EXHIBIT
10.2


 


LOAN
AND SECURITY AGREEMENT


 


THIS
LOAN AND SECURITY AGREEMENT (this “Agreement”) is dated as of the Effective Date between SILICON VALLEY BANK,
a California corporation (“Bank”), and the borrower listed on Schedule I hereto (“Borrower”). The
parties agree as follows:


 


1
LOAN AND TERMS OF PAYMENT


 


1.1
Term Loan.


 


(a)
Availability. Subject to the terms and conditions of this Agreement, upon Borrower’s request, during the Draw Period, Bank
shall make term loan advances not exceeding the Term Loan Availability Amount (each such advance is referred to herein as a “Term
Loan Advance” and, collectively, as the “Term Loan Advances”). Borrower may request Term Loan Advances as
set forth on Schedule I hereto.


 


(b)
Repayment. Borrower shall repay each Term Loan Advance as set forth in Schedule I hereto. All outstanding principal and accrued
and unpaid interest under each Term Loan Advance, and all other outstanding Obligations with respect to such Term Loan Advance, are due
and payable in full on the Term Loan Maturity Date.


 


(c)
Permitted Prepayment. Borrower shall have the option to prepay all or any portion of the Term Loan Advances, provided Borrower
(i) delivers written notice to Bank of its election to prepay all or a portion of the Term Loan Advances, which such prepayment portion
shall be an aggregate principal amount of at least $5,000,000.00, at least 10 days prior to such prepayment along with a notice of the
portion of the principal amount being prepaid, and (ii) pays, on the date of such prepayment (A) the outstanding principal plus accrued
and unpaid interest with respect to the portion of the Term Loan Advances, (B) the Prepayment Fee with respect to the portion of the
Term Loan Advances being prepaid, (C) the Final Payment with respect to the portion of the Term Loan Advances being prepaid, and (D)
all other sums, if any, that shall have become due and payable with respect to the portion of the Term Loan Advances being prepaid, including
interest at the Default Rate with respect to any past due amounts.


 


(d)
Mandatory Prepayment upon an Acceleration. If the Term Loan Advances are accelerated by Bank following the occurrence and during
the continuance of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of (i) all outstanding principal
plus accrued and unpaid interest with respect to the Term Loan Advances, (ii) the Prepayment Fee, (iii) the Final Payment, and (iv) all
other sums, if any, that shall have become due and payable with respect to the Term Loan Advances, including interest at the Default
Rate with respect to any past due amounts.


 


1.2
Payment of Interest on the Credit Extensions.


 


(a)
Interest Payments. Interest on the principal amount of each Term Loan Advance is payable as set forth on Schedule I hereto.


 


(b)
Interest Rate.


 


(i)
Subject to Section 1.2(c), the outstanding principal amount of any Term Loan Advance shall accrue interest as set forth on Schedule I
hereto.


 


(ii)
All-In Rate. Notwithstanding any terms in this Agreement to the contrary, if at any time the interest rate applicable to any Obligations
is less than 0.0%, such interest rate shall be deemed to be 0.0% for all purposes of this Agreement.


 




    	 



     


    

 


(c)
Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, the outstanding Obligations shall
bear interest at a rate per annum which is 3.0% above the rate that is otherwise applicable thereto (the “Default Rate”)
unless Bank otherwise elects, in its sole discretion, to impose a lesser increase or no increase. Fees and expenses which are required
to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall
bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the increased interest
rate provided in this Section 1.2(c) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event
of Default or otherwise prejudice or limit any rights or remedies of Bank.


 


(d)
Adjustment to Interest Rate. Each change in the interest rate applicable to any amounts payable under the Loan Documents based
on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of such change.


 


(e)
Interest Computation. Interest shall be computed as set forth on Schedule I hereto. In computing interest, the date of the making
of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension
is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension.


 


1.3
Fees. Borrower shall pay to Bank:


 


(a)
Prepayment Fee. The Prepayment Fee, when due hereunder, which shall be fully earned and non-refundable as of such date;


 


(b)
Final Payment. The Final Payment, when due hereunder, which shall be fully earned and non-refundable as of such date; and


 


(c)
Bank Expenses. All Bank Expenses incurred through and after the Effective Date, when due (or, if no stated due date, upon demand
by Bank).


 


Unless
otherwise provided in this Agreement or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or repayment
of any fees earned by Bank pursuant to this Agreement, notwithstanding any termination of this Agreement or the suspension or termination
of Bank’s obligation to make loans and advances hereunder. Bank may deduct amounts owing by Borrower under the clauses of this
Section 1.3 pursuant to the terms of Section 1.4(c). Bank shall provide Borrower written notice of deductions made pursuant to the terms
of the clauses of this Section 1.3.


 


1.4
Payments; Application of Payments; Debit of Accounts.


 


(a)
All payments (including prepayments) to be made by Borrower under any Loan Document shall be made in immediately available funds in Dollars,
without setoff, counterclaim, or deduction, before 12:00 p.m. Eastern time on the date when due. Payments of principal and/or interest
received after 12:00 p.m. Eastern time are considered received at the opening of business on the next Business Day. When a payment is
due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable,
shall continue to accrue until paid.


 


(b)
Bank has the right to determine in its commercially reasonable discretion the order and manner in which all payments with respect to
the Obligations may be applied. Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply
any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such allocation or application
is not specified elsewhere in this Agreement.


 


(c)
Bank may debit any of Borrower’s deposit accounts maintained with Bank, including the Designated Deposit Account, for principal
and interest payments or any other amounts Borrower owes Bank when due under the Loan Documents. These debits shall not constitute a
set-off.


 




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1.5
Change in Circumstances.


 


(a)
Increased Costs. If any Change in Law shall: (i) impose, modify, or deem applicable any reserve, special deposit, compulsory loan,
insurance charge, or similar requirement against assets of, deposits with or for the account of, or advances, loans, or other credit
extended or participated in by, Bank, (ii) subject Bank to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses
(b) through (d) of the definition of Excluded Taxes, and (C) Connection Income Taxes) on its loans, loan principal, letters of credit,
commitment, or other obligations, or its deposits, reserves, other liabilities, or capital attributable thereto, or (iii) impose on Bank
any other condition, cost, or expense (other than Taxes) affecting this Agreement or Credit Extensions made by Bank, and the result of
any of the foregoing shall be to increase the cost to Bank of making, converting to, continuing, or maintaining any Credit Extension
(or of maintaining its obligation to make any such Credit Extension), or to reduce the amount of any sum received or receivable by Bank
hereunder (whether of principal, interest, or any other amount) then, upon written request of Bank, Borrower shall promptly pay to Bank
such additional amount or amounts as will compensate Bank for such additional costs incurred or reduction suffered.


 


(b)
Capital Requirements. If Bank determines that any Change in Law affecting Bank regarding capital or liquidity requirements, has
or would have the effect of reducing the rate of return on Bank’s capital as a consequence of this Agreement, any term loan facility,
or the Credit Extensions made by Bank to a level below that which Bank could have achieved but for such Change in Law (taking into consideration
Bank’s policies with respect to capital adequacy and liquidity), then from time to time upon written request of Bank, Borrower
shall promptly pay to Bank such additional amount or amounts as will compensate Bank for any such reduction suffered.


 


(c)
Delay in Requests. Failure or delay on the part of Bank to demand compensation pursuant to this Section 1.5 shall not constitute
a waiver of Bank’s right to demand such compensation; provided that Borrower shall not be required to compensate Bank pursuant
to subsection (a) for any increased costs incurred or reductions suffered more than 9 months prior to the date that Bank notifies Borrower
of the Change in Law giving rise to such increased costs or reductions (except that if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 9-month period shall be extended to include the period of retroactive effect).


 


1.6
Taxes.


 


(a)
Payments Free of Taxes. Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made
without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good-faith
discretion of Borrower) requires the deduction or withholding of any Tax from any such payment by Borrower, then (i) Borrower shall be
entitled to make such deduction or withholding, (ii) Borrower shall timely pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with Applicable Law, and (iii) if such Tax is an Indemnified Tax, the sum payable by Borrower shall be increased
as necessary so that, after such deduction or withholding has been made (including such deductions and withholdings applicable to additional
sums payable under this Section 1.6), Bank receives an amount equal to the sum it would have received had no such deduction or withholding
been made.


 


(b)
Payment of Other Taxes by Borrower. Without limiting the provisions of subsection (a) above, Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with Applicable Law.


 


(c)
Tax Indemnification. Without limiting the provisions of subsections (a) and (b) above, Borrower shall, and does hereby, indemnify
Bank, within 30 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Section 1.6) payable or paid by Bank or required to be withheld or deducted from a payment
to Bank and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered
to Borrower by Bank shall be conclusive absent manifest error.


 


(d)
Evidence of Payments. As soon as practicable after any payment of Taxes by Borrower to a Governmental Authority pursuant to this
Section 1.6, Borrower shall deliver to Bank a certified copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to Bank.


 


(e)
Status of Bank. If Bank (including any assignee or successor) is entitled to an exemption from or reduction of withholding tax
with respect to payments made under any Loan Document, Bank shall deliver to Borrower, at the time or times reasonably requested by Borrower,
such properly completed and executed documentation reasonably requested by Borrower as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, Bank, if reasonably requested by Borrower, shall deliver such other documentation prescribed
by Applicable Law or reasonably requested by Borrower as will enable Borrower to determine whether or not Bank is subject to backup withholding
or information reporting requirements. Without limiting the generality of the foregoing, Bank shall deliver whichever of IRS Form W-9,
IRS Form W-8BEN-E, IRS Form W-8ECI or W-8IMY is applicable, as well as any applicable supporting documentation or certifications.


 




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1.7
Procedures for Borrowing.


 


(a)
Term Loan Advances. Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan Advance
set forth in this Agreement (which must be satisfied no later than 12:00 p.m. Eastern time on the applicable Funding Date), to obtain
a Term Loan Advance, Borrower (via an individual duly authorized by an Administrator) shall notify Bank (which notice shall be irrevocable)
by 12:00 p.m. Eastern time at least 2 Business Days prior to the Funding Date of the Term Loan Advance. Such notice shall be made by
electronic mail or by telephone and, together with any such notification, Borrower shall deliver to Bank by electronic mail a completed
Payment/Advance Form executed by an Authorized Signer and such other reports and information as Bank may reasonably request. Bank may
rely on any telephone notice given by a person whom Bank believes is an Authorized Signer. Borrower will indemnify Bank for any loss
Bank suffers due to such belief or reliance. Bank shall have received satisfactory evidence that the Board has approved that such Authorized
Signer may provide such notices and request such Term Loan Advance (which requirement may be deemed satisfied by the prior delivery of
Borrowing Resolutions or a secretary’s certificate that certifies as to such Board approval).


 


(b)
Bank shall credit proceeds of a Credit Extension to the Designated Deposit Account. Bank may make Advances and Term Loan Advances under
this Agreement based on instructions from an Authorized Signer or without instructions if such Advances or Term Loan Advances are necessary
to meet Obligations which have become due.


 


2
CONDITIONS OF CREDIT EXTENSIONS


 


2.1
Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject to the
condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such
other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:


 


(a)
duly executed Loan Documents;


 


(b)
the Operating Documents of Borrower and long-form good standing certificates of Borrower certified by the Secretary of State of the State
of Delaware and the Secretary of State of the State of New Jersey, in which Borrower is qualified to conduct business, in each case as
of a date no earlier than 30 days prior to the Effective Date;


 


(c)
certificate duly executed by a Responsible Officer or secretary of Borrower with respect to Borrower’s (i) Operating Documents
and (ii) Borrowing Resolutions;


 


(d)
duly executed payoff letter from Horizon Finance;


 


(e)
certified copies, dated as of a recent date, of searches for financing statements filed in the central filing office of the State of
Delaware, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements
either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;


 


(f)
the Cash Collateral Account shall have been opened and the Minimum Threshold Amount shall have been deposited therein;


 




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(g)
evidence that (i) the Liens securing Indebtedness owed by Borrower to Horizon Finance will be terminated and (ii) the documents and/or
filings evidencing the perfection of such Liens, including without limitation any financing statements and/or control agreements, have
or will, concurrently with the initial Credit Extension, be terminated;


 


(h)
duly executed Perfection Certificate of Borrower;


 


(i)
duly executed Cash Pledge Agreement, in form and substance acceptable to Bank;


 


(j)
evidence satisfactory to Bank that the insurance policies required by Section 5.6 hereof are in full force and effect; and


 


(k)
payment of the fees and Bank Expenses then due as specified in Section 1.3 hereof.


 


2.2
Conditions Precedent to All Credit Extensions. Bank’s obligation to make each Credit Extension, including the initial Credit
Extension, is subject to the following conditions precedent:


 


(a)
receipt of Borrower’s Credit Extension request and the related materials and documents as required by and in accordance with Section
1.7;


 


(b)
the representations and warranties in this Agreement shall be true and correct in all material respects as of the date of any Credit
Extension request and as of the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided,
further that those representations and warranties expressly referring to a specific date shall be true and correct in all material respects
as of such date, and no Default or Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit
Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain
true and correct in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations
and warranties expressly referring to a specific date shall be true and correct in all material respects as of such date; and


 


(c)
a Material Adverse Change shall not have occurred and be continuing.


 


2.3
Covenant to Deliver. Borrower shall deliver to Bank each item required to be delivered to Bank under this Agreement as a condition
precedent to any Credit Extension. A Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver
by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in the absence of a required item
shall be in Bank’s sole discretion.


 


3
CREATION OF SECURITY INTEREST


 


3.1
Grant of Security Interest.


 


(a)
Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations, a continuing security interest
in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products
thereof.


 


(b)
The Collateral may also be subject to Permitted Liens.


 


3.2
Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to Borrower,
with all jurisdictions deemed necessary or appropriate by Bank to perfect or protect Bank’s interest or rights hereunder, including
a notice that any disposition of the Collateral (other than permitted herein), by either Borrower or any other Person, shall be deemed
to violate the rights of Bank under the Code. Upon written request by Borrower, Bank shall provide Borrower with filed copies of all
financing statements.


 




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3.3
Termination. If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than
inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity
obligations) and at such time as Bank’s obligation to make Credit Extensions has terminated, the security interest of Bank in the
Collateral shall automatically terminated without any further action by any Person and all rights therein shall revert to Borrower; and
Bank shall, at Borrower’s sole cost and expense, provide payoff and release documentation to evidence the termination of its security
interest in the Collateral. In the event (a) all Obligations (other than inchoate indemnity obligations), are satisfied in full, and
(b) this Agreement is terminated, Bank shall terminate the security interest granted herein.


 


4
REPRESENTATIONS AND WARRANTIES


 


Borrower
represents and warrants as follows:


 


4.1
Due Organization, Authorization; Power and Authority.


 


(a)
Borrower and each of its Subsidiaries are each duly existing and in good standing as a Registered Organization in their respective jurisdiction
of formation and are qualified and licensed to do business and are in good standing in any jurisdiction in which the conduct of their
respective business or their ownership of property requires that they be qualified, except where the failure to do so could not reasonably
be expected to have a material adverse effect on Borrower’s business or operations.


 


(b)
All information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is true and correct (it being
understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective
Date to the extent permitted by one or more specific provisions in this Agreement and the Perfection Certificate shall be deemed to be
updated to the extent such notice is provided to Bank of such permitted update).


 


(c)
The execution, delivery, and performance by Borrower and each of its Subsidiaries of the Loan Documents to which they are parties have
been duly authorized, and do not (i) conflict with any of Borrower’s or any such Subsidiary’s organizational documents, (ii)
contravene, conflict with, constitute a default under, or violate any material Applicable Law, (iii) contravene, conflict with, or violate
any applicable order, writ, judgment, injunction, decree, determination, or award of any Governmental Authority by which Borrower or
any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration,
or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already
been obtained and are in full force and effect) and except as could not reasonably be expected to have a material adverse effect on Borrower’s
business or operations, or (v) conflict with, contravene, constitute a default or breach under, or result in or permit the termination
or acceleration of, any material agreement by which Borrower or any of its Subsidiaries is bound. Neither Borrower nor any of the Guarantors
are in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to
have a material adverse effect on Borrower’s or any of the Guarantors’ business or operations.


 


4.2
Collateral.


 


(a)
The security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral
(subject to Permitted Liens). Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which
it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens.


 


(b)
Borrower has no Collateral Accounts at or with any bank or financial institution other than Bank or Bank’s Affiliates except for
the Collateral Accounts described in the Perfection Certificate delivered to Bank in connection herewith.


 


(c)
The Collateral is not in the possession of any third-party bailee (such as a warehouse) except as otherwise provided in the Perfection
Certificate or as permitted pursuant to Section 6.2. None of the components of the Collateral shall be maintained at locations other
than as provided in the Perfection Certificate or as permitted pursuant to Section 6.2.


 




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4.3
Litigation. Other than as set forth in the Perfection Certificate or as disclosed to Bank pursuant to Section 5.3(h), there are no
actions, investigations, or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against
Borrower or any of its Subsidiaries involving more than, individually or in the aggregate, $150,000.00.


 


4.4
Financial Statements; Financial Condition. All consolidated financial statements for Borrower and any of its Subsidiaries delivered
to Bank by submission to the Financial Statement Repository or otherwise submitted to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of operations for the periods covered thereby, subject, in
the case of unaudited financial statements, to normal year-end adjustments and the absence of footnote disclosures. There has not been
any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements
submitted to the Financial Statement Repository or otherwise submitted to Bank.


 


4.5
Solvency. The fair salable value of Borrower’s consolidated assets (including goodwill minus disposition costs) exceeds the
fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement;
and Borrower and each of its Subsidiaries are able to pay their debts on a consolidated basis (including trade debts) as they mature.


 


4.6
Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations X, T, and U of the Federal Reserve Board of Governors). Borrower and each of its Subsidiaries
(a) have complied in all material respects with all Applicable Law, and (b) have not violated any Applicable Law, the violation of which
could reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower and each of its Subsidiaries
have duly complied with, and their respective facilities, business, assets, property, leaseholds, real property, and Equipment are in
compliance with, Environmental Laws, except where the failure to do so could not reasonably be expected to have a material adverse effect
on Borrower’s business or operations; there have been no outstanding citations, notices, or orders of non-compliance issued to
Borrower or any of its Subsidiaries or relating to their respective facilities, businesses, assets, property, leaseholds, real property,
or Equipment under such Environmental Laws, except where it could not reasonably be expected to have a material adverse effect on Borrower’s
business or operations. Borrower and each of its Subsidiaries 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 to continue their respective
businesses as currently conducted, except where the failure to obtain or make or file the same would not reasonably be expected to have
a material adverse effect on Borrower’s business or operations.


 


4.7
Subsidiaries; Investments. Borrower does not own any stock, partnership, or other ownership interest or other equity securities except
for Permitted Investments.


 


4.8
Tax Returns and Payments; Pension Contributions.


 


(a)
Borrower and each of its Subsidiaries have timely filed, or submitted extensions for, all required tax returns and reports, and Borrower
and each of its Subsidiaries have timely paid all foreign, federal, state, and local taxes, assessments, deposits, and contributions
owed by Borrower and each of its Subsidiaries except (a) to the extent such taxes are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor, or (b) if such taxes, assessments, deposits, and contributions do not, individually
or in the aggregate, exceed $50,000.00. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s or any
of its Subsidiary’s prior tax years which could result in additional taxes becoming due and payable by Borrower or any of its Subsidiaries
in excess of $50,000.00 in the aggregate.


 


(b)
Borrower and each of its Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing, and deferred compensation
plans in accordance with their terms, and neither Borrower nor any of its Subsidiaries has withdrawn from participation in, and has not
permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could
reasonably be expected to result in any liability of Borrower or any of its Subsidiaries, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other Governmental Authority.


 




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4.9
Full Disclosure. No written representation, warranty, or other statement of Borrower or any of its Subsidiaries in any report, certificate,
or written statement submitted to the Financial Statement Repository or otherwise submitted to Bank, as of the date such representation,
warranty, or other statement was made, taken together with all such reports, certificates, and written statements submitted to the Financial
Statement Repository or otherwise submitted to Bank, contains any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained in the reports, certificates, or written statements not misleading in light of the circumstances
under which they were made (it being recognized by Bank that the projections and forecasts provided by Borrower or any of its Subsidiaries
in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered
by such projections and forecasts may differ from the projected or forecasted results).


 


4.10
Sanctions. Neither Borrower nor any of its Subsidiaries is: (a) in violation of any Sanctions; or (b) a Sanctioned Person. Neither
Borrower nor any of its Subsidiaries, directors, officers, employees, agents, or Affiliates: (i) conducts any business or engages in
any transaction or dealing with any Sanctioned Person, including making or receiving any contribution of funds, goods, or services to
or for the benefit of any Sanctioned Person; (ii) deals in, or otherwise engages in any transaction relating to, any property or interests
in property blocked pursuant to any Sanctions; (iii) engages in or conspires to engage in any transaction that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Sanctions; or (iv) otherwise engages
in any transaction that could cause Bank to violate any Sanctions.


 


5
AFFIRMATIVE COVENANTS


 


Borrower
shall do all of the following:


 


5.1
Use of Proceeds. Cause the proceeds of the Credit Extensions to be used solely (a) to repay the Horizon Obligations, (b) as working
capital or (c) to fund its general business and corporate purposes, and not for personal, family, household or agricultural purposes.


 


5.2
Government Compliance.


 


(a)
Maintain its and all of its Subsidiaries’ legal existence (except as permitted under Section 6.3 with respect to Subsidiaries only)
and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure
to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall
comply, and have each Subsidiary comply, in all material respects, with all laws, ordinances, and regulations to which it is subject.


 


(b)
Obtain all of the Governmental Approvals necessary for the performance by Borrower and each of its Subsidiaries of their obligations
under the Loan Documents to which they are parties, including any grant of a security interest in the Collateral to Bank. Borrower shall
promptly provide copies of any such obtained Governmental Approvals to Bank.


 


5.3
Financial Statements, Reports. Deliver to Bank by submitting to the Financial Statement Repository:


 


(a)
Quarterly Compliance Statement. Within 45 days after the last day of each fiscal quarter and together with the statements set
forth in Section 5.3(b), a duly completed Compliance Statement, confirming that, as of the end of such fiscal quarter, Borrower was in
full compliance with all of the terms and conditions of this Agreement, and such other information as Bank may reasonably request;


 




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(b)
10-Q reports. Within 45 days after the end of the first three fiscal quarters of Borrower, a company prepared consolidated balance
sheet and income statement covering Borrower’s consolidated operations for such quarter, consistent with such quarterly financial
statements submitted to the SEC, in a form acceptable to Bank.


 


(c)
Annual Operating Budget and Financial Projections. Within 90 days after the end of each fiscal year of Borrower, and contemporaneously
with any updates or amendments thereto, (A) annual operating budgets (including income statements, balance sheets, and cash flow statements,
by month) for the current fiscal year of Borrower, and (B) annual financial projections for the current fiscal year (on a quarterly basis),
in each case as approved by the Board, together with any related business forecasts used in the preparation of such annual financial
projections;


 


(d)
10-K Reports and Annual Audited Financial Statements. As soon as available, and in any event within 90 days following the end
of Borrower’s fiscal year, Borrower’s 10-K report, together with audited consolidated financial statements prepared under
GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting
firm reasonably acceptable to Bank;


 


(e)
SEC Filings. Promptly filing, notification of the filing and copies of all periodic and other reports, proxy statements, and other
materials filed by Borrower and/or any of its Subsidiaries or any Guarantor with the SEC, any Governmental Authority succeeding to any
or all of the functions of the SEC, or with any national securities exchange, or distributed to its shareholders, as the case may be.
Documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date on which
Borrower or any of its Subsidiaries posts such documents, or provides a link thereto, on Borrower’s or any of its Subsidiaries’
website on the internet at Borrower’s or any of its Subsidiaries’ website address; provided, however, Borrower shall promptly
notify Bank in writing (which may be by electronic mail) of the posting of any such documents;


 


(f)
Security Holder and Subordinated Debt Holder Reports. Promptly upon delivery, copies of all material statements, reports, and
notices generally made available to Borrower’s security holders or to any holders of Subordinated Debt (solely in their capacities
as security holders or holders of Subordinated Debt and not in any other role);


 


(g)
Beneficial Ownership Information. If applicable to Borrower, upon request by Bank, Borrower shall provide prompt written notice
of any changes to the beneficial ownership information set out in Section 14 of the Perfection Certificate. Borrower understands and
acknowledges that Bank relies on such true, accurate, and up-to-date beneficial ownership information to meet Bank’s regulatory
obligations to obtain, verify, and record information about the beneficial owners of its legal entity customers;


 


(h)
Legal Action Notice. Prompt written notice of any legal actions, investigations, or proceedings pending or threatened in writing
against Borrower or any of its Subsidiaries that could reasonably be expected to result in damages or costs to Borrower or any of its
Subsidiaries of, individually or in the aggregate, $150,000.00 or more;


 


(i)
Tort Claim Notice. If Borrower shall acquire a commercial tort claim in excess of $150,000.00, Borrower shall promptly notify
Bank in a writing signed by Borrower of the general details thereof, and grant to Bank in such writing a security interest therein and
in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory
to Bank;


 


(j)
Government Filings. Promptly after the same are sent or received, copies of all material correspondence, reports, documents, and
other filings by Borrower or any of its Subsidiaries with any Governmental Authority regarding compliance with or maintenance of Governmental
Approvals or Applicable Law or that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals
or otherwise on the business of Borrower or any of its Subsidiaries;


 




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(k)
Registered Organization. If Borrower is not a Registered Organization as of the Effective Date but later becomes one, promptly
notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number;


 


(l)
Default. Prompt written notice of the occurrence of a Default or Event of Default; and


 


(m)
Other Information. Promptly, from time to time, such other information regarding Borrower or any of its Subsidiaries or compliance
with the terms of any Loan Documents as reasonably requested by Bank.


 


Any
submission by Borrower of a Compliance Statement or any other financial statement submitted to the Financial Statement Repository pursuant
to this Section 5.3 or otherwise submitted to Bank shall be deemed to be a representation by Borrower that (i) as of the date of such
Compliance Statement or other financial statement, the information and calculations set forth therein are true and correct, (ii) as of
the end of the compliance period set forth in such submission, Borrower is in complete compliance with all required covenants except
as noted in such Compliance Statement or other financial statement, as applicable, (iii) as of the date of such submission, no Events
of Default have occurred or are continuing, (iv) all representations and warranties other than any representations or warranties that
are made as of a specific date in Section 4 remain true and correct in all material respects as of the date of such submission except
as noted in such Compliance Statement or other financial statement, as applicable, (v) as of the date of such submission, Borrower and
each of its Subsidiaries has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state,
and local taxes, assessments, deposits, and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section
4.8, and (vi) as of the date of such submission, no Liens have been levied or claims made against Borrower or any of its Subsidiaries
relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.


 


5.4
Taxes; Pensions.


 


(a)
Timely file, and require each of its Subsidiaries to timely file (in each case, unless subject to a valid extension), all required tax
returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state, and local taxes,
assessments, deposits, and contributions owed by Borrower and each of its Subsidiaries, except for (i) taxes that do not exceed $50,000.00
and (ii) deferred payment of any taxes contested pursuant to the terms of Section 4.8(a) hereof, and shall deliver to Bank, on demand,
appropriate certificates attesting to such payments, and pay, and require each of its Subsidiaries to pay, all amounts necessary to fund
all present pension, profit sharing, and deferred compensation plans in accordance with their terms.


 


(b)
To the extent Borrower or any of its Subsidiaries defers payment of any contested taxes, the Borrower shall (i) notify Bank in writing
of the commencement of, and any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent
the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted
Lien.”


 


5.5
Access to Collateral; Books and Records. At reasonable times, on five (5) Business Days’ prior notice (provided no notice is
required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral
and the right to audit and copy Borrower’s Books. Such inspections and audits shall be conducted no more often than once every
12 months, unless an Event of Default has occurred and is continuing, in which case such inspections and audits shall occur as often
as Bank shall determine is necessary. The foregoing inspections and audits shall be conducted at Borrower’s expense and the charge
therefor shall be $1,000.00 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for
the same), plus out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than eight (8) days in advance, and Borrower
cancels or seeks to or reschedules the audit with less than eight (8) days written notice to Bank, then (without limiting any of Bank’s
rights or remedies) Borrower shall pay Bank a fee of $2,000.00 plus any out-of-pocket expenses incurred by Bank to compensate Bank for
the anticipated costs and expenses of the cancellation or rescheduling.


 




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5.6
Insurance.


 


(a)
Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location
and as Bank may reasonably request. Insurance policies shall be in a form, with financially sound and reputable insurance companies that
are not Affiliates of Borrower, and in amounts that are reasonably satisfactory to Bank.


 


(b)
All liability policies (other than D&O liability insurance, worker’s compensation insurance and business interruption insurance)
shall show, or have endorsements showing, Bank as an additional insured.


 


(c)
Ensure that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations. Notwithstanding
the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying proceeds
of any casualty policy up to $100,000.00 with respect to any loss, but not exceeding $200,000.00 in the aggregate for all losses under
all casualty policies in one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced
or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in
which Bank has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of
Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations.


 


(d)
At Bank’s request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments. Each provider
of any such insurance required under this Section 5.5 shall agree, by endorsement upon the policy or policies issued by it or by independent
instruments furnished to Bank, that it will give Bank 30 days’ prior written notice before any such policy or policies shall be
canceled or altered in any material respect. If Borrower fails to obtain insurance as required under this Section 5.5 or to pay any amount
or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance
policies required in this Section 5.5, and take any action under the policies Bank deems prudent.


 


5.7
Accounts.


 


(a)
Maintain all of Borrower’s, any of its Subsidiaries’, and any Guarantor’s operating accounts with Bank. In addition
to the foregoing, Borrower shall, at all times have on deposit as cash collateral in a segregated money market bank account (the “Cash
Collateral Account”) in the name of Borrower and maintained with Bank, unrestricted and unencumbered cash (other than lien
in favor of Bank) in an amount of at least 100% of the aggregate outstanding amount of the Term Loan Advances (the “Minimum
Threshold Amount”). Bank may restrict withdrawals or transfers by or on behalf of Borrower that would violate this Section
5.7(a) regardless of whether an Event of Default exists at such time.


 


(b)
In addition to the foregoing, Borrower, any Subsidiary of Borrower, and any Guarantor shall obtain any letter of credit exclusively from
Bank.


 


(c)
In addition to and without limiting the restrictions in (a), Borrower shall provide Bank 5 days’ prior written notice before establishing
any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account
that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which
any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such
Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder, which Control Agreement
may not be terminated without the prior written consent of Bank. The provisions of the previous sentence shall not apply to deposit accounts
exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrower’s employees
and identified to Bank by Borrower as such.


 


5.8
Protection of Intellectual Property Rights. (i) Protect, defend, and maintain the validity and enforceability of Borrower’s
and each Subsidiary’s Intellectual Property, except to the extent that such failure to do so would not reasonably be expected to
have a material adverse effect on Borrower’s business or operations; (ii) promptly advise Bank in writing of infringements or any
other event that could reasonably be expected to materially and adversely affect the value Borrower’s and each Subsidiary’s
Intellectual Property material to Borrower’s business; and (iii) not allow any Intellectual Property material to Borrower’s
or any Subsidiary’s business to be abandoned, forfeited, or dedicated to the public without Bank’s written consent.


 




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5.9
Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank (and
if no Event of Default exists, during normal business hours), without expense to Bank, Borrower and its officers, employees, and agents
and Borrower’s books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party
suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.


 


5.10
Formation or Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Sections 6.3 and
6.7 hereof, within 14 Business Days (or such longer period as Bank may agree in writing in its sole and absolute discretion) after the
date that that Borrower or any Guarantor forms any Subsidiary or acquires any Subsidiary after the Effective Date (including, without
limitation, pursuant to a Division), Borrower and such Guarantor shall (a) cause such new Subsidiary to provide to Bank a joinder to
this Agreement to become a co-borrower hereunder or a guaranty to become a Guarantor hereunder (as determined by Bank in its sole discretion),
together with documentation, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority
Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate
certificates and powers and financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary,
in form and substance satisfactory to Bank; and (c) provide to Bank all other documentation in form and substance satisfactory to Bank.
Any document, agreement, or instrument executed or issued pursuant to this Section 5.10 shall be a Loan Document. Notwithstanding the
foregoing, as of the Effective Date and thereafter, CLSN Laboratories, Inc. shall not be a co-Borrower or Guarantor hereunder.


 


5.11
Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between
Borrower and its Account Debtors shall follow Borrower’s customary practices in the ordinary course. Borrower shall promptly notify
Bank of all returns, recoveries, disputes, and claims that involve more than $150,000.00.


 


5.12
Further Assurances. Execute any further instruments and take such further action as Bank reasonably requests to perfect, protect,
ensure the priority of, or continue Bank’s Lien on the Collateral or to effect the purposes of this Agreement.


 


5.13
Sanctions. (a) Not, and not permit any of its Subsidiaries to, engage in any of the activities described in Section 4.10 in the future;
(b) not, and not permit any of its Subsidiaries to, become a Sanctioned Person; (c) ensure that the proceeds of the Obligations are not
used to violate any Sanctions; and (d) deliver to Bank any certification or other evidence requested from time to time by Bank in its
sole discretion, confirming each such Person’s compliance with this Section 5.13. In addition, have implemented, and will consistently
apply while this Agreement is in effect, procedures to ensure that the representations and warranties in Section 4.10 remain true and
correct while this Agreement is in effect.


 


5.14
Post-Closing Matters. Deliver to Bank, within thirty (30) days of the Effective Date, in form and substance acceptable to Bank, evidence
that the insurance indorsements required by Section 5.6 hereof are in full force and effect, together with additional insured clauses
or endorsements in favor of Bank.


 


6
NEGATIVE COVENANTS


 


Borrower
shall not do any of the following without Bank’s prior written consent:


 


6.1
Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (including, without limitation, pursuant to a Division)
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property,
except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment that is, in the reasonable
judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting
of Permitted Liens and Permitted Investments; (d) consisting of the sale or issuance of any stock, partnership, membership, or other
ownership interest or other equity securities of Borrower permitted under Section 6.2 of this Agreement; (e) consisting of Borrower’s
or its Subsidiaries’ use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement
or the other Loan Documents; (f) of non-exclusive licenses, sublicenses, and cross-licenses for the use of the property of Borrower or
its Subsidiaries in the ordinary course of business; and (g) transfers from Borrower to another Borrower or a secured Guarantor.


 




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6.2
Changes in Business, Management, Control, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any
business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related or incidental
thereto; (b) liquidate or dissolve or permit any of its Subsidiaries to liquidate or dissolve (except that a Subsidiary may liquidate
or dissolve, provided that all assets of such Subsidiary are transferred to Borrower or another Subsidiary); (c) fail to provide notice
to Bank of any Key Person departing from or ceasing to be employed by Borrower within 10 Business Days after such Key Person’s
departure from Borrower; and (d) permit, allow, or suffer to occur any Change in Control. Borrower shall not without at least 10 days’
prior written notice (or such shorter notice as Bank may agree in writing in its sole and absolute discretion) to Bank, (i) add any new
offices or business locations, including warehouses (unless such new offices or business locations contain less than $100,000.00 in Borrower’s
assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of $100,000.00 to a
bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (ii) change its jurisdiction
of organization, (iii) change its organizational structure or type, or (iv) change its legal name.


 


6.3
Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person,
or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the stock, partnership, membership, or other ownership
interest or other equity securities or property of another Person (including, without limitation, by the formation of any Subsidiary
or pursuant to a Division). A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.


 


6.4
Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.


 


6.5
Encumbrance. Create, incur, allow, or suffer to exist any Lien on any of its property, or assign or convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not
to be subject to the first priority security interest granted herein.


 


6.6
Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 5.7(c).


 


6.7
Distributions; Investments. (a) Pay any dividends or make any distribution or payment, or redeem, retire, or purchase any stock,
partnership, membership, or other ownership interest or other equity securities; or (b) directly or indirectly make any Investment (including,
without limitation, by the formation of any Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.


 


6.8
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.


 


6.9
Subordinated Debt. Except as expressly permitted under the terms of the subordination, intercreditor, or other similar agreement
to which any Subordinated Debt is subject: (a) make or permit any payment on such Subordinated Debt; or (b) amend any provision in any
document relating to such Subordinated Debt which would increase the principal amount thereof, provide for earlier or greater principal,
interest, or other payments thereon, or adversely affect the subordination thereof to Obligations owed to Bank.


 


6.10
Compliance. (a) Become an “investment company” or a company controlled by an “investment company”, under
the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry
margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit
Extension for that purpose; (b) (i) fail to meet the minimum funding requirements of ERISA, (ii) permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur, (iii) fail to comply with the Federal Fair Labor Standards Act, or (iv) violate any other
law or regulation, if the foregoing subclauses (i) through (iv), individually or in the aggregate, could reasonably be expected to have
a material adverse effect on Borrower’s business or operations, or permit any of its Subsidiaries to do so; or (c) withdraw or
permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other
event with respect to, any present pension, profit sharing, and deferred compensation plan which could reasonably be expected to result
in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental
Authority.


 




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7
EVENTS OF DEFAULT


 


Any
one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:


 


7.1
Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b)
pay any other Obligations within 3 Business Days after such Obligations are due and payable (which Business Day cure period shall not
apply to payments due on the Term Loan Maturity Date). During the cure period, the failure to make or pay any payment specified under
clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);


 


7.2
Covenant Default.


 


(a)
Borrower fails or neglects to perform any obligation in Section 5 (other than Sections 5.2 (Government Compliance), 5.9 (Litigation Cooperation),
5.11 (Inventory; Returns), and 5.12 (Further Assurances)) or violates any covenant in Section 6; or


 


(b)
Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant, or agreement contained in this
Agreement or any Loan Documents, and as to any default (other than those specified in this Section 7) under such other term, provision,
condition, covenant, or agreement that can be cured, has failed to cure the default within 10 Business Days after the occurrence thereof;
provided, however, that if the default cannot by its nature be cured within the 10-Business Day period or cannot after diligent attempts
by Borrower be cured within such 10-Business Day period, and such default is likely to be cured within a reasonable time, then Borrower
shall have an additional period (which shall not in any case exceed 30 days) to attempt to cure such default, and within such reasonable
time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such
cure period). Cure periods provided under this section shall not apply, among other things, to financial covenants or any other covenants
that are required to be satisfied, completed, or tested by a date certain or any covenants set forth in clause (a) above;


 


7.3
Material Adverse Change. A Material Adverse Change occurs;


 


7.4
Attachment; Levy; Restraint on Business.


 


(a)
(i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any Subsidiary in excess of $50,000.00,
or (ii) a notice of lien or levy is filed against any of Borrower’s or any of its Subsidiaries’ assets by any Governmental
Authority with a value in excess of $50,000.00, and the same under subclauses (i) and (ii) hereof are not, within 10 Business Days after
the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions
shall be made during any 10 day cure period; or


 


(b)
(i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, levied on, or comes into possession
of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries from conducting
all or any material part of its business;


 


7.5
Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b)
Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and is not dismissed or stayed within
45 days (but no Credit Extensions shall be made while any of the conditions described in clause (a) exist or until any Insolvency Proceeding
is dismissed);


 


7.6
Other Agreements. There is, under any agreement to which Borrower, any of Borrower’s Subsidiaries, or any Guarantor is a party
with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate
the maturity of any Indebtedness in an amount individually or in the aggregate in excess of $250,000.00; or (b) any breach or default
by Borrower, any of Borrower’s Subsidiaries, or Guarantor, the result of which could have a material adverse effect on Borrower’s,
any of Borrower’s Subsidiaries’, or any Guarantor’s business or operations;


 




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7.7
Judgments; Penalties. One or more fines, penalties, or final judgments, orders, or decrees for the payment of money in an amount,
individually or in the aggregate, of at least $250,000.00 (not covered by independent third-party insurance as to which liability has
been accepted by such insurance carrier) shall be rendered against Borrower or any of its Subsidiaries by any Governmental Authority,
and the same are not, within 30 days after the entry, assessment, or issuance thereof, discharged, or after execution thereof, or stayed
pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will
be made prior to the discharge, or stay of such fine, penalty, judgment, order, or decree);


 


7.8
Misrepresentations. Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document, or in any writing delivered to Bank or to induce Bank
to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect
when made (it being agreed and acknowledged by Bank that the projections and forecasts provided by Borrower or any of its Subsidiaries
in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered
by such projections and forecasts may differ from the projected or forecasted results);


 


7.9
Subordinated Debt. If: (a) any document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked
or invalidated or otherwise cease to be in full force and effect, or any Person (other than Bank) shall be in breach thereof or contest
in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder; (b) a default
or event of default (however defined) has occurred under any document, instrument, or agreement evidencing any Subordinated Debt, which
default shall not have been cured or waived within any applicable grace period; or (c) the Obligations shall for any reason be subordinated
or shall not have the priority contemplated by this Agreement or any applicable subordination or intercreditor agreement;


 


7.10
Lien Priority. There is a material impairment in the perfection or priority of Bank’s security interest in the Collateral;


 


7.11
Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason to be in full force and effect; (b) any Guarantor
does not perform any obligation or covenant under any guaranty of the Obligations; (c) any circumstance described in Sections 7.3, 7.4,
7.5, 7.6, 7.7, or 7.8 of this Agreement occurs with respect to any Guarantor, (d) the death, liquidation, winding up, or termination
of existence of any Guarantor; or (e) (i) a material impairment in the perfection or priority of Bank’s Lien in the collateral
provided by Guarantor or in the value of such collateral, or (ii) a material adverse change in the general affairs, management, results
of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations, occurs with respect to any Guarantor;
or


 


7.12
Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner,
or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing
with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority
taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification,
or non-renewal (i) causes, or could reasonably be expected to cause, a Material Adverse Change, or (ii) adversely affects the legal qualifications
of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission,
suspension, modification, or non-renewal could reasonably be expected to cause, a Material Adverse Change.


 


8
BANK’S RIGHTS AND REMEDIES


 


8.1
Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, without notice or demand, do
any or all of the following:


 


(a)
declare all Obligations immediately due and payable (but if an Event of Default described in Section 7.5 occurs, all Obligations are
immediately due and payable without any action by Bank);


 




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(b)
stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower
and Bank;


 


(c)
[reserved];


 


(d)
make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the
Collateral. Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates. Bank may enter premises
where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise
any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license
to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;


 


(e)
apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) amount held by Bank owing to or for the credit or
the account of Borrower;


 


(f)
ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral.


 


(g)
place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or
other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;


 


(h)
demand and receive possession of Borrower’s Books; and


 


(i)
exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under
the Code or any Applicable Law (including disposal of the Collateral pursuant to the terms thereof).


 


8.2
Power of Attorney. Borrower hereby irrevocably appoints Bank as its true and lawful attorney-in-fact, (a) exercisable upon the occurrence
and during the continuance of an Event of Default, to: (i) endorse Borrower’s name on any checks, payment instruments, or other
forms of payment or security; (ii) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account
Debtors; (iii) demand, collect, sue, and give releases to any Account Debtor for monies due, settle and adjust disputes and claims about
the Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim, case, or proceeding about any Collateral
(including filing a claim or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses); (iv) make,
settle, and adjust all claims under Borrower’s insurance policies; (v) pay, contest, or settle any Lien, charge, encumbrance, security
interest, or other claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge
the same; and (vi) transfer the Collateral into the name of Bank or a third party as the Code permits; and (b) if and when an Event of
Default has occurred and is continuing, to sign Borrower’s name on any documents necessary to perfect or continue the perfection
of Bank’s security interest in the Collateral. Bank’s foregoing appointment as Borrower’s attorney in fact, and all
of Bank’s rights and powers, coupled with an interest, are irrevocable until such time as all Obligations (other than inchoate
indemnity obligations) have been satisfied in full, Bank is under no further obligation to make Credit Extensions and the Loan Documents
have been terminated. Bank shall not incur any liability in connection with or arising from the exercise of such power of attorney and
shall have no obligation to exercise any of the foregoing rights and remedies.


 


8.3
Protective Payments. If Borrower fails to obtain the insurance called for by Section 5.5 or fails to pay any premium thereon or fails
to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required to
preserve the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately
due and payable, bearing interest at the Default Rate, and secured by the Collateral. Bank will make reasonable efforts to provide Borrower
with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are
deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.


 




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8.4
Application of Payments and Proceeds. After the occurrence and during the continuance of an Event of Default, Bank may apply any
funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts
or other disposition of the Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole discretion.
Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency.
If Bank, in its commercially reasonable discretion, directly or indirectly, enters into a deferred payment or other credit transaction
with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations
by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash
therefor.


 


8.5
Bank’s Liability for Collateral. Bank’s sole duty with respect to the custody, safekeeping, and physical preservation
of the Collateral in its possession or under its control, under Section 9-207 of the Code or otherwise, shall be to deal with it in the
same manner as Bank deals with its own property consisting of similar instruments or interests. Borrower bears all risk of loss, damage,
or destruction of the Collateral.


 


8.6
No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict performance by Borrower of any provision
of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance
and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting the waiver and then
is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement
and the other Loan Documents are cumulative. Bank has all rights and remedies provided under the Code, by law, or in equity. Bank’s
exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this Agreement
or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s
delay in exercising any remedy is not a waiver, election, or acquiescence.


 


8.7
Demand Waiver. Unless otherwise provided for herein or elsewhere in the Loan Documents, Borrower waives demand, notice of default
or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable.


 


9
NOTICES


 


All
notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must
be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and 3 Business
Days after deposit in the U.S. mail, first-class, registered or certified mail return receipt requested, with proper postage prepaid;
(b) upon transmission, when sent by electronic mail; (c) 1 Business Day after deposit with a reputable overnight courier with all charges
prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent
to the address or email address indicated below; provided that, for clause (b), if such notice, consent, request, approval, demand, or
other communication is not sent during the normal business hours of the recipient, it shall be deemed to have been sent at the opening
of business on the next Business Day of the recipient. Bank or Borrower may change its mailing or electronic mail address by giving the
other party written notice thereof in accordance with the terms of this Section 9.


 


	 	If
    to Borrower:  	Celsion
    Corporation      
	 	 	997
    Lenox Drive, Suite 100     
	 	 	Lawrenceville,
    NJ 08648      
	 	 	Attn:
    Jeffrey W. Church     
	 	 	Email:
    jchurch@celsion.com  
	 	 	Website
    URL: https://celsion.com/leadership-team/
	 	 	 
	 	If
    to Bank:  	Silicon
    Valley Bank         
	 	 	275
    Grove Street, Suite 2-200       
	 	 	Newton,
    MA 02466        
	 	 	Attn:
    Ryan Gass         
	 	 	Email:
    rgass@svb.com  


 




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	 	with
a copy to (which shall not constitute notice):  	Morrison
    & Foerster LLP
	 	 	200
    Clarendon Street, Floor 20
	 	 	Boston,
    Massachusetts 02116
	 	 	Attn:
    David A. Ephraim, Esquire
	 	 	Email:
    DEphraim@mofo.com


 


10
CHOICE OF LAW, VENUE and JURY TRIAL WAIVER; JUDICIAL REFERENCE


 


Except
as otherwise expressly provided in any of the Loan Documents, New York law governs the Loan Documents without regard to principles of
conflicts of law that would require the application of the laws of another jurisdiction. Borrower and Bank each irrevocably and unconditionally
submit to the exclusive jurisdiction of the State and Federal courts in New York, New York; provided, however, that nothing in this Agreement
shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction with respect to
the Loan Documents or to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court
order in favor of Bank. Borrower expressly, irrevocably, and unconditionally submits and consents in advance to such jurisdiction in
any action or suit commenced in any such court, and Borrower hereby irrevocably and unconditionally waives, to the fullest extent permitted
by Applicable Law, any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and
hereby irrevocably and unconditionally consents to the granting of such legal or equitable relief as is deemed appropriate by such court.
Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service
of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth
in, or subsequently provided by Borrower in accordance with, Section 9 of this Agreement and that service so made shall be deemed completed
upon the earlier to occur of Borrower’s actual receipt thereof or 3 days after deposit in the U.S. mails, proper postage prepaid.


 


TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF
DUTY, AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT. EACH PARTY HERETO
HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.


 


This
Section 10 shall survive the termination of this Agreement and the repayment of all Obligations.


 


11
GENERAL PROVISIONS


 


11.1
Termination Prior to Maturity Date; Survival. All covenants, representations, and warranties made in this Agreement shall continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations)
have been satisfied. So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations
which, by their terms, are to survive the termination of this Agreement and the repayment of all Obligations), this Agreement may be
terminated prior to the Term Loan Maturity Date by Borrower, effective 3 Business Days after written notice of termination is given to
Bank. Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination and the repayment
of all Obligations shall continue to survive notwithstanding this Agreement’s termination and the repayment of all Obligations.


 


11.2
Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower
may not assign or transfer this Agreement or any rights or obligations under it without Bank’s prior written consent (which may
be granted or withheld in Bank’s sole discretion) and any other attempted assignment or transfer by Borrower shall be null and
void. Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation
in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents.
Unless an Event of Default has occurred and is continuing, Bank shall only assign any interest in the Loan Documents to any Eligible
Assignee. For purposes hereof, an “Eligible Assignee” is (a) any bank organized under the Federal Reserve System, or (b)
any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined
in Regulation D under the Securities Act) and which extends credit or buys loans as one of its businesses and (i) has at least $500,000,000
of Tier 1 Capital and a Credit Rating of at least A1/P1 or equivalent or single A or equivalent, (ii) is not a vulture fund or distressed
debt fund as reasonably determined by Bank, and (iii) is not a competitor of Borrower as reasonably determined by Borrower; provided
that neither the Borrower nor any Subsidiary of the Borrower shall be an Eligible Assignee.


 




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11.3
Indemnification.


 


(a)
General Indemnification. Borrower shall indemnify, defend, and hold Bank and its Affiliates and the partners, directors, officers,
employees, agents, trustees, administrators, managers, advisors, and representatives of Bank and its Affiliates (each, an “Indemnified
Person”) harmless against: all losses, claims, damages, liabilities, and related expenses (including Bank Expenses and the
reasonable fees, charges, and disbursements of any counsel for any Indemnified Person) (collectively, “Claims”) arising
out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document, or any agreement
or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder,
or the consummation of the transactions contemplated hereby or thereby, (ii) any Credit Extension or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of hazardous materials on or from any property owned or operated by Borrower
or any of its Subsidiaries, or any environmental liability related in any way to Borrower or any of its Subsidiaries, or (iv) any actual
or prospective claim, litigation, investigation, or proceeding relating to any of the foregoing, whether based on contract, tort, or
any other theory, whether brought by a third party or by Borrower, and regardless of whether any Indemnified Person is a party thereto;
provided that such indemnity shall not, as to any Indemnified Person, be available to the extent that such losses, claims, damages, liabilities,
or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. All amounts due under this Section 11.3 shall be payable promptly
after demand therefor.


 


(b)
Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, Borrower shall not assert, and hereby
waives, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential, or punitive damages
(as opposed to direct or actual damages) or any loss of profits arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document, or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Credit
Extension, or the use of the proceeds thereof. No Indemnified Person shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through telecommunications, electronic, or other information transmission
systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.


 


This
Section 11.3 shall survive the termination of this Agreement and the repayment of all Obligations until all statutes of limitation with
respect to the Claims, losses, and expenses for which indemnity is given shall have run.


 


11.4
Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.


 


11.5
Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability
of any provision.


 


11.6
Amendments in Writing; Waiver; Integration. No purported amendment or modification of any Loan Document, or waiver, discharge, or
termination of any obligation under any Loan Document, shall be effective unless, and only to the extent, expressly set forth in a writing
signed by each party hereto. Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction,
delay, failure to require performance, or course of conduct shall operate as, or evidence, an amendment, supplement, or waiver or have
any other effect on any Loan Document. Any waiver granted shall be limited to the specific circumstance expressly described in it, and
shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation
or commitment to grant any further waiver. The Loan Documents represent the entire agreement about this subject matter and supersede
prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties
about the subject matter of the Loan Documents merge into the Loan Documents.


 




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11.7
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, is an original, and all taken together, constitute one Agreement. Delivery of an executed signature
page of this Agreement by electronic mail transmission shall be effective as delivery of a manually executed counterpart hereof.


 


11.8
Confidentiality. Bank agrees to maintain the confidentiality of Information (as defined below), except that Information may be disclosed
(a) to Bank’s Subsidiaries and Affiliates and their respective employees, directors, agents, attorneys, accountants, and other
professional advisors (collectively, “Representatives” and, together with Bank, collectively, “Bank Entities”);
(b) to prospective transferees, assignees, credit providers, or purchasers of Bank’s interests under or in connection with this
Agreement and their Representatives (provided, however, Bank shall use commercially reasonable efforts to obtain any such prospective
transferee’s, assignee’s, credit provider’s, purchaser’s, or their Representatives’ agreement to the terms
of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required
or requested in connection with Bank’s examination or audit; (e) in connection with the exercise of remedies under the Loan Documents
or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder;
and (f) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank
with terms no less restrictive than those contained herein. “Information” means all information received from Borrower
regarding Borrower or its business, in each case other than information that is either: (i) in the public domain or in Bank’s possession
when disclosed to Bank, or becomes part of the public domain (other than as a result of its disclosure by Bank in violation of this Agreement)
after disclosure to Bank; or (ii) disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing
the information.


 


11.9
Electronic Execution of Documents. The words “execution,” “signed,” “signature,” and words of
like import in any Loan Document shall be deemed to include electronic signatures, including any Electronic Signature as defined in the
Electronic Transactions Law (2003 Revision) of the Cayman Islands (the “Cayman Islands Electronic Signature Law”),
if applicable, or the keeping of records in electronic form, including any Electronic Record, as defined in Cayman Islands Electronic
Signature Law, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use
of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any Applicable Law, including, without
limitation, any state law based on the Uniform Electronic Transactions Act or the Cayman Islands Electronic Signature Law; provided,
however that sections 8 and 19(3) of the Cayman Islands Electronic Signature Law shall not apply to this Agreement or the execution or
delivery thereof.


 


11.10
Right of Setoff. Borrower hereby grants to Bank a Lien and a right of setoff as security for all Obligations to Bank, whether now
existing or hereafter arising upon and against all deposits, credits, collateral, and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Bank (including a subsidiary of Bank) or in transit to any of them,
and other obligations owing to Bank or any such entity. At any time after the occurrence and during the continuance of an Event of Default,
without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or Obligation of Borrower
even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE
BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT
OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS, OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVED.


 


11.11
Captions and Section References. The headings used in this Agreement are for convenience only and shall not affect the interpretation
of this Agreement. Unless indicated otherwise, section references herein are to sections of this Agreement.


 




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11.12
Construction of Agreement. The parties hereto mutually acknowledge that they and their attorneys have participated in the preparation
and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused
the uncertainty to exist.


 


11.13
Relationship. The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement. The parties
do not intend to create any agency, partnership, joint venture, trust, fiduciary, or other relationship with duties or incidents different
from those of parties to an arm’s-length contract.


 


11.14
Third Parties. Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights, or remedies
under or by reason of this Agreement on any Persons other than the express parties to it and their respective permitted successors and
assigns; (b) relieve or discharge the obligation or liability of any Person not an express party to this Agreement; or (c) give any Person
not an express party to this Agreement any right of subrogation or action against any party to this Agreement.


 


11.15
Anti-Terrorism Law. Bank hereby notifies Borrower that, pursuant to the requirements of Anti-Terrorism Law, Bank may be required
to obtain, verify, and record information that identifies Borrower, which information may include the name and address of Borrower and
other information that will allow Bank to identify Borrower in accordance with Anti-Terrorism Law. Borrower hereby agrees to take any
action necessary to enable Bank to comply with the requirements of Anti-Terrorism Law.


 


12
accounting terms and other DEFINITIONS


 


12.1
Accounting and Other Terms.


 


(a)
Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following
GAAP (except for with respect to unaudited financial statements for the absence of footnotes and subject to year-end audit adjustments),
provided that, if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either Borrower or Bank shall so request, Borrower and Bank shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of such change in GAAP; provided, further, that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Borrower shall provide Bank financial
statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to such change in GAAP.


 


(b)
As used in the Loan Documents: (i) the words “shall” or “will” are mandatory, the word “may” is permissive,
the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular
includes the plural, and numbers denoting amounts that are set off in brackets are negative; (ii) the term “continuing” in
the context of an Event of Default means that the Event of Default has not been remedied (if capable of being remedied) or waived; and
(iii) whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s
knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of any
Responsible Officer.


 


12.2
Definitions. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in this Section 12.2. All
other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms
are defined therein. As used in this Agreement, the following capitalized terms have the following meanings:


 


“Account”
is, as to any Person, any “account” of such Person as “account” is defined in the Code with such additions to
such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to such Person.


 


“Account
Debtor” is any “account debtor” as defined in the Code, with such additions to such term as may hereafter be made.


 


“Affiliate”
is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that controls or
is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners,
and, for any Person that is a limited liability company, that Person’s managers and members.


 




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“Agreement”
is defined in the preamble hereof.


 


“Anti-Terrorism
Law” means any law relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act.


 


“Applicable
Law” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations, and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.


 


“Authorized
Signer” means any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents,
including making (and executing if applicable) any Credit Extension request, on behalf of Borrower.


 


“Bank”
is defined in the preamble hereof.


 


“Bank
Entities” is defined in Section 11.8.


 


“Bank
Expenses” are all audit fees, costs, and reasonable expenses (including reasonable, out-of-pocket, and documented attorneys’
fees and expenses) for preparing, amending, negotiating, administering, defending, and enforcing the Loan Documents (including, without
limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower or any
Guarantor.


 


“Board”
is Borrower’s board of directors or equivalent governing body.


 


“Borrower”
is set forth on Schedule I hereto.


 


“Borrower’s
Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s
assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment
containing such information.


 


“Borrowing
Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s board of directors (and, if
required under the terms of such Person’s Operating Documents, stockholders) and delivered by such Person to Bank approving the
Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its
secretary on behalf of such Person certifying (a) such Person has the authority to execute, deliver, and perform its obligations under
each of the Loan Documents to which it is a party, (b) that set forth as a part of or attached as an exhibit to such certificate is a
true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery,
and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the
Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of such Person, together with
a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such
Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.


 


“Business
Day” is a day other than a Saturday, Sunday, or other day on which commercial banks in the State of California are authorized
or required by law to close.


 


“Cash
Collateral Account” is defined in Section 5.7(a) hereof.


 


“Cash
Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency
or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more
than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money
market funds at least 95.0% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this
definition.


 




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“Cash
Pledge Agreement” is that certain Cash Pledge Agreement dated as of the Effective Date executed by Borrower in favor of Bank,
as amended, modified, supplemented and/or restated from time to time.


 


“Cayman
Islands Electronic Signature Law” is defined in Section 11.9. “Change in Control” means (a) at any time,
any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), shall become,
or obtain rights (whether by means of warrants, options, or otherwise) to become, the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35.0% or more of the ordinary voting power for the election of
directors, partners, managers, and members, as applicable, of Borrower (determined on a fully diluted basis) other than by the sale of
Borrower’s equity securities in a public offering or to venture capital or private equity investors so long as Borrower identifies
to Bank the venture capital or private equity investors at least 7 Business Days prior to the closing of the transaction and provides
to Bank a description of the material terms of the transaction; (b) during any period of 12
consecutive months, a majority of the members of the Board of Borrower cease to be composed of individuals (i) who were members of that
board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority
of that board or equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body; or (c) at any time, Borrower shall cease to own and control, of record and beneficially,
directly or indirectly, 100.0% of each class of outstanding stock, partnership, membership, or other ownership interest or other equity
securities of each Subsidiary of Borrower free and clear of all Liens (except Permitted Liens).


 


“Change
in Law” means the occurrence, after the Effective Date, of: (a) the adoption or taking effect of any law, rule, regulation,
or treaty; (b) any change in Applicable Law or in the administration, interpretation, implementation, or application thereof by any Governmental
Authority; or (c) the making or issuance of any request, rule, guideline, or directive (whether or not having the force of law) by any
Governmental Authority; provided that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, or directives thereunder or issued in connection therewith and (ii) all requests,
rules, guidelines, or directives promulgated by Bank for International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority), or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, or issued.


 


“Claims”
is defined in Section 11.3.


 


“Collateral”
consists of all of Borrower’s right, title, and interest in that certain money market account (Cash Collateral Account) –
Account No. xxxxxxx504 (last three digits of account only) maintained by Borrower at Bank, and all cash, Cash Equivalents and other deposits
and proceeds from time to time contained therein.


 


“Collateral
Account” is any Deposit Account, Securities Account, or Commodity Account.


 


“Commodity
Account” is any “commodity account” as defined in the Code, with such additions to such term as may hereafter be
made.


 


“Compliance
Statement” is that certain statement in the form attached hereto as Exhibit A.


 


“Connection
Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are
franchise Taxes or branch profits Taxes.


 


“Contingent
Obligation” is, for any Person, any direct or indirect liability of that Person for (a) any direct or indirect guaranty by
such Person of any indebtedness, lease, dividend, letter of credit, credit card, or other obligation of another, (b) any other obligation
endorsed, co-made, discounted, or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (c) any
obligations for undrawn letters of credit for the account of that Person; and (d) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates, or commodity prices; but “Contingent Obligation” does not include
endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined
by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.


 




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“Control
Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account
or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower,
and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity
Account.


 


“Copyrights”
are any and all copyright rights, copyright applications, copyright registrations, and like protections in each work of authorship and
derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.


 


“Credit
Extension” is any Term Loan Advance, or any other extension of credit by Bank for Borrower’s benefit.


 


“Currency”
is coined money and such other banknotes or other paper money as are authorized by law and circulate as a medium of exchange.


 


“Default”
means any event which with notice or passage of time or both, would constitute an Event of Default.


 


“Default
Rate” is defined in Section 1.2(c).


 


“Deposit
Account” is any “deposit account” as defined in the Code, with such additions to such term as may hereafter
be made.


 


“Designated
Deposit Account” is the deposit account established by Borrower with Bank for purposes of receiving Credit Extensions.


 


“Division”
means, in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons, with the dividing
Person either continuing or terminating its existence as part of such division, including, without limitation, as contemplated under
Section 18-217 of the Delaware Limited Liability Company Act for limited liability companies formed under Delaware law, Section 17-220
of the Delaware Revised Uniform Limited Partnership Act for limited partnerships formed under Delaware law, or any analogous action taken
pursuant to any other Applicable Law with respect to any corporation, limited liability company, partnership, or other entity.


 


“Dollars,”
“dollars,” or use of the sign “$” means only lawful money of the United States and not any other currency,
regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money
of the United States. “Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined
by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency
for transfer to the country issuing such Foreign Currency.


 


“Draw
Period” is set forth on Schedule I hereto.


 


“Effective
Date” is set forth on Schedule I hereto.


 


“Eligible
Assignee” is defined in Section 11.2.


 


“Environmental
Laws” means any Applicable Law (including any permits, concessions, grants, franchises, licenses, agreements, or governmental
restrictions) relating to pollution or the protection of health, safety, or the environment or the release of any materials into the
environment (including those related to hazardous materials, air emissions, discharges to waste or public systems, and health and safety
matters).


 




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“Equipment”
is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without
limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.


 


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


 


“Event
of Default” is defined in Section 7.


 


“Exchange
Act” is the Securities Exchange Act of 1934, as amended.


 


“Excluded
Taxes” means any of the following Taxes imposed on or with respect to Bank or required to be withheld or deducted from a payment
to Bank, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case,
(i) imposed as a result of Bank being organized under the laws of, or having its principal office or its applicable lending office located
in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal
withholding Taxes imposed on amounts payable to or for the account of Bank with respect to an applicable interest in a Credit Extension
pursuant to a law in effect on the date on which (i) Bank acquires such interest in the Credit Extensions or (ii) Bank changes its lending
office, except in each case to the extent that, pursuant to Section 1.6, amounts with respect to such Taxes were payable either to Bank’s
assignor immediately before Bank became a party hereto or to Bank immediately before it changed its lending office, (c) Taxes attributable
to Bank’s failure to comply with Section 1.6(e), and (d) any withholding Taxes imposed under FATCA.


 


“FATCA”
means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version
that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations
thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code, and any fiscal or regulatory legislation,
rules, or practices adopted pursuant to any intergovernmental agreement, treaty, or convention among Governmental Authorities and implementing
such Sections of the Internal Revenue Code.


 


“Final
Payment” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest)
due on the earliest to occur of (a) the Term Loan Maturity Date, (b) the repayment of the Term Loan Advances in full, (c) as required
pursuant to Sections 1.1(c) or 1.1(d), or (d) the termination of this Agreement, in the amount of $300,000.00.


 


“Financial
Statement Repository” is Bank’s email address specified in Section 9 or such other means of collecting information approved
and designated by Bank after providing notice thereof to Borrower from time to time.


 


“Foreign
Currency” is the lawful money of a country other than the United States.


 


“Funding
Date” is any date on which a Credit Extension is made to or for the account of Borrower, which shall be a Business Day.


 


“GAAP”
is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the
circumstances as of the date of determination.


 


“General
Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof, with such additions
to such term as may hereafter be made, and includes, without limitation, all Intellectual Property, claims, income and other tax refunds,
security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all
litigation presently or hereafter pending (whether in contract, tort, or otherwise), insurance policies (including without limitation
key man, property damage, and business interruption insurance), payments of insurance, and rights to payment of any kind.


 




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“Governmental
Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration,
filing, or notice, of, issued by, from, or to, or other act by or in respect of, any Governmental Authority.


 


“Governmental
Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative
functions of or pertaining to government, any securities exchange, and any self-regulatory organization.


 


“Guarantor”
is any Person providing a Guaranty in favor of Bank.


 


“Guaranty”
is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified, or otherwise
supplemented.


 


“Horizon
Finance” is collectively, (i) Horizon Technology Finance Corporation, (ii) Horizon Funding I, LLC, and (iii) Horizon Funding
Trust 2019-1, each of (ii) and (iii) is an assignee of (i).


 


“Horizon
Obligations” is set forth on Schedule I hereto.


 


“Indebtedness”
is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures, or similar instruments, (c) capital lease
obligations, (d) Contingent Obligations, and (e) other short- and long-term obligations under debt agreements, lines of credit, and extensions
of credit.


 


“Indemnified
Person” is defined in Section 11.3.


 


“Indemnified
Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation
of Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.


 


“Information”
is defined in Section 11.8.


 


“Initial
Term Loan Advance” is set forth on Schedule I hereto.


 


“Insolvency
Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or
insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings
seeking reorganization, arrangement, receivership, or other relief.


 


“Intellectual
Property” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:


 


(a)
any Copyrights, Trademarks, and Patents;


 


(b)
any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, and
operating manuals;


 


(c)
any and all source code;


 


(d)
any and all design rights which may be available to such Person;


 




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(e)
any and all claims for damages by way of past, present, and future infringement of any of the foregoing, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and


 


(f)
all amendments, renewals, and extensions of any of the Copyrights, Trademarks, or Patents.


 


“Internal
Revenue Code” means the U.S. Internal Revenue Code of 1986, and the rules and regulations promulgated thereunder, each as amended
or modified from time to time.


 


“Inventory”
is all “inventory” as defined in the Code in effect on the date hereof, with such additions to such term as may hereafter
be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process,
and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody or possession or
in transit and including any returned goods and any documents of title representing any of the above.


 


“Investment”
is any beneficial ownership interest in any Person (including stock, partnership, membership, or other ownership interest or other equity
securities), and any loan, advance, or capital contribution to any Person.


 


“Key
Person” is each of Borrower’s (i) President and Chief Executive Officer, who is Michael H. Tardugno, (ii) Executive Vice
President and Chief Scientific Officer, who is Kursheed Anwer, (iii) Executive Vice President and Chief Medical Officer, who is Nicholas
Borys, and (iv) Executive Vice President, Chief Financial Officer and Corporate Secretary, who is Jeffrey W. Church.


 


“Lien”
is a claim, mortgage, deed of trust, levy, attachment charge, pledge, hypothecation, security interest, or other encumbrance of any kind,
whether voluntarily incurred or arising by operation of law or otherwise against any property.


 


“Loan
Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related
to this Agreement, the Perfection Certificate, Control Agreements, the Cash Pledge Agreement, any subordination agreement, any note,
or notes, or guaranties executed by Borrower or any Guarantor, landlord waivers and consents, bailee waivers and consents, and any other
present or future agreement by Borrower and/or any Guarantor with or for the benefit of Bank in connection with this Agreement, all as
amended, restated, or otherwise modified in accordance with the terms thereof.


 


“Material
Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the
value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower;
or (c) a material impairment of the prospect of repayment of any portion of the Obligations.


 


“Minimum
Threshold Amount” defined in Section 5.7(a) hereof.


 


“Obligations”
are Borrower’s obligations to pay when due any debts, principal, interest, fees, Bank Expenses, the Prepayment Fee, the Final Payment,
and other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents, or otherwise, including, without
limitation, interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank,
and to perform Borrower’s duties under the Loan Documents.


 


“OFAC”
is the Office of Foreign Assets Control of the United States Department of the Treasury and any successor thereto.


 


“Operating
Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent
agency) of such Person’s jurisdiction of organization on a date that is no earlier than 30 days prior to the Effective Date, and,
(a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability
company agreement (or similar agreement), and (c) if such Person is a partnership or limited partnership, its partnership agreement or
limited partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.


 


“Other
Connection Taxes” means, with respect to Bank, Taxes imposed as a result of a present or former connection between Bank and
the jurisdiction imposing such Tax (other than connections arising from Bank having executed, delivered, become a party to, performed
its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant
to, or enforced any Loan Document, or sold or assigned an interest in any Credit Extension or Loan Document).


 


“Other
Taxes” means all present or future stamp, court, documentary, intangible, recording, filing, or similar Taxes that arise from
any payment made under, from the execution, delivery, performance, enforcement, or registration of, from the receipt or perfection of
a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed
with respect to an assignment.


 


“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.


 


“Payment/Advance
Form” is that certain form in the form attached hereto as Exhibit B.


 


“Payment
Date” is set forth on Schedule I hereto.


 


“Perfection
Certificate” is the Perfection Certificate delivered by Borrower in connection with this Agreement.


 


“Permitted
Indebtedness” is:


 


(a)
Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;


 


(b)
Indebtedness existing on the Effective Date which is shown on the Perfection Certificate;


 


(c)
Subordinated Debt;


 


(d)
unsecured Indebtedness to trade creditors incurred in the ordinary course of business;


 


(e)
Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;


 


(f)
Indebtedness secured by Liens permitted under clauses (a) and (c) of the definition of “Permitted Liens” hereunder; and


 


(g)
extensions, refinancings, modifications, amendments, and restatements of any items of Permitted Indebtedness (a) through (f) above, provided
that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower
or its Subsidiary, as the case may be.


 


“Permitted
Investments” are:


 


(a)
Investments (including, without limitation, Subsidiaries) existing on the Effective Date which are shown on the Perfection Certificate;
and


 


(b)
Investments consisting of Cash Equivalents.


 


“Permitted
Liens” are:


 


(a)
Liens existing on the Effective Date which are shown on the Perfection Certificate or arising under this Agreement or the other Loan
Documents;


 




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(b)
Liens for taxes, fees, assessments, or other government charges or levies, either (i) not due and payable or (ii) being contested in
good faith and for which Borrower maintains adequate reserves on Borrower’s Books, provided that no notice of any such Lien has
been filed or recorded under the Internal Revenue Code;


 


(c)
purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment, securing
no more than $150,000.00 in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to
the property and improvements and the proceeds of the Equipment; and


 


(d)
Liens incurred in the extension, renewal or refinancing of the Indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness
may not increase.


 


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


 


“Prepayment
Fee” shall be an additional fee, payable to Bank, with respect to the Term Loan Advances, in an amount equal to:


 


(a)
for a prepayment of the Term Loan Advances made on or prior to the first (1st) anniversary of the Effective Date, three percent (3.0%)
of the then outstanding principal amount of the Term Loan Advances immediately prior to the date of such prepayment;


 


(b)
for a prepayment of the Term Loan Advances made after the first (1st) anniversary of the Effective Date, but on or prior to the second
(2nd) anniversary of the Effective Date, two percent (2.0%) of the then outstanding principal amount of the Term Loan Advances immediately
prior to the date of such prepayment;


 


(c)
for a prepayment of the Term Loan Advances made after the second (2nd) anniversary of the Effective Date, but on or prior to the Third
anniversary of the Effective Date, one percent (1.0%) of the then outstanding principal amount of the Term Loan Advances immediately
prior to the date of such prepayment; and


 


(d)
for a prepayment of the Term Loan Advances made after the third (3rd) anniversary of the Effective Date, zero percent (0.0%) of the then
outstanding principal amount of the Term Loan Advances immediately prior to the date of such prepayment.


 


Notwithstanding
the foregoing, provided no Event of Default has occurred and is continuing, the Prepayment Fee shall be waived by Bank if Bank closes
on the refinance and redocumentation of the Term Loan Advances (in its sole and absolute discretion) prior to the Term Loan Maturity
Date.


 


“Prime
Rate” is set forth on Schedule I hereto.


 


“Registered
Organization” is any “registered organization” as defined in the Code, with such additions to such term as may
hereafter be made.


 


“Representatives”
is defined in Section 11.8.


 


“Responsible
Officer” is any of the Chief Executive Officer, President, Chief Financial Officer, and Controller of Borrower.


 


“Sanctioned
Person” means a Person that: (a) is listed on any Sanctions list maintained by OFAC or any similar Sanctions list maintained
by any other Governmental Authority having jurisdiction over Borrower; (b) is located, organized, or resident in any country, territory,
or region that is the subject or target of Sanctions; or (c) is 50.0% or more owned or controlled by 1 or more Persons described in clauses
(a) and (b) hereof.


 




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“Sanctions”
means the economic sanctions laws, regulations, embargoes, or restrictive measures administered, enacted, or enforced by the United States
government and any of its agencies, including, without limitation, OFAC and the U.S. State Department, or any other Governmental Authority
having jurisdiction over Borrower.


 


“SEC”
is the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.


 


“Securities
Account” is any “securities account” as defined in the Code, with such additions to such term as may hereafter
be made.


 


“Specified
Affiliate” is any Person (a) more than 10.0% of whose aggregate issued and outstanding equity or ownership securities or interests,
voting, non-voting or both, are owned or held directly or indirectly, beneficially or of record, by Borrower, and/or (b) whose equity
or ownership securities or interests representing more than 10.0% of such Person’s total outstanding combined voting power are
owned or held directly or indirectly, beneficially or of record, by Borrower.


 


“Subordinated
Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all of Borrower’s or any of its
Subsidiaries’ now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in
form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.


 


“Subsidiary”
is, as to any Person, a corporation, partnership, limited liability company, or other entity of which shares of stock, partnership, membership,
or other ownership interest or other equity securities having ordinary voting power (other than stock, partnership, membership, or other
ownership interest or other equity securities having such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership, or other entity are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless the context
otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower or Guarantor.


 


“Taxes”
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees,
or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.


 


“Term
Loan Advance” and “Term Loan Advances” are each defined in Section 1.1 of this Agreement.


 


“Term
Loan Availability Amount” is set forth on Schedule I hereto.


 


“Term
Loan Maturity Date” is set forth on Schedule I hereto.


 


“Trademarks”
means, with respect to any Person, 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 such Person connected with and symbolized by such trademarks.


 


“Transfer”
is defined in Section 6.1.


 


“USA
Patriot Act” means the “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001” (Public Law 107-56, signed into law on October 26, 2001), as amended from time to time.


 


[Signature
page follows]


 




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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.


 


	 	BORROWER:
	 	 	 
	 	CELSION CORPORATION
	 	 	 
	 	By:	                                 
	 	Name:	Jeffrey
    W. Church
	 	Title:	Executive
    Vice President, Chief Financial Officer and Corporate Secretary
	 	 	 
	 	BANK:
	 	 	 
	 	SILICON VALLEY BANK
	 	 	 
	 	By:	
	 	Name:	Lauren
    Cole
	 	Title:	Director


 


Signature
Page to Loan and Security Agreement


 




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SCHEDULE
I


LSA
PROVISIONS


 


	LSA
    Section	 	LSA
    Provision
	1.1(a)
    – Term Loan – Availability	 	Each
    Term Loan Advance must be in an amount equal to at least $2,000,000.00. After repayment, no Term Loan Advance (or any portion thereof)
    may be reborrowed. Subject to the terms and conditions of this Agreement, upon Borrower’s request, Bank shall make an initial
    Term Loan Advance (“Initial Term Loan Advance”) available to Borrower on or about the Effective Date in an original
    principal amount of $6,000,000.00; provided that all or a portion of the Initial Term Loan Advance shall be used to repay in full
    Borrower’s outstanding obligations and liabilities to Horizon Finance (the “Horizon Obligations”). Borrower
    hereby authorizes Bank to apply the proceeds of the Initial Term Loan Advance to the Horizon Obligations as part of the funding process
    without actually depositing such funds into an account of Borrower.
	 	 	 
	1.1(b)
    – Term Loan – Repayment	 	Commencing
    on July 1, 2023 and continuing on each Payment Date thereafter, Borrower shall repay each Term Loan Advance in (i) 24 equal monthly
    installments of principal, plus (ii) monthly payments of accrued interest at the rate set forth in Section 1.2(b)(i).
	 	 	 
	1.2(a)
    – Interest Payments – Term Loan Advances	 	Interest
    on the principal amount of each Term Loan Advance is payable in arrears monthly (A) on each Payment Date commencing on the first
    Payment Date following the Funding Date of each such Term Loan Advance, (B) on the date of any prepayment, and (C) on the Term Loan
    Maturity Date.
	 	 	 
	1.2(b)(i)
    – Interest Rate – Term Loan Advances	 	The
    outstanding principal amount of any Term Loan Advance shall accrue interest at a floating rate per annum equal to the greater of
    (1) 3.25% and (2) the Prime Rate, which interest shall be payable in accordance with Section 1.2(a).
	 	 	 
	1.2(e)
    – Interest Computation	 	Interest
    shall be computed on the basis of the actual number of days elapsed and a 360-day year for any Credit Extension outstanding.
	 	 	 
	12.2
    – “Borrower”	 	“Borrower”
    means Celsion Corporation, a Delaware corporation.
	 	 	 
	12.2
    – “Draw Period”	 	“Draw
    Period” is the period commencing on the Effective Date and ending on June 30, 2022.
	 	 	 
	12.2
    – “Effective Date”	 	“Effective
    Date” is June 18, 2021.
	 	 	 
	12.2
    – “Payment Date”	 	“Payment
    Date” is the first (1st) calendar day of each month.
	 	 	 
	12.2
    – “Prime Rate”	 	“Prime
    Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal
    or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest,
    as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as
    determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in
    effect at its principal office in the State of California (such Bank-announced Prime Rate not being intended to be the lowest rate
    of interest charged by Bank in connection with extensions of credit to debtors); provided that, in the event such rate of interest
    is less than 0.0% per annum, such rate shall be deemed to be 0.0% per annum for purposes of this Agreement.
	 	 	 
	12.2
    – “Term Loan Availability Amount”	 	“Term
    Loan Availability Amount” is an aggregate principal amount equal to $10,000,000.00.
	 	 	 
	12.2
    – “Term Loan Maturity Date”	 	“Term
    Loan Maturity Date” is June 1, 2025.


 




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EXHIBIT
A


 


COMPLIANCE
STATEMENT


 


	TO:	SILICON
VALLEY BANK	Date:	
	FROM:	CELSION
    CORPORATION	 	 


 


Under
the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended, modified, supplemented, and/or restated
from time to time, the “Agreement”), Borrower is in complete compliance for the period ending _______________ with
all required covenants except as noted below. Attached are the required documents evidencing such compliance, setting forth calculations
prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.
Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.


 


Please
indicate compliance status by circling Yes/No under “Complies” column.


 


	Reporting
    Covenants		Required	 	Complies
	 	 	 	 	 
	Compliance
    Statement	 	Quarterly
    within 45 days	 	Yes
     No
	10-Q
    Report	 	Within
    45 days of Q1, Q2, and Q3	 	 
	10-K
    Report and Annual financial statements (CPA Audited)	 	FYE
    within 90 days	 	Yes
     No
	Filed
    10-Q, 10-K and 8-K	 	Promptly
    after filing with

    SEC
	 	Yes
     No
	Board
    approved projections	 	FYE
    within 90 days and as amended/updated	 	Yes
     No


 


The
following are the exceptions with respect to the statements above: (If no exceptions exist, state “No exceptions to note.”)


_____________________________________________________________________________________________


_____________________________________________________________________________________________


_____________________________________________________________________________________________


 




    	
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EXHIBIT
B


LOAN
PAYMENT/ADVANCE REQUEST FORM


 


Deadline
for same day processing is Noon Eastern Time


 


Date:
_____________________


 







	Loan
    Payment:
	 	 	 	 
	CELSION
    CORPORATION
	 	 	 	 
	From
    Account #	________________________________	To
    Account #	__________________________________________
	      	(Deposit
    Account #)	 	(Loan
    Account #)
	Principal
    $	_______________________________	and/or
    Interest $	________________________________________
	 	 	 	 
	Authorized
    Signature:  	_______________________________	Phone
    Number:	________________________________________
	Print
    Name/Title:	_______________________________	 	 
	 	 	 	 








 









Loan
Advance:


 


Complete
Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.


 


	From
    Account #	________________________________	To
    Account #	__________________________________________
	      	(Loan
    Account #)	 	(Deposit
    Account #)
	 	 	 	 
	Amount
    of Term Loan Advance $	_______________________________ 


 


All
Borrower’s representations and warranties in the Loan and Security Agreement are true, correct, and complete in all material respects
on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations
and warranties expressly referring to a specific date shall be true and correct in all material respects as of such date:


 


	Authorized Signature: 	________________________________	Phone
    Number	________________________________ 
	Print
    Name/Title: 	________________________________	 	 
	 	 	 	 











 







 


Outgoing
Wire Request:


 


Complete
only if all or a portion of funds from the loan advance above is to be wired.


 


Deadline
for same day processing is noon, Eastern Time


 


	Beneficiary
    Name:	_____________________________	Amount
    of Wire: $	_____________________________
	Beneficiary
    Bank:	_____________________________	Account
    Number: 	_____________________________
	City
    and State: 	_____________________________	 	 
	 	 	 	 
	Beneficiary
    Bank Transit (ABA) #:	_____________________________	Beneficiary Bank Code (Swift, Sort, Chip, etc.): 	_____________________________
	 	 	(For
    International Wire Only)	 
	 	 	 	 
	Intermediary
    Bank:  	_____________________________	Transit
    (ABA) #: 	_____________________________
	For
    Further Credit to: 	______________________________________________________________________________
	 	 	 	 
	Special
    Instruction: 	______________________________________________________________________________


 


By
signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to
the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received
and executed by me (us).


 


	Authorized
    Signature:	_____________________________	2nd
    Signature (if required):	_____________________________


 





 


 


	Print
    Name/Title:	______________________________	Print
    Name/Title:	______________________________
	Telephone
    #: 	______________________________	Telephone
    #:	______________________________


 





 




    	
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