EX-10.1



 Exhibit 10.1 
 LOAN AND SECURITY AGREEMENT 
 THIS LOAN AND SECURITY AGREEMENT (this
“Agreement”) dated as of February 22, 2013 (the “Effective Date”) between SILICON VALLEY BANK, a California corporation (“Bank”), and SORRENTO THERAPEUTICS, INC., a Delaware
corporation (“Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties agree as follows: 
 1 ACCOUNTING AND OTHER TERMS 
 Accounting terms not defined in this
Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. 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. 
 2 LOAN AND TERMS OF PAYMENT 
 2.1 Promise to Pay. Borrower
hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement. 

2.1.1 Equipment Advances. 
 (a) Availability. Subject to the terms and conditions of this Agreement, Bank shall make advances (each, an “Equipment Advance” and, collectively, “Equipment
Advances”) to Borrower not exceeding the Equipment Line. Bank shall make an initial Equipment Advance to Borrower on the Effective Date, or as soon thereafter as is practical, in the amount of Eight Hundred Seventy Five Thousand Eight
Hundred Eighty Eight Dollars ($875,888) (the “Tranche A Equipment Advance”). Borrower may request and Bank shall make an additional Equipment Advance to Borrower during the Draw Period in the amount of One Hundred Twenty Four
Thousand One Hundred Twelve Dollars ($124,112) (the “Tranche B Equipment Advance”). Equipment Advances may only be used to finance Eligible Equipment purchased within (i) three hundred sixty five (365) days prior to the
Effective Date, or (ii) one hundred eighty (180) days after the Effective Date (in each case, determined based upon the applicable invoice date of such Eligible Equipment). No Equipment Advance may exceed one hundred percent (100%) of
the total invoice for Eligible Equipment (excluding taxes, shipping, warranty charges, freight discounts and installation expenses relating to such Eligible Equipment except to the extent such are allowed to be financed pursuant hereto as Other
Equipment). Unless otherwise agreed to by Bank, not more than thirty-five percent (35.0%) of the proceeds of the Equipment Line shall be used to finance Other Equipment. After repayment, no Equipment Advance may be reborrowed. 

(b) Repayment. The Tranche A Equipment Advance shall be payable in (i) thirty six (36) consecutive equal monthly
installments of principal and (ii) monthly payments of accrued interest, beginning on May 1, 2013 and continuing on the first (1st) day of each month thereafter through the Equipment Maturity Date. If the Funding Date of the Tranche B
Equipment Advance occurs on or prior to April 30, 2013, the Tranche B Equipment Advance shall be payable in (i) thirty-six (36) consecutive equal monthly installments of principal and (ii) monthly payments of accrued interest,
beginning on May 1, 2013. If the Funding Date of the Tranche B Equipment Advance occurs after April 30, 2013, the Tranche B Equipment Advance shall immediately amortize and be payable in (i) consecutive monthly installment of
principal and (ii) monthly payments of accrued interest, beginning on the first (1st) day of the month immediately following the Funding Date of the Tranche B Equipment Advance and continuing on the first (1st) day of each month
thereafter through the Equipment Maturity Date. Notwithstanding the foregoing, all unpaid principal and interest on each Equipment Advance shall be due on the Equipment Maturity Date. 







 (c) Prepayment. 

(i) Permitted Prepayment. Borrower shall have the option to prepay all, but not less than all, of the Equipment Advances advanced
by Bank under this Agreement, provided Borrower (i) delivers written notice to Bank of its election to prepay the Equipment Advances at least three (3) Business Days prior to such prepayment, and (ii) pays, on the date of such
prepayment (a) all outstanding principal and accrued but unpaid interest, (b) the Equipment Advance Prepayment Fee, (c) the Final Payment and (d) all other sums, if any that shall have become due and payable hereunder in
connection with the Equipment Advances. 
 (ii) Mandatory Prepayment Upon an Acceleration. If the Equipment Advances are
accelerated following the occurrence and 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, (ii) the Equipment Advance
Prepayment Fee, (iii) the Final Payment and (iv) all other sums, if any, that shall have become due and payable hereunder in connection with the Equipment Advances. 
 2.2 Intentionally Omitted. 
 2.3 Payment of Interest on the Credit
Extensions. 
 (a) Interest Rate. Subject to Section 2.3(b), the principal amount outstanding for each Equipment
Advance shall accrue interest at a fixed per annum rate equal to the Basic Rate, which interest shall be payable monthly in accordance with Section 2.3(e) below. 
 (b) Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is five percentage points
(5.00%) above the rate that is otherwise applicable thereto (the “Default Rate”) unless Bank otherwise elects from time to time in its sole discretion to impose a smaller 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 2.3(b) 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. 

(c) Intentionally Omitted. 
 (d) Intentionally Omitted. 
 (e) Payment; Interest Computation.
Interest is payable monthly on the first (1st) calendar day of each month and shall be computed on the basis of a 360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 12:00 p.m. Pacific
time on any day shall be deemed received at the opening of business on the next Business Day, and (ii) 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. 
 2.4 Fees. Borrower shall pay to Bank: 
 (a) Equipment Advance Prepayment
Fee. The Equipment Advance Prepayment Fee when due pursuant to the terms of Section 2.1.1(c) or Section 2.1.1(d); 

(b) Final Payment. The Final Payment, when due hereunder; and 

(c) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of
this Agreement incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank). 







 (d) Fees Fully Earned. 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 2.4 pursuant to the terms of Section 2.5(c). Bank shall provide Borrower written notice of deductions made from the Designated
Deposit Account pursuant to the terms of the clauses of this Section 2.4. 
 2.5 Payments; Application of Payments;
Debit of Accounts. 
 (a) All payments to be made by Borrower under any Loan Document shall be made in immediately available
funds in Dollars, without setoff or counterclaim, before 12:00 p.m. Pacific time on the date when due. Payments of principal and/or interest received after 12:00 p.m. Pacific 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 exclusive right to determine 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 shall debit the Designated Deposit Account first, and if such account
does not have sufficient funds, then any of Borrower’s other deposit accounts, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off. 

2.6 Withholding. Payments received by Bank from Borrower under this Agreement will be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto).
Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to Bank, Borrower
hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, Bank
receives a net sum equal to the sum which it would have received had no withholding or deduction been required, and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority. Borrower will, upon request, furnish
Bank with proof reasonably satisfactory to Bank indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in
good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower. The agreements and obligations of Borrower contained in this Section 2.6 shall survive the termination of this
Agreement. 
 3 CONDITIONS OF LOANS 
 3.1 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 original signatures to the Loan Documents; 
 (b) the Operating
Documents and long-form good standing certificates of Borrower and its domestic Subsidiaries certified by the Secretary of State (or equivalent agency) of Borrower’s and such domestic Subsidiaries’ jurisdiction of organization or formation
and each jurisdiction in which Borrower and each domestic Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date; 







 (c) duly executed original signatures to the completed Borrowing Resolutions for Borrower;

 (d) certified copies, dated as of a recent date, of financing statement searches, as Bank may request, 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;

 (e) the Perfection Certificate of Borrower, together with the duly executed original signature thereto; 

(f) a landlord’s consent in favor of Bank for Borrower’s San Diego, CA location by the respective landlord thereof, together
with the duly executed original signatures thereto; 
 (g) a bailee’s waiver in favor of Bank for each location where
Borrower maintains property with a third party, by each such third party, together with the duly executed original signatures thereto; 
 (h) evidence satisfactory to Bank that the insurance policies and endorsements required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing lender loss
payable and/or additional insured clauses or endorsements in favor of Bank; and 
 (i) payment of the fees and Bank Expenses
then due as specified in Section 2.5 hereof. 
 3.2 Conditions Precedent to all Credit Extensions. Bank’s
obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent: 
 (a) except as otherwise provided in Section 3.5(a), timely receipt of an executed Payment/Advance Form; 
 (b) the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of the Payment/Advance Form and Loan Supplement and on 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, accurate and complete in all material respects as of such date, and no 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, accurate, and complete 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, accurate and complete in all material respects as of such date; and 
 (c) Bank determines to its satisfaction
that there has not been a Material Adverse Change. 
 3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each
item required to be delivered to Bank under this Agreement as a condition precedent to any Credit Extension. Borrower expressly agrees that 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. 
 3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of an Equipment Advance set forth in this Agreement, to obtain an Equipment Advance,
Borrower must notify Bank (which notice shall be irrevocable) by electronic mail or facsimile no later than 12:00 p.m. Pacific time one (1) Business Day before the proposed Funding Date. The notice shall be a Payment/Advance Form, must be
signed by a Responsible Officer or designee, and shall include a copy of the invoice for the Equipment being financed. Borrower shall also deliver to Bank by electronic mail or facsimile a completed Loan Supplement,








 
executed by a Responsible Officer or his or her designee, copies of invoices for the Financed Equipment and such additional information as Bank may reasonably request at least three
(3) Business Days before the proposed Funding Date. At Bank’s discretion, Bank shall have the opportunity to confirm that, upon filing the UCC-1 financing statement covering the Equipment described on the Loan Supplement, Bank shall have a
first priority perfected security interest in such Equipment. If Borrower satisfies the conditions of each Equipment Advance, Bank shall disburse such Equipment Advance by transfer to the Designated Deposit Account. 

4 CREATION OF SECURITY INTEREST  

4.1 Grant of Security Interest. 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. 

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, Bank shall, at the sole cost
and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower. 
 4.2 Priority
of Security Interest. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens
that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien under this Agreement). 

4.3 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to
Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of
Bank under the Code. 
 5 REPRESENTATIONS AND WARRANTIES 

Borrower represents and warrants as follows: 
 5.1 Due Organization, Authorization; Power and Authority. Borrower is duly existing and in good standing as a Registered Organization in its jurisdiction of formation and is qualified and licensed
to do business and is in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a material adverse
effect on Borrower’s business. In connection with this Agreement, Borrower has delivered to Bank a completed certificate signed by Borrower, entitled “Perfection Certificate”. Borrower represents and warrants to Bank that
(a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection
Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place
of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) other than as provided in the Perfection Certificate, Borrower (and each of its
predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the
Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (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). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s
organizational identification number. 
 The execution, delivery and performance by Borrower of the Loan Documents to which it
is a party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, 







 
conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict 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 (or are being obtained pursuant to Section 6.1(b))) 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 is bound. Borrower is not 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 business. 

5.2 Collateral. 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. 
 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 under the terms of this Agreement. 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 7.2. 
 All Financed Equipment is new,
except for such Financed Equipment that has been disclosed in writing to Bank by Borrower as “used” and that Bank, in its sole discretion, has agreed to finance. All Inventory is in all material respects of good and marketable quality,
free from material defects. 
 5.3 Litigation. There are no actions or proceedings pending or, to the knowledge of any
Responsible Officer, threatened in writing by or against Borrower or any of its Subsidiaries which would likely result in a Material Adverse Effect. 
 5.4 Financial Statements; Financial Condition. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects
Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial
statements submitted to Bank. 
 5.5 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 is able to pay its debts (including trade debts) as
they mature. 
 5.6 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 (a) has complied in all material respects with all Requirements of Law, and (b) has not violated any Requirements of Law the violation of which could reasonably be expected to have a material
adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than legally. 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
Government Authorities that are necessary to continue their respective businesses as currently conducted. 
 5.7
Subsidiaries; Investments. On the Effective Date, Borrower does not own any stock, partnership, or other ownership interest or other equity securities except as shown on the Perfection Certificate. 

5.8 Tax Returns and Payments; Pension Contributions. Borrower 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 (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 One
Hundred Thousand Dollars ($100,000). 
 To the extent Borrower defers payment of any contested taxes, 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.” Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could reasonably be expected to result in additional taxes
becoming due and payable by Borrower in excess of Fifty Thousand Dollars ($50,000). Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has
not 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,
including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 

5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely for the payment of Eligible Equipment and not
for personal, family, household or agricultural purposes. 
 5.10 Full Disclosure. No written representation, warranty or
other statement of Borrower in any certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given 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 certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided
by Borrower 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). 

5.11 Definition of “Knowledge.” For purposes of the Loan Documents, 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. 

6 AFFIRMATIVE COVENANTS 
 Borrower shall do all of the following: 
 6.1 Government Compliance.

 (a) Maintain its and all its Subsidiaries’ legal existence 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 of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in the Collateral. 

6.2 Financial Statements, Reports, Certificates. Provide Bank with the following: 

(a) Monthly Financial Statements. As soon as available, but no later than thirty (30) days after the last day of each month, a
company prepared consolidated balance sheet and income statement covering 







 
Borrower’s consolidated operations for such month certified by a Responsible Officer and in a form reasonably acceptable to Bank (the “Monthly Financial Statements”);

 (b) Monthly Compliance Certificate. Within thirty (30) days after the last day of each month and together with
the Monthly Financial Statements, a duly completed Compliance Certificate signed by a Responsible Officer, in substantially the form of Exhibit C hereto; 
 (c) Annual Operating Budget and Financial Projections. As soon as available, but no later than the earlier of (1) seven (7) Business Days after approval by Borrower’s Board of
Directors or (2) sixty (60) days after the last day of Borrower’s fiscal year, (i) annual operating budgets (including income statements, balance sheets and cash flow statements, by month) for the upcoming fiscal year of
Borrower, and (ii) annual financial projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with any related business forecasts used in the preparation of such annual
financial projections; 
 (d) Annual Audited Financial Statements. As soon as available, but no later than the earlier of
(1) two hundred seventy (270) days after the last day of the fiscal year of Borrower or (2) five (5) days after filing with the SEC, 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) Other Statements. Within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt,
in each case other than with respect to information made available to such holders in their capacity as members of Borrower’s board of directors; 
 (f) SEC Filings. Within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Borrower 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 posts such documents, or provides a link thereto, on Borrower’s
website on the Internet at Borrower’s website address; 
 (g) Legal Action Notice. A prompt report of any legal
actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, One Hundred Thousand Dollars ($100,000) or more;
and 
 (h) Other Financial Information. Other financial information reasonably requested by Bank. 

6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. 

6.4 Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely file, 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 deferred payment of any taxes contested or
permitted to not be paid pursuant to the terms of Section 5.8 hereof, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms. 

6.5 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 satisfactory to Bank. All property policies with respect to the Collateral shall have a lender’s loss payable








 
endorsement showing Bank as an additional lender loss payee. All liability policies with respect to the Collateral shall show, or have endorsements showing, Bank as an additional insured. Bank
shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral. 
 (b) Ensure that proceeds payable under any property policy with respect to the Collateral 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 the proceeds of any casualty policy up to Fifty Thousand Dollars ($50,000) with respect to any loss, but not exceeding One Hundred
Thousand Dollars ($100,000) in the aggregate for all losses under all casualty policies in any 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. 
 (c) At Bank’s request, Borrower shall deliver certified copies of insurance policies with respect to the Collateral and evidence of all premium payments. Each provider of any such insurance required
under this Section 6.5 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Bank, that it will give Bank thirty (30) days prior written notice before any such policy or policies
shall be materially altered or canceled. If Borrower fails to obtain insurance as required under this Section 6.5 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 6.5, and take any action under the policies Bank deems prudent. 

6.6 Operating Accounts. Maintain its primary operating and other deposit accounts and securities accounts with Bank and
Bank’s Affiliates.  
 6.7 Intentionally Omitted. 

6.8 Protection of Intellectual Property Rights. (i) Protect, defend and maintain the validity and enforceability of its
Intellectual Property material to its business; (ii) promptly advise Bank in writing of material infringements or any other event that could reasonably be expected to materially and adversely affect the value of its Intellectual Property; and
(iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent. 
 6.9 Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank, 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.

 6.10 Access to Collateral; Books and Records. Allow Bank, or its agents, at reasonable times, on ten
(10) Business Days’ notice (provided no notice is required if an Event of Default has occurred and is continuing), to inspect the Collateral and audit and copy Borrower’s Books. Such inspections or audits shall be conducted no more
often than once every twelve (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 at Borrower’s expense, and the charge therefor shall be Eight Hundred Fifty Dollars ($850) per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket
expenses. In the event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to reschedule the audit with less than ten (10) days written notice to Bank, then (without limiting any of
Bank’s rights or remedies), Borrower shall pay Bank a fee of One Thousand Dollars ($1,000) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.

 6.11 Further Assurances. Execute any further instruments and take further action as Bank reasonably requests to
perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement. 







 7 NEGATIVE COVENANTS 

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

7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or
permit any of its Subsidiaries. to Transfer any Collateral. 
 7.2 Changes in Business, Management, Ownership, or Business
Locations. Enter into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty-nine percent (49%) of the voting
stock of Borrower immediately after giving effect to such transaction or related series of such transactions (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 seven (7) Business Days prior to the closing of the transaction and provides to Bank a description of the material terms of the transaction). 

Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) deliver any portion of the Collateral
valued, individually or in the aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of
organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization. If Borrower intends to deliver any portion of the
Collateral valued, individually or in the aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower
intends to deliver the Collateral, then Borrower will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank. 

7.3 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than
Permitted Indebtedness. 
 7.4 Encumbrance. Create, incur, allow, or suffer any Lien on any of the Collateral, 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 
 7.5 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or adversely
affect the subordination thereof to Obligations owed to Bank. 
 7.6 Compliance. 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; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to
occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to
do so; 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 agency. 







 8 EVENTS OF DEFAULT 

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

8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension when due, or
(b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the Equipment 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); 
 8.2 Covenant Default. 
 (a) Borrower fails or neglects to perform any
obligation in Section 6 or violates any covenant in Section 7; 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 8) under such other term, provision, condition, covenant
or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent
attempts by Borrower be cured within such ten (10) 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 thirty (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 any covenants set forth in clause (a) above; 
 8.3 Intentionally Omitted. 

8.4 Attachment; Levy; Restraint on Business. 
 (a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the control of Borrower (including a Subsidiary) in excess of One Hundred
Thousand Dollars ($100,000), or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not, within ten (10) 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 ten (10) day cure period; or 

(b) (i) any material portion of Borrower’s 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 from conducting all or any material part of its business; 

8.5 Insolvency. (a) Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts) as they become due
or otherwise becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and is not dismissed or stayed within forty-five
(45) days (but no Credit Extensions shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed); 
 8.6 Other Agreements. There is, under any agreement to which Borrower 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 Two Hundred Fifty Thousand Dollars ($250,000); or (b) any breach or default by Borrower or Guarantor,
the result of which could have a material adverse effect on Borrower’s or any Guarantor’s business; 







 8.7 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 Two Hundred Fifty Thousand Dollars ($250,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance
carrier) shall be rendered against Borrower by any Governmental Authority, and the same are not, within ten (10) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution thereof, stayed or bonded
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 satisfaction, payment, discharge, stay, or bonding of such fine, penalty, judgment, order or
decree); 
 8.8 Misrepresentations. Borrower or any Person acting for Borrower 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; and 
 8.9 Subordinated Debt. 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 (other than pursuant to the terms thereof), 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, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement. 

9 BANK’S RIGHTS AND REMEDIES 
 9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, 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 8.4 occurs all Obligations
are immediately due and payable without any action by Bank); 
 (b) stop advancing money or extending credit for Borrower’s
benefit under this Agreement or under any other agreement between Borrower and Bank; 
 (c) 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 reasonably 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; 

(d) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or
for the credit or the account of Borrower; 
 (e) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade
names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this
Section, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit; and 
 (f)
exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof). 

9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence
and during the continuance of an Event of Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) make, settle, and adjust all claims under Borrower’s








 
insurance policies in connection with the Collateral; (c) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment
based thereon, or otherwise take any action to terminate or discharge the same; and (d) transfer the Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign
Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and
Bank is under no further obligation to make Credit Extensions hereunder. 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 all Obligations
(other than inchoate indemnity obligations) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates. 
 9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5 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 then highest rate applicable to the Obligations, 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. 
 9.4 Application of Payments and Proceeds Upon Default. If an Event of Default has occurred and is continuing, Bank shall have the right to apply in any order any funds in its possession, whether
from Borrower account balances, payments, proceeds realized as the result of disposition of the Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to Borrower by credit to the Designated Deposit Account or to other Persons
legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, 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. 

9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of
the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral. 
 9.6 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. 
 9.7 Demand Waiver.
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. 
 10 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 three (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 or facsimile transmission; (c) one (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, facsimile number, or email address indicated below. Bank or Borrower may change its mailing or electronic mail address or facsimile
number by giving the other party written notice thereof in accordance with the terms of this Section 10. 
  

							
	 If to Borrower:
	  	 SORRENTO THERAPEUTICS, INC.
 6042 Cornerstone Court, Ste. B
 San Diego, CA 92130

Attn: Henri Ji – CEO & President

Email: hji@sorrentotherapeutics.com
 Fax:
(858) 210-3759
	  	
			
	 If to Bank:
	  	 Silicon Valley Bank

4370 La Jolla Village Drive, Suite 860
 San
Diego, CA 92122
 Attn: Michael White – Relationship Manager
 Fax: (858) 622-1424
 Email: (858) 352-8052
	  	

 11 CHOICE OF LAW, VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE 

California law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Santa Clara County, California; 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
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 submits and consents in advance to such jurisdiction in any action or suit commenced in any
such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby 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 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual
receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid. 
 TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR 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 BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 
 WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties
hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the
Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the
federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California
Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and
permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently 







 
sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such
party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial
proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may
enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or
proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph. 

This Section 11 shall survive the termination of this Agreement. 

12 GENERAL PROVISIONS 
 12.1 Termination Prior to Equipment Maturity Date; Survival. All covenants, representations and warranties made in this Agreement 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), this Agreement may be terminated prior to the Equipment Maturity Date by Borrower, effective three (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 shall continue to survive notwithstanding this Agreement’s termination. 
 12.2 Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations
under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion). 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. Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing, Bank shall not 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 to a vulture fund or distressed debt fund as reasonably
determined by Bank or a direct competitor of Borrower. 
 12.3 Indemnification. Borrower agrees to indemnify, defend and
hold Bank and its directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against: (i) all obligations, demands, claims, and
liabilities (collectively, “Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Bank Expenses) in any way suffered,
incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower contemplated under the Loan Documents (including reasonable attorneys’ fees and expenses),
except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct. 
 This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run. 

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

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







 12.6 Correction of Loan Documents. Bank may correct patent errors and fill in any
blanks in the Loan Documents consistent with the agreement of the parties. 
 12.7 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 enforceable or admissible unless, and only to the extent, expressly set forth in a
writing signed by the party against which enforcement or admission is sought. 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. 

12.8 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. 
 12.9
Confidentiality. In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or
Affiliates (such Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall obtain any
prospective transferee’s or purchaser’s 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 in connection with
Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; 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. Confidential information does not include 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. 
 Bank Entities may use confidential information for the development of databases, reporting
purposes, and market analysis so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower. The provisions of the immediately preceding sentence shall survive the
termination of this Agreement. 
 12.10 Attorneys’ Fees, Costs and Expenses. In any action or proceeding between
Borrower and Bank arising out of or relating to the Loan Documents, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which it may be
entitled. 
 12.11 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 or the keeping of records in electronic form, 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. 
 12.12 Captions. The headings used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement. 
 12.13 Construction of Agreement. The parties 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. 







 12.14 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.

 12.15 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. 
 13 DEFINITIONS 
 13.1 Definitions. As used in the Loan
Documents, the word “shall” is 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. As used in this Agreement, the following capitalized terms have the following meanings: 
 “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. 

“Agreement” is defined in the preamble hereof. 
 “Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents, including any advance request, on behalf of Borrower.

 “Bank” is defined in the preamble hereof. 

“Bank Entities” is defined in Section 12.9. 

“Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable 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. 
 “Basic Rate” is the per annum rate of interest (based on a year of 360 days) equal to the sum of
(a) U.S. Treasury note yield to maturity for a term equal to the Treasury Note Maturity as reported in the Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading “U.S. Government Securities/Treasury Constant
Maturities” on the Funding Date, plus (b) the Loan Margin. (In the event Release H.15 is no longer published, Bank shall select in its reasonable discretion a comparable publication to determine the U.S. Treasury note yield to maturity.)

 “Borrower” is defined in the preamble hereof. 

“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 substantially in the form attached
hereto as Exhibit D. 
 “Business Day” is any day that is not a Saturday, Sunday or a day on
which Bank is closed. 
 “Claims” is defined in Section 12.3. 







 “Code” is the Uniform Commercial Code, as the same may, from time to time,
be enacted and in effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to,
Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such
other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions. 

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A. 

“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit B. 

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for
(a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that
Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) 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. 
 “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 Equipment Advance or any other extension of credit by Bank for Borrower’s benefit. 
 “Default Rate”
is defined in Section 2.3(b). 
 “Designated Deposit Account” is the multicurrency account denominated in
Dollars, account number                     , maintained by Borrower with Bank. 

“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. 

“Draw Period” is the period of time from the Effective Date through the earlier to occur of (a) the date one
hundred eighty days (180) after the Effective Date or (b) an Event of Default has occurred. 

“Effective Date” is defined in the preamble hereof. 

“Eligible Equipment” is the following to the extent it complies with all of Borrower’s representations and
warranties to Bank, is acceptable to Bank in all respects, is located at 6042 Cornerstone Court, Ste. B, San Diego, CA 92130 or such other location of which Bank has approved in writing, and is subject to a first priority Lien in favor of Bank,
including the Equipment listed on Annex A attached hereto. 
 “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. 







 “Equipment Advance” is defined in Section 2.1.1(a). 

“Equipment Advance Prepayment Fee” means a fee equal to (i) three percent (3.00%) of the Equipment Line if the
prepayment occurs on or prior to the first anniversary of the Effective Date, (ii) two percent (2.00%) of the Equipment Line if the prepayment occurs after the first anniversary of the Effective Date but on or prior to the second
anniversary of the Effective Date and (iii) one percent (1.00%) of the Equipment Line if the prepayment occurs after the second anniversary of the Effective Date but prior to the Equipment Maturity Date; provided, however, that such fees
shall not apply if Borrower refinances the Obligations with Bank. 
 “Equipment Line” is an Equipment Advance
or Equipment Advances in an aggregate amount of up to One Million Dollars ($1,000,000). 
 “Equipment Maturity
Date” is April 1, 2016. 
 “ERISA” is the Employee Retirement Income Security Act of 1974, and
its regulations. 
 “Event of Default” is defined in Section 8. 

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

“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 Equipment Maturity Date, (b) the acceleration of the Equipment Advances, or (c) the prepayment of the Equipment Advances, of Fifty Five Thousand Dollars ($55,000). 

“Financed Equipment” is all present and future Eligible Equipment in which Borrower has any interest which is financed
by an Equipment Advance. 
 “Foreign Currency” means 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. 
 “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. 







 “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, and
(d) Contingent Obligations. 
 “Indemnified Person” is defined in Section 12.3. 

“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, or other relief. 

“Intellectual Property” means, with respect to any Person, means all of such Person’s right, title, and interest in
and to the following: 
 (a) its Copyrights, Trademarks and Patents; 

(b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how,
operating manuals; 
 (c) any and all source code; 
 (d) any and all design rights which may be available to such Person; 
 (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. 

“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. 
 “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, 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, any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, 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. 

“Loan Margin” is four hundred seventy five basis points. 

“Loan Supplement” is the form attached hereto as Schedule 1. 

“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. 
 “Monthly Financial Statements” is defined in Section 6.2(a). 







 “Obligations” are Borrower’s obligations to pay when due any debts,
principal, interest, fees, Bank Expenses, and other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents, or otherwise, including 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. 

“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 thirty (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, its partnership agreement (or similar agreement), each of the foregoing with all
current amendments or modifications thereto. 
 “Other Equipment” is leasehold improvements, intangible
property such as computer software and software licenses, equipment specifically designed or manufactured for Borrower, other intangible property, limited use property and other similar property and soft costs approved by Bank, including taxes,
shipping, warranty charges, freight discounts and installation expenses. 
 “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 attached hereto as Exhibit C. 
 “Perfection Certificate” is defined in Section 5.1. 

“Permitted Indebtedness” is: 
 (a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents; 
 (b) Indebtedness existing on the Effective Date and 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; 
 (g) Other unsecured Indebtedness not exceeding One Hundred Thousand
Dollars ($100,000) in the aggregate; and 
 (h) extensions, refinancings, modifications, amendments and restatements of any
items of Permitted Indebtedness (a) through (g) 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 Liens” are: 
 (a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents; 

(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 its Books, 







 
provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder; 

(c) purchase money Liens (i) on Equipment (other than Financed Equipment) acquired or held by Borrower incurred for financing the
acquisition of the Equipment securing no more than One Hundred Thousand Dollars ($100,000) in the aggregate amount outstanding, or (ii) existing on Equipment (other than Financed Equipment) when acquired, if the Lien is confined to the
property and improvements and the proceeds of the Equipment; 
 (d) Liens of carriers, warehousemen, suppliers, or other Persons
that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) and which are not delinquent
or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto; 

(e) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like
obligations incurred in the ordinary course of business (other than Liens imposed by ERISA); 
 (f) 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; 
 (g) leases or subleases of real property granted in the ordinary course of
Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the
ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest
therein; 
 (h) non-exclusive license of Intellectual Property granted to third parties in the ordinary course of business, and
licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet geographical areas
outside of the United States; 
 (i) Liens arising from attachments or judgments, orders, or decrees in circumstances not
constituting an Event of Default; and 
 (j) Liens in favor of other financial institutions arising in connection with
Borrower’s deposit and/or securities accounts held at such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit and/or securities accounts. 

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

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law
(statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its
property is subject. 
 “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial
Officer and Controller of Borrower. 







 “SEC” shall mean the Securities and Exchange Commission, any successor
thereto, and any analogous Governmental Authority. 
 “Subordinated Debt” is indebtedness incurred by Borrower
subordinated to all of Borrower’s 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 or other ownership interests having ordinary voting power (other than stock or such other ownership interests 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. 
 “Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of
the business of Borrower connected with and symbolized by such trademarks. 
 “Tranche A Equipment Advance” is
defined in Section 2.1.1(a). 
 “Tranche B Equipment Advance” is defined in Section 2.1.1(a). 

“Transfer” is defined in Section 7.1. 
 “Treasury Note Maturity” is thirty six (36) months. 

[Signature page follows.] 







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

			
	BORROWER:
	
	SORRENTO THERAPEUTICS, INC.
		
	By	 	/s/ Richard Vincent
	Name:	 	Richard Vincent
	Title:	 	CFO

  

			
	 BANK:

	
	 SILICON VALLEY BANK

		
	By	 	/s/ D. Michael White
	Name:	 	D. Michael White
	Title:	 	SRM

 [Signature Page to Loan and Security Agreement]