$15 Million Financing

On October 2, 2012, Tengion, Inc. (the "Company") entered into several agreements with certain new and existing investors (collectively, the "Investors") to provide financing for the Company of approximately $15 million (the "Financing"). Each of the holders of the demand notes issued by the Company on September 7, 2012 exchanged their demand notes for the securities issued in connection with the Financing.

Pursuant to a Securities Purchase Agreement (the "Securities Purchase Agreement") and a Facility Agreement (the "Facility Agreement") between the Company and the Investors, the Investors purchased an aggregate of approximately $15 million of Senior Secured Convertible Notes (the "Notes") and warrants (together with the Notes, the "Securities") to purchase an aggregate of approximately 51 million shares of the Company's common stock, par value, $0.001 per share (the "Common Stock").

Pursuant to the Securities Purchase Agreement, the Investors have the right but not the obligation, to cause the Company to issue up to an additional $20 million of Securities on the same terms and conditions contained in the Securities Purchase Agreement and related transaction documents (the "Additional Securities"). Each Investor has the right to purchase its pro rata share of the Additional Securities from time-to-time and at any time prior to June 30, 2013. The Investors also have the right to participate in any financing conducted by the Company on or before October 2, 2014.

The Securities Purchase Agreement and Facility Agreement contain various representations and warranties, and affirmative and negative covenants, customary for financings of this type, including restrictions on the ability of the Company to incur additional liens on its assets.

The Notes are convertible at any time at the option of each Investor at a current conversion price of $0.75 per share. The conversion price is subject to a downward adjustment based upon the: (a) volume weighted average price during the five trading day period ("Five-Day VWAP") after the first registration statement filed with the Securities Exchange Commission (the "SEC") registering the shares of Common Stock underlying the Securities is declared effective by the SEC; (b) Five-Day VWAP after the first trading day following the date on which non-affiliates of the Company can freely sell the shares of Common Stock underlying the Notes under Rule 144(b)(i) of the Securities Act of 1933, as amended (the "Securities Act"), in the event the registration statement referenced in (a) above does not register all of the shares of Common Stock underlying the Securities; and (c) issuance(s) by the Company of other securities with an issue or exercise price lower than the then existing conversion price in effect as described in the Notes.

The Notes mature on October 2, 2015. No payment of principal is required prior to maturity unless there is an event of default or there is a sale of the Company's assets outside of the ordinary course of business. Pursuant to the Notes, the Investors may also cause the Company to redeem the Notes upon: (a) the consolidation, merger, share exchange or other change of control transaction; (b) the sale of all or substantially all of the assets of the Company; (c) the issuance by the Company of an aggregate number of shares of Common Stock in excess of forty percent (40%) of the Company's then issued and outstanding shares of Common Stock; (d) the liquidation, bankruptcy insolvency, dissolution or winding-up of the Company; or (e) the Company's shares of Common Stock cease to be registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (each, a "Major Transaction"). The redemption value of the Notes in the event of a Major Transaction will be based upon the Black Scholes Option Pricing Model (the "Black Scholes Value") of the shares underlying the Notes as provided in the Notes.

Upon an event of default, which includes, among other things, a failure to make a payment when due, a failure to deliver shares issuable upon conversion or to timely register such shares, and a failure to obtain stockholder approval by December 1, 2012 of an amendment to the Company's Fourth Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock to 750,000,000 shares, the Notes shall be immediately due and payable. The Notes bear interest at 10% per annum and interest is payable quarterly. At the option of the Company, the Company may pay interest by the issuance of freely tradable shares of common stock. Pursuant to a Security Agreement (the "Security Agreement") between the Company and each investor, the Notes are secured by a lien on all of the Company's assets, including its intellectual property assets. This lien is pari passu with the lien held by Horizon Credit II LLC ("Horizon"), an affiliate of Horizon Technology Finance Corporation, the Company's existing venture debt lender.

The Company also issued to the Investors (i) five-year warrants to purchase up to an aggregate of 16,672,145 shares of common stock (the "Five-Year Warrants") and (ii) ten-year warrants to purchase up to an aggregate of 33,344,293 shares of common stock (the "Ten-Year Warrants"). In addition, the Company issued to . . .

On October 2, 2012, the Company and Medtronic, Inc. entered into an agreement (the "Medtronic Termination Agreement") to terminate that certain Right of First Refusal and Right of First Negotiation Agreement dated March 1, 2011 (the "Medtronic Agreement"). Pursuant to the Medtronic Agreement, Company had granted Medtronic a right of first refusal to the license, sale, assignment, transfer or other disposition by the Company of any material portion of intellectual property (including patents and trade secrets) or other assets related to Tengion's Neo-Kidney Augment program (an "NKA Transaction") until October 31, 2013. Additionally, from November 1, 2013 through July 1, 2014, Medtronic had a right of first negotiation with respect to an NKA Transaction, with an option to convert that right of first negotiation to a right of first refusal. There are no early termination penalties associated with the Medtronic Termination Agreement.

The foregoing description of the Medtronic Termination Agreement is qualified in its entirety by reference thereto, which is filed as Exhibit 10.9 to this Current Report and is incorporated herein by reference.

The information contained in Item 1.01 above is incorporated by reference into this Item 2.03.

The information contained in Item 1.01 above is incorporated by reference into this Item 3.02.

(d) Exhibits.

  4.1      Form of Senior Secured Convertible Note issued October 2,
         2012

  4.2      Form of Warrant issued October 2, 2012

  4.3      Amended and Restated Secured Promissory Note issued as of
         September 1, 2012

10.1 Securities Purchase Agreement by and between Tengion, Inc. and the investors party thereto, dated October 2, 2012

10.2 Facility Agreement by and between Tengion, Inc. and the lenders party thereto, dated October 2, 2012

10.3 Security Agreement by and between Tengion, Inc. and the secured parties thereto, dated October 2, 2012

10.4 Registration Rights Agreement by and between Tengion, Inc. and the parties thereto, dated October 2, 2012

10.5 Escrow Agreement by and between Tengion, Inc., Ballard Spahr LLP as escrow agent, and the parties thereto, dated October 2, 2012

10.6 Right of First Negotiation Agreement by and between Tengion, Inc. and Celgene Corporation, dated October 2, 2012

10.7 First Amendment of Venture Loan and Security Agreement by and between Tengion, Inc., Horizon Credit II LLC and Horizon Technology Finance Corporation, dated October 2, 2012

10.8 Joinder Agreement by and between Tengion, Inc. and Horizon Credit II LLC, dated October 2, 2012

10.9 Termination Agreement by and between Tengion, Inc. and Medtronic, Inc., dated October 2, 2012

99.1 Press Release, dated October 3, 2012