Banc
    of America Leasing & Capital, LLC	Equipment
    Security Note Number 001


 


This
Equipment Security Note No. 001, dated as March 24, 2014, (this “Equipment Note”), is entered into pursuant
to and incorporates by this reference all of the terms and provisions of that certain Master Loan and Security Agreement No. 26928-70000
dated as of March 19, 2014 (the “Master Agreement”), by and between Banc of America Leasing &
Capital, LLC (“Lender”) Psychemedics Corporation (“Borrower”). All capitalized terms
used herein and not defined herein shall have the respective meanings assigned to such terms in the Master Agreement. If any provision
of this Equipment Note conflicts with any provision of the Master Agreement, the provisions contained in this Equipment Note shall
prevail. Borrower hereby authorizes Lender to insert the serial numbers and other identification data of the Equipment, dates,
and other omitted factual matters or descriptions in this Equipment Note.


 


The
occurrence of an “Event of Default,” as defined in the Master Agreement, shall entitle Lender to accelerate the
maturity of this Equipment Note and to declare the Prepayment Amount to be immediately due and payable, and to proceed at once
to exercise each and every one of the remedies provided in the Master Agreement or otherwise available at law or in equity. All
of Borrower's Obligations under this Equipment Note are absolute and unconditional, and shall not be subject to any offset or deduction
whatsoever. Borrower waives any right to assert, by way of counterclaim or affirmative defense in any action to enforce Borrower's
Obligations hereunder, any claim whatsoever against Lender.


 


1.        Equipment
Financed; Equipment Location; Grant of Security Interest. Subject to the terms and provisions of the Master Agreement and as
provided herein, Lender is providing financing in the principal amount described in Section 2 below to Borrower in connection with
the acquisition or financing of the following described Equipment:


 


	Quantity	 	Description
	5	 	ABSCIEX API3200 QTRAP LC/MS/MS
	 	 	Systems
	 	 	 
	 	 	 
	 	 	 



 


Location
of Equipment. The Equipment will be located or (in the case of over-the-road vehicles) based at the following locations:


 


	Location 	 	Address	 	City	 	County	 	State	 	ZIP
	 	 	6100 Bristol PKWY	 	Culver City	 	Los Angeles	 	CA	 	90230


 


Borrower
has agreed and does hereby grant a security interest in and to the Equipment and the Collateral related thereto, whether now owned
or hereafter acquired and wherever located, in order to secure the payment and performance of all Obligations owing to Lender,
including but not limited to this Equipment Note, all as more particularly provided in the Master Agreement. Lender's agreement
to provide the financing contemplated herein shall be subject to the satisfaction of all conditions established by Lender and Lender's
prior receipt of all required documentation in form and substance satisfactory to Lender in its sole discretion.


 


2.        Payments.
For value received, Borrower promises to pay to the order of Lender, the principal amount of $1,052,942.98, together with
interest thereon as provided herein. This Equipment Note shall be payable by Borrower to Lender in 60 consecutive monthly installments
of principal and interest (the “Payments”) commencing on April 27            ,
2014 (the “Initial Payment”) and continuing thereafter through and including the Maturity Date (as defined
below) (collectively, the “Equipment Note Term”). Each Payment shall be in the amount provided below,
and due and payable on the same day of the month as the Initial Payment set forth above in each succeeding payment period (each,
a “Payment Date” and the final such scheduled Payment Date, the “Maturity Date”) during
Equipment Note Term. All interest hereunder shall be calculated on the basis of a year of 360 days comprised of 12 months of 30
days each. The final Payment due and payable on the Maturity Date shall in any event be equal to the entire outstanding and unpaid
principal amount of this Equipment Note, together with all accrued and unpaid interest, charges and other amounts owing hereunder
and under the Master Agreement.


 




    	Equipment Security Note 10.6.10	Page 1 of 3	 



    	 



    

 


		(a)	Interest
                                         Rate.



 


Interest
shall accrue on the entire principal amount of this Equipment Note outstanding for any calendar month or portion thereof, at a
per annum rate of interest equal to (i) 2 and 0000/100 percent (2.0000%) plus the rate of interest equal
to the “average of interbank offered rates for dollar deposits in the London Market based on quotations of sixteen (16)
major banks” for a term of 30 days as published in the Wall Street Journal under a heading entitled “Money
Rates, London Interbank Offered Rates (LIBOR)” or any future or substitute heading, on the first day of the month (if the
Payments are due on the 1st through the 15th of the month) or the fifteenth day of the month (if the Payments
are due on the 16th through the 30th day of the month) preceding the Payment Date for the applicable Payment,
or (ii) if less, the highest rate of interest permitted by applicable law (the “Interest Rate”) from
the Advance Date set forth below until the principal amount of this Equipment Note is paid in full, and shall be due and payable
on each Payment Date.


  


		(b)	Payment Amount.



  


The
amount of each Payment shall consist of $17,549.05 of principal, plus all interest accrued at the Interest Rate.


  


3.        Prepayment.
Borrower may prepay all (but not less than all) of the outstanding principal balance of this Equipment Note on a scheduled
Payment Date upon 30 days prior written notice from Borrower to Lender, provided that any such prepayment shall be made together
with all accrued interest and other charges and amounts owing hereunder through the date of prepayment.


 


4.        Borrower
Acknowledgements. Upon delivery and acceptance of the Equipment, Borrower shall execute this Equipment Note evidencing the
amounts financed by Lender in respect of such Equipment and the Payments of principal and interest hereunder. By its execution
and delivery of this Equipment Note, Borrower:


 


		(a)	reaffirms of all of Borrower’s representations, warranties and covenants as set forth in
the Master Agreement and represents and warrants that no Default or Event of Default under the Master Agreement exists as of the
date hereof;



 


		(b)	represents, warrants and agrees that: (i) the Equipment has been delivered and is in an operating
condition and performing the operation for which it is intended to the satisfaction of Borrower; (ii) each item of Equipment has
been unconditionally accepted by Borrower for all purposes under the Master Agreement and this Equipment Note; and (iii) there
has been no material adverse change in the operations, business, properties or condition, financial or otherwise, of Borrower or
any Guarantor since December 31, 2013;



 


		(c)	authorizes and directs Lender (i) to advance the principal amount of this Equipment Note to reimburse
Borrower or pay Vendors all or a portion of the purchase price of Equipment in accordance with Vendors' invoices therefor, receipt
and approval of which are hereby reaffirmed by Borrower, and (ii) to enter the date of such advance below Lender’s signature
as the “Advance Date” for all purposes hereof; and



 


		(d)	agrees that Borrower is absolutely and unconditionally obligated to pay Lender all Payments at the
times and in the manner set forth herein.



  




    	Equipment Security Note 10.6.10	Page 2 of 3	 



    	 



    






 


	BANC OF AMERICA LEASING & CAPITAL, LLC	 	Borrower: Psychemedics Corporation
	 	 	 
	By:	/s/ Denise C Simpson	 	By:	/s/ Neil Lerner
	Printed Name:	Denise C Simpson	 	Printed Name: 	Neil Lerner
	Title:	Vice President	 	Title:	VP Finance
	Advance Date:	3/27/14	 	 	 


 




    	Equipment Security Note 10.6.10	Page 3 of 3