Document:

EX-10.11

 Exhibit 10.11 

This LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into as of September 9, 2013, by and between COMERICA BANK
(“Bank”) and SERES HEALTH, INC., a Delaware corporation (“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. 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; Use of Proceeds. 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. Borrower shall use the proceeds of the Credit
Extensions solely as working capital, and to fund its general business requirements, including capital expenditures, and not for personal, family, household or agricultural purposes. 

(b) [Reserved]. 
 (c)
Growth Capital Advances. 
 (i) Availability. Subject to and upon the terms and conditions of this Agreement, Borrower may
request, and Bank agrees to make Growth Capital Advances to Borrower. On the Closing Date, or as soon thereafter as may be practical, the initial Growth Capital Advance shall be made in an aggregate principal amount equal to One Million Dollars
($1,000,000). Thereafter, Borrower may request Growth Capital Advances through Growth Capital Availability End Date. The aggregate principal amount of all Growth Capital Advances shall not, in any event, exceed the Growth Capital Line. Each Growth
Capital Advance shall be in a minimum amount of $500,000. 
 (ii) Repayment. Interest shall accrue from the date of each Growth
Capital Advance at the rate specified in the Pricing Addendum, and shall be payable in accordance with Section 2.3(b) and on the terms set forth in the Pricing Addendum. Borrower shall make monthly payments of interest-only, commencing on the
first day of the month following the funding of such Growth Capital Advance, and continuing on the first day of each successive month thereafter through the Growth Capital Availability End Date. Any Growth Capital Advances that are outstanding on
the Growth Capital Availability End Date shall be payable in thirty (30) consecutive equal monthly installments of principal, plus all accrued and unpaid interest, beginning on September 1, 2014, and continuing on the same day of each
month thereafter, unless such day is not a Business Day and then on the next Business Day thereafter, until paid in full. Notwithstanding (but without duplication with) the foregoing, on 

  

 
the Growth Capital Maturity Date, if the Final Payment has not previously been paid in full in connection with the prepayment of the Growth Capital Advances, Borrower shall pay to Bank the Final
Payment in respect of each Growth Capital Advance. Growth Capital Advances, once repaid, may not be reborrowed. Borrower may only voluntarily prepay the Growth Capital Advances in accordance with Section 2.1(c)(iv) below. 

(iii) Procedures for Borrowing. Other than on the Closing Date, when Borrower desires to obtain a Growth Capital Advance, Borrower
shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Eastern Time three (3) Business Days before the day on which the Growth Capital Advance is to be made. Such notice shall be
substantially in the form of Exhibit C. The notice shall be signed by a Responsible Officer or its designee. Bank shall be entitled to rely on any facsimile given by a person who Bank reasonably believes to be a Responsible Officer or a
designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance. 

(iv) Voluntary Prepayments. Except as set forth in the Pricing Addendum, Borrower shall have the option to prepay all, but not less
than all, of the Growth Capital Advances in full, provided Borrower (a) provides written notice to Bank of its election to prepay the Growth Capital Advances at least three (3) days prior to such prepayment, and (b) pays to Bank, on
the date of such prepayment, an amount equal to the sum of (1) all outstanding principal of the Growth Capital Advances, plus (2) all accrued and unpaid interest in respect of the Growth Capital Advances and all other unpaid fees and
expenses, including Bank Expenses, owing hereunder, plus (3) the Final Payment, plus (4) all other sums, if any, that shall have become due and payable under the Loan Documents, including interest at the Default Rate with respect to any
past due amounts. 
 (v) Mandatory Prepayment on Acceleration. If the Growth Capital Advances are accelerated following the
occurrence of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of: (a) all outstanding principal of the Growth Capital Advances, plus (b) all accrued and unpaid interest thereon through the prepayment
date and all other unpaid fees and expenses, including Bank Expenses, owing hereunder, plus (c) the Final Payment, plus (d) all other Obligations that are due and payable under the Loan Documents, including interest at the Default Rate
with respect to any past due amounts. 
 2.2 [Reserved]. 

2.3 Interest Rates, Payments, and Calculations. 

(a) Interest Rate. The Growth Capital Advances shall bear interest, on the outstanding daily balance thereof, on the terms set forth
in the Pricing Addendum. 
 (b) Payments. Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic
Payments against any of Borrower’s deposit accounts. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder. All
payments shall be free and clear of any taxes, withholdings, duties, impositions or other charges, to the end that Bank will receive the entire amount of any Obligations payable hereunder, regardless of source of payment. 

2.4 Crediting Payments. Prior to the occurrence and continuance of an Event of Default, Bank shall credit a wire transfer of funds,
check or other item of payment to such deposit account or Obligation as Borrower specifies. After the occurrence and during the continuance of an Event of Default, Bank shall have the right, in its sole discretion, to immediately apply any wire
transfer of funds, check, or other item of payment Bank may receive to conditionally reduce Obligations, but such applications of funds shall not be considered a payment on account unless such payment is of immediately available federal funds or
unless and until such check or other item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon 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. 

  
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 2.5 Fees. Borrower shall pay to Bank the following: 

(a) Facility Fee. On the Closing Date, a facility fee equal to Five Thousand Dollars ($5,000), which shall be fully-earned and
nonrefundable; 
 (b) Final Payment Fee. The Final Payment on the earliest to occur of (i) the Growth Capital Maturity Date,
(ii) the acceleration of any Growth Capital Advances, or (iii) the prepayment of a Growth Capital Advance pursuant to Section 2.1(c)(iv) or (v); and 

(c) 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; provided, that Borrower’s liability for Bank Expenses incurred prior to and as of the Closing Date in connection with the negotiation and documentation of the Loan Documents shall be limited to Twenty Five
Thousand Dollars ($25,000) provided there is a customary level of negotiation of the Loan Documents. 
 2.6 Term. This Agreement
shall become effective on the Closing Date and, subject to Section 13.8, shall continue in full force and effect for so long as any Obligations (other than inchoate indemnity obligations as to which no claim has been asserted or is known to
exist) remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement or any other Loan Document (excluding the Warrant). Notwithstanding the foregoing, 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. 

3. CONDITIONS OF LOANS. 

3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make the initial Credit Extension is subject to the
condition precedent that Bank shall have received, in form and substance satisfactory to Bank, the following: 
 (a) this Agreement, duly
executed by Borrower; 
 (b) an officer’s certificate of Borrower with respect to incumbency and resolutions authorizing the execution
and delivery of this Agreement and the other Loan Documents; 
 (c) the Pricing Addendum, duly executed by Borrower; 

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

(e) agreement to furnish insurance, duly executed by Borrower; 

(f) payment of the fees and Bank Expenses then due specified in Section 2.5; 

(g) current SOS Reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in the
Collateral; 
 (h) current financial statements, including company prepared financial statements for Borrower’s most recently ended
fiscal year, company prepared consolidated balance sheets and income statements for the most recently ended month in accordance with Section 6.2, and such other updated financial information as Bank may reasonably request; 

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

(j) a Warrant in form and substance satisfactory to Bank, duly executed by Borrower; 

  
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 (k) a Collateral Information Certificate, duly executed by Borrower; 

(l) an Automatic Loan Payment Authorization, duly executed by Borrower; and 

(m) such other documents, instruments and certificates, and completion of such other matters, as Bank may reasonably deem necessary or
appropriate. 
 3.2 Conditions Precedent to all Credit Extensions. The obligation of Bank to make each Credit Extension, including
the initial Credit Extension, is further subject to the following conditions: 
 (a) timely receipt by Bank of the Payment/Advance Form as
provided in Section 2.1; 
 (b) the representations and warranties contained in the Loan Documents shall be true and correct in all
material respects on and as of the date of such Payment/Advance 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, and provided further, that that
such materiality qualifiers shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof). 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; and 
 (c)
no event or circumstance shall exist or have occurred that has had or could reasonably be expected to have a Material Adverse Effect. 
 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 (other than the Warrant). Except as set forth in the Schedule,
subject to Permitted Liens of the type described in clauses (c), (f) and (j) of the definition of Permitted Liens that may have superior priority to Bank’s Lien under this Agreement, 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, or allow a Lien on, any of its Intellectual Property, except in connection with Liens of the type described in clauses (b) and (e) of the definition of Permitted Liens and Permitted Transfers.
Notwithstanding any termination of this Agreement, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations (other than inchoate indemnity obligations as to which no claim has been asserted or is known to exist) are
outstanding or Bank has any obligation to make Credit Extensions under this Agreement or any other Loan Document. 
 4.2 Perfection of
Security Interest. Borrower authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) either specifically describe the Collateral or describe the Collateral as all assets of Borrower
of the kind pledged hereunder, and (ii) contain any other information required by the Code for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, including whether Borrower is an
organization, the type of organization and any organizational identification number issued to Borrower, if applicable. Any such financing statements may be filed by Bank at any time in any jurisdiction whether or not Division 9 of the Code is
then in effect in that jurisdiction. Borrower shall from time to time endorse and deliver to Bank, at the request of Bank, all Negotiable Collateral and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and
continue perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents. 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 with an aggregate book value not to

  
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exceed $150,000 is in possession of a third party bailee, Borrower shall take such steps as Bank reasonably requests for Bank to (i) obtain an acknowledgment, in form and substance
satisfactory to Bank, of the bailee that the bailee holds such Collateral for the benefit of Bank, and (ii) obtain “control” of any Collateral consisting of investment property, deposit accounts, securities accounts, letter-of-credit
rights or electronic chattel paper (as such items and the term “control” are defined in Division 9 of the Code) by causing the securities intermediary or depositary institution or issuing bank to execute a control agreement in form
and substance satisfactory to Bank subject to the terms therein; provided that control agreements shall not be required during the transition period provided under Section 6.6 so long as Borrower is in compliance with the terms thereof.
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. 
 4.3 Right to Inspect. 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 each 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, and appraise the Collateral in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral. 

4.4 Pledge of Collateral. Borrower hereby pledges, assigns and grants to Bank a security interest in all the Shares, together with all
proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security
for the performance of the Obligations; provided that Bank shall not have a security interest in more than sixty-five percent (65%) of the voting Equity Interests in any Excluded Foreign Subsidiary. On
the Closing Date, the certificate or certificates for the pledged Shares, if any, will be delivered to Bank, accompanied by an instrument of assignment duly executed in blank by Borrower. To the extent required by the terms and conditions governing
the Shares, Borrower shall cause the books of each entity whose Shares are part of the Collateral and any transfer agent to reflect the pledge of the Shares. Upon the occurrence and during the continuance of an Event of Default hereunder, Bank may
effect the transfer of any securities included in the Collateral (including but not limited to the Shares) into the name of Bank and cause new certificates representing such securities to be issued in the name of Bank or its transferee. Borrower
will execute and deliver such documents, and take or cause to be taken such actions, as Bank may reasonably request to perfect or continue the perfection of Bank’s security interest in the pledged Shares. Unless an Event of Default shall have
occurred and be continuing, Borrower shall be entitled to exercise any voting rights with respect to the pledged Shares and to give consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or
ratification given or action taken which would be inconsistent with any of the terms of this Agreement or which would constitute or create any violation of any of such terms and Borrower shall be permitted to receive any cash dividend or other
distribution with respect to the Shares. All such rights to vote and give consents, waivers and ratifications and to receive cash dividends and other distributions, shall terminate upon the occurrence and continuance of an Event of Default. 

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 jurisdiction in
which it is incorporated or organized, as applicable, 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 could
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 organizational documents, 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.

  
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 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 Inventory that is in transit, movable Equipment (such as mobile phones, laptops and the like) with
employees and consultants, and Inventory and Equipment at cleaning or repair locations in each case in the ordinary course of business or as permitted pursuant to the terms of this Agreement, all Collateral is located solely in the Collateral States
at the locations specified in the Collateral Information Certificate, and at such other locations as may be timely disclosed in writing to Bank pursuant to Section 7.2. The Accounts are bona fide existing obligations of the account debtors. No
licenses or agreements giving rise to any Accounts is with any Prohibited Territory or with any Person organized under or doing business in a Prohibited Territory. 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 or as disclosed in writing from time to time with respect to accounts maintained outside of Bank to the extent expressly
permitted under Section 6.6, none of the Collateral consisting of deposit, investment or securities accounts is maintained or invested with a Person other than Bank or Bank’s Affiliates. 

5.4 Intellectual Property. Borrower is the sole owner of the Intellectual Property, except for (i) licenses of the type identified
in clause (b) of the definition of Permitted Transfer, and (ii) over the counter software that is commercially available to the public. To the best of Borrower’s knowledge, each of the Copyrights, Trademarks and Patents is valid and
enforceable, and no part of the Intellectual Property 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 violates the rights of any third party except to
the extent such invalidity, unenforceability or claim could not reasonably be expected to cause a Material Adverse Effect. Borrower’s rights as a licensee of intellectual property (including trademarks), other than off-the-shelf or shrink-wrap
licenses, do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or disposition of any product or service. 

5.5 Name; Location of Chief Executive Office; Location of Inventory and Equipment. Except as disclosed in the Schedule, Borrower has
not done business during the five (5) years prior to the Closing Date, 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 in the Chief Executive Office State at the address indicated in Section 10 hereof or at such other location as to which Borrower has provided timely written notice in accordance with Section 7.2 hereof. Except
as disclosed in the Schedule, all Inventory and Equipment of Borrower in an aggregate book value over $150,000 is located at the address indicated in Section 10 hereof, or at such other location as to which Borrower has provided timely written
notice in accordance with Section 7.10 hereof. 
 5.6 Actions, Suits, Litigation, or Proceedings. Except as set forth in the
Schedule, there are no actions, suits, litigation or proceedings, at law or in equity, pending by or against Borrower or any Subsidiary before any court, administrative agency, or arbitrator which could reasonably be expected to have a Material
Adverse Effect. 
 5.7 No Material Adverse Change in Financial Statements. All consolidated financial statements related to Borrower
and any Subsidiary that are delivered by Borrower to Bank fairly present in all material respects Borrower’s consolidated financial condition as of the date thereof and Borrower’s consolidated results of operations for the period then
ended. As of the Closing Date, the date of delivery of each borrowing request and the date of funding of each Credit Extension, there has not been a material adverse change in the consolidated financial condition of Borrower since the date of the
most recent of such financial statements submitted to Bank. As of the date referenced in each Compliance Certificate delivered to Bank, except as set forth in such Compliance certificate, there has not been a material adverse change in the
consolidated 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. 

  
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 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 reasonably be expected to 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 the important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T, U, and X of the Board of
Governors of the Federal Reserve System). Borrower has complied in all material respects with all the provisions of the Federal Fair Labor Standards Act. Borrower is in compliance with all environmental laws, regulations and ordinances except where
the failure to comply is not reasonably likely to have a Material Adverse Effect. Borrower has not violated any statutes, laws, ordinances or rules applicable to it, the violation of which could 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 could 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. As of the Closing Date, Borrower has no Subsidiaries. 
 5.11 Government Consents. Borrower and each Subsidiary have
obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s business as currently conducted,
except where the failure to do so would not reasonably be expected to cause a Material Adverse Effect. 
 5.12 Restricted Agreements.
Except as disclosed on the Schedule or as timely disclosed in writing to Bank pursuant to Section 6.9, Borrower is not a party to, nor is bound by, any Restricted Agreement. 

5.13 Shares. Borrower has full power and authority to create a first lien on the pledged Shares and no disability or contractual
obligation exists that would prohibit Borrower from pledging such Shares pursuant to this Agreement. To Borrower’s knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or
options exercisable with respect to the pledged Shares. The pledged Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable. To Borrower’s knowledge, the Shares are not the subject of any present
or threatened suit, action, arbitration, administrative or other proceeding, and Borrower knows of no reasonable grounds for the institution of any such proceedings. 

5.14 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, 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 and satisfaction in full of all outstanding Obligations (other than inchoate indemnity obligations as
to which no claim has been asserted or is known to exist), and for so long as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall, and shall cause each Subsidiary to, do all of the following: 

  
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 6.1 Good Standing and Government Compliance. 

(a) Borrower shall maintain its corporate existence in the Borrower State. Notwithstanding the foregoing, it shall not be deemed a violation
of this Section 6.1(a) if Borrower effects a statutory conversion, under and in compliance with Section 214 of the Delaware Limited Liability Company Act, as in effect on the Closing Date, from a Delaware corporation to a Delaware limited
liability company, so long as each of the following have occurred or have been satisfied to the satisfaction of Bank: (i) Borrower is the continuing and surviving entity in such conversion, such conversion does not result in a change in
Borrower’s taxpayer identification number, and such conversion does not result in the creation of a “new debtor” (as such term is defined in the Code); (ii) such conversion has no adverse effect on the validity, enforceability,
attachment, perfection or priority of Bank’s security interests in the Collateral; (iii) such conversion does not involve a Transfer by Borrower or merger or consolidation involving Borrower; (iv) such conversion is otherwise
permitted under this Agreement and the other Loan Documents and would not result in a violation of any covenant or agreement contained herein or therein; (v) no Event of Default, or any event or circumstance that with the giving of notice or
the passage of time (or both) could result in an Event of Default, exists at the time of such conversion, or could reasonably be expected to occur immediately following such conversion; (vi) such conversion is permitted under and is effected in
compliance with all applicable law, including the Delaware General Corporation Law and the Delaware Limited Liability Company Act; (vii) Borrower shall have delivered to Bank, not less than thirty (30) days’ prior to the effective
date of such conversion, a certificate of a Responsible Officer of Borrower in form and substance satisfactory to Bank, which shall include but not be limited to: (A) the proposed effective date of such conversion, (B) the exact legal name
of Borrower following such conversion, (C) true, correct and complete copies of the certificate of conversion and certificate of formation to be filed with the Delaware Secretary of State, and (D) a true, correct and complete copy of the
limited liability company agreement for Borrower to be effective following such conversion; (viii) Borrower shall have delivered to Bank a certificate of a Responsible Officer of Borrower, as of the effective date of such conversion, in form
and substance satisfactory to Bank, which shall include but not be limited to certification: (A) certification as to the matters in clauses (i) through (vi) above, and (B) that Borrower has delivered to Bank, true, correct and
complete copies of all stockholder and board approvals obtained or required in connection with such conversion and the duly executed limited liability company agreement becoming effective upon such conversion; (ix) Borrower shall have executed
and delivered to Bank an amendment to this Agreement (including an assumption and reaffirmation of the Obligations and Bank’s Liens and authorizations to file such financing statement amendments or additional financing statements as Bank may
require) and an officer’s certificate of Borrower with respect to incumbency and resolutions authorizing the execution, delivery and performance of this Agreement and the other Loan Documents with respect to the new name and organizational
structure resulting from such conversion, in each case in form and substance satisfactory to Bank; (x) Bank has determined that such conversion does not create any regulatory or legal issues or issues with respect to Bank’s customer
identification program; (xi) Parent Holding Company shall have assumed the Warrant on terms satisfactory to Bank, and shall have issued to Bank a new warrant agreement on terms reasonably satisfactory to Bank; and (xii) Borrower and Parent
Holding Company shall have delivered to Bank such other documents, instruments, agreements, waivers, consents, resolutions, reaffirmations, authorizations, opinions and certificates as Bank may request in connection with such conversion. At all
times following the effective date of such conversion, Borrower shall maintain its limited liability company existence in the Borrower State. 

(b) Borrower shall maintain its good standing in the Borrower State and shall cause each of its Subsidiaries’ to maintain their
respective organizational existence and good standing in their respective jurisdictions of organization, shall maintain qualification and good standing in each other jurisdiction in which the failure to so qualify could reasonably be expected to
have a Material Adverse Effect, and shall furnish to Bank the organizational identification number issued to Borrower or any Subsidiary by the authorities of the jurisdiction in which Borrower or any Subsidiary 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 in all material respects with all applicable Environmental Laws, and
maintain all material permits, licenses and approvals required thereunder where the failure to do so could reasonably be expected to have a Material Adverse Effect. 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 could reasonably be expected to have a Material Adverse Effect. 

  
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 6.2 Financial Statements, Reports, Certificates. Borrower shall deliver the following to
Bank: 
 (a) (i) as soon as available, but in any event within thirty (30) days after the end of each calendar month, a company
prepared consolidated balance sheet and income statement covering Borrower’s operations during such period prepared in accordance with GAAP (subject to normal year-end adjustments and without all required footnotes), in a form reasonably
acceptable to Bank and certified by a Responsible Officer; (ii) as soon as available, but in any event within one hundred eighty (180) days after the end of Borrower’s fiscal year (commencing with the fiscal year ending
December 31, 2013), audited consolidated financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is unqualified (except for a going concern comment or qualification related solely
the need to raise additional equity capital due to Borrower not having sufficient cash to support 12 months of operations) or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm
reasonably acceptable to Bank; (iii) if applicable, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt and all reports on Forms 10-K and 10-Q
filed with the Securities and Exchange Commission; (iv) 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 Two Hundred Fifty Thousand Dollars ($250,000) or more; (v) promptly upon receipt, each management letter prepared by Borrower’s independent certified public accounting firm regarding Borrower’s
management control systems; (vi) as soon as available, but in any event not later than forty-five (45) days after the last day of each fiscal year, Borrower’s financial and business projections and budget for the immediately following
fiscal year (with quarterly detail), with evidence of approval thereof by Borrower’s board of directors; 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. 
 (b) [Reserved]. 

(c) Within thirty (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. 

(d) Immediately upon 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. 

(e) Bank shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense,
provided that such audits will be conducted no more often than every twelve (12) months unless an Event of Default has occurred and is continuing. 

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. If Borrower delivers this information electronically, it shall
also deliver to Bank by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or .pdf file within five (5) Business Days of submission of the unsigned electronic copy the certification of monthly financial statements, and the
Compliance Certificate, each bearing the physical signature of the Responsible Officer. 
 6.3 Inventory; Returns. Borrower shall
keep all Inventory in good and merchantable condition, free from all material defects except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same
basis and in accordance with the usual customary practices of Borrower, as they exist on the Closing Date. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims with respect to Borrower involving more than
Two Hundred Fifty Thousand Dollars ($250,000). 

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

6.5 Insurance. 
 (a)
Borrower, at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses
conducted in the locations where Borrower’s business is conducted on the date hereof. Borrower shall also maintain liability and other insurance in amounts and of a type that are customary to businesses similar to Borrower’s. 

(b) All such policies of insurance shall be in such form, with such companies, and in such amounts as are 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 thirty (30) days’ notice to Bank before canceling or not renewing its policy for any reason. Upon Bank’s request, Borrower shall deliver to Bank certified copies of the policies of insurance
and evidence of all premium payments. If no Event of Default has occurred and is continuing, 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. 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 Accounts. Borrower shall maintain all its, and shall
cause all of its Subsidiaries to maintain their, depository, operating, cash management accounts with Bank and all of its and their primary investment and securities accounts with Bank; provided, however, that Borrower shall have until sixty
(60) days after the Closing Date to complete the transfer to Bank of its account balances maintained at the other banks and financial institutions in the accounts identified on the Schedule and to close all such accounts, so long as the
aggregate amount on deposit in such accounts at no time exceeds One Million Five Hundred Thousand Dollars ($1,500,000). 
 6.7
[Reserved]. 
 6.8 Intellectual Property Rights. 

(a) Borrower shall register or cause to be registered (to the extent not already registered) with the United States Patent and Trademark
Office or the United States Copyright Office, as the case may be, those registrable intellectual property rights now owned or hereafter developed or acquired by Borrower, to the extent that Borrower, in its reasonable business judgment, deems it
appropriate to so protect such intellectual property rights. 
 (b) Borrower shall give Bank prompt written notice of any applications or
registrations of intellectual property rights filed with the United States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any. 

(c) Borrower shall give Bank prompt written notice of the filing of any applications or registrations with the United States Copyright
Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the date such applications or registrations will be filed. 

  
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 (d) Borrower shall to (i) protect, defend and maintain the validity and enforceability of
the Intellectual Property material to Borrower’s business, (ii) use commercially reasonable efforts to detect infringements of the Intellectual Property and promptly advise Bank in writing of material infringements detected and
(iii) not allow any material Intellectual Property to be abandoned, forfeited or dedicated to the public without the written consent of Bank, which shall not be unreasonably withheld. 

6.9 Restricted Agreement Consents. Promptly after entering into or becoming bound by any Restricted Agreement, Borrower shall:
(i) 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; and (ii) use commercially reasonable efforts to take such
actions as Bank may reasonably request to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (A) Borrower’s interest in such licenses or contract rights to be deemed Collateral and for Bank to have a
security interest in such license or contract right, and to have the power to assign such license or contract rights in connection with an enforcement of remedies, that might otherwise be restricted by the terms of the applicable license or
agreement, whether now existing or entered into in the future, and (B) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this
Agreement and the other Loan Documents. 
 6.10 Creation/Acquisition of Subsidiaries. Without limiting the generality of any other
provision hereof, in the event Borrower or any Subsidiary creates or acquires any Subsidiary, Borrower and such Subsidiary shall promptly notify Bank of the creation or acquisition of such new Subsidiary and take all such action as may be reasonably
required by Bank to cause each such Subsidiary (other than an Excluded Foreign Subsidiary) to guarantee the Obligations of Borrower under the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the property
and assets of such Subsidiary (substantially as described on Exhibit B hereto), and Borrower (or any intermediate Subsidiary holding the Equity Interests in such Subsidiary) shall grant and pledge to Bank a perfected security interest in the
Equity Interests of such Subsidiary (regardless of whether or not it is an Excluded Foreign Subsidiary); provided that Bank shall not have a security interest in more than sixty-five percent (65%) of the
voting Equity Interests of any Excluded Foreign Subsidiary. 
 6.11 Parent Holding Company. Without limiting the generality of any
other provision hereof, not less than thirty (30) days prior to the acquisition by, or transfer to, a Parent Holding Company of Borrower’s Equity Interests, Borrower shall provide written notice to Bank of such acquisition or transfer,
which notice shall include, but not be limited to, the proposed date for the transaction, a description of the transaction in reasonable detail, certified copies of Parent Holding Company’s organizational documents (including its operating
agreement if a limited liability company), a pro forma capitalization table for Borrower and such Parent Holding Company as of the date immediately following such transaction, and such other documents, instruments and agreements relating thereto as
Bank may require. Prior to or concurrent with such acquisition or transfer, Borrower and Parent Holding Company shall and take all such action as may be required by Bank, including the execution and delivery of such documents, instruments,
agreements and certificates as Bank may require, to cause each Parent Holding Company to become a co-borrower hereunder or, at Bank’s sole discretion, to unconditionally guarantee the Obligations of Borrower under the Loan Documents, and, in
each case, grant a continuing pledge and security interest in and to the property and assets of Parent Holding Company (substantially as described on Exhibit B hereto), including without limitation a pledge of all of the Equity Interests of
Borrower and delivery to Bank of original share certificates accompanied by assignments separate from certificate (or other appropriate instruments of transfer) duly executed in blank. 

6.12 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 (other than
inchoate indemnity obligations as to which no claim has been asserted or is known to exist) are paid and satisfied in full or for so long as Bank may have any commitment to make any Credit Extension, Borrower will not, and will not permit any
Subsidiary to, do any of the following without Bank’s prior written consent: 

  
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 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 subject to Section 6.6 of this Agreement, 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 Borrower State without thirty (30) days’ prior written notification to Bank; relocate its chief executive office without twenty
(20) days’ prior written notification to Bank; without at least fifteen (15) days’ prior written notice to Bank, add any new offices or business or Collateral locations unless such new offices or locations contain, in the
aggregate, less than $150,000 in Borrower’s or such Subsidiaries’ assets or property; replace its chief executive officer or chief financial officer, if one exists, without written notification to Bank promptly thereafter; 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, or enter into any agreement to do any of the same. 
 7.4 Indebtedness. Create, incur, assume, guarantee or be or remain
liable with respect to any Indebtedness, or permit any Subsidiary to do so, 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 expressly agreed to by, in writing, Bank under the relevant subordination agreement. 
 7.5 Encumbrances. Create, incur,
assume or allow any Lien with respect to any of its property, or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for (a) with respect to Intellectual
Property, Permitted Liens of the type described in clauses (b), (e) and (i) of the definition of Permitted Liens, and (b) with respect to other property, Permitted Liens, or covenant to any other Person that Borrower in the future
will refrain from creating, incurring, assuming or allowing any Lien with respect to any of Borrower’s property, or permit any Subsidiary to do so. 

7.6 Distributions. Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase
of any Equity Interests, except that, subject to the last sentence of this Section 7.6, Borrower may (a) pay up to One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year to repurchase outstanding capital stock issued
by Borrower as required pursuant to customary stock repurchase agreements approved by Borrower’s Board of Directors, from former officers, directors or employees upon the death, disability or termination or cessation of employment or service of
such officers, directors or employees, (b) pay any dividends or make any distribution solely in common stock of Borrower, provided that such dividends or distributions of such stock or equity do not otherwise violate the terms of this Agreement
and no Event of Default has occurred and is continuing at the time of making such dividend or distribution or would result from the making of such dividend or distribution, (c) purchase, redeem, or otherwise acquire shares of its equity
interests or warrant or options to acquire any such equity interests from its stockholders consistent with the requirement of existing equity agreements of Borrower to the extent the consideration paid in respect thereof is paid solely in equity
interests of Borrower, and (d) make distributions in cash in the aggregate amount not to exceed One Hundred Fifty Thousand Dollars ($150,000) during the term of this Agreement. Notwithstanding the foregoing, Borrower shall be permitted to make
such repurchases only if, at the time of such repurchase, and immediately after giving effect thereto: (i) no Event of Default, or any event or circumstance that with the giving of notice or the passage of time (or both) could result in an
Event of Default, exists or could reasonably be expected to occur, (ii) Borrower is solvent, and (iii) such distribution is permitted under and is made in compliance with applicable law, including Sections 170 and 173 of the Delaware
General Corporation Law. 
 7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or
permit any of its Subsidiaries to do so, other than Permitted Investments, or maintain or invest any of its property with a Person other than Bank or Bank’s Affiliates or permit any Subsidiary to do so except as expressly permitted under
Section 6.6, or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that 

  
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restricts such Subsidiary from paying dividends or otherwise distributing property to Borrower. Further, Borrower shall not enter into, or permit any Subsidiary or Affiliate to enter into, any
license or agreement with any Prohibited Territory or with any Person organized under or doing business in a Prohibited Territory. 
 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, and (b) transactions constituting bona fide rounds of preferred stock
financing (or “bridge” convertible Subordinated Debt financing primarily with venture capital or private equity investors) for capital raising purposes, provided that such transactions are approved by Borrower’s Board of Directors,
including all disinterested directors, do not cause a Change in Control and are otherwise permitted hereunder. 
 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 and the terms of the subordination agreement relating to such
Subordinated Debt, or amend any provision of any document evidencing such Subordinated Debt, except in compliance with the terms of the subordination agreement relating to 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, or cause or permit any Subsidiary to store, any Inventory or the Equipment, valued, individually or in the aggregate, in excess of One Hundred Fifty Thousand Dollars ($150,000), with a bailee, warehouseman, or similar third
party unless (a) Borrower shall promptly thereafter give Bank written notice thereof identifying the names and addresses of such third parties and briefly describing the Inventory or Equipment in the possession of such third parties; and
(b) the third party has been notified of Bank’s security interest and Bank (i) shall have received a duly executed Collateral Access Agreement, including an acknowledgment from the third party that it is holding or will hold the
Inventory or Equipment for Bank’s benefit, or (ii) is in possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Except for such locations as Bank may approve in writing, Borrower shall keep, and shall
cause each of its Subsidiaries to keep, its Inventory and Equipment, valued, individually or in the aggregate, in excess of One Hundred Fifty Thousand Dollars ($150,000), only at the locations set forth in the Schedule delivered by Borrower to Bank
prior to the Closing Date, and at such other locations of which Borrower gives Bank prior written notice as required under Section 7.2 and as to which Bank files Security Instruments where needed to perfect its security interests and liens in
such Inventory and Equipment and as to which (x) Bank has received a Collateral Access Agreement, and (y) Borrower has taken such actions as Bank reasonably requests to perfect and maintain the perfection and priority of Bank’s Lien
on the Collateral. 
 7.11 No Investment Company; Margin Regulation. Become or be controlled by an “investment company,”
within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds
of any Credit Extension for such purpose. 
 8. EVENTS OF DEFAULT. 

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

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

8.2 Covenant Default. 

(a) If Borrower fails to perform any obligation under Article 6 or violates any of the covenants contained in Article 7 of this Agreement; or

  
 13 

 (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 ten (10) Business 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 ten
(10) Business Day period or cannot after diligent attempts by Borrower be cured within such ten (10) Business 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 thirty (30) days) to attempt to cure such default, so long as Borrower continues to diligently 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 Investor Support. If Bank reasonably
determines, based on indications from Borrower’s existing investors, that such investors no longer intend to provide capital to Borrower in amounts and at times sufficient to enable Borrower to satisfy its obligations as they become due,
including but not limited to all Obligations owing from Borrower to Bank. 
 8.4 Defective Perfection. If Bank shall receive at any
time following the Closing Date an SOS Report indicating that except for Permitted Liens, Bank’s security interest in the Collateral is not prior to all other security interests or Liens of record reflected in such SOS Report; 

8.5 Attachment. If any material portion of Borrower’s and/or its Subsidiaries 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 ten
(10) days, or if Borrower and/or its Subsidiaries 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 and/or its Subsidiaries assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s and/or its Subsidiaries 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 (10) days after Borrower and/or its Subsidiaries 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 and/or its Subsidiaries (provided that no Credit Extensions
will be made during such cure period); 
 8.6 Insolvency. If Borrower and/or its Subsidiaries becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower and/or its Subsidiaries, or if an Insolvency Proceeding is commenced against Borrower and/or its Subsidiaries and is not dismissed or stayed within forty-five (45) days
(provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding); 
 8.7 Other Agreements. If
there is a default or other failure to perform in any agreement to which Borrower and/or its Subsidiaries is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or that could reasonably be expected to have a Material Adverse Effect; 

8.8 Subordinated Debt. If Borrower and/or its Subsidiaries makes any payment on account of Subordinated Debt, except to the extent the
payment is allowed under any subordination agreement entered into with Bank; 
 8.9 Judgments; Settlements. If one or more
(a) judgments, orders, decrees or arbitration awards requiring the Borrower and/or its Subsidiaries that are not covered by insurance and which require payment in an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or greater
shall be rendered against Borrower and/or its Subsidiaries and the same shall not have been vacated or stayed within ten (10) days thereafter (provided that no Credit Extensions will be made prior to such matter being vacated or stayed); or
(b) settlements is agreed upon by Borrower and/or its Subsidiaries for the payment by Borrower and/or its Subsidiaries of an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or greater or that could reasonably be expected to
have a Material Adverse Effect. 

  
 14 

 8.10 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. 

8.11 Guaranty. Except by its terms, if any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any
reason to be in full force and effect, or any guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of default occurs under any
Guaranty Document or any guarantor revokes or purports to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any
certificate delivered to Bank in connection with any Guaranty Document, or if any of the circumstances described in Sections 8.3 through 8.9 occur with respect to any guarantor. 

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 8.6 (Insolvency), all Obligations
shall become immediately due and payable without any action by Bank); 
 (b) Demand that Borrower (i) deposit cash with Bank in an
amount equal to the amount of any Letters of Credit remaining undrawn, as collateral security for the repayment of any future drawings under such Letters of Credit, and (ii) pay in advance all Letter of Credit fees scheduled to be paid or
payable over the remaining term of the Letters of Credit, and Borrower shall promptly deposit and pay such amounts; 
 (c) Cease advancing
money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and Bank; 

(d) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably
considers advisable; 
 (e) Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest
in the Collateral. Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to enter the premises where the Collateral is located, to take and
maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security interest and to pay all
expenses incurred in connection therewith. With respect to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of
Bank’s rights or remedies provided herein, at law, in equity, or otherwise; 
 (f) Set off and apply to the Obligations any and all
(i) balances and deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the credit or the account of Borrower held by Bank; 

  
 15 

 (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. 
 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, agents or employees) as Borrower’s true and lawful attorney, with full power of substitution,
to: (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest and Liens in the Accounts, Inventory and other Collateral; (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; (g) transfer all or any part of the Collateral into the name of Bank or a third party to the extent permitted under the
Code; (h) file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of Borrower where permitted by law; (i) execute and do all such
assurances, acts and things which Borrower is required, but fails to do under the covenants and provisions of the Loan Documents; (j) to take any and all such actions as Bank may reasonably determine to be necessary or advisable for the purpose
of maintaining, preserving or protecting the Collateral or any of the rights, remedies, powers or privileges of Bank under this Agreement or the other Loan Documents; and (k) sign Borrower’s name on any documents or Security Instruments
necessary to perfect or continue the perfection of, or maintain the priority of, Bank’s security interest in the Collateral; provided Bank may exercise such power of attorney to sign the name of Borrower on any of the documents, and take any of
the actions, described in clauses (h) through (k) above, regardless of whether an Event of Default has occurred or is continuing. 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 (other than inchoate indemnity obligations as to which no claim has been asserted or is known to exist) have been fully repaid and performed and all of Bank’s
obligations to provide Credit Extensions or other financial accommodations to Borrower under this Agreement or any of the other Loan Documents shall have terminated. 

  
 16 

 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; (b) set up such reserves under any revolving line of credit
provided by Bank as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.5 of this Agreement, and take any action with respect to
such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the
Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement. 

9.5 Bank’s Liability for Collateral. Bank has no obligation to clean up or otherwise prepare the Collateral for sale. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower. 
 9.6 No Obligation to Pursue Others. Bank has no
obligation to attempt to satisfy the Obligations by collecting them from any other Person liable for them and Bank may release, modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting
Bank’s rights against Borrower. Borrower waives any right it may have to require Bank to pursue any other Person for any of the Obligations. 

9.7 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and
then shall be effective only in the specific instance and for the specific purpose for which it was given. Borrower expressly agrees that this Section 9.7 may not be waived or modified by Bank by course of performance, conduct, estoppel or
otherwise. 
 9.8 Demand; Protest. Except as otherwise provided in this Agreement, Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment and any other notices relating to the Obligations. 
 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:	  	SERES HEALTH, INC.
		  	161 First Street
		  	Cambridge, MA 02142
		  	Attn: Chief Excutive Officer
		  	FAX: (617) 868-1115

  
 17 

			
	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 Street, 20th Floor
		  	San Francisco, CA 94111
		  	Attn: Haim Zaltzman
		  	FAX: (415) 395-8095
		
	If to Bank:	  	Comerica Bank
		  	M/C 7578
		  	39200 Six Mile Rd.
		  	Livonia, MI 48152
		  	Attn: National Documentation Services
		
	with a copy to:	  	Comerica Bank
		  	100 Federal Street, 28th Floor
		  	Boston, MA 02110
		  	Attn: Paula Howell & Jason Pan
		  	FAX: (617) 757-6351

 Notwithstanding the foregoing, however, the failure by the Bank to deliver a copy of a notice or demand to
Borrower’s counsel shall not affect the validity or efficacy of such notice or demand if otherwise sent to Borrower in accordance with this Section 10. 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 California, without regard to
principles of conflicts of law. Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the State and Federal courts located in the Count of Santa Clara, State of California. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED PARTIES. 

12. REFERENCE PROVISION. 

12.1 In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial Reference
Provision. 
 12.2 With the exception of the items specified in Section 12.3, below, any controversy, dispute or claim (each, a
“Claim”) between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “Comerica Documents”), will be resolved
by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the
resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Comerica Documents, venue for the reference proceeding will be in the Superior Court in the County where the real
property involved in the action, if any, is located or in a County where venue is otherwise appropriate under applicable law (the “Court”). 

  
 18 

 12.3 The matters that shall not be subject to a reference are the following: (i) foreclosure
of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including,
without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This Agreement does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses
(i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference
pursuant to this Agreement. 
 12.4 The referee shall be a retired Judge or Justice selected by mutual written agreement of the parties. If
the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for
appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. 

12.5 The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested,
subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try
all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision. 

12.6 The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or
cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery,
depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties
shall be submitted to the referee whose decision shall be final and binding. 
 12.7 Except as expressly set forth in this Agreement, the
referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee,
and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the
parties will equally share the cost of the referee and the court reporter at trial. 
 12.8 The referee shall be required to determine all
issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be
empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or
summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the
Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from any
appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted,
is also to be a reference proceeding under this provision. 

  
 19 

 12.9 If the enabling legislation which provides for appointment of a referee is repealed (and no
successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or Justice, in accordance
with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding. 

12.10 THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A
REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION
WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER COMERICA DOCUMENTS. 

13. GENERAL PROVISIONS. 

13.1 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, transfer, negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights and benefits hereunder. 
 13.2 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 Collateral or the transactions contemplated by this Agreement and/or the
other Loan Documents; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank, its officers, employees and agents as a result of or in any way arising out of, following, or consequential to transactions between Bank
and Borrower whether under this Agreement, or otherwise (including without limitation reasonable attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct. 

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

13.4 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. 
 13.5 Correction of Loan Documents. Bank may correct
patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties. 
 13.6
Amendments in Writing, Integration. This Agreement cannot be amended or terminated orally. All amendments to or terminations of this Agreement or the other Loan Documents must be in writing signed by the parties. 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. 

13.7 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. 

13.8 Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as
any Obligations (other than inchoate indemnity obligations as to which no claim has been asserted or is known to exist) remain outstanding or Bank has any obligation to make any Credit 

  
 20 

 
Extension to Borrower. The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 13.2 shall survive,
notwithstanding termination of this Agreement, until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run. 

13.9 Confidentiality. In handling any confidential information, Bank and all employees and agents of Bank shall exercise the same
degree of care that Bank exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such
information may be made (i) to the subsidiaries or Affiliates of Bank in connection with their present or prospective business relations with Borrower, (ii) to prospective transferees, participants, or purchasers of any interest in the
Obligations that are subject to confidentiality provisions substantially similar to the provisions of this Section 13.9 or that have agreed with Bank to comply with this Section 13.9, (iii) as required by law, regulations, rule or
order, subpoena, judicial order or similar order, (iv) as may be required in connection with the examination, audit or similar investigation of Bank, (v) to Bank’s accountants, auditors and regulators, (vi) as Bank may determine
in connection with the enforcement of any remedies under any of the Loan Documents, and (vii) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less
restrictive than those contained herein. Confidential information hereunder shall not include information that either: (a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public
domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not have actual knowledge that such third party is prohibited from disclosing such information. 

13.10 Termination. Upon written request of Borrower to Bank, this Agreement shall terminate on the indefeasible payment in full in cash
of the Obligations (other than inchoate indemnity obligations as to which no claim has been asserted or is known to exist), the deposit of cash collateral with respect to all contingent Obligations (excluding inchoate indemnification obligations as
to which no claim has been asserted) in amounts and on terms and conditions and with parties satisfactory to Bank, and the full and final termination of all of Bank’s obligations and commitments to make Credit Extensions. Promptly after any
such termination and written request of Borrower to Bank, Bank shall at Borrower’s sole cost and expense, execute and deliver to Borrower a payoff letter on Bank’s standard form and release the security interest in the Collateral granted
under this Agreement. 
 [Remainder of Page Left Blank] 

  
 21 

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

			
	SERES HEALTH, INC.
		
	By:	 	 /s/ David Berry

	Name:	 	 David Berry

	Title:	 	 President

	
	COMERICA BANK
		
	By:	 	 /s/ Jason Pan

	Name:	 	 Jason Pan

	Title:	 	 Vice President

 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), the licensing, sale or other transfer of any intellectual property of Borrower or any of its Subsidiaries, or the rendering of services by Borrower, whether or not earned by performance, and including, without limitation, all
accounts, contract rights and payment intangibles of Borrower under or in respect of term license agreements, subscription license agreements and maintenance contracts, and also including all accounts, payment intangibles and other forms of
obligations owing to Borrower under 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. 

“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 partners. 
 “Bank
Expenses” means all costs or expenses of Bank, or any other holder or owner of the Loan Documents (including, without limit, court costs, legal expenses and reasonable attorneys’ fees and expenses, whether generated in-house or by outside
counsel, whether or not suit is instituted, and, if suit is instituted, whether at trial court level, appellate court level, in a bankruptcy, probate or administrative proceeding or otherwise) incurred in connection with the preparation,
negotiation, execution, delivery, amendment, administration, performance and enforcement of the Loan Documents, or incurred in collecting, attempting to collect under the Loan Documents or the Obligations, or incurred in defending the Loan
Documents, or incurred in any other matter or proceeding relating to the Loan Documents or the Obligations; and reasonable Collateral audit fees, in each case whether incurred before, during and after an Insolvency Proceeding. 

“Borrower State” means Delaware, the state under whose laws Borrower is organized. 

“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 California are authorized or required to
close. 
 “Cash” means unrestricted cash and cash equivalents. 

“Change in Control” means the occurrence of any one or more of the foregoing: 

(a) prior to the Parent Holding Company Acquisition: (i) any transaction or series of related transactions in which any
“person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than Flagship, 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 Equity Interests 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, or (ii) Borrower’s existing venture capital investors ceasing to own and control at least twenty percent
(20%) of the voting power of all classes of Borrower’s Equity Interests entitled to vote for the election of directors (other than as a result of the Initial Public Offering); or 

(b) following the Parent Holding Company Acquisition: (i) any transaction or series of related transactions in which any
“person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than Flagship, 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 Equity Interests then 

  
 1 

 
outstanding of Parent Holding Company ordinarily entitled to vote in the election of directors, managers or similar governing authority, empowering such “person” or “group” to
elect a majority of the Board of Directors (or similar governing authority) of Parent Holding Company, who did not have such power before such transaction, or (ii) Flagship ceasing to own and control at least twenty percent (20%) of the
voting power of all classes of Parent Holding Company’s Equity Interests entitled to vote for the election of directors or similar governing body or authority (other than as a result of the Initial Public Offering), or (iii) Parent Holding
Company ceasing to own and control one hundred percent (100%) of the voting power of all classes of Borrower’s Equity Interests entitled to vote for the election of directors. 

Notwithstanding the foregoing, subject to compliance with Section 6.11 and the requirements of Section 1.5 of the Warrant, the
Parent Holding Company Acquisition shall not be deemed to be a Change in Control. 
 “Chief Executive Office State” means Massachusetts, where
Borrower’s chief executive office is located. 
 “Closing Date” means the date of this Agreement. 

“Code” means the California 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. 
 “Collateral Access Agreement” means an agreement in form and substance satisfactory to Bank in its reasonable discretion,
pursuant to which a mortgagee or lessor of real property on which Collateral is stored or otherwise located, or a warehouseman, processor, contract manufacturer, equipment holder, co-location facility or other bailee of Inventory, Equipment or other
property owned by Borrower, that acknowledges the Liens of Bank and waives any Liens held by such Person on such Inventory, Equipment or other property and, includes such other agreements with respect to the Collateral, including agreements relating
to access to the Collateral, as Bank may require in its sole discretion, as the same may be amended, restated or otherwise modified from time to time. 

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

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to
(i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, 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 designed to protect a Person against fluctuation in interest rates,
currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement. 

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

“Credit Extension” means each Growth Capital Advance or any other extension of credit by Bank to or for the benefit of Borrower hereunder. 

“Environmental Laws” means all laws, rules, regulations, orders and the like issued by any federal state, local foreign or other governmental or
quasi-governmental authority or any agency pertaining to the environment or to any hazardous materials or wastes, toxic substances, flammable, explosive or radioactive materials, asbestos or other similar materials. 

  
 2 

 “Equipment” means all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. 
 “Equity Interests” means, with respect to any Person, any
of the shares of capital stock of (or other ownership, membership or profit interests in) such Person, any of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership,
membership or profit interests in) such Person, any of the securities convertible into or exchangeable for shares of capital stock of (or other ownership, membership or profit interests in) such Person or warrants, rights or options for the purchase
or acquisition from such Person of such shares (or such other interests), and any of the other ownership, membership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and
whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination. 
 “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. 
 “Excluded Foreign Subsidiary” means any Foreign Subsidiary that is a controlled foreign corporation (as defined in the IRC) in
respect of which either (a) the pledge of all of the voting Equity Interests of such Foreign Subsidiary as Collateral or (b) the guaranteeing by such Foreign Subsidiary of the Obligations, would result in material adverse tax consequences
to Borrower. 
 “Flagship” means, collectively, FLAGSHIP VENTURES FUND IV, L.P, a Delaware limited partnership, and its affiliated investment
funds. 
 “Foreign Subsidiary” means, in relation to any Person, any Subsidiary of that Person that is organized under the laws of a jurisdiction
other than the United States of America or any of the States (or the District of Columbia) thereof. 
 “Final Payment” is a payment (in addition
to and not a substitution for the regular monthly payments of principal plus accrued interest) due on the earliest to occur of (a) the Growth Capital Maturity Date, or (b) the acceleration of any Growth Capital Advances, or (c) the
prepayment of any Growth Capital Advance pursuant to Section 2.1(c)(iv) or (v), equal to Sixty Thousand Dollars ($60,000). 
 “GAAP” means
generally accepted accounting principles, consistently applied, as in effect from time to time in the United States of America. 
 “Governmental
Authority” means the Government of Canada, the United States of America, any State thereof or the District of Columbia, any other nation or any political subdivision thereof, whether provincial, state, territorial or local, and any agency,
authority, instrumentality, regulatory body, court, central bank, fiscal or monetary authority or other authority regulating financial institutions, and any other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including the Bank Committee on Banking Regulation and Supervisory Practices of the Bank of International Settlements. 

“Growth Capital Advance(s)” means a cash advance or cash advances under the Growth Capital Line. 

“Growth Capital Availability End Date” means August 31, 2014. 

“Growth Capital Line” means a Credit Extension of up to Three Million Dollars ($3,000,000). 

“Growth Capital Maturity Date” means February 1, 2017. 

  
 3 

 “Initial Public Offering” means the closing of the initial firm commitment underwritten offering of
Borrower’s common stock pursuant to a registration statement under the Securities Act of 1933 filed with, and declared effective by, the Securities and Exchange Commission. 

“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. 
 “Insolvency Proceeding” means any proceeding or case 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 Copyrights, Patents, Trademarks,
servicemarks and applications therefor, now owned or hereafter acquired, and any claims for damages by way of any past, present and future infringement of any of the foregoing. 

“Inventory” means all present and future inventory in which Borrower has any interest, including any returns upon any accounts or other proceeds,
including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower’s Books relating to any of the foregoing. 

“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. 
 “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder. 
 “Letter of Credit” means a commercial or standby letter of credit or similar undertaking issued by Bank at Borrower’s request.

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

“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. For the sake of clarity, Loan Documents shall include all present or future agreements by Borrower with or for the benefit of Bank in connection with bank
products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower by Bank including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services,
direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto, all
as amended, restated, or otherwise modified. 
 “Material Adverse Effect” means (i) a material adverse change in Borrower’s business or
financial condition, or (ii) a material impairment in the prospect of repayment of all or any portion of the Obligations or in otherwise performing Borrower’s obligations under the Loan Documents, (iii) a material impairment in the
perfection, value or priority of Bank’s security interests in the Collateral or any security provided by any guarantor. 
 “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. 
 “Obligations” means all debt, principal, interest, Bank Expenses, the Final Payment and other amounts owed to Bank by
Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including
any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise but excluding any obligations under the Warrant. 

  
 4 

 “Parent Holding Company” means a limited liability company duly formed and organized and validly
existing under the laws of a state of the United States for the sole purpose of acquiring and holding the Equity Interests of Borrower that (a) holds no assets other than assets incidental to the ownership of such Equity Interests of Borrower,
and (b) conducts no other business or financial operations. 
 “Parent Holding Company Acquisition” means the acquisition by a Parent Holding
Company of all of the Equity Interests of Borrower, such that Borrower becomes a wholly-owned Subsidiary of such Parent Holding Company, and the voting and non-voting Equity Interests of the Parent Holding Company following such transaction are held
by Borrower’s former stockholders in substantially the same percentages of ownership as such stockholders held Borrower’s Equity Interests immediately prior to such transaction. 

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same. 
 “Periodic Payments” means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank. 

“Permitted Indebtedness” means: 
  

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

  

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

  

	(c)	Indebtedness of Borrower not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate outstanding at any time secured by a lien described in clause (c) of the defined term “Permitted
Liens,” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness; 

  

	(d)	Subordinated Debt; 

  

	(e)	Indebtedness to trade creditors incurred in the ordinary course of business, including Indebtedness incurred in the ordinary course of business with corporate credit cards with Bank; and 

 

	(f)	extensions, refinancings and renewals of any items of Permitted Indebtedness described in clauses (a) through (c) above, 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; 

  

	(g)	Indebtedness that also constitutes an intercompany loan under clause (e) of the definition of Permitted Investment; 

  

	(h)	reimbursement obligations not to exceed Fifty Thousand Dollars ($50,000) in the aggregate at any time, in connection with letters of credit that are secured by cash or cash equivalents and issued on behalf of a Borrower
or a Subsidiary thereof with respect to leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business); and

  

	(i)	other Indebtedness in an amount not to exceed One Hundred Thousand Dollars ($100,000) at any time outstanding. 

  
 5 

 “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 (1) year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Rating Services or Moody’s Investors Service,
Inc., (iii) Bank’s certificates of deposit maturing no more than one (1) year from the date of investment therein, and (iv) Bank’s money market accounts; 

 

	(c)	Repurchases of stock from former employees or directors of Borrower under the terms of customary board-approved stock repurchase agreements to the extent permitted under Section 7.6; 

 

	(d)	Investments accepted in connection with Permitted Transfers; 

  

	(e)	Investments of wholly-owned Subsidiaries of Borrower in or to other wholly-owned Subsidiaries of Borrower or Borrower and Investments by Borrower in its wholly-owned Subsidiaries not to exceed Five Hundred Thousand
Dollars ($500,000) in the aggregate in any fiscal year; 

  

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

  

	(g)	Investments (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; 

  

	(h)	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; 

  

	(i)	Joint ventures, strategic alliances or research and development collaborations with non-Affiliated third parties consistent with the ordinary course of business in Borrower’s industry, provided that any cash
Investments by Borrower do not exceed Three Hundred Fifty Thousand Dollars ($350,000) in the aggregate in any fiscal year; and 

  

	(j)	Additional Investments, other than Investments in Subsidiaries, that do not exceed $200,000 in the aggregate during the term of this Agreement. 

“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 or the other Loan Documents;

  

	(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, provided
the same have no priority over any of Bank’s security interests; 

  

	(c)	 Liens securing Permitted Indebtedness not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in aggregate principal amount outstanding at any
time (i) upon or in any Equipment (other than Equipment financed by Bank) 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 

  
 6 

	 	
such Equipment, or (ii) existing on such Equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the
proceeds of such Equipment; 

  

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

 

	(e)	Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.4 (Attachment) or 8.8 (Judgments; Settlements); 

 

	(f)	Liens in favor of other financial institutions arising in connection with Borrower’s deposit accounts held at such institutions to secured standard fees for deposit services charged by, but not financing made
available by such institutions, provided that Bank has a perfected, first-priority security interest in the amounts held in such deposit accounts and Borrower is in compliance with the requirements of Section 6.6 with respect to such accounts;

  

	(g)	Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate
amount not to exceed Fifty Thousand Dollars ($50,000) and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto; 

  

	(h)	Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);

  

	(i)	Licenses for the use of the property of Borrower or its Subsidiaries permitted under clause (b) of the definition of Permitted Transfer; 

 

	(j)	Liens securing reimbursement obligations not to exceed Fifty Thousand Dollars ($50,000) in the aggregate at any time, in connection with letters of credit issued with respect to leases or subleases of real property
granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business); and 

  

	(k)	Liens in favor of Bank securing Indebtedness for corporate credit cards issued by Bank. 

 “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)	(i) Non-exclusive licenses for the use of the Intellectual Property of Borrower or its Subsidiaries in the ordinary course of business, and (ii) licenses of Intellectual Property of Borrower or its Subsidiaries
granted in the ordinary course of business that could not result in a legal transfer of title of the licensed property that (A) may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet
geographical areas outside of the United States or (B) if not limited in geographical scope, whereby Borrower only exclusively licenses its platform Intellectual Property for use in connection with the licensee’s products; provided that
with respect to each licenses described in clause (i) or (ii) above, such license not interfere in any material respect with the business of Borrower and its Subsidiaries taken as a whole; 

 

	(c)	Worn-out or obsolete Equipment not financed by Bank; 

  
 7 

	(d)	transfers of cash that constitute Permitted Investments; payments of money by Borrower for its ordinary course business operating expenses (such as the payment, in each case in the ordinary course of Borrower’s
business, of payroll, rent, debt service, accounts payable, payments to vendors or other third parties for goods provided or services rendered to or on behalf of Borrower; and payments of money by any Subsidiary of Borrower for such
Subsidiary’s own ordinary course business operating expenses (such as the payment, in each case in the ordinary course of such Subsidiary’s business, of payroll, rent, debt service, accounts payable, payments to vendors or other third
parties for goods provided or services rendered to or on behalf of such Subsidiary); or 

  

	(e)	Other assets of Borrower or its Subsidiaries (other than Intellectual Property) that do not in the aggregate exceed One Hundred Thousand Dollars ($100,000) 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. 
 “Pricing
Addendum” means that certain Prime Referenced Rate Addendum to Loan and Security Agreement, dated as of the Closing Date, by and between Borrower and Bank, as the same may be amended, modified, supplemented, extended of restated from time to
time. 
 “Prohibited Territory” means any person or country listed by the Office of Foreign Assets Control of the United States Department of
Treasury as to which transactions between a United States Person and that territory are prohibited. 
 “Responsible Officer” means each of the
Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of Borrower. 
 “Restricted Agreement” is any
material license or other material agreement (other than over-the-counter software that is commercially available to the public) to which Borrower is a party or under which Borrower is bound (including licenses and agreements under which Borrower is
the licensee): (a) that prohibits or otherwise restricts Borrower from assigning to Bank, or granting to Bank a Lien in, Borrower’s interest in such license or agreement, the rights arising thereunder or any other property, or (b) for
which a default under or termination of such license or contract could interfere with the Bank’s right to use, license, sell or collect any Collateral or otherwise exercise its rights and remedies with respect to the Collateral under the Loan
Documents or applicable law. 
 “Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any. 

“Security Instrument” means any security agreement, assignment, pledge agreement, financing or other similar statement or notice, continuation
statement, other agreement or instrument, or any amendment or supplement to any thereof, creating, governing or providing for, evidencing or perfecting or maintaining the priority of any security interest or Lien. 

“Shares” means one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned or held of
record by Borrower in any Subsidiary of Borrower. 
 “SOS Reports” means the official reports from the Secretaries of State of each Collateral
State, Chief Executive Office State and the Borrower State 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 Indebtedness incurred by Borrower that is subordinated in writing to the Obligations owing by Borrower to Bank on terms
reasonably satisfactory to Bank (and identified as being such by Borrower and Bank), including without limiting the generality of the foregoing, subordination of such Indebtedness in right of payment to the prior indefeasible payment in full, in
cash, of the Obligations, the subordination of the priority of any Lien at any time securing such Indebtedness to Bank’s Lien, and prohibitions on the exercise of any rights or remedies of the holder of such Indebtedness against Borrower or any
of Borrower’s property pursuant to a written subordination agreement executed and delivered by Bank. 

  
 8 

 “Subsidiary” means, with respect to any Person, any corporation, partnership or, limited liability
company or joint venture in which (i) any general partnership interest or (ii) more than fifty percent (50%) of the stock, limited liability company interest, joint venture interest or other Equity Interest of which by the terms
thereof has the ordinary voting power to elect the Board of Directors, managers, trustees or similar governing body of the entity, at the time as of which any determination is being made, is owned or controlled by such Person, either directly or
through an Affiliate. Unless otherwise stated, references herein to a “Subsidiary” are to Subsidiaries of Borrower. 
 “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.

 “Warrant” means that certain Warrant to Purchase Stock issued on the Closing Date by Borrower to Bank. 

  
 9 

			
	DEBTOR:	  	SERES HEALTH, INC.
		
	SECURED PARTY:	  	COMERICA BANK

 EXHIBIT B 

COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT 

All personal property of SERES HEALTH, INC., a Delaware corporation (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 payment intangibles 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; and 

  

	(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.

 Notwithstanding the foregoing, the Collateral shall not include (i) property that 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, Sections 9406 and 9408 of the Code), (ii) property where 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) more than sixty five percent
(65%) of the voting power of all classes of capital stock of an Excluded Foreign Subsidiary, or (iv) any copyrights, patents, trademarks, servicemarks and applications therefor, now owned or hereafter acquired, or any claims for damages by
way of any past, present and future infringement of any of the foregoing (collectively, the “Intellectual Property”); provided, however, that the Collateral shall include all accounts, all general intangibles that consist of rights to
payment, and all proceeds from the sale, licensing or disposition of all or any part of, or rights in, any property, including the Intellectual Property (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 September
    , 2013, include the Intellectual Property to the extent necessary to permit perfection of Bank’s security interest in the Rights to Payment. 

All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time. 

  
 1 

 EXHIBIT C 

TECHNOLOGY & LIFE SCIENCES DIVISION 

LOAN ANALYSIS 
 LOAN
ADVANCE/PAYDOWN REQUEST FORM 

  
 1 

 EXHIBIT D 

COMPLIANCE CERTIFICATE 
  

			
	Please send all Required Reporting to:	  	Comerica Bank
		  	Technology & Life Sciences Division
		  	Loan Analysis Department
		  	250 Lytton Avenue, 3rd Floor, Mail Code 4240
		  	Palo Alto, CA 94301
		
		  	Phone: (650) 462-6060
		  	Fax: (650) 462-6061

  

	FROM:	    SERES HEALTH, INC. 

 The undersigned authorized Officer of SERES HEALTH, INC.
(“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending
                                 with all required covenants, including without
limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) except as noted below with respect to the representation and warranty in the last sentence of
Section 5.7, all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects on and as of the date hereof as though made at and as of each such date (provided, however, that that such
materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof and those representations and warranties expressly referring to another date shall be true,
correct and complete in all material respects as of such date). Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes. 
 Please indicate
compliance status by circling Yes/No under “Complies” or “Applicable” column. 
  

									
	 REPORTING COVENANTS
	  	 REQUIRED
	  	COMPLIES	 
	 Company Prepared Monthly F/S
	  	Monthly, within 30 days	  	

 	  	 	NO	  
	 Compliance Certificate
	  	Monthly, within 30 days	  	

 	  	 	NO	  
	 CPA Audited, Unqualified F/S
	  	Annually, within 180 days of FYE*	  	

 	  	 	NO	  
	 Annual Business Plan (incl. operating budget)
	  	Annually, within 45 days of FYE	  	

 	  	 	NO	  
	 Audit
	  	Semi-annual	  	

 	  	 	NO	  
				
	 If Public:
	  		  		  			
				
	 10-Q
	  	Quarterly, within 5 days of SEC filing (50 days)	  	YES	  	 	NO	  
	 10-K
	  	Annually, within 5 days of SEC filing (95 days)	  	YES	  	 	NO	  
	 Total amount of Borrower’s cash and investments
	  	Amount: $2,689,705.00                  	  	

 	  	 	NO	  
	 Total amount of Borrower’s cash and investments maintain with Bank
	  	Amount:
$                                        
	  	YES	  	 	NO	  

  

	*	commencing with FY ending December 31, 2013. 

  

											
	 	  	 DESCRIPTION
	  	APPLICABLE	 
	 Legal Action > $250,000
	  	Notify promptly upon notice                     	  	 	YES	  	  	 	

 	  
	 Inventory Disputes > $250,000
	  	Notify promptly upon notice                     	  	 	YES	  	  	 	

 	  
	 Cross default with other agreements > $250,000
	  	Notify promptly upon notice                     	  	 	YES	  	  	 	

 	  
	 Judgment > $250,000
	  	Notify promptly upon notice                     	  	 	YES	  	  	 	

 	  

  
 1 

											
	 FINANCIAL COVENANTS
	  	REQUIRED	 	  	ACTUAL	  	COMPLIES	 
	TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED:	 
				
	 N/A
	  				  		  			
				
	 OTHER COVENANTS
	  	REQUIRED	 	  	ACTUAL	  	COMPLIES	 
	 Permitted Indebtedness for equipment leases
	  	<$	250,000	  	  	0	  	 	

   NO	  
		  				  	  
	  			
	 Permitted Investments for stock repurchase
	  	<$	100,000	  	  	0	  	 	

   NO	  
		  				  	  
	  			
	 Permitted Investments for Subsidiaries
	  	<$	500,000	  	  	0	  	 	

   NO	  
		  				  	  
	  			
	 Permitted Investments for employee loans
	  	<$	125,000	  	  	0	  	 	

   NO	  
		  				  	  
	  			
	 Permitted Investments for joint ventures
	  	<$	350,000	  	  	0	  	 	

   NO	  
		  				  	  
	  			
	 Permitted Liens for equipment leases
	  	<$	250,000	  	  	0	  	 	

   NO	  
		  				  	  
	  			
	 Permitted Transfers
	  	<$	100,000	  	  	0	  	 	

   NO	  
		  				  	  
	  			

 Please enter below comments regarding violations: 

Please enter below exceptions to representation and warranty in last sentence of Section 5.7: 

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation,
the financial covenants, no credit extensions will be made. 
 Very truly yours, 
  

	
	 /s/ David Berry

	Authorized Signer
	
	 Name:     David Berry

	
	 Title:     President

  
 2 

 SCHEDULE OF EXCEPTIONS 

TO LOAN AND SECURITY AGREEMENT 

Permitted Indebtedness (Exhibit A) 

Silicon Valley Bank Credit Card in the amount of $4,000 as of June 30, 2013 

Permitted Investments (Exhibit A) 
 None

 Permitted Liens (Exhibit A) 
 None

 Prior Names (Section 5.5) 
 Newco
LS21,Inc. 
 Inventory or Equipment Locations (Section 5.5) 

Northeastern University, Mugar Hall, 360 Huntington Ave., Boston, MA 02115 

Litigation (Section 5.6) 
 None. 

Restricted Agreements (Section 5.12) 

None. 
 Deposit and Securities Accounts
(Section 6.6) 
 Checking account number 3300776807 at Silicon Valley Bank 

Money Market account 3300891963 at Silicon Valley Bank 

 Corporation Resolutions and Incumbency Certification 

Authority to Procure Loans 

 
 I certify that I am the duly elected and qualified
Secretary of SERES HEALTH, INC., a Delaware corporation (the “Corporation”); that the Corporation’s exact legal name is set forth above; that the Corporation is a corporation duly organized, existing and in good standing under the
laws of the State of Delaware; that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Corporation in accordance with its bylaws and applicable statutes. 

Copy of Resolutions: 
 Be it Resolved, That: 

 

	1.	Any one (1) of the following     President or CFO     (insert titles only) of the Corporation are/is authorized, for, on behalf of, and in the name of the Corporation
to: 

  

	 	(a)	Negotiate and procure loans, letters of credit and other credit or financial accommodations from Comerica Bank (“Bank”), a Texas banking association, from time to time, including without limitation that
certain Loan and Security Agreement dated as of September     , 2013, as may be subsequently amended, modified, supplemented, extended or restated from time to time. 

 

	 	(b)	Discount with the Bank, commercial or other business paper belonging to the Corporation made or drawn by or upon third parties, without limit as to amount; 

 

	 	(c)	Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Corporation, whether or not
registered in the name of the Corporation; 

  

	 	(d)	Give security for any liabilities of the Corporation to the Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Corporation;

  

	 	(e)	Issue a warrant or warrants to purchase the Corporation’s capital stock; and 

  

	 	(f)	Execute and deliver in form and content as may be required by the Bank any and all notes, evidences of Indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security
agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, ,and any and all amendments or modifications thereto, any
or all of which may relate to all or to substantially all of the Corporation’s property and assets. 

  

	2.	Said Bank be and it is authorized and directed to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign, whether so payable to the order of any of said persons in their
individual capacities or not, and whether such proceeds are deposited to the individual credit of any of said persons or not; 

  

	3.	Any and all agreements, instruments and documents previously executed and acts and things previously done to carry out the purposes of these Resolutions are ratified, confirmed and approved as the act or acts of the
Corporation. 

  

	4.	These Resolutions shall continue in force, and the Bank may consider the holders of said offices and their signatures to be and continue to be as set forth in a certified copy of these Resolutions delivered to the Bank,
until notice to the contrary in writing is duly served on the Bank (such notice to have no effect on any action previously taken by the Bank in reliance on these Resolutions). 

 

	5.	Any person, corporation or other legal entity dealing with the Bank may rely upon a certificate signed by an officer of the Bank to effect that these Resolutions and any agreement, instrument or document executed
pursuant to them are still in full force and effect and binding upon the Corporation. 

  

	6.	The Bank may consider the holders of the offices of the Corporation and their signatures, respectively, to be and continue to be as set forth in the Certificate of the Secretary of the Corporation until notice to the
contrary in writing is duly served on the Bank. 

 I further certify that the above Resolutions are in full force and effect as
of the date of this Certificate; that these Resolutions and any borrowings or financial accommodations under these Resolutions have been properly noted in the corporate books and records, and have not been rescinded, annulled, revoked or modified;
that neither the foregoing Resolutions nor any actions to be taken pursuant to them are or will be in contravention of any provision of the certificate of incorporation or bylaws of the Corporation or of any agreement, indenture or other instrument
to which the Corporation is a party or by which it is bound; and that neither the certificate of incorporation nor bylaws of the Corporation nor any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound
require the vote or consent of shareholders of the Corporation to authorize any act, matter or thing described in the foregoing Resolutions. 

  
 1 

 I further certify that the following named persons have been duly elected to the offices set opposite their
respective names, that they continue to hold these offices at the present time, and that the signatures which appear below are the genuine, original signatures of each respectively: 

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW) 

 

									
	NAME (Type or Print)	 	 	  	TITLE	  	 	  	SIGNATURE
					
	 David Berry
	 		  	 President
	  		  	 /s/ David Berry

					
	 Gregg Beloff
	 		  	 Chief Financial Officer
	  		  	 /s/ Gregg Beloff

 I further certify that attached as Exhibit A hereto is a true, correct and complete copy of the Corporation’s Certificate
of Incorporation (including amendments), as filed with the Delaware Secretary of State. Such Certificate of Incorporation has not been amended, annulled, rescinded, revoked or supplemented, and remains in full force and effect as of the date hereof.

 I further certify that attached as Exhibit B hereto is a true, correct and complete copy of Borrower’s By-Laws (including amendments). Such By-Laws
have not been amended, annulled, rescinded, revoked or supplemented, and remain in full force and effect as of the date hereof. 
 In Witness Whereof, I
have affixed my name as Secretary and have caused the corporate seal (where available) of said Corporation to be affixed on September     , 2013. 

 

			
	 /s/ David Berry

	Name:	 	David Berry
	Title:	 	President

 *** 
  

					
	The Above Statements are Correct.	 	 /s/ Gregg Beloff

		 	Name:	  	Gregg Beloff
		 	Title:	  	Chief Financial Officer

 Failure to complete the above when the Secretary is authorized to sign alone shall constitute a certification by the Secretary
that the Secretary is the sole Shareholder, Director and Officer of the Corporation. 

  
 2 

 COMERICA BANK 

Member FDIC 
 ITEMIZATION
OF AMOUNT FINANCED 
 DISBURSEMENT INSTRUCTIONS 

(Growth Capital Advances) 
  

					
	Name(s): SERES HEALTH, INC.	 	Date: September     , 2013            
			
	 $
	 		 	credited to deposit account No.                      when Growth Capital Advances are requested or disbursed to Borrower
by cashiers check or wire transfer
	
	Amounts paid to others on your behalf:
			
	 $5,000
	 		 	to Comerica Bank for Facility Fee
			
	 $
	 		 	to Bank counsel fees and expenses
			
	 $
	 		 	to                         
			
	 $
	 		 	to                         
			
	 $
	 		 	TOTAL (AMOUNT FINANCED)

 Upon consummation of this transaction, this document will also serve as the authorization for Comerica Bank to disburse the
loan proceeds as stated above. 
  

			
	 /s/ David Berry

	Name:	 	David Berry
	Title:	 	President

  
 1 

  
 

 
 Agreement to Furnish Insurance to Loan and Security Agreement 

 
  

(Herein called “Bank”) 
 Borrower(s): SERES HEALTH,
INC. 
 I understand that the Loan and Security Agreement or Deed of Trust which I executed in connection with this transaction requires me to provide a
physical damage insurance policy including a Lenders Loss Payable Endorsement in favor of the Bank as shown below, within ten (10) days from the date of this agreement. 

The following minimum insurance must be provided according to the terms of the security documents. 

 

					
	
 ̈    AUTOMOBILES, TRUCKS, 
RECREATIONAL 
	 		  	 x    MACHINERY &
EQUIPMENT: 

	          VEHICLES
	 		  	            MISCELLANEOUS PERSONAL PROPERTY

	 Comprehensive & Collision
	 		  	 Fire & Extended Coverage

	 Lender’s Loss Payable Endorsement
	 		  	 Lender’s Loss Payable Endorsement

		 		  	  ̈     Breach of Warranty Endorsement

			
	  ̈    BOATS
	 		  	
 ̈    AIRCRAFT

	 All Risk Hull Insurance
	 		  	 All Risk Ground & Flight Insurance

	 Lender’s Loss Payable Endorsement
	 		  	 Lender’s Loss Payable Endorsement

	  ̈     Breach of Warranty Endorsement
	 		  	  ̈     Breach of Warranty Endorsement

			
	  ̈    MOBILE
HOMES
	 		  	  ̈    REAL
PROPERTY

	 Fire, Theft & Combined Additional Coverage
	 		  	 Fire & Extended Coverage

	 Lender’s Loss Payable Endorsement
	 		  	 Lender’s Loss Payable Endorsement

	  ̈     Earthquake
	 		  	  ̈     All Risk Coverage

		 		  	  ̈     Special Form Risk Coverage

		 		  	  ̈     

		 		  	  ̈     Earthquake

	 x     INVENTORY
	 		  	
 ̈     Other           
                                         
             

 x Other Borrower, at its expense, shall keep the
Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where
Borrower’s business is conducted on the date hereof. Borrower shall also maintain liability and other insurance in amounts and of a type that are customary to businesses similar to Borrower’s. 

I may obtain the required insurance from any company that is acceptable to the Bank, and will deliver proof of such coverage with an effective date of
September     , 2013 or earlier. 
 I understand and agree that if I fail to deliver proof of insurance to the Bank at the address
below, or upon the lapse or cancellation of such insurance, the Bank may procure Lender’s Single Interest Insurance or other similar coverage on the property. If the Bank procures insurance to protect its interest in the property described in
the security documents, the cost for the insurance will be added to my indebtedness as provided in the security documents. Lender’s Single Interest Insurance shall cover only the Bank’s interest as a secured party, and shall become
effective at the earlier of the funding date of this transaction or the date my insurance was canceled or expired. I UNDERSTAND THAT LENDER’S SINGLE INTEREST INSURANCE WILL PROVIDE ME WITH ONLY LIMITED PROTECTION AGAINST PHYSICAL DAMAGE TO THE
COLLATERAL, UP TO THE BALANCE OF THE LOAN, HOWEVER, MY EQUITY IN THE PROPERTY WILL NOT BE INSURED. FURTHER, THE INSURANCE WILL NOT PROVIDE MINIMUM PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND DOES NOT MEET THE REQUIREMENTS OF THE
FINANCIAL RESPONSIBILITY LAW. 
 CALIFORNIA CIVIL CODE SECTION 2955.5. HAZARD INSURANCE DISCLOSURE: No lender shall require a borrower, as a condition of
receiving or maintaining a loan secured by real property, to provide hazard insurance coverage against risks to the improvements on that real property in an amount exceeding the replacement value of the improvements on the property. 

 

					
		 	
        Bank Address for Insurance Documents:

 
         Comerica Bank – Collateral
Operations,

        Mail Code 6514            
                                       
        1508 W. Mockingbird Lane                         
       
        Dallas, Texas 75235                           
                 
  
	 	

  
 1 

 I acknowledge having read the provisions of this agreement, and agree to its terms. I authorize the Bank to
provide to any person (including any insurance agent or company) any information necessary to obtain the insurance coverage required. 
  

			
	OWNER(S) OF COLLATERAL:	  	DATED: September     ,
2013                    

 

			
	SERES HEALTH, INC.
	
	 /s/ David Berry

	Name:	 	David Berry
	Title:	 	President

  

									
	INSURANCE VERIFICATION
				
	Date
                                         
               	  		  		  	Phone                                     
                      
				
	Agents Name                                 
                                         
   	  		  		  	Person Talked To                                 
        

									
		
	Agents Address	  	  

									
		
	Insurance Company	  	  

									
		
	Policy Number(s)	  	  

									
		
	Effective Dates: From                               
                              	  	  To:                                 
                                         
                                
		
	
Deductible $                       
                                         
             
  
	  	
  Comments:                      
                                         
                              

 

 

  
 2 

  
 

 
 AUTOMATIC LOAN PAYMENT AUTHORIZATION 

 
 Date:
    September         , 2013                     

 

							
	Obligor Name:	 	
                SERES HEALTH,
INC.

									
	Obligor Number:	 	  
	 	Lender’s Cost Center #:	 	  
	 	

									
	Address:	 	 161 First Street, Cambridge, MA 02142
	 	

 The undersigned hereby authorizes Comerica Bank (“Bank”) to charge the account designated below for the
payments due on the loan(s) as designated below and all renewals, extensions, modifications and/or substitutions thereof. This authorization will remain in effect unless the undersigned requests a modification that is agreed to by the Bank in
writing. The undersigned remains fully responsible for all amounts outstanding to Bank if the designated account is insufficient for repayment. 
  

	x	Automatic Payment Authorization for all payments on all current and future borrowings, as and when such payments come due (which payments include, without limitation, principal, interest, fees, costs, and
expenses). 

  

	 ̈	Automatic Payment Authorization for all payments on only the specific borrowing identified below, as and when such payments come due (which payments include, without limitation, principal, interest, fees, costs, and
expenses). 

  

			
	Specific Obligation Number:	 	  

  

	 ̈	Automatic Payment Authorization for less than all payments on only the specific borrowing identified below, as and when such payments come due. 

 

			
	Specific Obligation Number:	 	  

  

	 	 ̈	Principal and Interest payments only 

  

	 	 ̈	Principal payments only 

  

	 	 ̈	Interest payments only 

  

	 	 ̈	SPECIAL INSTRUCTIONS/IRREGULAR PAYMENT INSTRUCTIONS 

  

 
  

 
 Payment Due Date: Your loan payments will be
charged to your account as indicated above on the dates such payments become due (or on a date thereafter when there are available funds) unless that day is a Saturday, Sunday, or Bank holiday in which case such payments will be charged on the
following business day, with interest to accrue during this extension as provided under the loan documents. 
 Account to be Charged: 

 

					
	Account No.	 	  

	Transit No.	 	  

					
	Number of lead days to issue billing	 	  

	(Charges to account are withdrawals pursuant to account resolution)

  

			
	BORROWER:
	
	SERES HEALTH, INC.
		
	By:	 	 /s/ David Berry

	Name:	 	 David Berry

	Title:	 	 President

  
 1 

 USA PATRIOT ACT 

NOTICE 
 OF 

CUSTOMER IDENTIFICATION 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT 

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens an account. 
 WHAT THIS MEANS FOR YOU: when you open an
account, we will ask your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents. 

  
 2 

 COMERICA BANK 
  

			
		  	COMERICA BANK
		  	CLIENT AUTHORIZATION

 Fax 
  

General Authorization 
 I hereby authorize Comerica Bank
to use my company name, logo, and information relating to our banking relationship in its marketing and advertising campaigns which is intended for Comerica Bank’s customers, prospects and shareholders. 

Comerica Bank will forward any advertising or article including client for prior review and approval. 

 

	
	 /s/ David Berry

	Printed name: David Berry
	Title: President
	
	 SERES HEALTH, INC.

	Company
	
	 161 First Street

	Mailing Address
	
	 Cambridge, MA 02142

	City, State, Zip Code
	
	 617-868-1888

	Phone Number
	
	 617-868-1115

	Fax Number
	
	 dberry@FlagshipVentures.com

	E-Mail
	
	September     , 2013

			
	DEBTOR:	  	SERES HEALTH, INC.
		
	SECURED PARTY:	  	COMERICA BANK

  
 EXHIBIT A to UCC Financing Statement

 COLLATERAL DESCRIPTION ATTACHMENT TO UCC NATIONAL FINANCING FORM 

All personal property of SERES HEALTH, INC., a Delaware corporation (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 payment intangibles 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; and 

  

	(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.

 Notwithstanding the foregoing, the Collateral shall not include (i) property that 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, Sections 9406 and 9408 of the Code), (ii) property where 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) more than sixty five percent
(65%) of the voting power of all classes of capital stock of a controlled foreign corporation (as defined in the Internal Revenue Code of 1986, as amended, and the regulations thereunder) entitled to vote where the pledge of a greater
percentage would result in material adverse tax consequences to Borrower, or (iv) Debtor’s copyrights, patents, trademarks, servicemarks and applications therefor, now owned or hereafter acquired, or any claims for damages by way of any
past, present and future infringement of any of the foregoing (collectively, the “Intellectual Property”) ; provided, however, that the Collateral shall include all accounts, all general intangibles that consist of rights to payment, and
all proceeds from the sale, licensing or disposition of all or any part of, or rights in, any property, including the Intellectual Property (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 September
    , 2013, include the Intellectual Property to the extent necessary to permit perfection of Secured Party’s security interest in the Rights to Payment. 

All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time. 

  
 1 

 PRIME REFERENCED RATE ADDENDUM TO 

LOAN AND SECURITY AGREEMENT 
 This
Prime Referenced Rate Addendum to Loan and Security Agreement (this “Addendum”) is entered into as of September     , 2013, by and between COMERICA BANK (“Bank”) and SERES HEALTH, INC., a Delaware corporation
(“Borrower”). This Addendum supplements the terms of the Loan and Security Agreement dated as of the date hereof by and between Borrower and Bank (as the same may be amended, modified, supplemented, extended or restated from time to time,
collectively, the “Agreement”). 
 1. Definitions. As used in this Addendum, the following terms shall have the following meanings.
Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement. 
 a.
“Applicable Margin” means three percent (3.00%) per annum. 
 b. “Business Day” means any day, other than a
Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange)
in San Jose, California, and, in respect of notices and determinations relating to the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on the London interbank market and on which banks are open for
business in London, England. 
 c. “Change in Law” means the occurrence, after the date hereof, of any of the following:
(i) the adoption or introduction of, or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not applicable to Bank on such date, or (ii) any change in
interpretation, administration or implementation thereof of any such law, treaty, rule or regulation by any Governmental Authority, or (iii) the issuance, making or implementation by any Governmental Authority of any interpretation,
administration, request, regulation, guideline, or directive (whether or not having the force of law), including any risk-based capital guidelines. For purposes of this definition, (x) a change in law, treaty, rule, regulation, interpretation,
administration or implementation shall include, without limitation, any change made or which becomes effective on the basis of a law, treaty, rule, regulation, interpretation administration or implementation then in force, the effective date of
which change is delayed by the terms of such law, treaty, rule, regulation, interpretation, administration or implementation, and (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) and all requests,
rules, regulations, guidelines, interpretations or directives promulgated thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or promulgated, whether before
or after the date hereof, and (z) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States
regulatory authorities, in each case pursuant to Basel III, shall each be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented. 

d. “Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the quotient of the following: 

 

	 	(1)	for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets
Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the
Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar
rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits
at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the outstanding
principal amount of the Obligations and for a period equal to one (1) month; 

 divided by 
  

	 	(2)	1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on “Euro-currency Liabilities” as defined in and pursuant to Regulation D of the Board of
Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets
which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category. 

 e.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supranational bodies such as the European Union or the
European Central Bank). 
 f. “LIBOR Lending Office” means Bank’s office located in the Cayman Islands, British West Indies,
or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrower. 
 g.
“Prime Rate” means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time. 

h. “Prime Referenced Rate” means, for any day, a per annum interest rate which is equal to the Prime Rate in effect on such day, but
in no event and at no time shall the Prime Referenced Rate be less than the sum of the Daily Adjusting LIBOR Rate for such day plus two and one-half percent (2.50%) per annum. If, at any time, Bank determines that it is unable to determine or
ascertain the Daily Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day shall be the Prime Rate in effect at such time, but not less than two and one-half percent (2.50%) per annum. 

2. Interest Rate. Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest at the Prime Referenced
Rate plus the Applicable Margin. 
 3. Payment of Interest. Accrued and unpaid interest on the unpaid balance of the Obligations outstanding under
the Agreement shall be payable monthly, in arrears, on the first day of each month, until maturity (whether as stated herein, by acceleration, or otherwise). In the event that any payment under this Addendum becomes due and payable on any day which
is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this Addendum.
Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable interest rate as a result
of any change in the Prime Referenced Rate on the date of each such change. 
 4. Bank’s Records. The amount and date of each advance under the
Agreement, its applicable interest rate, and the amount and date of any repayment shall be noted on Bank’s records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank
to make any such notation, or any error in any such notation, shall not relieve Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement, when due in accordance with the
terms hereof. 

  
 -2- 

 5. Default Interest Rate. From and after the occurrence of any Event of Default, and for so long as any
such Event of Default remains unremedied or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of five percent (5%) above the otherwise applicable interest rate hereunder, which interest
shall be payable upon demand. In addition to the foregoing, a late payment charge equal to five percent (5%) of each late payment hereunder may be charged on any payment not received by Bank within ten (10) calendar days after the payment
due date therefor, but acceptance of payment of any such charge shall not constitute a waiver of any Event of Default under the Agreement. In no event shall the interest payable under this Addendum and the Agreement at any time exceed the maximum
rate permitted by law. 
 6. Prepayment. Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or
penalty. Any prepayment hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid. Borrower hereby acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or
otherwise affect Bank’s right to make demand for payment of all or any part of the Obligations under the Agreement due on a demand basis in Bank’s sole and absolute discretion. 

7. Regulatory Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate. 

a. If any Change in Law shall: (a) subject Bank to any tax, duty or other charge with respect to this Addendum or any Obligations under
the Agreement, or shall change the basis of taxation of payments to Bank of the principal of or interest under this Addendum or any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net
income of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank’s principal executive office or LIBOR Lending Office is located); or (b) impose, modify or deem applicable any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank, or shall impose on Bank or the foreign exchange and
interbank markets any other condition affecting this Addendum or the Obligations; and the result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations or to reduce the amount of any sum received or
receivable by Bank under this Addendum by an amount deemed by Bank to be material, then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, such additional
amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional
amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error. 
 b. In the event
that any Change in Law affects or would affect the amount of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence
of any obligations of Bank hereunder or the maintaining of any Obligations, and such increase has the effect of reducing the rate of return on Bank’s (or such controlling corporation’s) capital as a consequence of such obligations or the
maintaining of such Obligations to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to
Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of
capital and reduced rate of return which Bank reasonably determines to be allocable to the existence of any obligations of Bank hereunder or to maintaining any Obligations. A certificate of Bank as to the amount of such compensation, prepared in
good faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall be conclusive and binding for all purposes absent manifest error. 
 8.
Legal Effect. Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and effect. 
 9.
Conflicts. As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement, the terms of this Addendum shall control. 

(remainder of page left blank) 

  
 -3- 

 IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth
above. 
  

									
	COMERICA BANK	 		 	SERES HEALTH, INC.
					
	By:	 	 /s/ Jason Pan
	 		 	By:	 	 /s/ David Berry

	Name:	 	 Jason Pan
	 		 	Name:	 	 David Berry

	Title:	 	 Vice President
	 		 	Title:	 	 President

 FIRST AMENDMENT 

TO LOAN AND SECURITY AGREEMENT 

This First Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of December 22, 2014, by and between
COMERICA BANK (“Bank”) and SERES HEALTH, INC., a Delaware corporation (“Borrower”). 
 RECITALS 

A. Borrower and Bank are parties to that certain Loan and Security Agreement dated as of September 9, 2013, as amended, modified,
supplemented, extended or restated from time to time (collectively, the “Agreement”). 
 B. Borrower has requested that Bank amend
certain provisions of the Agreement, and, while Bank is under no obligation to do so, Bank is willing to amend the Agreement in accordance with and subject to the terms and conditions of this Amendment. 

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: 

1. Amendments to the Agreement. 

1.1 Section 5.10 of the Agreement is hereby amended and restated in its entirety to read as follows: 

5.10 Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities of any Person,
except for Permitted Investments. As of the First Amendment Closing Date, Borrower has no Subsidiaries other than Seres Securities. Series Securities is an MSC Subsidiary and qualifies as an Excluded MSC Subsidiary. 

1.2 Section 6.6 of the Agreement is hereby amended and restated in its entirety to read as follows: 

6.6 Accounts. Borrower shall, and shall cause all of its Subsidiaries (other than MSC Subsidiaries) to maintain all its
and their depository, operating, cash management accounts with Bank and all of its and their primary investment and securities accounts with Bank. Seres Securities may maintain assets in deposit or securities accounts outside of Bank;
provided however, no transfers or withdrawals from such accounts shall be permitted except to a deposit account of Borrower maintained with Bank. 

1.3 Section 6.10 of the Agreement is hereby amended and restated in its entirety to read as follows: 

6.10 Creation/Acquisition of Subsidiaries. Without limiting the generality of any other provision hereof, in the event
Borrower or any Subsidiary creates or acquires any Subsidiary, Borrower and such Subsidiary shall (a) promptly notify Bank in writing of the creation or acquisition of such new Subsidiary, (b) take all such action as may be reasonably
required by Bank to cause each such Subsidiary (other than an Excluded Subsidiary) to guarantee the Obligations of Borrower under the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the property and assets
of such Subsidiary (substantially as described on Exhibit B hereto), and (c) Borrower (or any intermediate Subsidiary holding the Equity Interests in such Subsidiary) shall grant and pledge to Bank a perfected security interest in the
Equity Interests of such Subsidiary (unless it is an Excluded MSC Subsidiary and such grant or pledge would result in material adverse tax consequences to Bank); provided that Bank shall not have a security interest in more than sixty five percent
(65%) of the voting Equity Interests of any Excluded Foreign Subsidiary. 

  
 - 1 - 

 1.4 The Agreement is hereby amended by adding a new Section 7.12 to read as follows: 

7.12 MSC Subsidiaries. Cause or permit (i) any MSC Subsidiary to incur or be liable for any Indebtedness other than
expenses incurred in the ordinary course of its business that are incidental to the maintenance of its existence and ownership of its assets, (ii) any Lien to exist with respect to any assets of any MSC Subsidiary, and (iii) any MSC
Subsidiary to transfer or withdraw funds, securities or other assets from its deposit, investment or securities accounts other than transfers to deposit accounts of Borrower maintained with Bank. Borrower shall provide to Bank prompt written notice
of each transfer of funds to any MSC Subsidiary. 
 1.5 Exhibit A to the Agreement is hereby amended by adding or amending and
restating the following defined terms to read as follows: 
 “Excluded MSC Subsidiary” means an MSC Subsidiary as to which all of
the following apply (i) it is qualified as a Massachusetts securities corporation, (ii) the guaranteeing of the Obligations by such MSC Subsidiary and the granting of a Lien on any of its assets to secure the Obligations, would result in
material adverse tax consequences to Borrower, (iii) all of its assets are maintained in deposit accounts maintained that have been disclosed in writing to Bank, (iv) such MSC Subsidiary has no operations or business activities other than
the maintenance, investment and management of funds transferred from Borrower from the proceeds of the sale and issuance of Borrower’s Equity Interests and Subordinated Debt, (v) its Equity Interests are pledged to Bank as security for the
Obligations and all original share certificates have been promptly delivered to Bank as Collateral together with undated stock powers duly executed in blank (unless the pledge of such Equity Interests would result in material adverse tax
consequences to Borrower), (vi) such MSC Subsidiary has no outstanding Indebtedness other than expenses incurred in the ordinary course of its business that are incidental to the maintenance of its existence and ownership of its assets, and
(vii) no Liens exist with respect to any of its assets or properties. 
 “Excluded Subsidiary” means (a) each Excluded
Foreign Subsidiary, and (b) each Excluded MSC Subsidiary. 
 “First Amendment Closing Date” means December
    , 2014. 
 “MSC Subsidiary” means a Subsidiary of Borrower that is a corporation that qualifies as a
Massachusetts securities corporation by meeting the requirements of Chapter 63, Section 38B of the Massachusetts General Laws. 

“Seres Securities” means Seres Therapeutics Securities Corporation, a Massachusetts corporation. 

1.6 Exhibit A to the Agreement is further amended by amending and restating paragraph (e) of the definition of “Permitted
Investments” in its entirety to read as follows: 
 (e) (i) Investments of wholly-owned Subsidiaries of Borrower in or to other
wholly-owned Subsidiaries of Borrower or Borrower; (ii) Investments by Borrower in its wholly-owned Subsidiaries (other than MSC Subsidiaries) not to exceed Five Hundred Thousand Dollars ($500,000) in the aggregate in any fiscal year;
(iii) Investments by Borrower in MSC Subsidiaries to the extent of the cash proceeds of the sale and issuance of Borrower’s Equity Interests and Subordinated Debt, so long as no Event of Default has occurred and is continuing at the time
of such Investment; and (iv) Investments by Borrower in an MSC Subsidiary (which, at the time of the Investment, has no assets) in amounts and to the extent reasonably necessary to cover such MSC Subsidiary’s taxes, bank fees and other
ordinary course of business operating expenses, if any, so long as no Event of Default has occurred and is continuing at the time of such transfer; 

  
 - 2 -

 1.7 Exhibit B to the Agreement is hereby amended in its entirety and replaced with
Exhibit B attached hereto. 
 2. Consent. Bank hereby consents to the formation by Borrower of Series Securities as a
wholly-owned MSC Subsidiary. Bank’s consent: (a) in no way shall be deemed to be a waiver by Bank of, or an agreement by Bank to waive, any covenant, liability or obligation of Borrower or any other Person or to waive any right, power, or
remedy of Bank, except as expressly set forth herein; (b) shall not limit or impair Bank’s right to demand strict performance of Borrower’s liabilities and obligations to Bank and the Obligations under the Agreement and the other Loan
Documents at all times following the date hereof; (c) in no way shall obligate Bank to make any future waivers, consents or modifications to the Agreement or any other Loan Document; and (d) is not a continuing waiver with respect to any
failure to perform any Obligation. Borrower acknowledges and agrees that Bank is relying upon Borrower’s representations, warranties and agreements, as set forth herein and in the Loan Documents in granting the foregoing waiver and consent.

 3. No Waivers. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by
Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall
not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank. 

4. Miscellaneous. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The
Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all promissory notes,
guaranties, security agreements, mortgages, deeds of trust, environmental agreements, and all other instruments, documents and agreements entered into in connection with the Agreement. Borrower hereby further affirms its absolute and unconditional
promise to pay to Bank the Growth Capital Advances, other Credit Extensions all other amounts due under the Letters of Credit and the other Loan Documents (including, without limitation, the Obligations), at the times and in the amounts provided for
therein. Borrower confirms and agrees that the obligations of Borrower to Bank under the Agreement as supplemented hereby are secured by and entitled to the benefits of the Loan Documents. The parties agree that this Amendment shall be deemed to be
one of the Loan Documents under the Agreement. Nothing in this Amendment shall constitute a satisfaction of any of Borrower’s Obligations. 

5. Representations and Warranties. In order to induce Bank to enter into this Amendment, Borrower hereby represents and warrants to
Bank as follows: 
 5.1 The representations and warranties contained in the Agreement and the other Loan Documents were true and correct in
all material respects when made and continue to be true and correct in all material respects as of the date of this Amendment (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). 
 5.2 Both before and immediately after giving effect to this Amendment and the
other transactions contemplated hereby, no Event of Default, or other event or circumstance that with the giving of notice or the passage of time could become an Event of Default, has occurred and is continuing. 

5.3 The execution, delivery, and performance by Borrower of this Amendment and the other documents, instruments and agreements delivered or to
be delivered to Bank in connection herewith (i) are within the corporate powers of Borrower and have been duly authorized by all necessary corporate action on the part of Borrower, (ii) do not require any governmental or third party
consents, except those which have been duly obtained and are in full force and effect, (iii) do not and will not conflict with any requirement of law, Borrower’s articles or certificate of incorporation, bylaws, partnership agreement,
operating agreement, minutes or resolutions, (iv) after giving effect to this Amendment, do not result in any breach of or constitute a default under any agreement or instrument to which Borrower or any of its Subsidiaries is a party or by
which Borrower or any of its Subsidiaries or their respective properties are bound, and (v) do not result in or require the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance of
any nature upon any of the assets or properties of Borrower, other than those in favor of Bank. 

  
 - 3 - 

 5.4 This Amendment and the other instruments and agreements delivered or to be delivered to Bank
in connection herewith have been duly executed and delivered by Borrower and constitute the legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with their respective terms, except to the extent that
(i) enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies of creditors, (ii) enforcement may be subject to general principles of
equity, and (iii) the availability of the remedies of specific performance and injunctive relief may be subject to the discretion of the court before which any proceedings for such remedies may be brought. 

5.5 Borrower has no right of offset, defense, counterclaim, dispute or disagreement of any kind or nature whatsoever with respect to any of
its liabilities, obligations or indebtedness arising under or in connection with any Loan Document. 
 6. Conditions Precedent. As a
condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following: 

6.1 this Amendment, duly executed by Borrower; 

6.2 a certificate of the Secretary of Borrower with respect to resolutions and incumbency; 

6.3 all Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts; and 

6.4 such other documents, instruments and certificates and completion of such other matters, as Bank may reasonably deem necessary or
appropriate. 
 7. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one instrument. 
 [Remainder of Page Left Blank] 

  
 - 4 - 

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

			
	SERES HEALTH, INC.
		
	By:	 	 /s/ Eric Shaff

	Title:	 	 CFO

	
	COMERICA BANK
		
	By:	 	 /s/ Jason Pan

	Title:	 	 Vice President

					
	 DEBTOR:
	 	SERES HEALTH, INC.	 	
			
	 SECURED PARTY:
	 	COMERICA BANK	 	

 EXHIBIT B 

COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT 

All personal property of SERES HEALTH, INC., a Delaware corporation (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 payment intangibles 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; and 

  

	(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.

 Notwithstanding the foregoing, the Collateral shall not include (i) property that 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, Sections 9406 and 9408 of the Code), (ii) property where 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) more than sixty five percent
(65%) of the voting power of all classes of capital stock of an Excluded Foreign Subsidiary, (iv) the capital stock issued by any MSC Subsidiary to the extent the pledge of such shares to Bank would result in material adverse tax
consequences to Borrower, or (v) any copyrights, patents, trademarks, servicemarks and applications therefor, now owned or hereafter acquired, or any claims for damages by way of any past, present and future infringement of any of the foregoing
(collectively, the “Intellectual Property”); provided, however, that the Collateral shall include all accounts, all general intangibles that consist of rights to payment, and all proceeds from the sale, licensing or disposition of all or
any part of, or rights in, any property, including the Intellectual Property (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 September 9, 2013, include the Intellectual Property to the extent necessary to
permit perfection of Bank’s security interest in the Rights to Payment. 
 All terms above have the meanings given to them in the
California Uniform Commercial Code, as amended or supplemented from time to time.EXH. 10.1 2015 FHCF Contract

Exhibit 10.1

REIMBURSEMENT CONTRACT 

Effective: June 1, 2015 
(Contract) 

between 

UNITED PROPERTY AND CASUALTY INSURANCE COMPANY
(Company) 

NAIC # 10969

and 

THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) 
WHICH ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (FHCF) 

PREAMBLE 

The  Legislature   of  the  State  of  Florida  has  enacted   Section   215.555,    Florida  Statutes   (Statute),    which directs  the  SBA  to  administer   the  FHCF.    This  Contract,   consisting   of the  principal   document   entitled Reimbursement    Contract,   addressing   the  mandatory   FHCF  coverage,   and  Addenda,   is   subject   to  the Statute   and  to  any  administrative    rule  adopted   pursuant   thereto,   and  is  not  intended    to  be  in  conflict therewith.    All  provisions    in  the  principal   document   are  equally   applicable   to  each  Addendum   unless specifically   superseded  by one of the Addenda.

In  consideration   of the promises  set forth  in this  Contract,  the parties  agree  as follows:

ARTICLE I - SCOPE OF AGREEMENT 

As  a  condition   precedent   to  the  SBA's   obligations   under  this  Contract,   the  Company,   an  Authorized Insurer   or  an  entity  writing   Covered   Policies   under  Section  627.351,   Florida   Statutes,   in the  State  of Florida,   shall  report  to the  SBA  in  a specified   format  the  business  it  writes   which  is  described   in  this Contract  as Covered  Policies.

The terms  of this  Contract  shall determine   the rights  and obligations  of the parties.  This  Contract  provides reimbursement   to the Company  under  certain  circumstances,   as described  herein,  and does  not provide  or extend  insurance  or reinsurance   coverage  to any person,  firm,  corporation   or other  entity.  The  SBA  shall reimburse  the Company  for its  Ultimate   Net  Loss on Covered  Policies,   which  were  in force  and  in  effect at the time of the Covered  Event  causing  the  loss,  in  excess  of the Company's   Retention  as a result  of each  Loss  Occurrence   commencing   during  the  Contract   Year,  to  the  extent  funds  are  available,   all  as hereinafter   defined.

1                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

ARTICLE II - PARTIES TO THE CONTRACT 

This  Contract  is solely  between  the  Company  and  the  SBA which  administers   the  FHCF.   In no instance shall  any  insured  of the Company  or any claimant  against  an insured  of the Company,   or any other  third party,  have any rights  under this  Contract,  except  as provided  in Article  XIV.  The  SBA will only disburse funds  to the  Company,   except  as provided  for in Article  XIV.  The  Company  shall  not,  without  the  prior approval  of the  Office  of Insurance  Regulation,   sell,  assign,  or transfer  to any third  party,  in return  for a fee or other  consideration   any sums the FHCF pays  under this Contract  or the right to receive  such sums.

ARTICLE III - TERM 

(1)   The term  of this  Contract  shall  apply  to Loss  Occurrences   which  commence   during  the  period  from
12:00:01    a.m.,  Eastern  Time,  June  1, 2015,  to  12:00 midnight,  Eastern  Time,  May  31,   2016 (Contract Year).  Pursuant  to the terms  of this  Contract,  the  SBA shall not be liable  for Loss Occurrences   which commence   after the  effective  time  and date  of expiration   or termination.   Should  this  Contract  expire or terminate   while  a Loss  Occurrence   covered  hereunder   is in progress,  the  SBA  shall be responsible for such  Loss Occurrence   in progress  in the same  manner  and to the same  extent  it would  have  been responsible   had  the  Contract  expired   the  day  following   the  conclusion   of  the  Loss  Occurrence   in progress.

(2)  The Company   is required  to designate  a coverage   level,  make  the  required  selections,   and return  this fully executed  Contract  (two  originals)  to the  FHCF  Administrator   so that the Contract  is received  by the  FHCF  Administrator   no  later than  5  p.m.,  Central  Time,  March   1,   2015.  Failure  to  do so shall result  in the Company's   coverage  level under this Contract  being deemed  as follows:

(a)  For Companies  that are a member  of a National  Association   oflnsurance  Commissioners   (NAIC) group, the same  coverage  level selected  by the other Companies   of the same NAIC  group  shall be deemed.   If executed  Contracts  for none  of the members  of an NAIC  group  have  been received  by the FHCF Administrator,  the coverage  level from the prior  Contract  Year  shall be deemed.
(b)  For Companies  that  are not a member  of an NAIC  group  under which  other  Companies  are active participants   in the FHCF,  the coverage  level from the prior Contract  Year  shall be deemed.
(c)   For New  Participants,   as that  term  is defined  in Article  V(21),   that  are  a member  of an NAlC group, the same coverage  level selected  by the other Companies   of the same NAIC  group  shall be deemed.
(d)   For New  Participants  that  are not a member  of an NAIC  group  under  which  other Companies   are active  participants   in the FHCF,  the 45%,  75% or 90% coverage  levels  may be selected  providing that the FHCF Administrator   receives  executed  Contracts  within  30 calendar  days of the effective date of the first Covered  Policy,  otherwise,  the 45% coverage  level shall be deemed.

(3)  Failure  by the Company  to meet the requirements   of this Article  may  result  in referral  to the Office  of
Insurance  Regulation. 

ARTICLE IV - LIABILITY OF THE FHCF 

		
	(1) 
	The  SBA  shall reimburse   the  Company,   with  respect  to each  Loss  Occurrence   commencing   during the  Contract  Year  for the  "Reimbursement    Percentage"  elected,  this percentage  times  the amount  of Ultimate  Net  Loss paid by the Company  in excess  of the  Company's   Retention,  as adjusted  pursuant to Article  V(28),  plus 5% of the reimbursed   losses for Loss Adjustment  Expense  Reimbursement.

(2)     The  Reimbursement    Percentage   will  be 45%  or 75%  or  90%,  at  the  Company's    option  as  elected     
          under Article  XVIII.

2                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

		
	(3)
	The  aggregate   liability   of  the  FHCF  with  respect   to  all  Reimbursement    Contracts   covering   this Contract  Year shall not exceed  the limit set forth under  Section  215.555( 4)(c)l.,   Florida  Statutes.  For specifics  regarding  loss reimbursement   calculations,  see section  (3)(c)  of Article  X.

( 4)    Upon  the  occurrence   of a Covered  Event,  the  SBA  shall  evaluate  the  potential   losses  to the  FHCF and  the  FHCF's   capacity   at the  time  of  the  event.  The  initial  Projected   Payout   Multiple   used  to reimburse   the  Company   for its losses  shall  not exceed  the  Projected   Payout  Multiple  as  calculated based  on  the  capacity   needed  to  provide  the  FHCF's   mandatory   coverage.   If  it appears   that  the Estimated   Claims-Paying    Capacity   may  be  exceeded,   the  SBA  shall  reduce  the  projected   payout factors  or multiples  for determining   each  participating   insurer's   projected  payout  uniformly   among all insurers  to reflect  the Estimated  Claims-Paying   Capacity.

		
	(5)
	Reimbursement   amounts  shall  not be reduced  by reinsurance   paid  or payable  to the  Company  from other  sources.  Once  the Company's    limit of coverage  has been exhausted,  the  Company   will not be entitled  to further reimbursements.

		
	(6)
	After  the  end  of  the  calendar   year,   the  SBA  shall   notify   insurers   of  the  estimated   Borrowing Capacity  and the Balance  of the Fund  as of December  31. In May and October  of each year,  the SBA shall  publish  in the Florida Administrative Weekly a statement  of the  FHCF's   estimated   Borrowing Capacity,    Estimated    Claims-Paying     Capacity,    and   the   projected    Balance   of   the   Fund   as   of December  31.

		
	(7)
	The obligation  of the  SBA with respect  to all Contracts  covering  a particular  Contract  Year  shall not exceed   the  Balance   of  the  Fund   as  of  December   31  of  that   Contract   Year,   together   with  the maximum   amount  the  SBA  is able to  raise through  the  issuance  of revenue  bonds  or through  other means  available  to  the  SBA  under  Section  215.555,    Florida  Statutes,  up to the  limit  in accordance with  Section  215.555(4)(c)1.,   Florida  Statutes.  The obligations  and the liability  of the  SBA are more fully described  in Rule  19-8.0J 3,  Florida  Administrative   Code (F.A.C.).

ARTICLE V - DEFINITIONS 

		
	(1) 
	Actual Claims-Paying Capacity of the FHCF 

This term means the sum of the Balance of the Fund as of December 31 of a Contract Year, plus any reinsurance purchased by the FHCF, plus the amount the SBA is able to raise through the issuance of revenue bonds, or through other means available by law to the SBA, up to the limit in accordance with Section 215.555(4)(c)1. and (6), Florida Statutes. 
		
	(2) 
	Actuarially Indicated 

This term means, with respect to Premiums paid by Companies for reimbursement provided by the FHCF, an amount determined in accordance with the definition provided in Section 215.555(2)(a), Florida Statutes. 
		
	(3) 
	Additional Living Expense (ALE) 

ALE losses covered by the FHCF are not to exceed 40 percent of the insured value of a Residential Structure or its contents based on the coverage provided in the policy. Fair rental value, loss of rents, or business interruption losses are not covered by the FHCF. 
		
	(4) 
	Administrator 

This term means the entity with which the SBA contracts to perform administrative tasks associated with the operations of the FHCF. The Administrator is Paragon Strategic Solutions Inc., 8200 Tower, 5600 West 83rd Street, Suite 1100, Minneapolis, Minnesota 55437. The telephone number is (800) 689-3863, and the facsimile number is (800) 264-0492. 
		
	(5) 
	Authorized Insurer 

This term is defined in Section 624.09(1), Florida Statutes. 
		
	(6) 
	Borrowing Capacity 

3                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

This term means the amount of funds which are able to be raised by the issuance of revenue bonds or through other financing mechanisms, less bond issuance expenses and reserves. 
		
	(7) 
	Citizens Property Insurance Corporation (Citizens) 

This term means Citizens Property Insurance Corporation as created under Section 627.351(6), Florida Statutes. For the purposes of the FHCF, Citizens Property Insurance Corporation incorporates   two  accounts,  (a) the  coastal   account  and  (b) the  personal   lines  and  commercial   lines accounts.  Each  account  is treated  by the  FHCF  as if it were  a separate  participating   insurer  with  its own reportable  exposures,  Reimbursement   Premium,  Retention,  and Ultimate  Net Loss.
		
	(8) 
	Contract 

This term means this Reimbursement Contract for the current Contract Year. 
		
	(9) 
	Covered Event 

This term means any one storm declared to be a hurricane by the National Hurricane Center which causes insured losses in Florida. A Covered Event begins when a hurricane causes damage in Florida while it is a hurricane and continues throughout any subsequent downgrades in storm status by the National Hurricane Center regardless of whether the hurricane makes landfall. Any storm, including a tropical storm, which does not become a hurricane is not a Covered Event. 
(10) Covered Policy or Covered Policies 
		
	(a) 
	Covered Policy, as defined in Section 215.555(2)(c), Florida Statutes, is further clarified to mean only that portion of a binder, policy or contract of insurance that insures real or personal property located in the State of Florida to the extent such policy insures a Residential Structure, as defined in definition (27) herein, or the contents of a Residential Structure, located in the State of Florida. 

		
	(b) 
	Due to the specialized nature of the definition of Covered Policies, Covered Policies are not limited to only one line of business in the Company's annual statement required to be filed by Section 624.424, Florida Statutes. Instead, Covered Policies are found in several lines of business on the Company's annual statement. Covered Policies will at a minimum be reported in the Company's statutory annual statement as: 

		
	1.
	Fire 

		
	2.
	Allied Lines 

		
	3.
	Farmowners Multiple Peril 

		
	4.
	Homeowners Multiple Peril 

		
	5.
	Commercial Multiple Peril (non liability portion, covering condominiums and apartments) 

		
	6.
	Inland Marine 

Note that where particular insurance exposures, e.g., mobile homes, are reported on an annual statement is not dispositive of whether or not the exposure is a Covered Policy. 
		
	(c) 
	This definition applies only to the first-party property section of a policy pertaining strictly to the structure, its contents, appurtenant structures, or ALE coverage. 

		
	(d) 
	Covered Policy also includes any collateral protection insurance policy covering personal residences which protects both the borrower's and the lender's financial interest, in an amount at least equal to the coverage for the dwelling in place under the lapsed homeowner's policy, if such policy can be accurately reported as required in Section 215.555(5), Florida Statutes. A Company will be deemed to be able to accurately report data if the required data, as specified in the Premium Formula adopted in Section 215.555(5), Florida Statutes, is available. 

		
	(e) 
	See Article VI of this Contract for specific exclusions. 

		
	(11) 
	Deductible Buy-Back Policies 

This term means a specific policy that provides coverage to a policyholder for some portion of the policyholder's deductible under a policy issued by another insurer. 
		
	(12) 
	Estimated Claims-Paying Capacity of the FHCF 

This term means the sum of the projected Balance of the Fund as of December 31 of a Contract Year, plus any reinsurance purchased by the FHCF, plus the most recent estimate of the Borrowing Capacity of the FHCF, determined pursuant to Section 215.555(4)(c), Florida Statutes. 
		
	(13) 
	Excess Policies 

This term, for the purposes of this Contract, means a policy that provides insurance protection for large commercial property risks and that provides a layer of coverage above a primary layer (which is insured by a different insurer) that acts much the same as a very large deductible. 

4                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

		
	(14) 
	Florida Department of Financial Services (Department) 

This term means the Florida regulatory agency, created pursuant to Section 20.121, Florida Statutes, which is charged with regulating the Florida insurance market and administering the Florida Insurance Code. 
		
	(15) 
	Florida Insurance Code 

This term means those chapters identified in Section 624.01, Florida Statutes, which are designated as the Florida Insurance Code.
		
	(16) 
	Formula or the Premium Formula

This term means the Formula approved by the SBA for the purpose of determining the Actuarially Indicated Premium to be paid to the FHCF. The Premium Formula is defined as an approach or methodology which leads to the creation of premium rates. The resulting rates are therefore incorporated as part of the Premium Formula. The Formula, shall, pursuant to Section 215.555(5)(b), Florida Statutes, include a cash build-up factor in the amount specified therein.
		
	(17) 
	Fund Balance or Balance of the Fund as of December 31

These terms mean the amount of assets available to pay claims, not including any bonding proceeds, resulting from Covered Events which occurred during the Contract Year.
		
	(18) 
	Insurer Group

For purposes of the coverage option election in Section 215.555(4)(b), Florida Statutes, Insurer Group means the group designation assigned by the National Association of Insurance Commissioners (NAIC) for purposes of filing consolidated financial statements. A Company is a member of a group as designated by the NAIC until such Company is assigned another group designation or is no longer a member of a group recognized by the NAIC.
		
	(19) 
	Loss Occurrence

This term means the sum of individual insured Losses incurred under Covered Policies resulting from the same Covered Event. “Losses” means all incurred losses under Covered Policies, including Additional Living Expenses not to exceed 40 percent of the insured value of a Residential Structure or its contents and amounts paid as fees on behalf of or inuring to the benefit of a policyholder, and excludes allocated or unallocated Loss Adjustment Expenses.
		
	(20) 
	Loss Adjustment Expense Reimbursement

		
	(a) 
	Loss Adjustment Expense Reimbursement shall be 5% of the reimbursed losses under this Contract as provided in Article IV, pursuant to Section 215.555(4)(b)1., Florida Statutes.

		
	(b) 
	To the extent that loss reimbursements are limited to the Payout Multiple applied to each Company, the 5% Loss Adjustment Expense is included in the total Payout Multiple applied to each Company.

		
	(21) 
	New Participant(s)

This term means all Companies which begin writing Covered Policies on or after the beginning of the Contract Year. A Company that removes exposure from either Citizens entity, as that term is defined in (7) above, pursuant to an assumption agreement effective on or after June 1 and had written no other Covered Policies before June 1 is also considered a New Participant.
		
	(22) 
	Office of Insurance Regulation

This term means that office within the Department of Financial Services and which was created in Section 20.121(3), Florida Statutes.
		
	(23) 
	Payout Multiple

This term means the multiple as calculated in accordance with Section 215.555(4)(c), Florida Statutes, which is derived by dividing the single season Claims-Paying Capacity of the FHCF by the total aggregate industry Reimbursement Premium for the FHCF for the Contract Year billed as of December 31 of the Contract Year. The final Payout Multiple is determined once Reimbursement Premiums have been billed as of December 31 and the amount of bond proceeds has been determined.
		
	(24) 
	Premium

This term means the same as Reimbursement Premium.
		
	(25) 
	Projected Payout Multiple

The Projected Payout Multiple is used to calculate a Company’s projected payout pursuant to Section 215.555(4)(d)2., Florida Statutes. The Projected Payout Multiple is derived by dividing the estimated single season Claims-Paying Capacity of the FHCF by the estimated total aggregate industry Reimbursement Premium for the FHCF for the Contract Year. The Company’s Reimbursement Premium as paid to the SBA for the Contract Year is 

5                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

multiplied by the Projected Payout Multiple to estimate the Company’s coverage from the FHCF for the Contract Year.
		
	(26) 
	Reimbursement Premium

This term means the Premium determined by multiplying each $1,000 of insured value reported by the Company in accordance with Section 215.555(5)(b), Florida Statutes, by the rate as derived from the Premium Formula, as described in Rule 19-8.028, F.A.C.
		
	(27) 
	Residential Structures

This  term  means  units  or  buildings   used  for dwelling   or  habitational   occupancies,   including   the primary  structure  and appurtenant   structures  insured  under the same  policy  and any other  structures covered   under  endorsements    associated   with  a  policy   covering   a  residential   structure.    Covered Residential  Structures  do not include  any  structures   listed  under  Article   VI  or  structures   used solely for non-residential   purposes.
		
	(28) 
	Retention

The Company’s Retention means the amount of hurricane losses under Covered Policies which must be incurred by the Company before it is eligible for reimbursement from the FHCF.
		
	(a) 
	When the Company experiences covered losses from one or two Covered Events during the Contract Year, the Company’s full Retention shall be applied to each of the Covered Events.

		
	(b) 
	When the Company experiences covered losses from more than two Covered Events during the Contract Year, the Company’s full Retention shall be applied to each of the two Covered Events causing the largest covered losses for the Company. For each other Covered Event resulting in covered losses, the Company’s Retention shall be reduced to one-third of its full Retention and applied to all other Covered Events.

		
	1. 
	All reimbursement of covered losses for each Covered Event shall be based on the Company’s full Retention until December 31 of the Contract Year. Adjustments to reflect a reduction to one-third of the full Retention shall be made on or after December 31 of the Contract Year provided the Company reports its losses as specified in this Contract.

		
	2. 
	Adjustments to the Company’s Retention shall be based upon its paid and outstanding losses as reported on the Company’s Proof of Loss Reports but shall not include incurred but not reported losses. The Company’s Proof of Loss Reports shall be used to determine which Covered Events constitute the Company’s two largest Covered Events, and the reduction to one-third of the full Retention shall be applied to all other Covered Events for the Contract Year. After this initial determination, any subsequent adjustments shall be made by the SBA only if the quarterly loss reports reveal that loss development patterns have resulted in a change in the order of Covered Events entitled to the reduction to one-third of the full Retention.

		
	(c) 
	The Company’s full Retention is established in accordance with the provisions of Section 215.555(2)(e), Florida Statutes, and shall be determined by multiplying the Retention Multiple by the Company’s Reimbursement Premium for the Contract Year.

(29) Retention Multiple
		
	(a) 
	The Retention Multiple is applied to the Company’s Reimbursement Premium to determine the Company’s Retention. The Retention Multiple for the 2014/2015 Contract Year shall be equal to $4.5 billion, adjusted based upon the reported exposure for the 2012/2013 Contract Year to reflect the percentage growth in exposure to the FHCF since 2004, divided by the estimated total industry Reimbursement Premium at the 90% reimbursement percentage level for the Contract Year as determined by the SBA.

		
	(b) 
	The Retention Multiple as determined under (29)(a) above shall be adjusted to reflect the reimbursement percentage elected by the Company under this Contract as follows:

		
	1. 
	If the Company elects a 90% reimbursement percentage, the adjusted Retention Multiple is 100% of the amount determined under (29)(a) above;

		
	2. 
	If the Company elects a 75% reimbursement percentage, the adjusted Retention Multiple is 120% of the amount determined under (29)(a) above; or

		
	3. 
	If the Company elects a 45% reimbursement percentage, the adjusted Retention Multiple is 200% of the amount determined under (29)(a) above. 

		
	(30) 
	Ultimate Net Loss 

		
	(a) 
	This term means all Losses of the Company under Covered Policies in force at the time of a Covered Event, as defined under (9) above, prior to the application of the Company's FHCF Retention, as defined under (28) above, and reimbursement percentage, and excluding loss adjustment expense and any exclusions under 

6                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

Article VI herein, arising from each Loss Occurrence during the Contract Year, provided, however, that the Company's Ultimate Net Loss shall be determined in accordance with the deductible level written under the policy sustaining the loss. 
		
	(b) 
	Salvages and all other recoveries, excluding reinsurance recoveries, shall be first deducted from such loss to arrive at the amount of liability attaching hereunder. 

		
	(c) 
	All salvages, recoveries or payments recovered or received subsequent to a loss settlement under this Contract shall be applied as if recovered or received prior to the aforesaid settlement and all necessary adjustments shall be made by the parties hereto. 

		
	(d) 
	Nothing in this clause shall be construed to mean that losses under this Contract are not recoverable until the Company's Ultimate Net Loss has been ascertained. 

		
	(e) 
	The SBA shall be subrogated to the rights of the Company to the extent of its reimbursement of the Company. The Company agrees to assist and cooperate with the SBA in all respects as regards such subrogation. The Company further agrees to undertake such actions as may be necessary to enforce its rights of salvage and subrogation, and its rights, if any, against other insurers as respects any claim, loss, or payment arising out of a Covered Event. 

ARTICLE VI - EXCLUSIONS
 
This Contract does not provide reimbursement for: 
		
	(1) 
	Any losses not defined as being within the scope of a Covered Policy. 

		
	(2)
	Any policy which excludes wind or hurricane coverage. 

		
	(3) 
	Any Excess Policy or Deductible Buy-Back Policy that requires individual ratemaking, as determined by the FHCF. 

		
	(4) 
	(a)     Any policy for Residential Structures, as defined in Article V(27) herein, that provides a layer of coverage underneath an Excess Policy, as defined in Article V(13) herein, issued by a different insurer; or 

(b)     Any other policy providing a layer of windstorm or hurricane coverage for a particular structure above or below a layer of windstorm or hurricane coverage under a separate policy issued by a different insurer, or any other circumstance in which two or more insurers provide primary windstorm or hurricane coverage for a single structure using separate policy forms. 
(c)     The exclusions in this subsection do not apply to primary quota share policies written by Citizens Property Insurance Corporation under Section 627.351(6)(c)2., Florida Statutes. 
		
	(5) 
	Any liability of the Company attributable to losses for fair rental value, loss of rent or rental income, or business interruption. 

		
	(6) 
	Any collateral protection policy that does not meet the definition of Covered Policy as defined in Article V(10)(d) herein. 

		
	(7) 
	Any reinsurance assumed by the Company. 

		
	(8) 
	Any exposure for hotels, motels, timeshares, shelters, camps, retreats, and any other rental property used solely for commercial purposes. 

		
	(9) 
	Any exposure for homeowner associations if no habitational structures are insured under the policy. 

		
	(10) 
	Any exposure for homes and condominium structures or units that are non-owner occupied and rented for six (6) or more rental periods by different parties during the course of a twelve (12) month period. 

		
	(11) 
	Commercial healthcare facilities and nursing homes; however, a nursing home which is an integral part of a retirement community consisting primarily of habitational structures that are not nursing homes will not be subject to this exclusion. 

		
	(12) 
	Any exposure under commercial policies covering only appurtenant structures or structures that do not function as a habitational structure (e.g., a policy covering only the pool of an apartment complex). 

		
	(13) 
	Policies covering only Additional Living Expense.

		
	(14) 
	Any exposure for barns or barns with apartments. 

		
	(15) 
	Any exposure for builders risk coverage or new Residential Structures still under construction. 

		
	(16) 
	Any exposure for recreational vehicles, golf carts, or boats (including boat related equipment) requiring licensing and written on a separate policy or endorsement. 

		
	(17) 
	Any liability of the Company for extra contractual obligations or liabilities in excess of original policy limits. This exclusion includes, but is not limited to, amounts paid as bad faith awards, punitive damages awards, or 

7                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

other court-imposed fines, sanctions, or penalties; or other amounts in excess of the coverage limits under the Covered Policy. 
		
	(18) 
	Any losses paid in excess of a policy's hurricane limit in force at the time of each Covered Event, including individual coverage limits (i.e., building, appurtenant structures, contents, and additional living expense), or other amounts paid as the result of a voluntary expansion of coverage by the insurer, including, but not limited to, a waiver of an applicable deductible. This exclusion includes overpayments of a specific individual coverage limit even if total payments under the policy are within the aggregate policy limit. 

		
	(19) 
	Any losses paid under a policy for Additional Living Expense, written as a time element coverage, in excess of the Additional Living Expense exposure reported for that policy under the Data Call for the applicable Contract Year (unless policy limits have changed effective after June 30 of the Contract Year). 

		
	(20) 
	Any losses for which the Company's claims files do not adequately support. Claim file support shall be deemed adequate if in compliance with the Records Retention Requirements outlined on the Form FHCF-L1B (Proof of Loss Report) applicable to the Contract Year. 

		
	(21) 
	Any exposure for, or amounts paid to reimburse a policyholder for, condominium association loss assessments or under similar coverages for contractual liabilities. 

		
	(22) 
	Losses in excess of the sum of the Balance of the Fund as of December 31 of the Contract Year and the amount the SBA is able to raise through the issuance of revenue bonds or by the use of other financing mechanisms, up to the limit pursuant to Section 215.555(4)(c), Florida Statutes. 

		
	(23) 
	Any liability assumed by the Company from Pools, Associations, and Syndicates. Exception: Covered Policies assumed from Citizens under the terms and conditions of an executed assumption agreement between the Authorized Insurer and Citizens are covered by this Contract. 

		
	(24) 
	All liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any insolvency fund. Insolvency fund includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, which provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, which has been declared by any competent authority to be insolvent, or which is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part. 

		
	(25) 
	Property losses that are proximately caused by any peril other than a Covered Event, including, but not limited to, fire, theft, flood or rising water, or windstorm that does not constitute a Covered Event, or any liability of the Company for loss or damage caused by or resulting from nuclear reaction, nuclear radiation, or radioactive contamination from any cause, whether direct or indirect, proximate or remote, and regardless of any other cause or event contributing concurrently or in any other sequence to the loss. 

		
	(26) 
	The FHCF does not provide coverage for water damage which is generally excluded under property insurance contracts and has been defined to mean flood, surface water, waves, tidal water, overflow of a body of water, storm surge, or spray from any of these, whether or not driven by wind. 

		
	(27) 
	Policies and endorsements predominately covering Specialized Fine Arts Risks or collectible types of property meeting the following requirements:

(a)    A policy or endorsement covering Specialized Fine Arts Risks and not covering any Residential Structure and/or contents thereof (other than such specialized fine arts items covered in the Specialized Fine Arts policy or endorsement) if it meets the description in subparagraph 1 and if all the conditions in subparagraphs 2. through 4. immediately below are met. 
		
	1. 
	For purposes of this exemption, a Specialized Fine Arts Risk policy or endorsement is a policy or endorsement that:

		
	a. 
	Insurers works of art, of rarity, or of historic value, such as paintings, works on paper, etchings, art glass windows, pictures, statuary, sculptures, tapestries, antique furniture, antique silver, antique rugs, rare books or manuscripts, jewelry, or other similar items; 

		
	b. 
	Charges a minimum premium of $500; 

		
	c. 
	Insures scheduled items valued, in the aggregate, at no less than $100,000; and 

		
	d. 
	Requires an investment by the insured in loss control measures to protect the Specialized Fine Arts Risks being insured. 

		
	2. 
	The insurer must perform a periodic and thorough specialized inspection and must provide a specialized loss prevention service designed to prevent or minimize loss. 

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Rule 19-8.010 F.A.C.

		
	3. 
	The structure and its fine arts contents must be provided with satisfactory watchman or alarm service or its equivalent where necessary.

		
	4. 
	The insurer must maintain a force of trained and competent loss prevention specialists, who perform the following tasks:

		
	a. 
	Make loss prevention surveys of each Specialized Fine Arts Risk;

		
	b. 
	Make available a specialized loss prevention service for the purpose of providing consultation regarding hazards the the fine arts being insured; 

		
	c. 
	Confirm through periodic inspections that loss prevention devices are properly maintained;

		
	d.  
	Investigate reported losses; and

		
	e. 
	Confer with the policyholder and confirm through periodic and unannounced inspections that recomment safety and loss control improvements are actually made. 

		
	(b)
	Any individual policy written to solely cover personal property, scheduled or written under a blanket limit, with a policy limit equal to or exceeding $500,000 and which predominantly covers one or more classes of collectible types of property shall be exempt from higher coverage under the Fund.  Generally such classes of collectible property have unusually high values due to their investible, artistic, or unique intrinsic nature.  Additionally, such exempt policy may also include coverage for incidental items of personal property that may also be scheduled although such property may not be considered as collectible.  The predominant class of property covered under such excluded policy represents an unusually high exposure value and such policy is intended to provide coverage for a class or classes of property that is not typical for the contents coverage under residential property insurance policies.  In many cases property may be located at various locations either in or outside the state of Florida or the location of the property may change from time to time.  The investment nature of such property distinguishes this type of exposure from the typical contents associated with a Covered Policy.

		
	(28) 
	Any losses under liability coverages.

ARTICLE VII - MANAGEMENT OF CLAIMS AND LOSSES 

The Company shall investigate and settle or defend all claims and losses. All payments of claims or losses by the Company within the terms and limits of the appropriate coverage parts of Covered Policies shall be binding on the SBA, subject to the terms of this Contract, including the provisions in Article XIII relating to inspection of records and examinations. 

ARTICLE VIII - LOSS REIMBURSEMENT ADJUSTMENTS 
		
	(1) 
	Offsets 

The SBA reserves the right to offset amounts payable to the SBA from the Company, including amounts payable under any Contract Year and the Company's full Premium for the current Contract Year (regardless of installment due dates), against any reimbursement or advance amounts, or amounts agreed to in a commutation agreement, which are due and payable to the Company from the SBA as a result of the liability of the SBA. 
		
	(2) 
	Reimbursement Adjustments 

Section 215.555(4)(d) and (e), Florida Statutes, provides the SBA with the right to seek the return of excess loss reimbursements which have been paid to the Company along with interest thereon. Excess loss reimbursements are those payments made to the Company by the SBA that are in excess of the Company's coverage under the Contract Year. Excess loss reimbursements may result from adjustments to the Projected Payout Multiple or the Payout Multiple, incorrect exposure (Data Call) submissions or resubmissions, incorrect calculations of Reimbursement Premiums or Retentions, incorrect Proof of Loss Reports, incorrect calculation of reinsurance recoveries, or subsequent readjustment of policyholder claims, including subrogation and salvage, or any combination of the foregoing. The Company will be sent an invoice showing the due date for adjustments along with the interest due thereon through the due date. The applicable interest rate for interest credits, and for interest charges for adjustments beyond the Company's control, will be the average rate earned by the SBA for the FHCF for the first four months of the Contract Year. The applicable interest rate for interest charges on excess loss reimbursements due to adjustments resulting from incorrect exposure submissions or Proof of Loss Reports will accrue at this rate plus 5%. All interest will continue to accrue if not paid by the due date. 

9                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

ARTICLE IX - REIMBURSEMENT PREMIUM 

		
	(1) 
	The Company shall, in a timely manner, pay the SBA its Reimbursement Premium for the Contract Year. The Reimbursement Premium for the Contract Year shall be calculated in accordance with Section 215.555, Florida Statutes, with any rules promulgated thereunder, and with Article X(2). 

		
	(2) 
	The Company's Reimbursement Premium is based on its June 30 exposure in accordance with Article X, except as provided for New Participants under Article X, and is not adjusted to reflect an increase or decrease in exposure for Covered Policies effective after June 30 nor is the Reimbursement Premium adjusted when the Company cancels policies or is liquidated or otherwise changes its business status (merger, acquisition, or termination) or stops writing new business (continues in business with its policies in a runoff mode). Similarly, new business written after June 30 will not increase or decrease the Company's FHCF Reimbursement Premium or impact its FHCF coverage. FHCF Reimbursement Premiums are required of all companies based on their writing Covered Policies in Florida as of June 30, and each company's FHCF coverage as based on the definition in Section 215.555(2)(m), Florida Statutes, shall exist for the entirety of the Contract Year regardless of exposure changes, except as provided for New Participants under Article X. 

		
	(3) 
	Since the calculation of the Actuarially Indicated Premium assumes that the Companies will pay their Reimbursement Premiums timely, interest charges will accrue under the following circumstances. A Company may choose to estimate its own Premium installments. However, if the Company's estimation is less than the provisional Premium billed, an interest charge will accrue on the difference between the estimated Premium and the final Premium. If a Company estimates its first installment, the Administrator shall bill that estimated Premium as the second installment as well, which will be considered as an estimate by the Company. No interest will accrue regarding any provisional Premium if paid as billed by the FHCF's Administrator, except in the case of an estimated second installment as set forth in this Article. Also, if a Company makes an estimation that is higher than the provisional Premium billed but is less than the final Premium, interest will not accrue. If the Premium payment is not received from a Company when it is due, an interest charge will accrue on a daily basis until the payment is received. Interest will also accrue on Premiums resulting from submissions or resubmissions finalized after December 1 of the Contract Year. An interest credit will be applied for any Premium which is overpaid as either an estimate or as a provisional Premium. Interest shall not be credited past December 1 of the Contract Year. The applicable interest rate for interest credits will be the average rate earned by the SBA for the FHCF for the first four months of the Contract Year. The applicable interest rate for interest charges will accrue at this rate plus 5%. 

ARTICLE X - REPORTS AND REMITTANCES
 
		
	(1) 
	Exposures 

		
	(a) 
	If the Company writes Covered Policies before June 1 of the Contract Year, the Company shall report to the SBA, unless otherwise provided in Rule 19-8.029, F.A.C., no later than the statutorily required date of September 1 of the Contract Year, by ZIP Code or other limited geographical area as specified by the SBA, its insured values under Covered Policies as of June 30 of the Contract Year as outlined in the annual reporting of insured values form, FHCF-D1A (Data Call) adopted for the Contract Year under Rule 19-8.029, F.A.C., and other data or information in the format specified by the SBA. 

		
	(b) 
	If the Company first begins writing Covered Policies on or after June 1 but prior to December 1 of the Contract Year, the Company shall report to the SBA, no later than February 1 of the Contract Year, by ZIP Code or other limited geographical area as specified by the SBA, its insured values under Covered Policies as of November 30 of the Contract Year as outlined in the Supplemental Instructions for New Participants section of the Data Call adopted for the Contract Year under Rule 19-8.029, F.A.C., and other data or information in the format specified by the SBA. 

		
	(c) 
	If the Company first begins writing Covered Policies on December 1 through and including May 31 of the Contract Year, the Company shall not report its exposure data for the Contract Year to the SBA. 

		
	(d) 
	The requirement that a report is due on a certain date means that the report shall be received by the SBA no later than 4 p.m. Eastern Time on the due date. If the applicable due date is a Saturday, Sunday or legal holiday, then the actual due date will be the day immediately following the applicable due date which is not a Saturday, Sunday or legal holiday. For purposes of the timeliness of the submission, neither the United States Postal Service postmark nor a postage meter date is in any way determinative. Reports sent to the 

10                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

FHCF Administrator in Minneapolis, Minnesota, will be returned to the sender. Reports not in the physical possession of the SBA by 4 p.m., Eastern Time, on the applicable due date are late. 
		
	(2) 
	Reimbursement Premium 

		
	(a) 
	If the Company writes Covered Policies before June 1 of the Contract Year, the Company shall pay the FHCF its Reimbursement Premium in installments due on or before August 1, October 1, and December 1 of the Contract Year in amounts to be determined by the FHCF. However, if the Company's Reimbursement Premium for the prior Contract Year was less than $5,000, the Company's full provisional Reimbursement Premium, in an amount equal to the Reimbursement Premium paid in the prior year, shall be due in full on or before August 1 of the Contract Year. The Company will be invoiced for amounts due, if any, beyond the provisional Reimbursement Premium payment, on or before December 1 of the Contract Year. 

		
	(b) 
	If the Company is under administrative supervision, or if any control or oversight of the Company has been transferred through any legal or regulatory action to a state regulator or court appointed receiver or rehabilitator (referred to in the aggregate as state action): 

		
	1. 
	The full annual provisional Reimbursement Premium as billed and any outstanding balances will be due and payable on August 1, or the date that such State action occurs after August 1 of the Contract Year. 

		
	2. 
	Failure by such Company to pay the full annual provisional Reimbursement Premium as specified in 1. above by the applicable due date(s) shall result in the 45% coverage level being deemed for the complete Contract Year regardless of the level selected for the Company through the execution of this Contract and regardless of whether a hurricane event occurred or triggered coverage. 

		
	3. 
	The provisions required in 1. and 2. above will not apply when the state regulator, receiver, or rehabilitator provides a letter of assurance to the FHCF that the Company will have the resources and will pay the full Reimbursement Premium for the coverage level selected through the execution of this Contract. 

		
	4. 
	When control or oversight has been transferred, in whole or in part, through a legal or regulatory action, the controlling management of the Company shall specify by August 1 or as soon thereafter as possible (but not to exceed two weeks after any regulatory or legal action) in a letter to the FHCF as to the Company's intentions to either pay the full FHCF Reimbursement Premium as specified in 1. above, to default to the 45% coverage being deemed as specified in 2. above, or to provide the assurances as specified in 3. above. 

		
	(c) 
	A New Participant that first begins writing Covered Policies on or after June 1 but prior to December 1 of the Contract Year shall pay the FHCF a provisional Reimbursement Premium of $1,000 upon execution of this Contract. The Administrator shall calculate the Company's actual Reimbursement Premium for the period based on its actual exposure as of November 30 of the Contract Year, as reported on or before February 1 of the Contract Year. To recognize that New Participants have limited exposure during this period, the actual Premium as determined by processing the Company's exposure data shall then be divided in half, the provisional Premium shall be credited, and the resulting amount shall be the total Premium due for the Company for the remainder of the Contract Year. However, if that amount is less than $1,000, then the Company shall pay $1,000. The Premium payment is due no later than April 1 of the Contract Year. The Company's Retention and coverage will be determined based on the total Premium due as calculated above. 

		
	(d) 
	A New Participant that first begins writing Covered Policies on or after December 1 through and including May 31 of the Contract Year shall pay the FHCF a Reimbursement Premium of $1,000 upon execution of this Contract. 

		
	(e) 
	The requirement that the Reimbursement Premium is due on a certain date means that the Premium shall be in the physical possession of the FHCF no later than 2 p.m., Eastern Time, on the due date applicable to the particular installment. If remitted by check to the FHCF's Post Office Box, the check shall be physically in the Post Office Box 100822, Atlanta, GA 30384-0822, as set out on the invoice sent to the Company. If remitted by check by hand delivery, the check shall be physically on the premises of the FHCF's bank in College Park, Georgia, as set out on the invoice sent to the Company. If remitted electronically, the wire transfer shall have been completed to the FHCF's account at its bank in Tampa, Florida, as set out on the invoice sent to the Company. If the applicable due date is a Saturday, Sunday or legal holiday, then the actual due date will be the day immediately following the applicable due date which is not a Saturday, Sunday or legal holiday. For purposes of the timeliness of the remittance, neither the United States Postal Service 

11                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

postmark nor a postage meter date is in any way determinative. Premium checks sent to the SBA in Tallahassee, Florida, or to the FHCF's Administrator in Minneapolis, Minnesota, will be returned to the sender. Reimbursement Premiums not in the physical possession of the FHCF by 2 p.m., Eastern Time, on the applicable due date are late.
		
	(f) 
	Except as required by Section 215.555(7)(c), Florida Statutes, or as described in the following sentence, Reimbursement Premiums, together with earnings thereon, received in a given Contract Year will be used only to pay for losses attributable to Covered Events occurring in that Contract Year or for losses attributable to Covered Events in subsequent Contract Years and will not be used to pay for past losses or for debt service on revenue bonds. Pursuant to Section 215.555(6)(a)1., Florida Statutes, Reimbursement Premiums and earnings thereon may be used for payments relating to revenue bonds in the event emergency assessments are insufficient. If Reimbursement Premiums or earnings thereon are used for debt service on revenue bonds, then the amount of the Reimbursement Premiums or earnings thereon so used shall be returned, without interest, to the Fund when emergency assessments or other legally available funds remain available after making payment relating to the revenue bonds and any other purposes for which emergency assessments were levied.

		
	(3) 
	Claims and Losses 

		
	(a) 
	In General 

		
	1. 
	Claims and losses resulting from Loss Occurrences commencing during the Contract Year shall be reported by the Company and reimbursed by the FHCF as provided herein and in accordance with the Statute, this Contract, and any rules adopted pursuant to the Statute. For a Company participating in a quota share primary insurance agreement(s) with Citizens Property Insurance Corporation Coastal Account, Citizens and the Company shall report only their respective portion of losses under the quota share primary insurance agreement(s). Pursuant to Section 215.555(4)(c), Florida Statutes, the SBA is obligated to pay for losses not to exceed the Actual Claims-Paying Capacity of the FHCF, up to the limit in accordance with Section 215.555(4)(c)1., Florida Statutes, for any one Contract Year. 

		
	2. 
	If the Company is in non-compliance with Section 215.555, Florida Statutes for any Contract Year, including deadlines for sending in Contracts, addenda or attachments to Contracts, Data Call submissions or resubmissions, loss reports, or in responding to SBA exam requirements, the SBA reserves the right to withhold any payments or advances until such time the Company becomes compliant. 

		
	(b) 
	Loss Reports 

		
	1. 
	At the direction of the SBA, the Company shall report its projected Ultimate Net Loss from each Loss Occurrence to provide information to the SBA in determining any potential liability for possible reimbursable losses under the Contract on the Interim Loss Report, Form FHCF-L1A, adopted for the Contract Year under Rule 19-8.029, F.A.C. Interim Loss Reports (including subsequent Interim Loss Reports if required by the SBA) will be due in no less than fourteen days from the date of the notice from the SBA that such a report is required. 

		
	2. 
	FHCF loss reimbursements will be issued based on Ultimate Net Loss information reported by the Company on the Proof of Loss Report, Form FHCF-L1B, adopted for the Contract Year under Rule 19-8.029, F.A.C. 

		
	a. 
	To qualify for reimbursement, the Proof of Loss Report must have the original signatures of two executive officers authorized by the Company to sign the report. 

		
	b. 
	The Company must also submit a detailed claims listing (as outlined on the Proof of Loss Report) at the same time it submits its first Proof of Loss Report for a specific Covered Event that qualifies the Company for reimbursement under that Covered Event, and should be prepared to supply a detailed claims listing for any subsequent Proof of Loss Report upon request. 

		
	c. 
	While a Company may submit a Proof of Loss Report requesting reimbursement at any time following a Loss Occurrence, all Companies shall submit a mandatory Proof of Loss Report for each Loss Occurrence no earlier than December 1 and no later than December 31 of the Contract Year during which the Covered Event(s) occurs using the most current data available, regardless of the amount of Ultimate Net Loss or the amount of loss reimbursements or advances already received. Reports may be faxed only if the Company does not qualify for a reimbursement. 

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Rule 19-8.010 F.A.C.

		
	d. 
	For the Proof of Loss Reports due by December 31 of the Contract Year, and the required subsequent quarterly and annual reports required under subparagraphs 3. and 4. below, the Company shall submit its Proof of Loss Reports by each quarter-end or year-end using the most current data available. However, the date of such data shall not be more than sixty days prior to the applicable quarter-end or year-end date. 

		
	3. 
	Updated Proof of Loss Reports for each Loss Occurrence are due quarterly thereafter until all claims and losses resulting from a Loss Occurrence are fully discharged including any adjustments to such losses due to salvage or other recoveries, or the Company has received its full coverage under the Contract Year in which the Loss Occurrence(s) occurred. Guidelines follow: 

		
	a. 
	Quarterly Proof of Loss Reports are due by March 31 from an insurer whose losses exceed, or are expected to exceed, 50% of its FHCF Retention for a specific Loss Occurrence(s). 

		
	b. 
	Quarterly Proof of Loss Reports are due by June 30 from an insurer whose losses exceed, or are expected to exceed, 75% of its FHCF Retention for a specific Loss Occurrence(s). 

		
	c. 
	Quarterly Proof of Loss Reports are due by September 30 and quarterly thereafter from an insurer whose losses exceed, or are expected to exceed, its FHCF Retention for a specific Loss Occurrence(s). 

If the Company's Retention must be recalculated as the result of an exposure resubmission, and if the recalculated Retention changes the FHCF's reimbursement obligations, then the Company shall submit additional Proof of Loss Reports for recalculation of the FHCF's obligations. 
		
	4. 
	Annually after December 31 of the Contract Year, all Companies shall submit a mandatory year-end Proof of Loss Report for each Loss Occurrence, as applicable, using the most current data available. This Proof of Loss Report shall be filed no earlier than December 1 and no later than December 31 of each year and shall continue until the earlier of the commutation process described in (3)(d) below or until all claims and losses resulting from the Loss Occurrence are fully discharged including any adjustments to such losses due to salvage or other recoveries. 

		
	5. 
	The SBA, except as noted below, will determine and pay, within 30 days or as soon as practicable after receiving Proof of Loss Reports, the reimbursement amount due based on losses paid by the Company to date and adjustments to this amount based on subsequent quarterly information. The adjustments to reimbursement amounts shall require the SBA to pay, or the Company to return, amounts reflecting the most recent determination of losses. 

		
	a. 
	The SBA shall have the right to consult with all relevant regulatory agencies to seek all relevant information, and shall consider any other factors deemed relevant, prior to the issuance of reimbursements. 

		
	b. 
	The SBA shall require commercial self-insurance funds established under Section 624.462, Florida Statutes, to submit contractor receipts to support paid losses reported on a Proof of Loss Report, and the SBA may hire an independent consultant to confirm losses, prior to the issuance of reimbursements. 

		
	c. 
	The SBA shall have the right to conduct a claims examination prior to the issuance of any advances or reimbursements submitted by Companies that have been placed under regulatory supervision by a State or where control has been transferred through any legal or regulatory proceeding to a state regulator or court appointed receiver or rehabilitator.

		
	6. 
	All Proof of Loss Reports received will be compared with the FHCF's exposure data to establish the facial reasonableness of the reports. The SBA may also review the results of current and prior Contract Year exposure and loss examinations to determine the reasonableness of the reported losses. Except as noted in paragraph 4. above, Companies meeting these tests for reasonableness will be scheduled for reimbursement. Companies not meeting these tests for reasonableness will be handled on a case-by-case basis and will be contacted to provide specific information regarding their individual book of business. The discovery of errors in a Company's reported exposure under the Data Call may require a resubmission of the current Contract Year Data Call which, as the Data Call impacts the Company's Premium, Retention, and coverage for the Contract Year, will be required before the Company's request for reimbursement or an advance will be fully processed by the Administrator. 

		
	(c) 
	Loss Reimbursement Calculations 

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Rule 19-8.010 F.A.C.

		
	1. 
	In general, the Company's paid Ultimate Net Losses must exceed its full FHCF Retention for a specific Covered Event before any reimbursement is payable from the FHCF for that Covered Event. As described in Article V(28)(b), Retention adjustments will be made on or after December 31 of the Contract Year. No interest is payable on additional payments to the Company due to this type of Retention adjustment. Each Company sustaining reimbursable losses will receive the amount of reimbursement due under the Contract up to the amount of the Company's payout. If more than one Covered Event occurs in any one Contract Year, any reimbursements due from the FHCF shall take into account the Company's Retention for each Covered Event. However, the Company's reimbursements from the FHCF for all Covered Events occurring during the Contract Year shall not exceed, in aggregate, the Projected Payout Multiple or Payout Multiple, as applicable, times the individual Company's Reimbursement Premium for the Contract Year. 

		
	2. 
	In determining reimbursements under this Contract, the SBA shall reimburse each of the Companies, including entities created pursuant to Section 627.351(6), Florida Statutes, for the amount (if any) of reimbursement due under the individual Company's Contract, but not to exceed for all Loss Occurrences, an amount equal to the Projected Payout Multiple or the Payout Multiple, as applicable, times the individual Company's Reimbursement Premium for the Contract Year. 

		
	3. 
	Reserve established. When a Covered Event occurs in a subsequent Contract Year when reimbursable losses are still being paid for a Covered Event in a previous Contract Year, the SBA will establish a reserve for the outstanding reimbursable losses for the previous Contract Year, based on the length of time the losses have been outstanding, the amount of losses already paid, the percentage of incurred losses still unpaid, and any other factors specific to the loss development of the Covered Events involved. 

		
	(d) 
	Commutation 

		
	1. 
	Not less than 36 months or more than 60 months after the end of the Contract Year, the Company shall file a final Proof of Loss Report(s), with the exception of Companies having no reportable losses as described in paragraph (3)(d)1.a. below. Otherwise, the final Proof of Loss Report(s) is required as specified in paragraph (3)(d)1.b. below. The Company and SBA may mutually agree to initiate commutation after 36 months and prior to 60 months after the end of the Contract Year. The commutation negotiations shall begin at the later of 60 months after the end of the Contract Year or upon completion of the FHCF loss examination for the Company and the resolution of all outstanding examination issues. 

		
	a. 
	If the Company's most recently submitted Proof of Loss Report(s) indicate that it has no losses resulting from a Loss Occurrence(s) during the Contract Year, the SBA shall after 36 months request that the Company execute a final commutation agreement. The final commutation agreement shall constitute a complete and final release of all obligations of the SBA with respect to all claims and losses. If the Company chooses not to execute a final commutation agreement, the SBA shall be released from all obligations 60 months following the end of the Contract Year if no Proof of Loss Report(s) indicating reimbursable losses have been filed and the commutation shall be deemed concluded. However during this time, if the Company determines that it does have losses to report for FHCF reimbursement, the Company must submit an updated Proof of Loss Report(s) prior to the end of 60 months after the Contract Year and the Company shall be required to follow the commutation provisions and time frames otherwise specified in this section.

		
	b. 
	If the Company has submitted a Proof of Loss Report(s) indicating that it does have losses resulting from a Loss Occurrence(s) during the Contract Year, the SBA may require the Company to submit within 30 days an updated, current Proof of Loss Report(s) for each Loss Occurrence during the Contract Year. The Proof of Loss Report(s) must include all paid losses as well as all outstanding losses and incurred but not reported losses, which are not finally settled and which may be reimbursable losses under this Contract, and must be accompanied by supporting documentation (at a minimum an adjuster’s summary report or equivalent details) and a copy of a written opinion on the present value of the outstanding losses and incurred but not reported losses by the Company’s certifying actuary. Failure of the Company to provide an updated current Proof of Loss Report(s), supporting documentation, and an opinion by the date requested by the SBA may result in referral to the Office of Insurance Regulation for a violation of the Contract. Increases in reported paid, outstanding, or incurred but not reported losses on original or corrected Proof of Loss Report 

14                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

filings received later than 60 months after the end of the Contract Year shall not be eligible for reimbursement or commutation.
		
	2. 
	Determining the present value of outstanding claims and losses.

		
	a. 
	If the Company exceeds or expects to exceed its Retention, the Company and the SBA or their respective representatives shall attempt, by mutual agreement, to agree upon the present value of all outstanding claims and losses, both reported and incurred but not reported, resulting from Loss Occurrences during the Contract Year. Payment by the SBA of its portion of any amount or amounts so mutually agreed and certified by the Company’s certifying actuary shall constitute a complete and final release of the SBA in respect of all claims and losses, both reported and unreported, under this Contract.

		
	b.
	If agreement on present value cannot be reached within 90 days of the FHCF’s receipt of the final Proof of Loss Report(s) and supporting documentation, the Company and the SBA may mutually appoint an actuary, adjuster, or appraiser to investigate and determine such claims or losses. If both parties then agree, the SBA shall pay its portion of the amount so determined to be the present value of such claims or losses.

		
	c. 
	If the parties fail to agree, then any difference shall be settled by a panel of three actuaries, as provided in this paragraph.

		
	i. 
	One actuary shall be chosen by each party, and the third actuary shall be chosen by those two actuaries. If either party does not appoint an actuary within 30 days, the other party may appoint two actuaries. If the two actuaries fail to agree on the selection of an independent third actuary within 30 days of their appointment, each of them shall name two, of whom the other shall decline one and the decision shall be made by drawing lots.

		
	ii. 
	All of the actuaries shall be regularly engaged in the valuation of property claims and losses and shall be members of the Casualty Actuarial Society and of the American Academy of Actuaries.

		
	iii. 
	None of the actuaries shall be under the control of either party to this Contract.

		
	iv. 
	Each party shall submit its case to the panel in writing on the 30th day after the appointment of the third actuary. Following the submission of the case to the panel, the parties are prohibited from providing any further information or other communication except at the request of the panel. Such responses to requests from the panel must be in writing and simultaneously provided to the other party and all members of the panel, except that the panel may require the response to be provided in a meeting or teleconference attended by both parties and all members of the panel. 

		
	v. 
	The decision in writing of any two actuaries, when filed with the parties hereto, shall be final and binding on both parties. 

		
	d. 
	The reasonable and customary expense of the actuaries and of the commutation (as a result of b. and c. above) shall be equally divided between the two parties. Said commutation shall take place in Tallahassee, Florida, unless some other place is mutually agreed upon by the Company and the SBA. 

		
	(4) 
	Advances 

		
	(a) 
	In accordance with Section 215.555(4)(e), Florida Statutes, the SBA may make advances for loss reimbursements as defined herein, at market interest rates, to the Company in accordance with Section 215.555(4)(e), Florida Statutes. An advance is an early reimbursement which allows the Company to continue to pay claims in a timely manner. Advances will be made based on the Company's paid and reported outstanding losses for Covered Policies (excluding all incurred but not reported [IBNR] losses) as reported on a Proof of Loss Report, and shall include Loss Adjustment Expense Reimbursement as calculated by the FHCF. In order to be eligible for an advance, the Company must submit its exposure data for the Contract Year as required under paragraph (1) of this Article. Except as noted below, advances, if approved, will be made as soon as practicable after the SBA receives a written request, signed by two officers of the Company, for an advance of a specific amount and any other information required for the specific type of advance under subparagraphs (c) and (e) below. All reimbursements due to a Company shall be offset against any amount of outstanding advances plus the interest due thereon. 

15                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

		
	(b) 
	For advances or excess advances, which are advances that are in excess of the amount to which the Company is entitled, the market interest rate shall be the prime rate as published in the Wall Street Journal on the first business day of the Contract Year. This rate will be adjusted annually on the first business day of each subsequent Contract Year, regardless of whether the Company executes subsequent Contracts. In addition to the prime rate, an additional 5% interest charge will apply on excess advances. All interest charged will commence on the date the SBA issues a check for an advance and will cease on the date upon which the FHCF has received the Company's Proof of Loss Report(s) for the Covered Event(s) for which the Company qualifies for reimbursement(s). If such reimbursement(s) are less than the amount of outstanding advance(s) issued to the Company, interest will continue to accrue on the outstanding balance of the advance(s) until subsequent Proof of Loss Reports qualify the Company for reimbursement under any Covered Event equal to or exceeding the amount of any outstanding advance(s). Interest shall be billed on a periodic basis. If it is determined that the Company received funds in excess of those to which it was entitled, the interest as to those sums will not cease on the date of the receipt of the Proof of Loss Report but will continue until the Company reimburses the FHCF for the overpayment. 

		
	(c) 
	If the Company has an outstanding advance balance as of December 31 of this or any other Contract Year, the Company is required to have an actuary certify outstanding and incurred but not reported losses as reported on the applicable December Proof of Loss Report. 

		
	(d) 
	The specific type of advances enumerated in Section 215.555, Florida Statutes, follow. 

		
	1. 
	Advances to Companies to prevent insolvency, as defined under Article XIV of this Contract.

		
	a. 
	Section 215.555(4)(e)1., Florida Statutes, provides that the SBA shall advance to the Company amounts necessary to maintain the solvency of the Company, up to 50 percent of the SBA’s estimate of the reimbursement due to the Company.

		
	b. 
	In addition to the requirements outlined in subparagraph (4)(a) above, the requirements for an advance to a Company to prevent insolvency are that the Company demonstrates it is likely to qualify for reimbursement and that the immediate receipt of moneys from the SBA is likely to prevent the Company from becoming insolvent, and the Company provides the following information:

		
	i. 
	Current assets;

		
	ii. 
	Current liabilities other than liabilities due to the Covered Event;

		
	iii. 
	Current surplus as to policyholders;

		
	iv. 
	Estimate of other expected liabilities not due to the Covered Event; and 

		
	v. 
	Amount of reinsurance available to pay claims for the Covered Event under other reinsurance treaties.

		
	c. 
	The SBA’s final decision regarding an application for an advance to prevent insolvency shall be based on whether or not, considering the totality of the circumstances, including the SBA’s obligations to provide reimbursement for all Covered Events occurring during the Contract Year, granting an advance is essential to allowing the entity to continue to pay additional claims for a Covered Event in a timely manner.

		
	2. 
	Advances to entities created pursuant to Section 627.351(6), Florida Statutes.

		
	a. 
	Section 215.555(4)(e)2., Florida Statutes, provides that the SBA may advance to an entity created pursuant to Section 627.351(6), Florida Statutes, up to 90% of the lesser of the SBA’s estimate of the reimbursement due or the entity’s share of the actual aggregate Reimbursement Premium for that Contract Year, multiplied by the current available liquid assets of the FHCF.

		
	b. 
	In addition to the requirements outlined in subparagraph (4)(a) above, the requirements for an advance to entities created pursuant to Section 627.351(6), Florida Statutes, are that the entity must demonstrate to the SBA that the advance is essential to allow the entity to pay claims for a Covered Event.

		
	3. 
	Advances to limited apportionment companies.

Section 215.555(4)(e)3., Florida Statutes, provides that the SBA may advance the amount of estimated reimbursement payable to limited apportionment companies.
		
	(e) 
	In determining whether or not to grant an advance and the amount of an advance, the SBA:

		
	1. 
	Shall determine whether its assets available for the payment of obligations are sufficient and sufficiently liquid to fulfill its obligations to other Companies prior to granting an advance;

16                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

		
	2. 
	Shall review and consider all the information submitted by such Companies;

		
	3. 
	Shall review such Companies’ compliance with all requirements of Section 215.555, Florida Statutes;

		
	4. 
	Shall consult with all relevant regulatory agencies to seek all relevant information;

		
	5. 
	Shall review the damage caused by the Covered Event and when that Covered Event occurred;

		
	6. 
	Shall consider whether the Company has substantially exhausted amounts previously advanced;

		
	7. 
	Shall consider any other factors deemed relevant; and

		
	8. 
	Shall require commercial self-insurance funds established under section 624.462, Florida Statutes, to submit a copy of written estimates of expenses in support of the amount of advance requested.

		
	(f) 
	Any amount advanced by the SBA shall be used by the Company only to pay claims of its policyholders for the Covered Event or Covered Events which have precipitated the immediate need to continue to pay additional claims as they become due.

		
	(5) 
	Delinquent Payments 

Failure to submit a payment when due is a violation of the terms of this Contract and Section 215.555, Florida Statutes. Interest on late payments shall be due as set forth in Article VIII(2) and Article IX(2) of this Contract. 
		
	(6) 
	Inadequate Data Submissions 

If exposure data or other information required to be reported by the Company under the terms of this Contract is not received by the FHCF in the format specified by the FHCF or is inadequate to the extent that the FHCF requires resubmission of data, the Company will be required to pay the FHCF a resubmission fee of $1,000 for resubmissions that are not a result of an examination by the SBA. If a resubmission is necessary as a result of an examination report issued by the SBA, the first resubmission fee will be $2,000. If the Company's examination-required resubmission is inadequate and the SBA requires an additional resubmission(s), the resubmission fee for each subsequent resubmission shall be $2,000. A resubmission of exposure data may delay the processing of the Company's request for reimbursement or an advance. 
		
	(7) 
	Delinquent Submissions 

Failure to submit an exposure submission, resubmission, loss report, or commutation documentation when due is a violation of the terms of this Contract and Section 215.555, Florida Statutes. 
		
	(8) 
	Confidential Information/Trade Secret Information 

Pursuant to the provisions of Section 215.557, Florida Statutes, the reports of insured values under Covered Policies by ZIP Code submitted to the SBA pursuant to Section 215.555, Florida Statutes, are confidential and exempt from the provisions of Section 119.07(1), Florida Statutes, and Section 24(a), Art. I of the State Constitution. If other information submitted by the Company to the FHCF could reasonably be ruled a trade secret as defined in Section 812.081, Florida Statutes, such information must be clearly marked Trade Secret Information. 

ARTICLE XI - TAXES
 
In consideration of the terms under which this Contract is issued, the Company agrees to make no deduction in respect of the Premium herein when making premium tax returns to the appropriate authorities. Should any taxes be levied on the Company in respect of the Premium herein, the Company agrees to make no claim upon the SBA for reimbursement in respect of such taxes. 

ARTICLE XII - ERRORS AND OMISSIONS
 
Any inadvertent delay, omission, or error on the part of the SBA shall not be held to relieve the Company from any liability which would attach to it hereunder if such delay, omission, or error had not been made. 

ARTICLE XIII - INSPECTION OF RECORDS
 
The Company shall allow the SBA to inspect, examine, and verify, at reasonable times, all records of the Company relating to the Covered Policies under this Contract, including Company files concerning claims, losses, or legal proceedings regarding subrogation or claims recoveries which involve this Contract, including premium, loss records and reports involving exposure data or losses under Covered Policies. This right by the SBA to inspect, examine, and verify shall survive the completion and closure of an exposure examination or loss examination file and the termination of the Contract. The Company shall have no right to re-open an exposure or loss reimbursement examination once 

17                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

closed and the findings have been accepted by the Company; any re-opening shall be at the sole discretion of the SBA. If the FHCF Finance Corporation has issued revenue bonds and relied upon the exposure and loss data submitted and certified by the Company as accurate to determine the amount of bonding needed, the SBA may choose not to require, or accept, a resubmission if the resubmission will result in additional reimbursements to the Company. The SBA may require any discovered errors, inadvertent omissions, and typographical errors associated with the data reporting of insured values, discovered prior to the closing of the file and acceptance of the examination findings by the Company, to be corrected to reflect the proper values. The Company shall retain its records in accordance with the requirements for records retention regarding exposure reports and claims reports outlined herein, and in any administrative rules adopted pursuant to Section 215.555, Florida Statutes. Companies writing covered collateral protection policies, as defined in definition (10)(d) of Article V herein, must be able to provide documentation that the policy covers personal residences, protects both the borrower’s and lender’s interest, and that the coverage is in an amount at least equal to the coverage for the dwelling in place under the lapsed homeowner’s policy.
		
	(1) 
	Purpose of FHCF Examination

The purpose of the examinations conducted by the SBA is to evaluate the accuracy of the FHCF exposure or loss data reported by the Company. However, due to the limited nature of the examination, it cannot be relied upon as an assurance that a company’s data is reported accurately or in its entirety. The company should not rely on the FHCF to identify every type of reporting error in its data. In addition, the reporting requirements are subject to change each Contract Year so it is the Company’s responsibility to be familiar with the applicable Contract Year requirements and to incorporate any changes into its data for that Contract Year. It is also the Company’s responsibility to ensure that its data is reported accurately and to comply with Florida Statutes and any applicable rules when reporting exposure data. The examination report is not intended to provide a legal determination of the Company’s compliance.
		
	(2) 
	Examination Requirements for Exposure Verification

The Company shall retain complete and accurate records, in policy level detail, of all exposure data submitted to the SBA in any Contract Year until the SBA has completed its examination of the Company’s exposure submissions. The Company shall also retain complete and accurate records of any completed exposure examination for any Contract Year in which the Company incurred losses until the completion of the loss reimbursement examination for that Contract Year. The records to be retained shall include the exam file which supports the exposure reported to the SBA and any other information which would allow for a complete examination of the Company’s reported exposure data. The exam file shall be prepared according to the SBA Exam File Specifications outlined in the Data Call. The Company must also have available, at the time of the examination, a copy of its underwriting manual, a copy of its rating manual, and staff to respond to the questions of the SBA or its agents. The Company is also required to retain declarations pages and policy applications to support reported exposure. To meet the requirement that the application must be retained, the Company may retain either the actual application or may retain the actual application in an electronic format. A complete list of records to be retained is set forth in Form FHCF-EAP1, adopted for the Contract Year under Rule 19-8.030, F.A.C.
		
	(3) 
	Examination Requirements for Loss Reports

The Company shall retain complete and accurate records of all reported losses and/or advances submitted to the SBA until the SBA has completed its examination of the Company’s reimbursable losses and commutation for the Contract Year (if applicable) has been concluded. The records to be retained are set forth as part of the Proof of Loss Report, Form FHCF-L1B, adopted for the Contract Year under Rule 19-8.029, F.A.C., and Form FHCF-LAP1, adopted for the Contract Year under Rule 19-8.030, F.A.C. 
		
	(4) 
	Examination Procedures

		
	(a) 
	The FHCF will send an examination notice to the Company providing the commencement date of the examination, the site of the examination, any accommodation requirements of the examiner, and the reports and data which must be assembled by the Company and forwarded to the FHCF upon request. The Company shall be prepared to choose one location in which to be examined, unless otherwise specified by the SBA.

		
	(b) 
	The reports and data are required to be forwarded to the FHCF as set forth in an examination notice letter. The information is then forwarded to the examiner. If the FHCF receives accurate and complete records as requested, the examiner will contact the Company to inform the Company as to what policies or other documentation will be required once the examiner is on site. Any records not required to be provided to the examiner in advance shall be made available at the time the examiner arrives on site. Any records to support reported losses which are provided after the examiner has left the work-site will, at the SBA’s discretion, 

18                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

result in an additional examination of exposure and/or loss records or an extension or expansion of the examination already in progress. All costs associated with such additional examination or with the extension or expansion of the original examination shall be borne by the Company.
		
	(c) 
	At the conclusion of the examiner’s work and the management review of the examiner’s report, findings, recommendations, and work papers, the FHCF will forward an examination report to the Company and require a response from the Company by a date certain as to the examination findings and recommendations.

		
	(d) 
	If the Company accepts the examination findings and recommendations, and there is no recommendation for additional information, the examination report will be finalized and the exam file closed.

		
	(e) 
	If the Company disputes the examiner’s findings, the areas in dispute will be resolved by a meeting or a conference call between the Company and FHCF management.

		
	(f)    1. 
	If the recommendation of the examiner is to resubmit the Company’s exposure data for the Contract Year in question, then the FHCF will send the Company a letter outlining the process for resubmission and including a deadline to resubmit. The resubmission will include a data file to be submitted to the FHCF’s Administrator and an exam file to be submitted to the offices of the SBA. The resubmission is also required to be accompanied by a detailed written description of the specific changes made to the resubmitted data. Once the resubmission is received by the FHCF’s Administrator, the FHCF’s Administrator calculates a revised Reimbursement Premium for the Contract Year which has been examined. The SBA shall then review the resubmission with respect to the examiner’s findings, and accept the resubmission or contact the Company with any questions regarding the resubmission. Once the SBA has accepted the resubmission as a sufficient response to the examiner’s findings, the exam is closed.

		
	2. 
	If the recommendation of the examiner is either to resubmit the Company’s exposure data for the Contract Year in question or giving the option to pay the estimated Premium difference, then the FHCF will send the Company a letter outlining the process for resubmission or for paying the estimated Premium difference and including a deadline for the resubmission or the payment to be received by the FHCF’s Administrator. If the Company chooses to resubmit, the same procedures outlined in Article XIII(3)(f)1. apply.

		
	(g) 
	If the recommendation of the examiner is to update the Company’s Proof of Loss Report(s) for the Contract Year under review, the FHCF will send the Company a letter outlining the process for submitting the Proof of Loss Report(s) and including a deadline to file. The updated Proof of Loss Report(s) will be submitted to the FHCF’s Administrator with a copy of the Proof of Loss Report(s) and a supporting detailed claims listing to be submitted to the offices of the SBA. The report is required to be accompanied by a detailed written description of the specific changes made. Once the Proof of Loss Report(s) is received by the FHCF Administrator, the FHCF’s Administrator will calculate a revised reimbursement. The SBA shall then review the submitted Proof of Loss Report(s) with respect to the examiner’s findings, and accept the Proof of Loss Report(s) as filed or contact the Company with any questions. Once the SBA has accepted the corrected Proof of Loss Report(s) as a sufficient response to the examiner’s findings, the exam is closed.

		
	(h) 
	The examiner’s list of errors is made available in the examination report sent to the Company. Given that the examination was based on a sample of the Company’s policies or claims rather than the whole universe of the Company’s Covered Policies or reported claims, the error list is not intended to provide a complete list of errors but is intended to indicate what information needs to be reviewed and corrected throughout the Company’s book of Covered Policy business or claims information to ensure more complete and accurate reporting to the FHCF.

		
	(5) 
	Costs of the Examinations

The costs of the examinations shall be borne by the SBA. However, in order to remove any incentive for a Company to delay preparations for an examination, the SBA shall be reimbursed by the Company for any examination expenses incurred in addition to the usual and customary costs, which additional expenses were incurred as a result of the Company’s failure, despite proper notice, to be prepared for the examination or as a result of a Company’s failure to provide requested information. All requested information must be complete and accurate.

19                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

ARTICLE XIV - INSOLVENCY OF THE COMPANY

Company shall notify the FHCF immediately upon becoming insolvent. Except as otherwise provided below, no covered loss reimbursements will be made until the FHCF has completed and closed its examination of the insolvent Company’s losses, unless an agreement is entered into by the court appointed receiver specifying that all data and computer systems required for FHCF exposure and loss examinations will be maintained until completion of the Company’s exposure and loss examinations. Except as otherwise provided below, in order to account for potential erroneous reporting, the SBA shall hold back 25% of requested loss reimbursements until the exposure and loss examinations for the Company are completed. Only those losses supported by the examination will be reimbursed. Pursuant to Section 215.555(4)(g), Florida Statutes, the FHCF is required to pay the “net amount of all reimbursement moneys” due an insolvent insurer to the Florida Insurance Guaranty Association (FIGA) for the benefit of Florida policyholders. For the purpose of this Contract, a Company is insolvent when an order of liquidation with a finding of insolvency has been entered by a court of competent jurisdiction. In light of the need for an immediate infusion of funds to enable policyholders of insolvent companies to be paid for their claims, the SBA may enter into agreements with FIGA allowing exposure and loss examinations to take place immediately without the usual notice and response time limitations and allowing the FHCF to make loss reimbursements (net of any amounts payable to the SBA from the Company or FIGA) to FIGA before the examinations are completed and before the response time expires for claims filing by reinsurers and financial institutions, which have a priority interest in those funds pursuant to Section 215.555(4)(g), Florida Statutes. Such agreements must ensure the availability of the necessary records and adequate security must be provided so that if the FHCF determines that it overpaid FIGA on behalf of the Company, or if claims are filed by reinsurers or financial institutions having a priority interest in these funds, that the funds will be repaid to the FHCF by FIGA within a reasonable time.

ARTICLE XV - TERMINATION

The FHCF and the obligations of both parties under this Contract can be terminated only as may be provided by law or applicable rules.

ARTICLE XVI - VIOLATIONS

Pursuant to the provisions of Section 215.555(10), Florida Statutes, any violation of the terms of this Contract by the Company constitutes a violation of the Insurance Code of the State of Florida. Pursuant to the provisions of Section 215.555(11), Florida Statutes, the SBA is authorized to take any action necessary to enforce any administrative rules adopted pursuant to Section 215.555, Florida Statutes, and the provisions and requirements of this Contract.

ARTICLE XVII - APPLICABLE LAW

This Contract shall be governed by and construed according to the laws of the State of Florida in respect of any matter relating to or arising out of this Contract.

ARTICLE XVIII – REIMBURSEMENT CONTRACT ELECTIONS

		
	(1) 
	Reimbursement Percentage

For purposes of determining reimbursement (if any) due the Company under this Contract and in accordance with the Statute, the Company has the option to elect a 45% or 75% or 90% reimbursement percentage under this Contract. If the Company is a member of an NAIC group, all members must elect the same reimbursement percentage, and the individual executing this Contract on behalf of the Company, by placing his or her initials in the box under (a) below, affirms that the Company has elected the same reimbursement percentage as all members of its NAIC group. If the Company is an entity created pursuant to Section 627.351, Florida Statutes, the Company must elect the 90% reimbursement percentage. The Company shall not be permitted to change its reimbursement percentage during the Contract Year. The Company shall be permitted to change its reimbursement percentage at the beginning of a new Contract Year, but may not reduce its reimbursement percentage if a Covered Event required the issuance of revenue bonds, until the bonds have been fully repaid.

20                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

    
IMPORTANT NOTE: The State Board of Administration Finance Corporation has issued revenue bonds as a result of its liabilities for Covered Events under the Contract Year effective June 1, 2005. As those bonds have not been fully repaid, the Company may not select a Reimbursement Percentage that is less than its selection under the prior Contract Year effective June 1, 2013.
    
    
The Reimbursement Percentage elected by the Company for the prior Contract Year effective June 1, 2013 was as follows: United Property and Casualty Insurance Company - 90%

		
	(a) 
	NAIC Group Affirmation: Initial the following box if the Company is part of an NAIC Group:

	
		
	 	BBM

	 

		
	(b) 
	Reimbursement Percentage Election: The Company hereby elects the following Reimbursement Percentage for the Contract Year from 12:00:01 a.m., Eastern Time, June 1, 2015, to 12:00 a.m., Eastern Time, May 31, 2016, (the individual executing this Contract on behalf of the Company shall place his or her initials in the box to the left of the percentage elected for the Company): 

	
									
	 
	 
	 
	 
	 
	 
	BBM
	 

	 
	45%
	OR
	 
	75%
	OR
	90
	%

		
	(2)
	Reporting Exposure for a Single Structure, with a Mix of Commercial Habitational and Commercial Non-Habitational Exposure, Written on a Commercial Policy 

This section is applicable to all Companies which either have exposure for single structures with a mix of commercial habitational and commercial non-habitational exposure written under a Commercial Policy, or have the authority to write such policies. If the Company does not have the authority to write this type of exposure, this section does not apply; initial the N/A box on the next page, which completes this section of ARTICLE XVIII. If the Company does write, or has the authority to write, this type of exposure, please read and complete the remainder of this section.

For the purpose of determining the predominant use of mixed-use single structures under this Contract, the FHCF considers predominant use to be greater than 50% of the total insured value of the structure as justified by the company on the basis of number of floors, square footage, or other reasonable methodology presented to the Administrator (e.g., a classification plan explaining how predominance is determined, and likely to include commercial residential and commercial non-residential or business class codes) for approval prior to the Data Call submission under this Contract.  Exposure shall be reported under the Company's Data Call in accordance with the following: 

Predominant Use is Dwelling or Habitational Occupancies
If a single structure is used for both habitational and non-habitational purposes and the predominant use is dwelling or habitational occupancies, the entire exposure for the structure should be reported to the FHCF under the Data Call, and the FHCF will reimburse losses for the entire structure. 

Predominant Use is Non-Dwelling or Non-Habitational Occupancies 
If a single structure is used for both habitational and non-habitational purposes and the predominant use is non-dwelling or non-habitational occupancies, the habitational portion of that structure should be identified and reported to the FHCF under the Data Call. 
    

21                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

However, in recognition of the unusual nature of commercial structures with incidental habitational exposure and the hardship some companies may face in having to carve out such incidental habitational exposure, as well as the losses to such structures, the FHCF will accommodate these companies by allowing them to exclude the entire exposure for the single structure from their Data Call submission, providing the following two conditions are met: 
		
	(a) 
	The decision to not carve out and report the incidental habitational exposure shall apply to all such structures insured by the Company; and 

		
	(b) 
	If the incidental habitational exposure is not reported to the FHCF, the Company agrees it shall not report losses to the structure and the FHCF shall not reimburse any losses to the structure. 

    
Initial the CARVING box below if the Company is able to carve out and report its incidental habitational exposure, OR, if this requirement presents a hardship, the Company must communicate its decision to not carve out and to not report the incidental exposure by having the individual executing this Contract on behalf of the Company placing his or her initials in the NOT CARVING box below. If the Company does not currently write such policies, but has the authority to write such policies after the start date of this Contract, the decision to carve or not carve out the incidental habitational exposure must be indicated below. 

	
			
	BBM
	 
	 

	OR
	 

	 
	 

	CARVING
	 
	NOT CARVING

By initialing the CARVING or NOT CARVING box above, the Company is making an irrevocable decision for the corresponding Contract Year Data Call submission and any subsequent resubmissions. 

Important Note: Since this election will impact your Data Call submission, please share this decision with the individual(s) responsible for compiling your Data Call submission. 

		
	(3) 
	Additional Living Expense (ALE) Written as Time Element Coverage 

If your Company writes Covered Policies that provide ALE coverage on a time element basis (i.e., coverage is based on a specific period of time as opposed to a stated dollar limit), you must initial the 'Yes - Time Element ALE' box below. If your Company does not write time element ALE coverage, initial 'No - Time Element ALE' box below. 

	
			
	 
	 
	BBM

	 
	OR

	 
	 

	Yes - Time
	 
	No - Time

	Element ALE
	 
	Element ALE

22                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

ARTICLE XIX - SIGNATURES 
Approved by: 

Florida Hurricane Catastrophe Fund 
By: State Board of Administration of the State of Florida 

By: __________________________________________ ______________________________ 
Ashbel C. Williams                             Date 
Executive Director & CIO 

Approved as to legality: 

By: __________________________________________ _____________________________ 
                         Date 

______________________________________________ 
United Property and Casualty Insurance Company

                                             B. Bradford Martz, Chief Financial Officer                                                   
                                            Typed/Printed Name and Title 

By: /s/ B. Bradford Martz                        3/2/15         
Signature                               Date

 

23                                                                        FHCF-2015K
Rule 19-8.010 F.A.C.

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