EX-10.15



 Exhibit 10.16 
 This LOAN AND SECURITY AGREEMENT (the “Agreement”) is entered into as of March 4, 2013, by and between Square 1 Bank (“Bank”) and Aratana Therapeutics, Inc.
(“Borrower”). 
 RECITALS 
 Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower. This Agreement sets forth the terms on which Bank will advance credit to Borrower, and Borrower
will repay the amounts owing to Bank. 
 AGREEMENT 
 The parties agree as follows: 
  

	1.	DEFINITIONS AND CONSTRUCTION. 

 1.1 Definitions. As used in this Agreement, all capitalized terms shall have the definitions set forth on Exhibit A. Any term used in the Code and not defined herein shall have the meaning
given to the term in the Code. 
 1.2 Accounting Terms. Any accounting term not specifically defined on Exhibit A
shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP (except for non­compliance with FAS 123R in monthly reporting). The term “financial statements” shall include the accompanying notes
and schedules. 
  

	2.	LOAN AND TERMS OF PAYMENT. 


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

(b) Term Loans. 
 (i) Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Term Loans to Borrower in two tranches, Tranche A and Tranche B. Bank agrees to make a term loan to Borrower
in an amount equal to $5,000,000 (the “Tranche A Term Loan”) on the Closing Date or as soon thereafter as all conditions precedent to the making thereof have been met. Upon Borrower’s receipt of no less than $20,000,000 in gross cash
proceeds from either (i) an IPO, (ii) the sale or issuance of Borrower’s equity securities, or (iii) a Corporate Partnership (the “Tranche B Conditions”), Borrower may request and Bank agrees to make one or more
additional term loans to Borrower in an aggregate principal amount not to exceed $5,000,000 (each a “Tranche B Term Loan”, collectively the “Tranche B Term Loans”, and together with the Tranche A Term Loan, the “Term
Loans”) through the Availability End Date. The proceeds of the Term Loans shall be used to supplement the growth capital needs of the Borrower and for general corporate purposes and working capital needs. The Term Loans shall not exceed
$10,000,000 in total principal amount. 







 (ii) Interest shall accrue from the date of each Term Loan at the rate specified in
Section 2.3(a), and prior to the Availability End Date shall be payable monthly in arrears beginning on the first date of the month next following the date such Term Loan was funded, and continuing on the same day of each month thereafter. Any
Term Loans that are outstanding on the Availability End Date shall be payable in 24 equal monthly installments of principal, plus all accrued interest, beginning on April 1, 2014 and continuing on the same day of each month thereafter through
the Term Loan Maturity Date, at which time all amounts due in connection with the Term Loans and any other amounts due under this Agreement shall be immediately due and payable. Term Loans, once repaid, may not be reborrowed. Borrower may prepay any
Term Loans without penalty or premium. 
 (iii) Other than the Tranche A Term Loan, when Borrower desires to obtain a
Term Loan, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:30 p.m. Eastern time on the Business Day prior to the date on which the Term Loan is to be made. Such notice
shall be substantially in the form of Exhibit C. The notice shall be signed by an Authorized Officer. 
 2.2
Intentionally Omitted. 
 2.3 Interest Rates, Payments, and Calculations. 

(a) Interest Rate on Term Loans. Except as set forth in Section 2.3(b), the Term Loans shall bear interest, on the
outstanding daily balance thereof, (i) prior to the Availability End Date, at a variable annual rate equal to the greater of (A) 2.25% above the Prime Rate then in effect, or (B) 5.50% and (ii) on and after the Availability End
Date, at a fixed annual rate equal to the greater of (A) 2.25% above the Prime Rate in effect on the Availability End Date, or (B) 5.50%. 
 (b) Late Fee; Default Rate. If any payment is not made within 15 days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) 5% of the amount of
such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to
5 percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default. 

(c) Payments. Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of
Borrower’s deposit accounts. 
 (d) Computation. In the event the Prime Rate is changed from time to time hereafter,
the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest chargeable under the Loan Documents shall be computed on
the basis of a 360 day year for the actual number of days elapsed. 
 2.4 Crediting Payments. So long as no Event of
Default has occurred and is continuing, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies, except that to the extent Borrower uses the 

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

2.5 Fees. Borrower shall pay to Bank the following: 
 (a) Facility Fee. On or before the Closing Date, a fee equal to $50,000, which shall be nonrefundable. 
 (b) Bank Expenses. On the Closing Date, all Bank Expenses incurred through the Closing Date, and, after the Closing Date, all Bank Expenses, as and when they become due. 

(c) Success Fee. Immediately upon consummation of an Acquisition, (i) if Bank has advanced the entire amount of the Tranche B
Term Loans, Borrower, shall pay a success fee to Bank of $250,000 and (ii) if Bank has not advanced the entire amount of the Tranche B Term Loans, Borrower shall pay a success fee to Bank of $125,000. 

2.6 Term. This Agreement shall become effective on the Closing Date and, subject to Section 12.7, shall continue in full
force and effect for so long as any Obligations (other than inchoate indemnity obligations) remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement. Notwithstanding the foregoing, (a) Bank shall have the
right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default, and (b) Borrower shall have the right to terminate this
Agreement upon five business days’ written notice to Bank so long as all Obligations (other than inchoate indemnity obligations) have been paid in full in cash. 
  

	3.	CONDITIONS OF LOANS. 


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

  
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 (b) (an officer’s certificate of Borrower, substantially in form of
Exhibit F, with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement; 

(c) a financing statement (Form UCC-1); 
 (d) an account control agreement for each of Borrower’s accounts held outside of Bank; 
 (e) payment of the fees and Bank Expenses then due specified in Section 2.5, which may be debited from any of Borrower’s accounts with Bank; 

(f) current SOS Reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in
the Collateral; 
 (g) current financial statements, including audited statements (or such other level required by the
Investment Agreement) for Borrower’s most recently ended fiscal year, together with an unqualified opinion (or an opinion qualified only for going concern so long as Borrower’s investors provide additional equity as needed), company
prepared consolidated and consolidating balance sheets, income statements and statements of cash flows for the most recently ended month in accordance with Section 6.2, and such other updated financial information as Bank may reasonably
request; 
 (h) current Compliance Certificate in accordance with Section 6.2; 

(i) a Borrower Information Certificate; 
 (j) a listing of Borrower’s Intellectual Property; 
 (k) such
other documents or certificates, and completion of such other matters, as Bank may reasonably request; and 
 (l)
Borrower shall have opened and funded not less than $50,000 in deposit accounts held with Bank. 
 3.2 Conditions Precedent
to all Credit Extensions. The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is contingent upon the Borrower’s compliance with Section 3.1 above, and is further subject to the following
conditions: 
 (a) timely receipt by Bank of the Loan Advance/Paydown Request Form as provided in Section 2.1;

 (b) Borrower shall have transferred substantially all of its Cash assets into operating accounts held with Bank in
accordance with Section 6.6 hereof, and otherwise be in compliance with Section 6.6 hereof; and 
 (c) the
representations and warranties contained in Section 5 shall be true and correct in all material respects on and as of the date of such Loan Advance/Paydown Request Form and on the effective date of each Credit Extension as though made at and as
of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit Extension (provided, however, that those representations and warranties expressly referring to another date shall be
true, correct and complete in all material respects as of such date). The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred
to in this Section 3.2. 

  
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	4.	CREATION OF SECURITY INTEREST. 

 4.1 Grant of Security Interest. Borrower grants and pledges to Bank a continuing security interest in the Collateral to secure prompt repayment of any and all Obligations and to secure prompt
performance by Borrower of each of its covenants and duties under the Loan Documents. Except for Permitted Liens or as disclosed in the Schedule, such security interest constitutes a valid, first priority security interest in the presently existing
Collateral, and will constitute a valid, first priority security interest in later-acquired Collateral. Borrower also hereby agrees not to sell, transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of its
Intellectual Property; provided that Borrower shall have the right to grant licenses for the use of the Intellectual Property of Borrower or its Subsidiaries, in the ordinary course of Borrower’s or such Subsidiaries’ business, as
permitted under this Agreement. Unless agreed in writing by Bank, notwithstanding any termination of this Agreement or of any filings undertaken related to Bank’s rights under the Code, Bank’s Lien on the Collateral shall remain in effect
for so long as any Obligations (other than inchoate indemnity obligations) are outstanding. Upon request by Borrower and payment in full in Cash of the Obligations (other than inchoate indemnify obligations) and at such time as Bank’s
obligation to make Credit Extensions has terminated, Bank shall provide, at Borrower’s sole cost and expense, Borrower with written notice that all Liens in the Collateral have been terminated and Bank shall take such action reasonably
requested by Borrower in order to cause such Liens to be terminated of record (including filing UCC-3 or similar termination statements with respect to such Liens. 
 4.2 Perfection of Security Interest. Borrower authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) either specifically describe
the Collateral or describe the Collateral as all assets of Borrower of the kind pledged hereunder (other than any Intellectual Property), and (ii) contain any other information required by the Code for the sufficiency of filing office
acceptance of any financing statement, continuation statement, or amendment, including whether Borrower is an organization, the type of organization and any organizational identification number issued to Borrower, if applicable. Borrower shall have
possession of the Collateral, except where expressly otherwise provided in this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a financing statement. Where Collateral is in possession of a
third party bailee, Borrower shall take such steps as Bank reasonably requests for Bank to (i) subject to Section 7.10 below, obtain an acknowledgment, in form and substance reasonably satisfactory to Bank, of the bailee that the bailee
holds such Collateral for the benefit of Bank, and (ii) subject to Section 6.6, obtain “control” of any Collateral consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such
items and the term “control” 

  
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are defined in Revised Article 9 of the Code) by causing the securities intermediary or depositary institution or issuing bank to execute a control agreement in form and substance reasonably
satisfactory to Bank. Borrower will not create any chattel paper without placing a legend on the chattel paper acceptable to Bank indicating that Bank has a security interest in the chattel paper. Borrower from time to time may deposit with Bank
specific cash collateral to secure specific Obligations; Borrower authorizes Bank to hold such specific balances in pledge and to decline to honor any drafts thereon or any request by Borrower or any other Person to pay or otherwise transfer any
part of such balances for so long as the specific Obligations are outstanding. Borrower shall take such other actions as Bank reasonably requests to perfect its security interests granted under this Agreement. 

 

	5.	REPRESENTATIONS AND WARRANTIES. 

 Borrower represents and warrants as follows: 
 5.1 Due Organization and
Qualification. Borrower and each Subsidiary is an entity duly existing under the laws of the state in which it is organized and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property
requires that it be so qualified, except where the failure to do so would not reasonably be expected to cause a Material Adverse Effect. 
 5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict with nor
constitute a breach of any provision contained in Borrower’s Certificate of Incorporation or Bylaws, nor will they constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any
agreement by which it is bound, except to the extent such default would not reasonably be expected to cause a Material Adverse Effect. 
 5.3 Collateral. Borrower has rights in or the power to transfer the Collateral, and its title to the Collateral is free and clear of Liens, adverse claims, and restrictions on transfer or pledge
except for Permitted Liens. Other than movable items of personal property such as laptop computers, all Collateral having an aggregate book value not in excess of $250,000 is located solely in the Collateral States. All Inventory is in all material
respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made. Except as set forth in the Schedule, none of the Borrower’s Cash is maintained or invested with a Person
other than Bank or Bank’s affiliates. 
 5.4 Intellectual Property. Borrower’s Intellectual Property is set
forth on Exhibit E hereto. Borrower is the sole owner of the intellectual property created or purchased by Borrower, except for licenses permitted hereunder. To the best of Borrower’s knowledge, each of the copyrights, trademarks and
patents created or purchased by Borrower is valid and enforceable, and no part of the intellectual property created or purchased by Borrower has been judged invalid or unenforceable, in whole or in part, and no claim has been made to Borrower that
any part of the intellectual property created or purchased by Borrower violates the rights of any third party, except in each case to the extent such claim would not reasonably be expected to cause a Material Adverse Effect. 

  
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 5.5 Name; Location of Chief Executive Office. Except as disclosed in the Schedule,
Borrower has not done business under any name other than that specified on the signature page hereof, and its exact legal name is as set forth in the first paragraph of this Agreement. The chief executive office of Borrower is located at the address
indicated in Section 10 hereof. 
 5.6 Litigation. Except as set forth in the Schedule, there are no actions or
proceedings pending by or against Borrower or any Subsidiary before any court or administrative agency in which a likely adverse decision would reasonably be expected to have a Material Adverse Effect. 

5.7 No Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related to
Borrower and any Subsidiary that are delivered by Borrower to Bank fairly present in all material respects Borrower’s consolidated and consolidating financial condition as of the date thereof and Borrower’s consolidated and consolidating
results of operations for the period then ended, except for year-end adjustments made in the ordinary course of business. There has not been a material adverse change in the consolidated or in the consolidating financial condition of Borrower since
the date of the most recent of such financial statements submitted to Bank. 
 5.8 Solvency, Payment of Debts. Borrower
is able to pay its debts (including trade debts) as they mature; the fair saleable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; and Borrower is not left with unreasonably
small capital after the transactions contemplated by this Agreement. 
 5.9 Compliance with Laws and Regulations.
Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. No event has occurred resulting from Borrower’s failure to comply with ERISA that is reasonably likely
to result in Borrower’s incurring any liability that could have a Material Adverse Effect. Borrower is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940. Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the
Board of Governors of the Federal Reserve System). Borrower has not violated any statutes, laws, ordinances or rules applicable to it, the violation of which would reasonably be expected to have a Material Adverse Effect. Borrower and each
Subsidiary have filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected therein except those being contested in good faith with adequate reserves under
GAAP or where the failure to file such returns or pay such taxes would not reasonably be expected to have a Material Adverse Effect. 
 5.10 Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments. 

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

  
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 5.12 Inbound Licenses. Except as disclosed on the Schedule or as permitted under
Section 6.8, Borrower is not a party to, nor is bound by, any material license or other material agreement important for the conduct of Borrower’s business that prohibits or otherwise restricts Borrower from granting a security interest in
Borrower’s interest in such license or agreement or any other property important for the conduct of Borrower’s business, other than this Agreement or the other Loan Documents. 

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


	6.	AFFIRMATIVE COVENANTS. 


Borrower covenants that, until payment in full of all outstanding Obligations (other than inchoate indemnity obligations), and for so long
as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall do all of the following: 
 6.1 Good
Standing and Government Compliance. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in the respective states of formation, shall maintain qualification and good standing in each other
jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect, and shall furnish to Bank the organizational identification number issued to Borrower by the authorities of the state in which Borrower
is organized, if applicable. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall comply, and shall cause each Subsidiary
to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, and shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which
or failure to comply with which would reasonably be expected to have a Material Adverse Effect. 
 6.2 Financial Statements,
Reports, Certificates. Borrower shall deliver to Bank: (i) as soon as available, but in any event within 30 days after the end of each calendar month, a company prepared consolidated and consolidating balance sheet, income statement and
statement of cash flows covering Borrower’s operations available, but in any event within 180 days after the end of Borrower’s fiscal year, audited consolidated and consolidating financial statements of Borrower prepared in accordance with
GAAP, consistently applied, together with an opinion which is either unqualified, qualified only for going concern so long as Borrower’s investors provide additional equity as needed or otherwise consented to in writing by Bank on such


  
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financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (iii) annual budget approved by Borrower’s Board of Directors as soon as available
but not later than 60 days after the beginning of each calendar year during the term hereof; (iv) if applicable, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt (excluding any materials provided to such security holders, stockholders or holders of Subordinated Debt solely in their capacity as members of Borrower’s Board of Directors) and all reports on Forms 10-K and 10-Q
filed with the Securities and Exchange Commission; (v) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could reasonably be expected to result in damages or
costs to Borrower or any Subsidiary of $250,000 or more; (vi) promptly upon receipt, each management letter prepared by Borrower’s independent certified public accounting firm regarding Borrower’s management control systems; and
(vii) such budgets, sales projections, operating plans or other financial information generally prepared by Borrower in the ordinary course of business as Bank may reasonably request from time to time. Any items that are required to be
delivered under this paragraph which are made publicly available shall be deemed delivered on the date made publicly available, provided Borrower provides Bank written notice of such public availability within 5 days of such item being made publicly
available. 
 (a) Within 30 days after the last day of each month, Borrower shall deliver to Bank with the monthly
financial statements a Compliance Certificate certified as of the last day of the applicable month and signed by a Responsible Officer in substantially the form of Exhibit D hereto. 

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

(c) Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower’s usual business hours but no more than once a year (unless an Event of Default has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, inspect, audit and appraise the
Collateral at Borrower’s expense in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral. 
 Borrower may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 6.2, and Bank shall be entitled to rely on the information contained in
the electronic files, provided that Bank in good faith believes that the files were delivered by a Responsible Officer. Borrower shall include a submission date on any certificates and reports to be delivered electronically. 

6.3 Inventory and Equipment; Returns. Borrower shall keep all Inventory and Equipment in good and merchantable condition, free
from all material defects except for Inventory and Equipment (i) sold in the ordinary course of business, and (ii) for which adequate reserves have been made, in all cases in the United States and such other locations as to which Borrower
gives prior written notice. Returns and allowances, if any, as between Borrower and 

  
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its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist on the Closing Date. Borrower shall promptly notify Bank of all
returns and recoveries and of all disputes and claims involving inventory having a book value of more than $250,000. 
 6.4
Taxes. Borrower shall make, and cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, including, but not limited to, those laws
concerning income taxes, F.I.C.A., F.U.T.A. and state disability, and will execute and deliver to Bank, on demand, proof reasonably satisfactory to Bank indicating that Borrower or a Subsidiary has made such payments or deposits and any appropriate
certificates attesting to the payment or deposit thereof; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to
the extent required by GAAP) by Borrower or such Subsidiary. 
 6.5 Insurance. Borrower, at its expense, shall
(i) keep the Collateral insured against loss or damage, and (ii) maintain liability and other insurance, in each case in as ordinarily insured against by other owners in businesses similar to Borrower’s. All such policies of insurance
shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Bank. All policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an
additional loss payee, and all liability insurance policies shall show Bank as an additional insured and specify that the insurer must give at least 20 days notice to Bank before canceling its policy for any reason. Within 30 days of the Closing
Date, Borrower shall cause to be furnished to Bank a copy of its policies or certificate of insurance including any endorsements covering Bank or showing Bank as an additional insured. Upon Bank’s request, Borrower shall deliver to Bank
certified copies of the policies of insurance and evidence of all premium payments. Proceeds payable under any casualty policy will, at Borrower’s option, be payable to Borrower to replace the property subject to the claim, provided that any
such replacement property shall be deemed Collateral in which Bank has been granted a first priority security interest, provided that if an Event of Default has occurred and is continuing, all proceeds payable under any such policy shall, at
Bank’s option, be payable to Bank to be applied on account of the Obligations. 
 6.6 Primary Depository. Subject to
the provisions of Section 3.1(1) and 3.2(b), Borrower shall maintain all of its operating accounts with Bank. Borrower shall maintain its primary depository accounts with Bank and (i) if the aggregate amount of Borrower’s Cash is
greater than $10,000,000 at any time, Borrower shall maintain at least 50% of its Cash at Bank and (ii) if the aggregate amount of Borrower’s Cash is less than or equal to $10,000,000 at any time, Borrower shall maintain all of its Cash at
Bank. 
 6.7 Financial Covenants. Borrower shall at all times maintain the following financial ratios and covenants:

 (a) Gross Remaining Months’ Cash. From the Closing Date through December 31, 2013, Gross Remaining
Months’ Cash of at least 4.00; provided that Borrower shall not be in default of this Section 6.7(a) if prior to the Gross Remaining Months’ Cash falling below 4.00, Borrower has delivered to Bank any one of the following, in any
case, in form and 

  
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substance satisfactory to Bank: (i) confirmation from inside investors of forthcoming Subordinated Debt an amount acceptable to Bank; (ii) a letter of intent for a strategic investment
or Acquisition in an amount acceptable to Bank; or (iii) a term sheet for New Equity in an amount acceptable to Bank, to close within 60 days of execution of such term sheet. 

(b) Liquidity Ratio. Beginning January 1, 2014, a Liquidity Ratio of at least 1.00:1.00; provided, however, that if Bank
receives evidence in form and substance satisfactory to it that Borrower has received FDA approval for at least 2 products, the required Liquidity Ratio shall be lowered to 0.50:1.00. 

6.8 Consent of Inbound Licensors. Within 30 days after entering into or becoming bound by any material inbound license or
agreement, Borrower shall provide written notice to Bank of the material terms of such license or agreement with a description of its likely impact on Borrower’s business or financial condition. Borrower shall in good faith use commercially
reasonable efforts to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for Borrower’s interest in such licenses or contract rights to be deemed Collateral and for Bank to have a security interest in it that
might otherwise be restricted by the terms of the applicable license or agreement, whether now existing or entered into in the future, provided, however, that the failure to obtain any such consent or waiver shall not constitute a default under this
Agreement. 
 6.9 Further Assurances. At any time and from time to time Borrower shall execute and deliver such further
instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement. 
  

	7.	NEGATIVE COVENANTS. 


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

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

7.2 Change in Name, Location, Executive Office, or Executive Management; Change in Business; Change in Fiscal Year; Change in
Control. Change its name or the state of Borrower’s formation or relocate its chief executive office without 30 days prior written notification (including, after an IPO, by public notification as required by Securities and Exchange
Commission regulations) to Bank; replace or suffer the departure of its chief executive officer or chief financial officer without delivering written notification to Bank within 10 days after such replacement or departure; fail to appoint an interim
replacement or fill a vacancy in the position of chief executive officer or chief financial officer for more than 90 consecutive days; suffer a change on its board of directors, which results in the failure of at least one partner of Avalon Ventures
and MPM Capital or its Affiliates to serve as a voting member (and “Investor 

  
 11 









 
Board Departure”), or suffer the resignation of one or more directors from its board of directors in anticipation of Borrower’s insolvency, in either case without the prior written
consent of Bank which may be withheld in Bank’s sole discretion, provided that after an IPO an Investor Board Departure shall not be a violation of this Section 7.2 so long as Borrower provides Bank with written notice within 30 days of
such Investor Board Departure; take action to liquidate, wind up, or otherwise cease to conduct business in the ordinary course; engage in any business, or permit any of its Subsidiaries to engage in any business, other than or reasonably related or
incidental to the businesses currently engaged in by Borrower; change its fiscal year end; have a Change in Control. 
 7.3
Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of a Subsidiary into another Subsidiary or into
Borrower), or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person except where (a) each of the following conditions is applicable: (i) the consideration paid in
connection with such transactions (including assumption of liabilities) does not in the aggregate exceed $250,000 during any fiscal year, (ii) no Event of Default has occurred, is continuing or would exist after giving effect to such
transactions, (iii) such transactions do not result in a Change in Control, and (iv) Borrower is the surviving entity; or (b) the Obligations are repaid in full concurrently with the closing of any merger or consolidation of Borrower
in which Borrower is not the surviving entity; provided, however, that Borrower shall not, without Bank’s prior written consent, enter into any binding contractual arrangement with any Person to attempt to facilitate a merger or acquisition of
Borrower, unless (i) no Event of Default exists when such agreement is entered into by Borrower, (ii) such agreement does not give such Person the right to claim any fee, payment or damages from any parties, other than from Borrower or
Borrower’s investors, in connection with a sale of Borrower’s stock or assets pursuant to or resulting from an assignment for the benefit of creditors, an asset turnover to Borrower’s creditors (including, without limitation, Bank),
foreclosure, bankruptcy or similar liquidation, and (iii) Borrower notifies Bank in advance of entering into such an agreement (provided, the failure to give such notification shall not be deemed a material breach of this Agreement).

 7.4 Indebtedness. Create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit
any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except Indebtedness to Bank or as permitted under any subordination
agreement in connection with Subordinated Debt. 
 7.5 Encumbrances. Create, incur, assume or allow any Lien with respect
to its property, or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or covenant to any other Person (other than (i) the
licensors of in-licensed property with respect to such property or (ii) the lessors of specific equipment or lenders financing specific equipment with respect to such leased or financed equipment) that Borrower in the future will refrain from
creating, incurring, assuming or allowing any Lien with respect to any of Borrower’s property. 

  
 12 









 7.6 Distributions. Pay any dividends or make any other distribution or payment on
account of or in redemption, retirement or purchase of any capital stock in cash, except that Borrower may (i) repurchase the stock of former employees, consultants and directors pursuant to stock repurchase agreements entered into by Borrower
in the ordinary course of business, as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase, and (ii) repurchase the stock of former employees, consultants and employees
to Borrower regardless of whether an Event of Default exists, and (iii) upon the occurrence of an IPO, pay dividends to holders of Borrower’s Series A Preferred Stock, Series B Preferred Stock and/or Series C Preferred Stock (as defined in
the Charter) pursuant to the terms of the Section 1(a), 1(b) and 1(c), respectively, in accordance with the terms of the Charter as in effect on the Closing Date. 
 7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments, or maintain or
invest any of its Investment Property with a Person other than Bank or Bank’s Affiliates or permit any Subsidiary to do so unless such Person has entered into a control agreement with Bank, in form and substance reasonably satisfactory to Bank,
or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to Borrower. 

7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate
of Borrower except for: (a) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a
non-affiliated Person; (b) the sale of Borrower’s equity securities to its existing venture capital investors (provided, for the sake of clarity, that no Change in Control occurs); and (c) Subordinated Debt. 

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

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

 7.11 No Investment Company; Margin Regulation. Become or be controlled by an “investment company,” within
the meaning of the Investment Company Act of 1940, or become 

  
 13 









 
principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit
Extension for such purpose. 
  

	8.	EVENTS OF DEFAULT. 


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

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

8.2 Covenant Default. 
 (a) If Borrower fails to perform any obligation under Sections 6.2 (financial reporting), 6.4 (taxes), 6.5 (insurance), 6.6 (primary accounts) or 6.7 (financial covenants), or violates any of the
covenants contained in Article 7 of this Agreement; or 
 (b) If Borrower fails or neglects to perform or observe any
other material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or
covenant that can be cured, has failed to cure such default within 20 days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the 20
day period or cannot after diligent attempts by Borrower be cured within such 20 day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case
exceed 30 days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made; 

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

  
 14 









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

8.6 Other Agreements. If there is an uncured default or other uncured failure to perform in any agreement to which Borrower is a
party with a third party or parties (a) resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of $350,000 or (b) that would reasonably be
expected to have a Material Adverse Effect; 
 8.7 Judgments. If a final, uninsured judgment or judgments for the payment
of money in an amount, individually or in the aggregate, of at least $350,000 shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of 10 days (provided that no Credit Extensions will be made prior to the
satisfaction or stay of the judgment); or 
 8.8 Misrepresentations. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter into this Agreement or any other Loan
Document. 
  

	9.	BANK’S RIGHTS AND REMEDIES. 

 9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one or more of
the following, all of which are authorized by Borrower: 
 (a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5 (insolvency), all Obligations shall become immediately due and payable
without any action by Bank); 
 (b) Demand that Borrower (i) deposit cash with Bank in an amount equal to the amount
of any Letters of Credit remaining undrawn, as collateral security for the repayment of any future drawings under such Letters of Credit, and (ii) pay in advance all Letter of Credit fees scheduled to be paid or payable over the remaining term
of the Letters of Credit, and Borrower shall promptly deposit and pay such amounts; 
 (c) Cease advancing money or
extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and Bank; 

(d) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank
reasonably considers advisable; 
 (e) Make such payments and do such acts as Bank considers necessary or reasonable to
protect its security interest in the Collateral. Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to enter the premises where the Collateral
is located, to 

  
 15 









 
take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be
prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy
the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise; 
 (f) Set off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank; 
 (g) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, 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 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit; 

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

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

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

  
 16 









 9.2 Power of Attorney. Effective only upon the occurrence and during the continuance
of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account
debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill
of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; and
(g) file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral; provided Bank may exercise such power of attorney to sign the name of Borrower on any of the documents
described in clause (g) above, regardless of whether an Event of Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide advances hereunder is terminated. 
 9.3 Accounts Collection. At any time after the occurrence and during the continuation of an Event of Default, Bank may notify any Person owing funds to Borrower of Bank’s security interest in
such funds and verify the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver such payments to Bank in their original form as received
from the account debtor, with proper endorsements for deposit. 
 9.4 Bank Expenses. If Borrower fails to pay any amounts
or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrower: (a) make payment of the same or any part
thereof; or (b) obtain and maintain insurance policies of the type discussed in Section 6.5 of this Agreement, and take any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall
constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to
make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement. 
 9.5 Bank’s
Liability for Collateral. Bank has no obligation to clean up or otherwise prepare the Collateral for sale. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower. 

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

  
 17 









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

 

	10.	NOTICES. 

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

			
	If to Borrower:	  	Aratana Therapeutics, Inc.
		  	1901 Olathe Blvd.
		  	Kansas City, Kansas 66103
		  	Attn:  Louise Mawhinney, Chief Financial Officer
		  	FAX: (913) 904-9641
		
	with copies to:	  	Latham & Watkins LLP
		  	John Hancock Tower, 20th Floor
		  	200 Clarendon Street
		  	Boston, MA 02116
		  	Attn:  Peter Handrinos
		  	FAX: (617) 948-6001
		
		  	Latham & Watkins LLP
		  	505 Montgomery St., Ste. 2000
		  	San Francisco, CA 94111
		  	Attn:  Haim Zaltzman
		  	FAX: (415) 395-8095
		
	If to Bank:	  	Square 1 Bank
		  	406 Blackwell Street, Suite 240
		  	Durham, North Carolina 27701
		  	Attn:  Loan Operations Manager
		  	FAX: (919) 314-3080


  
 18 










			
		
	with a copy to:	  	Square 1 Bank
		  	12481 High Bluff Drive
		  	Suite 350
		  	San Diego, California 92130
		  	Attn:  Scott Foote
		  	FAX: (858) 436-3501

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

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

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

  
 19 










	12.	GENERAL PROVISIONS. 


12.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns
of each of the parties and shall bind all persons who become bound as a debtor to this Agreement; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s prior written consent, which
consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without the consent of or notice to Borrower to sell, assign, transfer, negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights and benefits hereunder. 
 12.2 Indemnification. Borrower shall defend, indemnify and
hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and
(b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank, its officers, employees and agents as a result of or in any way arising out of, following, or consequential to the transactions between Bank and Borrower whether
under this Agreement, or otherwise (including without limitation reasonable attorneys fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct. 

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

12.4 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement
for the purpose of determining the legal enforceability of any specific provision. 
 12.5 Amendments in Writing,
Integration. All amendments to or terminations of this Agreement or the other Loan Documents must be in writing. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the
subject matter of this Agreement and the other Loan Documents, if any, are merged into this Agreement and the Loan Documents. 

12.6 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Executed copies of the signature pages of this Agreement sent by facsimile or
transmitted electronically in Portable Document Format (“PDF”), or any similar format, shall be treated as originals, fully binding and with full legal force and effect, and the parties waive any rights they may have to object to such
treatment. 
 12.7 Survival. All covenants, representations and warranties made in this Agreement shall continue in full
force and effect so long as any Obligations remain outstanding or Bank has any obligation to make any Credit Extension to Borrower. The obligations of Borrower to 

  
 20 









 
indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2 shall survive until all applicable statute of limitations periods with respect
to actions that may be brought against Bank have run. 
 12.8 Confidentiality. In handling any confidential information,
Bank and Borrower and all employees and agents of such party shall exercise the same degree of care that such party exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public
information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i) in the case of Bank, to the subsidiaries or Affiliates of Bank or Borrower in connection with their present or
prospective business relations with Borrower, (ii) in the case of Bank, to prospective transferees or purchasers of any interest in the Credit Extensions, provided that they have entered into a comparable confidentiality agreement in favor of
Borrower and have delivered a copy to Borrower, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) in the case of Bank, as may be required in connection with the examination, audit or
similar investigation of Bank and (v) as Bank may determine in connection with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is in the public domain or in the
knowledge or possession of the receiving party when disclosed to such party, or becomes part of the public domain after disclosure to such receiving party through no fault of such receiving party; or (b) is disclosed to the receiving party by a
third party, provided such receiving party does not have actual knowledge that such third party is prohibited from disclosing such information. 
 [Balance of Page Intentionally Left Blank] 

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

			
	ARATANA THERAPEUTICS, INC.
		
	By:	 	 /s/ Steven St. Peter

		
	Title:	 	 President & CEO

	
	SQUARE 1 BANK
		
	By:	 	 /s/ Alan Faulkner

		
	Title:	 	 Venture Bank Officer



 [Signature Page to Loan and Security Agreement]








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

“Acquisition” means (a) any sale, license, or other disposition of all or substantially all of the assets (including intellectual
property) of Borrower, (b) any sale or disposition of all or substantially all of the capital stock of Borrower, or (c) any reorganization, consolidation, merger or sale of the voting securities of Borrower or any other transaction where
the holders of 100% of Borrower’s voting securities before such transaction beneficially own less than 50% of the outstanding voting securities of the surviving entity after the transaction. 

“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or
is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and general partners. 
 “Authorized Officer” means someone designated as such in the corporate resolution provided by Borrower to Bank in which this Agreement and the transactions contemplated hereunder are authorized
by Borrower’s board of directors. If Borrower provides subsequent corporate resolutions to Bank after the Closing Date, the individual(s) designated as “Authorized Officer(s)” in the most-recently provided resolution shall be the only
“Authorized Officers” for purposes of this Agreement. 
 “Availability End Date” means March 4, 2014. 

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

“Borrower’s Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or
liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information. 
 “Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of North Carolina are authorized or required to close. 

  
 1 








 “Cash” means unrestricted cash and cash equivalents. 

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

 “Change in Control” shall mean a transaction other than a bona fide equity financing or series of financings on terms and from
investors reasonably acceptable to Bank or an IPO in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such
“person” or “group” to elect a majority of the Board of Directors of Borrower, who did not have such power before such transaction. 
 “Charter” means the Third Amended and Restated Certificate of Incorporation of Aratana Therapeutics, Inc. filed with the Delaware Secretary of State on December 28, 2012 as amended by the
Certificate of Amendment of Third Amended and Restated Certificate of Incorporation or Aratana Therapeutics, Inc. filed with the Delaware Secretary of State on February 11, 2013. 
 “Closing Date” means the date of this Agreement. 
 “Code” means the North
Carolina Uniform Commercial Code as amended or supplemented from time to time. 
 “Collateral” means the property described on
Exhibit B attached hereto and all Negotiable Collateral to the extent not described on Exhibit B, except to the extent any such property (i) is nonassignable by its terms without the consent of the licensor thereof or another party
(but only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation, §25-9-406 and §25-9-408 of the Code), (ii) the granting of a security interest therein is contrary to applicable
law, provided that upon the cessation of any such restriction or prohibition, such property shall automatically become part of the Collateral, (iii) constitutes the capital stock of a controlled foreign corporation (as defined in the IRC), in
excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporations entitled to vote, or (iv) property (including any attachments, accessions or replacements) that is subject to a Lien that is permitted
pursuant to clause (c) of the definition of Permitted Liens, if the grant of a security interest with respect to such property pursuant to this Agreement would be prohibited by the agreement creating such Permitted Lien or would otherwise
constitute a default thereunder, provided, that such property will be deemed “Collateral” hereunder upon the termination and release of such Permitted Lien. 
 “Collateral State” means the state where the Collateral is located, which is Kansas. 

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to (i) any indebtedness, lease, dividend, letter 

  
 2 








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

“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held. 
 “Corporate Partnership” means any corporate partnership, corporate collaboration, joint venture, licensing arrangement, or other similar arrangement, in each case, with parties and on terms
reasonably acceptable to Bank. 
 “Credit Extension” means the Tranche A Term Loan, each Tranche B Term Loan, or any other extension
of credit by Bank, to or for the benefit of Borrower hereunder. 
 “Equipment” means all present and future machinery, equipment,
tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. 
 “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder. 
 “Event of Default” has the meaning
assigned in Article 8. 
 “GAAP” means generally accepted accounting principles, consistently applied, as in effect from time to time
in the United States. 
 “Gross Remaining Months’ Cash” means (i) Cash at Bank, plus any Tranche B Term Loans then available
to be drawn divided by (ii) Cash Bum, calculated based on the actual change in Cash over the most recent 30 day period excluding any Credit Extensions made during such period. 
 “Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with
respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations, including but not limited to any
sublimit contained herein. 

  
 3 








 “Insolvency Proceeding” means any proceeding commenced by or against any Person or entity under
any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors,
or proceedings seeking reorganization, arrangement, or other relief. 
 “Intellectual Property” means all of Borrower’s right,
title, and interest in and to the following: 
 (a) Copyrights, Trademarks and Patents; 

(b) Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products
now or hereafter existing, created, acquired or held; 
 (c) Any and all design rights which may be available to Borrower
now or hereafter existing, created, acquired or held; 
 (d) Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, 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; 

(e) All licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights; 
 (f) All amendments, renewals and extensions of any of
the Copyrights, Trademarks or Patents; and 
 (g) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing. 
 “Inventory” means
all present and future inventory in which Borrower has any interest. 
 “Investment” means any beneficial ownership of (including
stock, partnership or limited liability company interest or other securities) any Person, or any loan, advance or capital contribution to any Person. 
 “Investment Agreement” means, collectively, Borrower’s stock purchase and other agreement(s) pursuant to which Borrower most recently issued its preferred stock. 

“IPO” means the Borrower’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration
statement under the Securities Act of 1933, as amended. 
 “IRC” means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder. 

  
 4 








 “Letter of Credit” means a commercial or standby letter of credit or similar undertaking issued by
Bank at Borrower’s request. 
 “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance. 
 “Liquidity Ratio” means the ratio of unrestricted Cash at Bank plus up to 50% of net trade Accounts receivable
(subject to Bank’s audit of Borrower’s Accounts) to all Indebtedness to Bank (but excluding any Indebtedness to Bank which is secured by Cash held in a segregated deposit account at Bank). 

“Loan Documents” means, collectively, this Agreement, any note or notes executed by Borrower, and any other document, instrument or agreement
entered into in connection with this Agreement, all as amended or extended from time to time. 
 “Material Adverse Effect” means a
material adverse effect on (i) the operations, business or financial condition of Borrower and its Subsidiaries taken as a whole, (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan
Documents, or (iii) Borrower’s interest in, or the value, perfection or priority of Bank’s security interest in the Collateral. 

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

“New Equity” means cash proceeds received after the Closing Date from the sale or issuance of Borrower’s equity securities (including any
convertible indebtedness convertible into equity securities). 
 “Obligations” means all debt, principal, interest, Bank Expenses and
other amounts owed to Bank by Borrower pursuant to this Agreement (excluding any warrants or equity securities), whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the
commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise. 
 “Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same. 
 “Periodic Payments” means all installments or similar recurring payments that Borrower may now
or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank. 
 “Permitted Indebtedness” means: 
 (a) Indebtedness of Borrower in
favor of Bank arising under this Agreement or any other Loan Document; 

  
 5 








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

 (c) Indebtedness not to exceed $350,000 in the aggregate in any fiscal year of Borrower secured by a lien described in
clause (c) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed at the time it is incurred the lesser of the cost or fair market value of the property financed with such Indebtedness; 

(d) Subordinated Debt; 
 (e) Indebtedness to trade creditors incurred in the ordinary course of business; and 
 (f) Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon
Borrower or its Subsidiary, as the case may be. 
 “Permitted Investment” means: 

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

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

 (c) Repurchases of stock from former employees or directors of Borrower under the terms of applicable repurchase
agreements (i) in an aggregate amount not to exceed $350,000 in any fiscal year, provided that no Event of Default has occurred, is continuing or would exist after giving effect to the repurchases, or (ii) in any amount where the
consideration for the repurchase is the cancellation of indebtedness owed by such former employees to Borrower regardless of whether an Event of Default exists; 
 (d) Investments accepted in connection with Permitted Transfers; 

(e) Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not to exceed
$350,000 in the aggregate in any fiscal year; 
 (f) Investments not to exceed $350,000 outstanding in the aggregate at
any time consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity
securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors; 

  
 6 








 (g) Investments in unfinanced capital expenditures in any fiscal year, not to exceed
$350,000; 
 (h) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s business; 

(i) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers
who are not Affiliates, in the ordinary course of business, provided that this subparagraph (h) shall not apply to Investments of Borrower in any Subsidiary; 
 (j) Joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of licensing of technology, the development of technology or the providing of technical
support permitted hereunder, provided that any cash Investments by Borrower do not exceed $350,000 in the aggregate in any fiscal year; 
 (k) Investments permitted under Section 7.3; and 
 (l)
Investments consisting of deposit account and securities accounts of Borrower, subject to the compliance by Borrower with the covenant set forth in Section 6.6. 
 “Permitted Liens” means the following: 
 (a) Any Liens existing
on the Closing Date and disclosed in the Schedule (excluding Liens to be satisfied with the proceeds of the Credit Extensions) or arising under this Agreement, the other Loan Documents, or any other agreement in favor of Bank; 

(b) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings and for which Borrower maintains adequate reserves; 
 (c) Liens not to exceed $250,000
in the aggregate in any fiscal year (i) upon or in any Equipment (other than Equipment financed by a Credit Extension) acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such Equipment, or (ii) existing on such Equipment at the time of its acquisition, in each case provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such Equipment; 
 (d) Liens not to exceed $250,000 in connection with leases
or subleases and licenses or sublicenses granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest; 

(e) Statutory liens not to exceed $250,000 securing claims or demands of materialmen, mechanics, carriers, repairmen, or other
like Liens imposed without the action of such parties arising in the ordinary course of business; 

  
 7 








 (f) Liens not to exceed $250,000 to secure payment for workers’ compensation,
employment insurance, old age pensions, social security or other like obligations incurred in the ordinary course of business; 

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

(i) Liens securing Subordinated Debt; and 
 (j) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.4 (attachment) or 8.7 (judgments); and 

(k) Liens in favor of other financial institutions arising in connection with Borrower’s deposit accounts held at such
institutions to secure standard fees for deposit services charged by, but not financing made available by such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit accounts. 

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

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

(c) worn-out, surplus or obsolete Equipment not financed with the proceeds of Credit Extensions; 

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

(e) other assets of Borrower or its Subsidiaries that do not in the aggregate exceed $350,000 during any fiscal year. 

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

“Prime Rate” means the “prime rate” or “base rate” published by the Wall Street Journal from time to time. 

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

  
 8 








 “Schedule” means the schedule of exceptions attached hereto as Exhibit E and approved by
Bank, if any. 
 “SOS Reports” means the official reports from the Secretaries of State of each Collateral State, the state where
Borrower’s chief executive office is located, the state of Borrower’s formation and other applicable federal, state or local government offices identifying all current security interests filed in the Collateral and Liens of record as of
the date of such report. 
 “Subordinated Debt” means any debt incurred by Borrower that is subordinated in writing to the debt owing
by Borrower to Bank on terms reasonably acceptable to Bank (and identified as being such by Borrower and Bank). 
 “Subsidiary” means
any corporation, partnership or limited liability company or joint venture in which (i) any general partnership interest or (ii) more than 50% of the stock, limited liability company interest or joint venture of which by the terms thereof
ordinary voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly or through an Affiliate. 

“Term Loan Maturity Date” means March 4, 2016. 
 “Term Loans” has the meaning assigned in Section 2.1(b)(i). 

“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 Term
Loan” has the meaning assigned in Section 2.l(b)(i). 
 “Tranche B Term Loan(s)” has the meaning assigned in
Section 2.1(b)(i). 

  
 9 









			
	DEBTOR	  	ARATANA THERAPEUTICS, INC.
		
	SECURED PARTY:	  	SQUARE 1 BANK

 EXHIBIT B 
 COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT 
 All personal property of
Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to: 

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

(b) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds,
and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the North Carolina Uniform Commercial Code, as amended or supplemented from time to time, including revised
Division 9 of the Uniform Commercial Code­ Secured Transactions. 
 Notwithstanding the foregoing, the Collateral shall not
include any of the intellectual property, in any medium, of any kind or nature whatsoever, now or hereafter owned or acquired or received by Borrower, or in which Borrower now holds or hereafter acquires or receives any right or interest
(collectively, the “Intellectual Property”); provided, however, that the Collateral shall include all accounts and general intangibles that consist of rights to payment and proceeds from the sale, licensing or disposition of all or any
part, or rights in, the foregoing (the “Rights to Payment”). 
 Notwithstanding the foregoing, if a judicial authority
(including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the Collateral shall automatically, and effective as of March 4,
2013, include the Intellectual Property to the extent and only to the extent necessary to permit perfection of Bank’s security interest in the Rights to Payment, and further provided, however, that Bank’s enforcement rights with respect to
any security interest in the Intellectual Property shall be absolutely limited to the Rights to Payment only, and Bank shall have no recourse whatsoever with respect to the underlying Intellectual Property. 

  
 1 








 EXHIBIT C 

LOAN ADVANCE / PAYDOWN REQUEST FORM 
 [Please refer to New Borrower Kit] 







 EXHIBIT D 

COMPLIANCE CERTIFICATE 
 [Please refer to New Borrower Kit] 







 EXHIBIT E 

SCHEDULE OF EXCEPTIONS 

Permitted Indebtedness (Exhibit A) - None. 
 Permitted Investments (Exhibit A) - 
 As of 2/23/13: 

Restricted cash CD $140,000 
 Brokered CDs $6,382,000 
 Permitted Liens (Exhibit A) - None. 

Intellectual Property (Section 5.4) - 
 See Exhibits to Exclusive License Agreements with RaQualia Pharma, Inc. and Pacira Pharmaceuticals, Inc. listed below. 
 Provisional Application No. 61/706,164 filed September 27, 2012: Compositions and methods of use of an inappetance controlling compound. 
 Prior Names (Section 5.5) - None. 
 Litigation (Section 5.6) - None.

 Inbound Licenses (Section 5.12) - 
 Exclusive IP License Agreement for RQ-00000005 with RaQualia Pharma, Inc., dated December 27, 2010. 
 Exclusive IP License Agreement for RQ-00000007 with RaQualia Pharma, Inc., dated December 27, 2010. 
 Exclusive License, Development and Commercialization Agreement with Pacira Pharmaceuticals, Inc., dated December 5, 2012.