This LOAN AND SECURITY AGREEMENT (the “Agreement”) is entered into as of
December 1, 2011, by and between Square 1 Bank (“Bank”) and Enumeral Biomedical
Corp. (“Borrower”).

 

RECITALS

 

Borrower wishes to obtain credit from time to time from Bank, and Bank desires
to extend credit to Borrower. This Agreement sets forth the terms on which Bank
will advance credit to Borrower, and Borrower will repay the amounts owing to
Bank.

 

AGREEMENT

 

The parties agree as follows:

 

1.           DEFINITIONS AND CONSTRUCTION.

 

1.1         Definitions. As used in this Agreement, all capitalized terms shall
have the definitions set forth on Exhibit A. Any term used in the Code and not
defined herein shall have the meaning given to the term in the Code.

 

1.2         Accounting Terms. Any accounting term not specifically defined on
Exhibit A shall be construed in accordance with GAAP and all calculations shall
be made in accordance with GAAP (except for non-compliance with FAS 123R in
monthly reporting). The term “financial statements” shall include the
accompanying notes and schedules.

 

2.           LOAN AND TERMS OF PAYMENT.

 

2.1         Credit Extensions.

 

(a)          Promise to Pay. Borrower promises to pay to Bank, in lawful money
of the United States of America, the aggregate unpaid principal amount of all
Credit Extensions made by Bank to Borrower, together with interest on the unpaid
principal amount of such Credit Extensions at rates in accordance with the terms
hereof.

 

(b)          Term Loan A.

 

(i)          Subject to and upon the terms and conditions of this Agreement,
Bank agrees to make one (1) term loan to Borrower in an aggregate principal
amount of the Term Loan A Amount (“Term Loan A”). Borrower agrees to request
Term Loan A on the Term Loan A Availability End Date. The proceeds of the Term
Loan A shall be used for general working capital purposes and for capital
expenditures.

 

(ii)         Interest shall accrue from the date of Term Loan A at the rate
specified in Section 2.3(a), and prior to the Term Loan A Interest-Only End Date
interest only shall be payable monthly beginning on January 1, 2011, and
continuing on the same day of each month thereafter. If Term Loan A remains
outstanding on the Term Loan A Interest-Only End Date, it shall be payable in 30
equal monthly installments of principal, plus all accrued interest, beginning on
one month immediately following the Term Loan A Interest-Only End Date, and
continuing on the same day of each month thereafter through the Term Loan A
Maturity Date, at which time all amounts due in connection with the Term Loan A
shall be immediately due and payable. Term Loan A, once repaid, may not be
re-borrowed.

 

1.

 

(iii)        On the Term Loan A Availability End Date, Borrower shall confirm to
Bank (which notice shall be irrevocable) by facsimile transmission to be
received no later than 3:30 p.m. Eastern time that Borrower desires to obtain
Term Loan A. Such confirmation shall be substantially in the form of Exhibit C.
The confirmation shall be signed by an Authorized Officer.

 

(c)          Term Loan B.

 

(i)          Subject to and upon the terms and conditions of this Agreement,
Bank agrees to make one (1) term loan to Borrower in an aggregate principal
amount of the Term Loan B Amount (“Term Loan B”). Borrower may request Term Loan
B at any time from the date hereof through the Term Loan B Availability End
Date. The proceeds of Term Loan B shall be used for general working capital
purposes and for capital expenditures.

 

(ii)         Interest shall accrue from the date of Term Loan B at the rate
specified in Section 2.3(a), and prior to the Term Loan B Interest-Only End Date
for the applicable Term Loan B interest only shall be payable monthly beginning
on the first day of the month next following such Term Loan B, and continuing on
the same day of each month thereafter. If Term Loan B remains outstanding on the
Term Loan B Interest-Only End Date, it shall be payable in 30 equal monthly
installments of principal, plus all accrued interest, beginning on one month
immediately following the Term Loan B Interest-Only End Date, and continuing on
the same day of each month thereafter through the Term Loan B Maturity Date, at
which time all amounts due in connection with the Term Loan B and any other
amounts due under this Agreement shall be immediately due and payable. Term Loan
B, once repaid, may not be re-borrowed.

 

(iii)        When Borrower desires to obtain Term Loan B, Borrower shall notify
Bank (which notice shall be irrevocable) by facsimile transmission to be
received no later than 3:30 p.m. Eastern time on the day on which the Term Loan
B is to be made. Such notice shall be substantially in the form of Exhibit C.
The notice shall be signed by an Authorized Officer and include evidence to Bank
that Borrower has received the New Equity in its entirety.

 

(d)          Equipment Advances.

 

(i)          Subject to and upon the terms and conditions of this Agreement,
Bank agrees to make Equipment Advances to Borrower. Borrower may request, and,
subject to terms and conditions hereof, the satisfaction of which shall be
determined in good faith by Bank in its sole discretion, Bank will fund
Equipment Advances at any time from the date hereof through the Equipment
Availability End Date. The aggregate outstanding amount of Equipment Advances
shall not exceed the Equipment Loan.

 

2.

 

 

(ii)         For Equipment purchased by Borrower within 90 days of the date of
the corresponding Equipment Advance, each Equipment Advance shall not exceed
100.0% (the “Equipment Advance Rate”) of the invoice amount of equipment and
software approved by Bank from time to time, excluding any portion of Soft Costs
that exceed of 10.0% of the Equipment Advance; provided however, that the
Equipment Advance Rate shall be decreased by 25.0% for Equipment aged 91-120
days from the invoice date and such Equipment Advance Rate shall be further
decreased by an additional 5.0% for each additional 30 days (or any part
thereof) beyond 120 days from the invoice date; and provided further however,
that the Equipment Advance Rate applicable to the initial Equipment Advance
shall not be subject to the aforementioned discounting process if such Equipment
Advance: (i) pertains to the approximately $590,000 of Equipment acquired by the
Borrower between May 1, 2011 and the Closing Date, (ii) occurs on or about the
Closing Date, and (iii) the Closing Date is on or before October 31, 2011. The
Equipment Advance Rate and the eligibility of all Equipment as the basis for
future Equipment Advances are subject to modification in the Bank’s sole
discretion based on Bank’s review of the Collateral.

 

(iii)        Interest shall accrue from the date of each Equipment Advance at
the rate specified in Section 2.3(a), and prior to the Equipment Interest-Only
End Date interest only shall be payable monthly beginning on the first day of
the month next following the Equipment Advance, and continuing on the first day
of each month thereafter. Any Equipment Advances that are outstanding on the
Equipment Interest-Only End Date shall be payable in 30 equal monthly
installments of principal, plus all accrued interest, beginning on the date one
(1) month immediately following the Equipment Interest-Only End Date, and
continuing on the same day of each month thereafter through the Equipment
Maturity Date, at which time all amounts due in connection with the Equipment
Advance shall be immediately due and payable. Equipment Advances, once repaid,
may not be reborrowed. Borrower may prepay any Equipment Advances without
penalty or premium.

 

(iv)        When Borrower desires to obtain an Equipment Advance, Borrower shall
notify Bank (which notice shall be irrevocable) by facsimile transmission to be
received no later than 3:00 p.m. Eastern time three Business Days before the day
on which the Equipment Advance is to be made. Such notice shall be substantially
in the form of Exhibit C. The notice shall be signed by a Responsible Officer or
its designee and include a copy of the invoice for any Equipment to be financed.

 

2.2         Intentionally Left Blank.

 

2.3         Interest Rates, Payments, and Calculations.

 

(a)          Interest Rates.

 

(i)          Equipment Advances. Except as set forth in Section 2.3(b), the
Equipment Advances shall bear interest, on the outstanding daily balance
thereof, at a variable annual rate equal to the greater of: (A) 3.75% above the
Prime Rate then in effect; or (B) 7.00%; provided however, subject to the
condition that no Event of Default has occurred hereunder, that the annual rate
shall not exceed 8.50% during the first 18 months after the Closing Date and
shall not exceed 9.50% thereafter.

 

3.

 

 

(ii)          Term Loans. Except as set forth in Section 2.3(b), the Term Loans
shall bear interest, on the outstanding daily balance thereof, at a variable
annual rate equal to the greater of: (A) 3.75% above the Prime Rate then in
effect; or (B) 7.00%; provided however, subject to the condition that no Event
of Default has occurred hereunder, that the annual rate shall not exceed 8.50%
during the first 18 months after the Closing Date and shall not exceed 9.50%
thereafter.

 

(a)          Late Fee; Default Rate. If any payment is not made within 15 days
after the date such payment is due, Borrower shall pay Bank a late fee equal to
the lesser of (i) 5% of the amount of such unpaid amount or (ii) the maximum
amount permitted to be charged under applicable law. All Obligations shall bear
interest, from and after the occurrence and during the continuance of an Event
of Default, at a rate equal to 5 percentage points above the interest rate
applicable immediately prior to the occurrence of the Event of Default.

 

(b)          Payments. Bank shall, at its option, charge such interest, all Bank
Expenses, and all Periodic Payments against any of Borrower’s deposit accounts.
Any interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate then
applicable hereunder.

 

(c)          Computation. In the event the Prime Rate is changed from time to
time hereafter, the applicable rate of interest hereunder shall be increased or
decreased, effective as of the day the Prime Rate is changed, by an amount equal
to such change in the Prime Rate. All interest chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed.

 

2.4         Crediting Payments. Prior to the occurrence of an Event of Default,
Bank shall credit a wire transfer of funds, check or other item of payment to
such deposit account or Obligation as Borrower specifies, except that to the
extent Borrower uses the Equipment Advances/Term Loans to purchase Collateral,
Borrower’s repayment of the Equipment Advances/Term Loans shall apply on a
“first-in-first-out” basis so that the portion of the Equipment Advances/Term
Loans used to purchase a particular item of Collateral shall be paid in the
chronological order the Borrower purchased the Collateral. After the occurrence
and during the continuance of an Event of Default, Bank shall have the right, in
its sole discretion, to immediately apply any wire transfer of funds, check, or
other item of payment Bank may receive to conditionally reduce Obligations, but
such applications of funds shall not be considered a payment on account unless
such payment is of immediately available federal funds or unless and until such
check or other item of payment is honored when presented for payment.
Notwithstanding anything to the contrary contained herein, any wire transfer or
payment received by Bank after 5:30 p.m. Eastern time shall be deemed to have
been received by Bank as of the opening of business on the immediately following
Business Day. Whenever any payment to Bank under the Loan Documents would
otherwise be due (except by reason of acceleration) on a date that is not a
Business Day, such payment shall instead be due on the next Business Day, and
additional fees or interest, as the case may be, shall accrue and be payable for
the period of such extension.

 

4.

 

 

2.5           Fees. Borrower shall pay to Bank the following:

 

(a)          Facility Fee. On or before the Closing Date, a fee equal to
$10,000, which shall be nonrefundable;

 

(b)          Bank Expenses. On the Closing Date, all Bank Expenses incurred
through the Closing Date, and, after the Closing Date, all Bank Expenses, as and
when they become due.

 

(c)          Prepayment Fee. In the event Borrower prepays all or a portion of
any Term Loans prior to the Term Loan Maturity Date, Borrower shall,
simultaneous with any such prepayment, pay Bank a fee of: (i) 3.0% of the
aggregate principal amount so prepaid if such prepayment occurs during the first
year after the Closing Date; (ii) 2.0% of the aggregate principal amount so
prepaid if such prepayment occurs during the second year after the Closing Date;
or (iii) 1.0% of the aggregate principal amount so prepaid if such prepayment
occurs during the third year after the Closing Date.

 

2.6           Term. This Agreement shall become effective on the Closing Date
and, subject to Section 12.7, shall continue in full force and effect for so
long as any Obligations remain outstanding or Bank has any obligation to make
Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank
shall have the right to terminate its obligation to make further Credit
Extensions under this Agreement immediately and without notice upon the
occurrence and during the continuance of an Event of Default.

 

3.           CONDITIONS OF LOANS.

 

3.1         Conditions Precedent to Closing. The agreement of Bank to enter into
this Agreement on the Closing Date is subject to the condition precedent that
Bank shall have received, in form and substance satisfactory to Bank, each the
following items and completed each of the following requirements:

 

(a)          this Agreement;

 

(b)         an officer’s certificate of Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Agreement;

 

(c)         a financing statement (Form UCC-1);

 

(d)         payment of the fees and Bank Expenses then due specified in Section
2.5, which may be debited from any of Borrower’s accounts with Bank;

 

(e)         current SOS Reports indicating that except for Permitted Liens,
there are no other security interests or Liens of record in the Collateral;

 

(f)          current financial statements, including statements (or such other
level required by the Investment Agreement) for Borrower’s most recently ended
fiscal year, together with an unqualified opinion (or an opinion qualified only
for going concern), company prepared consolidated and consolidating balance
sheets and income statements for the most recently ended month in accordance
with Section 6.2, and such other updated financial information as Bank may
reasonably request;

 

5.

 

 

(g)         current Compliance Certificate in accordance with Section 6.2;

 

(h)         a Warrant in form and substance satisfactory to Bank;

 

(i)          a Borrower Information Certificate;

 

(j)          Borrower shall have opened and funded not less than $50,000 in
deposit accounts held with Bank; and

 

(k)         such other documents or certificates, and completion of such other
matters, as Bank may reasonably request.

 

3.2         Conditions Precedent to all Credit Extensions. The obligation of
Bank to make each Credit Extension, including the initial Credit Extension, is
contingent upon the Borrower’s compliance with Section 3.1 above, and is further
subject to the following conditions:

 

(a)          timely receipt by Bank of the Loan Advance/Paydown Request Form as
provided in Section 2.1;

 

(b)          Borrower shall have transferred substantially all of its Cash
assets into operating accounts held with Bank and otherwise be in compliance
with Section 6.6 hereof;

 

(c)          prior to the making of Term Loan B only, delivery of evidence to
Bank that Borrower has received the New Equity in its entirety; and

 

(d)          the representations and warranties contained in Section 5 shall be
true and correct in all material respects on and as of the date of such Loan
Advance/Paydown Request Form and on the effective date of each Credit Extension
as though made at and as of each such date, and no Event of Default shall have
occurred and be continuing, or would exist after giving effect to such Credit
Extension (provided, however, that those representations and warranties
expressly referring to another date shall be true, correct and complete in all
material respects as of such date). The making of each Credit Extension shall be
deemed to be a representation and warranty by Borrower on the date of such
Credit Extension as to the accuracy of the facts referred to in this Section
3.2.

 

4.           CREATION OF SECURITY INTEREST.

 

4.1         Grant of Security Interest. Borrower grants and pledges to Bank a
continuing security interest in the Collateral to secure prompt repayment of any
and all Obligations and to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Except for Permitted Liens or as
disclosed in the Schedule, such security interest constitutes a valid, first
priority security interest in the presently existing Collateral, and will
constitute a valid, first priority security interest in later-acquired
Collateral. Borrower also hereby agrees not to sell, transfer, assign, mortgage,
pledge, lease, grant a security interest in, or encumber any of its Intellectual
Property. Notwithstanding any termination of this Agreement or of any filings
undertaken related to Bank’s rights under the Code, Bank’s Lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.

 

6.

 

4.2          Perfection of Security Interest. Borrower authorizes Bank to file
at any time financing statements, continuation statements, and amendments
thereto that (i) either specifically describe the Collateral or describe the
Collateral as all assets of Borrower of the kind pledged hereunder, and (ii)
contain any other information required by the Code for the sufficiency of filing
office acceptance of any financing statement, continuation statement, or
amendment, including whether Borrower is an organization, the type of
organization and any organizational identification number issued to Borrower, if
applicable. Borrower shall have possession of the Collateral, except where
expressly otherwise provided in this Agreement or where Bank chooses to perfect
its security interest by possession in addition to the filing of a financing
statement. Where Collateral is in possession of a third party bailee, Borrower
shall take such steps as Bank reasonably requests for Bank to (i) subject to
Section 7.10 below, obtain an acknowledgment, in form and substance satisfactory
to Bank, of the bailee that the bailee holds such Collateral for the benefit of
Bank, and (ii) obtain “control” of any Collateral consisting of investment
property, deposit accounts, letter-of-credit rights or electronic chattel paper
(as such items and the term “control” are defined in Revised Article 9 of the
Code) by causing the securities intermediary or depositary institution or
issuing bank to execute a control agreement in form and substance satisfactory
to Bank. Borrower will not create any chattel paper without placing a legend on
the chattel paper acceptable to Bank indicating that Bank has a security
interest in the chattel paper. Borrower from time to time may deposit with Bank
specific cash collateral to secure specific Obligations; Borrower authorizes
Bank to hold such specific balances in pledge and to decline to honor any drafts
thereon or any request by Borrower or any other Person to pay or otherwise
transfer any part of such balances for so long as the specific Obligations are
outstanding. Borrower shall take such other actions as Bank requests to perfect
its security interests granted under this Agreement.

 

5.           REPRESENTATIONS AND WARRANTIES.

 

Borrower represents and warrants as follows:

 

5.1         Due Organization and Qualification. Borrower and each Subsidiary is
a corporation duly existing under the laws of the state in which it is organized
and qualified and licensed to do business in any state in which the conduct of
its business or its ownership of property requires that it be so qualified,
except where the failure to do so would not reasonably be expected to cause a
Material Adverse Effect.

 

5.2         Due Authorization; No Conflict. The execution, delivery, and
performance of the Loan Documents are within Borrower’s powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower’s Certificate of Incorporation or Bylaws, nor
will they constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any agreement by which it is
bound, except to the extent such default would not reasonably be expected to
cause a Material Adverse Effect.

 

7.

 

5.3           Collateral. Borrower has rights in or the power to transfer the
Collateral, and its title to the Collateral is free and clear of Liens, adverse
claims, and restrictions on transfer or pledge except for Permitted Liens. Other
than movable items of personal property, for example such as laptop computers,
all Collateral having an aggregate book value not in excess of $100,000, is
located solely in the Collateral States. All Inventory is in all material
respects of good and merchantable quality, free from all material defects,
except for Inventory for which adequate reserves have been made. Except as set
forth in the Schedule, none of the Borrower’s Cash is maintained or invested
with a Person other than Bank or Bank’s affiliates.

 

5.4           Intellectual Property. Borrower is the sole owner of the
intellectual property created or purchased by Borrower, except for licenses
granted by Borrower to its customers, strategic partners, contractors, and other
third parties. To the best of Borrower’s knowledge, each of the Copyrights,
Trademarks and Patents created or purchased by Borrower is valid and
enforceable, and no part of the intellectual property created or purchased by
Borrower has been judged invalid or unenforceable, in whole or in part, and, to
the best of Borrower’s knowledge, no claim has been made to Borrower that any
part of the intellectual property created or purchased by Borrower violates the
rights of any third party except to the extent such claim would not reasonably
be expected to cause a Material Adverse Effect.

 

5.5          Name; Location of Chief Executive Office. Except as disclosed in
the Schedule, Borrower has not done business under any name other than that
specified on the signature page hereof, and its exact legal name is as set forth
in the first paragraph of this Agreement. The chief executive office of Borrower
is located at the address indicated in Section 10 hereof.

 

5.6          Litigation. Except as set forth in the Schedule, there are no
actions or proceedings pending by or against Borrower or any Subsidiary before
any court or administrative agency in which a likely adverse decision would
reasonably be expected to have a Material Adverse Effect.

 

5.7          No Material Adverse Change in Financial Statements. All
consolidated and consolidating financial statements related to Borrower and any
Subsidiary that are delivered by Borrower to Bank fairly present in all material
respects Borrower’s consolidated and consolidating financial condition as of the
date thereof and Borrower’s consolidated and consolidating results of operations
for the period then ended. There has not been a material adverse change in the
consolidated or in the consolidating financial condition of Borrower since the
date of the most recent of such financial statements submitted to Bank.

 

5.8          Solvency, Payment of Debts. Borrower is able to pay its debts
(including trade debts) as they mature; the fair saleable value of Borrower’s
assets (including goodwill minus disposition costs) exceeds the fair value of
its liabilities; and Borrower is not left with unreasonably small capital after
the transactions contemplated by this Agreement.

 

8.

 

5.9         Compliance with Laws and Regulations. Borrower and each Subsidiary
have met the minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA. No event has occurred resulting from Borrower’s
failure to comply with ERISA that is reasonably likely to result in Borrower’s
incurring any liability that could have a Material Adverse Effect. Borrower is
not an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940. Borrower is not
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T and U of the Board of Governors of the Federal
Reserve System). Borrower has not violated any statutes, laws, ordinances or
rules applicable to it, the violation of which would reasonably be expected to
have a Material Adverse Effect. Borrower and each Subsidiary have filed or
caused to be filed all tax returns required to be filed, and have paid, or have
made adequate provision for the payment of, all taxes reflected therein except
those being contested in good faith with adequate reserves under GAAP or where
the failure to file such returns or pay such taxes would not reasonably be
expected to have a Material Adverse Effect.

 

5.10       Subsidiaries. Borrower does not own any stock, partnership interest
or other equity securities of any Person, except for Permitted Investments.

 

5.11       Government Consents. Borrower and each Subsidiary have obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower’s business as currently conducted,
except where the failure to do so would not reasonably be expected to cause a
Material Adverse Effect.

 

5.12       Inbound Licenses. Except as disclosed on the Schedule, Borrower is
not a party to, nor is bound by, any material license or other agreement
important for the conduct of Borrower’s business that prohibits or otherwise
restricts Borrower from granting a security interest in Borrower’s interest in
such license or agreement or any other property important for the conduct of
Borrower’s business, other than this Agreement or the other Loan Documents.

 

5.13       Full Disclosure. No representation, warranty or other statement made
by Borrower in any certificate or written statement furnished to Bank taken
together with all such certificates and written statements furnished to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates or
statements not misleading in light of the circumstances in which they were made,
it being recognized by Bank that the projections and forecasts provided by
Borrower in good faith and based upon reasonable assumptions are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections and forecasts may differ from the projected or forecasted
results.

 

6.           AFFIRMATIVE COVENANTS.

 

Borrower covenants that, until payment in full of all outstanding Obligations,
and for so long as Bank may have any commitment to make a Credit Extension
hereunder, Borrower shall do all of the following:

 

9.

 

6.1         Good Standing and Government Compliance. Borrower shall maintain its
and each of its Subsidiaries’ corporate existence and good standing in the
respective states of formation, shall maintain qualification and good standing
in each other jurisdiction in which the failure to so qualify would reasonably
be expected to have a Material Adverse Effect, and shall furnish to Bank the
organizational identification number issued to Borrower by the authorities of
the state in which Borrower is organized, if applicable. Borrower shall meet,
and shall cause each Subsidiary to meet, the minimum funding requirements of
ERISA with respect to any employee benefit plans subject to ERISA. Borrower
shall comply, and shall cause each Subsidiary to comply, with all statutes,
laws, ordinances and government rules and regulations to which it is subject,
and shall maintain, and shall cause each of its Subsidiaries to maintain, in
force all licenses, approvals and agreements, the loss of which or failure to
comply with which would reasonably be expected to have a Material Adverse
Effect.

 

6.2         Financial Statements, Reports, Certificates. Borrower shall deliver
to Bank: (i) as soon as available, but in any event within 30 days after the end
of each calendar month, a company prepared consolidated and consolidating
balance sheet, cash flow statement and income statement covering Borrower’s
operations during such period, in a form reasonably acceptable to Bank and
certified by a Responsible Officer; (ii) as soon as available, but in any event
within 180 days after the end of Borrower’s fiscal year, audited (or such other
level as is required by the Investment Agreement) consolidated and consolidating
financial statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an opinion on such financial statements of an independent
certified public accounting firm reasonably acceptable to Bank which is either
unqualified or qualified only for going concern, so long as in the case of the
qualified opinion it is either consented to in writing by Bank or in the
alternative if following the delivery of such financial statements the Bank does
not consent to such qualified Borrower’s investors will provide additional
equity as needed within 30 days after notice from the Bank of such non consent
to the qualified financial statements or otherwise; (iii) annual budget approved
by Borrower’s Board of Directors as soon as available but not later than 30 days
before the beginning of the applicable calendar year, provided however, that for
the 2012 annual budget only, Borrower shall provide the 2012 annual budget
approved by Borrower’s Board of Directors as soon as available but not later
than March 1, 2012; (iv) if applicable, copies of all statements, reports and
notices sent or made available generally by Borrower to its security holders or
to any holders of Subordinated Debt and all reports on Forms 10-K and 10-Q filed
with the Securities and Exchange Commission; (v) promptly upon receipt of notice
thereof, a report of any legal actions pending or threatened against Borrower or
any Subsidiary that could reasonably be expected to result in damages or costs
to Borrower or any Subsidiary of $250,000 or more; (vi) promptly upon receipt,
each management letter prepared by Borrower’s independent certified public
accounting firm regarding Borrower’s management control systems, (vii) such
budgets, sales projections, operating plans or other financial information
generally prepared by Borrower in the ordinary course of business as Bank may
reasonably request from time to time.

 

(a)          Within 30 days after the last day of each month, Borrower shall
deliver to Bank with the monthly financial statements a Compliance Certificate
certified as of the last day of the applicable month and signed by a Responsible
Officer in substantially the form of Exhibit D hereto.

 

(b)          As soon as possible and in any event within three (3) Business days
after becoming aware of the occurrence or existence of an Event of Default
hereunder, a written statement of a Responsible Officer setting forth details of
the Event of Default, and the action which Borrower has taken or proposes to
take with respect thereto.

 

10.

 

 

(c)          If an Event of Default has occurred and is continuing, Bank
(through any of its officers, employees, or agents) shall have the right to
inspect Borrower’s Books and to make copies thereof and to check, test, inspect,
audit and appraise the Collateral at Borrower’s expense in order to verify
Borrower’s financial condition or the amount, condition of, or any other matter
relating to, the Collateral.

 

Borrower may deliver to Bank on an electronic basis any certificates, reports or
information required pursuant to this Section 6.2, and Bank shall be entitled to
rely on the information contained in the electronic files, provided that Bank in
good faith believes that the files were delivered by a Responsible Officer.
Borrower shall include a submission date on any certificates and reports to be
delivered electronically.

 

6.3          Inventory and Equipment; Returns. Borrower shall keep all Inventory
and Equipment in good and merchantable condition, free from all material defects
except for Inventory and Equipment (i) sold in the ordinary course of business,
and (ii) for which adequate reserves have been made, in all cases in the United
States and such other locations as to which Borrower gives prior written notice.
Returns and allowances, if any, as between Borrower and its account debtors
shall be on the same basis and in accordance with the usual customary practices
of Borrower, as they exist on the Closing Date. Borrower shall promptly notify
Bank of all returns and recoveries and of all disputes and claims involving
inventory having a book value of more than $100,000.

 

6.4          Taxes. Borrower shall make, and cause each Subsidiary to make, due
and timely payment or deposit of all material federal, state, and local taxes,
assessments, or contributions required of it by law, including, but not limited
to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability,
and will execute and deliver to Bank, on demand, proof satisfactory to Bank
indicating that Borrower or a Subsidiary has made such payments or deposits and
any appropriate certificates attesting to the payment or deposit thereof;
provided that Borrower or a Subsidiary need not make any payment if the amount
or validity of such payment is contested in good faith by appropriate
proceedings and is reserved against (to the extent required by GAAP) by Borrower
or such Subsidiary.

 

6.5         Insurance. Borrower, at its expense, shall (i) keep the Collateral
insured against loss or damage, and (ii) maintain liability and other insurance,
in each case in as ordinarily insured against by other owners in businesses
similar to Borrower’s. All such policies of insurance shall be in such form,
with such companies, and in such amounts as reasonably satisfactory to Bank. All
policies of property insurance shall contain a lender’s loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee, and all liability insurance policies shall show Bank as an additional
insured and specify that the insurer must give at least 10 days notice to Bank
before canceling its policy for any reason. Within 30 days of the Closing Date,
Borrower shall cause to be furnished to Bank a copy of its policies or
certificate of insurance including any endorsements covering Bank or showing
Bank as an additional insured. Upon Bank’s request, Borrower shall deliver to
Bank certified copies of the policies of insurance and evidence of all premium
payments. Proceeds payable under any casualty policy covering the Collateral
will, at Borrower’s option, be payable to Borrower to replace the property
subject to the claim, provided that any such replacement property shall be
deemed Collateral in which Bank has been granted a first priority security
interest, provided that if an Event of Default has occurred and is continuing,
all proceeds payable under any such policy shall, at Bank’s option, be payable
to Bank to be applied on account of the Obligations.

 

11.

 

 

6.6          “Primary Depository”. Subject to the provisions of Section 3.1(j)
and 3.2(b), Borrower within 30 days of the Closing Date shall maintain all its
depository and operating accounts with Bank and its primary investment accounts
with Bank or Bank’s affiliates.

 

6.7          Financial Covenants. Borrower shall at all times maintain at least
one of the following financial ratios and covenants:

 

(a)          Liquidity Ratio. A Liquidity Ratio of at least 1.25 to 1.00; or

 

(b)          Cash Burn. Tested monthly and calculated on a trailing six-months
average, a Cash Burn of not more than the amounts shown in column B below for
the corresponding reporting period in column A.

 

A  B  Reporting Period Ending On  Maximum Cash Burn  August 31, 2011 
$1,720,400  September 30, 2011  $1,897,700  October 31, 2011  $2,123,300 
November 30, 2011  $2,457,900  December 31, 2011  $1,907,600  January 31, 2012 
$1,935,400  February 29, 2012  $1,884,900  March 31, 2012  $1,651,000  April 30,
2012  $1,699,300  May 31, 2012  $1,658,900  June 30, 2012  $1,584,100  July 31,
2012  $1,288,200  August 31, 2012  $1,288,800  September 30, 2012  $1,190,100 
October 31, 2012  $1,149,500  November 30, 2012  $1,139,600  December 31, 2012 
$1,006,200 

 

Beginning with December 1, 2012, Bank and Borrower hereby agree that, on or
before December 1st of each year during the term of this Agreement, Borrower
shall provide to Bank a fully-funded budget for the upcoming calendar year, and
Bank shall use that budget to establish the maximum Cash Burn amounts for the
upcoming year, with such maximum amounts being incorporated herein by an
amendment, which shall be promptly executed by Bank and Borrower.

 

12.

 

 

6.8           Notice of Inbound Licensors. Prior to entering into or becoming
bound by any material inbound license or agreement, Borrower shall provide
written notice to Bank of the material terms of such license or agreement with a
description of its likely impact on Borrower’s business or financial condition.
.

 

6.9           Further Assurances. At any time and from time to time Borrower
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Bank to effect the purposes of this Agreement.

 

7.           NEGATIVE COVENANTS.

 

Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until the outstanding Obligations are paid in full or for so long
as Bank may have any commitment to make any Credit Extensions, Borrower will not
do any of the following without Bank’s prior written consent, which shall not be
unreasonably withheld:

 

7.1           Dispositions. Convey, sell, lease, license, transfer or otherwise
dispose of (collectively, to “Transfer”), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, or move cash balances on
deposit with Bank to accounts opened at another financial institution, other
than Permitted Transfers.

 

7.2           Change in Name, Location, Executive Office, or Executive
Management; Change in Business; Change in Fiscal Year; Change in Control. Change
its name or the state of Borrower’s incorporation or relocate its chief
executive office without 30 days prior written notification to Bank; replace or
suffer the departure of its chief executive officer or chief financial officer
without delivering written notification to Bank within 10 days following such
event; fail to appoint an interim replacement or fill a vacancy in the position
of chief executive officer or chief financial officer for more than 30
consecutive days; suffer a change on its board of directors which results in the
failure of at least one partner of Harris & Harris Group or its Affiliates to
serve as a voting member, or suffer the resignation of one or more directors
from its board of directors in anticipation of the Company’s insolvency, in
either case without the prior written consent of Bank which may be withheld in
Bank’s sole discretion; take action to liquidate, wind up, or otherwise cease to
conduct business in the ordinary course; engage in any business, or permit any
of its Subsidiaries to engage in any business, other than or reasonably related
or incidental to the businesses currently engaged in by Borrower; change its
fiscal year end; have a Change in Control.

 

13.

 

 

7.3           Mergers or Acquisitions. Merge or consolidate, or permit any of
its Subsidiaries to merge or consolidate, with or into any other business
organization (other than mergers or consolidations of a Subsidiary into another
Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to
acquire, all or substantially all of the capital stock or property of another
Person except where (a) each of the following conditions is applicable: (i) the
consideration paid in connection with such transactions (including assumption of
liabilities) does not in the aggregate exceed $250,000 during any fiscal year,
(ii) no Event of Default has occurred and is continuing or would exist after
giving effect to such transactions, (iii) such transactions do not result in a
Change in Control, and (iv) Borrower is the surviving entity; or (b) the
Obligations are repaid in full concurrently with the closing of any merger or
consolidation of Borrower in which Borrower is not the surviving entity;
provided, however, that Borrower shall not, without Bank’s prior written
consent, enter into any binding contractual arrangement with any Person to
facilitate a merger or acquisition of Borrower; provided however, Borrower may
enter into any such agreement without Bank’s prior written consent so long as
(i) no Event of Default exists when such agreement is entered into by Borrower,
(ii) such agreement does not give such Person the right to claim any fee,
payment or damages from any parties, other than from Borrower or Borrower’s
investors, in connection with a sale of Borrower’s stock or assets pursuant to
or resulting from an assignment for the benefit of creditors, an asset turnover
to Borrower’s creditors (including, without limitation, Bank), foreclosure,
bankruptcy or similar liquidation, and (iii) Borrower notifies Bank in advance
of entering into such an agreement (provided, the failure to give such
notification shall not be deemed a material breach of this Agreement).

 

7.4           Indebtedness. Create, incur, assume, guarantee or be or remain
liable with respect to any Indebtedness, or permit any Subsidiary so to do,
other than Permitted Indebtedness, or prepay any Indebtedness or take any
actions which impose on Borrower an obligation to prepay any Indebtedness,
except Indebtedness to Bank.

 

7.5           Encumbrances. Create, incur, assume or allow any Lien with respect
to its property, or assign or otherwise convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries so to do,
except for Permitted Liens, or covenant to any other Person (other than (i) the
licensors of in-licensed property with respect to such property or (ii) the
lessors of specific equipment or lenders financing specific equipment with
respect to such leased or financed equipment) that Borrower in the future will
refrain from creating, incurring, assuming or allowing any Lien with respect to
any of Borrower’s property.

 

7.6           Distributions. Pay any dividends or make any other distribution or
payment on account of or in redemption, retirement or purchase of any capital
stock, except that Borrower may (i) repurchase the stock of former employees or
consultants pursuant to stock repurchase agreements as long as an Event of
Default does not exist prior to such repurchase or would not exist after giving
effect to such repurchase, and (ii) repurchase the stock of former employees or
consultants pursuant to stock repurchase agreements by the cancellation of
indebtedness owed by such former employees or consultants to Borrower regardless
of whether an Event of Default exists.

 

7.7           Investments. Directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments, or maintain or invest any of its Investment
Property with a Person other than Bank or Bank’s Affiliates or permit any
Subsidiary to do so unless such Person has entered into a control agreement with
Bank, in form and substance satisfactory to Bank, or suffer or permit any
Subsidiary to be a party to, or be bound by, an agreement that restricts such
Subsidiary from paying dividends or otherwise distributing property to Borrower.

 

14.

 

 

7.8          Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower except
for transactions that are in the ordinary course of Borrower’s business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person.

 

7.9          Subordinated Debt. Make any payment in respect of any Subordinated
Debt, or permit any of its Subsidiaries to make any such payment, except in
compliance with the terms of such Subordinated Debt, or amend any provision
affecting Bank’s rights contained in any documentation relating to the
Subordinated Debt without Bank’s prior written consent.

 

7.10        Inventory and Equipment. Store the Inventory or the Equipment of a
book value in excess of $100,000 with a bailee, warehouseman, collocation
facility or similar third party unless the third party has been notified of
Bank’s security interest and Bank (a) has received an acknowledgment from the
third party that it is holding or will hold the Inventory or Equipment for
Bank’s benefit or (b) is in possession of the warehouse receipt, where
negotiable, covering such Inventory or Equipment. Except for Inventory sold in
the ordinary course of business and for movable items of personal property
having an aggregate book value not in excess of $100,000, and except for such
other locations as Bank may approve in writing, Borrower shall keep the
Inventory and Equipment only at the location set forth in Section 10 and such
other locations of which Borrower gives Bank prior written notice and as to
which Bank is able to take such actions as may be necessary to perfect its
security interest or to obtain a bailee’s acknowledgment of Bank’s rights in the
Collateral.

 

7.11        No Investment Company; Margin Regulation. Become or be controlled by
an “investment company,” within the meaning of the Investment Company Act of
1940, or become principally engaged in, or undertake as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Credit Extension for such
purpose.

 

8.           EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an Event of Default by
Borrower under this Agreement:

 

8.1          Payment Default. If Borrower fails to pay any of the Obligations
when due;

 

8.2          Covenant Default.

 

(a)          If Borrower fails to perform any obligation under Sections 6.2
(financial reporting), 6.4 (taxes), 6.5 (insurance), 6.6 (primary accounts) or
6.7 (financial covenants), or violates any of the covenants contained in Article
7 of this Agreement; or

 

15.

 

 

(b)          If Borrower fails or neglects to perform or observe any other
material term, provision, condition, covenant contained in this Agreement, in
any of the Loan Documents, or in any other present or future agreement between
Borrower and Bank and as to any default under such other term, provision,
condition or covenant that can be cured, has failed to cure such default within
fifteen (15) days after Borrower receives notice thereof or the Chief Executive
Office or Chief Financial Officer of Borrower has actual knowledge thereof;
provided, however, that if the default cannot by its nature be cured within the
fifteen (15) day period or cannot after diligent attempts by Borrower be cured
within such fifteen (15) day period, and such default is likely to be cured
within a reasonable time, then Borrower shall have an additional reasonable
period (which shall not in any case exceed forty-five (45) days) to attempt to
cure such default, and within such reasonable time period the failure to have
cured such default shall not be deemed an Event of Default but no Credit
Extensions will be made.

 

8.3          Material Adverse Change. If there occurs any circumstance or any
circumstances which would reasonably be expected to have a Material Adverse
Effect;

 

8.4          Attachment. If any material portion of Borrower’s assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within 10 days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower’s assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any material portion of Borrower’s assets by the United
States Government, or any department, agency, or instrumentality thereof, or by
any state, county, municipal, or governmental agency, and the same is not paid
within ten days after Borrower receives notice thereof, provided that none of
the foregoing shall constitute an Event of Default where such action or event is
stayed or an adequate bond has been posted pending a good faith contest by
Borrower (provided that no Credit Extensions will be made during such cure
period);

 

8.5          Insolvency. If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within 45 days (provided that no
Credit Extensions will be made prior to the dismissal of such Insolvency
Proceeding);

 

8.6          Other Agreements. If there is a default by the Borrower in any
agreement to which Borrower is a party with a third party or parties resulting
in a right by such third party or parties, whether or not exercised, to
accelerate the maturity of any Indebtedness in an amount in excess of $250,000
or that would reasonably be expected to have a Material Adverse Effect;

 

8.7          Judgments. If a final, uninsured judgment or judgments for the
payment of money in an amount, individually or in the aggregate, of at least
$250,000 shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of 10 days (provided that no Credit Extensions will be
made prior to the satisfaction or stay of the judgment); or

 

8.8          Misrepresentations. If any material misrepresentation or material
misstatement exists as of the date made in any warranty or representation set
forth herein or in any certificate delivered to Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or any
other Loan Document.

 

16.

 

  

9.           BANK’S RIGHTS AND REMEDIES.

 

9.1          Rights and Remedies. Upon the occurrence and during the continuance
of an Event of Default, Bank may, at its election, without notice of its
election and without demand, do any one or more of the following, all of which
are authorized by Borrower:

 

(a)          Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable
(provided that upon the occurrence of an Event of Default described in Section
8.5 (insolvency), all Obligations shall become immediately due and payable
without any action by Bank);

 

(b)          Demand that Borrower (i) deposit cash with Bank in an amount equal
to the amount of any Letters of Credit remaining undrawn, as collateral security
for the repayment of any future drawings under such Letters of Credit, and (ii)
pay in advance all Letter of Credit fees scheduled to be paid or payable over
the remaining term of the Letters of Credit, and Borrower shall promptly deposit
and pay such amounts;

 

(c)          Cease advancing money or extending credit to or for the benefit of
Borrower under this Agreement or under any other agreement between Borrower and
Bank;

 

(d)          Settle or adjust disputes and claims directly with account debtors
for amounts, upon terms and in whatever order that Bank reasonably considers
advisable;

 

(e)          Make such payments and do such acts as Bank considers necessary or
reasonable to protect its security interest in the Collateral. Borrower agrees
to assemble the Collateral if Bank so requires, and to make the Collateral
available to Bank as Bank may designate. Borrower authorizes Bank to enter the
premises where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or lien which in Bank’s determination appears to be prior
or superior to its security interest and to pay all expenses incurred in
connection therewith. With respect to any of Borrower’s owned premises, Borrower
hereby grants Bank a license to enter into possession of such premises and to
occupy the same, without charge, in order to exercise any of Bank’s rights or
remedies provided herein, at law, in equity, or otherwise;

 

(f)          Set off and apply to the Obligations any and all (i) balances and
deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or
for the credit or the account of Borrower held by Bank;

 

(g)          Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Bank is hereby granted a license or other right, to the extent it
may be granted, solely pursuant to the provisions of this Section 9.1, to use,
without charge, Borrower’s labels, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks, and advertising
matter, or any property of a similar nature, to complete production of,
advertise for sale, and sell any Collateral and, in connection with Bank’s
exercise of its rights under this Section 9.1, Borrower’s rights under all
licenses which are included in the Collateral and all franchise agreements shall
inure to Bank’s benefit;

 

17.

 

  

(h)          Sell the Collateral at either a public or private sale, or both, by
way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Borrower’s premises) as Bank determines is
commercially reasonable, and apply any proceeds to the Obligations in whatever
manner or order Bank deems appropriate. Bank may sell the Collateral without
giving any warranties as to the Collateral. Bank may specifically disclaim any
warranties of title or the like. This procedure will not be considered adversely
to affect the commercial reasonableness of any sale of the Collateral. If Bank
sells any of the Collateral upon credit, Borrower will be credited only with
payments actually made by the purchaser, received by Bank, and applied to the
indebtedness of the purchaser. If the purchaser fails to pay for the Collateral,
Bank may resell the Collateral and Borrower shall be credited with the proceeds
of the sale;

 

(i)          Bank may credit bid and purchase at any public sale;

 

(j)          Apply for the appointment of a receiver, trustee, liquidator or
conservator of the Collateral, without notice and without regard to the adequacy
of the security for the Obligations and without regard to the solvency of
Borrower, any guarantor or any other Person liable for any of the Obligations;
and

 

(k)          Any deficiency that exists after disposition of the Collateral as
provided above will be paid immediately by Borrower.

 

Bank may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.

 

9.2          Power of Attorney. Effective only upon the occurrence and during
the continuance of an Event of Default, Borrower hereby irrevocably appoints
Bank (and any of Bank’s designated officers, or employees) as Borrower’s true
and lawful attorney to: (a) send requests for verification of Accounts or notify
account debtors of Bank’s security interest in the Accounts; (b) endorse
Borrower’s name on any checks or other forms of payment or security that may
come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower’s policies of insurance; (f) settle
and adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable; and
(g) file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral; provided
Bank may exercise such power of attorney to sign the name of Borrower on any of
the documents described in clause (g) above, regardless of whether an Event of
Default has occurred. The appointment of Bank as Borrower’s attorney in fact,
and each and every one of Bank’s rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and
performed and Bank’s obligation to provide advances hereunder is terminated.

 

18.

 

 

9.3           Accounts Collection. At any time after the occurrence and during
the continuation of an Event of Default, Bank may notify any Person owing funds
to Borrower of Bank’s security interest in such funds and verify the amount of
such Account. Borrower shall collect all amounts owing to Borrower for Bank,
receive in trust all payments as Bank’s trustee, and immediately deliver such
payments to Bank in their original form as received from the account debtor,
with proper endorsements for deposit.

 

9.4           Bank Expenses. If Borrower fails to pay any amounts or furnish any
required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Bank may do any or all of the following after
reasonable notice to Borrower: (a) make payment of the same or any part thereof;
and/or (b) obtain and maintain insurance policies of the type discussed in
Section 6.5 of this Agreement, and take any action with respect to such policies
as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute
Bank Expenses, shall be immediately due and payable, and shall bear interest at
the then applicable rate hereinabove provided, and shall be secured by the
Collateral. Any payments made by Bank shall not constitute an agreement by Bank
to make similar payments in the future or a waiver by Bank of any Event of
Default under this Agreement.

 

9.5           Bank’s Liability for Collateral. Bank has no obligation to clean
up or otherwise prepare the Collateral for sale. All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower.

 

9.6           No Obligation to Pursue Others. Bank has no obligation to attempt
to satisfy the Obligations by collecting them from any other person liable for
them and Bank may release, modify or waive any collateral provided by any other
Person to secure any of the Obligations, all without affecting Bank’s rights
against Borrower. Borrower waives any right it may have to require Bank to
pursue any other Person for any of the Obligations.

 

9.7           Remedies Cumulative. Bank’s rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Bank of one right
or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank
shall constitute a waiver, election, or acquiescence by it. No waiver by Bank
shall be effective unless made in a written document signed on behalf of Bank
and then shall be effective only in the specific instance and for the specific
purpose for which it was given. Borrower expressly agrees that this Section 9.7
may not be waived or modified by Bank by course of performance, conduct,
estoppel or otherwise.

 

9.8           Demand; Protest. Except as otherwise provided in this Agreement,
Borrower waives demand, protest, notice of protest, notice of default or
dishonor, notice of payment and nonpayment and any other notices relating to the
Obligations.

 

19.

 

 

10.         NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands by any party
relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, or by
telefacsimile to Borrower or to Bank, as the case may be, at its addresses set
forth below:

 

If to Borrower: Enumeral Biomedical Corp.   1450 Broadway   New York, NY 10018

 

  Attn:       FAX:    

 

If to Bank: Square 1 Bank   406 Blackwell Street, Suite 240   Durham, North
Carolina 27701   Attn: Loan Operations Manager   FAX: (919) 314-3080

 

with a copy to: Square 1 Bank   424 Madison Avenue, Sixth Floor   New York, NY
10017       Attn: Bill Stickle   FAX: (646)336-4961

 

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

 

20.

 

  

11.        CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of North Carolina, without regard to principles of
conflicts of law. Jurisdiction shall lie in the State of North Carolina. All
disputes, controversies, claims, actions and similar proceedings arising with
respect to Borrower’s account or any related agreement or transaction shall be
brought in the General Court of Justice of North Carolina sitting in Durham
County, North Carolina or the United States District Court for the Middle
District of North Carolina, except as provided below with respect to arbitration
of such matters. BANK AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTION OF ANY OF THEM. THESE PROVISIONS SHALL NOT
BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR
BORROWER, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM. If the jury
waiver set forth in this Section 11 is not enforceable, then any dispute,
controversy, claim, action or similar proceeding arising out of or relating to
this Agreement, the Loan Documents or any of the transactions contemplated
therein shall be settled by final and binding arbitration held in Durham County,
North Carolina in accordance with the then current Commercial Arbitration Rules
of the American Arbitration Association by one arbitrator appointed in
accordance with those rules. The arbitrator shall apply North Carolina law to
the resolution of any dispute, without reference to rules of conflicts of law or
rules of statutory arbitration. Judgment upon any award resulting from
arbitration may be entered into and enforced by any state or federal court
having jurisdiction thereof. Notwithstanding the foregoing, the parties may
apply to any court of competent jurisdiction for preliminary or interim
equitable relief, or to compel arbitration in accordance with this Section. The
costs and expenses of the arbitration, including without limitation, the
arbitrator’s fees and expert witness fees, and reasonable attorneys’ fees,
incurred by the parties to the arbitration may be awarded to the prevailing
party, in the discretion of the arbitrator, or may be apportioned between the
parties in any manner deemed appropriate by the arbitrator. Unless and until the
arbitrator decides that one party is to pay for all (or a share) of such costs
and expenses, both parties shall share equally in the payment of the
arbitrator’s fees as and when billed by the arbitrator.

 

12.         GENERAL PROVISIONS.

 

12.1         Successors and Assigns. This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of each of the
parties and shall bind all persons who become bound as a debtor to this
Agreement; provided, however, that neither this Agreement nor any rights
hereunder may be assigned by Borrower without Bank’s prior written consent,
which consent may be granted or withheld in Bank’s sole discretion. Bank shall
have the right without the consent of or notice to Borrower to sell, assign,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank’s obligations, rights and benefits hereunder.

 

12.2         Indemnification. Borrower shall defend, indemnify and hold harmless
Bank and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in
connection with the transactions contemplated by this Agreement; and (b) all
losses or Bank Expenses in any way suffered, incurred, or paid by Bank, its
officers, employees and agents as a result of or in any way arising out of,
following, or consequential to transactions between Bank and Borrower whether
under this Agreement, or otherwise (including without limitation reasonable
attorneys fees and expenses), except for losses caused by Bank’s gross
negligence or willful misconduct.

 

12.3         Time of Essence. Time is of the essence for the performance of all
obligations set forth in this Agreement.

 

21.

 

  

12.4         Severability of Provisions. Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

 

12.5         Amendments in Writing, Integration. All amendments to or
terminations of this Agreement or the other Loan Documents must be in writing.
All prior agreements, understandings, representations, warranties, and
negotiations between the parties hereto with respect to the subject matter of
this Agreement and the other Loan Documents, if any, are merged into this
Agreement and the Loan Documents.

 

12.26         Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
Executed copies of the signature pages of this Agreement sent by facsimile or
transmitted electronically in Portable Document Format (“PDF”), or any similar
format, shall be treated as originals, fully binding and with full legal force
and effect, and the parties waive any rights they may have to object to such
treatment.

 

12.7         Survival. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding or Bank has any obligation to make any Credit
Extension to Borrower. The obligations of Borrower to indemnify Bank with
respect to the expenses, damages, losses, costs and liabilities described in
Section 12.2 shall survive until all applicable statute of limitations periods
with respect to actions that may be brought against Bank have run.

 

12.8         Confidentiality. In handling any confidential information, Bank and
all employees and agents of Bank shall exercise the same degree of care that
Bank exercises with respect to its own proprietary information of the same types
to maintain the confidentiality of any non-public information thereby received
or received pursuant to this Agreement except that disclosure of such
information may be made (i) to the subsidiaries or Affiliates of Bank or
Borrower in connection with their present or prospective business relations with
Borrower, (ii) to prospective transferees or purchasers of any interest in the
Credit Extensions, provided that they have entered into a comparable
confidentiality agreement in favor of Borrower and have delivered a copy to
Borrower, (iii) as required by law, regulations, rule or order, subpoena,
judicial order or similar order, (iv) as may be required in connection with the
examination, audit or similar investigation of Bank and (v) as Bank may
determine in connection with the enforcement of any remedies hereunder.
Confidential information hereunder shall not include information that either:
(a) is in the public domain or in the knowledge or possession of Bank when
disclosed to Bank, or becomes part of the public domain after disclosure to Bank
through no fault of Bank; or (b) is disclosed to Bank by a third party, provided
Bank does not have actual knowledge that such third party is prohibited from
disclosing such information.

 

********

 

22.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

 

  ENUMERAL BIOMEDICAL CORP.         By: /s/ John J. Rydzewsk         Title:
Executive Chairman         SQUARE 1 BANK         By: /s/ Basil Kushuir        
Title: AVP

 

23.

 

 

EXHIBIT A

 

DEFINITIONS

 

“Accounts” means all presently existing and hereafter arising accounts, contract
rights, payment intangibles and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by
Borrower and any and all credit insurance, guaranties, and other security
therefore, as well as all merchandise returned to or reclaimed by Borrower and
Borrower’s Books relating to any of the foregoing.

 

“Affiliate” means, with respect to any Person, any Person that owns or controls
directly or indirectly such Person, any Person that controls or is controlled by
or is under common control with such Person, and each of such Person’s senior
executive officers, directors, and general partners.

 

“Authorized Officer” means someone designated as such in the corporate
resolution provided by Borrower to Bank in which this Agreement and the
transactions contemplated hereunder are authorized by Borrower’s board of
directors. If Borrower provides subsequent corporate resolutions to Bank after
the Closing Date, the individual(s) designated as “Authorized Officer(s)” in the
most-recently provided resolution shall be the only “Authorized Officers” for
purposes of this Agreement.

 

“Bank Expenses” means all reasonable costs or expenses (including reasonable
attorneys’ fees and expenses) incurred in connection with the preparation,
negotiation, administration, and enforcement of the Loan Documents; reasonable
Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses
(whether generated in-house or by outside counsel) incurred in amending,
enforcing or defending the Loan Documents (including fees and expenses of
appeal), incurred before, during and after an Insolvency Proceeding, whether or
not suit is brought.

 

“Borrower’s Books” means all of Borrower’s books and records including: ledgers;
records concerning Borrower’s assets or liabilities, the Collateral, business
operations or financial condition; and all computer programs, or tape files, and
the equipment, containing such information.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks in the State of North Carolina are authorized or required to close.

 

“Cash” means unrestricted cash and cash equivalents.

 

“Cash Bum” means an amount equal to the prior period’s Cash minus the current
period’s ending Cash that has been adjusted for any changes to Cash as a result
of borrowings and repayments of borrowings, proceeds from the sale of equity for
Cash and the exercise of stock options or warrants for Cash, paid-in-capital and
minority interest, and capital expenditures financed under a capital lease.

 

“Change in Control” shall mean a transaction other than a bona fide equity
financing or series of financings on terms and from investors reasonably
acceptable to Bank in which any “person” or “group” (within the meaning of
Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of a sufficient number of shares of all
classes of stock then outstanding of Borrower ordinarily entitled to vote in the
election of directors, empowering such “person” or “group” to elect a majority
of the Board of Directors of Borrower, who did not have such power before such
transaction.

 

1.

 

 

“Closing Date” means the date of this Agreement.

 

“Code” means the North Carolina Uniform Commercial Code as amended or
supplemented from time to time.

 

“Collateral” means the property described on Exhibit B attached hereto and all
Negotiable Collateral to the extent not described on Exhibit B, except to the
extent any such property (i) is nonassignable by its terms without the consent
of the licensor thereof or another party (but only to the extent such
prohibition on transfer is enforceable under applicable law, including, without
limitation, §25-9-406 and §25-9-408 of the Code), (ii) the granting of a
security interest therein is contrary to applicable law, provided that upon the
cessation of any such restriction or prohibition, such property shall
automatically become part of the Collateral, (iii) constitutes the capital stock
of a controlled foreign corporation (as defined in the IRC), in excess of 65% of
the voting power of all classes of capital stock of such controlled foreign
corporations entitled to vote, or (iv) property (including any attachments,
accessions or replacements) that is subject to a Lien that is permitted pursuant
to clause (c) of the definition of Permitted Liens, if the grant of a security
interest with respect to such property pursuant to this Agreement would be
prohibited by the agreement creating such Permitted Lien or would otherwise
constitute a default thereunder, provided, that such property will be deemed
“Collateral” hereunder upon the termination and release of such Permitted Lien.

 

“Collateral State” means the state or states where the Collateral is located,
which is New York and Massachusetts.

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed, comade or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable;
(ii) any obligations with respect to undrawn letters of credit, corporate credit
cards or merchant services issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term “Contingent Obligation” shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.

 

“Copyrights” means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held.

 

“Credit Extension” means each Term Loan, Equipment Advance, or any other
extension of credit, by Bank to or for the benefit of Borrower hereunder.

 

“Equipment” means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

 

“Equipment Advance(s)” means a cash advance or cash advances under the Equipment
Loan.

 

2.

 

  

“Equipment Availability End Date” means July 31, 2012.

 

“Equipment Interest-Only End Date” means, for each Equipment Advance, the date
that is 6 months after the date upon which that particular Equipment Advance is
made.

 

“Equipment Loan” means a Credit Extension of up to $790,000.

 

“Equipment Maturity Date” means, for each Equipment Advance, the date that is 36
months after the date upon which that particular Equipment Advance is made.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder.

 

“Event of Default” has the meaning assigned in Article 8.

 

“GAAP” means generally accepted accounting principles, consistently applied, as
in effect from time to time in the United States.

 

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations, and (d) all Contingent
Obligations, including but not limited to any sublimit contained herein.

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

 

“Inventory” means all present and future inventory in which Borrower has any
interest.

 

“Investment” means any beneficial ownership of (including stock, partnership or
limited liability company interest or other securities) any Person, or any loan,
advance or capital contribution to any Person.

 

“Investment Agreement” means, collectively, Borrower’s stock purchase and other
agreement(s) pursuant to which Borrower most recently issued its preferred
stock.

 

“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

 

“Letter of Credit” means a commercial or standby letter of credit or similar
undertaking issued by Bank at Borrower’s request.

 

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

 

“Liquidity” means unrestricted Cash in Bank.

 

“Liquidity Ratio” means the ratio of Liquidity to all Indebtedness to Bank.

 

“Loan Documents” means, collectively, this Agreement, any note or notes executed
by Borrower, and any other document, instrument or agreement entered into in
connection with this Agreement, all as amended or extended from time to time.

 

3.

 

  

“Material Adverse Effect” means a material adverse effect on: (i) the
operations, business or financial condition of Borrower and its Subsidiaries
taken as a whole; (ii) the ability of Borrower to repay the Obligations or
otherwise perform its obligations under the Loan Documents; or (iii) Borrower’s
interest in, or the value, perfection or priority of Bank’s security interest in
the Collateral.

 

“Negotiable Collateral” means all of Borrower’s present and future letters of
credit of which it is a beneficiary, drafts, instruments (including promissory
notes), securities, documents of title, and chattel paper, and Borrower’s Books
relating to any of the foregoing.

 

“New Equity” means cash proceeds of at least Two Million Dollars ($2,000,000)
received by Borrower after the Closing Date from the sale or issuance of
Borrower’s equity securities to investors acceptable to Bank.

 

“Obligations” means all debt, principal, interest, Bank Expenses and other
amounts owed to Bank by Borrower pursuant to this Agreement or any other
agreement, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an Insolvency Proceeding and including any debt, liability, or obligation owing
from Borrower to others that Bank may have obtained by assignment or otherwise.

 

“Patents” means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.

 

“Periodic Payments” means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Bank pursuant to the
terms and provisions of any instrument, or agreement now or hereafter in
existence between Borrower and Bank.

 

“Permitted Indebtedness” means:

 

(a)          Indebtedness of Borrower in favor of Bank arising under this
Agreement or any other Loan Document;

 

(b)          Indebtedness existing on the Closing Date and disclosed in the
Schedule;

 

(c)          Indebtedness not to exceed $125,000 in the aggregate in any fiscal
year of Borrower secured by a lien described in clause (c) of the defined term
“Permitted Liens,” provided such Indebtedness does not exceed at the time it is
incurred the lesser of the cost or fair market value of the property financed
with such Indebtedness;

 

(d)          Subordinated Debt;

 

(e)          Indebtedness to trade creditors incurred in the ordinary course of
business; and

 

(f)          Extensions, refinancing and renewals of any items of Permitted
Indebtedness, provided that the principal amount is not increased or the terms
modified to impose more burdensome terms upon Borrower or its Subsidiary, as the
case may be.

 

“Permitted Investment” means:

 

(a)          Investments existing on the Closing Date disclosed in the Schedule;

 

4.

 

 

(b)          (i) Marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any State thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having rating of at least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit
maturing no more than one year from the date of investment therein, and (iv)
Bank’s money market accounts; (v) Investments in regular deposit or checking
accounts held with Bank or subject to a control agreement in favor of Bank; and
(vi) Investments consistent with any investment policy adopted by the Borrower’s
board of directors;

 

(c)          Repurchases of stock from former employees or directors of Borrower
under the terms of applicable repurchase agreements (i) in an aggregate amount
not to exceed $125,000 in any fiscal year, provided that no Event of Default has
occurred and, is continuing or would exist after giving effect to the
repurchases, or (ii) in any amount where the consideration for the repurchase is
the cancellation of indebtedness owed by such former employees to Borrower
regardless of whether an Event of Default exists;

 

(d)          Investments accepted in connection with Permitted Transfers;

 

(e)          Investments of Subsidiaries in or to other Subsidiaries or Borrower
and Investments by Borrower in Subsidiaries not to exceed $125,000 in the
aggregate in any fiscal year;

 

(f)          Investments not to exceed $125,000 outstanding in the aggregate at
any time consisting of (i) travel advances and employee relocation loans and
other employee loans and advances in the ordinary course of business, and (ii)
loans to employees, officers or directors relating to the purchase of equity
securities of Borrower or its Subsidiaries pursuant to employee stock purchase
plan agreements approved by Borrower’s Board of Directors;

 

(g)          Investments in unfinanced capital expenditures in any fiscal year,
not to exceed $250,000;

 

(h)          Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of customers or suppliers and in
settlement of delinquent obligations of, and other disputes with, customers or
suppliers arising in the ordinary course of Borrower’s business;

 

(i)          Investments consisting of notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers who are not Affiliates,
in the ordinary course of business, provided that this subparagraph (h) shall
not apply to Investments of Borrower in any Subsidiary;

 

(j)          Joint ventures or strategic alliances in the ordinary course of
Borrower’s business consisting of the licensing of technology, the development
of technology or the providing of technical support, provided that any cash
Investments by Borrower do not exceed $125,000 in the aggregate in any fiscal
year; and

 

(k)          Investments permitted under Section 7.3.

 

“Permitted Liens” means the following:

 

(a)          Any Liens existing on the Closing Date and disclosed in the
Schedule (excluding Liens to be satisfied with the proceeds of the Credit
Extensions) or arising under this Agreement, the other Loan Documents, or any
other agreement in favor of Bank;

 

(b)          Liens for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being contested in good faith by appropriate
proceedings and for which Borrower maintains adequate reserves;

 

5.

 

 

(c)          Liens not to exceed $125,000 in the aggregate (i) upon or in any
Equipment (other than Equipment financed by a Credit Extension) acquired or held
by Borrower or any of its Subsidiaries to secure the purchase price of such
Equipment or indebtedness incurred solely for the purpose of financing the
acquisition or lease of such Equipment, or (ii) existing on such Equipment at
the time of its acquisition, in each case provided that the Lien is confined
solely to the property so acquired and improvements thereon, and the proceeds of
such Equipment;

 

(d)          Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (c) above, provided that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness being extended, renewed or
refinanced does not increase;

 

(e)          Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Sections 8.4
(attachment) or 8.7 (judgments);

 

(f)          Liens securing Subordinated Debt; and

 

(g)          inchoate materialmen’s, mechanics, repairmen’s and similar liens
arising by operation of law in the ordinary course of business for amounts not
to exceed $125,000 which are not delinquent.

 

“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition
by Borrower or any Subsidiary of:

 

(a)          Inventory in the ordinary course of business;

 

(b)          licenses and similar arrangements for the use of the property of
Borrower or its Subsidiaries in the ordinary course of business;

 

(c)          worn-out, damaged, surplus or obsolete Equipment not financed with
the proceeds of Credit Extensions or if financed with the proceeds of a Credit
Extension provided the Company replaces such Equipment with Equipment of
equivalent value;

 

(d)          grants of security interests and other Liens that constitute
Permitted Liens; and

 

(e)          other assets of Borrower or its Subsidiaries that do not in the
aggregate exceed $125,000 during any fiscal year.

 

“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.

 

“Prime Rate” means the variable rate of interest, per annum, most recently
announced by Bank, as its “prime rate,” whether or not such announced rate is
the lowest rate available from Bank.

 

“Responsible Officer” means each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, Vice President of Finance and
the Controller of Borrower, as well as any other officer or employee identified
in as an Authorized Officer in the corporate resolution delivered by Borrower to
Bank in connection with this Agreement.

 

6.

 

  

“Schedule” means the schedule of exceptions attached hereto and approved by
Bank, if any.

 

“Soft Costs” means taxes, shipping, warranty charges, freight discounts and
installation expense.

 

“SOS Reports” means the official reports from the Secretaries of State of each
Collateral State, the state where Borrower’s chief executive office is located,
the state of Borrower’s formation and other applicable federal, state or local
government offices identifying all current security interests filed in the
Collateral and Liens of record as of the date of such report.

 

“Subordinated Debt” means any debt incurred by Borrower that is subordinated in
writing to the debt owing by Borrower to Bank on terms reasonably acceptable to
Bank (and identified as being such by Borrower and Bank).

 

“Subsidiary” means any corporation, partnership or limited liability company or
joint venture in which (i) any general partnership interest or (ii) more than
50% of the stock, limited liability company interest or joint venture of which
by the terms thereof ordinary voting power to elect the Board of Directors,
managers or trustees of the entity, at the time as of which any determination is
being made, is owned by Borrower, either directly or through an Affiliate.

 

“Term Loan A Amount” means Five Hundred Thousand Dollars $500,000.

 

“Term Loan A Availability End Date” means the Closing Date.

 

“Term Loan A Interest-Only End Date” means June 1, 2012.

 

“Term Loan A Maturity Date” means December 1, 2014.

 

“Term Loan B Amount” means Zero Dollars ($0.00); provided however, that if
Borrower delivers evidence to Bank that Borrower has received the New Equity in
its entirety, “Term Loan B Amount” shall there after mean Five Hundred Thousand
Dollars ($500,000).

 

“Term Loan B Availability End Date” means July 31, 2012.

 

“Term Loan B Interest-Only End Date” means the date that is 6 months after the
date upon which Term Loan B is made.

 

“Term Loan B Maturity Date” means the date that is 36 months after the date upon
which Term Loan B is made.

 

“Trademarks” means any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.

 

7.

 

 

 

DEBTOR: ENUMERAL BIOMEDICAL CORP.     SECURED PARTY: SQUARE 1 BANK

 

EXHIBIT B

 

COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT

 

All personal property of Borrower (herein referred to as “Borrower” or “Debtor”)
whether presently existing or hereafter created or acquired, and wherever
located, including, but not limited to:

 

(a)          all accounts (including health-care-insurance receivables), chattel
paper (including tangible and electronic chattel paper), deposit accounts,
documents (including negotiable documents), equipment (including all accessions
and additions thereto), financial assets, general intangibles (including
patents, trademarks, copyrights, goodwill, payment intangibles, domain names,
and software) goods (including fixtures), instruments (including promissory
notes), inventory (including all goods held for sale or lease or to be furnished
under a contract of service, and including returns and repossessions),
investment property (including securities and securities entitlements), letter
of credit rights, money, and all of Debtor’s books and records with respect to
any of the foregoing, and the computers and equipment containing said books and
records;

 

(b)          any and all cash proceeds and/or noncash proceeds of any of the
foregoing, including, without limitation, insurance proceeds, and all supporting
obligations and the security therefor or for any right to payment. All terms
above have the meanings given to them in the North Carolina Uniform Commercial
Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions.

 

Notwithstanding the foregoing (including, without limitation, any language in
clause (a) above), the Collateral shall not include any of the intellectual
property, in any medium, of any kind or nature whatsoever, now or hereafter
owned or acquired or received by Borrower, or in which Borrower now holds or
hereafter acquires or receives any right or interest (collectively, the
“Intellectual Property”); provided, however, that the Collateral shall include
all accounts and general intangibles that consist of rights to payment and
proceeds from the sale, licensing or disposition of all or any part, or rights
in, the foregoing (the “Rights to Payment”).

 

Notwithstanding the foregoing, if a judicial authority (including a U.S.
Bankruptcy Court) holds that a security interest in the underlying Intellectual
Property is necessary to have a security interest in the Rights to Payment, then
the Collateral shall automatically, and effective as of December 1, 2011,
include the Intellectual Property to the extent and only to the extent necessary
to permit perfection of Bank’s security interest in the Rights to Payment, and
further provided, however, that Bank’s enforcement rights with respect to any
security interest in the Intellectual Property shall be absolutely limited to
the Rights to Payment only, and Bank shall have no recourse whatsoever with
respect to the underlying Intellectual Property.

 

1.

 

 

EXHIBIT C

 

LOAN ADVANCE/PAYDOWN REQUEST FORM

 

[Please refer to New Borrower Kit]

 

 

 

EXHIBIT D

COMPLIANCE CERTIFICATE

 

[Please refer to New Borrower Kit]

 

1.

 

 

SCHEDULE OF EXCEPTIONS

 

Permitted Indebtedness (Exhibit A) – None.

 

Permitted Investments (Exhibit A) – None.

 

Permitted Liens (Exhibit A) – None.

 

Prior Names (Section 5.5) – Enumeral Technologies, Inc.

 

Litigation (Section 5.6) – None.

 

Inbound Licenses (Section 5.12) – Exclusive License Agreement, as may be amended
from time to time, between the Company and MIT (as amended from time to time,
“MIT License”). This MIT License is not assignable and therefore is excluded
from the Collateral securing the loans hereunder.

 

1.

 

 

FIRST AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement (the “Amendment”), is
entered into as of June 12, 2012, by and between SQUARE 1 BANK (the ‘'Bank”) and
ENUMERAL BIOMEDICAL CORP. (the “Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that Loan and Security Agreement dated as of
December 5, 2011 (as amended from time to time, the “Agreement”). The parties
desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1)A new Section 2.5(d) is hereby added to the Agreement, as follows:

 

(d)          Success Fee. On July 5, 2015 or such earlier date as all of the
outstanding Obligations hereunder are repaid in full, a fee equal to $15,000,
which shall be nonrefundable. This Section 2.5(d) shall survive any termination
of this Agreement.

 

  2) The first paragraph of Section 6.2 of the Agreement is hereby amended and
restated, as follows:

 

6.2          Financial Statements, Reports, Certificates. Borrower shall deliver
to Bank: (i) as soon as available, but in any event within 30 days after the end
of each calendar month, a company prepared consolidated and consolidating
balance sheet, cash flow statement and income statement covering Borrower’s
operations during such period, in a form reasonably acceptable to Bank and
certified by a Responsible Officer; (ii) as soon as available, but in any event
within 180 days after the end of Borrower’s fiscal year, audited (or such other
level as is required by the Investment Agreement) consolidated and consolidating
financial statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an opinion on such financial statements of an independent
certified public accounting firm reasonably acceptable to Bank which is either
unqualified or qualified only for going concern, so long as in the case of the
qualified opinion it is either consented to in writing by Bank or in the
alternative if following the delivery of such financial statements the Bank does
not consent to such qualified Borrower’s investors will provide additional
equity as needed within 30 days after notice from the Bank of such non consent
to the qualified financial statements or otherwise; provided however, that the
audited consolidated and consolidating financial statements of Borrower for
fiscal years 2011 and 2012 shall be delivered to Bank on or before July 1, 2013,
(iii) annual budget approved by Borrower’s Board of Directors as soon as
available but not later than 30 days before the beginning of the applicable
calendar year, provided however, that for the 2012 annual budget only, Borrower
shall provide the 2012 annual budget approved by Borrower’s Board of Directors
as soon as available but not later than March 1, 2012; (iv) if applicable,
copies of all statements, reports and notices sent or made available generally
by Borrower to its security holders or to any holders of Subordinated Debt and
all reports on Forms 10-K and 10-Q filed with the Securities and Exchange
Commission; (v) promptly upon receipt of notice thereof, a report of any legal
actions pending or threatened against Borrower or any Subsidiary that could
reasonably be expected to result in damages or costs to Borrower or any
Subsidiary of $250,000 or more; (vi) promptly upon receipt, each management
letter prepared by Borrower’s independent certified public accounting firm
regarding Borrower’s management control systems, (vii) such budgets, sales
projections, operating plans or other financial information generally prepared
by Borrower in the ordinary course of business as Bank may reasonably request
from time to time.

 

Enumeral Biomedical Corp. – 1st Amendment to LSA

 

1

 

 

3)Section 6.7(b) of the Agreement is hereby amended and restated, as follows:

 

(b)          Cash Burn. Tested monthly and calculated on a trailing six-months
average, a Cash Burn of not more than the amounts shown in column B below for
the corresponding reporting period in column A.

 

A  B  Reporting Period Ending On   Maximum Cash Burn  April 30, 2012 
$1,699,300  May 31, 2012  $1,658,900  June 30, 2012  $1,584,100  July 31, 2012 
$2,020,729  August 31, 2012  $2,149,201  September 30, 2012  $1,997,476  October
31, 2012  $2,021,432  November 30, 2012  $2,079,360  December 31, 2012 
$1,746,866 

 

Beginning with December 1, 2012, Bank and Borrower hereby agree that, on or
before December 1st of each year during the term of this Agreement, Borrower
shall provide to Bank a fully-funded budget for the upcoming calendar year, and
Bank shall use that budget to establish the maximum Cash Burn amounts for the
upcoming year, with such maximum amounts being incorporated herein by an
amendment, which shall be promptly executed by Bank and Borrower.

 

  4) The following definitions in Exhibit A to the Agreement are hereby amended
and restated, as follows:

 

“Equipment Availability End Date” December 5, 2012.

 

“Equipment Interest-Only End Date” means December 5, 2012.

 

“Equipment Maturity Date” means July 5, 2015.

 

“Term Loan A Interest-Only End Date” means December 5, 2012.

 

Enumeral Biomedical Corp. – 1st Amendment to LSA

 

2

 

 

“Term Loan A Maturity Date” means July 5, 2015.

 

“Term Loan B Availability End Date” means December 5, 2012.

 

“Term Loan B Interest-Only End Date” means December 5, 2012.

 

“Term Loan B Maturity Date” means July 5, 2015.

 

  5) Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement. The Agreement, as amended hereby, shall be
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower
ratifies and reaffirms the continuing effectiveness of all agreements entered
into in connection with the Agreement.

 

  6) Borrower represents and warrants that the representations and warranties
contained in the Agreement are true and correct as of the date of this
Amendment.

 

  7) This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

 

  8) As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

 

a)          this Amendment, duly executed by Borrower;

 

b)          an officer’s certificate of Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Amendment;

 

c)          a Second Warrant to Purchase Stock, duly executed by Borrower;

 

d)          payment of a $5,500 facility fee, which may be debited from any of
Borrower’s accounts;

 

e)          payment of all Bank Expenses, including Bank’s expenses for the
documentation of this Amendment and any related documents, and any UCC, good
standing and intellectual property search or filing fees, which may be debited
from any of Borrower’s accounts; and

 

f)         such other documents and completion of such other matters, as Bank
may reasonably deem necessary or appropriate.

 

[Signature Page Follows]

 

Enumeral Biomedical Corp. – 1st Amendment to LSA

 

3

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

ENUMERAL BIOMEDICAL CORP.   SQUARE 1 BANK       By: /s/ John J. Rydzewski   By:
/s/ Zack Robbins Name: John J. Rydzewski   Name: Zack Robbins Title: Executive
Chairman   Title: AVP

 

[Signature Page to First Amendment to Loan and Security Agreement]

 

Enumeral Biomedical Corp. – 1st Amendment to LSA

 

4

 

 

SECOND AMENDMENT

TO 

LOAN AND SECURITY AGREEMENT

 

This Second Amendment to Loan and Security Agreement (the “Amendment”), is made
and entered into as of August 9, 2013, by and between SQUARE 1 BANK (the “Bank”)
and ENUMERAL BIOMEDICAL CORP. (the “Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that Loan and Security Agreement dated as of
December 5, 2011 (as amended from time to time, the “Agreement”). The parties
desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1)Section 6.7 of the Agreement is hereby amended and restated, as follows:

 

6.7          Financial Covenants. Borrower shall at all times maintain at least
one of the following financial ratios and covenants; provided, however, that
from August 9, 2013 through the remainder of the 2013 calendar year, Borrower
shall not be required to maintain any of the financial ratios and covenants set
forth in this Section 6.7:

 

(a)          Liquidity Ratio. A Liquidity Ratio of at least 1.25 to 1.00; or

 

(b)          Cash Burn. Tested monthly and calculated on a trailing six-months
average, a Cash Bum of not more than the amounts shown in column B below for the
corresponding reporting period in column A.

 

A  B  Reporting Period Ending On   Maximum Cash Burn  January 31, 2013 
$1,807,516  February 28, 2013  $1,917,511  March 31, 2013  $1,826,044  April 30,
2013  $1,700,391  May 31, 2013  $1,551,829  June 30, 2013  $1,646,901  July 31,
2013  $1,618,389  August 31, 2013  $1,574,255  September 30, 2013  $1,695,620 
October 31, 2013  $1,762,491  November 30, 2013  $1,835,388  December 31, 2013 
$2,000,835 

 

Enumeral Biomedical Corp. – 2nd Amendment to LSA Execution1

 

1

 

 

Bank and Borrower hereby agree that, on or before December 15th of each year
during the term of this Agreement, Borrower shall provide to Bank a fully-funded
budget for the upcoming calendar year, and Bank shall use that budget to
establish the maximum Cash Bum amounts for the upcoming year, with such maximum
amounts being incorporated herein by an amendment, which shall be promptly
executed by Bank and Borrower.

 

  2) The following new Section 6.10 is hereby added to the Agreement, as
follows:

 

6.10        Milestone Covenants. Borrower shall achieve each; of the following
milestones:

 

(a)          Minimum Equity Milestone. On or before October 31, 2013, Borrower
shall have received net Cash proceeds from the sale or issuance of Borrower’s
equity securities in an amount not less than $750,000 (the “Initial Equity
Event”).

 

(b)          Term Sheet Milestone. On or before December 31, 2013, Borrower’s
receipt of a signed and accepted term sheet from one or more investor(s)
acceptable to Bank for the sale or issuance of Borrower’s equity securities on
terms and conditions which shall result in net Cash proceeds in amount not less
than $2,500,000 (the “Term Sheet”); provided, however, the net Cash proceeds
required under the Term Sheet shall be reduced by: (i) Cash proceeds which are
in excess of the required Cash amount pursuant the Initial Equity Event, and
(ii) funds to be received in the 2014 calendar year pursuant to signed term
sheets, signed proposals or signed contracts for new or expansion of existing
partnership(s) or collaboration(s) that are also included in Borrower’s 2014
Board approved plan to be in effect beginning January 1, 2014; provided,
further, that Borrower’s 2014 Board approved plan evidences Borrower’s ability
to retain a Cash balance throughout the remainder of the 2014 calendar year.

 

  3) Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement. The Agreement, as amended hereby, shall be
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower
ratifies and reaffirms the continuing effectiveness of all agreements entered
into in connection with the Agreement.

 

  4) Borrower represents and warrants that the representations and warranties
contained in the Agreement are true and correct as of the date of this
Amendment.

 

  5) This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

 

  6) As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

 

b)          this Amendment, duly executed by Borrower;

 

Enumeral Biomedical Corp. – 2nd Amendment to LSA Execution2

 

2

 

 

c)          payment of all Bank Expenses, including Bank’s expenses for the
documentation of this Amendment and any related documents, and any UCC, good
standing and intellectual property search or filing fees, which may be debited
from any of Borrower’s accounts; and

 

b)          such other documents and completion of such other matters, as Bank
may reasonably deem necessary or appropriate.

 

[Signature Page Follows]

 

Enumeral Biomedical Corp. – 2nd Amendment to LSA Execution3

 

3

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

ENUMERAL BIOMEDICAL CORP.   SQUARE 1 BANK           By: /s/ Derek Brand   By:
/s/ Zack Robbins Name: Derek Brand   Name: Zack Robbins Title: VP Business
Development & Finance   Title: AVP

 

[Signature Page to Second Amendment to Loan and Security Agreement]

 

Enumeral Biomedical Corp. – 2nd Amendment to LSA Execution4

 

4

 

 

THIRD AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This Third Amendment to Loan and Security Agreement (this “Amendment”), is made
and entered into as of February 3, 2014, by and between SQUARE 1 BANK (“Bank”)
and ENUMERAL BIOMEDICAL CORP. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that Loan and Security Agreement dated as of
December 5, 2011 (as amended from time to time, the “Agreement”). The parties
desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1)Section 6.7 of the Agreement is hereby amended and restated, as follows:

 

6.7           Financial Covenants. Borrower shall maintain the following
financial covenants:

 

(a)          Remaining Months Cash. Beginning on the date on which Borrower
achieves Equity Milestone I and continuing at all times thereafter. Borrower
shall maintain Remaining Months Cash of at least 3.0. For the avoidance of
doubt, Remaining Months Cash shall be tested on a daily basis, using the Cash
Burn level for the most recent trailing- three-month period for which reporting
is available.

 

(b)          Term Sheet Requirement for Forthcoming RMC Violation. Before
Borrower’s Remaining Months Cash falls below 3.0 in violation of Section 6.7(a)
above, Borrower shall submit to Bank a signed term sheet for the issuance of
Borrower's equity securities, with net Cash proceeds from such sale or issuance
of at least $2,000,000, and otherwise on terms and from investors acceptable to
Bank. Borrower shall receive such net Cash proceeds within 30 days after the
signed term sheet is delivered to Bank. During the period after Bank has
received the signed term sheet but before Borrower receives the required net
Cash proceeds, Borrower shall be required to maintain Remaining Months Cash of
at least 2.0 instead of the level required by Section 6.7(a) above.

 

2)Section 6.10 of the Agreement is hereby amended and restated, as follows:

 

6.10         Milestone Covenants. Borrower shall achieve each of the following
milestone covenants:

 

(a)          Equity Milestone I. Borrower shall achieve Equity Milestone I.

 

(b)          Equity Milestone II. Borrower shall achieve Equity Milestone II.

 

Enumeral Biomedical Corp. – 3rd Amendment to LSA

 

1

 

 

3)Section 8.2(a) of the Agreement is hereby amended and restated, as follows:

 

(a)          If Borrower fails to perform any obligation under Sections 6.2
(financial reporting), 6.4 (taxes), 6.5 (insurance), 6.6 (primary accounts), 6.7
(financial covenants), or 6.10 (milestone covenants), or violates any of the
covenants contained in Article 7 of this Agreement; or

 

4)The following defined terms are hereby added to Exhibit A to the Agreement, as
follows:

 

“Equity Milestone I” means Borrower’s receipt, after February 1, 2014 but on or
before March 31, 2014, of net Cash proceeds of at least $2,000,000 from the sale
or issuance of Borrower’s equity securities to investors acceptable to Bank,
which acceptance will not be unreasonably withheld.

 

“Equity Milestone II” means Borrower's receipt, after February 1, 2014 but on or
before June 30, 2014, of net Cash proceeds of at least $4,000,000 from the sale
or issuance of Borrower’s equity securities to investors acceptable to Bank,
which acceptance will not be unreasonably withheld.

 

“Remaining Months Cash” means (i) unrestricted Cash at Bank, divided by (ii) the
monthly average of trailing-three-months Cash Burn.

 

  5) The following defined term in Exhibit A to the Agreement is hereby amended
and restated, as follows:

 

“Cash Burn” means an amount equal to the prior period’s ending Cash minus the
current period’s ending Cash that has been adjusted for any changes to Cash as a
result of borrowings and repayments of borrowings, proceeds from the sale of
equity for Cash and the exercise of stock options or warrants for Cash, and
paid-in-capital and minority interest.

 

  6) The defined terms “Liquidity” and “Liquidity Ratio” and their respective
definitions in Exhibit A to the Agreement are hereby deleted.

 

7)Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement. The Agreement, as amended hereby, shall be
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower
ratifies and reaffirms the continuing effectiveness of all agreements entered
into in connection with the Agreement.

 

8)Borrower represents and warrants that the representations and warranties
contained in the Agreement are true and correct as of the date of this
Amendment.

 

9)This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

 

  10) As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

 

Enumeral Biomedical Corp. – 3rd Amendment to LSA

 

2

 

 

a) this Amendment, duly executed by Borrower;

 

b) evidence that Borrower has received at least $635,000 in net Cash proceeds
from the sale or issuance of Borrower’s Subordinated Debt securities to
investors acceptable to Bank;

 

a) a subordination agreement, duly executed by each of Harris & Harris Group,
Inc., Allan Rothstein, John J. Rydzewski, Michael Weiss, Emanuele Ostuni, and
Peter Green and acknowledged by Borrower;

 

b) payment of all Bank Expenses, including Bank’s expenses for the documentation
of this Amendment and any related documents, and any UCC, good standing and
intellectual property search or filing fees, which may be debited from any of
Borrower’s accounts; and

 

c) such other documents and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.

 

[Signature Page Follows]

 

Enumeral Biomedical Corp. – 3rd Amendment to LSA

 

3

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

ENUMERAL BIOMEDICAL CORP.   SQUARE 1 BANK           By: /s/ Derek Brand   By:
/s/ Zack Robbins Name: Derek Brand   Name: Zack Robbins Title: VP Business
Development Director of Finance   Title: AVP

 

[Signature Page to Third Amendment to Loan and Security Agreement]

 

Enumeral Biomedical Corp. – 3rd Amendment to LSA

 

4

 

 

 

FOURTH AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This Fourth Amendment to Loan and Security Agreement (this “Amendment”), is made
and entered into as of June 26, 2014, by and between SQUARE 1 BANK (“Bank”) and
ENUMERAL BIOMEDICAL CORP. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that Loan and Security Agreement dated as of
December 5, 2011 (as amended from time to time, the “Agreement”). The parties
desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1)Bank hereby waives Borrower's violation of the Remaining Months Cash covenant,
as set forth in Section 6.7(a) of the Agreement (as in effect prior to this
Amendment), for all the dates from June 12, 2014 through the date of this
Amendment.

 

2)Section 6.7(a) of the Agreement is hereby amended and restated, as follows:

 

(a)      Remaining Months Cash. Beginning on August 1, 2014 and continuing at
all times thereafter, Borrower shall maintain Remaining Months Cash of at least
3.0. For the avoidance of doubt, Remaining Months Cash shall be tested on a
daily basis, using the Cash Burn level for the most recent trailing-three-month
period for which reporting is available.

 

3)A new Section 6.7(c) is hereby added to the Agreement, as follows:

 

(c)      Minimum Cash. From June 26, 2014 through August 1, 2014, a balance of
unrestricted Cash at Bank of not less than $300,000, monitored on a daily basis.

 

4)The following defined term set forth in Exhibit A to the Agreement is hereby
amended and restated, as follows:

 

“Equity Milestone II” means Borrower’s receipt, after February 1, 2014 but on or
before August 1, 2014, of net Cash proceeds of at least $4,000,000 from the sale
or issuance of Borrower's equity securities to investors acceptable to Bank,
which acceptance will not be unreasonably withheld.

 

5)Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement. The Agreement, as amended hereby, shall be
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower
ratifies and reaffirms the continuing effectiveness of all agreements entered
into in connection with the Agreement.

 

Enumeral Biomedical Corp. – 4th Amendment to LSA

 

1

 

 

6)Borrower represents and warrants that the representations and warranties
contained in the Agreement are true and correct as of the date of this
Amendment.

 

7)This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

 

8)As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

 

a)this Amendment, duly executed by Borrower;

 

b)payment of a $500 facility fee, which may be debited from any of Borrower’s
accounts;

 

a)payment of all Bank Expenses, including Bank’s expenses for the documentation
of this Amendment and any related documents, and any UCC, good standing and
intellectual property search or filing fees, which may be debited from any of
Borrower’s accounts; and

 

b)such other documents and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.

 

[Signature Page Follows]

 

Enumeral Biomedical Corp. – 4th Amendment to LSA

 

2

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

ENUMERAL BIOMEDICAL CORP.   SQUARE 1 BANK           By: /s/ Derek Brand   By:
/s/ John Orlando Name : Derek Brand   Name: John Orlando Title: VP of Business
Development & Director, Finance   Title: AVP

 

[Signature Page to Fourth Amendment to Loan and Security Agreement]

 

Enumeral Biomedical Corp. – 4th Amendment to LSA

 

3