Document:

Exhibit 10.1

 

VENTURE LOAN AND SECURITY
AGREEMENT

 

Dated as of March 29, 2019

 

by and among

 

HORIZON TECHNOLOGY FINANCE
CORPORATION,

a Delaware corporation

312 Farmington Avenue

Farmington, CT 06032

 

as a Lender and Collateral
Agent

 

And

 

MUSTANG BIO, INC.,

a Delaware corporation

377 Plantation Street

Worcester, MA 01605

 

as Borrower

 

Loan A Commitment Amount:
$5,000,000

 

Loan B Commitment Amount:
$5,000,000

 

Loan C Commitment Amount:
$5,000,000

 

Loan D Commitment Amount:
$5,000,000

 

Loan A Commitment Termination
Date:        March 31, 2019

 

Loan B Commitment Termination
Date:         March 31, 2019

 

Loan C Commitment Termination
Date:         March 31, 2019

 

Loan D Commitment Termination
Date:         March 31, 2020

 

    	 

     

    

 

The Lender, Collateral Agent and Borrower hereby
agree as follows:

 

AGREEMENT

 

1.  Definitions
and Construction.

 

1.1 Definitions.
As used in this Agreement, the following capitalized terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

 

“Account Control
Agreement” means an agreement reasonably acceptable to Lender which perfects via control Lender’s and Collateral
Agent’s security interest in Borrower’s deposit accounts and/or securities accounts.

 

“Affiliate”
means, with respect to any Person, any other Person that owns or controls directly or indirectly twenty percent (20%) or more of
the stock of another entity of such Person, or any other Person that controls or is controlled by or is under common control with
such Person and each of such Person’s officers, directors, managers, joint venturers or partners. For purposes of this definition,
the term “control” of a Person means the possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of such Person, whether through the ownership of voting Equity Securities, by contract or otherwise
and the terms “controlled by” and “under common control with” shall have correlative meanings.

 

“Agreement”
means this certain Venture Loan and Security Agreement by and among Borrower, Collateral Agent and Lender dated as of the date
on the cover page hereto (as it may from time to time be amended, modified or supplemented in a writing signed by Borrower, Collateral
Agent and Lender).

 

“Anti-Terrorism
Laws” means any laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September
24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

 

“Borrower”
means Borrower as set forth on the cover page of this Agreement.

 

“Business Day”
means any day that is not a Saturday, Sunday, or other day on which banking institutions are authorized or required to close in
Connecticut or Massachusetts.

 

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“Cash Equivalents”
means: (a) (i) Dollars held by any Borrower in the ordinary course of business; (b) securities issued or directly and fully guaranteed
or insured by the United States, or, any agency or instrumentality thereof, having maturities of not more than two (2) years from
the date of acquisition; (c) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances issued
by any bank or trust company in each case subject to regulation by the Federal Deposit Insurance Corporation; (d) repurchase obligations
for underlying securities of the types described in clauses (b) and (c) entered into with any Person referenced in clause (c) above;
(e) commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by S&P or
“P-2” or the equivalent thereof by Moody’s; (f) readily marketable direct obligations issued by any state, commonwealth
or territory of the United States of America, or any political subdivision or taxing authority thereof, in each case, having one
of the two highest rating categories obtainable from either Moody’s or S&P with maturities of not more than two years
from the date of acquisition; (g) interests in any investment company or money market fund or enhanced high yield fund which invests
a majority of its assets in instruments of the type specified in clauses (a) through (f) above; and (h) any other Investments in
cash equivalents as described in Borrower’s investment policy, as such investment policy has been approved by Lender in writing.

 

“Claim”
has the meaning given such term in Section 10.3 of this Agreement.

 

“Code”
means the Uniform Commercial Code as adopted and in effect in the State of Connecticut, as amended from time to time; provided
that if by reason of mandatory provisions of law, the creation and/or perfection or the effect of perfection or non-perfection
of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than
the State of Connecticut, the term “Code” shall also mean the Uniform Commercial Code as in effect from time to time
in such jurisdiction for purposes of the provisions hereof relating to such creation, perfection or effect of perfection or non-perfection.

 

“Collateral”
has the meaning given such term in Section 4.1 of this Agreement.

 

“Collateral Agent”
means Horizon, or any successor collateral agent appointed by Lenders.

 

“Commitment Amount”
means the Loan A Commitment Amount, the Loan B Commitment Amount, the Loan C Commitment Amount or the Loan D Commitment Amount,
as applicable.

 

“Commitment Fee”
has the meaning given such term in Section 2.6(c) of this Agreement.

 

“Consolidated”
means the consolidation of accounts in accordance with GAAP.

 

“Default”
means any Event of Default or any event which with the passing of time or the giving of notice or both would become an Event of
Default hereunder.

 

“Default Rate”
means the per annum rate of interest equal to five percent (5%) over the Loan Rate, but such rate shall in no event be more than
the highest rate permitted by applicable law to be charged on commercial loans in a default situation.

 

“Disclosure Schedule”
means Exhibit A attached hereto (as the same may be updated from time to time).

 

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“Disqualified
Lender” means any financial institutions, investors or competitors (and any Affiliates thereof clearly identifiable as
such solely on the basis of the name thereof) designated in writing by Borrower to Lender on or prior to the date of this Agreement
or, upon the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed, as designated in writing
from time to time after the date of this Agreement; provided, that any subsequent designation of a competitor as a “Disqualified
Lender” hereunder shall not retroactively apply to disqualify any Persons that have acquired an interest in the Loans prior
to the date of such designation; provided further that Disqualified Lenders shall exclude any Person that Borrower has designated
as no longer being a Disqualified Lender by written notice delivered to Lender from time to time.

 

“Environmental
Laws” means all foreign, federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements
with, any Governmental Authorities, in each case relating to environmental, health, safety and land use matters, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act
and the Emergency Planning and Community Right-to-Know Act.

 

“Equity Securities”
of any Person means (a) all common stock, preferred stock, participations, shares, partnership interests, membership interests
or other equity interests in and of such Person (regardless of how designated and whether or not voting or non-voting) and (b)
all warrants, options and other rights to acquire any of the foregoing.

 

“ERISA”
has the meaning given to such term in Section 7.12 of this Agreement.

 

“Event of Default”
has the meaning given to such term in Section 8 of this Agreement.

 

“Excluded Accounts”
means any deposit accounts, securities accounts or other similar accounts (i) into which there are deposited no funds other than
those intended solely to cover wages and employee benefit payments for employees (and related contributions to be made on behalf
of such employees to health and benefit plans), provided, however that the amount on deposit in such accounts does not exceed the
amount necessary to fund one complete payroll cycle of Borrower, plus balances for outstanding checks for wages from prior periods;
(ii) constituting employee withholding accounts and containing only funds deducted from pay otherwise due to employees for services
rendered to be applied toward the tax obligations of such employees; (iii) into which there are deposited no funds other than funds
constituting cash collateral in accordance with clause (j) of the definition of Permitted Liens; and (iv) other deposit accounts,
securities accounts or similar accounts if the amount on deposit and value in security in such account does not exceed $5,000 individually
or $25,000 in the aggregate.

 

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“Excluded Collateral”
means (i) any property and assets the pledge of which would require governmental consent, approval, license or authorization or
is prohibited or restricted by applicable law (after giving effect to the applicable anti-assignment provisions of the Code or
other applicable law), (ii) any lease, license or agreement to the extent that a grant of a security interest therein would violate
or invalidate such lease, license or agreement or create a right of termination in favor of any other party thereto or otherwise
require consent thereunder (after giving effect to the applicable anti-assignment provisions of the Code or other applicable law),
the assignment of which is expressly deemed effective under the Code or other applicable law notwithstanding such prohibition (only
so long as such consent has not been obtained and such prohibition exists and only to the extent prohibition is not created in
contemplation of such grant), (iii) motor vehicles, airplanes and other assets subject to certificates of title (except to the
extent a security interest therein can be perfected by the filing of UCC financing statements), (iv) letter of credit rights (other
than those constituting supporting obligations of other Collateral) of Borrower below a threshold of $100,000 and commercial tort
claims of Borrower below a threshold of $100,000, (v) all Intellectual Property, (vi) equipment or other assets otherwise constituting
Collateral owned by Borrower on the date hereof or hereafter acquired that is subject to a Lien securing purchase money Indebtedness
or capital lease obligations permitted to be incurred pursuant to the provisions of this Agreement if the contract or other agreement
in which such Lien is granted (or the documentation providing for such purchase money Indebtedness or capital lease obligations)
validly prohibits the creation of any other Lien on such equipment or such other asset, (vii) Excluded Accounts, and (viii) nonassignable
licenses or contracts, which by their terms require 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, 9407 and 9408 of
the Code).

 

“Foreign Subsidiary”
means any Subsidiary other than a Subsidiary organized under the laws of any state within the United States of America.

 

“Founders Agreement”
means that certain Second Amended and Restated Founders Agreement, dated July 26, 2016, by and between Borrower and Fortress
Biotech, Inc.

 

“Funding Certificate”
means a certificate executed by a duly authorized Responsible Officer of Borrower substantially in the form of Exhibit B
or such other form as Lender may agree to accept.

 

“Funding Date”
means any date on which a Loan is made to or on account of Borrower under this Agreement.

 

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

 

“Good Faith Deposit”
has the meaning given such term in Section 2.6(a) of this Agreement.

 

“Governmental
Authority” means (a) any federal, state, county, municipal or foreign government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public
body, or (c) any court or administrative tribunal.

 

“Hazardous Materials”
means all those substances which are regulated by, or which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant, contaminant, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, or petroleum or petroleum derived substance or waste.

 

“Horizon”
means Horizon Technology Finance Corporation.

 

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“Indebtedness”
means, with respect to any Person, the aggregate amount of, without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations
of such Person to pay the deferred purchase price of property or services (excluding trade payables aged less than one hundred
eighty (180) days or being contested, challenged or disputed in good faith), (d) all capital lease obligations of such Person (other
than any such leases which in accordance with GAAP, as in effect on or prior to December 31, 2018, were not required to be capitalized),
(e) all obligations or liabilities of others secured by a Lien on any asset of such Person, whether or not such obligation or liability
is assumed, (f) all obligations or liabilities of others in the nature of Indebtedness set forth in clauses (a), (b), (c), (d),
(e), and (g) of this definition, guaranteed by such Person, and (g) any other obligations or liabilities which are required by
GAAP to be shown as debt on the balance sheet of such Person.

 

“Indemnified Person”
has the meaning given such term in Section 10.3 of this Agreement.

 

“Intellectual
Property” means, with respect to any Person, all of such Person’s right, title and interest in and to patents,
patent rights (and applications and registrations therefor and divisions, continuations, renewals, reissues, extensions and continuations-in-part
of the same), trademarks and service marks (and applications and registrations therefor and the goodwill associated therewith),
whether registered or not, inventions, copyrights (including applications and registrations therefor and like protections in each
work or authorship and derivative work thereof), whether published or unpublished, mask works (and applications and registrations
therefor), trade names, trade styles, software and computer programs, source code, object code, trade secrets, licenses, methods,
processes, know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research
and development, all whether now owned or subsequently acquired or developed by such Person and whether in tangible or intangible
form or contained on magnetic media readable by machine together with all such magnetic media (but not including embedded computer
programs and supporting information included within the definition of “goods” under the Code).

 

“Interest Only
Extension Milestone” means Borrower providing Lender with evidence reasonably satisfactory to Lender that Borrower has
(a) on or before October 1, 2020 filed an Investigational New Drug Application with the United States Food and Drug Administration
with respect to Borrower’s multicenter pivotal Phase 1/2 trial for CS1 directed CAR-T (MB-104) and (b) as of October 1, 2020,
has cash and Cash Equivalents on deposit in accounts over which Lender maintains an Account Control Agreement in an aggregate amount
of not less than Twenty Million Dollars ($20,000,000).

 

“Internal Revenue
Code” has the meaning given such term in Section 5.19 of this Agreement.

 

“Investment”
means the purchase or acquisition of any capital stock, equity interest, or any obligations or other securities of, or any interest
in, any Person, or the extension of any advance, loan, extension of credit or capital contribution to, or any other investment
in, or deposit with, any Person.

 

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“Landlord Agreement”
means an agreement substantially in the form provided by Lender to Borrower or such other form as Lender may agree to accept.

 

“Lender”
means the Lender as set forth on the cover page of this Agreement.

 

“Lender’s
Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in
connection with the preparation, negotiation, documentation, drafting, amendment, modification, administration, perfection and
funding of the Loan Documents; and all of Lender’s attorneys’ fees, costs and expenses incurred in enforcing or defending
the Loan Documents (including fees and expenses of appeal or review), including the exercise of any rights or remedies afforded
hereunder or under applicable law, whether or not suit is brought, whether before or after bankruptcy or insolvency, including
all fees and costs incurred by Lender in connection with such Lender’s enforcement of its rights in a bankruptcy or insolvency
proceeding filed by or against Borrower, any Subsidiary or their respective Property.

 

“LIBOR Rate”
means, for a given date of determination, the one-month LIBOR Rate (rounded to the nearest one hundredth percent) reported in the
Wall Street Journal on such date.

 

“Lien”
means any voluntary or involuntary security interest, pledge, bailment, lease, mortgage, hypothecation, conditional sales and title
retention agreement, encumbrance or other lien with respect to any Property in favor of any Person.

 

“Loan”
means each advance of credit by Lender to Borrower under this Agreement.

 

“Loan A”
means the advance of credit by Lender to Borrower under this Agreement in the Loan A Commitment Amount.

 

“Loan A Commitment
Amount” has the meaning set forth on the cover page of this Agreement.

 

“Loan A Commitment
Termination Date” has the meaning set forth on the cover page of this Agreement.

 

“Loan A Final
Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan Amortization
Date” means, with respect to each Loan, the Payment Date on which Borrower is required, pursuant to Section 2.2 (a)
below, to commence making equal payments of principal plus accrued interest on the outstanding principal amount of such Loan.

 

“Loan B”
means the advance of credit by Lender to Borrower under this Agreement in the Loan B Commitment Amount.

 

“Loan B Commitment
Amount” has the meaning set forth on the cover page of this Agreement.

 

“Loan B Commitment
Termination Date” has the meaning set forth on the cover page of this Agreement.

 

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“Loan B Final
Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan C”
means the advance of credit by Lender to Borrower under this Agreement in the Loan C Commitment Amount.

 

“Loan C Commitment
Amount” has the meaning set forth on the cover page of this Agreement.

 

“Loan C Commitment
Termination Date” has the meaning set forth on the cover page of this Agreement.

 

“Loan C Final
Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan D”
means the advance of credit by Lender to Borrower under this Agreement in the Loan D Commitment Amount.

 

“Loan D Commitment
Amount” has the meaning set forth on the cover page of this Agreement.

 

“Loan D Commitment
Termination Date” has the meaning set forth on the cover page of this Agreement.

 

“Loan D Final
Payment” has the meaning given such term in Section 2.2(g) of this Agreement.

 

“Loan Documents”
means, collectively, this Agreement, the Notes, the Warrants, any Landlord Agreement, any Account Control Agreement and all other
documents, instruments and agreements entered into in connection with this Agreement.

 

“Loan Rate”
means, with respect to each Loan, the per annum rate of interest equal to 9.00% plus the amount by which the one month LIBOR
Rate (rounded to the nearest one hundredth percent), as reported in the Wall Street Journal exceeds 2.50%, provided, however
that to the extent LIBOR (a) is no longer reported in the Wall Street Journal, (b) is no longer widely used as a benchmark
market rate for new facilities of this type, or (c) becomes permanently unavailable, Lender shall select a successor benchmark
rate, which successor rate shall be applied in a manner consistent with market practice, or if there is no consistent market practice,
such successor rate shall be applied in a manner reasonably determined by Lender. Notwithstanding the foregoing, in no event shall
the Loan Rate be less than 9.00%.

 

“Material Adverse
Effect” means a material adverse effect on (a) the financial condition, business, operations or Properties of Borrower,
(b) the ability of Borrower to perform its Obligations under the Loan Documents or (c) the Collateral or Collateral Agent’s
or Lender’s security interest in the Collateral.

 

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“Management Services
Agreement” means that certain Management Services Agreement, dated as of March 13, 2015, by and among Borrower and Fortress
Biotech, Inc., as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Maturity Date”
means, with respect to each Loan, forty-two (42) months from the first day of the month next following the month in which the Funding
Date for such Loan occurs, or if earlier, the date of acceleration of such Loan following an Event of Default or the date of prepayment,
whichever is applicable.

 

“Note”
means each promissory note executed in connection with a Loan in substantially the form of Exhibit C attached hereto.

 

“Obligations”
means all debt, principal, interest, fees, charges, expenses and attorneys’ fees and costs and other amounts, obligations,
covenants, and duties owing by Borrower to Collateral Agent or Lender of any kind and description (whether pursuant to or evidenced
by the Loan Documents (other than the Warrants), or by any other agreement between Lender and Borrower (other than the Warrants),
and whether or not for the payment of money), whether direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, including all Lender’s Expenses.

 

“OFAC”
means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“Officer’s
Certificate” means a certificate executed by a Responsible Officer substantially in the form of Exhibit E or such
other form as Lender may agree to accept.

 

“Payment Date”
has the meaning given such term in Section 2.2(a) of this Agreement.

 

“Permitted Indebtedness”
means and includes:

 

(a) Indebtedness
of Borrower to Lender under the Loan Documents;

 

(b) Indebtedness
arising from the endorsement of instruments in the ordinary course of business;

 

(c) Indebtedness
of Borrower existing on the date hereof and set forth on the Disclosure Schedule;

 

(d) intercompany
Indebtedness owed by any Subsidiary to Borrower or any wholly-owned Subsidiary, as applicable; provided that, if applicable,
such Indebtedness is also permitted as a Permitted Investment and, in the case of such Indebtedness owed to Borrower, such Indebtedness
shall be evidenced by one or more promissory notes;

 

(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;

 

(f) Indebtedness
that also constitutes a Permitted Investment;

 

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(g) reimbursement
obligations in connection with letters of credit that are secured by cash or Cash Equivalents and issued on behalf of the Borrower
or a Subsidiary thereof in an amount not to exceed $1,000,000 at any time outstanding;

 

(h) intercompany
Indebtedness as long as either (A) each of the obligor and the obligee under such Indebtedness is a Borrower or a Subsidiary that
has executed a guarantee in accordance with Section 7.8(b), or (B) such intercompany Indebtedness otherwise constitutes a Permitted
Investment;

 

(i) guarantees
by Borrower or any of its Subsidiaries of Indebtedness of Borrower or any other Subsidiary, provided that (1) the Indebtedness
so guaranteed is otherwise permitted by this definition of Permitted Indebtedness, and (2) guarantees by Borrower of Indebtedness
of any Subsidiary that is not a Borrower or a guarantor pursuant to Section 7.8(b) shall, in each case, constitute a Permitted
Investment;

 

(j) Indebtedness
owed to any Person (including obligations in respect of letters of credit for the benefit of such Person) providing workers’
compensation, health, disability or other employee benefits or property, casualty, liability insurance, self-insurance, pursuant
to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

 

(k) Indebtedness
in respect of or guarantee of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees,
workers’ compensation claims, letters of credit, bank guarantees and banker’s acceptances, warehouse receipts or similar
instruments and similar obligations (other than in respect of other Indebtedness for borrowed money) including those incurred to
secure health, safety and environmental obligations, in each case provided in the ordinary course of business;

 

(l) Indebtedness
comprised of performance based milestones, earnouts or royalties in the ordinary course of business or in connection with a Permitted
Investment;

 

(m) Indebtedness
consisting of the financing of insurance premiums;

 

(n) 
endorsement of instruments or other payment items for deposit in the ordinary course of business and Indebtedness arising from
the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient
funds in the ordinary course of business;

 

(o) extensions,
refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness under subsection (c) above; provided
that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms
upon Borrower; and

 

(p) other
Indebtedness not to exceed $100,000 at any time.

 

“Permitted Investments”
means and includes any of the following Investments as to which Collateral Agent and Lender have a perfected security interest
(except, in each case, to the extent constituting Excluded Collateral):

 

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(a) Deposits
and deposit accounts with commercial banks organized under the laws of the United States or a state thereof to the extent: (i)
the deposit accounts of each such institution are insured by the Federal Deposit Insurance Corporation up to the legal limit; and
(ii) each such institution has an aggregate capital and surplus of not less than One Hundred Million Dollars ($100,000,000);

 

(b) Investments
in marketable obligations issued or fully guaranteed by the United States and maturing not more than one (1) year from the date
of issuance;

 

(c) Investments
in open market commercial paper rated at least “A1” or “P1” or higher by a national credit rating agency
and maturing not more than one (1) year from the creation thereof;

 

(d) Investments
pursuant to or arising under currency agreements or interest rate agreements entered into in the ordinary course of business;

 

(e) Investments
existing on the date hereof which are disclosed in the Disclosure Schedule;

 

(f) Cash
Equivalents;

 

(g) to
the extent constituting Investments, any transactions permitted pursuant to Section 7.5 or Section 7.6;

 

(h) Investments
accepted in connection with Permitted Transfers;

 

(i) 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;

 

(j) 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;

 

(k) Investments
consisting of travel advances in the ordinary course of business;

 

(l) Investments
in newly-formed Subsidiaries (other than Foreign Subsidiaries), provided that each such Subsidiary enters into a guaranty or becomes
a Borrower promptly after its formation by Borrower and execute such other documents as shall be reasonably requested by the Collateral
Agent;

 

(m) 
joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the licensing of technology,
the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed
$250,000 in the aggregate in any fiscal year;

 

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(n) acquisitions
of licenses or sublicenses and similar arrangements for the use of Intellectual Property in the ordinary course of business;

 

(o) Investments
resulting from pledges or deposits described in clause (j) of the definition of Permitted Liens or otherwise resulting from Permitted
Liens;

 

(p) any
Investments as contemplated by clause (r) of the definition of Permitted Transfers;

 

(q) Investments
solely to the extent such Investments reflect an increase in the value of Investments otherwise constituting a Permitted Investment;

 

(r) Investments
consisting of endorsements for collection or deposit in the ordinary course of business;

 

(s) loans
or advances to partners, consultants and employees of any Borrower or any Subsidiary for relocation, entertainment, travel expenses,
or similar expenditures (including payments of taxes) in an aggregate amount not to exceed $50,000 at any time outstanding;

 

(t) guarantees
by any Borrower or any Subsidiary of leases (other than in relation to capital lease obligations), contracts, or of other obligations
that do not constitute Indebtedness, in each case entered into in the ordinary course of business; and

 

(u) other
Investments aggregating not in excess of Two Hundred Fifty Thousand Dollars ($250,000) at any time.

 

“Permitted Liens”
means and includes:

 

(a) the
Liens created by this Agreement;

 

(b) Liens
for fees, taxes, levies, imposts, duties or other governmental charges of any kind which are not yet delinquent or which are being
contested in good faith by appropriate proceedings which suspend the collection thereof (provided that such appropriate
proceedings do not involve any substantial danger of the sale, forfeiture or loss of any material item of Collateral which in the
aggregate is material to Borrower and that Borrower has adequately bonded such Lien or reserves sufficient to discharge such Lien
have been provided on the books of Borrower);

 

(c) Liens
identified on the Disclosure Schedule;

 

(d) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens arising in the ordinary course
of business and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate
proceedings (provided that such appropriate proceedings do not involve any substantial danger of the sale, forfeiture or
loss of any material item of Collateral or Collateral which in the aggregate is material to Borrower and that Borrower has adequately
bonded such Lien or reserves sufficient to discharge such Lien have been provided on the books of Borrower);

 

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(e) the
following deposits, to the extent made in the ordinary course of business: deposits under worker’s compensation, unemployment
insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than Liens arising under ERISA
or environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds;

 

(f) leasehold
interests in leases or subleases;

 

(g) Liens
in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paid
on or before the date they become due;

 

(h) statutory
and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository
institutions and brokerage firms;

 

(i) easements,
zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of
business so long as they do not materially impair the value or marketability of the related property;

 

(j) (A)
Liens on cash or Cash Equivalents securing obligations permitted under clause (g) of the definition of Permitted Indebtedness and
(B) security deposits in connection with real property leases, the combination of (A) and (B) in an aggregate amount not to exceed
$1,500,000 at any time;

 

(k) Liens
(1) of a collecting bank arising in the ordinary course of business under Section 4-208 (or Section 4-210, as applicable) of the
Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon or (2) in favor of
a banking or other financial institution arising as a matter of law encumbering deposits or other funds maintained with a financial
institution (including the right of set off) and which are within the general parameters customary in the banking industry;

 

(l) non-exclusive
licenses or sublicenses of Intellectual Property entered into in the ordinary course of business;

 

(m) 
Liens arising from judgments, decrees or attachments in circumstances which do not constitute an Event of Default hereunder;

 

(n) Liens
on insurance proceeds securing the payment of financed insurance premiums that are promptly paid on or before the date they become
due (provided that such Liens extend only to such insurance proceeds and not to any other property or assets);

 

(o) utility
and similar deposits in the ordinary course of business;

 

(p) Liens
that are contractual rights of set-off relating to agreements entered into by the Borrower or any Subsidiary in the ordinary course
of business;

 

    	12

     

    

 

(q) Liens
not otherwise permitted by this definition of Permitted Liens to the extent that the aggregate outstanding amount (or in the case
of Indebtedness, the original principal amount) of the obligations secured thereby at any time does not exceed, at any one time
outstanding, $100,000; and

 

(r) Liens
incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in
clauses (a) through (q) above; provided, that any extension, renewal or replacement Lien (i) shall not apply to any other
property or asset of the Borrower or any Subsidiary thereof (other than any replacements of such property or assets and additions
and accessions thereto) and (ii) shall secure only those obligations and unused commitment that it secures on the date hereof and
extensions, renewals and replacements thereof permitted hereunder (plus any accrued but unpaid interest (including any portion
thereof which is payable in kind in accordance with the terms of such extended, renewed or replaced Indebtedness) and premium payable
by the terms of such obligations thereon and reasonable fees and expenses associated therewith).

 

“Permitted Transfers”
means and includes:

 

(a) sales
of Inventory in the ordinary course of business;

 

(b) non-exclusive
licenses or sublicenses and similar arrangements for the use of Intellectual Property;

 

(c) dispositions
of worn-out, obsolete or surplus Equipment or assets in the ordinary course of business;

 

(d) other
Transfers of assets having a fair market value of not more than $100,000 in the aggregate in any fiscal year;

 

(e) any
issuance or sale by Borrower or any Subsidiary of its Equity Interests or other securities, in each case to the extent otherwise
permitted pursuant to this Agreement;

 

(f) sales,
transfers and other dispositions of accounts receivable (including write-offs, discounts and compromises) in connection with the
compromise, settlement or collection thereof;

 

(g) sales,
transfers, leases and other dispositions of property to the extent that such property constitutes an Investment that is a Permitted
Investment;

 

(h) leases
or licenses or subleases or sublicenses entered into in the ordinary course of business (other than in respect of Intellectual
Property), to the extent that they do not materially interfere with the business of Borrower and its Subsidiaries taken as a whole;

 

(i) dispositions
resulting from any casualty or insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of Borrower or any Subsidiary;

 

    	13

     

    

 

(j) the
abandonment or lapse of Intellectual Property that is no longer material to the business of Borrower or any Subsidiary, or otherwise
no longer of material value, including, for the avoidance of doubt, the termination of license agreements and related agreements;

 

(k) the
incurrence of Liens to the extent constituting Permitted Liens;

 

(l) samples
provided to customers or prospective customers;

 

(m) 
de minimis amounts of equipment provided to employees;

 

(n) any
distributions, dividends, repurchases or redemptions permitted pursuant to Section 7.5;

 

(o) (i)
converting any Indebtedness to Equity Interests, or (ii) settling, discounting, writing off, forgiving or canceling any intercompany
Indebtedness or other obligation owing by Borrower,

 

(p) payments
of fees and expenses owing pursuant to the Management Services Agreement as in effect as of the date of this Agreement;

 

(q) payments
of fees and expenses owing pursuant to the Torreya Agreement, as in effect as of the date of this Agreement;

 

(r) (i)
a sublicense of Borrower’s rights under the XSCID License to a non-Affiliate third party, or to an entity jointly-owned by
Borrower and such third party; (ii) the assignment of the XSCID License to a non-Affiliate third party, or to an entity jointly-owned
by Borrower and such third party; or (iii) any other arrangement pursuant to which rights to develop and/or commercialize products
or product candidates under the XSCID License, or the right to receive royalties on the sales of products under the XSCID License,
are transferred to a non-Affiliate third party; and

 

(s) surrendering
or waiving contractual rights and settling or waiving contractual or litigation claims to the extent not otherwise prohibited hereunder.

 

“Person”
means and includes any individual, any partnership, any corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any domestic or foreign national, state or local government, any
political subdivision thereof, and any department, agency, authority or bureau of any of the foregoing.

 

“Property”
means any interest in any kind of property or asset, whether real, personal or mixed, whether tangible or intangible.

 

“Responsible Officer”
has the meaning given such term in Section 6.3 of this Agreement.

 

    	14

     

    

 

“Restricted License”
means any license or other agreement with respect to which Borrower is the licensee and such license or agreement is material to
Borrower’s business and (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s
interest in such license or agreement or any other property (other than any customary anti-assignment provisions set forth in such
licenses or other agreements) or (b) for which a default under or termination of could interfere with Collateral Agent’s
or Lender’s right to sell any Collateral.

 

“Rights to Payment”
has the meaning given such term in Section 4.1 of this Agreement.

 

“Sanctions”
means any economic or financial sanction or trade embargo administered or enforced by the United States Government (including,
without limitation, OFAC and the United States Department of State), the United Nations Security Council, the European Union or
Her Majesty’s Treasury.

 

“Scheduled Payments”
has the meaning given such term in Section 2.2(a) of this Agreement.

 

“Solvent”
has the meaning given such term in Section 5.12 of this Agreement.

 

“Subsidiary”
means any corporation or other entity of which a majority of the outstanding Equity Securities entitled to vote for the election
of directors or other governing body (otherwise than as the result of a default) is owned by Borrower directly or indirectly through
Subsidiaries.

 

“Torreya Agreement”
means that certain Engagement Letter, dated as of December 12, 2018, by and among the Borrower and Torreya Holdings LP.

 

“Transfer”
has the meaning given such term in Section 7.4 of this Agreement.

 

“Warrant”
means the separate warrant or warrants dated on or about the date hereof in favor of each Lender or its designees to purchase securities
of Borrower.

 

“XSCID License”
means that certain Exclusive License and Option Agreement, dated as of July 30, 2018, by and between Borrower and St. Jude Children’s
Research Hospital, Inc.

 

1.2 Construction.
References in this Agreement to “Articles,” “Sections,” “Exhibits,” “Schedules”
and “Annexes” are to recitals, articles, sections, exhibits, schedules and annexes herein and hereto unless otherwise
indicated. References in this Agreement and each of the other Loan Documents to any document, instrument or agreement shall include
(a) all exhibits, schedules, annexes and other attachments thereto, (b) all documents, instruments or agreements issued
or executed in replacement thereof, and (c) such document, instrument or agreement, or replacement or predecessor thereto,
as amended, modified and supplemented from time to time and in effect at any given time (subject, in the case of clauses (b) and
(c), to any restrictions on such replacement, amendment, modification or supplement set forth in the Loan Documents). The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement
or any other Loan Document shall refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to
any particular provision of this Agreement or such other Loan Document, as the case may be. The words “include” and
“including” and words of similar import when used in this Agreement or any other Loan Document shall not be construed
to be limiting or exclusive. Unless the context requires otherwise, any reference in this Agreement or any other Loan Document
to any Person shall be construed to include such Person’s successors and assigns. Unless otherwise indicated in this Agreement
or any other Loan Document, all accounting terms used in this Agreement or any other Loan Document shall be construed, and all
accounting and financial computations hereunder or thereunder shall be computed, in accordance with GAAP, and all terms describing
Collateral shall be construed in accordance with the Code. The terms and information set forth on the cover page of this Agreement
are incorporated into this Agreement.

 

    	15

     

    

 

2. Loans;
Repayment.

 

2.1 Commitments.

 

(a) The
Commitment Amounts. Subject to the terms and conditions of this Agreement and relying upon the representations and warranties
herein set forth as and when made or deemed to be made, Lender agrees to lend to Borrower (i) on or prior to the Loan A Commitment
Termination Date, Loan A, (ii) on or prior to the Loan B Commitment Termination Date, Loan B, (iii) on or prior to the Loan C Commitment
Termination Date, Loan C and (iv) on or prior to the Loan D Commitment Termination Date, Loan D.

 

(b) The
Loans and the Notes. The obligation of Borrower to repay the unpaid principal amount of and interest on each Loan shall be
evidenced by a Note issued to the Lender.

 

(c) Use
of Proceeds. The proceeds of each Loan shall be used solely for working capital or other general corporate purposes of Borrower.

 

(d) Termination
of Commitment to Lend. Notwithstanding anything in the Loan Documents, Lender’s obligation to lend the undisbursed portion
of the Commitment Amount to Borrower hereunder shall terminate on the earlier of (i) at Lender’s sole election, the
occurrence of any Default or Event of Default hereunder, and (ii) (A) with respect to Loan A, the Loan A Commitment Termination
Date, (B) with respect to Loan B, the Loan B Commitment Termination Date, (C) with respect to Loan C, the Loan C Commitment Termination
Date and (D) with respect to Loan D, the Loan D Commitment Termination Date. Notwithstanding the foregoing, Lender’s obligation
to lend the undisbursed portion of the Commitment Amount to Borrower shall terminate if, in Lender’s sole and reasonable
discretion, there has been a material adverse change in the general affairs, management, results of operations, condition (financial
or otherwise) or prospects of Borrower, whether or not arising from transactions in the ordinary course of business, or there has
been any material adverse deviation by Borrower from the business plan of Borrower presented to Lender on or before the date of
this Agreement.

 

    	16

     

    

 

2.2 Payments.

 

(a) Scheduled
Payments. Borrower shall make (i) a payment of accrued interest only to Lender on the outstanding principal amount of each
Loan on the first eighteen (18) Payment Dates specified in the Note applicable to such Loan and (ii) an equal payment of principal
plus accrued interest to the Lender on the outstanding principal amount of each Loan on the next twenty-four (24) Payment Dates
as set forth in the Note (collectively, the “Initial Scheduled Payments”), provided, however, that if the Borrower
satisfies the Interest Only Extension Milestone, then, the Borrower may elect to make (A) a payment of accrued interest only to
Lender on the outstanding principal amount of each Loan on the first twenty-four (24) Payment Dates specified in the Note applicable
to such Loan and (B) an equal payment of principal plus accrued interest to the Lender on the outstanding principal amount of each
Loan on the next eighteen (18) Payment Dates as set forth in the Note (collectively, the “Revised Scheduled Payments”
and collectively with the Initial Scheduled Payments, the “Scheduled Payments”). Borrower shall make such Scheduled
Payments commencing on the date set forth in the Note applicable to such Loan and continuing thereafter on the first Business Day
of each calendar month (each a “Payment Date”) through the Maturity Date. In any event, all unpaid principal
and accrued interest shall be due and payable in full on the Maturity Date applicable to such Loan.

 

(b) Interim
Payment. Unless the Funding Date for a Loan is the first day of a calendar month, Borrower shall pay the per diem interest
(accruing at the Loan Rate from the Funding Date through the last day of that calendar month) payable with respect to such Loan
on the first Business Day of the next calendar month.

 

(c) Payment
of Interest. Borrower shall pay interest on each Loan at a per annum rate of interest equal to the Loan Rate. The Loan Rate
shall initially be calculated using the LIBOR Rate on the date which is five (5) Business Days prior to the proposed date of disbursement
of the Loan, but shall thereafter be calculated for each calendar month using the LIBOR Rate on the first calendar day of such
calendar month, provided, however, that if the first calendar day of any month is not a Business Day, the Loan Rate shall be calculated
using the LIBOR Rate on the Business Day immediately preceding the first calendar day of such calendar month. Interest (including
interest at the Default Rate, if applicable) shall be computed on the basis of a 360-day year for the actual number of days elapsed.
Notwithstanding any other provision hereof, the amount of interest payable hereunder shall not in any event exceed the maximum
amount permitted by the law applicable to interest charged on commercial loans.

 

(d) Application
of Payments. All payments received by Lender when an Event of Default has not occurred and is not continuing shall be applied
as follows: (i) first, to Lender’s Expenses then due and owing; and (ii) second, ratably, to all Scheduled Payments then
due and owing (provided, however, if such payments are not sufficient to pay the whole amount then due, such payments shall
be applied first to unpaid interest at the Loan Rate, then to the remaining amounts then due). When an Event of Default has occurred
and is continuing, all payments and application of proceeds shall be made as set forth in Section 9.7.

 

(e) Late
Payment Fee. Borrower shall pay to Lender a late payment fee equal to six percent (6%) of any Scheduled Payment not paid when
due to such Lender.

 

(f) 
Default Rate. Borrower shall pay interest at a per annum rate equal to the Default Rate on any amounts required to be paid
by Borrower to Collateral Agent or Lender under this Agreement or the other Loan Documents (including Scheduled Payments), payable
with respect to any Loan, accrued and unpaid interest, and any fees or other amounts which remain unpaid after such amounts are
due. If an Event of Default has occurred and is continuing, Borrower shall pay, without duplication of any amounts set forth in
the immediately preceding sentence, interest on the aggregate, outstanding balance hereunder from the date of the Event of Default
until all Events of Default are cured or waived in accordance with the provisions of this Agreement, at a per annum rate equal
to the Default Rate.

 

    	17

     

    

 

(g) Final
Payment.

 

(i)    Loan
A Final Payment. Borrower shall pay to Lender a payment in the amount of Two Hundred Fifty Thousand Dollars ($250,000) (the
“Loan A Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan A, (B) an Event
of Default and demand by Lender of payment in full of Loan A or (C) the Maturity Date applicable to Loan A, as applicable.

 

(ii)    Loan B Final Payment. Borrower shall pay to Lender a payment in the amount of Two Hundred Fifty Thousand Dollars ($250,000)
(the “Loan B Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan B, (B)
an Event of Default and demand by Lender of payment in full of Loan B or (C) the Maturity Date applicable to Loan B, as applicable.

 

(iii)    Loan
C Final Payment. Borrower shall pay to Lender a payment in the amount of Two Hundred Fifty Thousand Dollars ($250,000) (the
“Loan C Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan C, (B) an Event
of Default and demand by Lender of payment in full of Loan C or (C) the Maturity Date applicable to Loan C, as applicable.

 

(iv)    Loan D Final Payment. Borrower shall pay to Lender a payment in the amount of Two Hundred Fifty Thousand Dollars ($250,000)
(the “Loan D Final Payment”) upon the earlier of (A) payment in full of the principal balance of Loan D, (B)
an Event of Default and demand by Lender of payment in full of Loan D or (C) the Maturity Date applicable to Loan D, as applicable.

 

2.3 Prepayments.

 

(a) Mandatory
Prepayment Upon an Acceleration. If the Loans are accelerated following the occurrence of an Event of Default pursuant to Section
9.1(a) hereof, then Borrower, in addition to any other amounts which may be due and owing hereunder, shall immediately pay to Lender
the amount set forth in Section 2.3(b) below, as if Borrower had opted to prepay on the date of such acceleration.

 

(b) Optional
Prepayment. Upon ten (10) Business Days’ prior written notice to Lender, Borrower may, at its option, at any time, prepay
all or any portion of the outstanding Loans in an amount not less than Five Hundred Thousand Dollars ($500,000), by simultaneously
paying to Lender an amount equal to (i) any accrued and unpaid interest on the outstanding principal balance of the Loans being
prepaid; plus (ii) an amount equal to (A) if a Loan is prepaid on or before the Loan Amortization Date applicable to such
Loan, four percent (4%) of the portion of the then outstanding principal balance of such Loan being prepaid, (B) if a Loan is prepaid
after the Loan Amortization Date applicable to such Loan, but on or before the date that is twelve (12) months after such Loan
Amortization Date, three percent (3%) of the portion of the then outstanding principal balance of such Loan being prepaid, or (C)
if a Loan is prepaid more than twelve (12) months after the Loan Amortization Date applicable to such Loan, two percent (2%) of
the portion of the then outstanding principal balance of such Loan being prepaid; plus (iii) the portion of the outstanding
principal balance of the Loans being repaid; plus (iv) all other sums, if any, that shall have become due and payable hereunder.
Notwithstanding anything to the contrary contained herein, if Borrower chooses to prepay less than one hundred percent of the then-outstanding
principal balance of the Loans, the amount prepaid by Borrower shall be applied by Lender to the Loans pro-rata based upon the
then-outstanding principal balance of the Loans.

 

    	18

     

    

 

2.4 Other
Payment Terms.

 

(a) Place
and Manner. Borrower shall make all payments due to Lender in lawful money of the United States. All payments of principal,
interest, fees and other amounts payable by Borrower hereunder shall be made, in immediately available funds, not later than 12:00 p.m.
Connecticut time, on the date on which such payment is due. Borrower shall make such payments to Lender via wire transfer or ACH
as instructed by Lender from time to time.

 

(b) Date.
Whenever any payment is due hereunder on a day other than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall be included in the computation of interest or fees, as the case may be.

 

(c) Taxes.

 

(i) Unless
otherwise required under applicable law, any and all payments made hereunder or under the Notes shall be made free and clear of
and without deduction for any taxes; provided that if Borrower shall be required to deduct any taxes from such payments,
then (A) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 2.4(c)) the Lender receives an amount equal to the sum it would have received had
no such deductions been made, (B) Borrower shall make such deductions and (C) Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

 

(ii) Borrower
shall indemnify Lender, within ten (10) days after written demand therefor, for the full amount of any taxes imposed or asserted
directly on Lender by any Governmental Authority on or attributable to amounts payable under this Agreement solely as a result
of Lender entering into this Agreement to the extent such taxes are paid by Lender, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority; provided, however, that such indemnified taxes shall not include income or franchise
taxes imposed on (or measured by) Lender’s net income by the jurisdiction, or any political subdivision thereof or taxing
authority therein, under the laws of which such recipient is organized or in which its principal office is located or in which
its applicable lending office is located. A certificate as to the amount of such payment or liability delivered to Borrower by
Lender shall be conclusive absent manifest error.

 

    	19

     

    

 

(iii) As
soon as practicable after any payment of taxes by Borrower hereunder to a Governmental Authority, Borrower shall deliver to Lender
the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory to Lender.

 

(iv) If
Lender is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement, Lender shall deliver
to Borrower, as reasonably requested by Borrower, such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced rate.

 

(v) If
Lender receives a refund in respect of taxes paid by Borrower pursuant to this Section 2.4(c), which in the sole discretion
of Lender exercised in good faith is allocable to such payment, it shall promptly pay such refund, together with any other amounts
paid by Borrower in connection with such refunded taxes, to Borrower, net of all out-of-pocket expenses (including any taxes to
which Lender has become subject as a result of its receipt of such refund) of Lender incurred in obtaining such refund and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that
Borrower, upon the request of the Lender, shall repay to Lender amounts paid over pursuant to the preceding clause (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) in the event that Lender is required to repay such refund
to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (v), in no event will Lender be required
to pay any amount to Borrower pursuant to this paragraph (v) the payment of which would place Lender in a less favorable net after-tax
position than Lender would have been in if the indemnification payments or additional amounts giving rise to such refund had never
been paid. This paragraph shall not be construed to require Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to Borrower or any other Person.

 

2.5 Procedure
for Making the Loans.

 

(a) Notice.
Borrower shall notify Lender of the date on which Borrower desires Lender to make any Loan at least five (5) Business Days in advance
of the desired Funding Date, unless the Lender elects at its sole discretion to allow the Funding Date for a Loan to be made by
Lender to be within five (5) Business Days of Borrower’s notice. Borrower’s execution and delivery to Lender of one
or more Notes in respect of a Loan shall be Borrower’s agreement to the terms and calculations thereunder with respect to
such Loan. Lender’s obligation to make any Loan shall be expressly subject to the satisfaction of the conditions set forth
in Section 3.

 

(b) Loan
Rate Calculation. Prior to each Funding Date for any Loan, Lender shall establish the Loan Rate with respect to such Loan,
which shall be set forth in the Note to be executed by Borrower with respect to such Loan and shall be conclusive in the absence
of a manifest error.

 

    	20

     

    

 

(c) Disbursement.
Lender shall disburse the proceeds of each Loan by wire transfer to Borrower at the account specified in the Funding Certificate
for such Loan.

 

2.6 Good
Faith Deposit; Legal and Closing Expenses; and Commitment Fee.

 

(a) Good
Faith Deposit. On or before the date of this Agreement, Borrower delivered to Lender a good faith deposit in the amount of
Fifty Thousand Dollars ($50,000) (the “Good Faith Deposit”). The Good Faith Deposit paid to Horizon will be
credited to the Commitment Fee payable to the Lender. If the Funding Date does not occur, Lender shall retain the Good Faith Deposit
as compensation for its time, expenses and opportunity cost.

 

(b) Legal,
Due Diligence and Documentation Expenses. Concurrently with its execution and delivery of this Agreement, Borrower shall pay
to Lender all of Lender’s reasonable legal, due diligence and documentation expenses in connection with the negotiation and
documentation of this Agreement and the Loan Documents.

 

(c) Commitment
Fee. Borrower shall pay, concurrently with its execution and delivery of this Agreement, a commitment fee to Lender in the
amount of Two Hundred Thousand Dollars ($200,000) (the “Commitment Fee”), which Commitment Fee may be net funded
out of the amount of any Loan advanced on the date of this Agreement. The Commitment Fee shall be retained by the Lender and be
deemed fully earned upon receipt.

 

3. Conditions
of Loan.

 

3.1 Conditions
Precedent to Closing. At the time of the execution and delivery of this Agreement, Lender shall have received, in form and
substance reasonably satisfactory to Lender, all of the following (unless Lender has agreed to waive such condition or document,
in which case such condition or document shall be a condition precedent to the making of any Loan and shall be deemed added to
Section 3.2):

 

(a) Loan
Agreement. This Agreement duly executed by Borrower, Collateral Agent and Lender.

 

(b) Warrants.
The Warrants duly executed by Borrower.

 

(c) Secretary’s
Certificate. A certificate of the secretary or assistant secretary of Borrower, dated as of the date hereof, with copies of
the following documents attached: (i) the certificate of incorporation and bylaws (or equivalent documents) of Borrower certified
by Borrower as being complete and in full force and effect on the date thereof, (ii) incumbency and representative signatures,
and (iii) resolutions authorizing the execution and delivery of this Agreement and each of the other Loan Documents.

 

(d) Good
Standing Certificates. A good standing certificate from Borrower’s state of organization and the state in which Borrower’s
principal place of business is located, each dated as of a date no earlier than thirty (30) days prior to the date hereof.

 

(e) Certificate
of Insurance. Evidence of the insurance coverage required by Section 6.8 of this Agreement.

 

    	21

     

    

 

(f) Consents.
All necessary consents of shareholders and other third parties with respect to the execution, delivery and performance of this
Agreement, the Warrants and the other Loan Documents.

 

(g) Legal
Opinion. A legal opinion of Borrower’s counsel, dated as of the date hereof, covering the matters set forth in Exhibit D
hereto.

 

(h) Account
Control Agreements. Account Control Agreements for all of Borrower’s deposit accounts and securities accounts (other
than Excluded Accounts and other than in respect of CDARS interests existing as of the date of this Agreement) duly executed by
all of the parties thereto.        

 

(i) Fees
and Expenses. Payment of all fees and expenses then due hereunder or under any other Loan Document.

 

(j) Other
Documents. Such other documents and completion of such other matters, as Lender may reasonably deem necessary or appropriate.

 

3.2 Conditions
Precedent to Making Loan A, Loan B and Loan C. The obligation of Lender to make Loan A, Loan B and Loan C is further subject
to satisfaction of the following conditions as of the applicable Funding Date:

 

(a) No
Default. No Default or Event of Default shall have occurred and be continuing.

 

(b) Landlord
Agreements. Borrower shall have provided Lender with a Landlord Agreement for each location where Borrower’s books and
records and the Collateral is located (unless Borrower is the fee owner thereof).

 

(c) Notes.
Borrower shall have duly executed and delivered one or more Notes in the amount of each of Loan A, Loan B and Loan C to Lender.

 

(d) UCC
Financing Statements. Lender shall have received such documents, instruments and agreements, including UCC financing statements
or amendments to UCC financing statements and UCC financing statement searches, as Lender shall reasonably request to evidence
the perfection and priority of the security interests granted to Collateral Agent and Lender pursuant to Section 4.
Borrower authorizes Collateral Agent and Lender to file any UCC financing statements, continuations of or amendments to UCC financing
statements they deem necessary to perfect its security interest in the Collateral.

 

(e) Funding
Certificate. Borrower shall have duly executed and delivered to Lender a Funding Certificate for such Loans.

 

(f) Representations
and Warranties. The representations and warranties made by Borrower in Section 5 and in the other Loan Documents shall
be true and correct as of such Funding Date.

 

    	22

     

    

 

(g) Other
Documents. Borrower shall have provided Lender with such other documents and completion of such other matters, as Lender may
reasonably deem necessary or appropriate.

 

3.3 Conditions
Precedent to Making Loan D. The obligation of Lender to make Loan D is further subject to satisfaction of the following conditions
as of the applicable Funding Date:

 

(a) No
Default. No Default or Event of Default shall have occurred and be continuing.

 

(b) Note.
Borrower shall have duly executed and delivered one or more Notes in the amount of Loan D to Lender.

 

(c) Funding
Certificate. Borrower shall have duly executed and delivered to Lender a Funding Certificate for such Loan.

 

(d) IND
Filing. Borrower shall have provided Lender with evidence reasonably satisfactory to Lender that Borrower has, on or prior
to the Loan D Commitment Termination Date, filed an Investigational New Drug Application with the United States Food and Drug Administration
with respect to Borrower’s multicenter pivotal Phase 1/2 trial for CS1 directed CAR-T (MB-104).

 

(e) Capital
Raise. Borrower shall have provided Lender with evidence reasonably satisfactory to Lender that Borrower has, on or after April
1, 2019 and on or before December 31, 2019, received cash proceeds of not less than Twenty Million Dollars ($20,000,000), which
amount shall include (i) not more than Ten Million Dollars ($10,000,000) as a result of a Permitted Transfer pursuant to clauses
(b) or (r) of the definition of Permitted Transfers and (ii) cash proceeds received by Borrower as a result of the sale of Borrower’s
Equity Securities, including the capital raised by Borrower in satisfaction of Section 6.14 below.

 

(f) Representations
and Warranties. The representations and warranties made by Borrower in Section 5 and in the other Loan Documents shall
be true and correct in all material respects (or, if qualified by materiality, in all respects) as of such Funding Date, unless
such representations and warranties refer to an earlier date, in which case such representations and warranties shall be true and
correct in all material respects (or, if qualified by materiality, in all respects) as of such earlier date.

 

(g) Other
Documents. Borrower shall have provided Lender with such other documents and completion of such other matters, as Lender may
reasonably deem necessary or appropriate.

 

3.4 Covenant
to Deliver. Borrower agrees (not as a condition but as a covenant) to deliver to Lender each item required to be delivered
to Lender as a condition to each Loan, if such Loan is advanced. Borrower expressly agrees that the extension of any Loan prior
to the receipt by Lender of any such item shall not constitute a waiver by Lender of Borrower’s obligation to deliver such
item, and any such extension in the absence of a required item shall be in each Lender’s sole discretion.

 

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4. Creation
of Security Interest.

 

4.1 Grant
of Security Interests. Borrower grants to Collateral Agent and Lender a valid, continuing security interest in all presently
existing and hereafter acquired or arising Collateral in order to secure prompt, full and complete payment of any and all Obligations
and in order to secure prompt, full and complete performance by Borrower of each of its covenants and duties under each of the
Loan Documents (other than the Warrants). The “Collateral” shall mean and include all right, title, interest, claims
and demands of Borrower in the following:

 

(a) All
goods (and embedded computer programs and supporting information included within the definition of “goods” under the
Code) and equipment now owned or hereafter acquired, including all laboratory equipment, computer equipment, office equipment,
machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located;

 

(b) All
inventory now owned or hereafter acquired, including all merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products including such inventory as is temporarily out of Borrower’s custody or possession
or in transit and 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;

 

(c) All
contract rights and general intangibles (except to the extent included within the definition of Intellectual Property), now owned
or hereafter acquired, including goodwill, license agreements, franchise agreements, blueprints, drawings, purchase orders, customer
lists, route lists, infringements, claims, software, computer programs, computer disks, computer tapes, literature, reports, catalogs,
design rights, income tax refunds, payment intangibles, commercial tort claims, payments of insurance and rights to payment of
any kind;

 

(d) All
now existing and hereafter arising accounts, contract rights, royalties, license rights, license fees and all other forms of obligations
owing to Borrower arising out of the sale or lease of goods, the licensing of technology or the rendering of services by Borrower
(subject, in each case, to the contractual rights of third parties to require funds received by Borrower to be expended in a particular
manner), whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well
as all merchandise returned to or reclaimed by Borrower and Borrower’s books relating to any of the foregoing;

 

(e) All
documents, cash, deposit accounts, letters of credit and letters of credit rights (whether or not the letter of credit is evidenced
by a writing) and other supporting obligations, certificates of deposit, instruments, promissory notes, chattel paper (whether
tangible or electronic) and investment property, including all securities, whether certificated or uncertificated, security entitlements,
securities accounts, commodity contracts and commodity accounts, and all financial assets held in any securities account or otherwise,
wherever located, now owned or hereafter acquired and Borrower’s books relating to the foregoing; and

 

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(f) To
the extent not covered by clauses (a) through (e), all other personal property of the Borrower, whether tangible or intangible,
and any and all rights and interests in any of the above and the foregoing and, any and all claims, rights and interests in any
of the above and all substitutions for, additions and accessions to and proceeds thereof, including insurance, condemnation, requisition
or similar payments and proceeds of the sale or licensing of Intellectual Property to the extent such proceeds no longer constitute
Intellectual Property; but

 

Notwithstanding the foregoing,
the Collateral shall not include any Intellectual Property or any Excluded Collateral; provided, however, that the
Collateral shall include all accounts receivables, accounts, and general intangibles that consist of rights to payment and proceeds
from the sale, licensing or disposition of all or any part, or rights in, the foregoing (the “Rights to Payment”).
Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the
underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the Collateral shall automatically,
and effective as of the date hereof, include the Intellectual Property to the extent necessary to permit perfection of Lender’s
security interest in the Rights to Payment.

 

4.2 After-Acquired
Property. If Borrower shall at any time acquire a commercial tort claim (as defined in the Code) with a value in excess of
$100,000, Borrower shall immediately notify Collateral Agent and Lender in writing signed by Borrower of the brief details thereof
and grant to Collateral Agent and Lender in such writing a security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance satisfactory to Collateral Agent and Lender.

 

4.3 Duration
of Security Interest. Collateral Agent’s and Lender’s security interest in the Collateral shall continue until
the payment in full and the satisfaction of all Obligations, and termination of Lender’s commitment to fund the Loans, whereupon
such security interest shall terminate. Collateral Agent and Lender shall, at Borrower’s sole cost and expense, execute such
further documents and take such further actions as may be reasonably necessary to make effective the release contemplated by this
Section 4.3, including duly authorizing and delivering termination statements for filing in all relevant jurisdictions under
the Code.

 

4.4 Location
and Possession of Collateral. The Collateral is and shall remain in the possession of Borrower at its location listed on the
cover page hereof or as set forth in the Disclosure Schedule. Borrower shall remain in full possession, enjoyment and control of
the Collateral (except only as may be otherwise required by Collateral Agent or Lender for perfection of the security interests
therein created hereunder) and so long as no Event of Default has occurred and is continuing, shall be entitled to manage, operate
and use the same and each part thereof with the rights and franchises appertaining thereto; provided that the possession,
enjoyment, control and use of the Collateral shall at all times be subject to the observance and performance of the terms of this
Agreement.

 

4.5 Delivery
of Additional Documentation Required. Borrower shall from time to time execute and deliver to Collateral Agent and Lender,
at the request of Collateral Agent or Lender, all financing statements and other documents Collateral Agent or Lender may reasonably
request, in form satisfactory to Collateral Agent and Lender, to perfect and continue Collateral Agent’s and Lender’s
perfected security interests in the Collateral and in order to consummate fully all of the transactions contemplated under the
Loan Documents.

 

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4.6 Right
to Inspect. Collateral Agent and Lender (through any of their officers, employees, or agents) shall have the right, upon reasonable
prior notice, from time to time during Borrower’s usual business hours, to inspect the books and records of Borrower and
Subsidiaries and to make copies thereof and to inspect, 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. Any inspection, test or appraisal conducted
hereunder shall be conducted at the sole cost and expense of Borrower; provided, in the absence of an Event of Default, Borrower
shall only be responsible for the cost and expense of one (1) such inspection, test or appraisal in any fiscal year.

 

4.7 Protection of
Intellectual Property. Borrower shall:

 

(a) protect,
defend and maintain the validity and enforceability of its Intellectual Property to the extent a failure to do so could reasonably
be expected to have a Material Adverse Effect and promptly advise Collateral Agent in writing of material infringements;

 

(b) not
allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without
Lender’s written consent; and

 

(c) 
provide written notice to Collateral Agent within ten (10) days of entering or becoming bound by any Restricted License (other
than over-the-counter software that is commercially available to the public).

 

5. Representations
and Warranties. Except as set forth in the Disclosure Schedule, Borrower represents and warrants as follows:

 

5.1 Organization
and Qualification. Each of Borrower and its Subsidiaries is a corporation duly organized and validly existing under the laws
of its state of incorporation and qualified and licensed to do business in, and is in good standing in, any jurisdiction in which
the conduct of its business or its ownership of Property requires that it be so qualified and licensed or in which the Collateral
is located, except for such states as to which any failure to so qualify would not have a Material Adverse Effect.

 

5.2 Authority.
Borrower has all necessary power and authority to execute, deliver, and perform in accordance with the terms thereof, the Loan
Documents to which it is a party. Borrower and Subsidiaries have all requisite power and authority to own and operate their Property
and to carry on their businesses as now conducted. Borrower and Subsidiaries have obtained all material licenses, material permits,
material approvals and other material authorizations necessary for the operation of their business.

 

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5.3 Conflict
with Other Instruments, etc. Neither the execution and delivery of any Loan Document to which Borrower is a party nor the consummation
of the transactions therein contemplated nor compliance with the terms, conditions and provisions thereof will (A) conflict with
or result in a breach of (i) any of the terms, conditions or provisions of the certificate of incorporation, the by-laws, or any
other organizational documents of Borrower or (ii) any law or any regulation, order, writ, injunction or decree of any court or
Governmental Authority by which Borrower or any Subsidiary or any of their respective property or assets may be bound or affected
or (iii) any material agreement or instrument to which Borrower is a party or by which it or any of its Property is bound or to
which it or any of its Property is subject, except, as to clauses (ii) and (iii), where a conflict or breach would not reasonably
be expected to have a Material Adverse Effect, or (B) result in the creation or imposition of any Lien, other than Permitted Liens.

 

5.4 Authorization;
Enforceability. The execution and delivery of this Agreement, the granting of the security interest in the Collateral, the
incurrence of the Loans, the execution and delivery of the other Loan Documents to which Borrower is a party and the consummation
of the transactions herein and therein contemplated have each been duly authorized by all necessary action on the part of Borrower.
No authorization, consent, approval, license or exemption of, and no registration, qualification, designation, declaration or filing
with, or notice to, any Person is necessary for (a) the valid execution and delivery of any Loan Document to which Borrower is
a party, (b) the performance of Borrower’s obligations under any Loan Document or (c) the granting of the security interest
in the Collateral, except for filings in connection with the perfection of the security interest in any of the Collateral or the
issuance of the Warrants. The Loan Documents have been duly executed and delivered and constitute legal, valid and binding obligations
of Borrower, enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws of general application relating to or affecting the enforcement of creditors’ rights or
by general principles of equity.

 

5.5 No
Prior Encumbrances. Borrower has good and marketable title to the Collateral, free and clear of Liens except for Permitted
Liens. Borrower has good title and ownership of, or is licensed under, all of Borrower’s current material Intellectual Property.
Borrower is the sole owner of the Intellectual Property which it owns or purports to own and which is material to Borrower’s
business, except for (a) non-exclusive licenses granted to its customers, resellers and/or distributors in the ordinary course
of business, (b) over-the-counter software that is commercially available to the public and (c) material Intellectual Property
licensed to Borrower and noted on the Disclosure Schedule. Each patent which it owns or purports to own and which is material to
Borrower’s business is presumed valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports
to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. Except
as noted on the Disclosure Schedule, Borrower is not a party to, nor is it bound by, any Restricted License. Borrower has not received
any communications alleging that Borrower has violated, or by conducting its business as proposed, would violate any proprietary
rights of any other Person. Borrower has no knowledge of any infringement or violation by it of the intellectual property rights
of any third party and has no knowledge of any violation or infringement by a third party of any of its Intellectual Property.
The Collateral and the licensed Intellectual Property constitute substantially all of the assets and property of Borrower, and
Borrower owns or licenses all material Intellectual Property associated with the business of Borrower and Subsidiaries, free and
clear of any liens other than Permitted Liens.

 

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5.6 Security
Interest. The provisions of this Agreement create legal and valid security interests in the Collateral in favor of Collateral
Agent and Lender, and, assuming the proper filing of one or more financing statement(s) identifying the Collateral with the proper
state and/or local authorities and the taking of other appropriate perfection actions, the security interests in the Collateral
granted to Collateral Agent and Lender pursuant to this Agreement (a) constitute and will continue to constitute first priority
security interests (except to the extent any Permitted Liens may have a superior priority to Collateral Agent’s and Lender’s
Liens under this Agreement) and (b) are and will continue to be superior and prior to the rights of all other creditors of Borrower
(except to the extent any Permitted Liens may have a superior priority to Collateral Agent’s and Lender’s Liens under
this Agreement).

 

5.7 Name;
Location of Chief Executive Office, Principal Place of Business and Collateral. Borrower has not done business under any name
other than (i) that specified on the signature page hereof and (ii) Mustang Therapeutics, Inc. Borrower’s jurisdiction of
incorporation, chief executive office, principal place of business, and the place where Borrower maintains its records concerning
the Collateral are presently located in the state and at the address set forth on the cover page of this Agreement or as set forth
in the Disclosure Schedules. The Collateral is presently located at the address set forth on the cover page hereof or as set forth
in the Disclosure Schedule.

 

5.8 Litigation.
There are no actions or proceedings pending by or against Borrower or any Subsidiary before any court, arbitral tribunal, regulatory
organization, administrative agency or similar body which could have a Material Adverse Effect. Borrower does not have knowledge
of any such pending or threatened actions or proceedings.

 

5.9 Financial
Statements. All financial statements relating to Borrower, any Subsidiary or any Affiliate that have been or may hereafter
be delivered by Borrower to Collateral Agent or Lender present fairly 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.

 

5.10 No
Material Adverse Effect. No event has occurred and no condition exists which could reasonably be expected to have a Material
Adverse Effect since September 30, 2018.

 

5.11 Full
Disclosure. No representation, warranty or other statement made by Borrower in any Loan Document (including the Disclosure
Schedule), certificate or written statement furnished to Collateral Agent or Lender, taken as a whole, 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 materially misleading; it being understood by the Collateral Agent and the Lenders that any such representation,
warranty or other statement constituting projections or as to future events (i) are not to be viewed as facts, (ii)(A) are subject
to significant uncertainties and contingencies, many of which are beyond the control of Borrower, (B) no assurance is given by
Borrower that the forecasted results in any such projections will be realized and (C) the actual results during the period or periods
covered by any such projections may differ from the forecasted results set forth in such projections and such differences may be
material and (iii) are not a guarantee of performance. There is no fact known to Borrower which materially adversely affects, or
which could in the future be reasonably expected to materially adversely affect, its ability to perform its obligations under this
Agreement.

 

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5.12 Solvency,
Etc. Borrower is Solvent (as defined below) and, after the execution and delivery of the Loan Documents and the consummation
of the transactions contemplated thereby, Borrower will be Solvent. “Solvent” means, with respect to any Person on
any date, that on such date (a) the fair value of the property of such Person is greater than the fair value of the liabilities
(including contingent liabilities to the extent appearing as a liability on the balance sheet of such Person in accordance of GAAP)
of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities
mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction,
for which such Person’s property would constitute an unreasonably small capital.

 

5.13 Subsidiaries.
Borrower has no Subsidiaries.

 

5.14 Capitalization.
All issued and outstanding Equity Securities of Borrower are duly authorized and validly issued, fully paid and non-assessable,
and such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities,
except for such compliance with such laws that would not reasonably be expected to result in a Material Adverse Effect.

 

5.15 Catastrophic
Events; Labor Disputes. None of Borrower, any Subsidiary or any of their respective Property is or has been affected
by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God
or other casualty that could reasonably be expected to have a Material Adverse Effect. There are no disputes presently subject
to grievance procedure, arbitration or litigation under any of the collective bargaining agreements, employment contracts or employee
welfare or incentive plans to which Borrower or any Subsidiary is a party, and there are no strikes, lockouts, work stoppages or
slowdowns, or, to the knowledge of Borrower, jurisdictional disputes or organizing activity occurring or threatened which, as to
each of the foregoing, could reasonably be expected to have a Material Adverse Effect.

 

5.16 Certain
Agreements of Officers, Employees and Consultants.

 

(a) No
Violation. To the knowledge of Borrower, no officer, employee or consultant of Borrower is in violation of any term of any
employment contract, proprietary information agreement, nondisclosure agreement, noncompetition agreement or any other material
contract or agreement or any restrictive covenant relating to the right of any such officer, employee or consultant to be employed
by Borrower because of the nature of the business conducted or to be conducted by Borrower or relating to the use of trade secrets
or proprietary information of others, and to Borrower’s knowledge, the continued employment of Borrower’s officers,
employees and consultants does not subject Borrower to any material liability for any claim or claims arising out of or in connection
with any such contract, agreement, or covenant, except for any violation or liability which would not reasonably be expected to
have a Material Adverse Effect.

 

    	29

     

    

 

(b) No
Present Intention to Terminate. To the knowledge of Borrower, no officer of Borrower, and no employee or consultant of Borrower
whose termination, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, has
any present intention of terminating his or her employment or consulting relationship with Borrower.

 

5.17 No
Plan Assets. Neither Borrower nor any Subsidiary is an “employee benefit plan,” as defined in Section 3(3)
of ERISA, subject to Title I of ERISA, and none of the assets of Borrower or any Subsidiary constitutes or will constitute
“plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) neither
Borrower nor any Subsidiary is a “governmental plan” within the meaning of Section 3(32) of ERISA and (b) transactions
by or with Borrower or any Subsidiary are not subject to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code currently in effect, which prohibit or otherwise restrict the transactions contemplated by this Agreement.

 

5.18 Sanctions,
Etc. None of Borrower, any of its Subsidiaries or, any director, officer or employee of Borrower or any of its Subsidiaries,
nor to the knowledge of Borrower, any agent or Affiliate of Borrower or any of its Subsidiaries, is a Person that is, or, to the
knowledge of Borrower, is owned or controlled by Persons that are, (a) the subject or target of any Sanctions or (b) located, organized
or resident in a country or territory that is, or whose government is, the subject of Sanctions. To the best of Borrower’s
knowledge, as of the date hereof and at all times throughout the term of this Agreement, including after giving effect to any transfers
of interests permitted pursuant to the Loan Documents, none of the funds of Borrower, any Subsidiary or of their Affiliates have
been (or will be) derived from any unlawful activity with the result that the investment in the respective party (whether directly
or indirectly), is prohibited by applicable law or the Loans are in violation of applicable law.

 

5.19 Regulatory
Compliance. Borrower is not a “bank holding company” or a direct or indirect subsidiary of a “bank holding
company” as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of
Governors of the Federal Reserve System. Neither Borrower nor any Subsidiary is an “investment company” or a company
controlled by an “investment company” under the Investment Company Act of 1940. Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock (as defined in Regulation U of the Board of Governors
of the Federal Reserve System) and no proceeds of any Loan will be used to purchase or carry margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin stock.

 

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5.20 Payment
of Taxes. All federal and other material tax returns, reports and statements (including any attachments thereto or amendments
thereof) of Borrower and its Subsidiaries filed or required to be filed by any of them have been timely filed (or extensions have
been obtained and such extensions have not expired) and all taxes shown on such tax returns or otherwise due and payable and all
assessments, fees and other governmental charges upon Borrower, its Subsidiaries and their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and payable, except for the payment of any such taxes,
assessments, fees and other governmental charges which are being diligently contested by Borrower in good faith by appropriate
proceedings and for which adequate reserves have been made under GAAP. To the knowledge of Borrower, no tax return of Borrower
or any Subsidiary is currently under an audit or examination, and Borrower has not received written notice of any proposed audit
or examination, in each case, where a material amount of tax is at issue. Borrower is not an “S corporation” within
the meaning of Section 1361(a)(1) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

 

5.21 Anti-Terrorism
Laws. Borrower will not, directly or indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available
such proceeds to any Subsidiary, joint venture partner or other Person, (i) to knowingly fund any activities or business of or
with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of
Sanctions, or (ii) to the knowledge of Borrower, in any other manner that would result in a violation of Sanctions by any Person
(including any Person participating in the Loans, whether as lender, underwriter, advisor, investor or otherwise). Lenders hereby
notifies Borrower that pursuant to the requirements of Anti-Terrorism Laws, and Lender’s policies and practices, Lender is
required to obtain, verify and record certain information and documentation that identifies Borrower and its principals, which
information includes the name and address of Borrower and its principals and such other information that will allow Lender to identify
such party in accordance with Anti-Terrorism Laws.

 

6. Affirmative
Covenants. Borrower, until the full and complete payment of the Obligations (other than contingent indemnification Obligations),
covenants and agrees that:

 

6.1 Good
Standing. Borrower shall maintain, and cause each of its Subsidiaries to maintain, its corporate existence and its good standing
in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably
be expected to have a Material Adverse Effect. Borrower shall maintain, and cause each of its Subsidiaries to maintain, in force
all licenses, approvals and agreements, the loss of which could reasonably be expected to have a Material Adverse Effect.

 

6.2 Government
Compliance. Borrower shall comply, and cause each of its Subsidiaries to comply, with all statutes, laws, ordinances and government
rules and regulations to which it is subject, noncompliance with which could reasonably be expected to have a Material Adverse
Effect.

 

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6.3 Financial
Statements, Reports, Certificates. Borrower shall deliver to Lender: (a) as soon as available, but in any event within fourteen
(14) days after the end of each month, a Borrower prepared report of the amount of cash on deposit in each of Borrower’s
deposit accounts as of the last day of such calendar month; (b) as soon as available, but in any event within forty-five (45)
days after the end of each quarter, a Borrower prepared Consolidated balance sheet, Consolidated income statement and Consolidated
cash flow statement covering Borrower’s operations during such period, certified by Borrower’s president, treasurer
or chief financial officer (each, a “Responsible Officer”); (c) as soon as available, but in any event within
one hundred eighty (180) days after the end of Borrower’s fiscal year, audited Consolidated financial statements of Borrower
prepared in accordance with GAAP, together with an unqualified opinion on such financial statements of a nationally recognized
or other independent public accounting firm reasonably acceptable to Lender; (d) as soon as available, but in any event within
thirty (30) days after the end of Borrower’s fiscal year, Borrower’s operating budget and plan for the next fiscal
year; and (e) such other financial information as Lender may reasonably request from time to time. During such time as Borrower
becomes a publicly reporting company, promptly as they are available and in any event: (i) at the time of filing of Borrower’s
Form 10-K with the Securities and Exchange Commission after the end of each fiscal year of Borrower, the financial statements
of Borrower filed with such Form 10-K; and (ii) at the time of filing of Borrower’s Form 10-Q with the Securities
and Exchange Commission after the end of each of the first three fiscal quarters of Borrower, the Consolidated financial statements
of Borrower filed with such Form 10-Q. In addition, Borrower shall deliver to Lender (A) promptly upon becoming available,
copies of all statements, reports and notices sent or made available generally by Borrower to its security holders and (B) promptly
upon receipt of notice thereof, a report of any material legal actions pending or threatened against Borrower or any Subsidiary
or the commencement of any action, proceeding or governmental investigation involving Borrower or any Subsidiary is commenced that
is reasonably expected to result in damages or costs to Borrower of One Hundred Thousand Dollars ($100,000) or more.

 

6.4 Certificates
of Compliance. Each time financial statements are furnished pursuant to Section 6.3 above, Borrower shall deliver to Lender
an Officer’s Certificate signed by a Responsible Officer in the form of, and certifying to the matters set forth in Exhibit
E hereto.

 

6.5 Notice
of Defaults. As soon as possible, and in any event within five (5) days after the discovery of a Default or an Event of Default,
Borrower shall provide Lender with an Officer’s Certificate setting forth the facts relating to or giving rise to such Default
or Event of Default and the action which Borrower proposes to take with respect thereto.

 

6.6 Taxes.
Borrower shall make, and cause each Subsidiary to make, due and timely payment or deposit of all federal, state, and material local
taxes, assessments, or contributions required of it by law or imposed upon any Property belonging to it, and will execute and deliver
to Collateral Agent and Lender, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower will
make, and cause each Subsidiary to make, timely payment or deposit of all material tax payments and withholding taxes required
of it by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income
taxes, and will, upon request, furnish Collateral Agent and Lender with proof satisfactory to Lender indicating that Borrower and
each Subsidiary has made such payments or deposits; provided that Borrower need not make any payment if the amount or validity
of such payment is contested in good faith by appropriate proceedings which suspend the collection thereof (provided that such
proceedings do not involve any substantial danger of the sale, forfeiture or loss of any material item of Collateral or Collateral
which in the aggregate is material to Borrower and that Borrower has adequately bonded such amounts or reserves sufficient to discharge
such amounts have been provided on the books of Borrower). In addition, Borrower shall not change, and shall not permit any Subsidiary
to change, its respective jurisdiction of residence for taxation purposes.

 

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6.7 Use;
Maintenance. Borrower shall keep and maintain all items of equipment and other similar types of personal property that form
any significant portion or portions of the Collateral in good operating condition and repair and shall make all necessary replacements
thereof and renewals thereto so that the value and operating efficiency thereof shall at all times be maintained and preserved,
except for ordinary wear and tear and casualty. Borrower shall not permit any such material item of Collateral (other than any
heating, ventilation or air conditioning or power generation equipment) to become a fixture to real estate or an accession to other
personal property, without the prior written consent of Collateral Agent and Lender. Borrower shall not permit any such material
item of Collateral to be operated or maintained in violation, in any material respect, of any applicable law, statute, rule or
regulation. With respect to items of leased equipment (to the extent Collateral Agent and Lender have any security interest in
any residual Borrower’s interest in such equipment under the lease), Borrower shall keep, maintain, repair, replace and operate
such leased equipment, in all material respects, in accordance with the terms of the applicable lease.

 

6.8 Insurance.
Borrower shall keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s
industry and location, and as Collateral Agent or Lender may reasonably request. Insurance policies shall be in a form, with companies,
and in amounts that are reasonably satisfactory to Collateral Agent and Lender. All property policies shall have a lender’s
loss payable endorsement showing Collateral Agent and Lender as an additional loss payee and all liability policies shall show
Collateral Agent and Lender as an additional insured and all policies shall provide that the insurer must give Collateral Agent
at least thirty (30) days’ (or twenty (20) days in the case of nonpayment of premiums) notice before canceling its policy.
At Collateral Agent’s or Lender’s request, Borrower shall deliver certified copies of policies and evidence of all
premium payments. Proceeds payable under any property policy shall, at Collateral Agent’s or Lender’s option, be payable
to Collateral Agent, for the benefit of Lender, or to Lender on account of the Obligations. Notwithstanding the foregoing, so long
as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any property
policy, toward the replacement or repair of destroyed or damaged property; provided that (a) any such replaced or repaired
property to the extent constituting Collateral (i) shall be of equal or like value as the replaced or repaired Collateral and (ii)
shall be deemed Collateral in which Collateral Agent and Lender have been granted a first priority security interest, subject to
Permitted Liens permitted to have priority over Lender’s and Collateral Agent’s Liens pursuant to the terms of this
Agreement, and (b) after the occurrence and during the continuation of an Event of Default all proceeds payable under such property
policy shall, at the option of Collateral Agent or Lender, be payable to Collateral Agent, for the benefit of Lender, or to Lender
on account of the Obligations. If Borrower fails to obtain insurance as required under Section 6.8 or to pay any amount or furnish
any required proof of payment to third persons and Collateral Agent, Collateral Agent or Lender may make all or part of such payment
or obtain such insurance policies required in Section 6.8, and take any action under the policies Collateral Agent or Lender deems
prudent. On or prior to the first Funding Date and prior to each policy renewal, Borrower shall furnish to Collateral Agent certificates
of insurance or other evidence satisfactory to Collateral Agent that insurance complying with all of the above requirements is
in effect.

 

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6.9 Further
Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments and take such further
action as may reasonably be requested by Collateral Agent or Lender to make effective the purposes of this Agreement, including
the continued perfection and priority of Collateral Agent’s and Lender’s security interest in the Collateral.

 

6.10 
Equity Investment. Borrower shall permit Lender or its assignees, at Lender’s sole discretion, to purchase up to an
aggregate amount of Two Million Dollars ($2,000,000) of the equity securities sold in any follow-on public offering of Borrower’s
Equity Securities having an aggregate value of not less than Ten Million Dollars ($10,000,000) (such offering, a “Follow-On
Offering”) at a price equal to ninety-three percent (93%) of the closing price of Borrower’s publicly traded securities
as reported by NASDAQ on the trading day that is ten (10) days prior to the closing of the Follow-On Offering. Lender’s purchase
of Borrower’s Equity Securities pursuant to this Section 6.10 shall be on the same terms as those investors purchasing Borrower’s
Equity Securities in such Follow-On Offering. Borrower agrees that it shall notify Lender not less than five (5) days prior to
the filing of a registration statement for a Follow-On Offering.

 

6.11 Subsidiaries.
Borrower, upon Lender’s or Collateral Agent’s request, shall cause any Subsidiary to provide Lender and Collateral
Agent with a guaranty of the Obligations and a security interest in such Subsidiary’s assets to secure such guaranty.

 

6.12 
Keeping of Books. Borrower shall keep proper books of record and account, in which full and correct entries shall be made
of all financial transactions and the assets and business of Borrower and its Subsidiaries, in all material respects, in accordance
with GAAP.

 

6.13 Minimum
Cash Balance. Borrower shall, as of the last day of each calendar month, maintain unrestricted cash and/or Cash Equivalents
on deposit in accounts over which Lender maintains an Account Control Agreement (other than in respect of CDARS interests existing
as of the date of this Agreement) in an amount not less than:

 

	Calendar Month Ended:	 	Required Minimum Cash on Deposit:
	 	 	 
	April 30, 2019	 	$10,000,000
	 	 	 
	May 31, 2019	 	$10,000,000
	 	 	 
	June 30, 2019	 	$10,000,000
	 	 	 
	July 31, 2019	 	$9,900,000
	 	 	 
	August 31, 2019	 	$9,700,000
	 	 	 
	September 30, 2019	 	$9,400,000
	 	 	 
	October 31, 2019	 	$10,600,000
	 	 	 
	November 30, 2019	 	$11,800,000

 

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	December 31, 2019	 	$10,000,000
	 	 	 
	January 31, 2020	 	$11,500,000
	 	 	 
	February 29, 2020	 	$10,000,000
	 	 	 
	March 31, 2020	 	$8,500,000
	 	 	 
	April 30, 2020	 	$8,300,000
	 	 	 
	May 31, 2020	 	$8,000,000
	 	 	 
	June 30, 2020	 	$7,800,000
	 	 	 
	July 31, 2020	 	$7,900,000
	 	 	 
	August 31, 2020	 	$7,900,000
	 	 	 
	September 30, 2020	 	$7,900,000
	 	 	 
	October 31, 2020	 	$9,700,000
	 	 	 
	November 30, 2020	 	$11,500,000
	 	 	 
	December 31, 2020	 	$13,200,000
	 	 	 
	January 31, 2021	 	$12,500,000
	 	 	 
	February 28, 2021	 	$11,800,000
	 	 	 
	March 31, 2021	 	$11,100,000
	 	 	 
	April 30, 2021	 	$12,100,000
	 	 	 
	May 31, 2021	 	$13,200,000
	 	 	 
	June 30, 2021	 	$14,300,000
	 	 	 
	July 31, 2021	 	$14,700,000
	 	 	 
	August 31, 2021	 	$15,000,000
	 	 	 
	September 30, 2021	 	$15,300,000

 

Notwithstanding the foregoing,
if Borrower provides Lender with updated financial projections for any period from the date of this Agreement through September
30, 2021, then the minimum cash and/or Cash Equivalents required by Borrower to be maintained in accounts over which Lender maintains
an Account Control Agreement during any such period shall be the greater of (a) the amount set forth in the table immediately preceding
this paragraph and (b) the aggregate cash outflows projected by Borrower for the applicable forward rolling three (3) month period
as set forth in Borrower’s updated projections.

 

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The amount of cash and
Cash Equivalents that Borrower will be required to maintain in accounts over which Lender maintains an Account Control Agreement
during the period commencing on October 1, 2021 and continuing through the repayment in full of the Obligations (other than contingent
indemnification Obligations), will be set by Lender in its sole discretion based upon Borrower’s cash flow projections for
such period as approved by Borrower’s Board of Directors and provided to Lender.

 

6.14 Capital
Raise. Borrower shall, on or prior to the date that is ninety (90) days after the date of this Agreement, provide Lender with
evidence reasonably satisfactory to Lender that Borrower has, after the date of this Agreement, received cash proceeds of not less
than Five Million Dollars ($5,000,000) from the sale of Borrower’s Equity Securities.

 

6.15 Board
Observation Rights. For so long as the Obligations remain outstanding, Borrower shall
permit a designee of Lender or its Affiliates (the “Observer”) to attend all meetings of Borrower’s Board
of Directors (whether in person, telephonic or other), excluding executive sessions, in a nonvoting, observer capacity and in this
respect, Borrower shall provide the Observer, concurrently with Borrower’s delivery to the members of the Board of Directors,
with copies of all notices, minutes, consents, and other materials that Borrower provides to such members; provided, however, that
the Observer agrees to hold all information so provided to it or learned by it in connection with its rights hereunder in confidence
and trust in accordance with the confidentiality obligations of this Agreement; it being understood and agreed that, notwithstanding
the foregoing, the Observer shall be permitted to disclose such information to Lender and its Affiliates for use in connection
with the servicing of the Obligations; and provided, further, that Borrower reserves the right to withhold any information from
Observer or access to Observer if Observer’s access to such information or meetings could adversely affect the attorney-client
privilege between Borrower and its counsel, or if such information or meetings (or any portion thereof) relates to any waiver
of or any amendment to the Loan Documents or relates to a refinancing or replacement of this Agreement.  The Collateral Agent
and Lender each acknowledges that certain information it might receive constitutes material non-public information with respect
to the Borrower or its subsidiaries, or the respective securities of any of the foregoing.

 

7. Negative
Covenants. Borrower, until the full and complete payment of the Obligations (other than contingent indemnification Obligations),
covenants and agrees that Borrower shall not:

 

7.1 Chief
Executive Office. Change its name, jurisdiction of incorporation, chief executive office, principal place of business or any
of the items set forth in Section 1 of the Disclosure Schedule without twenty (20) days prior written notice to Collateral Agent.

 

7.2 Collateral
Control. Subject to its rights under Sections 4.4 and 7.4, remove any items of Collateral from Borrower’s facility located
at the address set forth on the cover page hereof or as set forth on the Disclosure Schedule.

 

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7.3 Liens.
Create, incur, allow or suffer, or permit any Subsidiary to create, incur, allow or suffer, any Lien on any of its property, or
assign or convey any right to receive income, including the sale of any accounts except for Permitted Liens and Permitted Transfers,
or permit any Collateral not to be subject to the first priority security interest granted herein (except for Permitted Liens that
are permitted by the terms of this Agreement to have priority to Collateral Agent’s and Lender’s Liens), or enter into
any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent, for the benefit of Lender,
or Lender) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from
assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s
Intellectual Property, except (a) as otherwise permitted in Section 7.4 hereof and (b) as permitted in the definition of “Permitted
Liens” herein.

 

7.4 Other
Dispositions of Collateral. Convey, sell, lease or otherwise dispose of, or permit any Subsidiary to convey, sell, lease or
otherwise dispose, of all or any part of the Collateral to any Person (collectively, a “Transfer”), except for any
Permitted Transfers.

 

7.5 Distributions.
(a) Pay any dividends or make any distributions, or permit any Subsidiary to pay any dividends or make any distributions, on their
respective Equity Securities; (b) purchase, redeem, retire, defease or otherwise acquire, or permit any Subsidiary to purchase,
redeem, retire, defease or otherwise acquire, for value any of their respective Equity Securities (other than (i) repurchases pursuant
to the terms of employee stock purchase plans, employee restricted stock agreements or similar arrangements in an aggregate amount
not to exceed One Hundred Thousand Dollars ($100,000) in any fiscal year, (ii) repurchases of Equity Interests deemed to occur
upon the cashless exercise of stock options when such Equity Interests represent a portion of the exercise price thereof, and (iii)
to the extent constituting a repurchase, to the extent contemplated by clauses (iv) and (v) to the proviso below; (c) return, or
permit any Subsidiary to return, any capital to any holder of its Equity Securities as such; (d) make, or permit any Subsidiary
to make, any distribution of assets, Equity Securities, obligations or securities to any holder of its Equity Securities as such;
or (e) set apart any sum for any such purpose; provided, however, that (i) Borrower or any Subsidiary may pay dividends
payable solely in Borrower’s or such Subsidiary’s Equity Interests (including, to the extent representing a return
on preferred Equity Interests and as contemplated by the Founders Agreement), (ii) a Subsidiary may pay dividends or make distributions
to Borrower, (iii) a Subsidiary may declare and make cash dividends or cash distributions ratably with respect to its Equity Interests,
(iv) Borrower or any Subsidiary may pay cash in lieu of fractional Equity Interests in connection with any dividend, split or combination
thereof, and (v) Borrower or any Subsidiary may honor any conversion request by a holder of convertible Indebtedness (to the extent
such conversion request is paid solely in shares of Equity Interests of Borrower) and make cash payments in lieu of fractional
shares in connection with any such conversion.

 

7.6 Mergers
or Acquisitions. Merge or consolidate, or permit any Subsidiary to merge or consolidate, with or into any other Person or acquire,
or permit any Subsidiary to acquire, all or substantially all of the capital stock or assets of another Person; provided
that (a) any Subsidiary may merge into another Subsidiary, (b) any Subsidiary may merge into Borrower so long as Borrower is the
surviving entity and (c) any Permitted Investment in accordance with Section 7.11 shall be permitted.

 

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7.7 Change
in Business or Ownership. (A) Engage, or permit any Subsidiary to engage, in any material line of business other than the businesses
currently engaged in by Borrower or such Subsidiary, as applicable, or any line of business reasonably complimentary, ancillary
or otherwise related thereto or (B) have a material change in Borrower’s ownership equal to or greater than twenty-five percent
(25%) other than (a) by the sale by Borrower of Borrower’s Equity Securities in one or more public offerings or (b) to venture
capital investors so long as Borrower identifies to Lender and Collateral Agent the venture capital investors prior to the execution
of a definitive agreement relating to such change of ownership and any such venture capital investors that purchase or otherwise
acquire twenty-five percent (25%) or more of the ownership of Borrower in one or a series of transactions have cleared Lender’s
“know your customer” checks.

 

7.8 Transactions
With Affiliates; Creation of Subsidiaries. (a) Enter, or permit any Subsidiary to enter, into any contractual obligation with
any Affiliate or engage in any other transaction with any Affiliate except upon terms (taken as a whole) at least as favorable
to Borrower or such Subsidiary, as applicable, as an arms-length transaction with Persons who are not Affiliates of Borrower except:
(i) transactions between or among Borrowers (or any entity that becomes a Borrower as a result of such transaction) not involving
any other Affiliate; (ii) loans or advances to employees, officers and directors otherwise constituting a Permitted Investment;
(iii) the payment of reasonable fees and reimbursement of out-of-pocket expenses to directors of a Borrower or a Subsidiary; (iv)
compensation (including bonuses) and employee benefit arrangements paid to, indemnities provided for the benefit of, and employment
and severance arrangements entered into with, directors, officers, managers, consultants or employees of a Borrower or a Subsidiary
in the ordinary course of business; (v) any issuances of securities or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans; (vi) any payment or distribution
not prohibited by Section 7.5; (vii) transactions set forth on the Disclosure Schedule, or (b) create a Subsidiary without providing
at least ten (10) Business Days advance notice thereof to Lender and, if requested by Lender, such Subsidiary (other than a Foreign
Subsidiary) guarantees the Obligations and grants a security interest in its assets to secure such guaranty, in each case on terms
reasonably satisfactory to Collateral Agent and Lender.

 

7.9 Indebtedness
Payments. (a) Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the scheduled repayment thereof
any Indebtedness for borrowed money (other than amounts due or permitted to be prepaid under this Agreement) except for (i) the
conversion of Indebtedness into equity securities and the payment of cash in lieu of fractional shares in connection with such
conversion, (ii) prepayment by any Subsidiary of (x) intercompany Indebtedness owed by such Subsidiary to Borrower, or (y) if such
Subsidiary is not a Borrower, intercompany Indebtedness owed by such Subsidiary to another Subsidiary that is not a Borrower, (iii)
any extension, refinancing or renewal of any such Indebtedness to the extent such extension, refinancing or renewal constitutes
Permitted Indebtedness or (iv) as otherwise permitted hereunder or approved in writing by Lender, (b) amend, modify or otherwise
change the terms of any Indebtedness for borrowed money or lease obligations so as to accelerate the scheduled repayment thereof
or (c) repay any notes to officers, directors or shareholders.

 

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7.10 Indebtedness.
Create, incur, assume or permit, or permit any Subsidiary to create, incur, or permit to exist, any Indebtedness except Permitted
Indebtedness.

 

7.11 Investments.
Make, or permit any Subsidiary to make, any Investment except for Permitted Investments.

 

7.12 Compliance.
(a) (i) Become, or permit any Subsidiary to become, an “investment company” or (ii) become, or permit any Subsidiary
to become, a company controlled by a Person required to be registered as an “investment company”, after giving effect
to any transitory regime available to such Person as it relates to such registration, in each case as defined under the Investment
Company Act of 1940, or undertake as one of its important activities, extending credit to purchase or carry margin stock (as defined
in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Loan for that purpose; (b)
become, or permit any Subsidiary to become, subject to any other federal or state law or regulation which purports to restrict
or regulate its ability to borrow money; or (c) (i) fail, or permit any Subsidiary to fail, to meet the minimum funding requirements
of the Employment Retirement Income Security Act of 1974, and its regulations, as amended from time to time (“ERISA”);
or (ii) permit, or permit any Subsidiary to permit, a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur;
or (d) fail, or permit any Subsidiary to fail, to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, if the violation could reasonably be expected to have Material Adverse Effect.

 

7.13 Maintenance
of Accounts. (a) Maintain any deposit account or securities account except accounts (other than Excluded Accounts and other
than in respect of CDARS interests existing as of the date of this Agreement, which CDARS interests shall mature on or prior to
April 30, 2019 with the proceeds thereof deposited into accounts over which Lender maintains an Account Control Agreement) with
respect to which Collateral Agent and Lender has obtained a perfected security interest in such accounts through one or more Account
Control Agreements or (b) grant or allow any other Person (other than Collateral Agent or Lender) to perfect a security interest
in, or enter into any agreements with any Persons (other than Collateral Agent or Lender) accomplishing perfection via control
as to, any of its deposit accounts or securities accounts (other than in respect of any Excluded Account).

 

7.14 Negative
Pledge Regarding Intellectual Property. Create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur,
assume or suffer to exist, any Lien of any kind upon any Intellectual Property or Transfer any Intellectual Property, whether now
owned or hereafter acquired, other than (i) non-exclusive licenses of Intellectual Property entered into in the ordinary course
of business and (ii) any Permitted Transfers contemplated by clauses (b), (j) and (r) of the definition of Permitted Transfers.

 

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 Failure
to Pay. If Borrower fails to pay when due and payable or when declared due and payable in accordance with the Loan Documents:
(a) any Scheduled Payment on the relevant Payment Date or on the relevant Maturity Date; or (b) any other portion of the Obligations
within five (5) days after receipt of written notice from Lender that such payment is due.

 

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8.2 Certain
Covenant Defaults. If Borrower fails to perform any obligation arising under Sections 6.5, 6.8, 6.13 or violates any of the
covenants contained in Section 7 of this Agreement.

 

8.3 Other
Covenant Defaults. If Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant,
or agreement contained in this Agreement (other than as set forth in Sections 8.1, 8.2 or 8.4 through 8.14), in any of the other
Loan Documents and Borrower has failed to cure such default within thirty (30) days of the occurrence of such default. During this
thirty (30) day period, the failure to cure the default is not an Event of Default (but no Loan will be made during the cure period).

 

8.4 Material
Adverse Change. If there occurs a material adverse change in Borrower’s business, or if there is a material impairment
of the prospect of repayment of any portion of the Obligations owing to Collateral Agent or Lender or a material impairment of
the value or priority of Collateral Agent’s and Lender’s security interest in the Collateral.

 

8.5 Investor
Abandonment. If Lender determines in its reasonable good faith judgment, that it is the clear intention of Borrower’s
investors not to continue to fund Borrower in the amounts and within the timeframe necessary to enable Borrower to satisfy the
Obligations as they become due and payable.

 

8.6 Seizure
of Assets, Etc. (a) If any material portion of Borrower’s or any Subsidiary’s assets (i) is attached, seized, subjected
to a writ or distress warrant, or is levied upon or (ii) 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 thirty (30) days, (b) if Borrower or any Subsidiary is enjoined, restrained or in any way prevented by court order from
continuing to conduct all or any material part of its business affairs, (c) if a judgment or other claim becomes a lien or encumbrance
upon any material portion of Borrower’s or any Subsidiary’s assets or (d) if a notice of lien, levy, or assessment
is filed of record with respect to any of Borrower’s or any Subsidiary’s assets by the United States Government, or
any department agency or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not
paid within thirty (30) days after Borrower receives notice thereof; provided that none of the foregoing shall constitute
an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower.

 

8.7 Service
of Process. (a) The service of process upon Collateral Agent or Lender seeking to attach by a trustee or other process any
funds of Borrower on deposit or otherwise held by Collateral Agent or Lender, (b) the delivery upon Collateral Agent or Lender
of a notice of foreclosure by any Person seeking to attach or foreclose on any funds of Borrower on deposit or otherwise held by
Collateral Agent or Lender or (c) the delivery of a notice of foreclosure or exclusive control to any entity holding or maintaining
Borrower’s deposit accounts or accounts holding securities by any Person (other than Collateral Agent or Lender) seeking
to foreclose or attach any such accounts or securities; 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.

 

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8.8 Default
on Indebtedness. One or more defaults shall exist under any agreement with any third party or parties which consists of the
failure to pay any Indebtedness of Borrower or any Subsidiary at maturity or which results in a right by such third party or parties,
whether or not exercised (but after giving effect to any cure period applicable thereto), to accelerate the maturity of Indebtedness
in an aggregate amount in excess of Two Hundred Fifty Thousand Dollars ($250,000).

 

8.9 Judgments.
If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty
Thousand Dollars ($250,000) (to the extent not covered by independent third-party insurance as to which the insurer has been notified
of the potential claim and does not dispute coverage) shall be rendered against Borrower or any Subsidiary and shall remain unsatisfied
and unstayed for a period of thirty (30) days or more.

 

8.10 Misrepresentations.
If any material misrepresentation or material misstatement exists now or hereafter in any warranty, representation, statement,
certification, or report made to Collateral Agent or Lender by Borrower or any officer, employee, agent, or director of Borrower.

 

8.11 Breach
of Warrant. If Borrower shall breach any material term of any Warrant.

 

8.12 Unenforceable
Loan Document. If any Loan Document shall in any material respect cease to be, or Borrower shall assert that any Loan Document
is not, a legal, valid and binding obligation of Borrower enforceable in accordance with its terms.

 

8.13 Involuntary
Insolvency Proceeding. (a) If a proceeding shall have been instituted in a court having jurisdiction in the premises (i) seeking
a decree or order for relief in respect of Borrower or any Subsidiary in an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, (ii) for the appointment of a receiver, liquidator, administrator, assignee, custodian,
trustee (or similar official) of Borrower or any Subsidiary or for any substantial part of its Property or (iii) for the winding-up
or liquidation of its affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60)
consecutive days or (b) such court shall enter a decree or order granting the relief sought in any such proceeding.

 

8.14 Voluntary
Insolvency Proceeding. If Borrower or any Subsidiary shall (a) commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, (b) consent to the entry of an order for relief in an involuntary case under any
such law, (c) consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian (or other
similar official) of Borrower or any Subsidiary or for any substantial part of its Property, (d) shall make a general assignment
for the benefit of creditors, (e) shall fail generally to pay its debts as they become due or (f) take any corporate action in
furtherance of any of the foregoing.

 

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9. Lender’s
Rights and Remedies.

 

9.1 Rights
and Remedies. Upon the occurrence of any Default or Event of Default, Lender shall not have any further obligation to advance
money or extend credit to or for the benefit of Borrower. In addition, upon the occurrence of an Event of Default, Collateral Agent
and Lender shall have the rights, options, duties and remedies of a secured party as permitted by law and, in addition to and without
limitation of the foregoing, Collateral Agent, on behalf of Lender, or Lender (acting alone) may, at its election, without notice
of election and without demand, do any one or more of the following, all of which are authorized by Borrower:

 

(a) Acceleration
of Obligations. Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise,
including (i) any accrued and unpaid interest, (ii) the amounts which would have otherwise come due under Section 2.3(b)(ii)
if the Loans had been voluntarily prepaid, (iii) the unpaid principal balance of the Loans and (iv) all other sums, if any, that
shall have become due and payable hereunder, immediately due and payable (provided that upon the occurrence of an Event
of Default described in Section 8.13 or 8.14 all Obligations shall become immediately due and payable without any action
by Collateral Agent or Lender);

 

(b) Protection
of Collateral. Make such payments and do such acts as Collateral Agent or Lender considers necessary or reasonable to protect
Collateral Agent’s and Lender’s security interest in the Collateral. Borrower agrees to assemble the Collateral if
Collateral Agent or Lender so requires and to make the Collateral available to Collateral Agent or Lender as Collateral Agent or
Lender may designate. Borrower authorizes Collateral Agent, Lender and their designees and agents 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 Lien which in Collateral Agent’s or Lender’s determination appears or is claimed 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 Collateral Agent and Lender a license to enter into possession of such premises and to occupy
the same, without charge, for up to one hundred twenty (120) days in order to exercise any of Collateral Agent’s and Lender’s
rights or remedies provided herein, at law, in equity, or otherwise;

 

(c) Preparation
of Collateral for Sale. Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and
sell (in the manner provided for herein) the Collateral. Collateral Agent, Lender and their agents and any purchasers at or after
foreclosure are hereby granted a non-exclusive, irrevocable, perpetual, fully paid, royalty-free license or other right, solely
pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s Intellectual Property, including
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, now or at any time hereafter owned or acquired by Borrower or in which Borrower now
or at any time hereafter has any rights; provided that such license shall only be exercisable in connection with the disposition
of Collateral upon Collateral Agent’s or Lender’s exercise of its remedies hereunder;

 

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(d) Sale
of Collateral. 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 Collateral Agent or Lender determines
are commercially reasonable; and

 

(e) Purchase
of Collateral. Credit bid and purchase all or any portion of the Collateral at any public sale.

 

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

 

9.2 Set
Off Right. Collateral Agent and Lender may set off and apply to the Obligations any and all Indebtedness at any time owing
to or for the credit or the account of Borrower or any other assets of Borrower in Collateral Agent’s or Lender’s possession
or control.

 

9.3 Effect
of Sale. Upon the occurrence of an Event of Default, to the extent permitted by law, Borrower covenants that it will not at
any time insist upon or plead, or in any manner whatsoever claim or take any benefit or advantage of, any stay or extension law
now or at any time hereafter in force, nor claim, take nor insist upon any benefit or advantage of or from any law now or hereafter
in force providing for the valuation or appraisement of the Collateral or any part thereof prior to any sale or sales thereof to
be made pursuant to any provision herein contained, or to the decree, judgment or order of any court of competent jurisdiction;
nor, after such sale or sales, claim or exercise any right under any statute now or hereafter made or enacted by any state or otherwise
to redeem the property so sold or any part thereof, and, to the full extent legally permitted, except as to rights expressly provided
herein, hereby expressly waives for itself and on behalf of each and every Person, except decree or judgment creditors of Borrower,
acquiring any interest in or title to the Collateral or any part thereof subsequent to the date of this Agreement, all benefit
and advantage of any such law or laws, and covenants that it will not invoke or utilize any such law or laws or otherwise hinder,
delay or impede the execution of any power herein granted and delegated to Collateral Agent or Lender, but will suffer and permit
the execution of every such power as though no such power, law or laws had been made or enacted. Any sale, whether under any power
of sale hereby given or by virtue of judicial proceedings, shall operate to divest all right, title, interest, claim and demand
whatsoever, either at law or in equity, of Borrower in and to the Property sold, and shall be a perpetual bar, both at law and
in equity, against Borrower, its successors and assigns, and against any and all Persons claiming the Property sold or any part
thereof under, by or through Borrower, its successors or assigns.

 

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9.4 Power
of Attorney in Respect of the Collateral. Borrower does hereby irrevocably appoint Collateral Agent, on behalf of Lender (which
appointment is coupled with an interest) the true and lawful attorney in fact of Borrower, with full power of substitution and
in its name to file any notices of security interests, financing statements and continuations and amendments thereof pursuant to
the Code or federal law, as may be necessary to perfect or to continue the perfection of Collateral Agent’s and Lender’s
security interests in the Collateral. Borrower does hereby irrevocably appoint Collateral Agent, on behalf of Lender (which appointment
is coupled with an interest) on the occurrence of an Event of Default, the true and lawful attorney in fact of Borrower, with full
power of substitution and in its name: (a) to ask, demand, collect, receive, receipt for, sue for, compound and give acquittance
for any and all rents, issues, profits, avails, distributions, income, payment draws and other sums in which a security interest
is granted under Section 4 with full power to settle, adjust or compromise any claim thereunder as fully as if Collateral
Agent or Lender were Borrower itself; (b) to receive payment of and to endorse the name of Borrower to any items of Collateral
(including checks, drafts and other orders for the payment of money) that come into Collateral Agent’s or Lender’s
possession or under Collateral Agent’s or Lender’s control; (c) to make all demands, consents and waivers, or
take any other action with respect to, the Collateral; (d) in Collateral Agent’s or Lender’s discretion to file
any claim or take any other action or proceedings, either in its own name or in the name of Borrower or otherwise, which Collateral
Agent or Lender may reasonably deem necessary or appropriate to protect and preserve the right, title and interest of Collateral
Agent and Lender in and to the Collateral; (e) endorse Borrower’s name on any checks or other forms of payment or security;
(f) sign Borrower’s name on any invoice or bill of lading for any account or drafts against account debtors; (g) make, settle,
and adjust all claims under Borrower’s insurance policies; (h) settle and adjust disputes and claims about the accounts directly
with account debtors, for amounts and on terms Collateral Agent or Lender determines reasonable; (i) transfer the Collateral into
the name of Collateral Agent, Lender or a third party as the Code permits; and (j) to otherwise act with respect thereto as
though Collateral Agent or Lender were the outright owner of the Collateral.

 

9.5 Lender’s
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 Collateral Agent or Lender may do any or all of the following: (a) make payment
of the same or any part thereof; or (b) obtain and maintain insurance policies of the type discussed in Section 6.8 of
this Agreement, and take any action with respect to such policies as Collateral Agent or Lender deems prudent. Any amounts paid
or deposited by Collateral Agent or Lender shall constitute Lender’s Expenses, shall be immediately due and payable, shall
bear interest at the Default Rate and shall be secured by the Collateral. Any payments made by Collateral Agent or Lender shall
not constitute an agreement by Collateral Agent or Lender to make similar payments in the future or a waiver by Collateral Agent
or Lender of any Event of Default under this Agreement. Borrower shall pay all reasonable fees and expenses, including Lender’s
Expenses, incurred by Collateral Agent or Lender in the enforcement or attempt to enforce any of the Obligations hereunder not
performed when due.

 

9.6 Remedies
Cumulative; Independent Nature of Lender’s Rights. Collateral Agent’s and Lender’s rights and remedies under
this Agreement, the Loan Documents, and all other agreements shall be cumulative. Collateral Agent and Lender shall have all other
rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No failure on the part of Collateral
Agent or Lender to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any
other right. The Obligations of Borrower to Lender or Collateral Agent may be enforced by Lender or Collateral Agent against Borrower
in accordance with the terms of this Agreement and the other Loan Documents and, to the fullest extent permitted by applicable
law, it shall not be necessary for Collateral Agent or Lender, as applicable, to be joined as an additional party in any proceeding
to enforce such Obligations.

 

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9.7 Application
of Collateral Proceeds. The proceeds and/or avails of the Collateral, or any part thereof, and the proceeds and the avails
of any remedy hereunder (as well as any other amounts of any kind held by Collateral Agent or Lender, at the time of or received
by Collateral Agent or Lender after the occurrence of an Event of Default hereunder) shall be paid to and applied as follows:

 

(a) First,
to the payment of out-of-pocket costs and expenses, including all amounts expended to preserve the value of the Collateral, of
foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses,
liability and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Collateral
Agent or Lender, including Lender’s Expenses;

 

(b) Second,
to the payment to Lender of the amount then owing or unpaid on the Loans for any accrued and unpaid interest, the amounts which
would have otherwise come due under Section 2.3(b)(ii), if the Loans had been voluntarily prepaid, the principal balance
of the Loans, and all other Obligations with respect to the Loans (provided, however, if such proceeds shall be insufficient
to pay in full the whole amount so due, owing or unpaid upon the Loans, then first, to the unpaid interest thereon ratably,
second, to the amounts which would have otherwise come due under Section 2.3(b)(ii) ratably, if the Loans had been
voluntarily prepaid, third, to the principal balance of the Loans ratably, and fourth, to the ratable payment of
other amounts then payable to Lender under any of the Loan Documents); and

 

(c) Third,
to the payment of the surplus, if any, to Borrower, its successors and assigns or to the Person lawfully entitled to receive the
same.

 

9.8 Reinstatement
of Rights. If Collateral Agent or Lender shall have proceeded to enforce any right under this Agreement or any other Loan Document
by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely, then and in every such case (unless otherwise ordered by a court of competent jurisdiction), Collateral
Agent and Lender shall be restored to their former position and rights hereunder with respect to the Property subject to the security
interest created under this Agreement.

 

10. Waivers;
Indemnification.

 

10.1 Demand;
Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments,
chattel paper, and guarantees at any time held by Collateral Agent or Lender on which Borrower may in any way be liable.

 

10.2 Lender’s
Liability for Collateral. So long as Collateral Agent and Lender comply with their obligations, if any, under the Code, neither
Collateral Agent nor Lender shall in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral;
(b) any loss or damage thereto occurring or arising in any manner or fashion from any cause other than Collateral Agent’s
or Lender’s gross negligence or willful misconduct; (c) any diminution in the value thereof; or (d) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other Person whomsoever. All risk of loss, damage or destruction
of the Collateral shall be borne by Borrower.

 

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10.3 Indemnification
and Waiver. Whether or not the transactions contemplated hereby shall be consummated:

 

(a) General
Indemnity. Borrower agrees upon demand to pay or reimburse Collateral Agent and Lender for all liabilities, obligations and
out-of-pocket expenses, including Lender’s Expenses and reasonable fees and expenses of counsel for Collateral Agent and
Lender from time to time arising in connection with the enforcement or collection of sums due under the Loan Documents, and in
connection with any amendment or modification of the Loan Documents or any “work-out” in connection with the Loan Documents.
Borrower shall indemnify, reimburse and hold Collateral Agent, Lender, and each of their respective successors, assigns, agents,
attorneys, officers, directors, equity holders, agents and employees (each an “Indemnified Person”) harmless
from and against all liabilities, losses, damages, actions, suits, demands, claims of any kind and nature (including claims relating
to environmental discharge, cleanup or compliance), all costs and expenses whatsoever to the extent they may be incurred or suffered
by such Indemnified Person in connection therewith (including reasonable attorneys’ fees and expenses), fines, penalties
(and other charges of any applicable Governmental Authority), licensing fees relating to any item of Collateral, damage to or loss
of use of property (including consequential or special damages to third parties or damages to Borrower’s property), or bodily
injury to or death of any person (including any agent or employee of Borrower) (each, a “Claim”), directly or
indirectly relating to or arising out of the use of the proceeds of the Loans or otherwise, the falsity of any representation or
warranty of Borrower or Borrower’s failure to comply with the terms of this Agreement or any other Loan Document, in each
case, limited, as to legal expenses, to the reasonable and documented fees, disbursements and other charges of one (1) firm of
counsel for the Lender and Collateral Agent and their respective Affiliates and, if necessary, one (1) firm of local counsel for
the Lender and Collateral Agent in each material jurisdiction. The foregoing indemnity shall cover, without limitation, (i) any
Claim in connection with a design or other defect (latent or patent) in any item of equipment or product included in the Collateral,
(ii) any Claim for infringement of any patent, copyright, trademark or other intellectual property right, (iii) any Claim resulting
from the presence on or under or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials
on the premises owned, occupied or leased by Borrower, including any Claims asserted or arising under any Environmental Law, (iv)
any Claim for negligence or strict or absolute liability in tort or (v) any Claim asserted as to or arising under any Account Control
Agreement or any Landlord Agreement; provided, however, Borrower shall not indemnify any Indemnified Person for any liability
incurred by such Indemnified Person as a result of such Indemnified Person’s (or such Indemnified Person’s successors,
assigns, agents, attorneys, officers, directors, equity holders, agents or employees) bad faith, gross negligence, willful misconduct.
Such indemnities shall continue in full force and effect, notwithstanding the expiration or termination of this Agreement. Upon
Collateral Agent’s or Lender’s written demand, Borrower shall assume and diligently conduct, at its sole cost and expense
but subject to the limitation set forth above, the entire defense of Collateral Agent and Lender, each of their members, partners,
and each of their respective, agents, employees, directors, officers, equity holders, successors and assigns against any indemnified
Claim described in this Section 10.3(a). Borrower shall not settle or compromise any Claim against or involving Collateral
Agent or Lender without first obtaining Collateral Agent’s or Lender’s written consent thereto, which consent shall
not be unreasonably withheld.

 

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(b) Waiver.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, BORROWER AGREES THAT IT SHALL NOT SEEK FROM
COLLATERAL AGENT OR LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES.

 

(c) Survival;
Defense. The obligations in this Section 10.3 shall survive payment of all other Obligations pursuant to Section 12.8.
At the election of any Indemnified Person, Borrower shall defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person’s reasonable discretion, at the sole cost and expense of Borrower but subject to the limitation
set forth above. All amounts owing under this Section 10.3 shall be paid within thirty (30) days after written demand.

 

11. 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 certified mail, postage prepaid,
return receipt requested, by prepaid nationally recognized overnight courier, electronic mail or by prepaid facsimile to Borrower
or to Lender, as the case may be, at their respective addresses set forth below:

 

	If to Borrower:	Mustang Bio, Inc.
	 	377 Plantation St.
	 	Worcester, MA 01605
	 	Attention: Brian Achenbach
	 	Ph: 774-778-5005
	 	Email: bachenbach@mustangbio.com
	 	 
	 	With a copy (which shall not constitute notice) to:
	 	 
	 	Alston & Bird LLP
	 	90 Park Avenue
	 	New York, NY 10016
	 	Attention: Paul W. Hespel
	 	Ph: (212) 210-9492
	 	Email: paul.hespel@alston.com
	 	 
	If to Horizon:	Horizon Technology Finance Corporation
	 	312 Farmington Avenue
	 	Farmington, CT 06032
	 	Attention: Legal Department
	 	Fax: (860) 676-8655
	 	Ph: (860) 676-8654

 

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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.

 

12. General
Provisions.

 

12.1 Successors
and Assigns. This Agreement and the Loan Documents shall bind and inure to the benefit of the respective successors and permitted
assigns of each of the parties; provided, however, neither this Agreement nor any rights hereunder may be assigned by Borrower
without Lender’s prior written consent, which consent may be granted or withheld in Lender’s sole discretion. Lender
shall have the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participations
in all or any part of, or any interest in Lender’s rights and benefits hereunder to any Person other than a Disqualified
Lender. Collateral Agent and Lender may disclose the Loan Documents and any other financial or other information relating to Borrower
to any potential participant or assignee of any of the Loans other than a Disqualified Lender; provided that such potential
participant or assignee agrees to protect the confidentiality of such documents and information in accordance with Section 14 of
this Agreement.

 

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

 

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

 

12.4 Entire
Agreement; Construction; Amendments and Waivers.

 

(a) Entire
Agreement. This Agreement and each of the other Loan Documents, taken together, constitute and contain the entire agreement
among Borrower, Collateral Agent and Lender and supersede any and all prior agreements, negotiations, correspondence, understandings
and communications between the parties, whether written or oral, respecting the subject matter hereof. Borrower acknowledges that
it is not relying on any representation or agreement made by Collateral Agent, Lender or any employee, attorney or agent thereof,
other than the specific agreements set forth in this Agreement and the Loan Documents.

 

(b) Construction.
This Agreement is the result of negotiations between and has been reviewed by each of Borrower, Collateral Agent and Lender as
of the date hereof and their respective counsel; accordingly, this Agreement shall be deemed to be the product of the parties hereto,
and no ambiguity shall be construed in favor of or against Borrower, Collateral Agent or Lender. Borrower, Collateral Agent and
Lender agree that they intend the literal words of this Agreement and the other Loan Documents and that no parol evidence shall
be necessary or appropriate to establish Borrower’s, Collateral Agent’s or Lender’s actual intentions.

 

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(c) Amendments
and Waivers. Any and all discharges or waivers of, or consents to any departures from, any provision of this Agreement or of
any of the other Loan Documents shall not be effective without the written consent of Lender; provided that no such discharge,
waiver or consent affecting the rights or duties of the Collateral Agent under this Agreement or any other Loan Document shall
be effective without the written consent of the Collateral Agent. Any and all amendments and modifications of this Agreement or
of any of the other Loan Documents shall not be effective without the written consent of Lender and Borrower; provided that
no such amendment or modification affecting the rights or duties of the Collateral Agent under this Agreement or any other Loan
Document shall be effective without the written consent of the Collateral Agent. Any waiver or consent with respect to any provision
of the Loan Documents shall be effective only in the specific instance and for the specific purpose for which it was given. No
notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, waiver or consent affected in accordance with this Section 12.4 shall be
binding upon Collateral Agent, Lender and on Borrower.

 

12.5 Reliance
by Lender. All covenants, agreements, representations and warranties made herein by Borrower shall be deemed to be material
to and to have been relied upon by Collateral Agent and Lender, notwithstanding any investigation by Collateral Agent or Lender.

 

12.6 No
Set-Offs by Borrower. All sums payable by Borrower pursuant to this Agreement or any of the other Loan Documents shall be payable
without notice or demand and shall be payable in United States Dollars without set-off or reduction of any manner whatsoever.

 

12.7 Counterparts.
This Agreement may be executed in any number of counterparts and by different parties on separate counterparts (including signatures
delivered by facsimile or other electronic means), 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.

 

12.8 Survival.
All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations
or commitment to fund remain outstanding. The obligations of Borrower to indemnify Collateral Agent and Lender with respect to
the expenses, damages, losses, costs and liabilities described in Section 10.3 shall survive until all applicable statute
of limitations periods with respect to actions that may be brought against Collateral Agent or Lender have run.

 

13. Relationship
of Parties. Borrower and Lender acknowledge, understand and agree that the relationship between Borrower, on the one hand,
and Lender, on the other, is, and at all times shall remain solely that of a borrower and lender. Lender shall not, under any circumstances,
be construed to be a partner or a joint venturer of Borrower or any of its Affiliates; nor shall Lender, under any circumstances,
be deemed to be in a relationship of confidence or trust or a fiduciary relationship with Borrower or any of its Affiliates, or
to owe any fiduciary duty or any other duty to Borrower or any of its Affiliates. Neither Collateral Agent nor Lender undertakes
or assumes any responsibility or duty to Borrower or any of its Affiliates to select, review, inspect, supervise, pass judgment
upon or otherwise inform Borrower or any of its Affiliates of any matter in connection with its or their Property, any Collateral
held by Collateral Agent or Lender or the operations of Borrower or any of its Affiliates. Borrower and each of its Affiliates
shall rely entirely on their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment
or supply of information undertaken or assumed by Collateral Agent or Lender in connection with such matters is solely for the
protection of Collateral Agent and Lender and neither Borrower nor any Affiliate is entitled to rely thereon.

 

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14. Confidentiality.
All information (other than periodic reports filed by Borrower with the Securities and Exchange Commission) disclosed by Borrower
to Collateral Agent or Lender in writing or through inspection pursuant to this Agreement that (x) is marked as confidential by
Borrower at the time of disclosure, or (y) should reasonably be understood to be confidential (the “Confidential Information”)
shall be considered confidential. Accordingly, Lender and the Collateral Agent agree that any Confidential Information it may obtain
in the course of acquiring, administering, or perfecting Collateral Agent’s security interest in the Collateral shall not
be disclosed to any other Person or entity in any manner whatsoever, in whole or in part, without the prior written consent of
Borrower, except that Lender and the Collateral Agent may disclose any such information: (a) to its own directors, officers, employees,
accountants, counsel and other professional advisors and to its Affiliates if Lender or the Collateral Agent in their sole discretion
determines that any such party should have access to such information in connection with such party’s responsibilities in
connection with the Loans or this Agreement and, provided that such recipient of such Confidential Information either (i) agrees
to be bound by the confidentiality provisions of this paragraph or (ii) is otherwise subject to confidentiality restrictions that
reasonably protect against the disclosure of Confidential Information; (b) if such information is generally available to the public;
(c) if required or appropriate in any report, statement or testimony submitted to any governmental authority having or claiming
to have jurisdiction over Lender or the Collateral Agent; (d) if required or appropriate in response to any summons or subpoena
or in connection with any litigation, to the extent permitted or deemed advisable by Lender’s or the Collateral Agent’s
counsel; (e) to comply with any legal requirement or law applicable to Lender or the Collateral Agent; (f) to the extent reasonably
necessary in connection with the exercise of any right or remedy under any Loan Document, including Collateral Agent’s sale,
lease, or other disposition of Collateral after default; (g) to any participant or assignee of Lender or the Collateral Agent or
any prospective participant or assignee (other than any Disqualified Lender); provided, that such participant or assignee or prospective
participant or assignee agrees in writing to be bound by this Section prior to disclosure; or (h) otherwise with the prior consent
of Borrower; provided, that any disclosure made in violation of this Agreement shall not affect the obligations of Borrower or
any of its Affiliates under this Agreement or the other Loan Documents.

 

15. CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT. EACH OF BORROWER, COLLATERAL AGENT AND LENDER HEREBY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT. BORROWER, COLLATERAL AGENT AND LENDER HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS
OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON
LAW OR STATUTORY CLAIMS.

 

[Remainder of page intentionally left blank.]

 

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

 

	 	BORROWER:
	 	MUSTANG BIO, INC.
	 	 	 
	 	By:	/s/ Manuel Litchman, M.D.
	 	Name:	Manuel Litchman, M.D.
	 	Title:	President and CEO
	 	 
	 	LENDER:
	 	HORIZON TECHNOLOGY FINANCE CORPORATION
	 	 	 
	 	By:	/s/ Robert D. Pomeroy, Jr.
	 	Name:	Robert D. Pomeroy, Jr.
	 	Title:	Chief Executive Officer

 

[SIGNATURE PAGE TO VENTURE
LOAN AND SECURITY AGREEMENT]

 

    	 

     

    

 

LIST OF EXHIBITS AND SCHEDULES

 

	Exhibit A	Disclosure Schedule
	Exhibit B	Funding Certificate
	Exhibit C	Form of Note
	Exhibit D	Form of Legal Opinion
	Exhibit E	Form of Officer’s Certificatecosm_ex101.htm

EXHIBIT 10.1
  
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). NO INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT), OR (iii) AN EXEMPTION FROM REGISTRATION UNDER THE ACT WHERE THE HOLDER HAS FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.
  
 COSMOS HOLDINGS INC.
  
 SENIOR PROMISSORY NOTE
  
 	 $250,000.00
	 April 1, 2019

  
 FOR VALUE RECEIVED, the undersigned, Cosmos Holdings Inc., a Nevada corporation (the “Company” or “Payor”), having its executive office at 141 West Jackson Boulevard, Suite 4236, Chicago, Illinois 60604, hereby promises to pay to __________________ (“Payee”), at Payee’s address at ____________________________________________________ (or at such other place as Payee may from time to time hereafter direct by notice in writing to Payor), the principal sum of Two Hundred Fifty Thousand ($250,000) Dollars, in such coin or currency, of the United States of America as at the time shall be legal tender for the payment of public and private debts; with simple and unpaid interest, thereon, payable in coin or currency. Outstanding principal on this note (the “Note”) shall be due and payable on the first to occur of the following dates: (i) April 1, 2020 (the “Maturity Date”); and (ii) any other date on which any principal amount of, or accrued unpaid interest on, this Note is declared to be, or becomes, due and payable pursuant to its terms prior to the Maturity Date (the “Acceleration Date”). 
  
 The following terms shall apply to this Note:
  
 I. Interest and Payment.
  
 1.1 Interest Rate. Simple interest will accrue daily on the principal of this Note, computed from the date of the first advance made hereunder at the rate of fifteen percent (15%) per annum. Interest shall be paid quarterly in arrears. The initial payment shall be calculated from the date of issue through the end of the first full calendar quarter. Each payment thereafter shall equal 3.75% per calendar quarter. Such simple interest shall be calculated based on the actual number of days elapsed in each calendar year. 
  
 1.2 Interest accrued, but unpaid, on this Note shall be payable not later than, on the earliest to occur of (i) the Maturity Date; or (ii) the Acceleration Date as defined above.
  
 1.3 All payments made by the Payor on this Note shall be applied first to the payment of accrued unpaid interest on this Note and then to the reduction of the unpaid principal balance of this Note.
  
  	 
	-1-
	 
 
	 

  
 1.4 In the event that the date for the payment of any amount payable under this Note falls due on a Saturday, Sunday or public holiday under the laws of the State of New York, the time for payment of such amount shall be extended to the next succeeding business day.
  
 II. Replacement and Substitute of Note.
  
 A. In the event that this Note is mutilated, destroyed, lost or stolen, Payor shall, at its sole expense, execute, register and deliver a new Note, in exchange and substitution for this Note, if mutilated, or in lieu of and substitution for this Note, if destroyed, lost or stolen. In the case of destruction, loss or theft, Payee shall furnish to Payor indemnity reasonably satisfactory to Payor, and in any such case, and in the case of mutilation, Payee shall also furnish to Payor evidence to its reasonable satisfaction of the mutilation, destruction, loss or theft of this Note and of the ownership thereof. Any replacement Note so issued shall be in the same outstanding principal amount as this Note and dated the date to which interest shall have been paid on this Note or, if no interest shall have yet been paid, dated the date of this Note.
  
 B. Every Note issued pursuant to the provisions of Section 2.1 above in substitution for this Note shall constitute an additional contractual obligation of the Payor, whether or not this Note shall be found at any time or be enforceable by anyone.
  
 III. Prepayment. The Company may prepay this Note after six (6) months from the date hereof with a premium of two (2.0%) percent ($5,000) in addition to principal and accrued interest in the absolute discretion of the Company. Prior to six (6) months, the Company shall pay the remainder of any unpaid interest for the first six (6) months.
  
 IV. Covenants of Payor.
  
 Payor covenants and agrees that, so long as this Note remains outstanding and unpaid, in whole or in part: 
  
 A. Payor will not sell, transfer or dispose of a material part of its assets; 
  
 B. Payor will not make any loan to any person who is or becomes a shareholder or executive employee of Payor, other than for reasonable advances for expenses in the ordinary course of business;
  
 C. Payor will promptly pay and discharge all lawful taxes, assessments and governmental charges or levies imposed upon it, its income and profits, or any of its property, before the same shall become in default, as well as all lawful claims for labor, materials and supplies which, if unpaid, might become a lien or charge upon such properties or any part thereof; provided, however, that Payor or such subsidiary shall not be required to pay and discharge any such tax, assessment, charge, levy or claim so long as the validity thereof shall be contested in good faith by appropriate proceedings and Payor or such subsidiary, as the case may be, shall set aside on its books adequate reserves with respect to any such tax, assessment, charge, levy or claim so contested;
  
  	 
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 D. Payor will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights and franchises and substantially comply with all laws applicable to Payor as its counsel may advise;
  
 E. Payor will at all times maintain, preserve, protect and keep its property used or useful in the conduct of its business in good repair, working order and condition (except for the effects of reasonable wear and tear in the ordinary course of business) and will, from time to time, make all necessary and proper repairs, renewals, replacements, betterments and improvements thereto;
  
 F. Payor will keep adequately insured, by financially sound reputable insurers, all property of a character usually insured by similar corporations and carry such other insurance as is usually carried by similar corporations;
  
 G. Payor will, promptly following the occurrence of an Event of Default or of any condition or event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default, furnish a statement of Payor's Chief Executive Officer to Payee setting forth the details of such Event of Default or condition or event and the action which Payor intends to take with respect thereto; and
  
 H. Payor will, and will cause to, at all times, maintain books of account in which all of its financial transactions are duly recorded in conformance with generally accepted accounting principles.
  
 V. Events of Default. 
  
 The occurrence of any of the following events of default (“Event of Default”), unless timely cured as set forth herein, shall, at the option of the Payee hereof, make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment, all of which hereby are expressly waived, except as set forth below:
  
 A. The dissolution of Payor or any vote in favor thereof by the Board of Directors and Members of Payor; or
  
 B. Payor makes an assignment for the benefit of creditors, or files with a court of competent jurisdiction an application for appointment of a receiver or similar official with respect to it or any substantial part of its assets, or Payor files a petition or a petition is instituted against Payor seeking relief under any provision of the Federal Bankruptcy Code or any other federal or state statute now or hereafter in effect affording relief to debtors, or any such application or petition is filed against Payor, which application or petition is not dismissed or withdrawn within sixty (60) days from the date of its filing; or
  
 C. Payor fails to pay the principal amount, or interest on, or any other amount payable under, this Note or any other similar Note issued to Payee, as and when the same becomes due and payable; or
  
 D. Payor admits in writing its inability to pay its debts as they mature; or
  
  	 
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 E. Payor sells all or substantially all of its assets or merges or is consolidated with or into another corporation; other than a merger with or into a publicly traded corporation, or
  
 F. A proceeding is commenced to foreclose a security interest or lien in any property or assets of Payor as a result of a default in the payment or performance of any debt (in excess of $100,000 and secured by such property or assets) of Payor or of any subsidiary of Payor; or
  
 G. A final judgment for the payment of money in excess of $100,000 is entered against Payor by a court of competent jurisdiction, and such judgment is not discharged (nor the discharge thereof duly provided for) in accordance with its terms, nor a stay of execution thereof procured, within sixty (60) days after the date such judgment is entered, and, within such period (or such longer period during which execution of such judgment is effectively stayed), an appeal therefrom has not been prosecuted and the execution thereof caused to be stayed during such appeal; or
  
 H. An attachment or garnishment is levied against the assets or properties of Payor or any subsidiary of Payor involving an amount in excess of $100,000 and such levy is not vacated, bonded or otherwise terminated within sixty (60) days after the date of its effectiveness; or
  
 I. Payor defaults in the due observance or performance of any covenant, condition or agreement on the part of Payor to be observed or performed pursuant to the terms of this Note (other than the default specified in Section 5.3 above) and such default continues uncured for a period of thirty (30) days; then, upon the occurrence of any such Event of Default and at any time thereafter, the holder of this Note shall have the right (at such holder's option) to declare the principal of, accrued unpaid interest on, and all other amounts payable under this Note to be forthwith due and payable, whereupon all such amounts shall be immediately due and payable to the holder of this Note, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived; provided, however, that in case of the occurrence of an Event of Default under any of the sections above, such amounts shall become immediately due and payable without any such declaration by the holder of this Note; or
  
 J. Any material representation or warranty of the Payor made herein, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made; or
  
 K. A default by the Payor of a material term, covenant, warranty or undertaking of any other agreement to which the Payor and the Payee are parties, or agreement made by Payor in favor of Payee, or the occurrence of any default under any such other agreement which is not cured after any required notice and/or cure period and which default may materially adversely affect the Payor’s ability to pay this Note or satisfy its liability under any other obligation to the Payee or the occurrence of an “Event of Default” under any such other agreement.
  
  	 
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 VI. Suits for Enforcement and Remedies.
  
 If any one or more Events of Default shall occur and be continuing, the Payee may proceed to (i) protect and enforce Payee's rights either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, condition or agreement contained in this Note or in any agreement or document referred to herein or in aid of the exercise of any power granted in this Note or in any agreement or document referred to herein, (ii) enforce the payment of this Note, or (iii) enforce any other legal or equitable right of the holder of this Note. No right or remedy herein or in any other agreement or instrument conferred upon the holder of this Note is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.
  
 VII. Unconditional Obligation; Fees, Waivers, Other.
  
 A. The obligations to make the payments provided for in this Note are absolute and unconditional and not subject to any defense, set-off, counterclaim, rescission, recoupment or adjustment whatsoever.
  
 B. If, following the occurrence of an Event of Default, Payee shall seek to enforce the collection of any amount of principal of and/or interest on this Note, there shall be immediately due and payable from Payor, in addition to the then unpaid principal of, and accrued unpaid interest on, this Note, all costs and expenses incurred by Payee in connection therewith, including, without limitation, reasonable attorneys' fees and disbursements.
  
 C. No forbearance, indulgence, delay or failure to exercise any right or remedy with respect to this Note shall operate as a waiver or as acquiescence in any default, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.
  
 D. This Note may not be modified or discharged (other than by payment or exchange) except by a writing duly executed by Payor and Payee. 
  
 E. Payor hereby expressly waives demand and presentment for payment, notice of nonpayment, notice of dishonor, protest, notice of protest, bringing of suit, and diligence in taking any action to collect amounts called for hereunder, and shall be directly and primarily liable for the payment of all sums owing and to be owing hereon, regardless of and without any notice, diligence, act or omission with respect to the collection of any amount called for hereunder or in connection with any right, lien, interest or property at any and all times which Payee had or is existing as security for any amount called for hereunder. 
  
 VIII. Restriction on Transfer. 
  
 This Note has been acquired for investment, and this Note has not been registered under the securities laws of the United States of America or any state thereof. Accordingly, no interest in this Note may be offered for sale, sold or transferred in the absence of registration and qualification of this Note, under applicable federal and state securities laws or an opinion of counsel of Payee reasonably satisfactory to Payor that such registration and qualification are not required. 
  
  	 
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 IX. Miscellaneous.
  
 A. The headings of the various paragraphs of this Note are for convenience of reference only and shall in no way modify any of the terms or provisions of this Note.
  
 B. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when personally delivered or sent by registered or certified mail (return receipt requested, postage prepaid), facsimile transmission or overnight courier to the address of the intended recipient as set forth in the preamble to this Note or at such other address as the intended recipient shall have hereafter given to the other party hereto pursuant to the provisions of this Note.
  
 C. The term “Note” and all references thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.
  
 D. The Payor may not delegate its obligations under this Note and such attempted delegations shall be null and void. The Payee may not assign, pledge or otherwise transfer this Note without the prior written consent of the Payor (which consent shall not be unreasonably withheld except in such instance where the proposed assignee or transferee is a direct or indirect competitor or owns any interest in any business that competes, directly or indirectly, with the Payor). This Note inures to the benefit of Payee, its successors and its assignee of this Note and binds the Payor, and its successors and assigns, and the terms “Payee” and “the Payor” whenever occurring herein shall be deemed and construed to include such respective successors and assigns. Any assignment or transfer made in violation of this Section 9.4 shall be void ab initio.
  
 E. If default is made in the payment of this Note, Payor shall pay the Payee hereof reasonable costs of collection, including reasonable attorneys’ fees.
  
 F. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the City of New York, County of New York. Both parties and the individual signing this Note on behalf of the Payor agree to submit to the personal jurisdiction of such courts. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue in any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The parties executing this Agreement and the other agreements referred to herein or delivered in connection herewith on behalf of the Payor agree to submit to the jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees, costs and expenses. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Payee from bringing suit or taking other legal action against the Payor in any other jurisdiction where the Payor holds assets to collect on the Payor’s obligations to the Payee, to realize on any collateral or any other security for such obligations, or to enforce a judgment in another court in favor of the Payee. 
  
 G. Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Payor to the Payee and thus refunded to the Payor.
  
  
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 IN WITNESS WHEREOF, Payor has caused this Note to be signed in its name by an authorized officer as of the 1st day of April, 2019.
  
 	
	  
	 COSMOS HOLDINGS INC.

	
	  
	 By:
	 /s/ Grigorios Siokas
	
	  
	 Name:
	 Grigorios Siokas
	
		 Title:
	 CEO
	

  
  	 	 LENDER:
	
	 	 	 	 
		By:		
	  
	  
	Name:	 

  
  
  	 -7-

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