Document:

FORM OF STONEGATE SECURITIES INC. WARRANT

 Exhibit 10.9 
  
 THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY OTHER SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT
TO SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.

  

			
	Date: October 19, 2004	 	 Warrant to Purchase
 ***843,396***
 Shares        

  
 ICORIA, INC.

  
 (Incorporated under the laws of the State of Delaware)

  
 REPRESENTATIVE’S WARRANT FOR THE PURCHASE OF SHARES OF

 COMMON STOCK 
  
 Warrant Price: $0.53 per share, subject to adjustment as provided below. 
  
 THIS IS TO CERTIFY that, for value received, Stonegate Securities, Inc. (“Stonegate”) and its assigns
(collectively, the “Holder”), is entitled to purchase, subject to the terms and conditions hereinafter set forth, up to ***843,396*** shares of the common stock, par value $0.01 per share (“Common Stock”), of Icoria, Inc., a
Delaware corporation (the “Company”), and to receive certificate(s) for the Common Stock so purchased. 
  
 1. Exercise Period and Vesting. The exercise period is the period beginning on the date of this Warrant (the “Issuance Date”) and ending
at 5:00 p.m., Dallas, Texas time, on October 19, 2009 (the “Exercise Period”). This Warrant is vested in full as of the Issuance Date and is immediately exercisable by Holder. This Warrant will terminate automatically and immediately upon
the expiration of the Exercise Period. 
  
 2. Exercise of
Warrant; Cashless Exercise. This Warrant may be exercised, in whole or in part, at any time and from time to time during the Exercise Period. Such exercise shall be accomplished by tender to the Company of the purchase price set forth above as
the warrant price (the “Warrant Price”), either (a) in cash, by wire transfer or by certified check or bank cashier’s check, payable to the order of the Company, or (b) by surrendering such number of shares of Common Stock received
upon exercise of this Warrant with a current market price equal to the Warrant Price (a “Cashless Exercise”), together with presentation and surrender to the Company of this Warrant with an executed subscription in substantially the form
attached hereto as Exhibit A (the “Subscription”). Upon receipt of the foregoing, the Company will deliver to the Holder, as promptly as possible, a certificate or certificates representing the shares of Common Stock so purchased,
registered in the name of the Holder or its transferee (as 

 permitted under Section 3 below). With respect to any exercise of this Warrant, the Holder will for all purposes be
deemed to have become the holder of record of the number of shares of Common Stock purchased hereunder on the date this Warrant, a properly executed Subscription and payment of the Warrant Price is received by the Company (the “Exercise
Date”), irrespective of the date of delivery of the certificate evidencing such shares, except that, if the date of such receipt is a date on which the stock transfer books of the Company are closed, such person will be deemed to have become
the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. Fractional shares of Common Stock will not be issued upon the exercise of this Warrant. In lieu of any fractional shares that
would have been issued but for the immediately preceding sentence, the Holder will be entitled to receive cash equal to the current market price of such fraction of a share of Common Stock on the trading day immediately preceding the Exercise Date.
In the event this Warrant is exercised in part, the Company shall issue a new Warrant to the Holder covering the aggregate number of shares of Common Stock as to which this Warrant remains exercisable for. 
  
 If the Holder elects to conduct a Cashless Exercise, the Company shall cause
to be delivered to the Holder a certificate or certificates representing the number of shares of Common Stock computed using the following formula: 
  

			
	 X =
	  	Y (A-B)
	 	  	    A

  

					
	 Where:
	  	 	  	 
	 	  	X	  	= the number of shares of Common Stock to be issued to Holder;
	 	  	Y	  	= the portion of the Warrant (in number of shares of Common Stock) being exercised by Holder (at the date of such calculation);
	 	  	A	  	= the fair market value of one share of Common Stock on the Exercise Date (as calculated below); and
	 	  	B	  	= Warrant Price (as adjusted to the date of such calculation).

  
 For purposes of the
foregoing calculation, “fair market value of one share of Common Stock on the Exercise Date” shall mean: (i) if the principal trading market for such securities is a national or regional securities exchange, the closing price on such
exchange for day immediately prior to such Exercise Date; (ii) if sales prices for shares of Common Stock are reported by the Nasdaq National Market System or Nasdaq Small Cap Market (or a similar system then in use), the last reported sales price
for the day immediately prior to such Exercise Date; or (iii) if neither (i) nor (ii) above are applicable, and if bid and ask prices for shares of Common Stock are reported in the over-the-counter market by Nasdaq (or, if not so reported, by the
National Quotation Bureau), the average of the high bid and low ask prices so reported for the ten (10) trading days immediately prior to such Exercise Date. Notwithstanding the foregoing, if there is no reported closing price, last reported sales
price, or bid and ask prices, as the case may be, for 

 the period in question, then the current market price shall be determined as of the latest ten (10) day period prior to
such day for which such closing price, last reported sales price, or bid and ask prices, as the case may be, are available, unless such securities have not been traded on an exchange or in the over-the-counter market for 30 or more days immediately
prior to the day in question, in which case the current market price shall be determined in good faith by, and reflected in a formal resolution of, the Board of Directors of the Company. The Company acknowledges and agrees that this Warrant was
issued on the Issuance Date. 
  
 3. Transferability and
Exchange. 
  
 (a) This Warrant, and the Common Stock issuable
upon the exercise hereof, may not be sold, transferred, pledged or hypothecated unless the Company shall have been provided with an opinion of counsel, or other evidence reasonably satisfactory to it, that such transfer is not in violation of the
Securities Act, and any applicable state securities laws. Subject to the satisfaction of the aforesaid condition, this Warrant and the underlying shares of Common Stock shall be transferable from time to time by the Holder upon written notice to the
Company. If this Warrant is transferred, in whole or in part, the Company shall, upon surrender of this Warrant to the Company, deliver to each transferee a Warrant evidencing the rights of such transferee to purchase the number of shares of Common
Stock that such transferee is entitled to purchase pursuant to such transfer. The Company may place a legend similar to the legend at the top of this Warrant on any replacement Warrant and on each certificate representing shares issuable upon
exercise of this Warrant or any replacement Warrants. Only a registered Holder may enforce the provisions of this Warrant against the Company. A transferee of the original registered Holder becomes a registered Holder only upon delivery to the
Company of the original Warrant and an original Assignment, substantially in the form set forth in Exhibit B attached hereto. 
  
 (b) This Warrant is exchangeable upon its surrender by the Holder to the Company for new Warrants of like tenor and date representing in the aggregate the
right to purchase the number of shares purchasable hereunder, each of such new Warrants to represent the right to purchase such number of shares as may be designated by the Holder at the time of such surrender. 
  
 4. Adjustments to Warrant Price and Number of Shares Subject to
Warrant. The Warrant Price and the number of shares of Common Stock purchasable upon the exercise of this Warrant are subject to adjustment from time to time upon the occurrence of any of the events specified in this Section 4. For the purpose
of this Section 4, “Common Stock” means shares now or hereafter authorized of any class of common stock of the Company and any other stock of the Company, however designated, that has the right to participate in any distribution of the
assets or earnings of the Company without limit as to per share amount (excluding, and subject to any prior rights of, any class or series of preferred stock). 
  

(a) In case the Company shall (i) pay a dividend or make a distribution in shares of Common Stock or other securities, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue by reclassification of its shares of Common Stock other securities of the Company, then the
Warrant Price in effect at the time of the record date for such 

 dividend or on the effective date of such subdivision, combination or reclassification, and/or the number and kind of
securities issuable on such date, shall be proportionately adjusted so that the Holder of any Warrant thereafter exercised shall be entitled to receive the aggregate number and kind of shares of Common Stock (or such other securities other than
Common Stock) of the Company, at the same aggregate Warrant Price, that, if such Warrant had been exercised immediately prior to such date, the Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend,
distribution, subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. 
  
 (b) In case the Company shall fix a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the surviving corporation) of cash, evidences of indebtedness or assets, or subscription rights or warrants, the Warrant Price to be in effect after such record date shall be
determined by multiplying the Warrant Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price per share of Common Stock on such record date, less the amount of cash so to be
distributed (or the fair market value (as determined in good faith by, and reflected in a formal resolution of, the Board of Directors of the Company) of the portion of the assets or evidences of indebtedness so to be distributed, or of such
subscription rights or warrants, applicable to one share of Common Stock, and the denominator of which shall be such current market price per share of Common Stock. Such adjustment shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Warrant Price shall again be adjusted to be the Warrant Price which would then be in effect if such record date had not been fixed. 
  
 (c) For the purpose of any computation under any subsection of this Section 4, the “current market price” per
share of Common Stock on any date shall be the per share price of the Common Stock on the trading day immediately prior to the event requiring an adjustment hereunder and shall be: (i) if the principal trading market for such securities is a
national or regional securities exchange, the closing price on such exchange on such day; or (ii) if sales prices for shares of Common Stock are reported by the Nasdaq National Market System or Small Cap Market System (or a similar system then in
use), the last reported sales price so reported on such day; or (iii) if neither (i) nor (ii) above are applicable, and if bid and ask prices for shares of Common Stock are reported in the over-the-counter market by Nasdaq (or, if not so reported,
by the National Quotation Bureau), the average of the high bid and low ask prices so reported on such day. Notwithstanding the foregoing, if there is no reported closing price, last reported sales price, or bid and ask prices, as the case may be,
for the day in question, then the current market price shall be determined as of the latest date prior to such day for which such closing price, last reported sales price, or bid and ask prices, as the case may be, are available, unless such
securities have not been traded on an exchange or in the over-the-counter market for 30 or more days immediately prior to the day in question, in which case the current market price shall be determined in good faith by, and reflected in a formal
resolution of, the Board of Directors of the Company. 
  
 (d)
Notwithstanding any provision herein to the contrary, no adjustment in the Warrant Price shall be required unless such adjustment would require an increase or decrease of 

 at least 1% in the Warrant Price; provided, however, that any adjustments which by reason of this subsection (d) are not
required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 4 shall be made to the nearest cent or the nearest one-hundredth of a share, as the case may be. 
  
 (e) In the event that at any time, as a result of an adjustment made pursuant
to subsection (a) above, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in this Section 4, and the other provisions
of this Warrant shall apply on like terms to any such other shares. 
  
 (f) If the Company merges or consolidates into or with another corporation or entity, or if another corporation or entity merges into or with the Company (excluding such a merger in which the Company is the surviving or continuing
corporation and which does not result in any reclassification, conversion, exchange, or cancellation of the outstanding shares of Common Stock), or if all or substantially all of the assets or business of the Company are sold or transferred to
another corporation, entity, or person, then, as a condition to such consolidation, merger, or sale (a “Transaction”), lawful and adequate provision shall be made whereby the Holder shall have the right from and after the Transaction to
receive, upon exercise of this Warrant and upon the terms and conditions specified herein and in lieu of the shares of the Common Stock that would have been issuable if this Warrant had been exercised immediately before the Transaction, such shares
of stock, securities, or assets as the Holder would have owned immediately after the Transaction if the Holder had exercised this Warrant immediately before the effective date of the Transaction. 
  
 5. Registration Rights. The Company hereby grants to Holder, with
respect to the shares of Common Stock underlying this Warrant, registration rights identical to those that are granted to Purchasers in the Placement (as such terms are defined in that certain Placement Agency Agreement, dated as of July 14, 2004,
by and between the Company and Stonegate); it being specifically agreed and understood that the shares of Common Stock underlying this Warrant will be included in any registration statement filed by the Company which includes shares of Common Stock,
or shares of Common Stock underlying any securities, issued to Purchasers in the Placement. 
  
 6. Reservation of Shares. The Company agrees at all times to reserve and hold available out of its authorized but unissued shares of Common Stock the number of shares of Common Stock issuable upon the full
exercise of this Warrant. The Company further covenants and agrees that all shares of Common Stock that may be delivered upon the exercise of this Warrant will, upon delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof hereunder. 
  
 7.
Notices to Holder. Upon any adjustment of the Warrant Price (or number of shares of Common Stock purchasable upon the exercise of this Warrant) pursuant to Section 4, the Company shall promptly thereafter cause to be given to the Holder
written notice of such 

 adjustment. Such notice shall include the Warrant Price (and/or the number of shares of Common Stock purchasable upon the
exercise of this Warrant) after such adjustment, and shall set forth in reasonable detail the Company’s method of calculation and the facts upon which such calculations were based. Where appropriate, such notice shall be given in advance and
included as a part of any notice required to be given under the other provisions of this Section 7. 
  
 In the event of (a) any fixing by the Company of a record date with respect to the holders of any class of securities of the Company for the purpose of
determining which of such holders are entitled to dividends or other distributions, or any rights to subscribe for, purchase or otherwise acquire any shares of capital stock of any class or any other securities or property, or to receive any other
right, (b) any capital reorganization of the Company, or reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all of the assets or business of the Company to, or consolidation or merger of
the Company with or into, any other entity or person, or (c) any voluntary or involuntary dissolution or winding up of the Company, then and in each such event the Company will give the Holder a written notice specifying, as the case may be (i) the
record date for the purpose of such dividend, distribution, or right, and stating the amount and character of such dividend, distribution, or right; or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, conveyance, dissolution, liquidation, or winding up is to take place and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such capital stock or securities receivable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock securities) for securities or other property deliverable upon such event. Any such notice shall be given at least 10 days prior to the earliest date
therein specified. 
  
 8. No Rights as a Stockholder. This
Warrant does not entitle the Holder to any voting rights or other rights as a stockholder of the Company, nor to any other rights whatsoever except the rights herein set forth. 
  
 9. Additional Covenants of the Company. For so long as the Common Stock is listed for trading on any regional or
national securities exchange or Nasdaq (National Market or Small Cap System), the Company shall, upon issuance of any shares for which this Warrant is exercisable, at its expense, promptly obtain and maintain the listing of such shares. The Company
shall also comply with the reporting requirements of Sections 13 and 15(d) of the Exchange Act for so long as and to the extent that such requirements apply to the Company. 
  
 The Company shall not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant. Without limiting the generality of the foregoing, the Company
(a) will at all times reserve and keep available, solely for issuance and delivery upon exercise of this Warrant, shares of Common Stock issuable from time to time upon exercise of this Warrant, (b) will not increase the par value of any shares of
capital stock receivable upon exercise of this Warrant above the amount payable therefor upon such exercise, and (c) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable stock. 

 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the
Company, the Holder and their respective successors and permitted assigns. 
  
 11. Notices. The Company agrees to maintain a ledger of the ownership of this Warrant (the “Ledger”). Any notice hereunder shall be given by registered or certified mail if to the Company, at its
principal executive office and, if to the Holder, to its address shown in the Ledger of the Company; provided, however, that the Holder may at any time on three (3) days written notice to the Company designate or substitute another address where
notice is to be given. Notice shall be deemed given and received after a certified or registered letter, properly addressed with postage prepaid, is deposited in the U.S. mail. 
  
 12. Severability. Every provision of this Warrant is intended to be severable. If any term or provision hereof is
illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the remainder of this Warrant. 
  
 13. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to
the principles of choice of laws thereof. 
  
 14.
Attorneys’ Fees. In any action or proceeding brought to enforce any provision of this Warrant, the prevailing party shall be entitled to recover reasonable attorneys’ fees in addition to its costs and expenses and any other
available remedy. 
  
 15. Entire Agreement. This Warrant
(including the Exhibits attached hereto) constitutes the entire understanding between the Company and the Holder with respect to the subject matter hereof, and supersedes all prior negotiations, discussions, agreements and understandings relating to
such subject matter. 
  
 IN WITNESS WHEREOF, the Company has
caused this Warrant to be executed by its duly authorized officer as of the date first set forth above. 
  

			
	 ICORIA, INC.

		
	 By:
	 	  

	 Title:
	 	  

  

 Exhibit A 
  

SUBSCRIPTION FORM 
  
 (To be Executed by the Holder to Exercise the Rights To Purchase Common Stock Evidenced by the Within Warrant) 
  
 The undersigned hereby irrevocably subscribes for
             shares (the “Stock”) of the Common Stock of
                    (the “Company”) pursuant to and in accordance with the terms and conditions of the attached Warrant (the
“Warrant”), and hereby makes payment of $             therefor by [tendering cash, wire transferring or delivering a certified check or bank cashier’s check, payable
to the order of the Company] [surrendering              shares of Common Stock received upon exercise of the Warrant, which shares have a current market price equal to such payment
as required in Section 2 of the Warrant]. The undersigned requests that a certificate for the Stock be issued in the name of the undersigned and be delivered to the undersigned at the address stated below. If the Stock is not all of the shares
purchasable pursuant to the Warrant, the undersigned requests that a new Warrant of like tenor for the balance of the remaining shares purchasable thereunder be delivered to the undersigned at the address stated below. 
  
 In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not with a view to, or for resale in connection with, a distribution of the shares within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”). 
  
 I understand that because the Stock has not been
registered under the Securities Act, I must hold such Stock indefinitely unless the Stock is subsequently registered and qualified under the Securities Act or is exempt from such registration and qualification. I shall make no transfer or
disposition of the Stock unless (a) such transfer or disposition can be made without registration under the Securities Act by reason of a specific exemption from such registration and such qualification, or (b) a registration statement has been
filed pursuant to the Securities Act and has been declared effective with respect to such disposition. I agree that each certificate representing the Stock delivered to me shall bear substantially the same as set forth on the front page of the
Warrant. 
  
 I agree that each certificate representing the Stock
delivered to me shall bear substantially the same legend as set forth on the front page of the Warrant. 
  
 I further agree that the Company may place stop orders on the certificates evidencing the Stock with the transfer agent, if any, to the same effect as the
above legend. The legend and stop transfer notice referred to above shall be removed only upon my furnishing to the Company of an opinion of counsel (reasonably satisfactory to the Company) to the effect that such legend may be removed. 

 

					
	 Date:                            
	 	Signed:	 	  

			
	 	 	Address:	 	  

		
	 	 	

	

  

 B-8 

 Exhibit B 
  

ASSIGNMENT 
  
 (To be Executed by the Holder to Effect Transfer of the Attached Warrant) 
  
 For Value Received                         
hereby sells, assigns and transfers to                          the Warrant attached hereto and the rights represented
thereby to purchase              shares of Common Stock in accordance with the terms and conditions hereof, and does hereby irrevocably constitute and appoint
                         as attorney to transfer such Warrant on the books of the Company with full power of substitution.

  

					
	 Dated:                     
	  	Signed:	  	  

		
	Please print or typewrite name and address of assignee:	  	Please insert Social Security or other Tax Identification Number of Assignee:
		
	  

	  	  

	  

	  	 
	  

	  	 

  

 B-9SECURED CONVERTIBLE TERM

 Exhibit 10.10 
  
 THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ICORIA, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 SECURED CONVERTIBLE TERM NOTE 
  
 FOR VALUE RECEIVED, ICORIA, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o
M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “Holder”) or its registered assigns or successors in interest, on order, the
sum of Five Million Dollars ($5,000,000), together with any accrued and unpaid interest hereon, on October 19, 2007 (the “Maturity Date”) if not sooner paid. 
  
 Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities
Purchase Agreement dated as of the date hereof between the Borrower and the Holder (as amended, modified or supplemented from time to time, the “Purchase Agreement”). 
  
 The following terms shall apply to this Note: 
  
 ARTICLE I 
 INTEREST &
AMORTIZATION 
  
 1.1(a) Interest Rate. Subject to
Sections 4.11 and 5.6 hereof, interest payable on this Note shall accrue at a rate per annum (the “Interest Rate”) equal to the “prime rate” published in The Wall Street Journal from time to time, plus two and one-half
percent (2.50%). The prime rate shall be increased or decreased as the case may be for each increase or decrease in the prime rate in an amount equal to such increase or decrease in the prime rate; each change to be effective as of the day of the
change in such rate. Subject to Section 1.1(b) hereof, the Interest Rate shall not be less than seven percent (7.0%). Interest shall be (i) calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears, commencing on November 1,
2004 and on the first business day of each consecutive calendar month thereafter until the Maturity Date (and on the Maturity Date), whether by acceleration or otherwise (each, a “Repayment Date”). 
  
 1.1 (b) Interest Rate Adjustment. The Interest Rate shall be calculated on the last
business day of each month hereafter until the Maturity Date (each a “Determination Date”) and shall be subject to adjustment as set forth herein. If (i) the Borrower shall have registered the shares of the Borrower’s common stock
underlying each of the conversion of the Note and that certain warrant issued to 
  

 1 

 Holder on a registration statement declared effective by the Securities and Exchange Commission (the “SEC”),
and (ii) the closing price (the “Market Price”) of the Common Stock as reported by Bloomberg, L.P. on the Principal Market (as defined below) for the five (5) trading days immediately preceding a Determination Date exceeds the then
applicable Fixed Conversion Price by at least twenty five percent (25%), the Interest Rate for the succeeding calendar month shall automatically be reduced by 140 basis points (140 b.p.) (1.40%) for each incremental twenty five percent (25%)
increase in the Market Price of the Common Stock above the then applicable Fixed Conversion Price. Notwithstanding the foregoing (and anything to the contrary contained in herein), in no event shall the Interest Rate be less than zero percent (0%).
 
  
 For Example 
  

										
	 Date

	  	Market Price

	  	Fixed Conversion Price

	  	Premium

	 
	 10/25
	  	$	0.65	  	$	0.50	  	30	%
	 10/26
	  	$	0.66	  	$	0.50	  	32	%
	 10/27
	  	$	0.64	  	$	0.50	  	28	%
	 10/28
	  	$	0.65	  	$	0.50	  	30	%
	 10/29
	  	$	0.67	  	$	0.50	  	34	%

  
 Determination Date: November 1

  
 Since the premium above the Fixed Conversion Price is greater than or equal to
25% for the five days prior to November 1, the Interest Rate will be reduce by 1.40% to Prime plus 1.10% (Prime plus 2.50% less 1.40%) effective November 1. 
  
 On December 1, the same calculation will occur. If the premium above the Fixed Conversion Price for the 5 trading days prior to December 1 is still greater than or equal
to 25%, the Interest Rate will remain Prime plus 1.10%. However, if the premium for any of the five trading days prior to December 1, was less than 25%, the Interest Rate will revert back to Prime + 2.50%. 
  
 1.2 Minimum Monthly Principal Payments. Amortizing payments of
the aggregate principal amount outstanding under this Note at any time (the “Principal Amount”) shall begin on May 1, 2005 and shall recur on the first business day of each succeeding month thereafter until the Maturity Date (each,
an “Amortization Date”). Subject to Article 3 below, beginning on the first Amortization Date, the Borrower shall make monthly payments to the Holder on each Repayment Date, each in the amount of $161,290.32, together with any
accrued and unpaid interest to date on such portion of the Principal Amount plus any and all other amounts which are then owing under this Note, the Purchase Agreement or any other Related Agreement but have not been paid (collectively, the
“Monthly Amount”). Any Principal Amount that remains outstanding on the Maturity Date shall be due and payable on the Maturity Date. 
  

 2 

 ARTICLE II 
 CONVERSION REPAYMENT 
  
 2.1 (a) Payment
of Monthly Amount in Cash or Common Stock. If the Monthly Amount (or a portion thereof of such Monthly Amount if such portion of the Monthly Amount would have been converted into shares of Common Stock but for Section 3.2) is required to be paid
in cash pursuant to Section 2.1(b), then the Borrower shall pay the Holder an amount equal to 100% of the Monthly Amount due and owing to the Holder on the Repayment Date in cash. If such repayment in cash is required, in whole or part, the
underlying data as reported by Bloomberg, L.P., used to support such calculations, will be provided to the Borrower upon request. If the Monthly Amount (or a portion of such Monthly Amount if not all of the Monthly Amount may be converted into
shares of Common Stock pursuant to Section 3.2) is required to be paid in shares of Common Stock pursuant to Section 2.1(b), the number of such shares to be issued by the Borrower to the Holder on such Repayment Date (in respect of such portion of
the Monthly Amount converted into in shares of Common Stock pursuant to Section 2.1(b)), shall be the number determined by dividing (x) the portion of the Monthly Amount converted into shares of Common Stock, by (y) the then applicable Fixed
Conversion Price. For purposes hereof, the initial “Fixed Conversion Price” means $0.53 which has been determined on the date of this Note as an amount equal to 110% of the average closing price for ten (10) trading days immediately
prior to the date of this Note. . 
  
 (b) Monthly Amount Conversion
Guidelines. Subject to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert into shares of Common Stock all or a portion of the Monthly Amount due on each Repayment Date according to the following guidelines (the “Conversion
Criteria”): (i) the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the six (6) trading days immediately preceding such Repayment Date shall be greater than or equal to 110% of the Fixed
Conversion Price and (ii) the amount of such conversion does not exceed twenty five percent (25%) of the aggregate dollar trading volume of the Common Stock for the twenty two (22) day trading period immediately preceding the applicable Repayment
Date. If the Conversion Criteria are not met, the Holder shall convert only such part of the Monthly Amount that meets the Conversion Criteria. Any part of the Monthly Amount due on a Repayment Date that the Holder has not been able to convert into
shares of Common Stock due to failure to meet the Conversion Criteria, shall be paid by the Borrower in cash at the rate of 100% of the Monthly Amount otherwise due on such Repayment Date, within six (6) business days of the applicable Repayment
Date. 
  

 3 

 For Example, 
  

									
	 Date

	  	Shares Traded

	  	Market Price

	  	Daily Dollar Volume

	 11/01
	  	70,000	  	$	0.65	  	 	45,500
	 11/02
	  	50,000	  	$	0.63	  	 	31,500
	 11/03
	  	80,000	  	$	0.65	  	 	52,000
	 11/04
	  	100,000	  	$	0.67	  	 	67,000
	 11/05
	  	70,000	  	$	0.65	  	 	45,500
	 11/08
	  	50,000	  	$	0.63	  	 	31,500
	 11/09
	  	80,000	  	$	0.62	  	 	49,600
	 11/10
	  	100,000	  	$	0.63	  	 	63,000
	 11/11
	  	70,000	  	$	0.65	  	 	45,500
	 11/12
	  	50,000	  	$	0.67	  	 	33,500
	 11/15
	  	80,000	  	$	0.65	  	 	52,000
	 11/18
	  	100,000	  	$	0.63	  	 	63,000
	 11/19
	  	70,000	  	$	0.62	  	 	43,400
	 11/20
	  	50,000	  	$	0.63	  	 	31,500
	 11/21
	  	80,000	  	$	0.65	  	 	52,000
	 11/22
	  	100,000	  	$	0.67	  	 	67,000
	 11/25
	  	70,000	  	$	0.65	  	 	45,500
	 11/26
	  	50,000	  	$	0.63	  	 	31,500
	 11/27
	  	80,000	  	$	0.62	  	 	49,600
	 11/28
	  	100,000	  	$	0.65	  	 	65,000
	 11/29
	  	100,000	  	$	0.70	  	 	70,000
	 11/30
	  	100,000	  	$	0.60	  	 	60,000
	 	  	1,700,000	  	 	 	  	$	1,095,100

  
 Repayment Date: December 1 

 
 Aggregate dollar trading volume of the ICOR common stock during the 22 trading days prior
to December 1 equals $1,095,100. 
  
 Given the premium above the Fixed Conversion
Price is greater than 10% for the six trading days prior to December 1, Laurus will convert into common stock an amount that equals the Monthly Amount due. However, this amount will be limited to 25% of the aggregate dollar trading volume of
$1,095,000 or $273,775. Therefore, if the Monthly Amount due was $300,000, Laurus would not have to convert more than $273,775 and the Company would have to pay in cash the remaining $26,225. 
  
 2.2 No Effective Registration. Notwithstanding anything to the
contrary herein, none of the Borrower’s obligations to the Holder may be converted into Common Stock unless (i) either (x) an effective current Registration Statement (as defined in the Registration Rights Agreement) 
  

 4 

 covering the shares of Common Stock to be issued in connection with satisfaction of such obligations exists or (y) an
exemption from registration of the Common Stock is available to pursuant to Rule 144 of the Securities Act and (ii) no Event of Default hereunder exists and is continuing, unless such Event of Default is cured within any applicable cure period or is
otherwise waived in writing by the Holder in whole or in part at the Holder’s option. 
  
 2.3 Optional Redemption in Cash. The Borrower will have the option of prepaying this Note (“Optional Redemption”) by paying to the Holder a sum of money equal to (i) in the event such
prepayment occurs prior to the one year anniversary of the Closing Date, one hundred twenty percent (120%) of the principal amount of this Note then outstanding, (ii) in the event such prepayment occurs on or after the one year anniversary of the
Closing Date and prior to the two year anniversary of the Closing Date, one hundred fifteen percent (115%) of the principal amount of this Note then outstanding and (iii) in the event such prepayment occurs after the two year anniversary of the
Closing Date, one hundred ten percent (110%) of the principal amount of this Note then outstanding, in each case, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this
Note, the Purchase Agreement, or any Related Agreement (the “Redemption Amount”) outstanding on the Redemption Payment Date (as defined below). The Borrower shall deliver to the Holder a written notice of redemption specifying the
date for such Optional Redemption (the “Redemption Payment Date”), which date shall be seven (7) business days after the date of the Notice of Redemption (the “Redemption Period”). A Notice of Redemption shall not
be effective with respect to any portion of this Note for which the Holder has a pending conversion pursuant to Section 3.1, or for conversions pursuant to Section 3.1 during the Redemption Period. The Redemption Amount shall be determined as if
such Holder’s conversion had been completed immediately prior to the date of the Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder. In the event the Borrower fails to pay the
Redemption Amount on the Redemption Payment Date as set forth herein, then such Redemption Notice will be null and void. 
  
 ARTICLE III 
 CONVERSION RIGHTS

  
 3.1. Holder’s Conversion. The Holder shall
have the right, but not the obligation to convert the then outstanding principal of this Note (in excess of the amounts set forth in Section 2.1(b) hereof), together with interest and fees due hereon, into shares of Common Stock subject to the terms
and conditions set forth in this Article III. The Holder will give notice of such conversion by delivery to the Borrower of a written notice of conversion not less than one (1) business day prior to the date upon which such conversion shall occur.
The shares of Common Stock to be issued upon such conversion are herein referred to as the “Conversion Shares.” 
  

 5 

 3.2 Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder
shall not convert pursuant to the terms of this Note an amount that would be convertible into that number of Conversion Shares which would exceed the difference between 4.99% of the outstanding shares of Common Stock of the Borrower and the number
of shares of Common Stock beneficially owned by such Holder or issuable upon exercise of warrants held by such Holder. The Holder shall not take a long position in the Borrower’s Common Stock for the purpose, or any other reason, that would
result in the Holder’s inability to convert this Note into Common Stock because of the limitations contained in this provision. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Holder may void the Conversion Share limitation described in this Section 3.2 upon 75 days prior notice to the Borrower or upon an Event of Default, without any notice
requirement beyond any applicable grace period. 
  
 At no time
shall the beneficial ownership exceed 19.99% of the issued and outstanding Common Stock. Notwithstanding anything contained herein to the contrary, the number of shares of Common Stock issuable by the Borrower and acquirable by the Holder at a price
below $0.49 per share pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, shall not exceed an aggregate of shares of the Borrower’s Common Stock (subject to appropriate adjustment for stock splits, stock
dividends, or other similar recapitalizations affecting the Common Stock) (the “Maximum Common Stock Issuance”), unless the issuance of shares hereunder in excess of the Maximum Common Stock Issuance shall first be approved by the
Borrower’s shareholders. If at any point in time and from time to time the number of shares of Common Stock issued pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, together with the number of shares of Common
Stock that would then be issuable by the Borrower to the Holder in the event of a conversion or exercise pursuant to the terms of this Note, the Purchase Agreement or any Related Agreement, would exceed the Maximum Common Stock Issuance but for this
Section 3.2, the Holder’s actions shall be stayed, and Borrower shall promptly call a shareholders meeting within (90) ninety days of Holder’s notice to Borrower of such an event to solicit shareholder approval for the issuance of the
shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance. 
  

 6 

 3.3 Mechanics of Holder’s Conversion. (a) Holder shall give notice of such future Conversions
under Section 3.1 hereof by delivering an executed and completed notice of conversion (“Notice of Conversion”) to the Borrower and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount,
accrued interest and fees being converted. On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount, accrued interest and fees as
entered in its records and shall provide written notice thereof to the Borrower within seven (7) business days after the Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the
provisions hereof shall be deemed a Conversion Date (the “Conversion Date”). A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A. 
  
 (b) Pursuant to the terms of the Notice of Conversion, the Borrower will issue instructions to the transfer agent
accompanied by an opinion of counsel within (three (3) business days of the date of the delivery to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder
by crediting the account of the Holder’s designated broker with the Depository Trust Corporation (“DTC”) through its Deposit Withdrawal Agent Commission (“DWAC”) system within three (3) business days after
receipt by the Borrower of the Notice of Conversion (the “Delivery Date”). In the case of the exercise of the conversion rights set forth herein the conversion privilege shall be deemed to have been exercised and the Conversion
Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Borrower of the Notice of Conversion. The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder
provides the Borrower written instructions to the contrary. 
  
 3.4 Conversion Mechanics. 
  
 (a) The number of
shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal and interest and fees to be converted, if any, by the then applicable Fixed Conversion Price. In the event of any
conversions of outstanding principal amount under this Note in part pursuant to this Article III, such conversions shall be deemed to constitute conversions of outstanding principal amount applying to Monthly Amounts for the remaining Repayment
Dates in chronological order. 
  
 (b) The Fixed Conversion Price
and number and kind of shares or other securities to be issued upon conversion is subject to adjustment from time to time upon the occurrence of certain events, as follows: 
  
 A. Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater
or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Fixed Conversion Price or 
  

 7 

 the Conversion Price, as the case may be, shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock
outstanding immediately prior to such event. 
  
 B. During the
period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that
upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty
of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note. 
  
 C. Subject to the provisions of this Section 3.4, if the Borrower shall at any time prior to the conversion or repayment in full of the Principal Amount
issue any shares of Common Stock or securities convertible into Common Stock to a person other than the Holder (except (i) pursuant to Subsections A or B above; (ii) pursuant to options, warrants, or other obligations to issue shares outstanding on
the date hereof as disclosed to Holder in writing; or (iii) pursuant to options that may be issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Borrower) for a consideration per share (the
“Offer Price”) less than the Fixed Conversion Price in effect at the time of such issuance, then the Fixed Conversion Price shall be immediately reset pursuant to the formula below. For purposes hereof, the issuance of any security of the
Borrower convertible into or exercisable or exchangeable for Common Stock shall result in an adjustment to the Fixed Conversion Price at the time of issuance of such securities. 
  
 If the Corporation issues any additional shares pursuant to Section 3.4 above then, and thereafter successively upon each
such issue, the Fixed Conversion Price shall be adjusted by multiplying the then applicable Fixed Conversion Price by the following fraction: 
  

			
	 	 	                                     A + B

	 	 	                 (A + B) + [((C – D) x B) /
C]

  
 A = Total amount of
shares convertible pursuant to this Note. 
  
 B = Actual shares
sold in the offering 
  
 C = Fixed Conversion Price 
  
 D = Offer Price per share 
  

 8 

 D. Reclassification, etc. If the Borrower at any time shall, by reclassification or otherwise,
change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted
number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change. 
  
 E. To the extent there are fractional shares, or dollar values smaller
that one (1) cent, they shall be rounded to the nearest share or cent. 
  
 3.5 Issuance of New Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder
for the principal balance of this Note and interest which shall not have been converted or paid. Subject to the provisions of Article IV, the Borrower will pay no costs, fees or any other consideration to the Holder for the production and issuance
of a new Note. 
  

 9 

 3.6 Mandatory Conversion. Notwithstanding anything herein to the contrary, subject to the
conversion limitations set forth in Section 3.2, if, after the date a registration statement covering the resale of the Conversion Shares is declared effective, and so long as such registration statement remains effective, (A) the closing price for
any ten (10) consecutive trading days (a “Conversion Period”) exceeds 400% of the then effective Fixed Conversion Price, which as of the date of this Agreement is $2.12, the Holder will, within ten (10) trading days of any such Conversion
Period, convert all or part of the then outstanding Principal Amount of this Note plus all accrued, but unpaid interest thereon. The Holder shall only be required to effect such a conversion referred to in the immediately preceding sentence if each
of the following shall be true: (i) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the Conversion Shares issued to the Holder (or such Conversion Shares
are eligible under Rule 144 of the Securities Act); (ii) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all the Conversion Shares as are issuable to the Holder upon such
conversion of this Note pursuant to this Section 3.6 and (iii) the amount of this Note to be so converted pursuant to this Section 3.6 (when combined with the amount of any other promissory note issued by the Borrower to the Holder required to be
similarly manditorily converted) does not exceed 25% of the aggregate dollar trading volume of the Common Stock during the Conversion Period. There shall be only one Conversion Period during any 30 trading day period. 
  
 For
Example,             
  

									
	 Date

	  	 Shares
 Traded

	  	Market Price

	  	Daily Dollar Volume

	 10/18
	  	100,000	  	$	0.63	  	 	63,000
	 10/19
	  	70,000	  	$	0.62	  	 	43,400
	 10/20
	  	50,000	  	$	0.63	  	 	31,500
	 10/21
	  	80,000	  	$	0.65	  	 	52,000
	 10/22
	  	100,000	  	$	0.67	  	 	67,000
	 10/25
	  	70,000	  	$	0.65	  	 	45,500
	 10/26
	  	50,000	  	$	0.63	  	 	31,500
	 10/27
	  	80,000	  	$	0.62	  	 	49,600
	 10/28
	  	100,000	  	$	0.65	  	 	65,000
	 10/29
	  	100,000	  	$	0.70	  	 	70,000
	 	  	
	  	 	 	  	
	

	 TOTAL
	  	800,000	  	 	 	  	$	518,500
	 	  	
	  	 	 	  	
	

	 	  	 	  	 	 	  	 	@ 25.00% = $129,625

  
 Determination Date: November 11

  
 If the premium above the Fixed Conversion Price is greater than or equal to
400% for a consecutive 10-day period, the holder is required within 10 days of such period to convert all or part of the outstanding principal and accrued interest but limited to 25% of the cumulative daily dollar volume traded during such period.

  

 10 

 ARTICLE IV 
 EVENTS OF DEFAULT 
  
 Upon
the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of principal, interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately due and
payable. In the event of such an acceleration, the amount due and owing to the Holder shall be, one hundred twenty five (125%) of the then outstanding principal amount of this Note, in each case, plus accrued and unpaid interest and fees, if any
(the “Default Payment”). The Default Payment shall be applied first to any fees due and payable to Holder pursuant to the Note or the Related Agreements, then to accrued and unpaid interest due on the Note and then to outstanding
principal balance of the Note. 
  
 The occurrence of any of the
following events set forth in Sections 4.1 through 4.10, inclusive, is an “Event of Default”: 
  
 4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay when due any installment of principal, interest or other fees
hereon in accordance herewith, or the Borrower fails to pay when due any amount due under any other promissory note issued by Borrower, and in any such case, such failure shall continue for a period of five (5) business days following the date upon
which any such payment was due. 
  
 4.2 Breach of Covenant.
The Borrower breaches any covenant or any other term or condition of this Note, the Purchase Agreement or any Related Agreement in any material respect, and, in any such case, such breach, continues for a period of fifteen (15) days after the
occurrence thereof. 
  
 4.3 Breach of Representations and
Warranties. Any representation or warranty made by the Borrower in this Note, the Purchase Agreement or in any Related Agreement shall, in any such case, be false or misleading in any material respect on the date that such representation or
warranty was made or deemed made. 
  
 4.4 Receiver or
Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall
otherwise be appointed. 
  
 4.5 Judgments. Any money
judgment, writ or similar final process shall be entered or filed against the Borrower or any of its property or other assets for more than $200,000, and shall remain unvacated, unbonded or unstayed for a period of sixty (60) days. 
  
 4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower. 
  

 11 

 4.7 Stop Trade. An SEC stop trade order or Principal Market trading suspension, so long as a
change of quotation among markets is not considered a “trading suspension”, of the Common Stock shall be in effect for six (6) consecutive days or six (6) days during a period of ten (10) consecutive days, excluding in all cases a
suspension of all trading on a Principal Market, provided that the Borrower shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another Principal Market within
sixty (60) days of such notice. The “Principal Market” for the Common Stock shall include the OTC Bulletin Board, Nasdaq SmallCap Market, Nasdaq National Market System, American Stock Exchange, or New York Stock Exchange (whichever of the
foregoing is at the time the principal trading exchange or market for the Common Stock). It is expressly understood that movement between any exchange or quotation service set forth herein is permissible and shall not be an Event of Default under
this or any Related Agreements. 
  
 4.8 Failure to Deliver
Common Stock or Replacement Note. The Borrower shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, and Section 9 of the Purchase Agreement, if such failure to timely deliver Common Stock
shall not be cured within two (2) business days or (ii) to deliver a replacement Note to Holder within seven (7) business days following the required date of such issuance pursuant to this Note, the Purchase Agreement or any Related Agreement (to
the extent required under such agreements). 
  
 4.9 Default
Under Related Agreements or Other Agreements. The occurrence and continuance of any Event of Default, without cure within the time period set forth in the Related Agreements or Other Agreements. (as defined in the Purchase Agreement or any
Related Agreement) or any event of default (or similar term) of any indebtedness permitted under Section 6.12(e) of the Securities Purchase Agreement in excess of $200,000. 
  
 4.10 Change in Control. There shall be a change in control in the record or beneficial ownership of an aggregate of
more than forty percent (40%) of the outstanding Common Stock, in one or more transactions with third parties, compared to the ownership of then outstanding shares of Common Stock, without the prior written consent of Holder, which consent shall not
be unreasonably withheld. No such prior written consent shall be required in the sale of the Borrower’s equity securities in a public offering, nor will such consent be required with respect to issuances to the Holder. A change of control will
not be deemed to occur merely through the purchase and sale of any beneficial owners’ then current interest. The centralization of investment for the purpose of obtaining control over the Company must be present for this provision to be a Event
of Default. No Event of Default will occur in the event the Company shall dissolve, liquidate or merge with any other person or entity the Company is the surviving entity, or when the successor entity is solvent and expressly assumes all of the
duties and obligations of the Company and its Subsidiaries under this Agreement and Related Agreements. 
  

 12 

 DEFAULT RELATED PROVISIONS 
  
 4.11 Default Interest Rate. Following the occurrence and during the continuance of an Event of Default, if not cured
within the appropriate time, the Borrower shall pay additional interest on this Note in an amount equal to one percent (1.0%) per month, and all outstanding obligations under this Note, including unpaid interest, shall continue to accrue such
additional interest from the date of such Event of Default until the date such Event of Default is cured or waived. 
  
 4.12 Conversion Privileges. The conversion privileges set forth in Article III shall remain in full force and effect immediately from the date
hereof and until this Note is paid in full. 
  
 4.13 Cumulative
Remedies. The remedies under this Note shall be cumulative during the longest timeline of any relevant period of cure and then only to the extent those Defaults remain outstanding. 
  
 ARTICLE V 
 MISCELLANEOUS 
  
 5.1 Failure or Indulgence Not
Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 
  
 5.2 Notices. Any notice herein required or permitted to be given shall
be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c)
five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Borrower at the address provided in the Purchase Agreement executed in connection herewith, and to the Holder at the address provided in the Purchase Agreement for such Holder, with a copy to John E.
Tucker, Esq., 825 Third Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such
other address as the Borrower or the Holder may designate by ten days advance written notice to the other parties hereto. A Notice of Conversion shall be deemed given when made to the Borrower pursuant to the Purchase Agreement. 
  
 5.3 Amendment Provision. The term “Note” and all reference
thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued pursuant to Section 3.5 hereof, as it may be
amended or supplemented. 
  
 5.4 Assignability. This Note
shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of the Purchase Agreement and with
notice, a legal opinion or such other evidence that the Borrower deems appropriate to determine that the transfer is occurring pursuant to an exemption from registration. This Note shall not be assigned by the Borrower without the consent of the
Holder. 
  

 13 

 5.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the
State of New York, without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. Both parties and the individual signing this Note on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party
its reasonable attorney’s fees and costs. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note.
Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations to Holder, to realize on any
collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the Holder. 
  
 5.6 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess
of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed
by the Borrower to the Holder and thus refunded to the Borrower. 
  
 5.7 Security Interest. The holder of this Note has been granted a security interest in certain assets of the Borrower more fully described in a Master Security Agreement dated as of the date hereof. 
  
 5.8 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor any party against
the other. 
  
 5.9 Cost of Collection. If default is made
in the payment of this Note, the Borrower shall pay to Holder reasonable costs of collection, including reasonable attorney’s fees. 
  
 [Balance of page intentionally left blank; signature page follows.] 
  

 14 

 IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its name effective as of
this 19th day of October, 2004. 
  

			
	Icoria, Inc.
		
	 By:
	 	 /s/ Philip R. Alfano

	 Name:
	 	 Philip R. Alfano

	 Title:
	 	 Vice President, Finance and CFO

  

	
	WITNESS:
	 
	 J. Barry Buzogany

  

 15 

 EXHIBIT A 
  
 NOTICE OF CONVERSION 
  
 (To be executed by the Holder in order to convert all or part of the Note into Common Stock 
  
 [Name and Address of Holder] 
  
 The Undersigned hereby converts $                 of the principal due on [specify
applicable Repayment Date] under the Convertible Term Note issued by Icoria, Inc. dated [Month]     , 2004 by delivery of Shares of Common Stock of Icoria, Inc. on and subject to the conditions set forth in Article III of
such Note. 
  

			
	 1.
	  	Date of
Conversion                                      
      
		
	 2.
	  	Shares To Be
Delivered:                                   
 

  

			
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

  
  

 16

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