Exhibit 10.3

 

Execution Version

 

SECURITY AND PLEDGE AGREEMENT FOR OBLIGATIONS OF ICA-T

 

SECURITY AND PLEDGE AGREEMENT FOR OBLIGATIONS OF ICA-T, dated as of May 15, 2017
(this “Agreement”), made by Icagen, Inc., a Delaware corporation with offices
located at 4222 Emperor Blvd., Suite 350, Research Triangle Park, Durham, NC,
27703 (the “Parent”), Icagen-T, Inc., a Delaware corporation and a wholly-owned
Subsidiary of the Parent with offices located at 2090 E. Innovation Park Drive,
Oro Valley, Arizona 85755 (“ICA-T”) and each of the undersigned direct and
indirect Domestic Subsidiaries (as defined below) from time to time (together
with ICA-T and the Parent, collectively, the “Grantors” and each a “Grantor”),
in favor of GPB Debt Holdings II, LLC (in its capacity as collateral agent for
itself as purchaser of the Notes (as defined below) and each other Person who
may become a Noteholder (as defined below), the “Collateral Agent;” and in its
capacity as the purchaser of the Notes, the “Buyer”), pursuant to the Securities
Purchase Agreement, dated as of May 15, 2017 (as amended, modified,
supplemented, extended, renewed, restated or replaced from time to time, the
“Securities Purchase Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, the Parent, ICA-T and the Buyer are parties to the Securities Purchase
Agreement, pursuant to which, among other items (i) ICA-T issued and sold an
$8,000,000 aggregate principal amount senior secured convertible note of ICA-T
(as such may be amended, modified, supplemented, extended, renewed, restated or
replaced from time to time (the “ICA-T Note”), and (ii) the Parent issued and
sold, among other securities, a $2,000,000 aggregate principal amount senior
secured convertible note of the Parent (as such may be amended, modified,
supplemented, extended, renewed, restated or replaced from time to time (the
“Parent Note” and together with the ICA-T Note, collectively, the “Notes), to
the Buyer;”

 

WHEREAS, the Parent and certain other Grantors from time to time (other than
ICA-T) (each a “Guarantor” and collectively, the “Guarantors”) may execute and
deliver one or more guaranties including, but not limited to, that Guaranty of
Obligations of ICA-T (as defined below) in form and substance acceptable to and
in favor of the Collateral Agent, for the benefit of itself as a Noteholder and
any other Noteholder with respect to all of (i) ICA-T’s obligations under the
ICA-T Note, the Securities Purchase Agreement and the other Transaction
Documents (as defined in the Securities Purchase Agreement), and (ii) the
Parent’s obligations under the ICA-T Note;

 

WHEREAS, it is a condition precedent to the Buyer’s obligation to purchase the
ICA-T Note, (and the Parent Note and the Parent Warrant) issued pursuant to the
Securities Purchase Agreement, that the Grantors (including ICA-T) shall have
executed and delivered to the Collateral Agent this Agreement providing for the
grant to the Collateral Agent, for the benefit of itself as a Noteholder and any
other Noteholder, of a valid, enforceable, and perfected security interest in
all personal property of each Grantor to secure all of (i) ICA-T’s obligations
under the Transaction Documents, (ii) the Grantors’ (other than ICA-T)
obligations under the Guaranty of Obligations of ICA-T, and (iii) the Parent’s
obligations under the ICA-T Note; and

 

WHEREAS, each Grantor has determined that the execution, delivery and
performance of this Agreement directly and/or indirectly benefits, and is in the
best interest of, such Grantor;

 

 

 

 

NOW, THEREFORE, in consideration of the premises and the agreements herein and
such other consideration which the parties hereto recognize and acknowledge the
sufficiency of and in order to induce the Buyer to perform its obligations under
the Securities Purchase Agreement, each Grantor agrees with the Collateral
Agent, for the benefit of the Collateral Agent and the Noteholders, as follows:

 

SECTION 1. Definitions.

 

(a)       Reference is hereby made to the Securities Purchase Agreement and the
Notes for a statement of the terms thereof. All terms used in this Agreement and
the recitals hereto which are defined in the Securities Purchase Agreement, the
Notes or in the Code (as defined below), and which are not otherwise defined
herein shall have the same meanings herein as set forth therein; provided that
terms used herein which are defined in the Code on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of the Code except as the Collateral Agent may otherwise determine.

 

(b)       The following terms shall have the respective meanings provided for in
the Code: “Accounts” “Account Debtor”, “Cash Proceeds”, “Certificate of Title”,
“Chattel Paper”, “Commercial Tort Claim”, “Commodity Account”, “Commodity
Contracts”, “Deposit Account”, “Documents”, “Electronic Chattel Paper”,
“Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”,
“Inventory”, “Investment Property”, “Letter-of-Credit Rights”, “Payment
Intangibles”, “Proceeds”, “Promissory Notes”, “Security”, “Record”, “Security
Account”, “Software”, and “Supporting Obligations”.

 

(c)       As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of such terms:

 

“Affiliate” of any Person means any other Person which, directly or indirectly,
controls or is controlled by or is under common control with such Person and any
officer or director of such Person. A Person shall be deemed to be “controlled
by” any other Person if such Person possesses, directly or indirectly, power to
vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managers or power to direct or
cause the direction of the management and policies of such Person, whether by
contract or otherwise.

 

“Bankruptcy Code” means Chapter 11 of Title 11 of the United States Code, 11
U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency or similar
laws).

 

“Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain
closed.

 

“Buyer” shall have the meaning set forth in the recitals hereto.

 

“Capital Stock” means (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock (including, without
limitation, any warrants, options, rights or other securities exercisable or
convertible into equity interests or securities of such Person), and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.

 

 2 

 

 

“Closing Date” means the date of the sale by (i) ICA-T of the ICA-T Note, and
(ii) the Parent of the Parent Note and the Parent Warrant to the Buyer pursuant
to the terms of the Securities Purchase Agreement.

 

“Code” means Articles 8 or 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York; provided that, if perfection or the
effect of perfection or non-perfection or the priority of any security interest
in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “Code” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.

 

“Collateral” shall have the meaning set forth in Section 2(a) of this Agreement.

 

“Collateral Agent” shall have the meaning set forth in the preamble hereto.

 

“Controlled Account Agreement” means a deposit account control agreement or
securities account control agreement with respect to a Pledged Account, in form
and substance satisfactory to the Collateral Agent, as the same may be amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time.

 

“Controlled Accounts” means the Deposit Accounts, Commodity Accounts, Securities
Accounts, and/or Foreign Currency Controlled Account of the Grantors listed on
Schedule I attached hereto.

 

“Copyright Licenses” means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to use or sell any works covered by any Copyright
(including, without limitation, all Copyright Licenses set forth in Schedule II
hereto).

 

“Copyrights” means all domestic and foreign copyrights, whether registered or
not, including, without limitation, all copyright rights throughout the universe
(whether now or hereafter arising) in any and all media (whether now or
hereafter developed), in and to all original works of authorship fixed in any
tangible medium of expression, acquired or used by any Grantor (including,
without limitation, all copyrights described in Schedule II hereto), all
applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.

 

“Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.

 

“Event of Default” shall have the meaning set forth in Section 4(a) of the ICA-T
Note.

 

 3 

 

 

“Excluded Collateral” means (A) the voting Capital Stock of any Foreign
Subsidiary to the extent that (i) such Capital Stock represents more than 65% of
the issued and outstanding voting Capital Stock of such Foreign Subsidiary and
(ii) to the extent the pledge thereof is prohibited by the laws of such Foreign
Subsidiary’s Organization or pledging more than 65% of the total outstanding
voting Capital Stock of such Foreign Subsidiary would result in a material
adverse tax consequence to a Grantor, (B) accounts receivable and/or Inventory
of each Grantor, but only if and to the extent as of any time of determination
any such Grantor’s accounts receivable and/or Inventory is being factored
pursuant to an existing accounts receivable and/or Inventory financing
arrangement between the provider of such financing and such Grantor, provided at
all times commencing on the Closing Date (as defined in the Securities Purchase
Agreement) that a Grantor’s accounts receivable and/or Inventory does not
constitute Excluded Collateral pursuant to (B) of this definition of Excluded
Collateral, such shall constitute Collateral and the Collateral Agent for the
benefit of itself as a Noteholder and any other Noteholders shall have a senior
secured security interest in and a valid, enforceable perfected senior priority
Lien on such Grantor’s accounts receivable and/or Inventory and the Parent and
each Grantor shall take at any time and from time to time any and all action
necessary and/or as reasonably requested by the Collateral Agent to effectuate
the same including, but not limited to, providing an opinion of legal counsel to
the Parent relating to the above in form and substance satisfactory to the
Collateral Agent, and (C) the Capital Stock of ICA-T; provided, the Capital
Stock of ICA-T shall not be considered Excluded Collateral and shall constitute
Collateral and “Pledged Equity” and ICA-T shall be a Pledged Entity commencing
on the first calendar day following the date that the Master Services Agreement
dated July 15, 2016 by and between Sanofi US Services, Inc. (“Sanofi”) and ICA-T
(as amended, restated and/or otherwise modified, the “MSA”) shall not prohibit
the Capital Stock of ICA-T from being pledged as Collateral (the “Restriction
End Date”) and in connection therewith, ICA-T and the Parent shall take any and
all such actions necessary and/or requested by the Collateral Agent to satisfy
the Collateral Agent that such and the following has been effectuated and that
the Collateral Agent for the benefit of itself as a Noteholder and any other
Noteholders has a senior secured security interest in and a perfected senior
priority Lien on the Capital Stock of ICA-T and that the Capital Stock of ICA-T
is not directly and/or indirectly subject to any security interest and/or Lien
of Sanofi and/or any other Person (except the Collateral Agent for the benefit
of itself as a Noteholder and the holder of the Parent Note and any other
Noteholder and/or other holder of a Parent Note) including, but not limited to,
providing an opinion of legal counsel to the Parent relating to the above in
form and substance satisfactory to the Collateral Agent (the “ICA-T Capital
Stock Actions”).

 

“Foreign Currency Controlled Accounts” means any Controlled Account of the
Parent or its Subsidiaries holding non-United States dollar deposits.

 

“Foreign Subsidiary” means any Subsidiary of a Grantor organized under the laws
of a jurisdiction other than the United States, any of the states thereof,
Puerto Rico or the District of Columbia.

 

“GAAP” means U.S. generally accepted accounting principles consistently applied.

 

“Governmental Authority” means any nation or government, any Federal, state,
city, town, municipality, county, local, foreign or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

 

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“Guaranteed Obligations of ICA-T” shall have the meaning set forth in Section 2
of the Guaranty of Obligations of ICA-T.

 

“Guarantor” or “Guarantors” shall have the meaning set forth in the recitals
hereto.

 

“Guaranty” or “Guaranties” shall mean any additional guaranties required to be
entered into pursuant to the Transaction documents with respect to the ICA-T
Note.

 

“Guaranty of Obligations of ICA-T” shall mean that Guaranty of Obligations of
ICA-T dated the date hereof made by the Grantors (other than ICA-T) and any
future grantors.

 

“ICA-T Note” shall have the meaning set forth in the recitals hereto.

 

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, or extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.

 

“Intellectual Property” means, collectively, the Copyrights, Trademarks and
Patents.

 

“Intellectual Property Security Agreement” means the Intellectual Property
Security Agreement required to be delivered pursuant to Section 5(h)(i) of this
Agreement, in the form attached hereto as Exhibit A.

 

“Licenses” means, collectively, the Copyright Licenses, the Trademark Licenses
and the Patent Licenses, provided any such License does not contain a provision
expressly prohibiting the pledge of such License.

 

“Lien” means any mortgage, lien, pledge, charge, security interest, adverse
claim or other encumbrance upon or in any property or assets.

 

“Noteholder” means, at any time, the holders of all or any portion of the ICA-T
Note at such time.

 

“Obligations” shall have the meaning set forth in Section 3 of this Agreement.

 

“Paid in Full” or “Payment in Full” means the indefeasible payment in full
(including by way of redemption) of all Obligations in cash (and/or through the
issuance of shares of Parent Common Stock (as defined in the ICA-T Note), by the
ICA-T, Parent or a Subsidiary but only if and to the extent permitted by the
ICA-T Note and the other Transaction Documents).

 

“Parent” shall have the meaning set forth in the preamble hereto.

 

 5 

 

 

“Patent Licenses” means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to manufacture, use or sell any invention covered by any
Patent (including, without limitation, all Patent Licenses set forth in Schedule
III hereto).

 

“Patents” means all domestic and foreign letters patent, design patents, utility
patents, industrial designs, inventions, trade secrets, ideas, concepts,
methods, techniques, processes, proprietary information, technology, know-how,
formulae, rights of publicity and other general intangibles of like nature, now
existing or hereafter acquired (including, without limitation, all domestic and
foreign letters patent, design patents, utility patents, industrial designs,
inventions, trade secrets, ideas, concepts, methods, techniques, processes,
proprietary information, technology, know-how and formulae described in Schedule
III hereto), all applications, registrations and recordings thereof (including,
without limitation, applications, registrations and recordings in the United
States Patent and Trademark Office, or in any similar office or agency of the
United States or any other country or any political subdivision thereof), and
all reissues, reexaminations, divisions, continuations, continuations in part
and extensions or renewals thereof.

 

“Perfection Requirement” or “Perfection Requirements” shall have the meaning set
forth in Section 4(j) of this Agreement.

 

“Person” means an individual, corporation, limited liability Parent,
partnership, association, joint-stock Parent, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.

 

“Pledged Accounts” means all of each Grantor’s right, title and interest in all
of its Deposit Accounts, Commodity Accounts and Securities Accounts (in all
cases, including, without limitation, all Controlled Accounts and Foreign
Currency Control Accounts).

 

“Pledged Entity” means, each Person listed from time to time on Schedule IV
hereto as a “Pledged Entity,” together with each other Person, any right in or
interest in or to all or a portion of whose Capital Stock is acquired or
otherwise owned by a Grantor after the date hereof.

 

“Pledged Equity” means all of each Grantor’s right, title and interest in and to
all of the Securities and Capital Stock now or hereafter owned by such Grantor,
regardless of class or designation, including all substitutions therefor and
replacements thereof, all proceeds thereof and all rights relating thereto, also
including any certificates representing the Securities and/or Capital Stock, the
right to receive any certificates representing any of the Securities and/or
Capital Stock, all warrants, options, share appreciation rights and other
rights, contractual or otherwise, in respect thereof, and the right to receive
dividends, distributions of income, profits, surplus, or other compensation by
way of income or liquidating distributions, in cash or in kind, and cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of, on
account of, or in exchange for any or all of the foregoing; provided, however,
that the term Pledged Equity shall include all ICA-T Capital Stock commencing on
the Restriction End Date and the Parent, ICA-T and each other Grantor shall take
all ICA-T Capital Stock Actions.

 

 6 

 

 

“Pledged Operating Agreements” means all of each Grantor’s rights, powers and
remedies under the limited liability Parent operating agreements of each of the
Pledged Entities that are limited liability companies, as may be amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time.

 

“Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and
remedies under the partnership agreements of each of the Pledged Entities that
are partnerships, as may be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time.

 

“Securities Purchase Agreement” shall have the meaning set forth in the recitals
hereto.

 

“Subsidiary” means any Person in which a Grantor directly or indirectly (i) owns
a majority of the outstanding Capital Stock, voting stock or holds a majority of
any equity or similar interest of such Person or (ii) controls or operates a
substantial portion of the business, operations or administration of such
Person, and all of the foregoing, collectively, “Subsidiaries”.

 

“Trademark Licenses” means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensor or licensee and providing for
the grant of any right concerning any Trademark, together with any goodwill
connected with and symbolized by any such licenses, contracts or agreements and
the right to prepare for sale or lease and sell or lease any and all Inventory
now or hereafter owned by any Grantor and now or hereafter covered by such
licenses, contracts or agreements (including, without limitation, all Trademark
Licenses described in Schedule V hereto).

 

“Trademarks” means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a’s,
assumed names, Internet domain names, trade styles, designs, logos and other
source or business identifiers and all general intangibles of like nature, now
or hereafter owned, adopted, acquired or used by any Grantor (including, without
limitation, all domestic and foreign trademarks, service marks, collective
marks, certification marks, trade names, business names, d/b/a’s, assumed names,
Internet domain names, trade styles, designs, logos and other source or business
identifiers described in Schedule V(a) hereto), all applications, registrations
and recordings thereof (including, without limitation, applications,
registrations and recordings in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state thereof or any
other country or any political subdivision thereof), and all reissues,
extensions or renewals thereof, together with all goodwill of the business
symbolized by such marks and all customer lists, formulae and other Records of
any Grantor relating to the distribution of products and services in connection
with which any of such marks are used.

 

SECTION 2. Grant of Security Interest.

 

(a)       As collateral security for the due and punctual payment and
performance of all of the Obligations, as and when due, each Grantor hereby
pledges, assigns and grants to the Collateral Agent, for the benefit of itself
as a Noteholder itself and for the benefit of any other Noteholders, a
continuing security interest in, all personal property and assets of such
Grantor, wherever located and whether now or hereafter existing and whether now
owned or hereafter acquired, of every kind, nature and description, whether
tangible or intangible (collectively, the “Collateral”), including, without
limitation, the following:

 

(i)        All Accounts (but with regard to accounts receivable, subject to the
provisions of Section (B) of the definition of Excluded Collateral);

 

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(ii)       all Chattel Paper (whether tangible or Electronic Chattel Paper)
having a value in excess of $25,000;

 

(iii)      all Commercial Tort Claims having a value in excess of $25,000,
including, without limitation, those specified on Schedule VI hereto;

 

(iv)      all Documents;

 

(v)       all Equipment;

 

(vi)      all Fixtures;

 

(vii)     all General Intangibles (including, without limitation, all Payment
Intangibles);

 

(viii)    all Goods;

 

(ix)      all Inventory (subject to the provisions of Section (B) of the
definition of Excluded Collateral);

 

(x)       all Instruments (including, without limitation, all Promissory Notes
and each certificated Security);

 

(xi)      all Investment Property (and, regardless of whether classified as
Investment Property under the Code, all Pledged Equity, Pledged Operating
Agreements and Pledged Partnership Agreements);

 

(xii)     all Intellectual Property and Licenses;

 

(xiii)    all Letters of Credit and Letter-of-Credit Rights;

 

(xiv)    all Pledged Accounts, all cash and other property from time to time
deposited therein, and all monies and property in the possession or under the
control of the Collateral Agent or any Noteholder or any Affiliate,
representative, agent or correspondent of the Collateral Agent or any such
Noteholder;

 

(xv)     all Supporting Obligations;

 

 8 

 

 

(xvi)     all other tangible and intangible personal property of each Grantor
(whether or not subject to the Code), including, without limitation, all those
relating to ICA-T’s compound library pursuant to which a security interest can
be granted upon, all  cell line and plasmid repositories and related items, all
Deposit and other accounts and all cash and all investments therein, all
proceeds, products, offspring, accessions, rents, profits, income, benefits,
substitutions and replacements of and to any of the property of any Grantor
described in the preceding clauses of this Section 2(a) (including, without
limitation, any proceeds of insurance thereon and all causes of action, claims
and warranties now or hereafter held by each Grantor in respect of any of the
items listed above), and all books, correspondence, files and other Records,
including, without limitation, all tapes, desks, cards, Software, data and
computer programs in the possession or under the control of any Grantor or any
other Person from time to time acting for any Grantor, in each case, to the
extent of such Grantor’s rights therein, that at any time evidence or contain
information relating to any of the property described in the preceding clauses
of this Section 2(a) or are otherwise necessary or helpful in the collection or
realization thereof; and

 

(xvii)    all Proceeds, including all Cash Proceeds and Noncash Proceeds, and
products of any and all of the foregoing Collateral;

 

in each case howsoever any Grantor’s interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).

 

(b)       Notwithstanding anything herein to the contrary, the term “Collateral”
shall not include any Excluded Collateral.

 

(c)       Except for Permitted Liens, each Grantor agrees not to further
encumber, or permit any other Lien to exist that encumbers, any of its
Copyrights, Copyright applications, Copyright registrations and like protections
in each work of authorship and derivative work, whether published or
unpublished, any Licenses other than by the parties to the License, Patents,
Patent applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same, Trademarks, service marks and, to the extent permitted under applicable
law, any applications therefor, whether registered or not, and the goodwill of
the business of such Grantor connected with and symbolized thereby, know-how,
operating manuals, trade secret rights, rights to unpatented inventions, and any
claims for damage by way of any past, present, or future infringement of any of
the foregoing, in each case without the Collateral Agent’s prior written consent
(which consent may be withheld or given in the Collateral Agent’s sole
discretion).

 

(d)       The Grantors agree that the pledge of the shares of Capital Stock
acquired by a Grantor of any and all Persons now or hereafter existing who is a
Foreign Subsidiary may be supplemented by one or more separate pledge
agreements, deeds of pledge, share charges or other similar agreements or
instruments, executed and delivered by the relevant Grantors in favor of the
Collateral Agent, which pledge agreements will provide for the pledge of such
shares of Capital Stock in accordance with the laws of the applicable foreign
jurisdiction but in no event shall Excluded Collateral be pledged. With respect
to such shares of Capital Stock, the Collateral Agent may, at any time and from
time to time, in its sole discretion, take such actions in such foreign
jurisdictions that will result in the perfection of the Lien created in such
shares of Capital Stock.

 

(e)       In addition, to secure the prompt and complete payment, performance
and observance of the Obligations and in order to induce the Buyer as aforesaid,
each Grantor hereby grants to the Collateral Agent, for itself and for the
ratable benefit of the Noteholders, a right of set-off against the property of
such Grantor held by the Collateral Agent, for itself and for the ratable
benefit of the Noteholders, consisting of property described above in Section
2(a) now or hereafter in the possession or custody of or in transit to the
Collateral Agent, for any purpose, including safekeeping, collection or pledge,
for the account of such Grantor, or as to which such Grantor may have any right
or power; provided that such right shall only to be exercised after an Event of
Default has occurred and is continuing.

 

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SECTION 3. Security for Obligations. The security interest created hereby in the
Collateral constitutes continuing collateral security for all of the following
obligations, whether direct or indirect, absolute or contingent, and whether now
existing or hereafter incurred (collectively, the “Obligations”):

 

(a)       (i) all payments by ICA-T as and when due and payable (by scheduled
maturity, required prepayment, redemption, acceleration, demand or otherwise),
of all amounts from time to time owing by it in respect of the Securities
Purchase Agreement, this Agreement, the ICA-T Note and the other Transaction
Documents to which ICA-T is a party, (ii) all payments by the Parent as and when
due and payable (by scheduled maturity, required prepayment, redemption,
acceleration, demand or otherwise), of all amounts from time to time owing by
the Parent in respect of the ICA-T Note and/or any other obligations of ICA-T
pursuant to any other Transaction Document and (iii) in the case of the
Guarantors, the payment by such Guarantors, as and when due and payable of all
Guaranteed Obligations of ICA-T under the Guaranty of Obligations of ICA-T,
including, without limitation, in all cases set forth in (i) – (iii) above, (A)
all principal of, interest, redemption amounts, Late Charges (as defined in the
ICA-T Note) and other amounts on the ICA-T Note and the other Transaction
Documents to which ICA-T is a party (including, without limitation, all
interest, redemption amounts, Late Charges and other amounts that accrue after
the commencement of any Insolvency Proceeding of any Grantor, whether or not the
payment of such interest is enforceable or is allowable in such Insolvency
Proceeding), and (B) all fees, interest, Late Charges, premiums, penalties,
contract causes of action, costs, commissions, expense reimbursements,
indemnifications and all other amounts due or to become due under this Agreement
or any of the Transaction Documents; and

 

(b)       the due performance and observance by each Grantor of all of its other
obligations from time to time existing in respect of any of the Transaction
Documents, including without limitation, with respect to any conversion or
redemption rights of the Noteholders under the ICA-T Note.

 

SECTION 4. Representations and Warranties. Each Grantor represents and warrants
as follows:

 

(a)       Schedule VII hereto sets forth (i) the exact legal name of each
Grantor, and (ii) the state of incorporation, organization or formation and the
organizational identification number of each Grantor in such state. The
information set forth in Schedule VII hereto with respect to such Grantor is
true and accurate in all respects. Such Grantor has not previously changed its
name (or operated under any other name), jurisdiction of organization or
organizational identification number from those set forth in Schedule VII hereto
except as disclosed in Schedule VII hereto.

 

 10 

 

 

(b)       There is no pending or, to its knowledge, written notice threatening
any action, suit, proceeding or claim affecting any Grantor before any
Governmental Authority or any arbitrator, or any order, judgment or award issued
by any Governmental Authority or arbitrator, in each case, that may adversely
affect the grant by any Grantor, or the perfection, of the security interest
purported to be created hereby in the Collateral, or the exercise by the
Collateral Agent of any of its rights or remedies hereunder.

 

(c)       All Federal, state and local tax returns and other reports required by
applicable law to be filed by any Grantor have been filed, or extensions have
been obtained, and all taxes, assessments and other governmental charges imposed
upon any Grantor or any property of any Grantor (including, without limitation,
all federal income and social security taxes on employees’ wages) and which have
become due and payable on or prior to the date hereof have been paid, except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with GAAP.

 

(d)       All Equipment, Fixtures, Goods and Inventory of each Grantor now
existing are, and all Equipment, Fixtures, Goods and Inventory of each Grantor
hereafter existing will be, located and/or based at the addresses specified
therefor in Schedule VIII hereto, except that each Grantor will give the
Collateral Agent written notice of any change in the location of any such
Collateral within 20 days of such change, other than to locations set forth on
Schedule VIII hereto (and with respect to which the Collateral Agent has filed
financing statements and otherwise fully perfected its Liens thereon). Each
Grantor’s principal place of business and chief executive office, the place
where each Grantor keeps its Records concerning the Collateral and all located
at the addresses specified therefor in Schedule VIII hereto. None of the
Accounts is or will be evidenced by Promissory Notes or other Instruments.

 

(e)       Set forth in Schedule IX hereto is a complete and accurate list, as of
the date of this Agreement, of (i) each Promissory Note, Security and other
Instrument owned by each Grantor, (ii) each Pledged Account of each Grantor,
together with the name and address of each institution at which each such
Pledged Account is maintained, the account number for each such Pledged Account
and a description of the purpose of each such Pledged Account and (iii) the name
of each Foreign Currency Controlled Account, together with the name and address
of each institution at which each such Foreign Currency Controlled Account is
maintained and the amount of cash or cash equivalents held in each such Foreign
Currency Controlled Account. Set forth in Schedule IX hereto is a complete and
correct list of each trade name used by each Grantor and the name of, and each
trade name used by, each Person from which each Grantor has acquired any
substantial part of the Collateral.

 

 11 

 

 

(f)       Each Grantor has delivered to the Collateral Agent complete and
correct copies of each License described in Schedule X hereto, including all
schedules and exhibits thereto, which represent all of the Licenses of the
Grantors existing on the date of this Agreement. Each such License sets forth
the entire agreement and understanding of the parties thereto relating to the
subject matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby or the
rights of such Grantor or any of its Affiliates in respect thereof. Each
material License now existing is, and any material License entered into in the
future will be, the legal, valid and binding obligation of the parties thereto,
enforceable against such parties in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, and similar laws of general application relating to or affecting
the rights and remedies of creditors and by general principles of equity. No
default under any material License by any such party has occurred, nor does any
defense, offset, deduction or counterclaim exist thereunder in favor of any such
party.

 

(g)       Each Grantor owns and controls, or otherwise possesses adequate rights
to use, all of its Intellectual Property. Schedule XI hereto sets forth a true
and complete list of all Intellectual Property and Licenses owned or used by
each Grantor as of the date hereof, and applications for grant or registration
of Intellectual Property. To the knowledge of each Grantor, all such
Intellectual Property of such Grantor is subsisting and in full force and
effect, has not been adjudged invalid or unenforceable, and has not been
abandoned in whole or in part. Except as set forth in Schedule XI, no such
Intellectual Property is the subject of any licensing or franchising agreement.
Except as set forth in Schedule XI, no Grantor has any knowledge of any
infringement upon or conflict with the Patent, Trademark, Copyright, trade
secret rights of others and, each Grantor is not now knowingly infringing or
knowingly in conflict with any Patent, Trademark, Copyright, trade secret or
similar rights of others, and to the knowledge of each Grantor, no other Person
is now infringing or in conflict in any material respect with any such
properties, assets and rights owned or used by each Grantor. No Grantor has
received any notice that it is violating or has violated the Trademarks,
Patents, Copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae, rights of publicity or other intellectual
property rights of any third party.

 

(h)       Each Grantor is and will be at all times the sole and exclusive owner
of the Collateral pledged by such Grantor hereunder free and clear of any Liens,
except for Permitted Liens thereon. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording or filing office except such as (i) may have been filed in
favor of the Collateral Agent and/or the Noteholders relating to this Agreement
or the other Transaction Documents, and (ii) are securing Permitted Liens as of
the date hereof and disclosed on Schedule XII hereto.

 

(i)        The exercise by the Collateral Agent of any of its rights and
remedies hereunder will not contravene any law or any contractual restriction
binding on or otherwise affecting each Grantor or any of its properties and will
not result in or require the creation of any Lien, upon or with respect to any
of its properties.

 

 12 

 

 

(j)       No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority, is required for (i) the grant by each
Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral, or (ii) the exercise by the Collateral Agent of any of
its rights and remedies hereunder, except for (A) the filing under the Code as
in effect in the applicable jurisdiction of the financing statements described
in Schedule XII hereto, all of which financing statements have been duly filed
and are in full force and effect, (B) with respect to all Pledged Accounts, and
all cash and other property from time to time deposited therein, the execution
of a Controlled Account Agreement with the depository or other institution with
which the applicable Pledged Accounts are maintained, as provided in Section
5(h)(i), (C) with respect to Commodity Contracts, the execution of a control
agreement with the commodity intermediary with which such Commodity Contract is
carried, as provided in Section 5(h)(i), (D) with respect to the perfection of
the security interest created hereby in the United States Intellectual Property
and Licenses, the recording of the appropriate Intellectual Property Security
Agreement in the United States Patent and Trademark Office or the United States
Copyright Office, as applicable (E) with respect to the perfection of the
security interest created hereby in any Letter-of-Credit Rights, the consent of
the issuer of the applicable letter of credit to the assignment of proceeds as
provided in the Code as in effect in the applicable jurisdiction, (G) with
respect to Investment Property constituting uncertificated securities, the
applicable Grantor causing the issuer thereof either (i) to register the
Collateral Agent as the registered owner of such securities or (ii) to agree in
an authenticated record with such Grantor and the Collateral Agent that such
issuer will comply with instructions with respect to such securities originated
by the Collateral Agent without further consent of such Grantor, such
authenticated record to be in form and substance satisfactory to the Collateral
Agent, (H) with respect to Investment Property constituting certificated
securities or instruments, such items to be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignment
in blank, all in form and substance satisfactory to the Collateral Agent, (I)
with respect to any action that may be necessary to obtain control of Collateral
constituting Commodity Contracts, Electronic Chattel Paper or Letter of Credit
Rights, the taking of such actions, and (J) the Collateral Agent having
possession of all Documents, Chattel Paper, Instruments and cash constituting
Collateral (subclauses (A) through (J) each a “Perfection Requirement” and
collectively, the “Perfection Requirements”).

 

(k)       This Agreement creates in favor of the Collateral Agent a legal, valid
and enforceable security interest in the Collateral, as security for the
Obligations. The performance of the Perfection Requirements results in the
perfection of such security interest in the Collateral. Such security interest
is (or in the case of Collateral in which each Grantor obtains rights after the
date hereof, will be), subject only to Permitted Liens and the Perfection
Requirements, a first priority, valid, enforceable and perfected security
interests in all personal property of each Grantor (other than Excluded
Collateral). Such recordings and filings and all other action necessary to
perfect and protect such security interest have been duly taken (and, in the
case of Collateral in which any Grantor obtains rights after the date hereof,
will be duly taken), except for the Collateral Agent’s having possession of all
Documents, Chattel Paper, Instruments and cash constituting Collateral after the
date hereof and the other actions, filings and recordations described above,
including the Perfection Requirements.

 

(l)        As of the date hereof, no Grantor holds any Commercial Tort Claims or
has knowledge of any pending Commercial Tort Claims, except for the Commercial
Tort Claims described in Schedule VI.

 

 13 

 

 

(m)      All of the Pledged Equity is presently owned by the applicable Grantor
as set forth in Schedule XV, and is presently represented by the certificates
listed on Schedule XV hereto (if applicable). As of the date hereof, there are
no existing options, warrants, calls or commitments of any character whatsoever
relating to the Pledged Equity other than as contemplated and permitted by the
Transaction Documents. Each Grantor is the sole holder of record and the sole
beneficial owner of the Pledged Equity, as applicable. None of the Pledged
Equity has been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any jurisdiction to which
such issuance or transfer may be subject. The Pledged Equity constitutes 100% or
such other percentage as set forth on Schedule XV of the issued and outstanding
shares of Capital Stock of the applicable Pledged Entity.

 

(n)       Such Grantor (i) is a corporation, limited liability company or
limited partnership, as applicable, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, organization
or formation, (ii) has all requisite corporate, limited liability company or
limited partnership power and authority to conduct its business as now conducted
and as presently contemplated and to execute and deliver this Agreement and each
other Transaction Document to which such Grantor is a party, and to consummate
the transactions contemplated hereby and thereby and (iii) is duly qualified to
do business and is in good standing in each jurisdiction in which the character
of the properties owned or leased by it or in which the transaction of its
business makes such qualification necessary, except where the failure to be so
qualified would not result in a Material Adverse Effect.

 

(o)       The execution, delivery and performance by each Grantor of this
Agreement and each other Transaction Document to which such Grantor is a party
(i) have been duly authorized by all necessary corporate, limited liability
company or limited partnership action, (ii) do not and will not contravene its
charter or by-laws, limited liability company or operating agreement,
certificate of partnership or partnership agreement, as applicable, or any
applicable law or any contractual restriction binding on such Grantor or its
properties, (iii) do not and will not result in or require the creation of any
Lien (other than pursuant to any Transaction Document) upon or with respect to
any of its assets or properties, and (iv) do not and will not result in any
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval applicable
to it or its operations or any of its assets or properties.

 

(p)       This Agreement and each of the other Transaction Documents to which
any Grantor is or will be a party, when delivered, will be, a legal, valid and
binding obligation of such Grantor, enforceable against such Grantor in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or
other similar laws and equitable principles (regardless of whether enforcement
is sought in equity or at law).

 

(q)       There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.

 

 14 

 

 

SECTION 5. Covenants as to the Collateral. So long as any of the Obligations
shall remain outstanding, unless the Collateral Agent shall otherwise consent in
writing:

 

(a)       Further Assurances. Each Grantor will, at its expense, at any time and
from time to time, promptly execute and deliver all further instruments and
documents and take all further action that the Collateral Agent may reasonably
request in order to: (i) perfect and protect the security interest of the
Collateral Agent created hereby; (ii) enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder in respect of the Collateral,
including, without limitation, the Controlled Accounts; or (iii) otherwise
effect the purposes of this Agreement, including, without limitation: (A)
marking conspicuously all Chattel Paper and each License and, at the request of
the Collateral Agent, each of its Records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Collateral Agent, indicating
that such Chattel Paper, License or Collateral is subject to the security
interest created hereby, (B) delivering and pledging to the Collateral Agent
each Promissory Note, Security (subject to the limitations set forth in Section
2), Chattel Paper or other Instrument, now or hereafter owned by any Grantor,
duly endorsed and accompanied by executed instruments of transfer or assignment,
all in form and substance satisfactory to the Collateral Agent, (C) executing
and filing (to the extent, if any, that any Grantor’s signature is required
thereon) or authenticating the filing of, such financing or continuation
statements, or amendments thereto, as may be necessary or that the Collateral
Agent may reasonably request in order to perfect and preserve the security
interest created hereby, (D) furnishing to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral in each case as the
Collateral Agent may reasonably request, all in reasonable detail, (E) if any
Collateral shall be in the possession of a third party, notifying such Person of
the Collateral Agent’s security interest created hereby and obtaining a written
acknowledgment from such Person, in form and substance reasonably satisfactory
to the Collateral Agent, that such Person holds possession of the Collateral for
the benefit of the Collateral Agent (for the benefit the Noteholders), (F) if at
any time after the date hereof, any Grantor acquires or holds any Commercial
Tort Claim, promptly notifying the Collateral Agent in a writing signed by such
Grantor setting forth a brief description of such Commercial Tort Claim and
granting to the Collateral Agent a security interest therein and in the proceeds
thereof, which writing shall incorporate the provisions hereof and shall be in
form and substance satisfactory to the Collateral Agent, (G) upon the
acquisition after the date hereof by any Grantor of any motor vehicle or other
Equipment subject to a certificate of title or ownership (other than a motor
vehicle or Equipment that is subject to a purchase money security interest),
causing the Collateral Agent to be listed as the lienholder on such certificate
of title or ownership and delivering evidence of the same to the Collateral
Agent in accordance with Section 5(j) hereof; and (H) taking all actions
required by the Code or by other law, as applicable, in any relevant Code
jurisdiction, or by other law as applicable in any foreign jurisdiction.

 

(b)       Location of Collateral. Each Grantor will keep the Collateral (i) at
the locations specified therefor on Schedule XVI hereto, or (ii) at such other
locations set forth on Schedule XVI and with respect to which the Collateral
Agent has filed financing statements and otherwise fully perfected its Liens
thereon, or (iii) at such other locations in the United States , provided that
30 days prior to any change in the location of any Collateral to such other
location, or upon the acquisition of any Collateral to be kept at such other
locations, the Grantors shall give the Collateral Agent written notice thereof
and deliver to the Collateral Agent a new Schedule XVI indicating such new
locations and such other written statements and schedules as the Collateral
Agent may require.

 

(c)       Condition of Equipment. Each Grantor will maintain or cause to be
maintained and preserved in good condition, repair and working order, ordinary
wear and tear excepted, the Equipment (necessary or useful to its business) and
will forthwith, or in the case of any loss or damage to any Equipment of any
Grantor within a commercially reasonable time after the occurrence thereof, make
or cause to be made all repairs, replacements and other improvements in
connection therewith which are necessary or desirable, consistent with past
practice, or which the Collateral Agent may request to such end. Any Grantor
will promptly furnish to the Collateral Agent a statement describing in
reasonable detail any such loss or damage in excess of $50,000 per occurrence to
any Equipment.

 

 15 

 

 

(d)       Taxes, Etc. Each Grantor agrees to pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against, the
Equipment and Inventory, except to the extent the validity thereof is being
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves in accordance with GAAP have been set aside for the
payment thereof.

 

(e)       Insurance.

 

(i)       Each Grantor will, at its own expense, maintain insurance (including,
without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real
properties leased or owned by it) and business, in such amounts and covering
such risks, in such form and with responsible and reputable insurance companies
or associations as is required by any Governmental Authority having jurisdiction
with respect thereto or as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated and in
any event, in amount, adequacy and scope reasonably satisfactory to the
Collateral Agent.

 

(ii)      To the extent requested by the Collateral Agent at any time and from
time to time, each such policy for liability insurance shall provide for all
losses to be paid on behalf of the Collateral Agent and any Grantor as their
respective interests may appear, and each policy for property damage insurance
shall provide for all losses to be adjusted with, and paid directly to, the
Collateral Agent. In addition to and without limiting the foregoing, to the
extent requested by the Collateral Agent at any time and from time to time, each
such policy shall in addition (A) name the Collateral Agent as an additional
insured party and/or loss payee, as applicable, thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as its
interests may appear, (B) contain an agreement by the insurer that any loss
thereunder shall be payable to the Collateral Agent on its own account
notwithstanding any action, inaction or breach of representation or warranty by
any Grantor, (C) provide that there shall be no recourse against the Collateral
Agent for payment of premiums or other amounts with respect thereto, and (D)
provide that at least 30 days’ prior written notice of cancellation, lapse,
expiration or other adverse change shall be given to the Collateral Agent by the
insurer. Any Grantor will, if so requested by the Collateral Agent, deliver to
the Collateral Agent original or duplicate policies of such insurance (including
certificates demonstrating compliance with this Section 5(e)) and, as often as
the Collateral Agent may reasonably request, a report of a reputable insurance
broker with respect to such insurance. Any Grantor will also, at the request of
the Collateral Agent, execute and deliver instruments of assignment of such
insurance policies and cause the respective insurers to acknowledge notice of
such assignment.

 

 16 

 

 

(iii)      Reimbursement under any liability insurance maintained by any Grantor
pursuant to this Section 5(e) may be paid directly to the Person who shall have
incurred liability covered by such insurance. In the case of any loss involving
damage to Equipment or Inventory, to the extent paragraph (iv) of this Section
5(e) is not applicable, any proceeds of insurance involving such damage shall be
paid to the Collateral Agent, and any Grantor will make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by any Grantor pursuant to this Section 5(e)
(except as otherwise provided in paragraph (iv) in this Section 5(e)) shall be
paid by the Collateral Agent to any Grantor as reimbursement for the reasonable
costs of such repairs or replacements.

 

(iv)      Notwithstanding anything to the contrary in subsection 5(e)(iii)
above, following and during the continuance of an Event of Default (as defined
in the Securities Purchase Agreement and the ICA-T Note), all insurance payments
in respect of each Grantor’s properties and business shall be paid to the
Collateral Agent and applied as specified in Section 7(b) hereof.

 

(f)       Provisions Concerning the Accounts and the Licenses.

 

(i)        Each Grantor will (A) give the Collateral Agent at least 30 days’
prior written notice of any change in such Grantor’s name, identity or
organizational structure, (B) maintain its jurisdiction of incorporation,
organization or formation as set forth in Schedule VII hereto, (C) immediately
notify the Collateral Agent upon obtaining an organizational identification
number, if on the date hereof such Grantor did not have such identification
number, and (D) keep adequate records concerning the Collateral and permit
representatives of the Collateral Agent during normal business hours on
reasonable notice to such Grantor, to inspect and make abstracts from such
records.

 

 17 

 

 

(ii)       Each Grantor will (except as otherwise provided in this subsection
(f)), continue to collect, at its own expense, all amounts due or to become due
under the Accounts. In connection with such collections, any Grantor may (and,
at the Collateral Agent’s direction, will) take such action as any Grantor or
the Collateral Agent may deem necessary or advisable to enforce collection or
performance of the Accounts that are not Excluded Collateral; provided, however,
that the Collateral Agent shall have the right at any time following the
occurrence and during the continuance of an Event of Default to notify the
Account Debtors or obligors under any Accounts that are not Excluded Collateral
of the assignment of such Accounts to the Collateral Agent and to direct such
Account Debtors or obligors to make payment of all amounts due or to become due
to any Grantor thereunder directly to the Collateral Agent or its designated
agent and, upon such notification and at the expense of any Grantor and to the
extent permitted by applicable law, to enforce collection of any such Accounts
and to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as any Grantor might have done. After receipt by
any Grantor of a notice from the Collateral Agent that the Collateral Agent has
notified, intends to notify, or has enforced or intends to enforce any Grantor’s
rights against the Account Debtors or obligors under any Accounts as referred to
in the proviso to the immediately preceding sentence, (A) all amounts and
proceeds (including Instruments) received by any Grantor in respect of the
Accounts shall be received in trust for the benefit of the Collateral Agent
hereunder (for the benefit the Noteholders), shall be segregated from other
funds of any Grantor and shall be forthwith paid over to the Collateral Agent in
the same form as so received (with any necessary endorsement) to be applied as
specified in Section 7(b) hereof, and (B) no Grantor will adjust, settle or
compromise the amount or payment of any Account or release wholly or partly any
Account Debtor or obligor thereof or allow any credit or discount thereon. In
addition, upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent may (in its sole and absolute discretion) direct any or all
of the banks and financial institutions with which any Grantor either maintains
a Deposit Account or a lockbox (including, without limitation, any Controlled
Account) or deposits the proceeds of any Accounts to send immediately to the
Collateral Agent by wire transfer (to such deposit account as the Collateral
Agent shall specify, or in such other manner as the Collateral Agent shall
direct) all or a portion of such securities, cash, investments and other items
held by such institution. Any such securities, cash, investments and other items
so received by the Collateral Agent shall be applied as specified in accordance
with Section 7(b) hereof.

 

(iii)       Upon the occurrence and during the continuance of any breach or
default under any material License referred to in Schedule XVII hereto by any
party thereto other than any Grantor, each Grantor party thereto will, promptly
after obtaining knowledge thereof, give the Collateral Agent written notice of
the nature and duration thereof, specifying what action, if any, it has taken
and proposes to take with respect thereto and thereafter will take reasonable
steps to protect and preserve its rights and remedies in respect of such breach
or default, or will obtain or acquire an appropriate substitute License.

 

(iv)       Each Grantor will, at its expense, promptly deliver to the Collateral
Agent a copy of each notice or other communication received by it by which any
other party to any material License referred to in Schedule XVIII hereto
purports to exercise any of its rights or affect any of its obligations
thereunder, together with a copy of any reply by such Grantor thereto.

 

(v)        Each Grantor will exercise promptly and diligently each and every
right which it may have under each material License (other than any right of
termination) and will duly perform and observe in all respects all of its
obligations under each material License and will take all action reasonably
necessary to maintain such Licenses in full force and effect. No Grantor will,
without the prior written consent of the Collateral Agent, cancel, terminate,
amend or otherwise modify in any respect, or waive any provision of, any
material License referred to in Schedule XIX hereto.

 

 18 

 

 

(g)       Transfers and Other Liens.

 

(i)       Except as otherwise expressly permitted in the other Transaction
Documents, no Grantor shall, directly or indirectly, sell, lease, license,
assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any
Collateral whether in a single transaction or a series of related transactions,
other than (A) sales, leases, licenses, assignments, transfers, conveyances and
other dispositions of such assets or rights by such Grantor for value in the
ordinary course of business consistent with past practices; and (B) sales of
Inventory and product in the ordinary course of business.

 

(ii)      Except if expressly permitted under Section 14(e) of the ICA-T Note,
no Grantor shall, directly or indirectly, redeem, repurchase or declare or pay
any cash dividend or distribution on any of its Capital Stock.

 

(iii)     No Grantor shall, directly or indirectly, without the prior written
consent of the Required Holders issue any securities that would cause a breach
or default under the ICA-T Note, the Securities Purchase Agreement and/or any
other Transaction Document.

 

(iv)     Except for payments to Taglich Brothers, Inc. or an Affiliate thereof
for fundraising services they provide (but no payments shall be made to any such
parties related to any financing provided to any Grantor by the Buyer), no
Grantor shall enter into, renew, extend or be a party to, any transaction or
series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) with any Affiliate, except in the ordinary
course of business in a manner and to an extent consistent with past practice
and necessary or desirable for the prudent operation of its business, for fair
consideration and on terms no less favorable to it than would be obtainable in a
comparable arm’s length transaction with a Person that is not an Affiliate
thereof.

 

(v)       No Grantor will create, suffer to exist or grant any Lien upon or with
respect to any Collateral other than a Permitted Lien.

 

 19 

 

 

(h)       Intellectual Property.

 

(i)       If applicable, each Grantor shall duly execute and deliver the
applicable Intellectual Property Security Agreement. Each Grantor (either itself
or through licensees) will, and will cause each licensee thereof to, take all
action reasonably necessary and/or requested by the Collateral Agent to maintain
all of the Intellectual Property in full force and effect, including, without
limitation, using the proper statutory notices, numbers and markings (relating
to patent, trademark and copyright rights) and using the Trademarks on each
applicable trademark class of goods in order to so maintain the Trademarks in
full force and free from any claim of abandonment for non-use, and each Grantor
will not (nor permit any licensee thereof to) do any act or knowingly omit to do
any act whereby any Intellectual Property may become abandoned, cancelled or
invalidated; provided, however, that so long as no Event of Default has occurred
and is continuing, no Grantor shall have an obligation to use or to maintain any
Intellectual Property (A) that relates solely to any product or work, that is no
longer necessary or material and has been, or is in the process of being,
discontinued, abandoned or terminated in the ordinary course of business and
consistent with the exercise of reasonable business judgment, (B) that is being
replaced with Intellectual Property substantially similar to the Intellectual
Property that may be abandoned or otherwise become invalid, so long as the
failure to use or maintain such Intellectual Property does not materially
adversely affect the validity of such replacement Intellectual Property and so
long as such replacement Intellectual Property is subject to the Lien created by
this Agreement and does not have a Material Adverse Effect on the business of
any Grantor or (C) that is substantially the same as another Intellectual
Property that is in full force, so long the failure to use or maintain such
Intellectual Property does not materially adversely affect the validity of such
replacement Intellectual Property and so long as such other Intellectual
Property is subject to the Lien and security interest created by this Agreement
and does not have a material adverse effect on the business of any Grantor. Each
Grantor will cause to be taken all necessary steps in any proceeding before the
United States Patent and Trademark Office and the United States Copyright Office
or any similar office or agency in any other country or political subdivision
thereof to maintain each registration of the Intellectual Property and
application for registration of Intellectual Property (other than the
Intellectual Property described in the proviso to the immediately preceding
sentence), including, without limitation, filing of renewals, affidavits of use,
affidavits of incontestability and opposition, interference and cancellation
proceedings and payment of maintenance fees, filing fees, taxes or other
governmental fees. If any Intellectual Property (other than Intellectual
Property described in the proviso to the second sentence of subsection (i) of
this clause (h)) is infringed, misappropriated, diluted or otherwise violated in
any material respect by a third party, each Grantor shall (x) upon learning of
such infringement, misappropriation, dilution or other violation, promptly (but
in no event more than five (5) business days after learning of such) notify the
Collateral Agent and (y) if reasonably requested by the Collateral Agent
promptly sue for infringement, misappropriation, dilution or other violation,
seek injunctive relief where appropriate and recover any and all damages for
such infringement, misappropriation, dilution or other violation, or take such
other actions as such Grantor shall deem appropriate under the circumstances to
protect such Intellectual Property. Each Grantor shall furnish to the Collateral
Agent from time to time upon its request statements and schedules further
identifying and describing the Intellectual Property and Licenses and such other
reports in connection with the Intellectual Property and Licenses as the
Collateral Agent may reasonably request, all in reasonable detail and promptly
upon request of the Collateral Agent, following receipt by the Collateral Agent
of any such statements, schedules or reports, each Grantor shall modify this
Agreement by amending Schedules II, III and IV and any other applicable Schedule
hereto, as the case may be, to include any Intellectual Property and License, as
the case may be, which is or hereafter becomes part of the Collateral under this
Agreement and shall execute and authenticate such documents and do such acts as
shall be necessary or, in the reasonable judgment of the Collateral Agent,
desirable to subject such Intellectual Property and Licenses to the Lien and
security interest created by this Agreement. Notwithstanding anything herein to
the contrary, upon the occurrence and during the continuance of an Event of
Default, no Grantor may abandon, surrender or otherwise permit any Intellectual
Property to become abandoned, cancelled or invalid without the prior written
consent of the Collateral Agent, and if any Intellectual Property is infringed,
misappropriated, diluted or otherwise violated in any material respect by a
third party, each Grantor will take such reasonable action as the Collateral
Agent shall deem appropriate under the circumstances to protect such
Intellectual Property.

 

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(ii)       In the event that any Grantor, either itself or through any agent,
employee, licensee or designee, files an application for the registration of any
Patent, Trademark or Copyright or the United States Copyright Office or the
United States Patent and Trademark Office, as applicable, or in any similar
office or agency of the United States or any country or any political
subdivision thereof, it shall give the Collateral Agent prompt written notice
thereof (but in no event more than one (1) business day after the initial filing
of application). Upon request of the Collateral Agent, any Grantor shall
execute, authenticate and deliver any and all assignments, agreements,
instruments, documents and papers as the Collateral Agent may reasonably request
to evidence the Collateral Agent’s security interest hereunder in such
Intellectual Property and the General Intangibles of any Grantor relating
thereto or represented thereby, and each Grantor hereby appoints the Collateral
Agent its attorney-in-fact to execute and/or authenticate and file all such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed, and such power (being coupled with an interest) shall be
irrevocable until all Obligations are Paid in Full.

 

(i)       Pledged Accounts.

 

(A)       Each Grantor shall use its reasonable best efforts to, as soon as
practical following the Closing Date, but in no event more than sixty (60)
calendar days following the Closing Date (the “CAB Period”), cause each bank and
other financial institution which maintains a Controlled Account (each a
“Controlled Account Bank”) to execute and deliver to the Collateral Agent, in
form and substance satisfactory to the Collateral Agent, a Controlled Account
Agreement with respect to such Controlled Account, duly executed by each Grantor
and such Controlled Account Bank, pursuant to which such Controlled Account Bank
among other things shall irrevocably agree, with respect to such Controlled
Account, that (i) at any time after any Grantor, the Collateral Agent or the
Buyer shall have notified such Controlled Account Bank that an Event of Default
has occurred or is continuing, such Controlled Account Bank will comply with any
and all instructions originated by the Collateral Agent directing the
disposition of the funds in such Controlled Account without further consent by
such Grantor, (ii) such Controlled Account Bank shall waive, subordinate or
agree not to exercise any rights of setoff or recoupment or any other claim
against the applicable Controlled Account other than for payment of its service
fees and other charges directly related to the administration of such Controlled
Account and for returned checks or other items of payment, (iii) at any time
after any Grantor, the Collateral Agent or the Buyer shall have notified such
Controlled Account Bank that an Event of Default has occurred or is continuing,
with respect to each such Controlled Account, such Controlled Account Bank shall
not comply with any instructions, directions or orders of any form with respect
to such Controlled Accounts other than instructions, directions or orders
originated by the Collateral Agent, (iv) all funds deposited by any Grantor with
such Controlled Account Bank shall be subject to a perfected, first priority
security interest in favor of the Collateral Agent, and (v) upon receipt of
written notice from the Collateral Agent during the continuance of an Event of
Default, such Controlled Account Bank shall immediately send to the Collateral
Agent by wire transfer (to such account as the Collateral Agent shall specify,
or in such other manner as the Collateral Agent shall direct) all such funds and
other items held by it. No Grantor shall create or maintain any Pledged Account
without the prior written consent of the Collateral Agent and complying with the
terms of this Agreement.

 

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(B)       If at any time after the expiration of the CAB Period, the average
daily balance of any Account that is not subject to a Controlled Account
Agreement exceeds $100,000 during any calendar month (including the calendar
month in which the Closing Date occurs), the Parent shall, either (x) within two
(2) Business Days following such date, transfer to a Controlled Account an
amount sufficient to reduce the total aggregate amount of the cash in such
Account to an amount not in excess of $100,000 or (y) within twenty-one (21)
calendar days following the last day of such calendar month, deliver to the
Collateral Agent a Controlled Account Agreement with respect to such Account,
duly executed by such Grantor and the depositary bank in which such Account is
maintained.

 

(C)       Notwithstanding anything to the contrary contained in Section 5(i)(B)
above, and without limiting any of the foregoing, if at any time after the
expiration of the CAB Period, the total aggregate amount of the cash of the
Parent and any of its Subsidiaries, in the aggregate, that is not held in a
Controlled Account exceeds $150,000 (the “Maximum Free Cash Amount”), the Parent
shall within twenty one (21) Business Days following such date, either (x)
transfer to a Controlled Account an amount sufficient to reduce the total
aggregate amount of the cash that is not held in a Controlled Account to an
amount not in excess of the Maximum Free Cash Amount or (y) deliver to the
Collateral Agent a Controlled Account Agreement with respect to such Account (or
Accounts), duly executed by such Grantor and the depositary bank in which such
Account (or Accounts) is maintained, as necessary to reduce the total aggregate
amount of the cash that is not held in a Controlled Account to an amount not in
excess of the Maximum Free Cash Amount.

 

(j)       Control. Each Grantor hereby agrees to take any or all action that may
be necessary or that the Collateral Agent may reasonably request in order for
the Collateral Agent to obtain “control” in accordance with Sections 9-105
through 9-107 of the Code with respect to the following Collateral: (i)
Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit
Rights.

 

 22 

 

 

(k)       Inspection and Reporting. Each Grantor shall permit the Collateral
Agent, or any agent or representatives thereof or such professionals or other
Persons as the Collateral Agent may designate at Grantors’ sole cost and expense
no more than once per quarter (the “Quarterly Limitations”), unless an Event of
Default exists and/or with the passage of time, the occurrence of an event or
the giving of notice an Event of Default would exist, in which event there shall
be no limitations including, but not limited to, the Quarterly Limitations (i)
to examine and make copies of and abstracts from any Grantor’s records and books
of account, (ii) to visit and inspect its properties, (iii) to verify materials,
leases, Instruments, Accounts, Inventory and other assets of any Grantor from
time to time, and (iv) to conduct audits, physical counts, appraisals and/or
valuations, examinations at the locations of any Grantor. Each Grantor shall
also permit the Collateral Agent, or any agent or representatives thereof or
such attorneys, accountants or other professionals or other Persons as the
Collateral Agent may designate to discuss such Grantor’s affairs, finances and
accounts with any of its directors, officers, members, managers managerial
employees, independent accountants or any of its other representatives. Without
limiting the foregoing, the Collateral Agent may, at any time, in the Collateral
Agent’s own name, in the name of a nominee of the Collateral Agent, or in the
name of any Grantor communicate (by mail, telephone, facsimile or otherwise)
with the Account Debtors of such Grantor, parties to contracts with such Grantor
and/or obligors in respect of Instruments of such Grantor to verify with such
Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms
of, and any other matter relating to, Accounts, Instruments, Chattel Paper,
payment intangibles and/or other receivables.

 

(l)       Future Subsidiaries. If any Grantor hereafter creates or acquires any
Subsidiary, simultaneously with the creation or acquisition of such Subsidiary,
such Grantor shall (i) if such Subsidiary is a Domestic Subsidiary, cause such
Subsidiary to become a party to this Agreement as an additional “Grantor”
hereunder, (ii) deliver to the Collateral Agent updated Schedules to this
Agreement, as appropriate (including, without limitation, an updated Schedule IV
to reflect the grant by such Grantor of a Lien on all Pledged Equity now or
hereafter owned by such Grantor), (iii) if such Subsidiary is a Domestic
Subsidiary, cause such Subsidiary to duly execute and deliver a guaranty of the
Obligations in favor of the Collateral Agent in form and substance acceptable to
the Collateral Agent, (iv) if such Subsidiary is a (a) Domestic Subsidiary,
deliver to the Collateral Agent the stock certificates representing all, and (b)
so long as permitted by applicable law, Foreign Subsidiary, deliver to the
Collateral Agent the stock certificates representing 65%, of the Capital Stock
of such Subsidiary, along with undated stock powers for each such certificates,
executed in blank (or, if any such shares of Capital Stock are uncertificated,
confirmation and evidence reasonably satisfactory to the Collateral Agent that
the security interest in such uncertificated securities has been transferred to
and perfected by the Collateral Agent, in accordance with Sections 8-313, 8-321
and 9-115 of the Code or any other similar or local or foreign law that may be
applicable), and (v) duly execute and/or cause to be delivered to the Collateral
Agent, in form and substance acceptable to the Collateral Agent, such opinions
of counsel and other documents as the Collateral Agent shall request with
respect thereto; provided, however, that no Grantor shall be required to pledge
any Excluded Collateral. Each Grantor hereby authorizes the Collateral Agent to
attach such updated Schedules to this Agreement and agrees that all Pledged
Equity listed on any updated Schedule delivered to the Collateral Agent shall
for all purposes hereunder be considered Collateral. The Grantors agree that the
pledge of the shares of Capital Stock acquired by a Grantor of Foreign
Subsidiary may be supplemented by one or more separate pledge agreements, deeds
of pledge, share charges, or other similar agreements or instruments, executed
and delivered by the relevant Grantor in favor of the Collateral Agent, which
pledge agreements will provide for the pledge of such shares of Capital Stock in
accordance with the laws of the applicable foreign jurisdiction. With respect to
such shares of Capital Stock, the Collateral Agent may, at any time and from
time to time, in its sole discretion, take actions in such foreign jurisdictions
that will result in the perfection of the Lien created in such shares of Capital
Stock other than Excluded Collateral.

 

 23 

 

 

SECTION 6. Additional Provisions Concerning the Collateral.

 

(a)       To the maximum extent permitted by applicable law, and for the purpose
of taking any action that the Collateral Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes
the Collateral Agent to execute any such agreements, instruments or other
documents in such Grantor’s name and to file such agreements, instruments or
other documents in such Grantor’s name and in any appropriate filing office,
(ii) authorizes the Collateral Agent at any time and from time to time to file,
one or more financing or continuation statements, and amendments thereto,
relating to the Collateral (including, without limitation, any such financing
statements that (A) describe the Collateral as “all assets” or “all personal
property” (or words of similar effect) other than Excluded Collateral or that
describe or identify the Collateral by type or in any other manner as the
Collateral Agent may determine regardless of whether any particular asset of
such Grantor falls within the scope of Article 9 of the Code or whether any
particular asset of such Grantor constitutes part of the Collateral, and (B)
contain any other information required by Part 5 of Article 9 of the Code for
the sufficiency or filing office acceptance of any financing statement,
continuation statement or amendment, including, without limitation, whether such
Grantor is an organization, the type of organization and any organizational
identification number issued to such Grantor) and (iii) ratifies such
authorization to the extent that the Collateral Agent has filed any such
financing or continuation statements, or amendments thereto, prior to the date
hereof. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.

 

(b)       Each Grantor hereby irrevocably appoints (but Collateral Agent shall
not use such power until an Event of Default occurs) the Collateral Agent as its
attorney-in-fact and proxy, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, from time to time in the
Collateral Agent’s discretion to take any action and to execute any instrument
which the Collateral Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation, (i) to obtain and
adjust insurance required to be paid to the Collateral Agent pursuant to Section
5(e) hereof, (ii) to ask, demand, collect, sue for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (iii) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper in connection with clause (i) or
(ii) above, (iv) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for the
collection of any Collateral or otherwise to enforce the rights of the
Collateral Agent and the Noteholders with respect to any Collateral, (v) to
execute assignments, licenses and other documents to enforce the rights of the
Collateral Agent and the Noteholders with respect to any Collateral, and (vi) to
verify any and all information with respect to any and all Accounts. This power
is coupled with an interest and is irrevocable until all of the Obligations are
Paid in Full.

 

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(c)       For the purpose of enabling the Collateral Agent to exercise rights
and remedies hereunder, at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Grantor hereby grants to the Collateral Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to any Grantor) to use, assign, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, wherever
the same may be located, including in such license reasonable access to all
media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof. Notwithstanding
anything contained herein to the contrary, but subject to the provisions of the
Securities Purchase Agreement that limit the right of any Grantor to dispose of
its property, and Section 5(g) and Section 5(h) hereof, so long as no Event of
Default shall have occurred and be continuing, any Grantor may exploit, use,
enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary course of its
business and as otherwise expressly permitted by any of the other Transaction
Documents. In furtherance of the foregoing, unless an Event of Default shall
have occurred and be continuing, the Collateral Agent shall from time to time,
upon the request of any Grantor, execute and deliver any instruments,
certificates or other documents, in the form so requested, which such Grantor
shall have certified are appropriate (in such Grantor’s judgment) to allow it to
take any action permitted above (including relinquishment of the license
provided pursuant to this clause (c) as to any Intellectual Property). Further,
upon the Payment in Full of all of the Obligations, the Collateral Agent
(subject to Section 10(e) hereof) shall release and reassign to any Grantor all
of the Collateral Agent’s right, title and interest in and to the Collateral,
including the Intellectual Property, and the Licenses, all without recourse,
representation or warranty whatsoever. The exercise of rights and remedies
hereunder by the Collateral Agent shall not terminate the rights of the holders
of any licenses or sublicenses theretofore granted by each Grantor in accordance
with the second sentence of this clause (c). Each Grantor hereby releases the
Collateral Agent from any claims, causes of action and demands at any time
arising out of or with respect to any actions taken or omitted to be taken by
the Collateral Agent under the powers of attorney granted herein other than
actions taken or omitted to be taken through the Collateral Agent’s gross
negligence or willful misconduct, as determined by a final determination of a
court of competent jurisdiction.

 

(d)       If any Grantor fails to perform any agreement or obligation contained
herein, upon an Event of Default, the Collateral Agent may itself perform, or
cause performance of, such agreement or obligation, in the name of such Grantor
or the Collateral Agent, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by such Grantor pursuant to Section 8
hereof and shall be secured by the Collateral.

 

 25 

 

 

(e)       The powers conferred on the Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.

 

(f)       Anything herein to the contrary notwithstanding (i) each Grantor shall
remain liable under the Licenses and otherwise with respect to any of the
Collateral to the extent set forth therein to perform all of its obligations
thereunder to the same extent as if this Agreement had not been executed, (ii)
the exercise by the Collateral Agent of any of its rights hereunder shall not
release any Grantor from any of its obligations under the Licenses or otherwise
in respect of the Collateral, and (iii) the Collateral Agent shall not have any
obligation or liability by reason of this Agreement under the Licenses or with
respect to any of the other Collateral, nor shall the Collateral Agent be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.

 

(g)       As long as no Event of Default (as defined under the Notes) shall have
occurred and be continuing and until written notice shall be given to the
applicable Grantor:

 

(i)       Each Grantor shall have the right, from time to time, to vote and give
consents with respect to the Pledged Equity, or any part thereof for all
purposes not inconsistent with the provisions of this Agreement, the Securities
Purchase Agreement or any other Transaction Document; provided, however, that no
vote shall be cast, and no consent shall be given or action taken, which would
have the effect of impairing the position or interest of the Collateral Agent in
respect of the Pledged Equity or which would authorize, effect or consent to
(unless and to the extent expressly permitted by the Securities Purchase
Agreement):

 

(A)       the dissolution or liquidation, in whole or in part, of a Pledged
Entity;

 

(B)       the consolidation or merger of a Pledged Entity with any other Person;

 

(C)       the sale, disposition or encumbrance of all or substantially all of
the assets of a Pledged Entity, except for Liens in favor of the Collateral
Agent;

 

(D)       any change in the authorized number of shares, the stated capital or
the authorized share capital of a Pledged Entity or the issuance of any
additional shares of its Capital Stock; or

 

(E)       the alteration of the voting rights with respect to the Capital Stock
of a Pledged Entity.

 

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(ii)       Each Grantor shall be entitled, from time to time, to collect and
receive for its own use all cash dividends and interest paid in respect of the
Pledged Equity to the extent not in violation of the Securities Purchase
Agreement other than any and all: (A) dividends and interest paid or payable
other than in cash in respect of any Pledged Equity, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Equity; (B) dividends and other distributions paid or
payable in cash in respect of any Pledged Equity in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in capital of a Pledged Entity; and (C) cash paid,
payable or otherwise distributed, in respect of principal of, or in redemption
of, or in exchange for, any Pledged Equity; provided, however, that until
actually paid all rights to such distributions shall remain subject to the Lien
created by this Agreement; and

 

(iii)       all dividends and interest (other than such cash dividends and
interest as are permitted to be paid to any Grantor in accordance with clause
(i) above) and all other distributions in respect of any of the Pledged Equity,
whenever paid or made, shall be delivered to the Collateral Agent to hold as
Pledged Equity and shall, if received by any Grantor, be received in trust for
the benefit of the Collateral Agent (for the benefit of the Noteholders), be
segregated from the other property or funds of such Grantor, and be forthwith
delivered to the Collateral Agent as Pledged Equity in the same form as so
received (with any necessary endorsement).

 

SECTION 7. Remedies Upon Event of Default; Application of Proceeds. If any Event
of Default shall have occurred and be continuing:

 

(a)       The Collateral Agent may exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein, in any other
Transaction Document or otherwise available to it, all of the rights and
remedies of a secured party upon default under the Code (whether or not the Code
applies to the affected Collateral), and also may (i) take absolute control of
the Collateral, including, without limitation, transfer into the Collateral
Agent’s name or into the name of its nominee or nominees (to the extent the
Collateral Agent has not theretofore done so) and thereafter receive, for the
benefit of the Noteholders, all payments made thereon, give all consents,
waivers and ratifications in respect thereof and otherwise act with respect
thereto as though it were the outright owner thereof, (ii) require each Grantor
to, and each Grantor hereby agrees that it will at its expense and upon request
of the Collateral Agent forthwith, assemble all or part of its respective
Collateral as directed by the Collateral Agent and make it available to the
Collateral Agent at a place or places to be designated by the Collateral Agent
that is reasonably convenient to both parties, and the Collateral Agent may
enter into and occupy any premises owned or leased by any Grantor where the
Collateral or any part thereof is located or assembled for a reasonable period
in order to effectuate the Collateral Agent’s rights and remedies hereunder or
under law, without obligation to any Grantor in respect of such occupation, and
(iii) without notice except as specified below and without any obligation to
prepare or process the Collateral for sale, (A) sell the Collateral or any part
thereof in one or more parcels at public or private sale (including, without
limitation, by credit bid), at any of the Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Collateral Agent may deem commercially
reasonable and/or (B) lease, license or dispose of the Collateral or any part
thereof upon such terms as the Collateral Agent may deem commercially
reasonable. Each Grantor agrees that, to the extent notice of sale or any other
disposition of its respective Collateral shall be required by law, at least ten
(10) days’ notice to any Grantor of the time and place of any public sale or the
time after which any private sale or other disposition of its respective
Collateral is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale or other disposition of
any Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Grantor hereby
waives any claims against the Collateral Agent and the Noteholders arising by
reason of the fact that the price at which its respective Collateral may have
been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Collateral Agent accepts the first offer received and
does not offer such Collateral to more than one offeree, and waives all rights
that any Grantor may have to require that all or any part of such Collateral be
marshaled upon any sale (public or private) thereof. Each Grantor hereby
acknowledges that (i) any such sale of its respective Collateral by the
Collateral Agent shall be made without warranty, (ii) the Collateral Agent may
specifically disclaim any warranties of title, possession, quiet enjoyment or
the like, and (iii) such actions set forth in clauses (i) and (ii) above shall
not adversely affect the commercial reasonableness of any such sale of
Collateral. In addition to the foregoing, (1) upon written notice to any Grantor
from the Collateral Agent after and during the continuance of an Event of
Default, such Grantor shall cease any use of the Intellectual Property or any
trademark, patent or copyright similar thereto for any purpose described in such
notice; (2) the Collateral Agent may, at any time and from time to time after
and during the continuance of an Event of Default, upon 5 days’ prior notice to
such Grantor, license, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any of the Intellectual Property, throughout
the universe for such term or terms, on such conditions, and in such manner, as
the Collateral Agent shall in its sole discretion determine; and (3) the
Collateral Agent may, at any time, pursuant to the authority granted in Section
6 hereof or otherwise (such authority being effective upon the occurrence and
during the continuance of an Event of Default), execute and deliver on behalf of
such Grantor, one or more instruments of assignment of the Intellectual Property
(or any application or registration thereof), in form suitable for filing,
recording or registration in any country.

 

 27 

 

 

(b)       Any cash held by the Collateral Agent as Collateral and all Cash
Proceeds received by the Collateral Agent in respect of any sale or disposition
of or collection from, or other realization upon, all or any part of the
Collateral shall be applied as follows (subject to the provisions of the
Securities Purchase Agreement): first, to pay any fees, indemnities or expense
reimbursements then due to the Collateral Agent (including those described in
Section 8 hereof); second, to pay any fees, indemnities or expense
reimbursements then due to the Noteholders, on a pro rata basis; third to pay
interest due under the ICA-T Note owing to the Noteholders, on a pro rata basis;
fourth, to pay or prepay principal in respect of the ICA-T Note, whether or not
then due, owing to the Noteholders, on a pro rata basis; fifth, to pay or prepay
any other Obligations, whether or not then due, in such order and manner as the
Collateral Agent shall elect, consistent with the provisions of the Securities
Purchase Agreement and any other Transaction Document. Any surplus of such cash
or Cash Proceeds held by the Collateral Agent and remaining after the Payment in
Full of all of the Obligations shall be paid over to whomsoever shall be
lawfully entitled to receive the same or as a court of competent jurisdiction
shall direct.

 

(c)       In the event that the proceeds of any such sale, disposition,
collection or realization are insufficient to pay all amounts to which the
Collateral Agent and the Noteholders are legally entitled, each Grantor shall
be, jointly and severally, liable for the deficiency, together with interest
thereon at the highest rate specified in the ICA-T Note for interest on overdue
principal thereof or such other rate as shall be fixed by applicable law,
together with the costs of collection and the fees, costs, expenses and other
charges of any attorneys employed by the Collateral Agent to collect such
deficiency.

 

(d)       To the extent that applicable law imposes duties on the Collateral
Agent to exercise remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is commercially reasonable for the Collateral
Agent (i) to fail to incur expenses deemed significant by the Collateral Agent
to prepare Collateral for disposition or otherwise to transform raw material or
work in process into finished goods or other finished products for disposition,
(ii) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral, (iv) to exercise
collection remedies against Account Debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other Persons, whether or not in the
same business as any Grantor, for expressions of interest in acquiring all or
any portion of such Collateral, (vii) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the
Collateral is of a specialized nature, (viii) to dispose of Collateral by
utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Collateral Agent against risks of loss, collection or
disposition of Collateral or to provide to the Collateral Agent a guaranteed
return from the collection or disposition of Collateral, or (xii) to the extent
deemed appropriate by the Collateral Agent, to obtain the services of brokers,
investment bankers, consultants, attorneys and other professionals to assist the
Collateral Agent in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this section is to provide
non-exhaustive indications of what actions or omissions by the Collateral Agent
would be commercially reasonable in the Collateral Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Collateral
Agent shall not be deemed commercially unreasonable solely on account of not
being indicated in this section. Without limitation upon the foregoing, nothing
contained in this section shall be construed to grant any rights to any Grantor
or to impose any duties on the Collateral Agent that would not have been granted
or imposed by this Agreement or by applicable law in the absence of this
section.

 

 28 

 

 

(e)       The Collateral Agent shall not be required to marshal any present or
future collateral security (including, but not limited to, this Agreement and
the Collateral) for, or other assurances of payment of, the Obligations or any
of them or to resort to such collateral security or other assurances of payment
in any particular order, and all of the Collateral Agent’s rights hereunder and
in respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that any Grantor lawfully may, each Grantor hereby agrees that it
will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of the Collateral Agent’s rights under
this Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, each Grantor hereby irrevocably waives the
benefits of all such laws.

 

SECTION 8. Indemnity and Expenses.

 

(a)       Each Grantor agrees, jointly and severally, to defend, protect,
indemnify and hold the Collateral Agent and each of the Noteholders harmless
from and against any and all claims, damages, losses, liabilities, obligations,
penalties, fees, costs and expenses (including, without limitation, legal fees,
costs, expenses, and disbursements of such Person’s counsel) to the extent that
they arise out of or otherwise result from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent resulting from
such Person’s gross negligence or willful misconduct, as determined by a final
judgment of a court of competent jurisdiction no longer subject to appeal.

 

(b)       Each Grantor agrees, jointly and severally, to pay to the Collateral
Agent upon demand the amount of any and all costs and expenses, including the
reasonable fees, costs, expenses and disbursements of counsel for the Collateral
Agent and of any experts and agents (including, without limitation, any
collateral trustee which may act as agent of the Collateral Agent), which the
Collateral Agent may incur in connection with (i) the preparation, negotiation,
execution, delivery, recordation, administration, amendment, waiver or other
modification or termination of this Agreement, (ii) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon,
any Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or
observe any of the provisions hereof.

 

SECTION 9. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed (by certified mail,
first-class postage prepaid and return receipt requested), telecopied, e-mailed
or delivered, if to any Grantor (other than ICA-T), to the Parent’s address, if
to ICA-T, to ICA-T’s address or if to the Collateral Agent or any Noteholder, to
it at its respective address, each as set forth in Section 9(f) of the
Securities Purchase Agreement; or as to any such Person, at such other address
as shall be designated by such Person in a written notice to all other parties
hereto complying as to delivery with the terms of this Section 9. All such
notices and other communications shall be effective (a) if sent by certified
mail, return receipt requested, when received or three (3) Business Days after
deposited in the mails, whichever occurs first, (b) if telecopied or e-mailed,
when transmitted (during normal business hours) and confirmation is received,
and otherwise, the day after the notice or communication was transmitted and
confirmation is received, or (c) if delivered in person, upon delivery. For the
avoidance of doubt, all Foreign Subsidiaries, as Grantors, hereby appoint the
Parent as its agent for receipt of service of process and all notices and other
communications in the United States at the address specified below.

 

 29 

 

 

SECTION 10. Miscellaneous.

 

(a)       No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by each Grantor and the Collateral Agent (and
approved by the Required Holders), and no waiver of any provision of this
Agreement, and no consent to any departure by each Grantor therefrom, shall be
effective unless it is in writing and signed by each Grantor and the Collateral
Agent (and approved by the Required Holders), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

 

(b)       No failure on the part of the Collateral Agent to exercise, and no
delay in exercising, any right reasonably hereunder or under any of the other
Transaction Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right reasonably preclude any other or further
exercise thereof or the exercise of any other right. The rights and remedies of
the Collateral Agent or any Noteholder provided herein and in the other
Transaction Documents are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law. The rights of the Collateral Agent
or any Noteholder under any of the other Transaction Documents against any party
thereto are not conditional or contingent on any attempt by such Person to
exercise any of its rights under any of the other Transaction Documents against
such party or against any other Person, including but not limited to, any
Grantor.

 

(c)       If any provision of this Agreement or any Transaction Document is
prohibited by law or otherwise determined to be invalid or unenforceable by a
court of competent jurisdiction, the provision that would otherwise be
prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or
unenforceability of such provision shall not affect the validity of the
remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair
the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the
parties.  The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the
effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

 

(d)       This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until Payment in Full
of the Obligations, and (ii) be binding on each Grantor and all other Persons
who become bound as debtor to this Agreement in accordance with Section 9-203(d)
of the Code and shall inure, together with all rights and remedies of the
Collateral Agent and the Noteholders hereunder, to the benefit of the Collateral
Agent and the Noteholders and their respective permitted successors, transferees
and assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence, without notice to any Grantor, the Collateral Agent and the
Noteholders may assign or otherwise transfer their rights and obligations under
this Agreement and any of the other Transaction Documents, to any other Person
and such other Person shall thereupon become vested with all of the benefits in
respect thereof granted to the Collateral Agent and the Noteholders herein or
otherwise. Upon any such assignment or transfer, all references in this
Agreement to the Collateral Agent or any such Noteholder shall mean the assignee
of the Collateral Agent or such Noteholder. None of the rights or obligations of
any Grantor hereunder may be assigned or otherwise transferred without the prior
written consent of the Collateral Agent, and any such assignment or transfer
without such consent of the Collateral Agent shall be null and void.

 

 30 

 

 

(e)       Upon the Payment in Full of the Obligations, (i) this Agreement and
the security interests created hereby shall terminate and all rights to the
Collateral shall revert to the respective Grantor that granted such security
interests hereunder, and (ii) the Collateral Agent will, upon any Grantor’s
request and at such Grantor’s expense, (A) return to such Grantor such of the
Collateral as shall not have been sold or otherwise disposed of or applied
pursuant to the terms hereof and (B) execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination,
all without any representation, warranty or recourse whatsoever.

 

(f)       Governing Law; Jurisdiction; Jury Trial.

 

(i)       All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed exclusively by the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York.

 

(ii)      Each Grantor hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or under any of the other Transaction Documents or with any transaction
contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim, defense or objection that
it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under Section 9(f) of the Securities Purchase
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Nothing contained herein shall be deemed or operate to preclude the Collateral
Agent or the Noteholders from bringing suit or taking other legal action against
any Grantor in any other jurisdiction to collect on a Grantor’s obligations or
to enforce a judgment or other court ruling in favor of the Collateral Agent or
a Noteholder.

 

 31 

 

 

(iii)       WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

(iv)       Each Grantor irrevocably and unconditionally waives any right it may
have to claim or recover in any legal action, suit or proceeding referred to in
this Section any special, exemplary, indirect, incidental, punitive or
consequential damages.

 

(g)       Section headings herein are included for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.

 

(h)       This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together constitute one and the same
Agreement. Delivery of any executed counterpart of a signature page of this
Agreement by pdf, facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.

 

(i)       This Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Obligations is rescinded
or must otherwise be returned by the Collateral Agent, any Noteholder or any
other Person (upon (i) the occurrence of any Insolvency Proceeding of any of the
Parent or any Grantor or (ii) otherwise, in all cases as though such payment had
not been made).

 

SECTION 11. Material Non-Public Information. Upon receipt or delivery by the
Parent of any notice in accordance with the terms of this Agreement, unless the
Parent has in good faith determined that the matters relating to such notice do
not constitute material, non-public information relating to the Parent or any of
its Subsidiaries, the Parent shall within one (1) Business Day after any such
receipt or delivery publicly disclose such material, non-public information on a
Current Report on Form 8-K or otherwise. In the event that the Parent believes
that a notice contains material, non-public information relating to the Parent
or any of its Subsidiaries, the Parent so shall indicate to the Collateral Agent
and any applicable Noteholder contemporaneously with delivery of such notice,
and in the absence of any such indication, the Collateral Agent and each
Noteholder shall be allowed to presume that all matters relating to such notice
do not constitute material, non-public information relating to the Parent or its
Subsidiaries. Nothing contained in this Section 11 shall limit any obligations
of the Parent, or any rights of the Collateral Agent or any Noteholder, under
Section 4(i) of the Securities Purchase Agreement.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 32 

 

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized, as of the date first above
written.

 

  GRANTORS:         ICAGEN, INC.,   a Delaware corporation         By: /s/
Richard Cunningham     Name: Richard Cunningham     Title: President and CEO    
    ICAGEN CORP (FORMERLY KNOWN AS XRPRO CORP.)., a Nevada corporation        
By: /s/ Richard Cunningham     Name: Richard Cunningham     Title: President and
CEO         ICAGEN-T INC., a Delaware corporation         By: /s/ Richard
Cunningham     Name: Richard Cunningham     Title: President and CEO        
CALDERA DISCOVERY, INC, a Delaware corporation         By: /s/ Richard
Cunningham     Name: Richard Cunningham     Title: President and CEO        
XRPRO SCIENCES, INC., a Delaware corporation         By: /s/ Richard Cunningham
    Name: Richard Cunningham     Title: President and CEO

 

ACCEPTED BY:         GPB Debt Holdings II, LLC,   as Collateral Agent  

 

  By:  /s/  David Gentile     Name: David Gentile     Title: Manager  

 

 33 

 

 

LIST OF EXHIBITS AND SCHEDULES TO SECURITY AND PLEDGE AGREEMENT

 

A. EXHIBITS

 

Exhibit A – IP Security Agreement

 

B. SCHEDULES

 

Schedule I – Controlled Accounts Etc.

 

Schedule II – Copyrights, Etc.

 

Schedule III – Patents, Etc.

 

Schedule IV – Pledged Entities

 

Schedule V – Trademark Licenses

 

Schedule V(a) – Trademarks, Etc.

 

Schedule VI – Commercial Tort Claims

 

Schedule VII – Legal Names, Organizational Identification Numbers; States or
Jurisdiction of Organization

 

Schedule VIII – Locations

 

Schedule IX – Securities Etc. of each Grantor

 

Schedule X – Licenses, Etc.

 

Schedule XI – All Intellectual Property and Licenses of Grantors

 

Schedule XII – Pledged Collateral

 

Schedule XIII – [RESERVED]

 

Schedule XIV – [RESERVED]

 

Schedule XV - Pledged Equity

 

Schedule XVI – Locations of Collateral

 

Schedule XVII – Licenses, Etc.

 

Schedule XVIII – Notices. Etc., Re: Exercise of Rights by certain parties under
Licenses

 

Schedule XIX – No Termination Etc. of Licenses

 

 

 

 

Execution Version

 

EXHIBIT A

 

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, modified,
supplemented, renewed, restated or replaced from time to time, this “IP Security
Agreement”), dated May 15, 2017, is made by the Persons listed on the signature
pages hereof (collectively, the “Grantors”) in favor of GPB Debt Holdings II,
LLC, in its capacity as collateral agent (the “Collateral Agent”) for itself as
a Noteholder and any other Noteholders. All capitalized terms not otherwise
defined herein (or as indicated herein as being defined in another document,
agreement and/or instrument) shall have the meanings respectively ascribed
thereto in the Security Agreement (as defined below).

 

WHEREAS, Icagen, Inc., a Delaware corporation with offices located at 4222
Emperor Blvd., Suite 350, Research Triangle Park, Durham, NC, 27703 (the
“Parent”), Icagen-T, Inc., a Delaware corporation and a wholly-owned Subsidiary
of the Parent with offices located at 2090 E. Innovation Park Drive, Oro Valley,
Arizona 85755 (“ICA-T”) and GPB Debt Holdings II, LLC, as investor (the “Buyer”)
are parties to that certain Securities Purchase Agreement, dated May 15, 2017,
pursuant to which ICA-T and the Parent shall be required to sell, and the Buyer
shall purchase or have the right to purchase, the ICA-T Note (as defined
therein) and the Parent Note and Parent Warrant (both terms as defined therein)
from ICA-T and the Parent, respectively;

 

WHEREAS, it is a condition precedent to the purchase of the ICA-T Note and the
Parent Note and Parent Warrants under the Securities Purchase Agreement that
each Grantor has executed and delivered that certain Security and Pledge
Agreement, dated May 15, 2017, made by the Grantors to the Collateral Agent (as
amended, modified, supplemented, renewed, restated or replaced from time to
time, the “Security Agreement”); and

 

WHEREAS, under the terms of the Security Agreement, the Grantors have granted to
the Collateral Agent, for the benefit of the Noteholders, a security interest
in, among other property, certain intellectual property and Licenses of the
Grantors, and have agreed as a condition thereof to execute this IP Security
Agreement for recording with the U.S. Patent and Trademark Office and the United
States Copyright Office; and

 

WHEREAS, the Grantors have determined that the execution, delivery and
performance of this IP Security Agreement directly benefits, and is in the best
interest of, the Grantors.

 

NOW, THEREFORE, in consideration of the premises and the agreements herein and
for such other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and in order to induce the Buyer to perform under
the Securities Purchase Agreement, each Grantor agrees with the Collateral
Agent, for the benefit of the Noteholders, as follows

 

SECTION 1. Grant of Security. Each Grantor hereby grants to the Collateral Agent
for the benefit of the Collateral Agent as a Noteholder and any other
Noteholders a security interest in all of such Grantor’s right, title and
interest in and to the following (the “Collateral”):

 

(i)       the United States Patents and Patent applications set forth in
Schedule A hereto;

 

 

 

 

(ii)       the United States Trademarks and service mark registrations and
applications set forth in Schedule B hereto (provided that no security interest
shall be granted in United States intent-to-use trademark applications to the
extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law), together
with the goodwill symbolized thereby;

 

(iii)      all United States Copyrights, whether registered or unregistered, now
owned or hereafter acquired by such Grantor, including, without limitation, the
copyright registrations and applications and exclusive copyright licenses set
forth in Schedule C hereto;

 

(iv)      all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing, all rights in
the foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;

 

(v)       any and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation, misuse or breach
with respect to any of the foregoing, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages; and

 

(vi)       any and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral of or arising from any of
the foregoing.

 

SECTION 2. Security for Obligations. The grant of a security interest in, the
Collateral under this IP Security Agreement by each Grantor) secures the payment
of all Obligations of each Grantor now or hereafter existing under or in respect
of the ICA-T Note and the other Transaction Documents, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, redemption payments, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.

 

SECTION 3. Recordation. Each Grantor authorizes and requests that the Register
of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.

 

SECTION 4. Execution in Counterparts. This IP Security Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement.

 

SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has been
entered into in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the security
interest hereunder to, and the rights and remedies of, the Collateral Agent with
respect to the Collateral are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated herein by reference as if
fully set forth herein.

 

 2 

 

 

SECTION 6. Governing Law; Jurisdiction; Jury Trial.

 

(i)       All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.

 

(ii)       Each Grantor hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or under any of the other Transaction Documents or with any transaction
contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim, defense or objection that
it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under Section 9(f) of the Securities Purchase
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Nothing contained herein shall be deemed or operate to preclude the Collateral
Agent or the Noteholders from bringing suit or taking other legal action against
any Grantor in any other jurisdiction to collect on a Grantor’s obligations or
to enforce a judgment or other court ruling in favor of the Collateral Agent or
a Noteholder.

 

(iii)      WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

(iv)      Each Grantor irrevocably and unconditionally waives any right it may
have to claim or recover in any legal action, suit or proceeding referred to in
this Section any special, exemplary, indirect, incidental, punitive or
consequential damages.

 

[The remainder of the page is intentionally left blank]

 

 3 

 

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.

 

  GRANTORS:         ICAGEN, INC.,   a Delaware corporation         By:     Name:
Richard Cunningham     Title: President and CEO         ICAGEN CORP. (FORMERLY
KNOWN AS XRPRO CORP., FORMERLY KNOWN AS CALDERA PHARMACEUTICALS, INC.), a Nevada
corporation         By:     Name: Richard Cunningham     Title: President and
CEO         ICAGEN-T INC., a Delaware corporation         By:     Name: Richard
Cunningham     Title: President and CEO         CALDERA DISCOVERY, INC, a
Delaware corporation         By:     Name: Richard Cunningham     Title:
President and CEO         XRPRO SCIENCES, INC., a Delaware corporation        
By:     Name: Richard Cunningham     Title: President and CEO

 

 4 

 

 

SCHEDULE I

 

Controlled Accounts Etc.

 

  Icagen Inc.            #####  #####             Icagen Corp.           ##### 
#####              Icagen-T, Inc.           #####  #####   

 

Accounts to be closed within 90 days of conclusion of Agreement:

 

Icagen Inc.

 

   #####  #####              #####  #####              #####  #####            
 ##### #####               #####  #####  

 

 

 

 

SCHEDULE II

 

Copyrights, Etc.

 

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE III

 

Patents, Etc.

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-001  METHOD FOR DETECTING BINDING EVENTS USING MICRO-X-RAY FLUORESCENCE
SPECTROMETRY  United States  09/859,701  2003-0027129  7,858,385  Patented
ICA-002EP  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Europe  3748920  1525458  1525458  Patented ICA-002BE  FLOW METHOD
AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  Belgium 
3748920  1525458  1525458  Patented ICA-002CH  FLOW METHOD AND APPARATUS FOR
SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  Switzerland  3748920 
1525458  1525458  Patented ICA-002DE  FLOW METHOD AND APPARATUS FOR SCREENING
CHEMICALS USING MICRO X-RAY FLUORESCENCE  Germany  3748920  1525458  1525458 
Patented ICA-002DK  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING
MICRO X-RAY FLUORESCENCE  Denmark  3748920  1525458  1525458  Patented
ICA-002ES  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Spain  3748920  1525458  1525458  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-002FI  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Finland  3748920  1525458  1525458  Patented ICA-002FR  FLOW
METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE 
France  3748920  1525458  1525458  Patented ICA-002GB  FLOW METHOD AND APPARATUS
FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  United Kingdom  3748920 
1525458  1525458  Patented ICA-002IT  FLOW METHOD AND APPARATUS FOR SCREENING
CHEMICALS USING MICRO X-RAY FLUORESCENCE  Italy  3748920  1525458  1525458 
Patented ICA-002SE  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING
MICRO X-RAY FLUORESCENCE  Sweden  3748920  1525458  1525458  Patented ICA-002NL 
FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Netherlands  3748920  1525458  1525458  Patented ICA-002JP  FLOW
METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE 
Japan  2004-524531  2006-503268  4560403  Patented ICA-002SG  FLOW METHOD AND
APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  Singapore 
200500360-3  109345  109345  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-002C2  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  United States  11/444,660  2007-0003008  7,519,145  Patented
ICA-002C3  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  United States  12/396,592  2009-0175410  7,929,662  Patented
ICA-003EP  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  Europe 
4755687.3  1644095  1644095  Patented ICA-003CH  METHOD AND APPARATUS FOR
DETECTING CHEMICAL BINDING  Switzerland/
Liechtenstein  4755687.3  1644095  1644095  Patented ICA-003DE  METHOD AND
APPARATUS FOR DETECTING CHEMICAL BINDING  Germany  4755687.3  1644095  1644095 
Patented ICA-003FR  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  France 
4755687.3  1644095  1644095  Patented ICA-003GB  METHOD AND APPARATUS FOR
DETECTING CHEMICAL BINDING  United Kingdom  4755687.3  1644095  1644095 
Patented ICA-003IE  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING 
Ireland  4755687.3  1644095  1644095  Patented ICA-003NL  METHOD AND APPARATUS
FOR DETECTING CHEMICAL BINDING  Netherlands  4755687.3  1644095  1644095 
Patented ICA-003JP  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  Japan 
2006-520181  2007527524  4782676  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-003SG  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  Singapore 
2005085584     118682  Patented ICA-003  METHOD AND APPARATUS FOR DETECTING
CHEMICAL BINDING  United States  10/621,825  2005-0011818  6,858,148  Patented
ICA-003C1  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  United States 
10/986,519  2005-0095636  7,241,381  Patented ICA-004  DRUG DEVELOPMENT AND
MANUFACTURING  United States  10/880,388  2004-0235059  9,157,875  Patented
ICA-005EP  X-RAY FLUORESCENCE ANALYSIS METHOD  Europe  7874491.9  2084519 
2084519  Patented ICA-005CH  X-RAY FLUORESCENCE ANALYSIS METHOD  Switzerland/
Liechtenstein  07 874 491.9  2084519  2084519  Patented ICA-005DE  X-RAY
FLUORESCENCE ANALYSIS METHOD  Germany  60 2007 024 468.4  2084519 
608007024468.4  Patented ICA-005DK  X-RAY FLUORESCENCE ANALYSIS METHOD  Denmark 
07 874 491.9  2084519  2084519  Patented ICA-005FR1  X-RAY FLUORESCENCE ANALYSIS
METHOD  France  07 874 491.9  2084519  2084519  Patented ICA-005GB  X-RAY
FLUORESCENCE ANALYSIS METHOD  United Kingdom  7874491.9  2084519  2084519 
Patented ICA-005HK  ADVANCED DRUG DEVELOPMENT AND MANUFACTURING  Hong Kong (via
EP -005EPDV)  13104259.3  1177280  1177280  Patented ICA-005IE  X-RAY
FLUORESCENCE ANALYSIS METHOD  Ireland  7874491.9  1177280  2084519  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-005IT  X-RAY FLUORESCENCE ANALYSIS METHOD  Italy  7874491.9  1177280 
2084519  Patented ICA-005NL  X-RAY FLUORESCENCE ANALYSIS METHOD  Netherlands 
7874491.9  1177280  2084519  Patented ICA-005SE  X-RAY FLUORESCENCE ANALYSIS
METHOD  Sweden  7874491.9  1177280  2084519  Patented ICA-005EPDV  X-RAY
MICROSCOPE  Europe  12164870.3  2511844  2511844  Patented ICA-005CHDV  X-RAY
MICROSCOPE  Switzerland and Lichtenstein  12164870.3  2511844  2511844  Patented
ICA-005DEDV  X-RAY MICROSCOPE  Germany  12164870.3  2511844  602007042616.2 
Patented ICA-005FRDV  X-RAY MICROSCOPE  France  12164870.3  2511844  2511844 
Patented ICA-005GBDV  X-RAY MICROSCOPE  United Kingdom  12164870.3  2511844 
2511844  Patented ICA-005HK  ADVANCED DRUG DEVELOPMENT AND MANUFACTURING  Hong
Kong (via EP -005EPDV)  2013104259.3  1177280  1177280  Patented ICA-005IEDV 
X-RAY MICROSCOPE  Ireland  12164870.3  2511844  2511844  Patented ICA-005JP 
ADVANCED DRUG DEVELOPMENT AND MANUFACTURING  Japan  2009-532446  2010509566 
5143841  Patented ICA-005JPDV2  ADVANCED DRUG DEVELOPMENT AND MANUFACTURING 
Japan  2014-123249  2014-123249  5913441  Patented ICA-005C1  ADVANCED DRUG
DEVELOPMENT AND MANUFACTURING  United States  14/693,094  2015-0309021  N/A 
Pending

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-006EP  WELL PLATE  Europe  8798006.6  2183644  2183644  Patented ICA-006BE 
WELL PLATE  Belgium  8798007.6  2183644  2183644  Patented ICA-006CH  WELL
PLATE  Switzerland  8798008.6  2183644  2183644  Patented ICA-006DE  WELL PLATE 
Germany  8798009.6  2183644  602008044640.9  Patented ICA-006DK  WELL PLATE 
Denmark  8798010.6  2183644  2183644  Patented ICA-006ES  WELL PLATE  Spain 
8798011.6  2183644  2183644  Patented ICA-006FI  WELL PLATE  Finland  8798012.6 
2183644  2183644  Patented ICA-006FR  WELL PLATE  France  8798013.6  2183644 
2183644  Patented ICA-006GB  WELL PLATE  United Kingdom  8798014.6  2183644 
2183644  Patented ICA-006IE  WELL PLATE  Ireland  8798015.6  2183644  2183644 
Patented ICA-006IT  WELL PLATE  Italy  8798016.6  2183644  2183644  Patented
ICA-006 NL  WELL PLATE  Netherlands  8798017.6  2183644  2183644  Patented
ICA-006NO  WELL PLATE  Norway  8798018.6  2183644  2183644  Patented ICA-006SE 
WELL PLATE  Sweden  8798019.6  2183644  2183644  Patented ICA-006JP  WELL PLATE 
Japan  2010-521206  2010537171  5628035  Patented ICA-006JPDV  WELL PLATE 
Japan  2013-117600  2013224946  5755682  Patented ICA-006JPDV2  WELL PLATE 
Japan  2014-202871  2015004692  6076308  Patented ICA-006  WELL PLATE  United
States  12/192,762  2009-0046832  8,238,515  Patented ICA-006C1  WELL PLATE 
United States  13/567,613  2013-0034205  8,873,707  Patented ICA-006C2  WELL
PLATE  United States  14/508,322  2015-0023467  9,476,846  Patented ICA-006C3 
WELL PLATE  United States  15/273,767  2017-0010228  N/A  Pending ICA-007JP 
METHOD AND APPARATUS FOR MEASURING PROTEIN POST-TRANSLATIONAL MODIFICATION 
Japan  2010-5272  2010539944  5743135  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-007JPDV1  METHOD AND APPARATUS FOR MEASURING PROTEIN POST-TRANSLATIONAL
MODIFICATION  Japan  2014-221166  2015033386  N/A  Pending ICA-007C1/XR7-US2 
METHOD AND APPARATUS FOR MEASURING PROTEIN POST-TRANSLATIONAL MODIFICATION 
United States  15/052,914  2016-0201111  N/A  Pending ICA-008CN  METHOD AND
APPARATUS FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS  China 
200980125952.3  102083365  ZL 200980125952.3  Patented ICA-008CNDV  METHOD AND
APPARATUS FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS  China 
201310298029.8  103411988  2077368  Patented ICA-008CNDV2  METHOD AND APPARATUS
FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS  China  201510083796.6  N/A 
N/A  Pending ICA-008EP  METHOD AND APPARATUS FOR MEASURING ANALYTE TRANSPORT
ACROSS BARRIERS  Europe  09774467.6  2306897  N/A  Allowed ICA-008HK  METHOD AND
APPARATUS FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS  Hong Kong 
11112984.0  1158478  1158478  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-008  METHOD AND APPARATUS FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS
USING X-RAY FLUORESCENCE  United States  12/496,532  2010-0003697  8,431,357 
Patented ICA-008C1  METHOD FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS USING
X-RAY FLUORESCENCE USING X-RAY FLUORESCENCE  United States  13/871,697 
2013-0236887  9,063,154  Patented ICA-008C2  METHOD FOR MEASURING ANALYTE
TRANSPORT ACROSS BARRIERS USING X-RAY FLUORESCENCE  United States  14/669,923 
2015-0198615  9,506,931  Patented ICA-008C3  METHOD FOR MEASURING ANALYTE
TRANSPORT ACROSS BARRIERS USING X-RAY FLUORESCENCE  United States  15/334,854 
2017-0045530  N/A  Pending ICA-009  METHOD FOR ANALYSIS USING X-RAY
FLUORESCENCE  United States  13/317,341  2012-0093286  9,063,066  Patented
ICA-009C1  METHOD FOR ANALYSIS USING X-RAY FLUORESCENCE  United States 
14/715,206  2015-0276631  9,435,756  Patented ICA-009C2  METHOD FOR ANALYSIS
USING X-RAY FLUORESCENCE  United States  14/715,218  2015-0276632  9,442,085 
Patented ICA-009C3  METHOD FOR ANALYSIS USING X-RAY FLUORESCENCE  United States 
14/715,233  2015-0260664  9,335,284  Patented ICA-009C4  METHOD FOR ANALYSIS
USING X-RAY FLUORESCENCE  United States  15/227,292  2016-0341678  N/A  Pending
ICA-010PC  METHODS AND APPARATUS FOR MEASURING METALS AND METALLOIDS 
International  PCT/US17/28064  N/A  N/A  Pending

 

 

 

 

SCHEDULE IV

 

Pledged Entities

 

Icagen Corp.

 

XRpro Sciences, Inc.

 

Caldera Discovery, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE V

 

Trademark Licenses

 

None

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE V(a)

 

Trademarks, Etc.

 

[ex10iii_01.jpg]

 

 

 

 

[ex10iii_02.jpg] 

 

 

 

 

[ex10iii_03.jpg] 

 

 

 

 

SCHEDULE VI

 

Commercial Tort Claims

 

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE VII

 

Legal Names, Organizational Identification Numbers; States or Jurisdiction of
Organization

 

Grantor’s Name  State of Organization  Federal Employer I.D.  Organizational
I.D. Icagen, Inc. (formerly known as; Caldera Pharmaceuticals, Inc.; and XRpro
Sciences, Inc.  Delaware North Carolina  #####  3723366 Icagen Corp. (formerly
known as XRpro Corp.)  Nevada North Carolina     #####  NV20101523783 Caldera
Discovery, Inc.  Delaware   #####  5717856 XRpro Sciences, Inc.   Delaware  
#####  5904530 Icagen-T, Inc.  Delaware Arizona   #####  6070175

 

 

 

 

SCHEDULE VIII

 

Locations

 

Icagen Corp.

4222 Emperor Boulevard, Suite 350

Research Triangle Park

Durham, NC, 27703

 

Icagen-T, Inc.

2090 E. Innovation Park Drive

Tucson, AZ 85755

 

 

 

 

 

 

 

 

 

SCHEDULE IX

 

Securities Etc. of each Grantor

 

Securities

 

Grantor  Name of Issuer / Pledged Entity  Number of Shares  Class  Certificate
No.(s) Icagen, Inc.  Icagen Corp.  100,000  Common  C01 Icagen, Inc.  Caldera
Discovery, Inc.  100  Common  C-01 Icagen, Inc.  XRpro Sciences, Inc  100 
Common  C-01

 

Deposit Accounts, Securities Accounts and Commodities Accounts

 

Grantor   Name and Address of Institution   Purpose of the Account   Account No.
Icagen Inc.    #####    #####    #####               Icagen Inc.    #####  
 #####    #####               Icagen Inc.    #####    #####    #####            
  Icagen Corp.    #####    #####    #####               Icagen-T, Inc.    #####
   #####    #####

 

Foreign Currency Controlled Accounts

 

None

 

 

 

 

SCHEDULE X

 

Licenses, Etc.

 

Radioactive Materials License

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE XI

 

All Intellectual Property of Grantors

 

See Schedule 5(a) and 10

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-001  METHOD FOR DETECTING BINDING EVENTS USING MICRO-X-RAY FLUORESCENCE
SPECTROMETRY  United States  09/859,701  2003-0027129  7,858,385  Patented
ICA-002EP  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Europe  3748920  1525458  1525458  Patented ICA-002BE  FLOW METHOD
AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  Belgium 
3748920  1525458  1525458  Patented ICA-002CH  FLOW METHOD AND APPARATUS FOR
SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  Switzerland  3748920 
1525458  1525458  Patented ICA-002DE  FLOW METHOD AND APPARATUS FOR SCREENING
CHEMICALS USING MICRO X-RAY FLUORESCENCE  Germany  3748920  1525458  1525458 
Patented ICA-002DK  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING
MICRO X-RAY FLUORESCENCE  Denmark  3748920  1525458  1525458  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-002ES  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Spain  3748920  1525458  1525458  Patented ICA-002FI  FLOW METHOD
AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  Finland 
3748920  1525458  1525458  Patented ICA-002FR  FLOW METHOD AND APPARATUS FOR
SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  France  3748920  1525458 
1525458  Patented ICA-002GB  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS
USING MICRO X-RAY FLUORESCENCE  United Kingdom  3748920  1525458  1525458 
Patented ICA-002IT  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING
MICRO X-RAY FLUORESCENCE  Italy  3748920  1525458  1525458  Patented ICA-002SE 
FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Sweden  3748920  1525458  1525458  Patented ICA-002NL  FLOW METHOD
AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE 
Netherlands  3748920  1525458  1525458  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-002JP  FLOW METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY
FLUORESCENCE  Japan  2004-524531  2006-503268  4560403  Patented ICA-002SG  FLOW
METHOD AND APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE 
Singapore  200500360-3  109345  109345  Patented ICA-002C2  FLOW METHOD AND
APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  United States 
11/444,660  2007-0003008  7,519,145  Patented ICA-002C3  FLOW METHOD AND
APPARATUS FOR SCREENING CHEMICALS USING MICRO X-RAY FLUORESCENCE  United States 
12/396,592  2009-0175410  7,929,662  Patented ICA-003EP  METHOD AND APPARATUS
FOR DETECTING CHEMICAL BINDING  Europe  4755687.3  1644095  1644095  Patented
ICA-003CH  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  Switzerland/
Liechtenstein  4755687.3  1644095  1644095  Patented ICA-003DE  METHOD AND
APPARATUS FOR DETECTING CHEMICAL BINDING  Germany  4755687.3  1644095  1644095 
Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-003FR  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  France 
4755687.3  1644095  1644095  Patented ICA-003GB  METHOD AND APPARATUS FOR
DETECTING CHEMICAL BINDING  United Kingdom  4755687.3  1644095  1644095 
Patented ICA-003IE  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING 
Ireland  4755687.3  1644095  1644095  Patented ICA-003NL  METHOD AND APPARATUS
FOR DETECTING CHEMICAL BINDING  Netherlands  4755687.3  1644095  1644095 
Patented ICA-003JP  METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  Japan 
2006-520181  2007527524  4782676  Patented ICA-003SG  METHOD AND APPARATUS FOR
DETECTING CHEMICAL BINDING  Singapore  2005085584     118682  Patented ICA-003 
METHOD AND APPARATUS FOR DETECTING CHEMICAL BINDING  United States  10/621,825 
2005-0011818  6,858,148  Patented ICA-003C1  METHOD AND APPARATUS FOR DETECTING
CHEMICAL BINDING  United States  10/986,519  2005-0095636  7,241,381  Patented
ICA-004  DRUG DEVELOPMENT AND MANUFACTURING  United States  10/880,388 
2004-0235059  9,157,875  Patented ICA-005EP  X-RAY FLUORESCENCE ANALYSIS METHOD 
Europe  7874491.9  2084519  2084519  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-005CH  X-RAY FLUORESCENCE ANALYSIS METHOD  Switzerland/
Liechtenstein  07 874 491.9  2084519  2084519  Patented ICA-005DE  X-RAY
FLUORESCENCE ANALYSIS METHOD  Germany  60 2007 024 468.4  2084519 
608007024468.4  Patented ICA-005DK  X-RAY FLUORESCENCE ANALYSIS METHOD  Denmark 
07 874 491.9  2084519  2084519  Patented ICA-005FR1  X-RAY FLUORESCENCE ANALYSIS
METHOD  France  07 874 491.9  2084519  2084519  Patented ICA-005GB  X-RAY
FLUORESCENCE ANALYSIS METHOD  United Kingdom  7874491.9  2084519  2084519 
Patented ICA-005HK  ADVANCED DRUG DEVELOPMENT AND MANUFACTURING  Hong Kong (via
EP -005EPDV)  13104259.3  1177280  1177280  Patented ICA-005IE  X-RAY
FLUORESCENCE ANALYSIS METHOD  Ireland  7874491.9  1177280  2084519  Patented
ICA-005IT  X-RAY FLUORESCENCE ANALYSIS METHOD  Italy  7874491.9  1177280 
2084519  Patented ICA-005NL  X-RAY FLUORESCENCE ANALYSIS METHOD  Netherlands 
7874491.9  1177280  2084519  Patented ICA-005SE  X-RAY FLUORESCENCE ANALYSIS
METHOD  Sweden  7874491.9  1177280  2084519  Patented ICA-005EPDV  X-RAY
MICROSCOPE  Europe  12164870.3  2511844  2511844  Patented ICA-005CHDV  X-RAY
MICROSCOPE  Switzerland and Lichtenstein  12164870.3  2511844  2511844  Patented
ICA-005DEDV  X-RAY MICROSCOPE  Germany  12164870.3  2511844  602007042616.2 
Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-005FRDV  X-RAY MICROSCOPE  France  12164870.3  2511844  2511844  Patented
ICA-005GBDV  X-RAY MICROSCOPE  United Kingdom  12164870.3  2511844  2511844 
Patented ICA-005HK  ADVANCED DRUG DEVELOPMENT AND MANUFACTURING  Hong Kong (via
EP -005EPDV)  2013104259.3  1177280  1177280  Patented ICA-005IEDV  X-RAY
MICROSCOPE  Ireland  12164870.3  2511844  2511844  Patented ICA-005JP  ADVANCED
DRUG DEVELOPMENT AND MANUFACTURING  Japan  2009-532446  2010509566  5143841 
Patented ICA-005JPDV2  ADVANCED DRUG DEVELOPMENT AND MANUFACTURING  Japan 
2014-123249  2014-123249  5913441  Patented ICA-005C1  ADVANCED DRUG DEVELOPMENT
AND MANUFACTURING  United States  14/693,094  2015-0309021  N/A  Pending
ICA-006EP  WELL PLATE  Europe  8798006.6  2183644  2183644  Patented ICA-006BE 
WELL PLATE  Belgium  8798007.6  2183644  2183644  Patented ICA-006CH  WELL
PLATE  Switzerland  8798008.6  2183644  2183644  Patented ICA-006DE  WELL PLATE 
Germany  8798009.6  2183644  602008044640.9  Patented ICA-006DK  WELL PLATE 
Denmark  8798010.6  2183644  2183644  Patented ICA-006ES  WELL PLATE  Spain 
8798011.6  2183644  2183644  Patented ICA-006FI  WELL PLATE  Finland  8798012.6 
2183644  2183644  Patented ICA-006FR  WELL PLATE  France  8798013.6  2183644 
2183644  Patented ICA-006GB  WELL PLATE  United Kingdom  8798014.6  2183644 
2183644  Patented ICA-006IE  WELL PLATE  Ireland  8798015.6  2183644  2183644 
Patented ICA-006IT  WELL PLATE  Italy  8798016.6  2183644  2183644  Patented
ICA-006 NL  WELL PLATE  Netherlands  8798017.6  2183644  2183644  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-006NO  WELL PLATE  Norway  8798018.6  2183644  2183644  Patented ICA-006SE 
WELL PLATE  Sweden  8798019.6  2183644  2183644  Patented ICA-006JP  WELL PLATE 
Japan  2010-521206  2010537171  5628035  Patented ICA-006JPDV  WELL PLATE 
Japan  2013-117600  2013224946  5755682  Patented ICA-006JPDV2  WELL PLATE 
Japan  2014-202871  2015004692  6076308  Patented ICA-006  WELL PLATE  United
States  12/192,762  2009-0046832  8,238,515  Patented ICA-006C1  WELL PLATE 
United States  13/567,613  2013-0034205  8,873,707  Patented ICA-006C2  WELL
PLATE  United States  14/508,322  2015-0023467  9,476,846  Patented ICA-006C3 
WELL PLATE  United States  15/273,767  2017-0010228  N/A  Pending ICA-007JP 
METHOD AND APPARATUS FOR MEASURING PROTEIN POST-TRANSLATIONAL MODIFICATION 
Japan  2010-5272  2010539944  5743135  Patented ICA-007JPDV1  METHOD AND
APPARATUS FOR MEASURING PROTEIN POST-TRANSLATIONAL MODIFICATION  Japan 
2014-221166  2015033386  N/A  Pending ICA-007C1/XR7-US2  METHOD AND APPARATUS
FOR MEASURING PROTEIN POST-TRANSLATIONAL MODIFICATION  United States 
15/052,914  2016-0201111  N/A  Pending

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-008CN  METHOD AND APPARATUS FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS 
China  200980125952.3  102083365  ZL 200980125952.3  Patented ICA-008CNDV 
METHOD AND APPARATUS FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS  China 
201310298029.8  103411988  2077368  Patented ICA-008CNDV2  METHOD AND APPARATUS
FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS  China  201510083796.6  N/A 
N/A  Pending ICA-008EP  METHOD AND APPARATUS FOR MEASURING ANALYTE TRANSPORT
ACROSS BARRIERS  Europe  09774467.6  2306897  N/A  Allowed ICA-008HK  METHOD AND
APPARATUS FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS  Hong Kong 
11112984.0  1158478  1158478  Patented ICA-008  METHOD AND APPARATUS FOR
MEASURING ANALYTE TRANSPORT ACROSS BARRIERS USING X-RAY FLUORESCENCE  United
States  12/496,532  2010-0003697  8,431,357  Patented ICA-008C1  METHOD FOR
MEASURING ANALYTE TRANSPORT ACROSS BARRIERS USING X-RAY FLUORESCENCE USING X-RAY
FLUORESCENCE  United States  13/871,697  2013-0236887  9,063,154  Patented

 

 

 

 

Reference  Title  Country  Application No.  Pub. No.  Patent No.  Status
ICA-008C2  METHOD FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS USING X-RAY
FLUORESCENCE  United States  14/669,923  2015-0198615  9,506,931  Patented
ICA-008C3  METHOD FOR MEASURING ANALYTE TRANSPORT ACROSS BARRIERS USING X-RAY
FLUORESCENCE  United States  15/334,854  2017-0045530  N/A  Pending ICA-009 
METHOD FOR ANALYSIS USING X-RAY FLUORESCENCE  United States  13/317,341 
2012-0093286  9,063,066  Patented ICA-009C1  METHOD FOR ANALYSIS USING X-RAY
FLUORESCENCE  United States  14/715,206  2015-0276631  9,435,756  Patented
ICA-009C2  METHOD FOR ANALYSIS USING X-RAY FLUORESCENCE  United States 
14/715,218  2015-0276632  9,442,085  Patented ICA-009C3  METHOD FOR ANALYSIS
USING X-RAY FLUORESCENCE  United States  14/715,233  2015-0260664  9,335,284 
Patented ICA-009C4  METHOD FOR ANALYSIS USING X-RAY FLUORESCENCE  United States 
15/227,292  2016-0341678  N/A  Pending ICA-010PC  METHODS AND APPARATUS FOR
MEASURING METALS AND METALLOIDS  International  PCT/US17/28064  N/A  N/A 
Pending

 

 

 

 

SCHEDULE XII

 

Pledged Collateral

 

Icagen, Inc. Delaware Secretary of State - U.S. Bank Equipment Finance-Equipment
   

Icagen-T, Inc.

Arizona, Pima County-Sanofi U.S. Services Inc-buildings, improvements and
fixtures, rents, leases, issues, profits or income on property located in Pima
County.    

Icagen-T, Inc.

Arizona Secretary of State-Sanofi U.S. Services Inc.-chemical libraries and
equipment and movable assets owned by Sanofi U.S. Services Inc.    

Icagen-T, Inc.

Delaware Secretary of State - Sanofi U.S. Services Inc.-chemical libraries and
equipment and movable assets owned by Sanofi U.S. Services Inc.    

Icagen-T, Inc.

Deed of Trust and Assignment of Rents    

Icagen-T, Inc.

Deed of Sale

 

 

 

 

SCHEDULE XIII

 

[RESERVED]

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE XIV

 

[RESERVED]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE XV

 

Pledged Equity

 

Icagen Inc. Icagen Corp. 100,000 common shares C01           XRpro Sciences,
Inc. 1,000 common shares C-01           Caldera Discovery, Inc. 100 common
shares C-01

 

 

 

 

 

SCHEDULE XVI

 

Locations of Collateral

 

Icagen Inc.

4222 Emperor Boulevard, Suite 350

Research Triangle Park

Durham, NC, 27703

 

Icagen Corp.

4222 Emperor Boulevard, Suite 350

Research Triangle Park

Durham, NC, 27703

 

Icagen-T, Inc.

2090 E Innovation Park Drive

Tucson, AZ 85755

 

 

 

 

 

SCHEDULE XVII

 

Licenses, Etc.

 

None

 

 

 

 

Schedule XVIII

 

Notices. Etc. Re: Exercise of Rights by certain parties under Licenses

 

None

 

 

 

 

 

 

SCHEDULE XIX

 

No Termination Etc. of Licenses

 

None