result
of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the
Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the
exercise of this option to consist solely of such number of shares of common stock of the acquiring or succeeding corporation (or
an affiliate thereof) that the Board determined to be equivalent in value (as of the date of such determination or another date
specified by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of
the Reorganization Event.
No Right To Employment or Other Status. The grant of this option shall not be construed as giving the Participant
the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time
to dismiss or otherwise terminate its relationship with the Participant free from any liability or claim hereunder.
No Rights As Stockholder. Subject to the provisions of this option, the Participant shall not have any rights as
a stockholder with respect to any shares of Common Stock to be distributed with respect to this option until becoming the record
holder of such shares.
Amendment. The Board may amend, modify or terminate this Agreement, including but not limited to, substituting another
option of the same or a different type and changing the date of exercise or realization. Notwithstanding the foregoing, the Participant’s
consent to such action shall be required unless the Board determines that the action, taking into account any related action, would
not materially and adversely affect the Participant.
Compliance with Code Section 409A. This Agreement does not, and shall not be amended so as to, provide for deferral
of compensation that does not comply with Section 409A of the Code, unless the Board, at the time of amendment, specifically provides
that this Agreement is not intended to comply with Section 409A of the Code.
Acceleration. The Board may at any time provide that this option shall become immediately exercisable in whole or
in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part, as the case may be.
Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment
tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock
under this option. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages.
If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount,
if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding
obligations is due before the Company will issue any shares on exercise of this option or at the same time as payment of the exercise
price, unless the Company determines otherwise. If approved by the Board, in its sole discretion, a Participant may satisfy such
tax obligations in whole or in part by delivery (either by actual delivery or attestation) of shares of Common Stock underlying
this option valued at their Fair Market Value; provided, however, except as otherwise provided by the Board, that the total
tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income). Shares used to satisfy tax withholding requirements cannot be subject to any forfeiture,
unfulfilled vesting or other similar requirements.
Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant
to this Agreement until (i) all conditions of this Agreement have been met to the satisfaction of the Company, (ii) in the opinion
of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider
appropriate to satisfy the requirements of any applicable laws, rules or regulations.
Administration by Board. The Board will administer this Agreement and may construe and interpret the terms hereof.
The Board may correct any defect, supply any omission or reconcile any inconsistency in this Agreement in the manner and to the
extent it shall deem expedient to carry the Agreement into effect and it shall be the sole and final judge of such expediency.
No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating
to or under this Agreement made in good faith.
Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers
hereunder to one or more committees or subcommittees of the Board (a “Committee”). All references herein to the “Board”
shall mean the Board or a Committee to the extent that the Board’s powers or authority hereunder have been delegated to such
Severability. The invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability
of any other provision hereof, and each such other provision shall be severable and enforceable to the extent permitted by law.
Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware,
excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other
than the State of Delaware.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one in the same instrument.
The Company has caused this option to be executed by its duly authorized
ARGOS THERAPEUTICS, INC.
The undersigned hereby accepts the foregoing option and agrees to
the terms and conditions thereof.