Document:

Venture Loan and Security Agreement

 Exhibit 10.13 
 VENTURE LOAN AND SECURITY AGREEMENT 
 Dated as of October 31,
2008 
 by and between 
 COMPASS HORIZON FUNDING COMPANY LLC, 
 a Delaware limited liability company

 76 Batterson Park Road 
 Farmington, CT 06032 
 as Lender 
 And 
 TENGION, INC.,

 a Delaware corporation 
 2900 Potshop Lane 
 East Norriton, PA 19403 
 as Borrower 
 COMMITMENT AMOUNT: $5,772,621.85 
 Commitment Termination Date:         October 31, 2008

 The Lender 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: 
 “Account Control Agreement”
means an agreement acceptable to Lender which perfects via control Lender’s security interest in Borrower’s deposit accounts and/or accounts holding securities. 
 “Account Collateral” means accounts receivable due or to become due under all purchase orders and contracts
for the sale of products or the performance of services or both (and related general intangibles in the nature of rights to payment) and the proceeds thereof. 
 “Affiliate” means any Person that owns or controls directly or indirectly ten percent (10%) or more of
the stock of another entity, any Person that controls or is controlled by or is under common control with such Persons or any Affiliate of such Persons and each of such Person’s officers, directors, joint venturers or partners. 
 “Agreement” means this certain Venture Loan and Security Agreement by and between Borrower and Lender dated
as of the date on the cover page hereto (as it may from time to time be amended or supplemented in writing signed by the Borrower and Lender). 
 “Borrower” means the Borrower as set forth on the cover page of this Agreement. 
 “Borrower’s Home State” means Pennsylvania. 
 “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 Borrower’s Home State. 
 “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 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. 
 “Commitment Termination Date” has the
meaning as set forth on the cover page of this Agreement. 
  

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 “Commitment Amount” has the meaning as set forth on the
cover page of this Agreement. 
 “Default” means 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 four percent (4%) 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. 
 “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. 
 “Existing Agreement” means that certain Venture Loan and Security Agreement executed September 16, 2006 to be effective as of September 1, 2006, as the same may be amended or
supplemented from time to time. 
 “Existing Venture Debt” means the obligations of Borrower to
Existing Lender pursuant to the Existing Agreement. 
 “Existing Lender” means Horizon
Technology Funding Company LLC. 
 “Event of Default” has the meaning given to such term in
Section 8 of this Agreement. 
 “Funding Certificate” means a certificate executed
by a 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. 
  

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 “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, (c) any court
or administrative tribunal, or (d) with respect to any Person, any arbitration tribunal or other non-governmental authority to whose jurisdiction that Person has consented. 
 “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. 
 “Indebtedness” means, with respect to
Borrower or any Subsidiary, 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 and other payables aged less than one hundred eighty (180) days), (d) all capital lease obligations of such Person,
(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 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. Unless otherwise indicated, the term “Indebtedness” shall include all Indebtedness of Borrower and the
Subsidiaries. 
 “Indemnified Person” has the meaning given such term in
Section 10.3 of this Agreement. 
 “Intellectual Property” means all of
Borrower’s right, title and interest in and to patents, patent rights (and applications and registrations therefor), trademarks and service marks (and applications and registrations therefor), inventions, copyrights, mask works (and
applications and registrations therefor), trade names, trade styles, software and computer programs, source code, object code, trade secrets, 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 Borrower 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) and all agreements, instruments or other documents pursuant to or under which any right, title or interest
in or to any of the foregoing items in this definition have been or will be acquired, including but not limited to purchase agreements, leases, licenses, installment sale agreements, joint venture arrangements or corporate collaboration agreements.

 “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 in favor of Lender
in substantially the form provided by Lender or any Third Part Equipment 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, administration and funding of the Loan Documents; and Lender’s reasonable attorneys’ fees, costs and expenses incurred in amending, modifying, 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 without limitation all fees and costs incurred by
Lender in connection with Lender’s enforcement of its rights in a bankruptcy or insolvency proceeding filed by or against Borrower or its Property. 
 “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 the advance of credit by
Lender to Borrower under this Agreement. 
 “Loan Documents” means, collectively, this
Agreement, the Note, the Warrant, any Landlord Agreement, any Account Control Agreement and all other documents, instruments and agreements entered into in connection with this Agreement, all as amended, supplemented or extended from time to time.

 “Loan Rate” means, with respect to the Loan, the per annum rate of interest (based on a year
of twelve 30-day months) equal to the one month LIBOR Rate, as reported in the Wall Street Journal, on the date which is five (5) days before the Funding Date for such Loan (or, if such date is not a Business Day, the next earlier
Business Day) plus (ii) 9.00%. The Loan Rate shall be fixed for the term of the Loan. 
 “Material Adverse Change” has the meaning set forth in Section 2.1(d). 
 “Maturity Date” means August 1, 2011, or, in any case, if earlier, the date of acceleration of such Loan following an Event of Default or the date of prepayment, whichever is applicable. 
 “Note” means the promissory note executed in connection with the 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 Lender of any kind and description (pursuant to or evidenced by the Loan Documents (other than the Warrant) and whether
or not for the payment of money), whether direct or indirect, absolute or contingent, due and payable or to become due and payable, now existing or hereafter arising, including all Lender’s Expenses. 
  

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 “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. 
 “PA Lease Agreements” means that certain (a) Sub-Sublease, dated February 1, 2006, between Corporate Interiors, Inc. and Borrower for the property located at 2900 Potshop Lane,
East Norriton, PA 19403; and (b) Lease, dated February 1, 2006, between Norriton Business Campus, L.P. and Borrower for the property located at 2900 Potshop Lane, East Norriton, PA 19403 and which lease period commences on March 1,
2011. 
 “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 and Existing Lender; 
 (b) Indebtedness of Borrower outstanding or available to be borrowed as of October 31, 2008 secured by Liens permitted
under clause (e) of the definition of Permitted Liens in an aggregate outstanding principal amount not to exceed Ten Million Dollars ($10,000,000); 
 (c) Indebtedness arising from the endorsement of instruments in the ordinary course of business; 
 (d) Indebtedness of Borrower arising from the establishment of letters of credit in favor of Corporate Interiors, Inc. and Norriton Business Campus, L.P. in accordance with the PA Lease Agreements, such
indebtedness not to exceed Three Million Dollars ($3,000,000);and 
 (e) Indebtedness existing on the date hereof
and set forth on the Disclosure Schedule. 
 “Permitted Investments” means and includes any of
the following Investments as to which Lender has a perfected security interest: 
 (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. 
 (c) Investments in open market commercial paper rated at least “A1” or “P1” or higher by a national credit rating agency. 
  

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 (d) Investments pursuant to or arising under currency agreements or interest
rate agreements entered into in the ordinary course of business. 
 (e) Other Investments aggregating not in
excess of Two Hundred Fifty Thousand Dollars ($250,000) at any time. 
 “Permitted Liens” means
and includes: 
 (a) the Lien created by this Agreement and the Existing 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); 
 (e) Liens upon any equipment or other personal property acquired by
Borrower to secure (i) the purchase price of such equipment or other personal property, or (ii) lease obligations or indebtedness incurred solely for the purpose of financing the acquisition of such equipment or other personal property;
provided that (A) such Liens are confined solely to the equipment or other personal property so acquired and the amount secured does not exceed the acquisition price thereof, including, without limitation, soft costs (including,
without limitation, engineering and installation expenses) and taxes, and (B) no such Lien shall be created, incurred, assumed or suffered to exist in favor of Borrower’s officers, directors or shareholders holding five percent
(5%) or more of Borrower’s Equity Securities; 
 (f) licenses of Intellectual Property pursuant to or
in connection with leases, license agreements, purchase agreements, joint ventures and corporate collaborations entered into in the ordinary course of business; and 
 (g) Liens created by the establishment of the letters of credit referenced in clause (d) of the definition of Permitted
Indebtedness. 
 “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. 
  

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 “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. 
 “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. 
 “Third Party Equipment” has
the meaning given such term in Section 4.8 of this Agreement. 
 “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 the Lender or its designees to purchase ______ shares of Series C Convertible Preferred Stock of Borrower. 
 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. 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 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. 
  

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 2. Loans; Repayment. 
 2.1 Commitment. 
 (a) The Commitment Amount. 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 prior to the Commitment Termination Date, the Loan in the amount of the Commitment Amount. 
 (b) The Loan and the Note. The obligation of Borrower to repay the unpaid principal amount of and interest on the Loan shall be evidenced by a Note issued to Lender. 
 (c) Use of Proceeds. The proceeds of the Loan shall be used solely to repay (through the direct payment by Lender to
Existing Lender at Borrower’s written instruction) a portion of the existing obligations of Borrower to Existing Lender pursuant to the Existing Agreement, as evidenced by a certain Amended and Restated Secured Promissory Note (Loan A) dated as
of September 1, 2006 in the original principal amount of Eleven Million Five Hundred and Forty-Five Thousand Two Hundred Forty-Three and 71/100 Dollars ($11,545,243.71). 
 (d) Termination of Commitment to Lend. Notwithstanding anything in the Loan Documents, Lender’s obligation to
lend 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) the Commitment Termination Date. Notwithstanding
the foregoing, Lender’s obligation to lend the Commitment Amount to Borrower shall terminate if, in Lender’s reasonable judgment, there has been a material adverse change in the results of operations and financial condition 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 (each, a
“Material Adverse Change”). 
 2.2 Payments. 
 (a) Scheduled Payments. Borrower shall make (i) payments of accrued interest only on the outstanding principal
amount of the Loan on the first day of each calendar month through and including January 1, 2010 and (ii) twenty (20) equal payments of principal plus accrued interest on the outstanding principal amount of the Loan on each subsequent
Payment Date as set forth in the Note (collectively, the “Scheduled Payments”). Borrower shall make such Scheduled Payments commencing on the date set forth in the Note and continuing thereafter on the first Business Day of each
calendar month (each a “Payment Date”) through the Maturity Date. On or before the Funding Date, Lender shall provide Borrower with an amortization and payment schedule for the Loan. In any event, all unpaid principal and accrued
interest shall be due and payable in full on the Maturity Date. 
 (b) Interim Payment. Unless the Funding
Date for the 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 month) payable with respect to the Loan on the first Business Day of the
next calendar month. 
  

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 (c) Payment of Interest. Borrower shall pay interest on the Loan at a
per annum rate of interest equal to the Loan Rate. All computations of interest (including interest at the Default Rate, if applicable) shall be based on a year of twelve 30-day months. 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 prior to an Event of Default shall be applied as follows: (1) first, to Lender’s Expenses then due and owing; and
(2) second 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 amount then due). After an Event of Default and until such Event of Default shall have been waived, 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 five percent (5%) of any Scheduled
Payment not paid within three (3) Business Days of Lender notifying Borrower that such payment is past due. 
 (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 under this Agreement or the other Loan Documents (including Scheduled Payments), payable with
respect to the 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 the Obligations have been accelerated (whether automatically or by Lender’s
election), Borrower shall pay interest on the aggregate, outstanding accelerated balance hereunder from the date of the Event of Default until all Events of Default are cured, at a per annum rate equal to the Default Rate. 
 2.3 Prepayments. 
 (a) Mandatory Prepayment Upon an Acceleration. If the Loan is 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 the Borrower had opted to prepay on the date of such acceleration. 
 (b) Optional Prepayment. Upon five (5) Business Days’ prior written notice to Lender, Borrower may, at its
option, at any time, prepay the Loan by paying to Lender an amount equal to (i) all accrued and unpaid Scheduled Payments with respect to the Loan due prior to the date of prepayment; (ii) any accrued and unpaid interest on the then
outstanding principal balance of the Loan; (iii) an amount equal to (A) if the Loan is prepaid within twelve (12) months from its Funding Date, five (5%) percent of the then outstanding principal balance of the Loan, (B) if
the Loan is prepaid more than twelve (12) months from the date hereof but less than twenty-four (24) months from its Funding Date, three (3%) percent of the then

  

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outstanding principal balance of the Loan, or (C) if the Loan is prepaid more than twenty-four (24) months from the Funding Date, two (2%) percent of the then outstanding principal
balance of the Loan; (iv) the outstanding principal balance of the Loan and (v) all other sums, if any, that shall have become due and payable hereunder. 
 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 10:00 a.m. Connecticut time, on the date on which such payment is due. Borrower shall make such payments to Lender via wire transfer as follows: 
  

			
	 Payment via wire transfer to
 Compass Horizon:
 Credit:
	  	 Compass Horizon Funding Company
 LLC/Horizon Credit I LLC

	Bank Name:	  	U.S. Bank National Association
	Bank Address:	  	 P.O. Box 643857
 Cincinnati
OH 45264-3857

	Account No.:	  	
	ABA Routing No.:	  	
	Reference:	  	Tengion, Inc. Invoice #

 (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. 
 2.5 Procedure for Making Loan. 
 (a) Notice. Whenever Borrower desires that Lender make the Loan, Borrower shall notify Lender of the date on which
Borrower desires Lender to make the Loan. Borrower’s notice shall be made at least five (5) Business Days in advance of the desired Funding Date, unless Lender elects at its sole discretion to allow the Funding Date to be within five
(5) Business Days of the notice. Borrower’s execution and delivery to Lender of a Note shall be Borrower’s agreement to the terms and calculations thereunder with respect to the Loan. Lender’s obligation to make the Loan shall be
expressly subject to the satisfaction of the conditions set forth in Sections 3.1 and 3.2. 
 (b)
Loan Rate Calculation. Prior to the Funding Date, Lender shall establish the Loan Rate with respect to the Loan, which shall be set forth in the Note to be executed by Borrower with respect to the Loan and shall be conclusive in the absence
of a manifest error. 
 (c) Disbursement. Lender shall disburse the proceeds of the Loan by wire transfer
to Borrower at the account specified in the Funding Certificate for the Loan. 
  

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 2.6 Good Faith Deposit; and Legal and Closing Expenses. 

(a) Good Faith Deposit. Borrower has delivered to Lender a good faith deposit in the amount of Thirty Thousand
Dollars ($30,000) (the “Good Faith Deposit”). The Good Faith Deposit will be applied to the legal, due diligence and documentation expenses as set forth in Section 2.6(c) below and the balance shall be applied to the Commitment
Fee as provided in Section 2.6(b) below. 
 (b) Commitment Fee. Borrower shall pay Lender
concurrently with its execution and delivery of this Agreement a commitment fee in the amount of Twenty Eight Thousand Eight Hundred Sixty Three and 11/100 Dollars ($28,863.11) (the “Commitment Fee”). The Commitment Fee shall be
retained by Lender and be deemed fully earned upon receipt. 
 (c) Legal, Due Diligence and Documentation
Expenses. Borrower authorizes Lender, concurrently with Borrower’s and Lender’s execution and delivery of this Agreement, to apply Twenty-Five Thousand Dollars ($25,000) from the Good Faith Deposit to pay for Lender’s legal, due
diligence and documentation expenses in connection with the negotiation and documentation of this Agreement and the Loan Documents and such payment shall satisfy in full Borrower’s obligation to pay the same. 
 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 the Loan and shall be deemed added to Section 3.2): 
 (a) Loan Agreement. This Agreement duly executed by Borrower and Lender. 
 (b) Warrant. The Warrant to be issued to Lender or its designees, duly executed by Borrower. 
 (c) Secretary’s Certificate. A certificate of the secretary or assistant secretary of Borrower with copies of the
following documents attached: (i) the certificate of incorporation and bylaws 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 incorporation and the state, in which Borrower’s principal place of business is located, each dated as of a recent date. 
 (e) Certificate of Insurance. Evidence of the insurance coverage required by Section 6.8 of this
Agreement. 
  

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 (f) Consents. All necessary consents of shareholders and other third
parties with respect to the execution, delivery and performance of this Agreement, the Warrant and the other Loan Documents. 
 (g) Legal Opinion. A legal opinion of Borrower’s counsel covering the matters set forth in Exhibit D hereto. 
 (h) Account Control Agreements. Account Control Agreements for all of Borrower’s deposit accounts and accounts
holding securities duly executed by all of the parties thereto, in the forms provided or approved by Lender. 
 (i) Other Documents. Such other documents and completion of such other matters, as Lender may in good faith deem reasonably necessary or appropriate. 
 3.2 Conditions Precedent to Making a Loan. The obligation of Lender to make each Loan is further subject to the
following conditions: 
 (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) Note. Borrower shall have duly executed and delivered to Lender a Note in the amount of the Loan. 
 (d) UCC Financing Statements. Lender shall have received such documents, instruments and agreements, including UCC financing statements or amendments to UCC financing statements, as Lender shall
reasonably request to evidence the perfection and priority of the security interests granted to Lender pursuant to Section 4. Borrower authorizes Lender to file any UCC financing statements, continuations of or amendments to UCC
financing statements it deems 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 the Loan. 
 (f) Other Documents. Such other documents and completion of such other matters, as Lender in good faith may deem reasonably necessary or appropriate. 
 3.3 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 the Loan, if the Loan is advanced. Borrower expressly agrees that the extension of the 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 Lender’s sole discretion. 
  

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 4. Creation of Security Interest. 
 4.1 Grant of Security Interest. Borrower grants to Lender a valid, first priority (except for Permitted Liens that may
have priority), 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 Warrant). The “Collateral” shall mean and include all right, title, interest, claims and demands of Borrower in and to all
personal property of Borrower, including without limitation, all of 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, without limitation, 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, without limitation,
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 (excluding Intellectual Property), now owned or hereafter
acquired, including, without limitation, 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 (whether
or not the letter of credit is evidenced by a writing), certificates of deposit, instruments, promissory notes, chattel paper (whether tangible or electronic) and investment property, including, without limitation, 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) Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof, including, without limitation, insurance, condemnation, requisition or similar payments and proceeds of the sale or licensing of Intellectual Property; but 
 (g) Notwithstanding the foregoing, the Collateral shall not include any Intellectual Property; 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 Closing Date, include the Intellectual Property to the extent necessary to permit perfection of Lender’s security interest solely with respect to 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, Borrower shall immediately notify Lender in writing signed by Borrower of the brief details thereof and grant to 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 Lender. 
 4.3 Duration of Security
Interest. 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 any Loans, whereupon such security interest shall
terminate. 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
executing 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 or such other locations which Borrower has
identified in writing to Lender. Borrower shall remain in full possession, enjoyment and control of the Collateral (except only as may be otherwise required by Lender for perfection of its security interest therein) and so long as no Event of
Default has occurred, 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 time 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 Lender, at the request of Lender, all financing statements and other documents Lender may reasonably request, in form satisfactory to Lender, to perfect
and continue 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. Lender (through any of its officers, employees,
or agents) shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours, to inspect Borrower’s books and records 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. 
 4.7 Protection of Intellectual Property. Borrower shall (i) protect, defend and maintain the validity and enforceability of its Intellectual Property material to Borrower’s business, to
the extent that failure to do so would have a material adverse effect on Borrower’s business, and (ii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public other
than in the ordinary course of business. Borrower’s obligations under this section shall be subject to Borrower’s good faith determination as to whether and in what manner Borrower should exercise its obligations, including as to whether
and in what manner legal proceedings should be pursued. 
 4.8 Lien Subordination. Lender agrees that the
Liens granted to it hereunder in Third Party Equipment shall be subordinate to the Liens of current and future lenders providing equipment financing and equipment lessors for equipment and other personal property acquired by Borrower after the date
hereof (“Third Party Equipment”); provided that such Liens are confined solely to the equipment so financed and the proceeds thereof and are Permitted Liens. Notwithstanding the foregoing, the Obligations hereunder
shall not be subordinate in right of payment to any obligations to other lenders, equipment lenders or equipment lessors and Lender’s rights and remedies hereunder in the Collateral which does not constitute Third Party Equipment shall not in
any way be subordinate to the rights and remedies of any such lenders or equipment lessors. So long as no Event of Default has occurred which has not been waived by Lender, Lender agrees to execute and deliver such agreements and documents as may be
reasonably requested by Borrower from time to time which set forth the lien subordination described in this Section 4.8 and are reasonably acceptable to Lender. Lender shall have no obligation to execute any agreement or document which
would impose obligations, restrictions or lien priority on Lender which are less favorable to Lender than those described in this Section 4.8. 
 5. Representations and Warranties. Except as set forth in the Disclosure Schedule, Borrower represents and warrants as follows: 
 5.1 Organization and Qualification. Borrower is a corporation duly organized and validly existing and in good standing
under the laws of its state of incorporation and qualified and licensed to do business in, and is in good standing in, any state in which the conduct of its business or its ownership of Property requires that it be so qualified 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 on Borrower. 
 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 has all
requisite power and authority to own and operate its Property and to carry on its businesses as now conducted. 
  

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 5.3 Conflict with Other Instruments, etc. Except as set forth in
Section 5.3 to the Disclosure Schedule, 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 conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation, the by-laws, or any other organizational documents of Borrower or any law or any regulation, order, writ, injunction
or decree of any court or governmental instrumentality or 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, or constitute a default
thereunder or 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 incurring 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, was or will be necessary to (i) the valid execution and delivery of any Loan Document to which Borrower is a party, (ii) the performance of
Borrower’s obligations under any Loan Document, or (iii) 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
Warrant. 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 Intellectual Property. Borrower has not received any written 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 Intellectual Property constitute substantially all of the assets and property of Borrower. 
 5.6 Name; Location of Chief Executive Office, Principal Place of Business and Collateral. Borrower has not done
business under any name other than that specified on the signature page hereof. 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 states and at the addresses set forth on the cover page of this Agreement and in Section 5.6 of the Disclosure Schedule. The Collateral is presently located at the address set forth on the cover page
hereof or as set forth in the Disclosure Schedule. 
  

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 5.7 Litigation. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency in which an adverse decision could have a material adverse effect on Borrower or the aggregate value of the Collateral. Borrower does not have knowledge of any such pending or threatened
actions or proceedings. 
 5.8 Financial Statements. All financial statements relating to Borrower or any
Affiliate that have been or may hereafter be delivered by Borrower to Lender present fairly in all material respects Borrower’s financial condition as of the date thereof and Borrower’s results of operations for the period then ended.

 5.9 No Material Adverse Effect. To Borrower’s knowledge, no event has occurred and no condition
exists which would reasonably be expected to have a material adverse effect on the financial condition, business or operations of Borrower since December 31, 2007. 
 5.10 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 Lender contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements
not misleading. There is no fact known to Borrower which materially adversely affects, or which would in the future be reasonably expected to materially adversely affect, its ability to perform its obligations under this Agreement. 
 5.11 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, without limitation, contingent liabilities) 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. 
 5.12 Subsidiaries. Borrower has no Subsidiaries. 
 5.13 Catastrophic Events; Labor Disputes. None of Borrower or its properties 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 on the financial condition, business or
operations of Borrower. 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 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 could reasonably be expected to have a material adverse effect on
the financial condition, business or operations of Borrower. 
  

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 5.14 Certain Agreements of Officers, Employees and
Consultants. 
 (a) No Violation. To the knowledge of Borrower, no officer, employee or
consultant of Borrower is, or is now expected to be, 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. 
 (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, would reasonably be expected to have a material adverse effect on the financial condition, business or operations
of Borrower, has any present intention of terminating his or her employment or consulting relationship with Borrower. 
 6.
Affirmative Covenants. Borrower, until the full and complete payment of the Obligations, covenants and agrees that: 
 6.1 Good Standing. Borrower shall 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 on the financial condition, operations or business of Borrower. Borrower shall maintain in force all licenses, approvals and agreements, the loss of which would reasonably be
expected to have a material adverse effect on its financial condition, operations or business. 
 6.2
Government Compliance. Borrower shall comply with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which would reasonably be expected to materially adversely affect the financial
condition, operations or business of Borrower. 
 6.3 Financial Statements, Reports, Certificates.
Borrower shall deliver to Lender: (a) as soon as available, but in any event within thirty (30) days after the end of each month, a company prepared balance sheet, income statement and cash flow statement covering Borrower’s
operations during such period, certified by Borrower’s president, treasurer or chief financial officer (each, a “Responsible Officer”); (b) as soon as available, but in any event within one hundred fifty (150) days
after the end of Borrower’s fiscal year, audited 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; and (c) as soon as available, but in any event within ninety (90) days after the end of Borrower’s fiscal year or the date of Borrower’s board of directors’ adoption,
Borrower’s operating budget and plan for the next fiscal year; and (d) such other financial information as Lender may reasonably request from time to time. From and after such time as Borrower becomes a publicly reporting company, promptly
as they are

  

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available and in any event: (x) within five (5) Business Days after 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 (y) within five (5) Business Days after 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 financial statements of Borrower filed with such Form 10-Q. In addition, Borrower shall deliver to Lender (i) promptly upon becoming available, copies of all
statements, reports and notices sent or made available generally by Borrower to its security holders (other than requests for approvals or consents); (ii) immediately upon receipt of notice thereof, a report of any material legal actions
pending or threatened against Borrower or the commencement of any action, proceeding or governmental investigation involving Borrower is commenced that is reasonably expected to result in damages or costs to Borrower of One Hundred Fifty Thousand
Dollars ($150,000) or more; and (iii) such other financial information as Lender may reasonably request from time to time. 
 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 ten (10) 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 due and timely payment or deposit of all federal, state, and local taxes, assessments, or contributions required of it by law or imposed upon any Property belonging to it, and will execute and deliver
to Lender, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower will make timely payment or deposit of all 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 Lender with proof satisfactory to Lender indicating that Borrower 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). 
 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. Borrower shall not permit any such material item of Collateral to be operated or maintained in violation of any applicable law, statute, rule or regulation where
failure to comply would reasonably be expected to have a material adverse effect on Borrower’s

  

 20 

 
business. With respect to items of leased equipment (to the extent Lender has 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 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, and as Lenders may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are reasonably
satisfactory to Lender. All property policies shall have a lender’s loss payable endorsement showing Horizon Technology Finance Management LLC as an additional loss payee and all liability policies shall show Horizon Technology Finance
Management LLC as an additional insured and all policies shall provide that the insurer must give Horizon Technology Finance Management LLC at least thirty (30) days notice before canceling its policy. At Lender’s request, Borrower shall
deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Lender’s option, be payable to Horizon Technology Finance Management LLC 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 casualty policy, toward the replacement or repair of destroyed or damaged property; provided that (i) any
such replaced or repaired property (a) shall be of equal or like value as the replaced or repaired Collateral and (b) shall be deemed Collateral in which Lender has been granted a first priority security interest (except to the extent any
Permitted Liens may have a superior priority to Lender’s Lien under this Agreement) and (ii) after the occurrence and during the continuation of an Event of Default all proceeds payable under such casualty policy shall, at the option of
Lender, be payable to Horizon Technology Finance Management LLC, 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 Lender, 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 Lender deems prudent. On or prior to the Funding Date and prior to each policy renewal,
Borrower shall furnish to Lender certificates of insurance or other evidence satisfactory to Lender that insurance complying with all of the above requirements is in effect. 
 6.9 Security Interest. Assuming the proper filing of one or more financing statement(s) identifying the Collateral
with the proper state and/or local authorities, the security interests in the Collateral granted to Lender pursuant to this Agreement (i) constitute and will continue to constitute first priority security interests (except to the extent any
Permitted Liens may have a superior priority to Lender’s Lien under this Agreement) and (ii) are and will continue to be superior and prior to the rights of all other creditors of Borrower (except to the extent of such Permitted Liens).

 6.10 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 Lender to make effective the purposes of this Agreement, including without limitation, the continued perfection and priority of Lender’s security interest in the
Collateral. 
  

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 7. Negative Covenants. Borrower, until the full and complete payment of the
Obligations, covenants and agrees that Borrower shall not, without the prior written consent of Lender: 
 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 thirty (30) days prior written
notice to Lender. 
 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. 
 7.3 Liens. Create, incur, assume or suffer to exist any Lien of any kind upon any Collateral, whether now owned or
hereafter acquired, except Permitted Liens. 
 7.4 Other Dispositions of Collateral. Convey, sell, lease
or otherwise dispose of all or any part of the Collateral to any Person (collectively, a “Transfer”), except for: (i) Transfers of inventory in the ordinary course of business; (ii) Transfers of worn-out or obsolete
equipment; or (iii) Transfers permitted under subclause (f) of the definition of Permitted Liens with respect to Collateral. 
 7.5 Distributions. (i) Pay any dividends or make any distributions on its Equity Securities; (ii) purchase, redeem, retire, defease or otherwise acquire for value any of its Equity
Securities (other than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements or similar arrangements in each case as approved by Borrower’s Board of Directors (or an appropriate committee
thereof) and to the extent required, Borrower’s preferred stockholders); (iii) return any capital to any holder of its Equity Securities as such; (iv) make any distribution of assets, Equity Securities, obligations or securities to
any holder of its Equity Securities as such; or (v) set apart any sum for any such purpose; provided, however, Borrower may pay dividends payable solely in common stock. 
 7.6 Mergers or Acquisitions. Merge or consolidate with or into any other Person or acquire all or substantially all of
the capital stock or assets of another Person. 
 7.7 Change in Ownership. Engage in or permit any of its
Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower or reasonably related thereto or have a material change in its ownership of greater than twenty five percent (25%) (other than by the sale by
Borrower of Borrower’s Equity Securities in a public offering or to venture capital or other investors so long as Borrower identifies to Lender the venture capital or other investors prior to the closing of the investment). 
 7.8 Transactions With Affiliates. Enter into any contractual obligation with any Affiliate or engage in any other
transaction with any Affiliate except upon terms at least as favorable to Borrower as an arms-length transaction with Persons who are not Affiliates of Borrower. 
  

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 7.9 Indebtedness Payments. (i) 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 or the Existing Agreement) or lease obligations in an aggregate
amount of more than Fifty Thousand Dollars ($50,000) in any calendar year , (ii) 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
(iii) repay any notes to officers, directors or shareholders. 
 7.10 Indebtedness. Create, incur,
assume or permit to exist any Indebtedness except Permitted Indebtedness. 
 7.11 Investments. Make any
Investment except for Permitted Investments. 
 7.12 Compliance. Become an “investment company”
or a company controlled by an “investment company” under the Investment Company Act of 1940 or undertake as one of its important activities extending credit to purchase or carry margin stock, or use the proceeds of any Loan for that
purpose; 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”), permit a Reportable Event or Prohibited Transaction, as
defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business or operations or
could reasonably be expected to cause a material adverse change, or permit any of its Subsidiaries to do so. 
 7.13 Maintenance of Accounts. (i) Maintain any deposit account or account holding securities owned by Borrower except (a) accounts with respect to which Lender is able to take such actions as it deems reasonably necessary
to obtain a perfected security interest in such accounts through one or more Account Control Agreements or (b) accounts whose value when added to the value of all other such accounts of Borrower is not more than One Hundred Thousand Dollars
($100,000) in the aggregate; or (ii) grant or allow any other Person (other than Lender or Existing Lender) to perfect a security interest in, or enter into any agreements with any Persons (other than Lender or Existing Lender) accomplishing
perfection via control as to, any of its deposit accounts or accounts holding securities (except Permitted Liens). 
 7.14 Negative Pledge Regarding Intellectual Property. 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 leases or licenses of Intellectual Property (a) pursuant to or in connection with license agreements, joint ventures and corporate collaborations entered into in the ordinary course of business or (b) as may be customary in the
pharmaceutical, biotechnical or tissue engineering industries. 
 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: (i) any Scheduled Payment on the relevant Payment Date or on the relevant Maturity Date, or
(ii) 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 under Section 6.8 or violates any of the covenants contained in Section 7 of this Agreement; provided, that Borrower shall have thirty (30) days from the date it obtains knowledge of any involuntary Lien on
the Collateral to cure such violation. 
 8.3 Other Covenant Defaults. If Borrower fails or neglects to
perform, keep, or observe any other material 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 8.13), in any of the other Loan Documents and Borrower
has failed to cure such default (a) within thirty (30) days of the occurrence of such default, or (b) if such default is capable of being cured and the Collateral or Lender’s prospects of repayment are not materially impaired by
such default, within thirty (30) days of Borrower’s obtaining knowledge of such default. During this cure 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 Intentionally Omitted. 
 8.5 Seizure of Assets, Etc. If any material portion of Borrower’s assets is attached, seized, subjected to a writ
or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or Person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within
twenty (20) days, or if Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim not covered by insurance and in an
amount greater than Two Hundred Fifty thousand Dollars ($250,000) becomes a lien or encumbrance upon any material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any material portion
of Borrower’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within twenty (20) 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. 
 8.6 Notice of Control. 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 Lender) seeking to foreclose or attach any such accounts or securities, which results in the foreclosure or the exclusive control of such accounts
or inability of Borrower to access of such accounts, whether by judicial or administrative hold on such accounts. 
 8.7 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 at maturity or which results in a right by such third party or
parties, whether or not exercised, to accelerate the maturity of Indebtedness in an aggregate amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or a default shall exist under any financing agreement with Lender or any of
Lender’s Affiliates. 
  

 24 

 8.8 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) shall be rendered against Borrower, is not substantially covered by insurance and shall remain unsatisfied and unstayed for a period of twenty
(20) days or more. 
 8.9 Misrepresentations. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty, representation, statement, certification, or report made to Lender by Borrower or any officer, employee, agent, or director of Borrower. 
 8.10 Breach of Warrant. If Borrower shall breach any term of the Warrant, which breach is not cured within thirty
(30) days of Borrower becoming aware thereof. 
 8.11 Unenforceable Loan Document. If (a) any
Loan Document shall in any material respect cease to be a legal, valid and binding obligation of Borrower enforceable in accordance with its terms so as to deprive Lender of the practical realization of the principal benefits provided by the Loan
Documents, or (b) Borrower shall assert that any Loan Document is not a legal, valid and binding obligation of Borrower enforceable in accordance with its terms. 
 8.12 Involuntary Insolvency Proceeding. If a proceeding shall have been instituted in a court having jurisdiction in
the premises seeking a decree or order for relief in respect of Borrower in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee (or similar official) of Borrower or for any substantial part of its Property, or 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 such court shall enter a decree or order granting the relief sought in such proceeding. 
 8.13 Voluntary Insolvency Proceeding. If Borrower shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian (or other similar official) of Borrower or for any substantial part of its Property, or shall
make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action in furtherance of any of the foregoing. 
 9. Lender’s Rights and Remedies. 
 9.1 Rights and Remedies. Upon the occurrence of any Default or Event of Default and during the continuance thereof, 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 and during the continuance thereof, 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, Lender 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) all accrued and unpaid Scheduled Payments with respect to each Loan, (ii) any accrued and unpaid interest, (iii) the amounts which would have otherwise come due under
Section 2.3(b)(iii) if the Loans had been voluntarily prepaid, (iv) the unpaid principal balance of the Loans and (v) 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 8.12 or 8.13 all Obligations shall become immediately due and payable without any action by Lender); 
  

 25 

 (b) Protection of Collateral. Make such payments and do such acts as
Lender considers necessary or reasonable to protect Lender’s security interest in the Collateral. Borrower agrees to assemble the Collateral if Lender so requires and to make the Collateral available to Lender as Lender may designate. Borrower
authorizes Lender and its 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 Lender’s
determination appears or is claimed to be prior or superior to its security interest and to pay all reasonable expenses incurred in connection therewith. With respect to any of Borrower’s owned premises, Borrower hereby grants 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 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. Lender and its 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 without limitation, 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 Lender’s exercise of its remedies hereunder and shall automatically terminate upon the disposition of the Collateral; 
 (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 Lender determines are commercially reasonable and otherwise in accordance with applicable law; 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. Upon the occurrence and during the continuance of any Event of Default, 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 Lender’s possession or control. 
  

 26 

 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 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. 
 9.4 Power of Attorney in Respect of the Collateral. Borrower does hereby irrevocably appoint Lender (which appointment
is coupled with an interest), the true and lawful attorney in fact of Borrower with full power of substitution, for it 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 Lender’s security interests in the Collateral. Borrower does hereby irrevocably appoint Lender (which appointment is coupled with an interest) on the
occurrence and during the continuance of an Event of Default, the true and lawful attorney in fact of Borrower with full power of substitution, for it 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 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 Lender’s
possession or under Lender’s control; (c) to make all demands, consents and waivers, or take any other action with respect to, the Collateral; (d) in 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 Lender may reasonably deem necessary or appropriate to protect and preserve the right, title and interest of 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 Lender determines reasonable; (i) transfer the Collateral into the name of Lender or a third party as the Code
permits; and (j) to otherwise act with respect thereto as though Lender were the outright owner of the Collateral. 
  

 27 

 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 Lender may do any or all of the following: (a) after five (5) Business Days’ prior written notice of
Lender’s intention to do so, 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 Lender deems prudent. Any amounts so paid or deposited by 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
Lender shall not constitute an agreement by Lender to make similar payments in the future or a waiver by Lender of any Event of Default under this Agreement. Borrower shall pay all reasonable fees and expenses, including without limitation,
Lender’s Expenses, incurred by Lender in the enforcement or attempt to enforce any of the Obligations hereunder not performed when due. 
 9.6 Remedies Cumulative. Lender’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Lender shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of Default on Borrower’s part shall be deemed a
continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it. 
 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 Lender, at the time of or
received by 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 Lender, including, without limitation, Lender’s Expenses; 
 (b) Second, to the payment to Lender of the amount then owing or unpaid on the Loans for Scheduled Payments, any
accrued and unpaid interest, the amounts which would have otherwise come due under Section 2.3(b)(iii), 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 to the unpaid interest thereon, then to the amounts which would have otherwise come due under
Section 2.3(b)(iii), if the Loans had been voluntarily prepaid, then to the principal balance of the Loans, and then to the 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. 
  

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 9.8 Reinstatement of Rights. If 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), Lender shall be restored to its former position and rights hereunder with respect to the Property subject to the security interest created under this Agreement. If Lender at any
time after it has accelerated the Loans chooses in its sole discretion to declare the acceleration void and reinstate the Loans, Borrower and Lender shall thereafter continue to be governed by the terms and conditions of the Loan Document as if such
acceleration had not occurred. 
 10. Waivers; Indemnification. 
 10.1 Demand; Protest. Except as expressly set forth in any Loan Document, 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 Lender on which Borrower may in any way be liable. 
 10.2 Lender’s Liability for
Collateral. So long as Lender complies with its obligations, if any, under the Code, Lender shall not 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 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. 
 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 Lender for all liabilities, obligations and out-of-pocket expenses, including Lender’s Expenses and reasonable fees and
expenses of counsel for 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 Lender, and each of its respective successors, assigns, agents, attorneys, officers, directors, shareholders, servants, 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

  

 29 

 
Borrower or Borrower’s failure to comply with the terms of this Agreement or any other Loan Document. 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 Lender for any liability incurred by Lender as a direct and sole result of Lender’s gross negligence or willful misconduct or any Claim arising from (i) Lender’s disposition of any Collateral which was
still a work-in-process at the time Lender took control of such Collateral, or (ii) any Collateral altered after Lender took control of such Collateral. Such indemnities shall continue in full force and effect, notwithstanding the expiration or
termination of this Agreement. Upon Lender’s written demand, Borrower shall assume and diligently conduct, at its sole cost and expense, the entire defense of Lender, each of its partners, and each of their respective, agents, employees,
directors, officers, shareholders, 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 Lender without first obtaining
Lender’s written consent thereto, which consent shall not be unreasonably withheld; provided, that Borrower may settle Claims which require the payment of monetary damages only, without Lender’s consent, so long as Borrower obtains a
general release of all claims against Lender. 
 (b) Waiver. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, EACH OF BORROWER AND LENDER AGREES THAT IT SHALL NOT SEEK FROM THE OTHER 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. All amounts owing under this Section 10.3 shall be paid within thirty (30) days after written demand. 
  

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 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, or by prepaid facsimile to Borrower or to Lender, as the case may be, at their respective addresses set
forth below: 
  

			
	If to Borrower:	  	 Tengion, Inc.
 2900 Potshop
Lane, Suite 100
 East Norriton, PA 19403
 Attention: Chief Financial Officer
 Fax: (610) 275-3754
 Ph: (267) 960-4802
  
 With a
copy to:
 2900 Potshop Lane, Suite 100
 East Norriton, PA 19403
 Attention: General Counsel
 Fax: (610) 275-3754
 Ph: (267) 960-4805

		
	If to Lender:	  	 Compass Horizon Funding Company LLC
 76 Batterson Park Road
 Farmington, CT 06032
 Attention: Legal Department
 Fax: (860) 676-8655
 Ph: (860) 676-8654

 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, provided that such sale, transfer, assignment, negotiation, or participation is not to a competitor of the Borrower. Lender will endeavor to give notice of the same to Borrower, but failure to do so shall not affect
the validity of the same. Lender may disclose the Loan Documents and any other financial or other information relating to Borrower or any Subsidiary to any potential participant or assignee of any of the Loans, provided that such
participant or assignee agrees to protect the confidentiality of such documents and information using the same measures that it uses to protect its own confidential information. 
  

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 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 several 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 dated as of the date hereof, taken together, constitute and contain the entire agreement between Borrower 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
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 and Lender executing this Agreement 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 or Lender. Borrower 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 or Lender’s actual intentions. 
 (c) Amendments and Waivers. Any and all amendments, modifications, 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. 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 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 Lender, notwithstanding
any investigation by 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, 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. 
  

 32 

 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 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 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 time 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 to Borrower or any of its Affiliates. Lender does not undertake or
assume 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 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 Lender in connection with such matters is solely for the protection of Lender and neither Borrower nor any Affiliate is entitled to rely thereon. 
 14. Confidentiality. All information (other than periodic reports filed by Borrower with the Securities and Exchange Commission)
disclosed by Borrower to Lender in writing or through inspection pursuant to this Agreement that is marked confidential or a reasonable person would deem confidential shall be considered confidential. Lender agrees to use the same degree of care to
safeguard and prevent disclosure of such confidential information as Lender uses with its own confidential information, but in any event no less than a reasonable degree of care. Lender shall not disclose such information to any third party (other
than to Lender’s partners, attorneys, governmental regulators, or auditors, or to Lender’s subsidiaries and affiliates and prospective transferees and purchasers of the Loans, all subject to the same confidentiality obligation set forth
herein or as required by law, regulation, subpoena or other order to be disclosed) and shall use such information only for purposes of evaluation of its investment in Borrower and the exercise of Lender’s rights and the enforcement of its
remedies under this Agreement and the other Loan Documents. The obligations of confidentiality shall not apply to any information that (a) was known to the public prior to disclosure by Borrower under this Agreement, (b) becomes known to
the public through no fault of Lender, (c) is disclosed to Lender by a third party having a legal right to make such disclosure, or (d) is independently developed by Lender. Notwithstanding the foregoing, Lender’s agreement of
confidentiality shall not apply if Lender has acquired indefeasible title to any Collateral or in connection with any enforcement or exercise of Lender’s rights and remedies under this Agreement following an Event of Default, including the
enforcement of Lender’s security interest in the Collateral. 
  

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 15. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF BORROWER AND LENDER HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
IN THE DISTRICT OF CONNECTICUT. BORROWER 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:
 TENGION,
INC.

		
	By:	 	/s/ Gary Sender
	Name: 	 	Gary Sender
	Title:	 	CFO
	
	 LENDER:
 COMPASS
HORIZON FUNDING COMPANY LLC
 By: Horizon Technology Finance Management LLC, its adviser

		
	By:	 	/s/ Robert D. Pomeroy, Jr.
	Name: 	 	Robert D. Pomeroy, Jr.
	Title:	 	Chief Executive Officer

  

 35 

 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 Certificate

 EXHIBIT A 
 DISCLOSURE SCHEDULE 
 Borrower hereby certifies the following information to
Lender: 
 Section 1. Information For UCC Financing Statements and Searches and Deposit Accounts and Accounts Holding Securities.

 (a) The exact corporate name of Borrower as it appears in its Certificate of Incorporation, as amended to date is: Tengion,
Inc. 
 (b) Borrower’s state of incorporation is: Delaware. 
 (c) The organizational ID number of Borrower from its jurisdiction of incorporation is 3679969. 
 (d) Borrower’s taxpayer identification number is 20 021 4813. 
 (e) The following is a list of all corporate names, dba or trade names used by Borrower in the past five years: Tengion, Inc. 
 (f) The following is a list of all Subsidiaries of Borrower: none. 
 (g) The address of Borrower’s headquarters and chief executive office is: 2900 Potshop Lane, Suite 100, East Norriton, Pennsylvania
19403. The following is a list of all States where Borrower’s headquarters and chief executive office has been located in the past five years: Pennsylvania, Connecticut. 
 (h) The following is a list of all States where Borrower’s property and assets have been located in the past five years: Pennsylvania,
North Carolina, Connecticut, New York. 
 (i) The following is a list of all of Borrower’s deposit accounts (bank name,
address and account names and numbers): 
 Commerce Bank 
 4309 Skippack Pike 
 PO Box 800 
 Skippack, PA 19474 
 Premier Savings/Investment 
 (j) The following is a list of all of Borrower’s
accounts holding securities (broker/bank name, address and account names and numbers): 
 Morgan Stanley Private Wealth
Management 
 522 Fifth Avenue 
 New York NY 10036 
 Bank: Citibank NYC 

 ABA 021-000089 
 A/C Morgan Stanley & Co. 
 FBO Tengion Inc. 
 FBO # 32-78FT2 
 Section 5.3
Conflict with Other Instruments, etc. 
 Borrower’s covenants in Section 7.5(iii) may conflict with rights of the
equity holders of Borrower with respect to dividends, redemption rights and liquidation preferences contained in Borrower’s Amended and Restated Certificate of Incorporation and the documents related to the sale and purchase of Borrower’s
outstanding shares of Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. 
 Section 5.6 Name; Location of Chief Executive Office, Principal Place of Business and Collateral. 
 In addition
to the Borrower’s chief executive office, the address of which is included on the cover page of this Agreement, certain Collateral is or will be located at the Borrower’s Science and Technology facility in North Carolina, the address of
which is: 
 Main NC Office and Laboratory Facility: 
 Westpoint Industrial Park 
 3929 Westpoint Boulevard, Suite G 
 Winston-Salem, NC 27103 

 EXHIBIT B 
 FUNDING CERTIFICATE 
 The undersigned, being the duly
elected and acting
                                        
         of TENGION, INC., a Delaware corporation (“Borrower”), does hereby certify to COMPASS HORIZON FUNDING COMPANY LLC (the “Lender”) in connection with that certain Venture Loan and
Security Agreement of even date herewith by and between Borrower and Lender (the “Loan Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement) that: 
 1. The representations and warranties made by Borrower in Section 5 of the Loan Agreement and in the other Loan Documents are
true and correct as of the date hereof. 
 2. No event or condition has occurred that would constitute a Default or an Event of
Default under the Loan Agreement or any other Loan Document. 
 3. Borrower is in compliance with the covenants and requirements
contained in Sections 4, 6 and 7 of the Loan Agreement. 
 4. All conditions referred to in Section 3 of the
Loan Agreement to the making of the Loan to be made on or about the date hereof have been satisfied. 
 5. No material adverse
change in the general affairs, results of operations, and financial condition of Borrower, whether or not arising from transactions in the ordinary course of business, has occurred. 
 6. The proceeds for Loan should be disbursed as follows: 
  

				
	 Disbursement from Lender:
	  		
	 Loan Amount
	  	$	5,772,621.85
	 Less:
	  		
	 Partial Payoff of Loan A
	  	$	5,772,621.85
	 Net Proceeds due from Lender:
	  	$	 0

 7. The Lender shall pay the proceeds of the Loan in the amount of $5,772,621.85 to Horizon
Technology Funding Company LLC as follows: 
  

			
	Bank Name:	  	LaSalle Bank NA CDO Trust Services
	Bank Address:	  	 540 W. Madison
 25th Floor

 Chicago, IL 60661
 Attn: Robert
Feeney, 312-904-0283

	Account No.:	  	
	FFCT-Reference Account Number	  	721771.1
	ABA Routing No.:	  	
	Reference:	  	Tengion

 Dated: October __, 2008 
  

			
	 BORROWER:
 TENGION,
INC.

		
	By:	 	 
		
	Name: 	 	 
		
	Title:	 	 

 EXHIBIT C 
 SECURED PROMISSORY NOTE 
  

			
	$5,772,621.85	  	Dated: October __, 2008

 FOR VALUE RECEIVED, the undersigned, TENGION, INC., a Delaware corporation
(“Borrower”), HEREBY PROMISES TO PAY to the order of COMPASS HORIZON FUNDING COMPANY LLC, a Delaware limited liability company (“Lender”) the principal amount of Five Million Seven Hundred Seventy Two Thousand Six
Hundred Twenty-one and 85/100 Dollars ($5,772,621.85) or such lesser amount as shall equal the outstanding principal balance of the Loan made to Borrower by Lender pursuant to the Loan Agreement (as defined below), and to pay all other amounts due
with respect to the Loan on the dates and in the amounts set forth in the Loan Agreement. 
 Interest on the principal amount of
this Note from the date of this Note shall accrue at the Loan Rate or, if applicable, the Default Rate. The Loan Rate for this Note is             % per annum based on a year
of twelve 30-day months. If the Funding Date is not the first day of the month, interim interest accruing from the Funding Date through the last day of that month shall be paid on the first calendar day of the next calendar month. Borrower shall
make payments of accrued interest only on the outstanding principal amount of the Loan on the first day of each month (“Payment Date”), commencing __________, 200_, through and including ________, 200_. Commencing on ________, 200_,
and continuing on consecutive Payment Dates thereafter, Borrower shall make to Lender _______ (__) equal payments of principal plus accrued interest on the then outstanding principal amount due hereunder of _______ Dollars ($________). If not sooner
paid, all outstanding amounts hereunder and under the Loan Agreement shall become due and payable on August 1, 2011. 
 Principal, interest and all other amounts due with respect to the Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement. The principal amount of this Note and the interest rate
applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note. 
 This Note is referred to in, and is entitled to the benefits of, the Venture Loan and Security Agreement dated on or about the date hereof
by and between Borrower and Lender (the “Loan Agreement”). The Loan Agreement, among other things, (a) provides for the making of a secured Loan to Borrower, and (b) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events. 
 This Note may not be prepaid except as set forth in Section 2.3 of
the Loan Agreement. 
 This Note and the obligation of Borrower to repay the unpaid principal amount of the Loan, interest on
the Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement. 
 Presentment for
payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived. 

 Borrower shall pay all reasonable fees and expenses, including, without limitation,
reasonable attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due. This Note shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Connecticut. 
 IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of
its officers thereunto duly authorized on the date hereof. 
  

			
	 BORROWER:
 TENGION,
INC.

		
	By:	 	 
		
	Name: 	 	 
		
	Title:	 	 

 EXHIBIT D 
 ITEMS TO BE COVERED BY OPINION OF BORROWER’S COUNSEL 
 1. Borrower is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified and authorized to do business in the State of Pennsylvania. 
 2. Borrower has the full corporate power, authority and legal right, and has obtained all necessary approvals, consents and given all
notices to execute and deliver the Loan Documents and perform the terms thereof. 
 3. The Loan Documents have been duly
authorized, executed and delivered by Borrower and constitute valid, legal and binding agreements, and are enforceable in accordance with their terms. 
 4. To our knowledge, there is no action, suit, audit, investigation, proceeding or patent claim pending or threatened against Borrower in any court or before any governmental commission, agency, board or
authority which might have a material adverse effect on the business, condition or operations of Borrower or the ability of Borrower to perform its obligations under the Loan Documents. 
 5. The Shares (as defined in the Warrant) issuable pursuant to exercise or conversion of the Warrant have been duly authorized and reserved
for issuance by Borrower and, when issued in accordance with the terms thereof, will be validly issued, fully paid and nonassessable. 
 6. The shares of Common Stock issuable upon conversion of the Shares have been duly authorized and reserved and, when issued in accordance with the terms of Borrower’s [Articles/Certificate] of Incorporation, as amended, will be
validly issued, fully paid and nonassessable. 
 7. The execution and delivery of the Loan Documents are not, and the issuance
of the Shares upon exercise of the Warrant in accordance with the terms thereof will not be, inconsistent with Borrower’s [Articles/Certificate] of Incorporation, as amended, or Bylaws, do not and will not contravene any law, governmental rule
or regulation, judgment or order applicable to Borrower, and do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other agreement or instrument of which Borrower is a
party or by which it is bound or require the consent or approval of, the giving of notice to, the registration or filing with or the taking of any action in respect of or by, any federal, state or local government authority or agency or other
person, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby. 

 EXHIBIT E 
 FORM OF OFFICER’S CERTIFICATE 
 TO: COMPASS
HORIZON FUNDING COMPANY LLC 
 Reference is made to the Venture Loan and Security Agreement dated as of _____, 200_ (as it may
be amended from time to time, the “Loan Agreement”) by and between TENGION, INC. (“Borrower”) and COMPASS HORIZON FUNDING COMPANY LLC (“Lender”). Unless otherwise defined herein, capitalized terms
have the meanings given such terms in the Loan Agreement. 
 The undersigned Responsible Officer of Borrower hereby certifies to
Lender that: 
  

	1.	No Event of Default or Default has occurred under the Loan Agreement. (If a Default or Event of Default has occurred, specify the nature and extent thereof and the
action Borrower proposes to take with respect thereto.) 

  

	2.	The information provided in Section 1 of the Disclosure Schedule is currently true and accurate, except as noted below. 

  

	3.	Borrower is in compliance with the provisions of Sections 4, 6 and 7 of the Loan Agreement, except as noted below. 

  

	4.	Attached herewith are the [monthly financial statements pursuant to Section 6.3(a) of the Loan Agreement/annual audited financial statements pursuant to
Section 6.3(b) of the Loan Agreement]. These have been prepared in accordance with GAAP and are consistent from one period to the next except as noted below. 

  

	
	NOTES TO ABOVE CERTIFICATIONS:
	
	 
	
	 

  

			
	 BORROWER:
 TENGION,
INC.

		
	By:	 	 
	Name: 	 	 
	Title:Machinery and Equipment Loan Fund

 Exhibit 10.17 
 MACHINERY AND EQUIPMENT LOAN FUND #25-9-779 
 LOAN AGREEMENT

  
 THIS LOAN AGREEMENT, MADE this 20th day of December,
2007, effective as of December 31, 2007 (the “Effective Date”) BY AND BETWEEN TENGION, INC., a corporation organized and existing under the laws of Delaware and having an address of 2900 Potshop Lane, Suite 100, East Norriton, Pennsylvania
19403, (the “Borrower”) and THE COMMONWEALTH OF PENNSYLVANIA, acting by and through the DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT, having its principal place of business at Commonwealth Keystone Building, 400 North Street, Fourth
Floor, Harrisburg, Pennsylvania 17120 (the “Department”). 
 NOW, THEREFORE, the parties hereto, in consideration of
the mutual promises herein contained, and intending to be legally bound hereby, covenant and agree as follows: 
 ARTICLE I

 DEFINITIONS AND BACKGROUND 
 Section 1.01. When used herein the following words and phrases shall have the following meanings: 
 “Act” means Chapter 29 of the Job Enhancement Act, Act of February 12, 2004, No. 12, P.L. 99, codified at 12 P.S. § 2901 et seq. 
 “Application” means the application for the Loan submitted by the Borrower to the Department, including all attachments and
exhibits thereto. 
 “CERCLA” means The Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended. 
 “Collateral” means that certain machinery and equipment the Borrower has purchased or intends to
purchase or has upgraded or intends to upgrade for use at the Premises as more fully described at Exhibit “A”, which is incorporated herein by reference and made a part hereof . 
 “Commitment” means the Department’s letter of June 28, 2006, as amended, setting forth its agreement to make the Loan,
and the conditions under which the Loan would be made. 
  

 Loan Agreement 
 Page 1 of 30 

 “Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise. 
 “Cost” or “Costs” means the costs of the purchase and installation of the Collateral. 
 “Due Inquiry” shall mean that the Borrower, consistent with good commercial or customary practice, has caused to be made by a responsible officer or agent of the Borrower appropriate inquiry
among those directors, officers, employees, agents, accountants and attorneys for the Borrower who might reasonably be expected to have knowledge of the particular matter and, when such matter includes the condition of the Collateral, the Premises
or other facility, has further undertaken appropriate inquiries into the present and past ownership and uses thereof. 
 “Eligible Activity” means manufacturing, industrial processes, mining, Production Agriculture, information technology, biotechnology, services as a Medical Facility or other industrial or technology sectors as defined by the
Department. 
 “Environmental Laws” shall mean The Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, The Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, The Clean Water Act, The Toxic Substances Control Act, The
Clean Air Act, the Pennsylvania Hazardous Sites Cleanup Act, the Pennsylvania Solid Waste Management Act, the Pennsylvania Storage Tank and Spill Prevention Act, the Pennsylvania Worker and Community Right to Know Act, the Pennsylvania Clean Streams
Law, as amended, or any rule or regulation promulgated pursuant to any of the foregoing statutes, or any other applicable law, statute, rule, regulation or ordinance regulating the manufacture, use, possession, discharge or disposal of substances
injurious to the natural environment or to human health, whether federal, state or local. 
 “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended. 
 “Event of Default” means those occurrences listed in
Section 7.01 herein. 
 “Hazardous Materials”, shall include, without limitation, asbestos (including, without
limitation, asbestos in friable form), polychlorinated biphenyls, petroleum products, flammable or explosive materials, radioactive materials, hazardous materials, hazardous waste, hazardous or toxic substances or related materials, each as defined
under or pursuant to any Environmental Law. 
 “Indemnified Party” means the Department and its employees and agents,
including, without limitation, any engineer or environmental consultant retained by the Department. 
  

 Loan Agreement 
 Page 2 of 30 

 “Loan” means a loan in the maximum principal amount of One Million Six Hundred
Fifty Thousand Dollars ($1,650,000) to be used exclusively by the Borrower to defray a portion of the Cost not to exceed 50%. 
 “Loan Documents” means this Loan Agreement, the Note, the Security Agreement, the opinions of counsel hereinafter referred to, and all other agreements, instruments and documents to be delivered hereunder. 
 “Note” means the $1,650,000 promissory note given by the Borrower to the Department, effective as of the Effective Date.

 “Participation Percentage” means fifty percent (50%). 
 “Premises” means a tract of land in East Norriton Township Montgomery County, Pennsylvania. 
 “Production Agriculture” means the management and use of a normal agricultural operation for the production of a farm commodity.

 “Project” means the purchase and installation of new machinery and equipment or the upgrade of existing machinery
and equipment that is directly related to the business process. 
 “Security Documents” means the Security Agreement
and financing statements given by the Borrower to the Department which constitutes not less than a first lien upon the Collateral. 
 Section 1.02. The Borrower has purchased or intends to purchase or has upgraded or intends to upgrade certain machinery and equipment for use at the Premises. The Borrower has filed with the Department the Application and accepted from
the Department the Commitment for the Loan, to be used exclusively to defray a portion of the Cost. The Department is willing to make the Loan upon the terms and subject to the conditions hereinafter set forth. 
 ARTICLE II 
 THE
LOAN 
 Section 2.01. The Loan. Subject to the conditions set forth herein, the Department agrees to make the
Loan to the Borrower, and the Borrower agrees to accept the Loan from the Department, for the purposes set forth in the Application. 
  

 Loan Agreement 
 Page 3 of 30 

 ARTICLE III 
 THE NOTE AND SECURITY DOCUMENTS 
 Section 3.01. The Note. The
Loan shall be evidenced by the Note, which shall be executed by the Borrower. 
 Section 3.02. The Security
Documents. Payment of the Note and satisfaction of all obligations of the Borrower hereunder and under the Note and any other present or future obligations of the Borrower to the Department shall be secured by a perfected security interest in
the Collateral given by the Borrower to the Department under the Security Documents. The Security Documents shall be dated the date of the Note and shall create a perfected first lien upon the Collateral. The Borrower agrees that whatever right,
title and interest which it and its successors and assigns may have in and to the Collateral shall be, and the same are hereby expressly made subject and subordinate to the lien of the Security Documents and any other judgment, lien or encumbrance
pursuant to the Note, the Security Documents or this Loan Agreement. 
 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES OF THE BORROWER 
 The Borrower makes the following representations and warranties to the Department and the Borrower, which shall survive and continue until the Loan is paid in full and all of the Borrower’s
obligations hereunder have been satisfied: 
 Section 4.01. Organization. The Borrower is a corporation validly
existing and in good standing under the laws of Delaware and is qualified to do business in the Commonwealth of Pennsylvania. 
 Section 4.02. Power and Authority. The Borrower has all necessary power and authority to purchase, own, encumber, and sell its property and to carry on its business as now being conducted, and to carry out the transactions
contemplated by the Loan Documents. 
 Section 4.03. Loan Documents Consistent with Law and Agreements. The
execution and delivery of this Agreement and of each of the Loan Documents to be executed and delivered by the Borrower, consummation of the transactions herein contemplated, and compliance with the terms and

  

 Loan Agreement 
 Page 4 of 30 

 
provisions hereof and of the Loan Documents which Borrower has executed and delivered or to which it is otherwise subject do not (i) contravene any provision of law, statute, rule or
regulation to which Borrower is subject or any judgment, decree, franchise, order or permit applicable to the Borrower or (ii) conflict with, or result in, a breach of any of the terms, conditions or provisions of the organizational documents
of the Borrower, or of any material agreement, indenture or other instrument to which the Borrower is a party or by which it is bound or to which it or its property is subject. 
 Section 4.04. Due Authorization. The execution, delivery and performance of this Agreement, the performance of the transactions
contemplated by the provisions hereof, and the execution, issuance and delivery of each of the Loan Documents to be executed and delivered by the Borrower hereunder have each been duly authorized by all necessary action on the part of the Borrower.

 Section 4.05. Execution and Delivery. This Agreement and each of the Loan Documents being executed and delivered
by Borrower concurrently herewith have been duly and validly executed and delivered by the Borrower and constitute valid and legally binding obligations of the Borrower, enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other substantially similar laws of general application relating to or affecting the enforcement of creditors’ rights or by general principles of equity. 
 Section 4.06. Litigation. There is no material litigation or governmental proceeding pending or, to the knowledge of the
Borrower, threatened against the Borrower other than that which has been previously disclosed to the Department in writing. If such litigation or proceeding exists or is threatened, it shall be set forth in an exhibit which shall be attached hereto
and made a part hereof. 
 Section 4.07. Taxes. The Borrower has filed all required federal, state and local tax
returns and has paid all taxes shown on such returns as such taxes have become due unless the obligation to file such return or pay such tax is the subject of a pending administrative or judicial appeal or proceeding with respect to which the
Borrower has posted or caused to be posted a bond or other security satisfactory to the Department in an amount which is at least equal to the sum which is the subject of the appeal or proceeding, together with all interest, costs, and charges
relating thereto. 
 Section 4.08. No Default For Borrowed Money. No default with respect to any agreement pursuant
to which the Borrower has borrowed money or guaranteed the obligations of others has occurred and is continuing as of the date hereof nor has any such event occurred which with the passage of time and/or giving of notice would constitute such a
default.

  

 Loan Agreement 
 Page 5 of 30 

 Section 4.09. Financial Statements and Financial Condition. All financial
statements of the Borrower (including all related notes) and all supplementary financial information delivered to the Department fairly present what they purport to present as of the dates and for the respective fiscal periods presented, and were
prepared in accordance with generally accepted accounting principles consistently applied, except as disclosed in such financial statements. The Borrower has no material liabilities, direct or indirect, fixed or contingent, as of the date of such
financial statements which are not reflected therein. There has been no material adverse change in the financial condition of the Borrower from that disclosed in the most recent annual financial statements delivered to the Department prior to the
initial approval of the Loan by the Department. 
 Section 4.10. Employee Benefits. Any employee pension benefit
plans and employee welfare benefit plans, collectively referred to as employee benefit plans, within the meaning of ERISA maintained by the Borrower or any subsidiary of the Borrower comply in all material respects with the reporting and disclosure
and fiduciary responsibility provisions of Title I of ERISA. 
 Section 4.11. Environmental Violations. Any
transportation, storage, handling or usage of Hazardous Materials by the Borrower, whether on the Premises or otherwise, has been in compliance with all Environmental Laws. Borrower further represents and warrants that, to the best of its knowledge,
no spill, release, discharge, or disposal of Hazardous Materials has occurred on the Premises to date, and that the soil and groundwater on the Premises are free of Hazardous Materials. 
 Section 4.12. Bankruptcy, etc. The Borrower has not within seven (7) years prior to the date hereof filed any voluntary
petition for relief under the U.S. Bankruptcy Code. 
 Section 4.13. Criminal Convictions. Neither the Borrower nor
any owner, director, officer or person employed or engaged by the Borrower in a senior management capacity or as a manager or comptroller, has been convicted by any court of any felony or any misdemeanor involving theft, dishonesty, deception, false
swearing, or the filing or submission of any false or misleading information to any agency of government. 
 Section 4.14.
No Consent Required. No consent or approval to the execution and performance of this Agreement and the transactions contemplated hereby not already obtained is required to be obtained by the Borrower from any governmental body, authority,
agency, court or other person or entity, public or private, other than the Department. 
 Section 4.15. No Removal of
Jobs. The establishment of the Project by the Borrower at the Premises will not cause the removal of any business operation from one area of Pennsylvania to another area of Pennsylvania, nor result in the reduction of the number of employees at
any other plant controlled by Borrower presently located in Pennsylvania. 
  

 Loan Agreement 
 Page 6 of 30 

 Section 4.16. Eligible Activity at the Premises. The Borrower engages in an
Eligible Activity at the Premises. 
 ARTICLE V 
 BORROWING PROCEDURES AND AGREEMENTS 
 Section 5.01. Conditions
Precedent to All Advances. The obligation of the Department to make the initial advance of the proceeds of the Loan to the Borrower and to make each subsequent advance thereof is subject to the satisfaction of the following conditions precedent
at the time of each such advance: 
 (a) The Borrower has satisfied all conditions set forth in the Commitment,
the closing requirements transmitted by the Department’s counsel to the Borrower’s counsel following issuance of the Commitment have been satisfied; the Loan Documents shall have been properly executed and, where appropriate, delivered to
the Department; and the Security Documents and any other document requested to be filed or recorded by the Department shall have been duly acknowledged and delivered for filing or recording in the appropriate public office. 
 (b) Each and all of the representations and warranties of the Borrower set forth in Articles IV hereof, and in any of the
other Loan Documents, shall be true and correct in all respects, as though separately and independently made on and as of the date of each such advance. 
 (c) There shall be no event of default under any of the Loan Documents or any event which, with the passage of time or the giving of notice, or both, could constitute an event of default under any of the
Loan Documents. 
 (d) There shall have been no material adverse change in the financial condition of the
Borrower from that disclosed in financial statements heretofore delivered to and approved by the Department. 
 (e) In the event there is any material change in the Project, Department may refuse to make further advances under this Agreement until the matter is resolved to the Department’s reasonable satisfaction, whether or not the Department
has declared an Event of Default hereunder or such revocation, rescission, suspension, or material adverse effect would comprise an Event of Default hereunder. 
  

 Loan Agreement 
 Page 7 of 30 

 The Borrower agrees that by making a request for an advance hereunder, the Borrower shall be
deemed to be reconfirming to the Department that all representations and warranties of the Borrower set forth in this Agreement and all related instruments, agreements and documents remain true and correct as of the date of each request. 

Section 5.02. Deadline for Requesting Disbursements. Unless otherwise agreed to by the Department, the Borrower shall comply
with the conditions stated in Section 5.01, and submit a request or requests to the Department for disbursement of one hundred percent (100%) of the Loan by the end of the twenty-fourth full calendar month following the Effective Date. If
the Borrower fails to comply with this deadline the Commitment shall be automatically terminated and no further disbursements will be permitted. 
 ARTICLE VI 
 BORROWER’S COVENANTS 
 Until the Loan has been entirely repaid and all of Borrower’s obligations to the Department in connection therewith and herewith have
been satisfied, the Borrower hereby covenants that: 
 Section 6.01. Use of Proceeds. The Borrower shall use the
proceeds of the Loan solely for the purpose of defraying a portion of the Cost. 
 Section 6.02. Preservation of
Existence. The Borrower will (a) maintain and preserve its existence as a corporation, limited liability company, limited partnership, general partnership, or Medical Facility, as the case may be, and the right to carry on its Eligible
Activity at the Premises, and (b) duly procure and maintain all necessary licenses, franchises, permits and other documents necessary or appropriate in connection therewith and all necessary renewals and extensions thereof. 
 Section 6.03. Debt Secured by Collateral. Without the prior written consent of the Department, the Borrower shall not take any
action to cause or permit any lien or encumbrance to be placed against the Collateral or any interest therein, except such liens and encumbrances as may be expressly permitted by the Security Documents. 
 Section 6.04. Nondiscrimination/Sexual Harassment. The Borrower and its subsidiaries will not discriminate against or intimidate
any employee or any applicant for employment because of gender, race, creed, or color, in any manner, including but not limited to the following activities: employment; upgrading, demotion or transfer; recruitment or recruitment advertising; layoff
or

  

 Loan Agreement 
 Page 8 of 30 

 
termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Borrower hereby accepts and agrees to be bound by the nondiscrimination/sexual
harassment provisions set forth in Exhibit “B” hereto, and will cause comparable nondiscrimination/sexual harassment provisions to be inserted into all Project contracts. 
 Section 6.05. Filing and Other Costs. The Department may require the Borrower to pay the costs of filing or recording and
any other costs that the Department may incur in connection with closing and administration of the Loan. 
 Section 6.06.
Inspection. The Borrower shall provide proper facilities at all times for inspection of the Project before and after completion thereof by the Department and the Department’s authorized representatives (including, without limitation, any
engineer or environmental consultant retained by the Department), and afford full and free access to the Project and Premises to such persons as may from time to time be designated by the Department. 
 Section 6.07. Operations and Number of Jobs. The Borrower will create, or retain, as the case may be, at the Premises within
three years from the date of the Loan closing, no less than the number of jobs specified to be created or retained in the Application. 
 (a) A breach by the Borrower of this Section 6.07 shall be an Event of Default under this Loan Agreement. The remedies of the Department for an Event of Default arising solely from a breach by the
Borrower of this Section 6.07 are governed by Section 7.03 of this Loan Agreement. 
 (b) The
Department Policy For Failure to Meet Job Projections (the “Department Policy”) is incorporated herein by reference and is attached hereto as Exhibit F and the Department may, in compliance with the Department Policy and such other
regulations and statements of policy, if any, as are then in effect, raise the rate of interest on the Loan as permitted under the Note. 
 (c) The Borrower shall be required to meet job projections within the three (3) year period referred to above and shall not be penalized if there is a reduction in the number of jobs once the
projections have been achieved even if such reduction occurs within the three (3) year period. 
 Section 6.08.
Certificate re Jobs. The Borrower will annually provide the Department with a certificate executed by an authorized officer setting forth the number of employees, and their respective job classifications (skilled, semi-skilled and unskilled),
employed by the Borrower or any subsidiary during the previous year at the Premises, together with such other related information as the Department may request. 
  

 Loan Agreement 
 Page 9 of 30 

 Section 6.09. Employee Benefit Plans. To the extent that the Borrower maintains
any employee benefit plans subject to the requirements of ERISA, the Borrower and its subsidiaries shall: (1) fund all of its employee pension benefit plans, to the extent required, in accordance with the minimum funding standards of
Section 302 of ERISA and Section 412 of the Internal Revenue Code of 1986 (the “Code”), except where the failure to do so would not have a material adverse effect on the continuing operations of the Borrower; (2) make all
payments of contributions to all employee benefit plans within the time periods established in ERISA and the Code, except where the failure to do so would not have a material adverse effect on the continuing operations of the Borrower;
(3) furnish the Department, upon its request, with copies of all reports or other statements filed with the United States Department of Labor, the Internal Revenue Service or the Pension Benefit Guaranty Corporation, or any other agencies,
whether federal, state, or local, with respect to all employee benefit plans; (4) advise the Department within ten days of the occurrence of any “reportable event” or “prohibited transaction,” within the respective meanings
of these terms in ERISA and the Code, with respect to any employee benefit plan to which the Borrower contributes, potentially having a material adverse effect on the continuing operations of the Borrower; (5) promptly advise the Department of
any audit or investigation of any employee benefit plans by the Internal Revenue Service or Department of Labor or any other governmental agency or any threatened or proposed action by any such agency affecting the status of, and deductibility of
contributions to, any employee benefit plans, potentially having in any such case a material adverse effect on the continuing operations of the Borrower. 
 Section 6.10. Environmental Compliance. The Borrower shall comply with all Environmental Laws. 
 Section 6.11. Insurance. The Borrower shall annually submit to the Department evidence of its compliance with the Department’s insurance requirements set forth in the Security Agreement.

 Section 6.12. Compliance with Agreements and Laws; Payment of Obligations. The Borrower will act in accordance
with all applicable agreements, laws, rules, regulations, orders, judgments, injunctions, decrees, resolutions, permits, franchises, determinations or awards of any administrative or governmental authority or administrative or governmental
organization, non-compliance with which could have a material adverse effect on the ability of the Borrower to carry on the operations at the Premises or make payments or perform and observe its other material obligations under any of the Loan
Documents. The Borrower will pay and discharge all bills, claims and charges relating to the Project or the Premises, including without limitation claims for taxes and

  

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claims of laborers, mechanics and materialmen (collectively, “Project Claims”), prior to the time the holder of any Project Claim lawfully may cause any judgment or writ of execution to
be filed or lodged against the Premises as a result of such Project Claim. 
 Section 6.13. Financial Statements.
During the term of the Loan, the Borrower will provide the Department with: 
 (a) financial statements for the
Borrower within one hundred twenty (120) days after the close of each fiscal year including balance sheets, statements of income and reconciliations of equity, in accordance with generally accepted accounting principles, reviewed by an
independent certified public accountant satisfactory to the Department, provided that if the Borrower is a corporation subject to the reporting requirements of the Exchange Act, the relevant entity’s obligation under this paragraph shall be
satisfied by delivery to the Department of the financial statements required to be filed by the Borrower under the Exchange Act in its annual reports; 
 (b) with reasonable promptness, such other information respecting the business, operations and condition (financial or otherwise) of the Borrower as the Department may from time to time reasonably
request, including information relating to the Project; and 
 (c) with reasonable promptness, after it becomes
known to the Borrower, reasonably complete information on material adverse developments which may reasonably be expected to threaten the completion or continued operation of the Project. 
 The Department will not disclose any confidential information submitted to it by the Borrower pursuant to this Section 6.13 to any
third party, except as may be required by applicable law or court order, or to fulfill the requirements of the Act. 
 Section 6.14. Compliance Certificates. If the Department shall so request, the Borrower will provide the Department with annual Compliance Certificates, executed (in the case of entities other than natural persons) by officers
authorized to execute and deliver the same, within 120 days of each fiscal year’s end reciting compliance with representations, warranties and covenants. 
 Section 6.15. Accuracy of Information Supplied. The Borrower will ensure that all information prepared by the Borrower and supplied to the Department or any third party under the provisions of
this Agreement for the purpose of any report or certificate to be furnished to the Department in connection with this Agreement or any of the Loan Documents will at the time it is supplied be true and accurate in all material respects, except that
(i) financial statements and other statements expressly effective as of a particular date

  

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prior to the date when furnished are required only to be true and accurate or (in the case of financial statements) fairly to present what they purport to present, in either case as of the
effective date thereof, and (ii) to the extent any such information is based upon or constitutes a forecast, projection or other data which by its nature is uncertain, the Borrower is committed only to act in good faith and utilize due and
careful consideration and the best information then known to it in preparing such information. With respect to all information prepared by third parties and supplied by the Borrower to the Department and/or any third party under the provisions
hereof for the purpose of any report or certificate to be furnished to the Department in connection with this Agreement or any of the Loan Documents, the Borrower shall deliver a written notice to the Department as soon as possible if it believes
that such information is not complete and accurate in all material respects, which written notice shall include the basis for such belief. 
 Section 6.16. Notice of Defaults. The Borrower will give prompt notice to the Department of the occurrence of any Event of Default under the Loan Documents either on its part, or on the part
of the Borrower of which the Borrower becomes aware. 
 Section 6.17. Further Assurances. The Borrower will make,
execute or endorse, and acknowledge and deliver or file, all such vouchers, invoices, notices and certifications and additional agreements, undertakings, conveyances, transfers, assignments, financing statements, continuation statements or further
assurances, and take any and all such other actions, as the Department may reasonably deem necessary or advisable from time to time in connection with the Loan or the Loan Documents to assure or confirm to the Department and perfect all or any part
of the security for the Loan and any other obligations of the Borrower. 
 Section 6.18. Indemnification. The
Borrower hereby indemnifies and holds harmless the Indemnified Party from and against any and all claims, damages, losses, liabilities, costs or expenses (including all reasonable fees or expenses resulting from the settlement of any claims or
liabilities and reasonable attorneys’ fees) (collectively, “Indemnified Claims”) whatsoever which the Indemnified Party may incur (or which may be claimed against the Indemnified Party by any person or entity whatsoever) by reason of
or in connection with (a) the issuance of the Loan, (b) any breach by the Borrower of any representation, warranty, covenant, term or condition in, or the occurrence of any default under, this Agreement or the Loan Documents, and
(c) involvement of the Indemnified Party in any legal suit, investigation, proceeding, inquiry or action as a consequence, direct or indirect, of the Department’s issuance of the Loan, the Department’s or the Borrower’s entering
into this Agreement or any of the Loan Documents or any other event or transaction contemplated by any of the foregoing; provided, however, that (i) the Indemnified Party shall within sixty (60) days of

  

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becoming aware of (A) its actual or potential liability for any Indemnified Claim or (B) the formal assertion against it in writing of any Indemnified Claim, have notified the Borrower
of such Indemnified Claim and tendered to the Borrower the defense of such claim; (ii) that no Indemnified Claim shall be paid or compromised without the consent of the Borrower, which shall not unreasonably be withheld and shall be deemed
given if the Borrower does not object, by a notice in writing to the Indemnified Party, to the payment or compromise of such Indemnified Claim within 10 calendar days after the Indemnified Party has given to the Borrower notice of the proposed
payment or compromise thereof, and (iii) the Borrower shall not be required to indemnify an Indemnified Party hereunder for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the
negligence or willful misconduct of such Indemnified Party. 
 The liability under this Section 6.18 shall in no way be
limited or impaired by (i) any extension of time for performance required by any of the Loan Documents, (ii) any sale, assignment or foreclosure of the Note or any sale or transfer of all or part of the Collateral or the Premises,
(iii) the discharge of the Note, (iv) any exculpatory provisions in any of the Loan Documents limiting the Department’s recourse to any other security, (v) the accuracy or inaccuracy of the representations and warranties made by
the Borrower; (vi) the release of the Borrower or any other person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents by operation of law, the Department’s
voluntary act (other than the execution and delivery by the Department of an instrument of release expressly and specifically referring to Borrower’s indemnification obligations), or otherwise, (vii) the release or substitution in whole or
in part of any security for the Note; or (viii) the Department’s failure to file any mortgage or UCC financing statements (or the Department’s improper filing of any thereof) or to otherwise perfect, protect, secure or insure any
mortgage, security interest or lien given as security for the Note; and, in any such case, whether with or without notice to the Borrower and with or without consideration. 
 The indemnity provisions contained in this Section 6.18 hereof shall survive any judicial foreclosure, foreclosure by power of sale,
deed in lieu of foreclosure, transfer of the property by the Borrower or the Department, and payment of the Loan in full, provided, however, that such indemnity provisions shall at no time accrue to, or be construed to benefit, any other third party
entity (other than an Indemnified Party or a successor in interest or assign of the Department) no matter how such other third party entity obtains title or any interest in the Project or Premises. 
  

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 The liability covered by the indemnity provision shall include, but not be limited to,
losses sustained by an Indemnified Party for (i) amounts owing under the Loan and the Loan Documents, (ii) amounts arising out of personal injury or death claims, (iii) amounts charged to an Indemnified Party for any environmental or
Hazardous Materials clean up costs and expenses, liens, or other such charges or impositions, (iv) payment for fees, court costs, environmental tests and design studies, and (v) any other amounts reasonably expended by an Indemnified
Party. 
 Section 6.19 Payment. The Borrower will make all payments required to be made by it to the Department, at
such address as the Department may specify from time to time. 
 Section 6.20. Negative Covenants. 
 (a) Without the prior written consent of the Department, the Borrower shall not permit, allow or suffer to exist, any lien or
encumbrance to be placed against the Collateral or any interest therein or enter into any agreement requiring, contemplating or providing for placement of any such lien or encumbrance, except (i) liens and encumbrances expressly provided for in
the Application which the Department has permitted in writing, and (ii) that the terms of this Section 6.19(a) shall not be deemed to prohibit execution of any note or credit instrument not providing for any specific lien against the
Premises but permitting confession of judgment against the Borrower subsequent to an event of default thereunder so long as judgment is not confessed thereunder. 
 (b) The Borrower will not change its name without notice to the Department. 
 (c) Without the prior written consent of the Department, the Borrower shall not (i) merge, consolidate or divide,
whether or not the Borrower is the surviving corporation or other entity, (ii) sell, transfer, assign, lease, mortgage, lien, pledge or otherwise convey or dispose of all or any material part of its assets, except in the ordinary course of
business, (iii) effect a reorganization, recapitalization or reclassification of its capital stock or equity securities the effect of which is materially to reduce tangible net assets or shareholders’ equity of the Borrower, or
(iv) redeem, purchase or retire any of its member interests, capital stock or equity securities or grant or issue any warrant, right or option pertaining thereto or other security convertible into any of the foregoing, except for the following
(A) pro rata among existing security holders the effect of which is not materially to reduce tangible net assets or shareholders’ equity, (B) in connection with the repurchase of shares from former employees in connection with their
termination from employment, (C) redemption of shares or Preferred in accordance with Borrower’s certificate of incorporation, or (D) in accordance with Borrower’s 2004 stock incentive plan, or any successor plan thereto or (E)
in connection with a bona fide capital financing or refinancing transaction. 
  

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 ARTICLE VII 
 EVENTS OF DEFAULT 
 Section 7.01. Events of Default. The
following shall each constitute an Event of Default hereunder: 
 (a) Payment Default. The Borrower shall
fail to pay when due any amount payable under any of the Loan Documents and such failure shall continue for a period of thirty (30) days; 
 (b) False Representation. Any representation, warranty or statement made by the Borrower herein or in the Application or in any of the Loan Documents or in any certificate or financial or other
statement furnished pursuant to the provisions of any of the Loan Documents or the Application (except for any representation, warranty or statement expressly made effective as of a date prior to the date when made or furnished), shall have been
false or misleading in any material respect as of the time made or furnished or as of the date hereof, whichever is later; any representation, warranty or statement expressly made effective as of a date prior to the date when made or furnished shall
have been false or misleading in any material respect as of the effective date thereof; 
 (c) Borrower
Insolvency. The Borrower shall (i) become insolvent, (ii) admit its inability to pay its debts as they come due, (iii) make an assignment to the benefit of its creditors, (iv) be adjudicated bankrupt or insolvent,
(v) voluntarily initiate proceedings under any bankruptcy or reorganization law either now or hereafter in effect, (vi) become the subject of any involuntary proceedings under any bankruptcy or reorganization law either now or hereafter in
effect that shall not have been discharged within ninety (90) days of the initiation thereof, or (vii) seek to take advantage of any moratorium law either now or hereafter in effect; 
 (d) Receiver Appointed. A receiver, liquidator or trustee shall be appointed for the Borrower and shall not have been
discharged within ninety (90) days; 
 (e) Covenant Default. The Borrower shall fail to observe or
perform any of the terms, covenants, promises and agreements on the Borrower’s part to be observed and performed under this Agreement or under the Note, Security Agreement or any of the other Loan Documents and such failure shall continue for a
period of thirty (30) days after written notice thereof shall have been given to Borrower; 
  

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 (f) Default Under Other Financing. A default in the due and punctual
payment of principal or interest or the due and punctual observance or performance of any covenants or agreements on any loan or debt instrument which results in the acceleration of the maturity date of the loan evidenced by such loan or debt
instrument; 
 (g) Collateral Default. The Collateral is (i) sold, leased, liened or encumbered
without the prior written consent of the Department, which consent shall not be unreasonably withheld; (ii) the Collateral is seized or levied upon under any legal or governmental process against the Debtor or against the Collateral; or
(iii) the Collateral is lost, stolen, substantially damaged, destroyed, or moved from the Property without the consent of the Department; or 
 (h) Change in the Project. The Borrower makes substantial changes to or does not complete the Project as described in the Application. 
 Section 7.02. Remedies Upon an Event of Default. Immediately and without further notice to the Borrower, upon the occurrence of
an Event of Default, other than an Event of Default, arising solely from a breach by the Borrower of Section 6.07 “Operations and Number of Jobs” pertaining to job creation or retention, the Department, or any subsequent holder of the
Note, may exercise any one or more of the following remedies: 
 (a) cease making any further disbursements of
advances hereunder; 
 (b) declare the Note and interest accrued thereon and all liabilities of the Borrower
thereunder to be immediately due and payable, and the same shall thereupon become and be due and payable; 
 (c)
raise the rate of interest on the Loan as provided in the Note; 
 (d) bring an action (which may be by
confession of judgment to the extent permitted by the particular instrument) against the Borrower under the Note; or 
 (e) exercise any other remedy available to it under any of the Loan Documents or applicable law, including the Pennsylvania Uniform Commercial Code. 
 Except as expressly required by the particular Loan Document pursuant to which such remedies are exercised or by applicable law, the Department may exercise any of the foregoing remedies without
presentment, demand, protest or notice of any kind to any person (including, without limitation, the Borrower), all of which are hereby expressly and knowingly waived. 
  

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 Subject solely to the limitation that the Department is limited to one recovery for the
aggregate amounts due and owing under the Loan Documents, the Department’s remedies under the Loan Documents are cumulative and concurrent and may, in the Department’s sole discretion, be exercised, deferred, compromised, settled or
discontinued without affecting any other remedy available to the Department under any of the Loan Documents or under applicable law. 
 Section 7.03. Remedies for Event of Default Arising From Failure to Create or Retain Jobs. Upon the occurrence of an Event of Default arising solely from a breach by the Borrower of Section 6.07 “Number of Jobs”
of this Agreement, the Department may, in compliance with such regulations and statements of policy, if any, as are then in effect, raise the rate of interest on the Loan as permitted under the Note. 
 ARTICLE VIII 
 MISCELLANEOUS 
 Section 8.01. Obligations Unconditional. The obligations to the Department under
this Agreement and each of the Loan Documents shall be absolute and unconditional without defense or set-off by reason of any default by the contractors under the contracts relating to the Project or by the Department under this Agreement, any of
the Loan Documents, or under any other agreement between the Borrower and the Department, or for any other reason, including without limitation failure to complete the Project, any acts or circumstances that may constitute failure of consideration,
destruction of or damage to the Project, commercial frustration of purpose, or failure of the Department to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this
Agreement, it being the intention of the parties that the payments required under each of the Loan Documents will be paid in full when due without any delay or diminution whatsoever. Payments and additional sums required to be paid to the Department
under any of the Loan Documents shall be received by the Department as net sums and the Borrower agrees to pay or cause to be paid all charges against or which might diminish such net sums. The provisions of this Section shall not impair the ability
of the Borrower or any other persons to bring an independent action against the Department with respect to any cause of action such person may have against the Department. 
 Section 8.02. Provisions Complementary. The provisions of this Agreement shall be in addition to those of any other Loan

  

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Document. All of such provisions shall be construed as complementary to each other. Nothing contained herein shall prevent the Department from enforcing any and all of such provisions in
accordance with their respective terms. 
 Section 8.03. Rights and Remedies. The terms of all Loan Documents shall
be liberally construed in favor of the Department to effectuate the purposes hereof. No delay or failure on the part of the Department in exercising any right, power or privilege under any of the Loan Documents shall affect such right, power or
privilege; nor shall any single or partial exercise thereof or any abandonment, waiver, or discontinuance of steps to enforce such a right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right, power
or privilege. The rights and remedies of the Department under any of the Loan Documents are cumulative and concurrent and not exclusive of any rights or remedies which the Department might otherwise have. The Department shall have the right at all
times to enforce the provisions of each of the Loan Documents and all related documentation in strict accordance with the terms hereof and thereof, notwithstanding any conduct or custom on the part of the Department in refraining from so doing at
any time or times. The failure of the Department at any time or times to enforce the Department’s rights under such provisions, strictly in accordance with the same, shall not be construed as having created a custom in any way or manner
contrary to specific provisions of such Loan Documents or any such documentation, or as having in any way or manner modified or waived the same. 
 Section 8.04. Writing Required. Any permit, consent or approval of any kind or character on the part of the Department under any of the Loan Documents, and any waiver of any provision or
condition thereof, must be in writing and executed by the Department and shall be effective only to the extent specifically set forth in such writing. 
 Section 8.05. Duration of Covenants. All covenants and agreements of the Borrower in any of the Loan Documents, or otherwise made in writing in connection herewith, shall survive and continue
until the Loan is entirely paid and all of the obligations of the Borrower hereunder have been entirely satisfied, unless a longer term is expressly provided for, in which event such longer term shall apply. 
 Section 8.06. Pennsylvania Law to Govern. Each of the Loan Documents shall be deemed to be contracts made under the laws of the
Commonwealth of Pennsylvania and, for all purposes, shall be construed in accordance with the laws of such Commonwealth, including its statutes of limitations, but without regard to its rules regarding conflict of laws. 
 Section 8.07. Counterparts. Each of the Loan Documents may be executed in as many counterparts as may be deemed necessary

  

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and convenient and each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. All signatures need not appear on the
same copy of any Loan Document. 
 Section 8.08. Department Project Inspections Solely for the Department’s
Benefit. It is understood and agreed that the Department, its agents, servants, invitees and employees, may inspect the plans and specifications for the Project and enter the Premises and conduct such tests, surveys, examinations and inspections
as it shall, from time to time, deem appropriate. The Borrower hereby acknowledges and agrees (i) that such project inspections are solely for the protection and benefit of the Department, and (ii) that the Department, its agents,
servants, invitees and employees carry no responsibility whatsoever for the Project, its quality or the compliance or lack of compliance with the plans and specifications. 
 Section 8.09. Setoff. The Borrower agrees that the Commonwealth of Pennsylvania may set off the amount of any state tax
liability or other debt of the Borrower or its subsidiaries that is owed to the Commonwealth and not being contested on appeal against any payments due the Borrower under this or any other contract with the Commonwealth. 
 Section 8.10. Contractor Responsibility. Included in and made a part of this Agreement is Exhibit “C”, a clause
pertaining to Contractor Responsibility. 
 Section 8.11. Contractor Integrity. The Borrower represents, warrants
and covenants that it currently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of its obligations hereunder. Included in and made a part of this Agreement is
Exhibit “D”, a clause pertaining to Contractor Integrity. 
 Section 8.12. Americans with Disabilities
Act. Included in and made a part of this Agreement is Exhibit “E”, a clause pertaining to compliance with the Americans with Disabilities Act. 
 Section 8.13. Successors and Assigns. This Agreement and each of the Loan Documents shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of the
Department and the Borrower. Although the Department has no present intention to convey, pledge or otherwise assign its rights under the Loan Documents, it may nevertheless do so in whole or in part without notice to any person (including, without
limitation, the Borrower). The Borrower has no right to assign any of its rights or obligations hereunder or under any of the Loan Documents without the prior written consent of the Department, and any such assignment without the prior written
consent of the Department shall be void. The Borrower and the Department intend that no person except Borrower shall have any claim or interest under this Agreement or right of action hereunder. 
  

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 Section 8.14. Notices. Notices required hereunder, or any correspondence
concerning this Agreement shall be directed to the following addresses and shall be deemed properly given (a) if delivered by hand, (b) if sent by certified mail, return receipt requested, postage prepaid, or by recognized overnight
courier service (including, without limitation, Federal Express or United Parcel Service overnight service), charges prepaid; or (c) if sent by facsimile, with a copy sent by first class U.S. Mail, postage prepaid. 
 To the Department: 
 Department of Community and Economic Development 
 Commonwealth
Keystone Building 
 400 North Street, Fourth Floor 
 Harrisburg, PA 17120 
 FAX: (717) 772-2890 
       Attention: Machinery and Equipment Loan Fund 
 To Borrower: 
 Tengion, Inc. 
 2200 Renaissance Boulevard, Suite 150 
 King of Prussia,
Pennsylvania 19406 
 Attention: Chief Financial Officer 
 Notices and communications hereunder shall be deemed sufficiently given when dispatched pursuant to the foregoing provisions. Notices and
communications delivered by hand shall be effective upon receipt; notices and communications sent by fax, with a copy by first class U.S. Mail, shall be effective upon dispatch provided they are dispatched between 9:00 a.m. and 5:00 p.m. on a
business day; notices and communications sent by recognized overnight courier service shall be effective on the business day following dispatch; and notices sent by certified mail shall be effective on the third business day following dispatch. The
parties hereto may, by a notice given hereunder, designate any further or different addresses to which any subsequent notice or communication hereunder shall be sent. 
 Section 8.15. Severability. If any provision hereof or of the Loan Documents is found by a court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction, it shall be
ineffective as to such jurisdiction only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision as to such jurisdiction to the extent it is not prohibited or
unenforceable, nor invalidate such provision in any other jurisdiction, nor invalidate the other

  

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provisions of the Loan Documents, all of which shall be liberally construed in favor of the Department in order to effect the provisions of this Agreement. Notwithstanding anything to the
contrary herein contained, the total liability of the Borrower for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by applicable law to be contracted for, charged or received, and if any
payments by the Borrower to the Department include interest in excess of such a maximum amount, the Department shall apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shall be
refunded to the Borrower or the Borrower, as appropriate; provided that, to the extent permitted by applicable law, in the event the interest is not collected, is applied to principal or is refunded pursuant to this sentence and interest thereafter
payable pursuant hereto shall be less than such maximum amount, then such interest thereafter so payable shall be increased up to such maximum amount to the extent necessary to recover the amount of interest, if any, theretofore uncollected, applied
to principal or refunded pursuant to this sentence. Any such application or refund shall not cure or waive any Event of Default. In determining whether or not any interest payable under the Loan Documents exceeds the highest rate permitted by law,
any nonprincipal payment (except payments specifically stated to be “interest”) shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest. 
 Section 8.16. Consent to Jurisdiction. The Borrower hereby irrevocably (a) agrees that any suit, action or other legal
proceeding arising out of or relating to this Agreement or the Loan Documents may be brought in any federal or state court located in or whose district includes Harrisburg, Pennsylvania or the county wherein the Project is located and consents to
the jurisdiction of such court in any such suit, action or proceeding, and (b) waives any objection it may have to the laying of venue of any such suit, action or proceeding in any such court and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. The Borrower hereby irrevocably consents to the service of any and all process in any such suit, action or proceeding by mailing of copies of such process to the Borrower at its address provided
under or pursuant to Section 8.14. The Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. All
mailings under this section shall be by certified or registered mail, return receipt requested. Nothing in this section shall affect the right of the Department to serve legal process in any other manner permitted by law or affect the right of the
Department to bring any suit, action or proceeding against the Borrower or its property in the courts of any other jurisdiction. 
  

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 Section 8.17. Defined Terms. In each of the Loan Documents, unless otherwise
indicated, (i) defined terms may be used in the singular or the plural and the use of any gender includes all genders, (ii) the words, “hereof”, “herein”, “hereto”, “hereby” and “hereunder”
refer to the particular Loan Document in which they occur in such document’s entirety, (iii) the term, the “Loan Documents”, and the words, “thereof”, “therein”, “thereto”, “thereby” and
“thereunder” refer to all the Loan Documents, taken together as a whole, (iv) all references to particular Articles, Sections or Paragraphs are references to the particular Article, Section or Paragraph of the particular Loan Document
in which such references occur, and (v) the Borrower shall be referred to as Contractor in the Exhibits hereto. 
 Section 8.18. Incorporation by Reference. All exhibits to this Agreement and the terms of all Loan Documents shall be incorporated herein by reference as though expressly set forth herein. The Borrower agrees to be bound as the
“Contractor” under the provisions of the exhibits to this Agreement. 
 Section 8.19. Descriptive
Headings. Descriptive headings of the several Articles and Sections of each of the Loan Documents are intended for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 
 Section 8.20. Further Assurances. The Borrower from time to time, shall execute such further instruments as the Department may
reasonably request to further confirm and assure the interests and rights created or intended to be created in favor of the Department hereunder or under the Loan Documents. 
 Section 8.21. Complete Agreement. The Loan Documents constitute the entire agreement between the Department and the Borrower
with respect to the Project and the Loan. The Loan Documents supersede and replace all prior agreements related to the subject matter thereof including, without limitation, the Commitment, except to the extent such prior agreements are expressly
incorporated by reference or otherwise referred to. This Agreement may be modified or amended only by a written instrument duly executed by the Department and the Borrower. Each of the remaining Loan Documents may be modified only by a written
instrument duly executed by the Department and the remaining parties to the particular Loan Document. 
  

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 WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year
first above written. 
  

							
	 	 	 	 	COMMONWEALTH OF PENNSYLVANIA, acting by and
through the DEPARTMENT OF COMMUNITY AND
ECONOMIC DEVELOPMENT
			
		 		 	  
 Deputy Secretary

			
	ATTEST:	 		 	TENGION, INC.
				
	  
	 		 	By:	 	 /s/ Gary Sender

		 		 		 	Title: Chief Financial Officer

  

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 EXHIBIT “A” 
 COLLATERAL 
 The “Collateral” –
the machinery, equipment and other tangible personal property listed below, and all parts, replacements and/or substitutions, additions and accessions, equipment, tools and operating manuals thereto, any proceeds of sale or disposition thereof and
any proceeds of insurance thereon or condemnation thereof. 
  

					
	 Type of Equipment
	  	 Vendor/Manufacturer
	  	 Model No./Serial No.

  
  

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 EXHIBIT “B” 
 NONDISCRIMINATION CLAUSE 
 During the term of this
contract, the Contractor agree as follows: 
 l. The Contractor shall not discriminate against any employe, applicant for
employment, independent contractor or any other person because of race, color, religious creed, ancestry, national origin, age or sex. The Contractor shall take affirmative action to insure that applicants are employed, and that employes or agents
are treated during employment, without regard to their race, color, religious creed, ancestry, national origin, age or sex. Such affirmative action shall include, but is not limited to: employment, upgrading, demotion or transfer, recruitment or
recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training. The Contractor shall post in conspicuous places, available to employes, agents, applicants for employment and other persons, a
notice to be provided by the contracting agency setting forth the provisions of this nondiscrimination clause. 
 2. The
Contractor shall in advertisements or requests for employment placed by it or on its behalf, state that all qualified applicants will receive consideration for employment without regard to race, color, religious creed, ancestry, national origin,
age, or sex. 
 3. The Contractor shall send each labor union or workers’ representative with which they have a collective
bargaining agreement or other contract or understanding, a notice advising said labor union or workers’ representative of their commitment to this nondiscrimination clause. Similar notice shall be sent to every other source of recruitment
regularly utilized by the Contractor. 
 4. It shall be no defense to a finding of noncompliance with this nondiscrimination
clause that the Contractor had delegated some of its employment practices to any union, training program or other source of recruitment which prevents it from meeting its obligations. However, if the evidence indicates that the Contractor was not on
notice of the third party discrimination or made a good faith effort to correct it, such factor shall be considered in mitigation in determining appropriate sanctions. 
 5. Where the practices of a union or of any training program or other source of recruitment will result in the exclusion of minority group persons, so that the Contractor will be unable to meet its
obligations under this nondiscrimination clause, the Contractor shall then employ and fill vacancies through other nondiscriminatory employment procedures. 
 6. The Contractor shall comply with all state and federal laws prohibiting discrimination in hiring or employment opportunities. In the event of the Contractor’s noncompliance with the
nondiscrimination clause of this contract or with any such laws, this contract may be terminated or suspended, in whole or in part, and the Contractor may be declared temporarily ineligible for further Commonwealth contracts, and other sanctions may
be imposed and remedies invoked. 
 7. The Contractor shall furnish all necessary employment documents and records to, and
permit access to its books, records and accounts by, the contracting agency and the Office of Administration, Bureau of Affirmative Action, for purposes of investigation to ascertain compliance with the provisions of this clause. If the Contractor
does not possess documents or records reflecting the necessary information requested, it shall furnish such information on reporting forms supplied by the contracting agency or the Bureau of Affirmative Action. 
 8. The Contractor shall actively recruit minority subcontractors or subcontractors with substantial minority representation among its
employees. 
 9. The Contractor shall include the provisions of this nondiscrimination clause in every subcontract, so that such
provisions will be binding upon each subcontractor. 
 10. The Contractor obligations under this clause are limited to the
Contractor’s facilities within Pennsylvania or, where the contract is for purchase of goods manufactured outside of Pennsylvania, the facilities at which such goods are actually produced. 
  

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 EXHIBIT “C” 
 CONTRACTOR RESPONSIBILITY PROVISIONS 
 1. The
Contractor certifies that it is not currently under suspension or debarment by the Commonwealth, any other state, or the federal government, and if the Contractor cannot so certify, then it agrees to submit along with the bid/proposal a written
explanation of why such certification cannot be made. 
 2. If the Contractor enters into any subcontracts or employs under this
contract any subcontractors/individuals who are currently suspended or debarred by the Commonwealth or the federal government or who become suspended or debarred by the Commonwealth or federal government during the term of this contract or any
extensions or renewals thereof, the Commonwealth shall have the right to require the Contractor to terminate such subcontracts or employment. 
 3. The Contractor agrees to reimburse the Commonwealth for the reasonable costs of investigation incurred by the Office of Inspector General for investigations of the Contractor’s compliance with
terms of this or any other agreement between the Contractor and the Commonwealth which result in the suspension or debarment of the Contractor. Such costs shall include, but not be limited to, salaries of investigators, including overtime; travel
and lodging expenses; and expert witness and documentary fees. The Contractor shall not be responsible for investigative costs for investigations which do not result in the Contractor’s suspension or debarment. 
 4. The Contractor may obtain the current list of suspended and debarred contractors by contacting the: 
 Department of General Services 
 Office of Chief Counsel 
 603 North Office Building 
 Harrisburg, PA 17125 
 Telephone No. (717) 783-6472 
 Fax No. (717) 787-9138 
  

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 EXHIBIT “D” 
 CONTRACTOR INTEGRITY PROVISIONS 
 1. Definitions.

 a. Confidential information means information that is not public knowledge, or available to the public on request,
disclosure of which would give an unfair, unethical, or illegal advantage to another desiring to contract with the Commonwealth. 
 b. Consent means written permission signed by a duly authorized officer or employee of the Commonwealth, provided that where the material facts have been disclosed, in writing, by prequalification, bid, proposal, or contractual
terms, the Commonwealth shall be deemed to have consented by virtue of execution of this Agreement. 
 c. Commonwealth
means the Commonwealth of Pennsylvania Acting by and Through its Department of Community and Economic Development and any agencies and instrumentalities of the Commonwealth of Pennsylvania for which the Department of Community and Economic
Development provides staff services (including without limitation the Pennsylvania Industrial Development Authority, Pennsylvania Economic Development Financing Authority, Pennsylvania Energy Development Authority, and Pennsylvania Minority Business
Development Authority). 
 d. Contractor means the individual or entity that has entered into an agreement with the
Commonwealth, assumed the obligations of another to repay moneys to the Commonwealth, or is the intended beneficiary of, and has knowingly received benefits under, an agreement between the Commonwealth and a financial intermediary or educational
institution, including directors, officers, partners, managers, key employees, and owners of more than a 5% interest. 
 e.
Financial Interest means: 
 (1) ownership of more than a 5% interest in any business; or 
 (2) holding a position as an officer, director, trustee, partner, employee, or the like, or holding any position of
management. 
 f. Gratuity means any payment of more than nominal monetary value in the form of cash, travel,
entertainment, gifts, meals, lodging, loans, subscriptions, advances, deposits of money, services, employment, or contracts of any kind. 
 2. The Contractor shall take no action in violation of state or federal laws, regulations, or other requirements that govern contracting with the Commonwealth. 
 3. The Contractor shall not, in connection with this or any other agreement with the Commonwealth, directly or indirectly offer, confer, or
agree to confer any pecuniary benefit on anyone as consideration for the decision, opinion, recommendation, vote, other exercise of discretion, or violation of a known legal duty by any officer or employee of the Commonwealth. 
 4. The Contractor shall not, in connection with this or any other agreement with the Commonwealth, directly or indirectly offer, give, or
agree or promise to give to anyone any gratuity for the benefit of or at the direction or request of any officer or employee of the Commonwealth. 
 5. Except with the consent of the Commonwealth, the Contractor shall not have a financial interest in any other contractor, subcontractor, or supplier providing services, labor, or material on this
project. 
 6. The Contractor, upon being informed that any violation of these provisions has occurred or may occur, shall
immediately notify the Commonwealth in writing. 
  

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 7. The Contractor, by execution of this Agreement and by the submission of any bills or
invoices for payment pursuant thereto, certifies and represents that he has not violated any of these provisions. 
 8. The
Contractor, upon the inquiry or request of the Inspector General of the Commonwealth or any of that official’s agents or representatives, shall provide, or if appropriate, make promptly available for inspection or copying, any information of
any type or form relevant to the Contractor’s compliance with this Agreement (including without limitation these provisions relating to Contractor integrity). Such information shall be retained by the Contractor for a period of three years
beyond the termination of the contract unless provided by law. 
 9. For violation of any of the above provisions, the
Commonwealth may declare an event of default hereunder, subject to applicable notice and cure provisions, and debar and suspend the Contractor from doing business with the Commonwealth, including without limitation participation in its financial
assistance programs. These rights and remedies are cumulative, and the use or nonuse of any one shall not preclude the use of all or any other. These rights and remedies are in addition to those the Commonwealth may have under law, statute,
regulation, or otherwise. 
  

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 EXHIBIT “E” 
 AMERICANS WITH DISABILITIES ACT PROVISIONS 
 During
the term of this contract, the Contractor agrees as follows: 
 1. Pursuant to federal regulations promulgated under the
authority of The Americans With Disabilities Act, 28 C.F.R. § 35.101 et seq., the Contractor understands and agrees that no individual with a disability shall, on the basis of the disability, be excluded from participation in this contract or
from activities provided for under this contract. As a condition of accepting and executing this contract, the Contractor agrees to comply with the “General Prohibitions Against Discrimination,” 28 C.F.R. § 35.130, and all other
regulations promulgated under Title II of The Americans With Disabilities Act which are applicable to the benefits, services, programs, and activities provided by the Commonwealth of Pennsylvania through contracts with outside contractors.

 2. The Contractor shall be responsible for and agrees to indemnify and hold harmless the Commonwealth of Pennsylvania from
all losses, damages, expenses, claims, demands, suits, and actions brought by any party against the Commonwealth of Pennsylvania as a result of the Contractor’s failure to comply with the provisions of paragraph 1 above. 
 3. “Contractor” means the individual or entity that has entered into this Agreement with the Commonwealth. 
  

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 EXHIBIT “F” 
 CRITERIA FOR FAILURE TO MEET JOB PROJECTIONS 
 Criteria for Penalty Waiver: 
 The following four criteria will be evaluated to determine if a valid
explanation exists for failing to meet employment projections. If the Department determines that a company has provided adequate justification that one of the factors below led to its failure to meet projections, no penalty will be imposed. The
criteria are: (1) Natural Disaster, (2) Industry Trend, (3) Labor Force and (4) Loss of Major Supplier. 
 Detailed Explanation of Above Criteria 
 If a company fails to meet its projections because of any of the
following four reasons, no penalty will be levied: 
 (1) Natural Disaster. A company
will not be held responsible for failing to attain employment projections if a natural disaster such as a fire, flood or tornado strikes the business. 
 (2) Industry Trend. If a company can demonstrate to the satisfaction of the Department that the industry in which the company does a majority of its business suffered a sales
or revenue decline of at least 10%, the company will not be held responsible for failing to attain employment projections. The following points will be considered: 
 (i) Burden of proof resides with the company. The company must provide documentation from industry sources or other verifiable documentation to prove the overall industry sales or revenue decline.
Statistical comparisons must be for a period of no less than one year and must be from within the project term. 
 (ii) The
company must also provide a narrative explaining the business in which it operates, and how the industry downturn impacted its business operations. 
 (iii) If the company does business in more than one industry, the company must provide evidence that it’s overall business was dramatically impacted by the failure of its business within the
declining industry. 
 (3) Labor Force If a company can demonstrate to the satisfaction of the
department that there was a lack of an available labor pool, the company will not be held responsible for failure to attain employment projections. This demonstration must take the following into consideration: 
 (i) The unemployment rate of the county in which the project is located does not in itself signify the absence of available labor,
particularly for low skilled jobs; however, if the company requires skilled workers, or those with scarce skills, this factor could constitute sufficient demonstration. 
 (ii) A company will not be deemed to have experienced lack of an available labor pool if the wages offered by the company are below average. In this instance, the burden of proof shall be on the company
to demonstrate that it pays employees the average wage based on the industry-wide average for a particular region. Staff research utilizing average wage data supplied by the Department of Labor and Industry will be used to determine the validity of
this explanation. 
 (4) Loss of a Major Supplier If the failure of a company to attain employment
projections is the result of a loss of a major supplier, the company will not be held responsible for failing to attain employment projections. 
 (i) Burden of proof resides with the company. The company must provide financial/accounting proof that the supplier accounted for at least 25% of its business. 
 (ii) The company must also provide a narrative outlining its dependence on this supplier, and any attempts that were made to secure a new
supplier. 
 90% Guideline: 
 If a company fails to create the full job requirement, but achieves at least 90% of the job creation requirement, the Department will take into consideration other criteria including the quality of the
jobs created, the economic condition of the area, the strategic importance of the industry to the Commonwealth and other pertinent criteria, as determined by the Department. 
  

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