Document:

EXECUTIVE EMPLOYMENT AGREEMENT DATED MAY 14, 2004 W/ RICHARD D. KATZ

 Exhibit 10.4 
  
 EXECUTIVE EMPLOYMENT AGREEMENT 
  
 This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of May 14, 2004 by and between Icagen,
Inc. (the “Company”), with offices located at 4222 Emperor Boulevard, Suite 350, Durham, North Carolina 27703, and Richard D. Katz, M.D. (“Executive”), whose address is 209 Sierra Drive, Chapel Hill, NC 27514. 
  
 WITNESSETH: 
  
 WHEREAS, the Company is engaged in certain pharmaceutical research, development and marketing activities; and 
  
 WHEREAS, the Company has employed and wishes to continue to employ Executive
in the position of Chief Financial Officer and Senior Vice President, Finance and Corporate Development and Treasurer, and Executive desires to continue in the employment with the Company; and 
  
 NOW, THEREFORE, in consideration of the foregoing and the provisions and
mutual promises herein contained and other good and valuable consideration, the parties hereby agree as follows: 
  
 1. EMPLOYMENT. The Company hereby engages and employs Executive, and Executive hereby accepts engagement and employment, as Chief Financial Officer and
Senior Vice President, Finance and Corporate Development and Treasurer, of the Company, with such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and any additional duties as may
be assigned to Executive from time to time by the Board of Directors of the Company. 
  
 2. TERM. Executive’s employment shall be for a term beginning as of the date of execution of this Agreement and continuing to and including April 23, 2007 (the “Term”), and thereafter shall be
automatically renewed with additional one (1) year terms to follow consecutively, subject to the termination and severance provisions herein later provided, unless amended or modified by mutual agreement of the parties. As used herein,
“Term” shall include the Initial Term and any renewals thereof in accordance with this Agreement. 
  
 3. EXCLUSIVE SERVICE. Executive agrees to devote Executive’s full time and attention to the performance of Executive’s duties and
responsibilities on behalf of the Company and to comply with all policies and regulations of the Company. 
  
 4. COMPENSATION. During the Term of this Agreement, Executive’s compensation shall be determined and paid as follows: 
  
 (a) Base Salary. Executive shall receive an annual
base salary of at least $220,000.00, payable in accordance with the Company’s payroll practices. Annual increases will be made, if any, based upon performance, and in the sole discretion of the Board of Directors or 

 the Compensation Committee of the Board of Directors (each or collectively, the “Committee”),
such increases to be effective as of April 23 of each year during the Term. 
  
 (b) Bonus. Executive shall be eligible to participate in any management bonus plan established by the Board of Directors from time to time. The determination of the actual bonus earned, if any, shall be at the
sole discretion of the Committee and shall be based upon the Committee’s assessment of Executive’s performance and the achievement of certain objectives which shall be set by the Committee from time to time. Nothing in this section shall
be construed as guaranteeing Executive a bonus in any amount. 
  
 (c) Stock Options. Executive shall be eligible for future stock options as shall be awarded in the discretion of the Committee. 
  
 (d) Benefits. Executive shall be eligible to participate in the Company’s standard employee
benefit programs, including vacation, made available to employees of the Company from time to time, subject to appropriate premium contributions, benefit elections, etc. 
  
 (e) Business Expenses. The Company shall reimburse Executive for all reasonable expenses incurred in
the furtherance of the Company’s business and interests, including travel and entertainment. Executive agrees to comply with the expense reporting policies and procedures of the Company. 
  
 (f) Adequate Office Space. The Company shall provide
to Executive adequate office space, facilities, and administrative support appropriate to Executive’s position. 
  
 (g) Disability. The Company will pay Executive as additional compensation an amount equal to the premium costs of an individual
long term disability insurance plan. The plan shall provide for a benefit indemnity payment schedule equal to 60% of Executive’s annual base salary rate. The Company shall also pay Executive as additional salary for such long term disability
plan, an amount sufficient to cover the additional income taxes owed on such compensation payments. 
  
 (h) Estate Planning and Similar Costs. During the term of this Agreement, the Company will reimburse Executive for up to $10,000 in
legal fees and expenses incurred by Executive in connection with (A) estate and tax planning, and (B) the establishment and administration of a Rule 10b5-1 securities selling program. 
  
 5. TERMINATION. This Agreement shall or may be terminated, as the case may
be, upon the terms and conditions hereinafter provided. 
  
 (a) Voluntary Termination. This Agreement shall be considered voluntarily terminated by the parties if either party provides written notice of such party’s intent not to renew this Agreement, provided that such party shall
provide at least one hundred eighty (180) days’ written notice to the other party. 
  
 (b) Involuntary Termination. The Company may terminate this Agreement upon written notice to Executive (or Executive’s
representative) in any of the following events: 
  

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 (i) The death of Executive; 
  
 (ii) Executive becomes permanently disabled; or 

 
 (iii) For Cause, immediately upon written notice to
Executive. “Cause” shall be determined by the Board of Directors and shall mean: 
  
 A. Any material breach of Executive of the terms of this Agreement or any non-disclosure, invention, non-competition or non-solicitation
agreement between Executive and the Corporation; or 
  
 B. The failure of Executive to diligently and properly perform Executive’s duties for the Corporation, such breach or failure to be determined in the reasonable and final judgment of the Board of Directors of the Corporation and which
breach or failure is not corrected within thirty (30) days after written notice of such failure by the Board of Directors; or 
  
 C. Any material failure by Executive to comply with the reasonable policies and/or directives of the Board of Directors, which failure is
not corrected within thirty (30) days after written notice of such failure by the Board of Directors; or 
  
 D. Any action by Executive that is illegal or dishonest which is materially detrimental to the interest and well-being of the
Corporation; or 
  
 E. Any willful and knowing
violation of any rules or regulations of any governmental or regulatory body, which is materially detrimental to the interest and well-being of the Corporation; or 
  
 F. Any failure by Executive to fully disclose any material conflict of interest Executive may have with the
Corporation in a transaction between the Corporation and any third party which is materially detrimental to the interest and well-being of the Corporation; or 
  

G. Any adverse act or omission by Executive which would be required to be disclosed pursuant to applicable securities laws or which
would limit the ability of the Corporation or any entity affiliated with the Corporation to issue or sell securities under any Federal or state law or which would disqualify the Corporation or any affiliated entity from any exemption otherwise
available to it, all of which are materially detrimental to the interest and well-being of the Corporation. 
  
 (c) Obligations upon Certain Terminations. Upon voluntary termination of this Agreement by Executive, or termination of
Executive’s employment by the Company for Cause (as defined above) or upon Executive’s death or disability, or termination by Executive for other than Good Reason (as defined below), the Company shall have no further obligations hereunder
other than the payment of all compensation and other benefits payable to Executive 
  

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 through the date of such termination and the payment of any amounts due pursuant to the last sentence of
Section 4(g) hereof and pursuant to Section 5(f) hereof. 
  
 (d) Severance. In the event of termination of Executive’s employment (i) by the Company for reasons other than Cause other than by reason of Executive’s death or disability, or (ii) by Executive for
Good Reason, Executive shall receive, as partial consideration for the covenants of Executive set forth in the agreement referenced in Section 6 hereof, a severance payment (the “Severance Benefit”) in an amount equal to twelve (12)
month’s base salary if such termination occurs prior to April 23, 2005 and eighteen (18) months if such termination occurs on or after April 23, 2005, payable in accordance with the Company’s regular payroll schedule. Executive shall also
continue to be entitled to receive all Company medical and dental insurance, life insurance and disability insurance benefits (including the disability insurance benefits and payments specified in Section 4(g) hereof) to which Executive was entitled
as of the date of termination (the “Continuing Benefits”), subject to the terms of all applicable benefit plans and to the extent such benefits can be provided to non-employee (or to the extent such benefits cannot be provided to
non-employees, then the cash equivalent thereof), at the same average level and on the same terms and conditions which applied immediately prior to the date of Executive’s termination, for the shorter of (i) twelve (12) months following the
date of such termination if such termination occurs prior to April 23, 2005 and eighteen (18) months if such termination occurs on after April 23, 2005, or (ii) until Executive obtains comparable coverage from another employer. At any time during
the severance period, the Company may elect to pay a lump sum amount to Executive which represents the reasonable value of the Severance Benefit and/or the Continuing Benefits reduced to their present value in lieu of continuing payment of such
benefits. Such present value calculation shall be made by an independent consultant with expertise in such matters reasonably acceptable to the Company and Executive. The Company shall also pay to Executive any payments due pursuant to the last
sentence of Section 4(g) hereof and pursuant to Section 5(f) hereof. 
  
 In the event of the termination of Executive’s employment by the Company pursuant to Section 5(a) hereof, the Severance Benefits and the Continuing Benefits specified above in this Section 5(d) shall apply but,
wherever “eighteen (18) months” appears, it shall be amended to read as “twelve (12) months”. 
  
 (e) Good Reason. For purposes of this Agreement, “Good Reason” shall mean, the occurrence, without the consent of
Executive, of any of the following events, unless, in the case of (i), (ii), (iii), (iv) and (v) below, such event is corrected within thirty (30) days after written notification by Executive to the Company of the same: (i) the office from which
Executive performs Executive’s principal duties is moved more than 50 miles from the current location of the Company’s offices in Durham, North Carolina; (ii) the assignment to Executive of duties inconsistent in any material respect with
Executive’s position (including status, offices, titles and reporting requirements), authority or responsibilities; (iii) the Company materially breaches its obligations under this Agreement; (iv) a reduction in the Executive’s annual base
salary as in effect on the date hereof or as the same was or may be increased thereafter from time to time; (v) the failure of the Company to obtain the agreement from any successor to the Company to assume and agree to perform this Agreement; or
(vi) a Change of Control (as defined below) occurs and Executive notifies the Company in writing within one (1) year of the consummation of such Change of Control that Executive intends to terminate Executive’s employment as a result of the
Change of Control, in which event such termination shall be effective not less than sixty (60) days after the date of such written notice. 
  

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 (f) Tax Gross-Up for Parachute Payments. 
  
 (A) If at any time or from time to time it shall be
determined that any payment to Executive pursuant to this Agreement or any other payment or benefit hereunder or under any other plan or agreement or otherwise (“Potential Parachute Payment”) would constitute an “excess parachute
payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and thus would be subject to the excise tax imposed by Section 4999 of the Code or any similar tax payable under any United
States federal, state, local, foreign or other law (“Excise Tax”), then Executive shall receive and the Company shall pay or cause to be paid a Tax Gross-Up Payment with respect to all Taxes (as defined below). The Tax Gross-Up Payment is
intended to compensate Executive for all such excise taxes and federal, state, local, foreign or other income, employment or excise taxes or other taxes (“Taxes”) payable by Executive with respect to the Tax Gross-Up Payment (subject to
the maximum amount set forth in clause (ii) below) and shall be the lesser of: (i) an amount such that after payment of Taxes on such amount there remains a balance sufficient to pay the taxes being reimbursed or (ii) $50,000. For purposes of
determining the amount of the Tax Gross-Up Payment, Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Tax Gross-Up
Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive’s residence (or, if greater, the state and locality in which Executive is required to file a nonresident
income tax return with respect to the Potential Parachute Payment), net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. 
  
 (B) The determinations to be made under this Section 5(f)
shall be made by the Company’s independent public accountants (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations both to the Company and to Executive. Any such determination by the
Accounting Firm shall be binding upon the Company and Executive. All fees and expenses of the Accounting Firm in performing the determinations referred to in this Section 5(f) shall be borne solely by the Company, and the Company shall indemnify and
hold harmless the Accounting Firm of and from any and all claims, damages and expenses resulting therefrom, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm. 
  
 (g) Disability. For purposes of this Agreement,
Executive shall be considered permanently disabled when a qualified medical doctor mutually acceptable to the Company and Executive or Executive’s personal representative shall have certified in writing that: (i) Executive is unable because of
medically determinable physical or mental disability to perform substantially all of Executive’s duties for more than one hundred eighty (180) calendar days measured from the last full day of work; or (ii) by reason of mental or physical
disability, it is unlikely that Executive will be able, within one hundred eighty (180) calendar days, to resume 
  

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 substantially all business duties and responsibilities in which Executive was previously engaged and
otherwise discharge Executive’s duties under this Agreement. 
  
 (h) Change of Control. For purposes of this Agreement, a “Change of Control” shall mean: 
  
 (i) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of 1934, as
amended) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act of 1934, as amended)
30% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Corporation Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Corporation Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control
Event: (A) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (B) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition;
or 
  
 (ii) such time as the Continuing Directors
(as defined below) do not constitute a majority of the Board of Directors, (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the
Board of Directors (x) who was a member of the Board of Directors on the date hereof or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board of Directors was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be
excluded from this clause (y) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of
proxies or consents, by or on behalf of a person other than the Board of Directors; or 
  
 (iii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial owners of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities immediately prior to such Business Combination 
  

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 beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock
and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation,
a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the
“Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, respectively, immediately prior to such Business
Combination and (y) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such
ownership existed prior to the Business Combination); or 
  
 (iv) a complete liquidation or dissolution of the Company. 
  
 (i) Resignation from Board of Directors. In the event that Executive is terminated pursuant to this Section 5 or upon termination
of this Agreement, Executive agrees to tender his resignation as a member of the Board of Directors of the Company as of the date of such termination. 
  
 6. NON-DISCLOSURE, INVENTIONS AND NON-COMPETITION. Executive shall execute and be bound by the terms of the Company’s standard non-disclosure,
inventions and non-competition agreement in the form attached hereto as Exhibit A and incorporated herein by reference. 
  
 7. NOTICES. Any notice required to be given shall be in writing personally delivered by certified mail or registered mail or by facsimile (receipt
confirmed) to the address last shown in the Company’s records. 
  
 8. SEVERABILITY. The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision (or part thereof) of this Agreement shall in no way affect the validity or enforceability of any other
provision (or remaining part thereof). 
  
 9. GOVERNING LAW. This
Agreement shall be governed by and construed according to the laws of the State of North Carolina, without reference to the choice of law provisions of such laws. 
  
 10. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and
the parties hereto have made no agreements, representations, or warranties relating to the subject matter of this Agreement which are not set forth herein. In particular, the Agreement supercedes in its entirety the Severance Payment Agreement dated
February 9, 2004 between Executive and the Company. No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto. 
  

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 11. BENEFIT. This Agreement shall be binding upon and inure to the benefit of both parties and their
respective successors and assigns, including any corporation or other entity with which or into which the Company may be merged or which may succeed to its assets or business; provided, however, that the obligations of Executive are personal and
shall not be assigned by Executive. 
  
 12. INJUNCTIVE RELIEF.
Executive understands and agrees that the Company will suffer irreparable harm in the event that Executive breaches any of Executive’s obligations under this Agreement and that monetary damages will be inadequate to compensate the Company for
such breach. Accordingly, Executive agrees that, in the event of a breach or threatened breach by Executive of any of the provisions of this Agreement, the Company, in addition to and not in limitation of any other rights, remedies, or damages
available to the Company at law or in equity, shall be entitled to a permanent injunction in order to prevent or to restrain any such breach by Executive, or by Executive’s partners, agents, representatives, servants, employers, employees
and/or any and all persons directly or indirectly acting for or with Executive; provided such injunction shall not affect Executive’s ownership rights in the Company or compensation earned or due Executive. 
  
 [Remainder of this page left blank intentionally.] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Executive Employment Agreement and affixed
their seals as of the day and year first above written. 
  

			
	 EMPLOYER:
  
 ICAGEN, INC.

		
	 By:
	 	 /s/    P. Kay Wagoner

	 	 	 P. Kay Wagoner, President and
 Chief Executive Officer

  

			
	
	  
 EMPLOYEE:

	
	 /s/    Richard D. Katz

	Richard D. Katz, M.D.

  
  
  
  
  

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 EXHIBIT A 
  

COVENANT NOT TO COMPETE, CONFIDENTIALITY 
 AND 
 OWNERSHIP OF INVENTIONS AGREEMENT 
  
 THIS AGREEMENT is made to be effective as of the
             day of                     ,
200     (the “Effective Date”), by and between ICAgen, Inc., a Delaware corporation (the “Corporation”), and
                                     (the
“Employee”), an individual residing in              County,
                                        .

  
 W I T N E S S E T H: 
  
 WHEREAS, Corporation wishes to employ Employee and Employee wishes to be
employed by Corporation; and 
  
 WHEREAS, as a part of
Employee’s employment by the Corporation, Employee is expected to make new contributions and inventions of value to the Corporation and Employee will otherwise have access to confidential and proprietary information of the Corporation; and

  
 WHEREAS, the Corporation is engaged in all aspects of
pharmaceutical research and development and contemplates expanding the scope of its business to include manufacturing, marketing and sales of pharmaceutical products; and 
  
 WHEREAS, as a condition of extending an offer of employment to Employee and as a part of the original contract of employment
with Employee the Corporation requires that Employee enter a covenant not to compete and not to disclose certain information relating to the Corporation’s business and certain other covenants; 
  
 NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and of other good and valuable consideration, including the employment of Employee by the Corporation, and the compensation received by Employee from the Corporation from time to time, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows: 
  
 1. CONFIDENTIALITY. 
  
 (a) Employee acknowledges that, in and as a result of his/her employment by the Corporation, he/she will be making use of, acquiring and/or adding to
confidential information of a special and unique nature and value, including, without limitation, the Corporation’s trade secrets, products, systems, programs, procedures, manuals, guides (as periodically updated or supplemented), confidential
reports and communications (including, without limitation, customer information, technical information on the performance and reliability of the Corporation’s products and the development or acquisition of future products or product
enhancements by the Corporation), formulas, and lists of customers and suppliers and potential customers and suppliers. Employee further acknowledges that any information and materials received by the Corporation or Employee from third parties in
confidence (or subject to 

 non-disclosure covenants) shall be deemed to be and shall be confidential information within the meaning of this Section
l(a). As a material inducement to the Corporation to employ Employee and to pay to Employee compensation for such services to be rendered to the Corporation by Employee (it being understood and agreed by the parties hereto that such compensation
shall also be paid and received in consideration hereof), Employee covenants and agrees that he/she shall not, except with the prior written consent of the Board of Directors of the Corporation, at any time during or following the termination of
his/her employment with the Corporation, directly or indirectly, divulge, use, reveal, report, publish, transfer or disclose, for any purpose whatsoever, any of such confidential information which has been obtained by or disclosed to his/her as a
result of his/her employment with the Corporation, including, without limitation, any Proprietary Information, as defined in Section 3 hereof. 
  
 (b) The aforementioned obligation of confidentiality and non-disclosure shall not apply when: 
  
 (i) Public Domain. The Proprietary Information disclosed to Employee
was in the public domain at the time of disclosure, or at any time after disclosure has become a part of the public domain by publication or otherwise through sources other than Employee, directly or indirectly, and without fault on the part of
Employee in failing to keep such information confidential; or 
  
 (ii) Requirement of Law or Order. Disclosure is required by law or court order, provided Employee gives the Corporation prior written notice of any such disclosure and takes all reasonable effort to maintain the confidentiality of
such Proprietary Information; or 
  
 (iii) Agreement.
Disclosure is made with the prior written agreement of the Board of Directors of the Corporation; or 
  
 (iv) Prior Information. The information is encompassed by the ideas and inventions listed on Schedule A hereto or was in Employee’s
possession prior to the Effective Date, as shown by written records in existence prior to the Effective Date; or 
  
 (v) Third Party Disclosure. The Proprietary Information is lawfully disclosed to Employee after the termination of his/her employment by a third
party who is under no obligation of confidentiality to the Corporation with respect to such information; or 
  
 (vi) Independent Development. Such information is independently developed by Employee subsequent to the termination of his/her employment with the
Corporation, as demonstrated by written records of Employee which are contemporaneously maintained. 
  
 2. COVENANT NOT TO COMPETE. It is recognized and understood by the parties hereto that Employee, through his/her association with the Corporation
as an employee, shall acquire a considerable amount of knowledge and goodwill with respect to the business of the Corporation, which knowledge and goodwill are extremely valuable to the Corporation and which would be extremely detrimental to the
Corporation if used by Employee to compete with 
  

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 the Corporation. It is, therefore, understood and agreed by the parties hereto that, because of the nature of the
business of the Corporation, it is necessary to afford fair protection to the Corporation from such unfair competition by Employee. Consequently, as a material inducement to employ Employee, Employee covenants and agrees to the following;

  
 (a) that at any time while engaged as an employee of the
Corporation and for a period of two (2) years following his/her termination as an employee, he/she will not, directly or indirectly, with or through any family member or former director, officer or employee of the Corporation, or acting alone or as
a director, employee, agent, consultant, member of a partnership, firm, corporation or other entity or as a holder of or investor in 5% or more of any security of any class of any corporation or other business entity: 
  
 (i) perform or provide services for any customer of the Corporation which
are the same or substantially similar to the services performed or provided by Employee for such customers on behalf of the Corporation within twelve (12) months prior to the end of Employee’s employment with the Corporation; or 
  
 (ii) interfere with, or seek to interfere with, the relationship between the
Corporation, or any affiliate of the Corporation, and any of the following: (a) any of the employees of the Corporation or any affiliate of the Corporation; (b) any of the customers of the Corporation or any affiliate of the Corporation then
existing or existing at any time within three years prior to termination of Employee’s employment with the Corporation; or (c) any of the suppliers of the Corporation or any affiliate of the Corporation then existing or existing at any time
within three (3) years prior to termination of Employee’s employment with the Corporation; or 
  
 (iii) perform or provide services in the Noncompetition Area for any competing business which are the same or substantially similar to the services
performed or provided to the Corporation by Employee within twelve (12) months prior to the end of employment with the Corporation, including ion channel therapeutic projects and processes that constitute technologies in research and/or development
by the Corporation for its own use or which are proprietary to or trade secrets of the Corporation. With respect to the covenant contained in this paragraph 2 (a) (iii), it is acknowledged by Employee that the Corporation’s competitors in
research and development of ion channel therapeutics are located throughout the world and compete in a worldwide market, and that unfair competition can be prevented only by enforcing this specific covenant on a worldwide basis. This covenant is not
intended to prevent Employee from working for such a competing business by rendering services to a division or subsidiary not involved in ion channel therapeutics or technologies practiced, under development or reasonably contemplated for
development by the Corporation. 
  
 (b) For the purpose of this
Agreement, the “Noncompetition Area” shall be (i) the entire world; (ii) North America; (iii) the United States of America; (iv) each state in which the Corporation does business or did business at any time within three (3) years prior to
the termination of the undersigned’s engagement by The Corporation; and (v) the State of North Carolina. If a court of competent jurisdiction determines that the Noncompetition Area described above in subparagraph (i) is too restrictive, then
the parties agree that the 
  

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 Noncompetition Area shall be the area specified in subparagraph (ii). If a court of competent jurisdiction determines
that the Noncompetition Area as set forth in subparagraphs (i) and (ii) above are too restrictive, then the parties agree the Noncompetition Area shall be reduced to the area specified in each of the following subsections and in the following order
until the court determines an acceptable geographic area: subparagraphs (iii), (iv) or (v). If the court determines that all of the geographic areas mentioned above are too restrictive, then the parties agree that the court may reduce or limit the
area to enable the intent of this Section to be enforced in the largest acceptable area. 
  
 (c) The parties hereto agree that, in the event that the length of time set forth in paragraph (a) above is deemed too restrictive in any court proceeding, the court may reduce such restrictions to those which it
deems reasonable under the circumstances. 
  
 3. DEFINITION OF
PROPRIETARY INFORMATION. For purposes of this Agreement, the term “Proprietary Information” shall mean all of the following materials and information (whether or not reduced to writing and whether or not patentable or protectable by
copyright) which Employee receives, receives access to, conceives of, discovers, or develops, in whole or in part, as a direct or indirect result of his/her employment with the Corporation, in the course of his/her employment with the Corporation
(in any capacity, whether employee, managerial, planning, technical, sales, research, development, manufacturing, engineering, or otherwise) or through the use of any of the Corporation’s facilities or resources: 
  
 (a) Discoveries, concepts and ideas, whether or not patentable or
protectable by copyright, including, without limitation, the nature and results of research and development activities, pharmaceutical information, technical information on product or product performance and reliability, processes, formulas,
techniques, “know-how”, source codes, object codes, measurements, weights, designs, drawings and specifications; 
  
 (b) Any manufactured products or components thereof and related goods or systems thereof and any and all future products developed or derived therefrom;

  
 (c) With respect to the items described in Section 3(b) above,
all hardware and software relating to their design or manufacture; all source and object codes to such hardware and software; all specifications, design concepts, documents and manuals; all security systems relating to the product or procedures,
including, without limitation, software security systems; 
  
 (d)
Trade secrets, production processes, marketing techniques, software programs, marketing plans, formulae, data, mailing lists, purchasing information, price lists, pricing policies, quoting procedures, financial information, customer and prospect
names and requirements, customer data, customer site information, pricing strategies and other materials or information relating to the manner in which the Corporation does business; 
  
 (e) Any other materials or information related to the business or activities of the Corporation which are not generally
known to others engaged in similar businesses or activities; 
  

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 (f) Any other materials or information that has been created, discovered or developed, or otherwise
become known to the Corporation which has commercial value in the business in which the Corporation is engaged; and 
  
 (g) All ideas which are derived from or relate to Employee’s access to or knowledge of any of the above-enumerated materials and information.

  
 Failure to mark any of the Proprietary Information as
confidential shall not affect its status as Proprietary Information under the terms of this Agreement. 
  
 4. OWNERSHIP OF INVENTIONS. 
  
 (a) Employee hereby assigns to the Corporation all of Employee’s right, title and interest in any idea (whether or not patentable or protectable by
copyright), invention, pharmaceutical research, development or design, computer software program or other computer-related equipment or technology, discoveries, improvements, formulae, processes, techniques, programs, know how, data, or other
information of possible technical or commercial importance relating to the Corporation’s business or the Corporation’s anticipated business or based on, derived from or relating to any Proprietary Information, conceived or developed in
whole or in part, or in which Employee may have aided development, while employed by the Corporation, including, without limitation, any Proprietary Information (collectively, “Work Product”). If any one or more of the aforementioned are
deemed in any way to fall within the definition of “work made for hire” as such term is defined in 17 U.S.C. §101, such work shall be considered “work made for hire,” copyright of which shall be owned solely by, or assigned
or transferred completely and exclusively to the Corporation. Employee agrees to execute any instruments and to do all other things reasonably requested by the Corporation (both during and after Employee’s employment with the Corporation) in
order to more fully vest in the Corporation all ownership rights in those items thereby transferred by Employee to the Corporation. Employee further agrees to disclose immediately to the Corporation all Proprietary Information conceived of or
developed in whole or in part by him/her during the term of his/her employment with the Corporation and to assign to the Corporation any right, title or interest he/she may have in such Proprietary Information. 
  
 (b) The undersigned hereby designates and appoints the Corporation and its
duly authorized officers and agents as its agents and attorneys-in-fact to execute and file any certificates, applications or documents and to do all of their lawful acts necessary to protect the Corporation’s rights in the Work Product. The
undersigned expressly acknowledges that the foregoing power of attorney is coupled with an interest and is therefore irrevocable and shall survive his or her death or incompetency and the termination of his or her engagement by The Corporation.

  
 (c) Notwithstanding anything in this Agreement to the
contrary, the obligation of Employee to assign or offer to assign his/her rights in an invention to the Corporation shall not extend or apply to an invention that Employee developed entirely on his/her own time without using the Corporation’s
equipment, supplies, facility or trade secret information unless such 
  

 5 

 invention (i) relates to the Corporation’s business or actual or demonstrably anticipated research or development,
or (ii) results from any work performed by Employee for the Corporation. Employee shall bear the burden of proof in establishing that his/her invention qualifies for exclusion under this Section 4(c). With respect to Section 4(c) it is agreed and
acknowledged that during Employee’s employment, the Corporation may enter other lines of business, which are related or unrelated to its current lines of business, in which case this Agreement would be expanded to cover such new lines of
business. 
  
 (d) Employee hereby represents and warrants that
Employee has fully disclosed to the Corporation on Schedule A hereto any idea, invention, improvement, computer software program or other equipment or technology related to ion channel therapeutics (“Inventions or Improvements”) not
covered in Section 4(a) above which, prior to his/her employment with the Corporation, Employee conceived of or developed, wholly or in part, and in which Employee has any right, title or proprietary interest and which is directly related to the
Corporation’s business, but which has not been published or filed with the United States Patent or Copyright Offices or assigned or transferred to the Corporation, and which Employee desires to remove from the operation of this Agreement. If
there is no such list on Schedule A, Employee represents that Employee has made no such Inventions or Improvements at the time of signing this Agreement or Employee hereby assigns such Inventions or improvements to the Corporation.

  
 5. EMPLOYEE REPRESENTATIONS. 
  
 (a) Employee represents that his/her performance of all of the terms of this
Agreement and as an employee does not and will not breach any agreement to keep in confidence proprietary information acquired by Employee in confidence or in trust prior to Employee’s employment by the Corporation. Employee represents that
he/she has not entered into, and agrees not to enter into, any agreement either oral or written in conflict herewith. 
  
 (b) Employee understands as part of the consideration for the offer of employment extended to Employee by the Corporation and of Employee’s
employment or continued employment by the Corporation, that Employee has not brought and will not bring with Employee to the Corporation, or use in the performance of Employee’s responsibilities for the Corporation, any materials or documents
of a former employer which are not generally available to the public, unless Employee has obtained written authorization from the former employer or other owner for their possession and use and provided the Corporation with a copy thereof.
Accordingly, Employee has advised the Corporation that the only materials or documents of a former employer or other person or entity which are not generally available to the public that Employee has brought or will bring to the Corporation or has
used or will use in Employee’s employment are identified in Schedule B attached hereto. As to each such item, Employee represents that Employee has obtained prior to the Effective Date written authorization for their possession and use
in Employee’s employment with the Corporation. 
  
 (c)
Employee understands that during his/her employment for the Corporation he/she is not to breach any obligation of confidentiality that Employee has to a former employer or any other person or entity. 
  

 6 

 6. INDEMNIFICATION. Employee agrees to indemnity and hold harmless the Corporation, its directors,
officers, agents and employees against any liabilities and expenses, including amounts paid in settlement, incurred by any of them in connection with any claim by any of Employee’s prior employers that the termination of Employee’s
employment with such employer, Employee’s employment by the Corporation, or use of any skills and knowledge of the undersigned by the Corporation is a violation of contract or law. 
  
 7. RECORDS. All notes, data, tapes, reference materials, sketches, drawings, memoranda, models and records in any way
relating to any of the information referred to in Sections 1, 2, 3 and 4 hereof (including without limitation, any Proprietary Information) or to the Corporation’s business shall belong exclusively to the Corporation and Employee agrees to turn
over to the Corporation all such materials and all copies of such materials in his/her possession or then under his/her control at the request of the Corporation or, in the absence of such request, upon the termination of Employee’s employment
with the Corporation. 
  
 8. REASONABLENESS OF
RESTRICTIONS. 
  
 (a) Employee has carefully read and
considered the provisions of Paragraphs 1, 2, 3 and 4 hereof and, having done so, agrees that the restrictions set forth therein are fair and reasonable and are reasonably required for the protection of the interests of the Corporation, its
officers, directors, stockholders and employees. Employee further acknowledges that the nature of the Corporation’s products and services are such that its natural market is worldwide. Accordingly, Employee agrees that the length of time,
geographic area and any other restrictions contained in this Agreement are reasonable to protect the legitimate interests of the Corporation and do not unfairly restrict or penalize Employee. 
  
 (b) In the event that, notwithstanding the foregoing, any part of the
covenants set forth in Sections 1 through 7 hereof shall be held to be invalid and unenforceable, the court so deciding shall interpret such provisions in a manner so as to enforce them to the fullest extent of the law. 
  
 9. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such terms, covenants or conditions, nor shall any waiver or relinquishment of any right or power granted hereunder at any particular time be deemed a waiver or relinquishment of
such rights or power at any time or times. Each party agrees and acknowledges that nothing herein shall be construed to prohibit the other party from pursuing any remedies available to it for breach or threatened breach of this Agreement, including
the recovery of money damages. 
  
 10. REMEDY. Employee
understands and agrees that the Corporation will suffer irreparable harm in the event that Employee breaches any of his/her obligations under this Agreement and that monetary damages will be inadequate to compensate the Corporation for such breach.
Accordingly, Employee agrees that, in the event of a breach or threatened breach by Employee of any of the provisions of this Agreement, the Corporation, in addition to and not in limitation of any other rights, remedies or damages available to the
Corporation at law or in 
  

 7 

 equity, shall be entitled to a permanent injunction in order to prevent or to restrain any such breach by Employee, or by
Employee’s partners, agents, representatives, servants, employers, employees and/or any and all persons directly or indirectly acting for or with him. 
  
 11. RECOUPMENT OF PROFITS. Employee covenants and agrees that, if he/she shall violate any of his/her covenants or agreements under this Agreement,
the Corporation shall be entitled to an accounting and repayment of all profits, compensation, commissions, remunerations or benefits which Employee directly or indirectly has realized and/or may realize as a result of, growing out of or in
connection with any such violation; such remedy shall be in addition to and not in limitation of any other remedy, including without limitation, damages for lost profits of the Corporation or any affiliates of the Corporation, injunctive relief or
other rights or remedies to which the Corporation is or may be entitled at law, in equity or under this Agreement. 
  
 12. EMPLOYMENT AT WILL. Employee understands and agrees that this Agreement is not intended to nor does it create any employment contract for a
specified term, and Employee’s employment may be terminated by either the Employee or the Corporation at any time, with or without cause. The Corporation shall have no liability to Employee in the event of said termination, except for
compensation accrued and unpaid at the time of termination. 
  
 13. SEVERABILITY. The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision (or part thereof) of this Agreement shall in no way affect the validity or enforceability of any
other provision (or remaining part thereof). 
  
 14. GOVERNING
LAW. This Agreement shall be governed by and construed according to the laws of the State of North Carolina, without reference to the choice of law provisions of such laws. 
  
 15. NOTICES. Any notice required to be given hereunder shall be sufficient if in writing and sent by certified or
registered mail, return receipt requested, first-class postage prepaid, in the case of Employee, to his/her address as shown on the Corporation’s records, and in the case of the Corporation, to its principal office in the State of North
Carolina. 
  
 16. BENEFIT. This Agreement shall be binding
upon and shall inure to the benefit of each of the parties hereto, and to their respective heirs, representatives, successors and permitted assigns. This Agreement shall be binding upon the Corporation and upon any successor corporation. Employee
may not assign any of his/her rights or delegate any of his/her duties under this Agreement. 
  
 17. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understandings by and between the Corporation and Employee with respect to the covenants herein described, and no representations,
promises, agreements or understandings with respect to the covenants herein described, written or oral, not herein contained shall be of any force or affect. No change or modification hereof shall be valid or binding unless the same is in writing
and signed by the parties hereto. No waiver of any provision of this Agreement shall be valid unless the same is in writing and signed by the party against whom such waiver is sought to be 
  

 8 

 enforced; moreover, no valid waiver of any other provision of this Agreement at any time shall be deemed a waiver of any
other provision of this Agreement at such time nor will it be deemed a valid waiver of such provision at any other time. 
  
 18. CAPTIONS. The captions in this Agreement are for convenience only and in no way define, bind or describe the scope or intent of this Agreement.

  
 19. SURVIVAL OF COVENANTS. The provisions set forth in
Sections 1 through 20 hereof shall survive the termination of this Agreement. 
  
 20. ARBITRATION AND EQUITABLE RELIEF. 
  
 (a) Arbitration. Except as provided in Section 20(b) below, the undersigned agrees that any dispute or controversy arising out of, relating to, or concerning any interpretation, construction, performance or breach of
this Agreement, shall be settled by arbitration to be held in accordance with the Employment Dispute Resolution Rules then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The Corporation and the undersigned
shall each pay their own respective attorneys’ fees and one-half of the costs and expenses of such arbitration (provided, however, that if the arbitrator finds that the arbitration action was brought or defended other than in good faith and
with a reasonable basis in fact, the non-prevailing party shall pay all such costs and expenses of arbitration and the other party’s attorneys’ fees and expenses). 
  
 This arbitration clause constitutes a waiver of the undersigned’s right to a jury trial and relates to the resolution
of all disputes relating to all aspects of the employer/employee relationship (except as provided in Section 20(b) below), including, but not limited to, the following claims. 
  
 (i) Any and all claims for wrongful discharge of employment; breach of contract, both express and implied; breach of the
covenant of good faith and fair dealing, both express and implied; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; and defamation; 
  
 (ii) Any and all claims for
violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of
1990, the Fair Labor Standards Act, and Labor Code Section 201, et seq.; 
  
 (iii) Any and all claims arising out of any other laws and regulations relating to employment or employment discrimination. 
  
 (b) Equitable Remedies. The undersigned agrees that it would be impossible or inadequate to measure and calculate The Corporation’s damages from any
breach of the 
  

 9 

 Agreement. Accordingly, the undersigned agrees that if the undersigned breaches any of such sections, The Corporation
will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and to obtain specific performance of any such provision
of this Agreement. The undersigned further agrees that no bond or other security shall be required in obtaining such equitable relief and the undersigned hereby consents to the issuance of such injunction and to the ordering of specific performance.

  
 (c) Consideration. The undersigned understands that each
party’s promise to resolve claims by arbitration in accordance with the provisions of this Agreement, rather than through the courts, is consideration for the other party’s like promise. The undersigned further understands that the
undersigned is offered employment in consideration of the undersigned’s promise to arbitrate claims. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement and affixed their seals the day and year first above written. 
  

					
	 EMPLOYEE:
	 	 ICAGEN, INC.

			
	  

	 	 By:
	 	  

	 Print Name:

	 	 Name:
	 	  

	 	 	 Title:
	 	  

  

 10 

 SCHEDULE A 
  

The following items are inventions, ideas, computer software programs or other equipment or technology not covered by Section 4 of this Agreement, which the
undersigned conceived of or developed, wholly or in part, prior to his or her engagement with The Corporation and shall be excluded from the scope of this Agreement. 
  
 If the undersigned has no such items to disclose, write “NONE” on this line: 
  
                                       
      . 
  
 Description of Items: (if applicable)

  

 11 

 SCHEDULE B 
  

Materials or Documents of Former Employer 
  

 12Master Loan and Security Agreement, dated July 14, 1999

 EXHIBIT 10.13 
  
 MASTER LOAN AND SECURITY AGREEMENT 
  

	 No. 7688 
	 Dated July 14, 1999 

  

			
	 LENDER:
	  	CUSTOMER:
	 OXFORD VENTURE FINANCE, LLC
 a Virginia limited liability corporation
	  	 ICAGEN, INC.
 a Delaware corporation

		
	 Address:
	  	Address:
	 133 North Fairfax Street
 Alexandria, Virginia 22314
	  	 4222 Emperor Blvd
 Durham, NC 27703

  
 In consideration of
each Loan Agreement, Customer hereby agrees with Lender that, whenever Customer shall be at any time or times directly or contingently indebted, liable or obligated to Lender in any manner whatsoever, Lender shall have the following rights:

  
 1. DEFINITIONS. To the extent not otherwise specifically
defined in this Agreement, unless the context otherwise requires, all other terms contained in this Agreement shall have the meanings assigned or referred to them in the UCC. The following terms shall have the following meanings: 
  
 “Acceptance Date” with respect to each item of Equipment shall
have the meaning assigned to such term in Section 3 of this Agreement. 
  
 “Affiliate” shall mean, with respect to any person, firm or entity, any other person, firm or entity controlling, controlled by, or under common control with such person, firm or entity; for the purposes hereof “control”
shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any such person, firm or entity, whether through the legal or beneficial ownership of voting securities, by contract
or otherwise. 
  
 “Agreement” shall mean this Master
Loan and Security Agreement, as amended or modified from time to time. 
  
 “Attorneys’ Fees and Expenses” shall mean all reasonable attorneys’ fees and legal costs and expenses (including, without limitation, those fees, costs and expenses incurred in connection with bankruptcy proceedings,
including Relief from Stay Motions, Cash Collateral Motions and disputes concerning any proposed disclosure statement and/or bankruptcy plan). 
  
 “Collateral” shall mean all Equipment and any licenses, trademarks or other tangible or intangible property ancillary to the Equipment and all
products, proceeds, rents and profits therefrom or thereof including proceeds in the form of goods, accounts, chattel paper, documents, instruments and insurance proceeds. 
  
 “Default” shall have the meaning ascribed to such term in Section 8 of this Agreement. 
  
 “Equipment” shall mean one or more items or units of personal
property now owned or hereafter acquired by Customer, as described in each Equipment Schedule, wherever the same may be located, including all present and future additions, attachments, accessions and accessories thereto and all replacements,
substitutions and a right to use license for any software related to any of the foregoing and proceeds thereof, including all proceeds of insurance thereon. 
  
 “Equipment Schedule” shall mean each Equipment Schedule, which incorporates by reference the terms and conditions of this Agreement and
describes one or more items of Equipment and specific terms and conditions with respect thereto. 
  
 “Event of Default” shall have the meaning ascribed to such term in Section 8 of this Agreement. 
  
 “Loan Agreement” shall mean the applicable Equipment Schedule
incorporating the terms and conditions of this Agreement, including all exhibits, addenda, schedules, certificates, riders and all other documents and instruments executed and delivered in connection with the applicable Equipment Schedule or this
Master Loan and Security Agreement. 
  

 Page 1 

 “Note” shall mean a promissory note of Customer in favor of Lender evidencing Customer’s
obligations to Lender with respect to Loan Agreement. 
  
 “Obligations” shall mean all liabilities, absolute or contingent, joint, several or independent, of Customer or any Affiliate of Customer now or hereafter existing, due or to become due to, or held or to be held by, Lender for its
own account or as agent for another or others, whether credited directly or acquired by assignment or otherwise and howsoever evidenced, including, without limitation, the Loan Agreement, and all interest, taxes, fees, charges, expenses and
Attorneys’ Fees and Expenses chargeable to Customer or incurred by Lender under the Loan Agreement, or any other document or instrument delivered in connection herewith. 
  
 “Person” shall mean any individual, partnership, joint venture, firm, corporation, association, trust, or other
enterprise or any government or political subdivision or any agency, department or instrumentality thereof. 
  
 “Security Deposit” with respect to each item of Equipment shall have the meaning assigned to such term in the Equipment Schedule applicable to
such item of Equipment. 
  
 “UCC “ shall mean the
Uniform Commercial Code as enacted in the State of Connecticut. 
  
 2. INDEPENDENT LOAN; CROSS-COLLATERALIZATION; SECURITY INTEREST. Each Equipment Schedule shall constitute a separate, distinct and independent Loan Agreement and contractual obligation of Customer. As security for the due and punctual
payment of any and all of the present and future Obligations of Customer to Lender, Customer hereby (i) grants to Lender with respect to each Loan Agreement and for the full amount of all Obligations, a security interest in all of the Collateral and
all collateral securing any other lease or security agreement between Customer and Lender, whether now in existence or hereafter entered into and (ii) assigns to Lender all of its rights, title and interest in surplus money to which Customer may be
entitled upon the sale of all such Collateral provided that such assignment shall not apply to proceeds received by Customer once the obligations have been paid in full. The extent to which Lender’s security interest in any item of Collateral
shall be entitled to purchase money priority shall be determined by reference to the unpaid principal balance of any Note evidencing the financing of the purchase price of such item of Equipment. 
  
 3. ACCEPTANCE OF EQUIPMENT. The Equipment is to be delivered and installed at
the location specified or referred to in the applicable Equipment Schedule. The Equipment shall be deemed to have been accepted by Customer for all purposes under this Agreement upon Customer’s execution of an Equipment Schedule (the
“Acceptance Date”) without limiting Customer’s ability to pursue any rights it may have against any vender or supplier of the Equipment. Customer shall not be liable or responsible for any failure or delay in the delivery of the
Equipment to Customer for whatever reason. 
  
 4. TERM; PRINCIPAL
AND INTEREST; NO PREPAYMENT; LATE CHARGES. The term for any Loan Agreement shall be as specified in the applicable Equipment Schedule. No Loan Agreement is prepayable by Customer, in whole or in part, without the express written consent of Lender in
its sole discretion. Principal and interest payments shall be in the amounts and shall be due and payable as set forth in the applicable Equipment Schedule. If any payment of principal or interest or other amount payable hereunder shall not be paid
within 10 days of the date when due, Customer shall pay as an administrative and late charge an amount equal to 5% of the amount of any such overdue payment. In addition, Customer shall pay overdue interest on any delinquent payment or other amounts
due under any Loan Agreement (by reason of acceleration or otherwise) from the due date until paid at the rate of one and one-half percent (1.5%) per month or the maximum amount permitted by applicable law, whichever is lower. All payments to be
made to Lender shall be made to Lender in immediately available funds at the address shown above, or at such other place as Lender shall specify in writing. 
  
 5. REPRESENTATIONS, WARRANTIES AND COVENANTS. Customer hereby represents and warrants to and covenants with Lender that, as of the date hereof and for so
long as any Obligations shall remain outstanding: 
  
 (a)
Customer is duly organized and is existing in good standing under the laws of its jurisdiction of organization and is duly qualified and in good standing in those jurisdictions where the conduct of its business or the ownership of its properties
requires qualification; 
  
 (b) Customer has the power and
authority to own the Collateral, to enter into and perform this Agreement and any other document or instrument delivered in connection herewith and to incur the Obligations; 
  
 (c) Customer’s chief executive office is located at the address set forth above; 
  

 Page 2 

 (d) Customer does not utilize, and has not in the last five years utilized, any trade names in the
conduct of its business except as set forth on Schedule 1 hereto; 
  
 (e) Customer has not changed its name, been the surviving entity in a merger, acquired any business or changed the location of its chief executive office within the previous five years, except as set forth on Schedule 2 hereto; 

 
 (f) Neither the execution, delivery or performance by Customer of the Loan
Agreement nor compliance by it with the terms and provisions hereof, nor the consummation of the transactions contemplated herein, (i) will contravene any applicable provision of any law, statute, rule or regulation, or any order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in any lien upon any
property, pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or any other material agreement or instrument to which Customer is a party or by which it or any of its property or assets are bound or to which it may be
subject or (iii) will violate any provision of its Certificate of Incorporation or By-Laws, or other governance documents; 
  
 (g) The Loan Agreement, the Note and any document or instrument delivered in connection herewith and the transactions contemplated hereby or thereby are
duly authorized, executed and delivered, and the Loan Agreement, the Note and such other documents and instruments constitute valid and legally binding obligations of Customer and are enforceable against Customer in accordance with their respective
terms; 
  
 (h) Other than filings required by the UCC, No order,
consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or any subdivision thereof, is required to authorize or required in connection with
(i) the grant by Customer of the security interest in connection with the Loan Agreement, (ii) the execution, delivery and performance of the Loan Agreement, (iii) the legality, validity, binding effect or enforceability of the Loan Agreement or
(iv) the perfection or maintenance of the aforementioned lien and security interest; 
  
 (i) Customer has filed all federal, state and local tax returns and other reports it is required to file (and which, if not filed, would have a material adverse effect on the Customer) and, has paid or made adequate
provision for payment of all such taxes, assessments and other governmental charges, and shall pay or deposit promptly when due all sales, use, excise, personal property, income, withholding, corporate, franchise and other taxes, assessments and
governmental charges upon or relating to the manufacture, purchase, ownership, maintenance, modification, delivery, installation, possession, condition, use, acceptance, rejection, operation or return of the Equipment and, upon request by Lender,
Customer will submit to Lender proof satisfactory to Lender that such payments and/or deposits have been made; 
  
 (j) There are no pending or, to the best knowledge of the Customer upon due inquiry, threatened actions or proceedings before any court or administrative
agency, an unfavorable resolution of which could have a material adverse effect on Customer’s financial condition or operations; 
  
 (k) No representation, warranty or statement by Customer contained in the Loan Agreement or in any certificate or other document furnished or to be
furnished by Customer pursuant to the Loan Agreement contains or at the time of delivery shall contain any untrue statement of material fact, or omits, or shall omit at the time of delivery, to state a material fact necessary to make it not
misleading; 
  
 (l) All financial statements delivered and to be
delivered by Customer to Lender in connection with the execution and delivery of the Loan Agreement presented fairly in all material respects the assets, liabilities and financial condition of Customer as of the date of such financial statements,
and have been prepared in accordance with generally accepted accounting principles, and at all times since the date of the most recent financial statements, there has been no material change in Customer’s financial affairs or business
operations. Customer shall furnish Lender: (i) within 120 days after the last day of each fiscal year of Customer, a financial statement including a balance sheet, income statement, statement of retained earnings and statement of cash flows, each
prepared in accordance with generally accepted accounting principles consistently applied with a report signed by an independent certified public accountant satisfactory to Lender; (ii) upon the request of Lender, within 45 days after the close of
each quarter of each fiscal year of Customer, financial statements similar to those described in the immediately preceding clause, prepared by Customer and certified by the chief financial officer of Customer; (iii) promptly upon the request of
Lender, such tax returns or financial statements regarding any guarantor of the Obligations or any Affiliate of Customer as Lender may reasonably request from time to time; (iv) promptly upon request of Lender, in form satisfactory to Lender, such
other and additional information as Lender may reasonably request from time to time, and; (v) promptly inform Lender of any Defaults (defined below) or any events or changes in the financial condition of Customer occurring since the date of the last
financial statements of Customer delivered to Lender which, individually or cumulatively, when viewed in light of prior financial statements, may result in a material adverse change in the financial condition of Customer; 
  

 Page 3 

 (m) Customer shall permit Lender, at Lender’s expense and with reasonable advanced notice, through
its authorized attorneys, accountants and representatives, to inspect and examine the Equipment and the books, accounts, records, ledgers and assets of every kind and description of Customer with respect thereto at all reasonable times; provided,
however, that the failure of Lender to inspect the Equipment or to inform Customer of any noncompliance shall not relieve Customer of any of its Obligations hereunder; 
  
 (n) Other than liens and security interests granted to the Lender and liens for taxes not yet due and payable, Customer is
the owner of the Equipment free and clear of all rights, title, security interests, encumbrances or liens of any other party, will defend the Equipment against all claims and demands of all persons at any time claiming any interest therein and shall
deliver to Lender any and all evidence of ownership of, and certificates of title to, any and all of the Equipment; 
  
 (o) The Equipment is personal property and not a fixture under the law of the jurisdiction in which the Equipment is located even though the Equipment may
hereafter become attached or affixed to real property; 
  
 (p)
Each site where Equipment is located, if not owned by Customer, is leased by Customer pursuant to a valid lease or rental agreement which permits the possession, use and operation of the Equipment at such location; 
  
 (q) Customer shall provide Lender with disclaimers and waivers from
landlords, mortgagees and other persons holding any interest or claim in and to any premises where Equipment is located, acceptable in all respects to Lender, which may be necessary or advisable in the reasonable discretion of Lender to confirm that
the first priority security interest and rights of Lender in the Equipment are and will remain valid and superior against all other parties; 
  
 (r) The Equipment is in the possession of Customer at the location(s) specified in the applicable Equipment Schedule, and shall not be removed from such
location without the prior written consent of Lender, which consent shall in any event be conditioned upon Customer having completed all notifications, filings, recordings, and other actions in such new location as Lender may require to protect and
perfect Lender’s interests in the Collateral; 
  
 (s)
Customer shall not, without the prior written consent of Lender, sell, offer to sell, lease, rent, hire or in any other manner dispose, transfer or surrender use and possession of any Equipment; 
  
 (t) Customer will not, directly or indirectly, create, incur or permit to
exist any lien, encumbrance, mortgage, pledge, attachment or security interest on or with respect to the Equipment other than in connection with the execution and delivery of the Loan Agreement and liens for taxes not yet due and payable;

  
 (u) Customer shall permit each item of Equipment to be used
only within the continental United States by qualified personnel solely for business purposes and the purpose for which it was designed and, at its sole expense, shall service, repair, overhaul and maintain each item of Equipment in the same
condition as when received, ordinary wear and tear excepted, in good operating order, consistent with prudent industry practice (but, in no event less than the same extent to which Customer maintains other similar equipment in the prudent management
of its assets and properties) and in material compliance with all applicable laws, ordinances, regulations, and conditions of all insurance policies required to be maintained by Customer under the Loan Agreement and all manuals, orders,
recommendations, instructions and other written requirements as to the repair and maintenance of such item of Equipment issued at any time by the vendor and/or manufacturer thereof; 
  
 (v) If any item of Equipment does not comply with the requirements of the Loan Agreement, Customer shall bring such
Equipment into compliance with the provisions hereof; and Customer shall not use any Equipment, nor allow the same to be used, for any unlawful purpose; 
  
 (w) Customer acknowledges that Lender has not selected, manufactured or supplied the Equipment to Customer and has acquired any Equipment subject hereto
solely in connection with this Loan Agreement and Customer has received and approved the terms of any purchase order or agreement with respect to the Equipment; and 
  
 (x) Customer has all permits, licenses and other authorizations which are required with respect to its business under
Environmental Laws (as defined below) and is in material compliance with all terms and conditions of such permits, licenses and other authorizations, including all limitations, restrictions, standards, prohibitions, requirements, obligations,
schedules and timetables. The Customer is not presently in violation of any Environmental Laws. “Environmental Laws” shall mean any Federal, state or local law relating to releases or threatened releases of Hazardous 
  

 Page 4 

 Substances; the manufacture handling, transport, use, treatment, storage or disposal of Hazardous Substances or materials
containing Hazardous Substances; or otherwise relating to pollution of the environment or the protection of human health. “Hazardous Substances” shall mean substances or materials which contain substances defined in or regulated as toxic
or hazardous materials, chemicals, substances, waste or pollutants under any present or future Federal statutes and their state counterparts, as well as any implementing regulations as amended from time to time and as interpreted by administering
agencies. 
  
 6. DISCLAIMER OF WARRANTIES; LIMITATION OF REMEDY;
LIMITATION OF LIABILITY. Customer has selected both the Equipment and the supplier (identified in the Equipment Schedule, herein (“Supplier”)) from whom Customer agrees to purchase the Equipment. CUSTOMER ACKNOWLEDGES THAT LENDER HAS NO
SPECIAL FAMILIARITY OR EXPERTISE WITH RESPECT TO THE EQUIPMENT. CUSTOMER AGREES THAT THE EQUIPMENT IS “AS IS” AND IS OF A SIZE, DESIGN AND CAPACITY SELECTED BY CUSTOMER AND THAT CUSTOMER IS SATISFIED THAT THE SAME IS SUITABLE FOR
CUSTOMER’S PURPOSES, AND THAT EXCEPT AS MAY OTHERWISE BE SPECIFICALLY PROVIDED HEREIN OR IN THE EQUIPMENT SCHEDULE, LENDER HAS MADE NO REPRESENTATION OR WARRANTY AS TO ANY MATTER WHATSOEVER. LENDER DISCLAIMS, AND CUSTOMER HEREBY EXPRESSLY
WAIVES AS TO LENDER, ALL WARRANTIES WITH RESPECT TO THE EQUIPMENT INCLUDING BUT NOT LIMITED TO ALL EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, QUALITY, CAPACITY, OR WORKMANSHIP, ALL EXPRESS OR IMPLIED
WARRANTIES AGAINST PATENT INFRINGEMENTS OR DEFECTS, WHETHER HIDDEN OR APPARENT, AND ALL EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO COMPLIANCE OF THE EQUIPMENT WITH THE REQUIREMENTS OF ANY LAW, REGULATION, SPECIFICATION OR CONTRACT RELATIVE
THERETO. IN NO EVENT SHALL LENDER BE LIABLE (INCLUDING WITHOUT LIMITATION, UNDER ANY THEORY IN TORTS) FOR ANY LOSS OF USE, REVENUE, ANTICIPATED PROFITS OR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH
THE LOAN OR THE USE, PERFORMANCE OR MAINTENANCE OF THE EQUIPMENT. If the Equipment is not properly installed, does not operate as represented or warranted by the Supplier, manufacturer and/or service company or is unsatisfactory for any reason,
Customer shall make any claim on account thereof solely against the Supplier, manufacturer and/or service company and shall, nevertheless, pay Lender all amounts payable under the Loan Agreement and any such claims shall not act as a defense,
counterclaim, deduction, setoff or otherwise limit Customer’s Obligations under the Loan Agreement. 
  
 7. RISK OF LOSS AND DAMAGE; INSURANCE. Customer assumes all risk of loss, damage or destruction to the Equipment from whatever cause and for whatever
reason. If all or a portion of an item of Equipment shall become lost, stolen, destroyed, damaged beyond repair or rendered permanently unfit for use for any reason, or in the event of any condemnation, confiscation, theft or seizure or requisition
of title to or use of such item of Equipment, Customer shall immediately pay to Lender an amount equal to the outstanding principal balance of and accrued and unpaid interest on any Note with respect to such Equipment, less the net amount of the
recovery, if any, received by Lender from insurance on the Equipment. For so long as any Obligations shall remain outstanding, Customer shall procure and maintain insurance in such amounts and with such coverages, and upon such terms and with such
companies, as Lender may approve, at Customer’s expense; provided, however, that in no event shall such insurance be less than the following coverages and amounts: (a) Worker’s Compensation and Employer’s Liability Insurance, in the
full statutory amounts provided by law; (b) Comprehensive General Liability Insurance including product/completed operations and contractual liability coverage, with minimum limits on a per occurrence basis, as reasonably required by Lender, and
Combined Single Limit Bodily Injury and Property Damage on an aggregate basis, as reasonably required by Lender or, in either case, as otherwise specified in any Equipment Schedule hereto; and (c) All Risk Physical Damage Insurance, including
earthquake and flood, on each item of Equipment, in an amount not less than the greater of (i) the outstanding principal balance owing under any Note with respect to such Equipment; or (ii) its full replacement value. Customer shall cause Lender to
be included as an additional insured on each such Comprehensive General Liability Insurance policy. On each such All Risk Physical Damage Insurance policy Lender shall be named as loss payee. Such policies shall be endorsed to provide that the
coverage afforded to Lender shall not be rescinded, impaired or invalidated by any act or neglect of Customer. Customer agrees to waive Customer’s rights and its insurance carrier’s rights of subrogation against Lender for any and all loss
or damage. In addition to the foregoing minimum insurance coverage, Customer shall procure and maintain such other insurance coverage as Lender may reasonably require. All policies shall be endorsed or contain a clause requiring the insurer to
furnish Lender with at least 30 days prior written notice of any material change, cancellation or non-renewal of coverage. Upon execution of this Agreement, and thereafter, 30 days prior to the expiration of each insurance policy required hereunder,
Customer shall furnish Lender with a certificate of insurance or other evidence satisfactory to Lender that the insurance coverages required under such policy are and will continue in effect, provided, however, that Lender shall be under no duty
either to ascertain the existence of or to examine such insurance coverage or to advise Customer in the event such insurance coverage should not comply with the requirements hereof. If Customer shall at any time or times hereafter fail to obtain
and/or maintain any of the policies of insurance required herein, or 
  

 Page 5 

 fail to pay any premium in whole or in part relating to any such policies, Lender may, but shall not be obligated to,
obtain, and or cause to be maintained, insurance coverage with respect to the Collateral, including, at Lender’s option, the coverage provided by all or any of the policies of Customer and pay all or any part of the premium therefor, without
waiving any Event of` Default by Customer, and any sums so disbursed by Lender shall be additional Obligations of Customer to Lender payable on demand upon an event of default. Lender shall have the right to settle and compromise any and all claims
under any of the All Risk Physical Damage policies required to be maintained by Customer hereunder and Customer hereby appoints Lender as its attorney-in-fact, with power to demand, receive and receipt for all monies payable thereunder, to execute
in the name of Customer or Lender or both any proof of loss, notice, draft or other instruments in connection with such policies or any loss thereunder and generally to do and perform any and all acts as Customer, but for this appointment, might or
could perform. 
  
 8. EVENTS OF DEFAULT. An “Event of
Default” under this Agreement shall be deemed to have occurred upon the occurrence or existence of any one or more of the following events or conditions (each a “Default”) and after the giving of any required notice or the passage of
any required period of time (or both) specified below with respect to such Default: (a) Customer shall fail to make any payment due under any Note or as required under the Loan Agreement within 10 days of its due date; or (b) Customer shall fail to
obtain or maintain any of the insurance required under the Loan Agreement; or (c) Customer shall remove, sell, transfer, encumber, or part with possession of any Equipment; (d) Customer shall fail to perform or observe any other covenant, condition
or agreement under the Loan Agreement and such failure shall continue for 30 days after written notice thereof to Customer; or (e) Customer or any of its Affiliates shall default in the payment or performance of any Obligation owing to Lender, and
such default shall continue for 30 days after written notice thereof to Customer; or (f) any representation or warranty made by Customer herein or in any certificate, agreement, statement or document heretofore or hereafter furnished Lender,
including without limitation any financial information disclosed to Lender, shall prove to be false or incorrect in any material respect; or (g) the commencement of any bankruptcy, insolvency, arrangement, reorganization, receivership, liquidation
or other similar proceeding by or against Customer or any of its properties or businesses, or the appointment of a trustee, receiver, liquidator or custodian for Customer or any of its properties or businesses, or if Customer suffers the entry of an
order for relief under Title 11 of the United States Code; or (h) the making by Customer of general assignment or deed of trust for the benefit of creditors; or (i) Customer shall default in any payment or other material obligation to any other
lender and such lender has accelerated the debt in accordance with its terms provided such obligation is in excess of $50,000; or (j) Customer shall merge with or consolidate into any other entity or sell all or substantially all of its assets or in
any manner terminate its existence unless Customer is the surviving entity or Customer’s Shareholders, as of the date of this agreement, constitutes a majority of the Shareholders of the new entity provided, however, the new entity has a
financial standing equal to or greater than the original entity; or (k) if Customer is a privately held corporation, more than 50% of Customer’s voting capital stock, or effective control of Customer’s voting capital stock, issued and
outstanding from time to time, is not retained by the holders of such stock on the date the Loan Agreement is executed; or (l) Lender shall reasonably determine that there has been a material adverse change in the financial condition or business
operations of Customer since the date of the execution of the Loan Agreement, or that Customer’s ability to perform its obligations is materially impaired; or (m) if Customer leases the premises where any Equipment is located, a breach by
Customer of any such lease and the commencement of an action by the landlord to evict Customer or to repossess the premises. Customer shall promptly notify Lender of the occurrence of any Event of Default or the occurrence or existence of any event
or condition which, upon the giving of notice or lapse of time, or both, would constitute an Event of Default. 
  
 9. RIGHTS AND REMEDIES; ACCELERATION. (a) Upon the occurrence of an Event of Default, Lender shall have all of the rights and remedies enumerated herein
(all of which are cumulative and not exclusive of any other right or remedy available to Lender) and Lender may, at its sole option and discretion, exercise one or more of the following remedies with respect to any or all of the Collateral: (i) by
written notice to Customer, terminate any or all Loan Agreements as such notice shall specify, and, with respect to such terminated Loan Agreements, declare immediately due and payable and recover from Customer, as liquidated damages for loss of
Lender’s bargain and not as a penalty, an amount equal to the aggregate of all unpaid periodic installment payments and other sums due under Loan Agreements to the date of default plus the charges set forth in Section 4 hereof, if any, plus an
amount equal to the outstanding principal balances of and accrued and unpaid interest on any of the Notes with respect to the Loan Agreements, (ii) Lender may declare, at its option, all or any part of the Obligations immediately due and payable,
without demand, notice of intention to accelerate, notice of acceleration, notice of nonpayment, presentment, protest, notice of dishonor, or any other notice whatsoever, all of which are hereby waived by Customer and any endorser, guarantor, surety
or other party liable in any capacity for any of the Obligations; (iii) cause Customer to promptly ship, with insurance and freight prepaid by Customer, any or all Equipment to such location as Lender may designate, or Lender, at its option, may
enter upon the premises where the Equipment is located and take immediate possession of and remove the same by summary proceedings or otherwise, all without liability to Lender for or by reason of damage to property or such entry or taking
possession except for Lender’s gross negligence or willful misconduct; (iv) sell any or all Collateral at public or private sale or otherwise dispose of, hold, use, operate, lease to others or keep idle the Equipment, all as Lender in its sole
discretion may determine and all free and clear of any rights of Customer; (v) remedy such default, including making repairs or modifications to the Equipment, for the account and expense of Customer and Customer agrees to 
  

 Page 6 

 reimburse Lender for all of Lender’s costs and expenses; (vi) apply any Security Deposit or other cash collateral or
sale or remarketing proceeds of the Equipment at any time to reduce any amounts due to Lender, or (vii) exercise any other right or remedy which may be available to Lender under applicable law, or proceed by appropriate court action to enforce the
terms hereof or to recover damages for the breach hereof, including Attorneys’ Fees and Expenses. Any notice required to be given by Lender of a sale or other disposition or other intended action which is made in accordance with the terms of
the Loan Agreement at least seven (14) days prior to such proposed action, shall constitute fair and reasonable notice to Customer of any such action. Lender shall be liable to Customer only for its gross negligence or willful misconduct in failing
to comply with any applicable law imposing duties upon Lender; Lender’s liability for any such failure shall be limited to the actual loss suffered by Customer directly resulting from such failure, and in no event shall Lender have any
liability to Customer for incidental, consequential, punitive or exemplary damages. No remedy referred to in this Section 9 shall be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available
to Lender at law or in equity. 
  
 (b) The exercise or pursuit by
Lender of any one or more of such remedies shall not preclude the simultaneous or later exercise or pursuit by Lender of any or all such other remedies, and all remedies hereunder shall survive termination of the Loan Agreement. In the event Lender
takes possession and disposes of the Collateral, the proceeds of any such disposition shall be applied in the following order: (1) to all of Lender’s costs, charges and expenses incurred in taking, removing, holding, repairing and selling or
leasing the Equipment; (2) to pay the Lender the remaining amount of any Obligations owed to Lender and (3) the balance, if any, to Customer. A termination shall occur only upon written notice by Lender and only with respect to such Equipment as
Lender shall specify in such notice. Termination under this Section 9 shall not affect Customer’s duty to perform Customer’s Obligations under the Loan Agreement in full. Customer agrees to reimburse Lender on demand for any and all costs
and expenses reasonably incurred by Lender in enforcing its rights and remedies hereunder following the occurrence of an Event of Default, including, without limitation, Attorneys’ Fees and Expenses, and the costs of repossession, storage,
insuring, reletting, selling and disposing of any and all Equipment. 
  
 10. INDEMNITY. (a) Customer agrees to indemnify, reimburse and hold Lender and its successors, Affiliates, assigns, officers, directors, employees, agents and servants (hereinafter in this Section 10 referred to individually as
“Indemnitee”, and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements,
including Attorneys’ Fees and Expenses of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of the Loan Agreement or any other document executed in connection
herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to
or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Equipment (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on
account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim, or any claim based on patent, trademark or copyright infringement or any obligation or liability to the manufacturer or supplier of
the Equipment under any Supply Contracts (referenced in the Equipment Schedule), including purchase orders issued by Customer or Lender or assigned to Lender; provided, however, that no Indemnitee shall be indemnified pursuant to this Section 10 for
losses, damages or liabilities to the extent caused solely by the gross negligence or willful misconduct of such Indemnitee. Customer agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, suit or judgement, Customer shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify Customer of any such assertion of which such Indemnitee has
knowledge. 
  
 (b) Without limiting the application of Section
10(a) hereof, Customer agrees to pay, or reimburse Lender for any and all reasonable fees, costs and expenses (including Attorneys’ Fees and Expenses) of whatever kind or nature reasonably incurred in connection with the creation, preservation
or protection of Lender’s liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of
any taxes or liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and Lender’s interest
therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral. 
  
 (c) Customer shall, at its sole cost and expense, protect, defend, indemnify release and hold harmless the Indemnitees from
and against any and all Losses imposed upon or incurred by or asserted against any Indemnitees, and arising out of or in any way relating to any one or more of the following, unless caused solely by the gross negligence or willful misconduct of any
Indemnitee: (i) any presence of any Hazardous Substances in, on, above or under Customer’s leased or owned real property (the “Property”); (ii) any past, present or threatened Release of Hazardous Substances 
  

 Page 7 

 in, on, above, under or from the Property; or (ii) any past or present violation of any Environmental Laws. The term
“Release” of any Hazardous Substance includes, but is not limited to, any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement
of Hazardous Substances. The term “Losses” includes any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in
value, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement, costs of remediating a Hazardous Substance (whether or not performed voluntarily), engineers’ fees, environmental consultants’ fees, and costs
of investigation (including, but not limited to sampling, testing and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid or gas) or punitive damages, of whatever kind or nature (including, but
not limited to Attorneys’ Fees and Expenses). 
  
 (d) Without
limiting the application of Section 10(a) or (b), or (c) hereof, Customer agrees to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses (including Attorneys’ Fees and Expenses) which such
Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation or omission of a material fact by Customer in the Loan Agreement or in any writing contemplated by or made or delivered pursuant to or in connection
with the Loan Agreement. 
  
 (e) If and to the extent that the
obligations of Customer under this Section 10 are unenforceable for any reason, Customer hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. 
  
 11. MAINTENANCE; INSPECTION. During the term of the Loan Agreement, Customer
shall, unless Lender shall otherwise consent in writing: (a) maintain conspicuously on any Equipment such labels, plates, decals or other markings as Lender may reasonably require, stating that Lender has a security interest in such Equipment; (b)
furnish to Lender such information concerning the condition, location, use and operation of the Equipment as Lender may reasonably request; (c) permit any person designated by Lender to visit and inspect any Equipment and any records maintained in
connection therewith at all reasonable times, provided, however, that the failure of Lender to inspect the Equipment or to inform Customer of any noncompliance shall not relieve Customer of any of its obligations hereunder; and (d) make no
additions, alterations, modifications or improvements (collectively, “Improvements”) to any item of Equipment that are not readily removable without causing material damage to such item of Equipment or which will cause the value, utility
or useful life of such item of Equipment to materially decline. If any such Improvement is made and cannot be removed without causing material damage or decline in value, utility or useful life (a “Non-Severable Improvement”), then
Customer warrants that such Non-Severable Improvement shall immediately become subject to Lender’s security interest upon being installed and shall be free and clear of all liens and encumbrances, other than Lender’s security interest, and
shall become Equipment subject to all of the terms and conditions of the Loan Agreement. 
  
 12. FURTHER ASSURANCES. Customer shall promptly execute and deliver to Lender such further documents and take such further action as Lender may require in order to more effectively carry out the intent and purpose of
the Loan Agreement. Customer shall execute and deliver to Lender upon Lender’s request any and all schedules, forms and other reports and information as Lender may deem reasonably necessary or appropriate to respond to requirements or
regulations imposed by any governmental authorities or to comply with the provisions of the law of any jurisdiction in which Customer may then be conducting business or in which any of the Equipment may be located. Customer shall execute and deliver
to Lender upon Lender’s request such further and additional documents, instruments and assurances as Lender deems reasonably necessary to acknowledge and confirm, for the benefit of Lender or any assignee or transferee of any of Lender’s
rights, title and interests hereunder in accordance with Section 13 hereof (an “Assignee”), all of the terms and conditions of all or any part of the Loan Agreement and Lender’s or Assignee’s rights with respect thereto, and
Customer’s compliance with all of the terms and provisions thereof 
  
 13. ASSIGNMENT. The provisions of the Loan Agreement shall be binding upon and shall inure to the benefit of the heirs, administrators, successors and assigns of Lender and Customer, provided, however, Customer may not assign any of its
rights, transfer any interest in the Equipment or delegate any of its obligations under the Loan Agreement without the prior written consent of Lender in its sole discretion. Lender may, from time to time, absolutely or as security, without notice
to Customer, sell, assign, transfer, participate, pledge or otherwise dispose of all or any part of a Loan Agreement, the Obligations and/or the Collateral therefor, subject to the rights of Customer under the Loan Agreement for the use and
possession of the Equipment. In such event, each and every immediate and successive Assignee shall have the right to enforce the Loan Agreement with respect to those Obligations and/or Collateral transferred to the Assignee, by legal action or
otherwise, for its own benefit as fully as if such Assignee were herein by name specifically given such rights. Customer agrees that the rights of any such Assignee hereunder or with respect to the related Obligations, shall not be subject to any
defense, set off or counterclaim that Customer may assert or claim against Lender, and that any such Assignee shall have all of Lender’s 
  

 Page 8 

 rights hereunder but none of Lender’s obligations. Lender shall have an unimpaired right to enforce the Loan
Agreement for its benefit with respect to that portion of any Loan Agreement, Obligations and/or Collateral that Lender has not sold, assigned, pledged or otherwise transferred. 
  
 14. GOVERNING LAW; MEDIATION OF THE LOAN AGREEMENT. THE LOAN AGREEMENT AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL
IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CONNECTICUT, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. CUSTOMER HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF CONNECTICUT AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ITS OBLIGATIONS UNDER THE LOAN AGREEMENT, AND EXPRESSLY WAIVES ANY OBJECTIONS THAT IT MAY
HAVE TO THE VENUE OF SUCH COURTS. CUSTOMER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THE LOAN AGREEMENT. Any action by Customer against Lender for any cause of action under the Loan Agreement
shall be brought within one year after any such cause of action first arises. If requested by Lender, Customer agrees that prior to the commencement of any litigation regarding the terms and conditions of the Loan Agreement, the parties hereto shall
subject themselves to non-binding mediation with a qualified mediator mutually satisfactory to both parties. 
  
 15. NOTICES. Any demand or notice required or permitted to be given hereunder shall be deemed effective (a) when deposited in the United States mail, and
sent by certified mail, return receipt requested, postage prepaid, addressed to Lender or to Customer at the addresses set forth herein, or to such other address as may be hereafter provided by the party to be notified by written notice complying
with the provisions hereof or (b) when transmitted to Lender or Customer by facsimile at the respective numbers provided for such purpose; provided, that such facsimile notice is promptly followed by notice given in accordance with the immediately
preceding subsection (a). 
  
 16. SECURITY DEPOSIT. Lender may, at
its option, apply the Security Deposit, if any is indicated in an Equipment Schedule, to cure any default of Customer, whereupon Customer shall promptly restore such Security Deposit to its original amount. Lender shall return to Customer any
unapplied Security Deposit, without interest, upon full payment and performance of Customer’s Obligations under the Loan Agreement. 
  
 17. MISCELLANEOUS; GENERAL PROVISIONS. The Loan Agreement will not be binding on Lender until accepted and executed by Lender at its executive office in
South Norwalk, Connecticut. All options, powers and rights granted to Lender hereunder or under any promissory note, guaranty, letter of credit agreement, depository agreement, instrument, document or other writing delivered to Lender shall be
cumulative and shall be in addition to any other options, powers or rights which Lender may now or hereafter have under any applicable law or otherwise. Time is of the essence in the payment and performance of all of Customer’s obligations
under the Loan Agreement. The captions in the Loan Agreement are for convenience only and shall not define or limit any of the terms thereof. 
  
 Any provisions of the Loan Agreement which are unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
unenforceability without invalidating the remaining provisions hereof, and any such unenforceability in any jurisdiction shall not render unenforceable such provisions in any other jurisdiction. To the extent permitted by applicable law, Customer
hereby waives any provisions of law which render any provision of the Loan Agreement unenforceable in any respect. 
  
 CUSTOMER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS LOAN AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION AND EXCEPT AS OTHERWISE PROVIDED IN THE LOAN
AGREEMENT CUSTOMER HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH LENDER’S TAKING POSSESSION OR LENDER’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH CUSTOMER WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE. 
  
 THE LOAN AGREEMENT AND ANY OTHER WRITTEN AGREEMENT(S) BETWEEN THE PARTIES
EXECUTED SIMULTANEOUSLY HEREWITH, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES CONCERNING THE SUBJECT MATTER HEREOF, AND SUPERSEDE AND MAY NOT BE CONTRADICTED BY ANY PRIOR WRITTEN AGREEMENTS BETWEEN THE PARTIES, INCLUDING, WITHOUT LIMITATION,
PROPOSALS, LETTERS, COMMITMENT LETTERS OR BY ANY PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. CUSTOMER ACKNOWLEDGES AND CERTIFIES 
  

 Page 9 

 original, but all of which together shall constitute but one and the same instrument. Each reference herein to
“Lender” shall be deemed to include its successors and assigns, and each reference to “Customer” and any pronouns referring thereto as used herein shall be construed in the masculine, feminine, neuter, singular or plural as the
context may require, and shall be deemed to include the legal representatives, successors and assigns of Customer, all of whom shall be bound by the provisions hereof. EACH REFERENCE HEREIN TO “CUSTOMER” SHALL MEAN AND INCLUDE ANY AND ALL
CUSTOMERS WHO SIGN BELOW, EACH OF WHOM SHALL BE JOINTLY AND SEVERALLY LIABLE UNDER THIS LOAN AGREEMENT. 
  
 The Loan Agreement and all related documents, including (a) amendments, addenda, consents, waivers and modifications which may be executed
contemporaneously or subsequently herewith, (b) documents received by Lender from the Customer, and (c) financial statements, certificates and other information previously or subsequently furnished to Lender, may be reproduced by Lender by any
photographic, photostatic, microfilm, micro-card, miniature photographic, compact disk reproduction or other similar process and Lender may destroy any original document so reproduced. Customer agrees, herein waives all right to object to the
admissibility of such reproduction and stipulates that any such reproduction shall, to the extent permitted by law, be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original itself is
in existence and whether or not the reproduction was made by Lender in the regular course of business) and that any enlargement, facsimile or further reproduction of the reproduction shall likewise be admissible in evidence. 
  
 18. SURVIVAL. Sections 6, 7, 9, 10, 11, 13, 15, 16 and 17 shall survive and
continue in full force and effect without regard to the payment in full of all Obligations under the Loan Agreement. 
  
 Executed and delivered by duly authorized representatives of the parties hereto as of the date set forth below. 
  

							
	 LENDER:
	 	 CUSTOMER:

		
	 OXFORD VENTURE FINANCE, LLC
	 	 ICAGEN, INC.

				
	 By:
	 	 /s/ J. Alden Philbrick, IV

	 	 By:
	 	 /s/ P. Kay Wagoner

	 Name:
	 	 J. Alden Philbrick, IV
	 	 Name:
	 	 P. Kay Wagoner

	 Title:
	 	 President
	 	 Title:
	 	 President and CEO

	 Date:
	 	 7/16/99
	 	 Date:
	 	 7/15/99

  

 Page 10 

 SCHEDULE 1 
  

Trade Names 
  

 Page 11 

 SCHEDULE 2 
  

Name Changes; Changes in Chief Executive Office 
  

 Page 12 

 OXFORD 
 VENTURE FINANCE 
  
 December 20, 2001 
  
 Mr. Robert J. Jakobs

 Controller 
 ICAgen, Inc. 
 4222 Emperor Boulevard 
 Suite 460 
 Durham, NC 27703 
  
 Dear Bob: 
  
 Oxford Venture
Finance is pleased to provide the following loan proposal to ICAgen, Inc. for laboratory and other internal use equipment, subject to terms and conditions embodied in formal loan agreements which shall include but not be limited to the following
terms and conditions: 
  

			
	 Borrower:
	  	ICAgen, Inc.
		
	 Lender:
	  	Oxford Venture Finance, LLC, or its assigns.
		
	 Equipment:
	  	Laboratory and computer equipment for the internal use of Borrower as summarized in Attachment A (“Equipment”). Equipment must be acceptable to Lender.
		
	 Total Loan Amount:
	  	$1,250,000
		
	 Funding Dates:
	  	December 2001 through December 2002
		
	 Term:
	  	Each Schedule shall have a fixed term of 48 months for laboratory equipment, and 36 months for computers and soft costs.
		
	 Loan Payment Rate:
	  	2.6010% of the Loan Amount per month for 48 months; 3.2825% of the Loan Amount per month for 36 months.
		
	 Periodicity:
	  	Monthly, in advance.
		
	 Index Basis:
	  	The four-year Treasury Bill Weekly Average at a rate of 3.615% for 48 month term and three-year Treasury Bill Weekly Average at a rate of 3.26% for 36 month term as published in Federal
Reserve statistical release H.15 (519) on November 19, 2001.
		
	 Payment Commencements:
	  	Upon Schedule fundings
		
	 Documentation:
	  	Master Loan and Security Agreement #7688 dated July 14, 1999 between Lender and Borrower.
		
	 Commitment Fee:
	  	Borrower will provide a $5,000 Commitment Fee to Lender upon execution of this proposal letter. The Commitment Fee

  
 OXFORD VENTURE
FINANCE, LLC 
 133 North Fairfax Street  •  Alexandria, Virginia 22314  •  (703)
519-4910 FAX 

 Mr. Robert J. Jakobs 
 December 20, 2001 
 Page 2 
  

			
	 	  	will be applied to any transaction Costs, as defined herein, with the remainder to be retained by Lender after funding commences. Should the Lender not issue a commitment to provide funding,
the Commitment Fee, less any transaction Costs, will be returned.
		
	 Rate Adjustment:
	  	The effective Loan Rate will remain fixed for the duration of each Term. Prior to Schedule funding, Lender may adjust the Loan Rate in order to maintain its originally anticipated rate of
return if there is an increase in the yield on the U.S Treasury Bills, as quoted in the Federal Reserve statistical release H.15 (519), from the Index Basis specified in this proposal letter.
		
	 Costs:
	  	Borrower shall be responsible for all costs and expenses relating to the transaction, including, without limitation, extraordinary attorneys’ and appraisal fees, lien search and filing
fees relating to the preparation, execution and recording of all documents
		
	 Expiration:
	  	This loan proposal will expire if a signed copy of this proposal letter is not received by Oxford on or before December 20, 2001.

  
 This proposal letter
and the collateral described are subject to final review and approval by Oxford Venture Finance, LLC and its Executive Credit Committee, and is not a commitment to provide financing. Any material adverse change in Borrower’s financial condition
may render this proposal or established loan line null and void, at the sole discretion of Lender. Neither party shall have any obligation or liability to the other with respect to funding against collateral under this proposal in the
above-described transaction until a binding Loan Agreement satisfactory to all parties has been executed. 
  
 Oxford Venture Finance welcomes the opportunity to be of service to ICAgen, Inc. We look forward to working with you. 
  

	
	 Sincerely,

	 OXFORD VENTURE FINANCE, LLC

	
	 /s/ J. Alden Philbrick, IV

	 J. Alden Philbrick, IV

	 President

  

			
	 ACKNOWLEDGED AND AGREED:

	 ICAgen, Inc.

		
	 By:
	 	 /s/ P. Kay Wagoner

	 Title: CEO & President

	 Date: 12/20/01

 Mr. Robert J. Jakobs 
 December 20, 2001 
 Page 3 
  
 ATTACHMENT A 
  
 Estimated Categories of Equipment: 
  

						
	 Category

	  	Amount

	  	Percentage

	 
	 Laboratory
	  	850,000	  	68	%
	 Software, Tenant Improvements
	  	250,000	  	20	%
	 Computers
	  	150,000	  	12	%
	 	  	
	  	
	

	 Total
	  	1,250,000	  	100	%

 OXFORD 
  
 February 24, 2003 
  
 Mr. Bob Jakobs 
 Director of Finance 
 42222 Emperor Blvd. 
 Suite 350 
 Durham, NC 27703 
  
 Transmitted via facsimile: 919-941-0813 
  
 Dear Bob: 
  
 This is to notify you that Oxford Finance
Corporation has approved your request for a credit line extension good through December 31, 2003 under the same terms and conditions of the original proposal executed on December 20, 2001. This is to accommodate your anticipated funding of $500,000
worth of capital expenditures in 2003. If you need to increase this amount, or if you have any questions or concerns about this extension, please do not hesitate to contact me at 703-519-6080. 
  

	
	 Sincerely,

	
	 /s/ Chad D. Norman

	 Chad D. Norman

	 Business Development Officer

  

	 133 NORTH FAIRFAX STREET  
	 OXFORD FINANCE CORPORATION 

 ALEXANDRIA, VIRGINIA 22314 
 TEL.: 703-519-4900
FAX: 703-519-4910 
 WWW.OXFORDFINANCE.COM

 OXFORD 
  
 September 2, 2003 
  
 Mr. Bob Jakobs 
 Director of Finance 
 42222 Emperor Blvd 
 Suite 350 
 Durham, NC 27703 
  
 Transmitted via facsimile: 919-941-0813 
  
 Dear Bob: 
  
 This is to notify you that Oxford Finance
Corporation has approved your request for a credit line expansion good through December 31, 2003 under the same terms and conditions of the original proposal executed on December 20, 2001. This is to accommodate your anticipated funding of $600,000
worth of capital expenditures in the third and fourth quarters of 2003. If you need to increase this amount, or if you have any questions or concerns about this expansion, please do not hesitate to contact me at 703-519-6080. 
  

	
	 Sincerely,

	
	 /s/ Chad D. Norman

	 Chad D. Norman

	 Business Development Officer

  

	 133 NORTH FAIRFAX STREET  
	 OXFORD FINANCE CORPORATION 

 ALEXANDRIA, VIRGINIA 22314 
 TEL.: 703-519-4900
FAX: 703-519-4910 
 WWW.OXFORDFINANCE.COM

 AMENDMENT 
 TO 
 MASTER LOAN AND SECURITY AGREEMENT 
  
 This AMENDMENT TO MASTER LOAN AND SECURITY AGREEMENT (this
“Amendment”), dated as of May 18, 2004, is entered into by and between ICAGEN, INC., a Delaware corporation (“Customer”), and OXFORD FINANCE CORPORATION, a Maryland corporation (“Lender”).

  
 RECITALS 
  
 A. Customer and Lender are parties to an Master Loan and
Security Agreement dated as of July 14, 1999 (the “Loan Agreement”) pursuant to which Lender has provided financing to Customer. 
  
 B. Customer and Lender now desire to amend the Loan Agreement upon the terms and conditions set forth herein. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Customer and Lender hereby agree as follows: 
  
 1. Definitions; Interpretation. Unless otherwise defined herein, all capitalized terms used herein and defined in the Loan Agreement shall have the
respective meanings given to those terms in the Loan Agreement. Other rules of construction set forth in the Loan Agreement, to the extent not inconsistent with this Amendment, apply to this Amendment and are hereby incorporated by reference.

  
 2. Amendment to Loan Agreement. Section 5(l) of the
Loan Agreement shall be amended by inserting the following language following the last word of the current Section 5(l): 
  
 “; provided, that, upon the closing of the sale of shares of the Common Stock of Customer in a public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, resulting in at least $25,000,000 of gross proceeds to Customer, the Customer’s obligations under this sentence shall cease and terminate and Customer shall have no further
obligation to furnish Lender with the information or materials described in, or to inform Lender of matters required by, the preceding clauses (i) through (iii);” 
  
 3. Effect of Amendment. On and after the date hereof, each reference to the Loan Agreement in the Loan Agreement or
in any other document shall mean the Loan Agreement as amended by this Amendment. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power, or remedy of Lender, nor constitute a waiver of any
provision of the Loan Agreement. 
  
 4. Full Force and
Effect. Except as amended above, the Loan Agreement and any other dually created amendments remain in full force and effect. 
  

 - 1 - 

 5. Headings. Headings in this Amendment are for convenience of reference only and are not part of
the substance hereof. 
  
 6. Counterparts. This Amendment
may be executed in any number of identical counterparts, any set of which signed by all of the parties hereto shall be deemed to constitute a complete, executed original for all purposes. 
  
 IN WITNESS WHEREOF, Customer and Lender have caused this Amendment to be executed as of the day and year first above
written. 
  

									
	 LENDER:
  

OXFORD FINANCE CORPORATION,
	 	 	 	 CUSTOMER:
  
 ICAGEN, INC.

					
	 By:
	 	 /s/    Michael J.
Altenburger        
	 	 	 	 By:
	 	 /s/    Robert J.
Jakobs        

	 Name:
	 	Michael J. Altenburger	 	 	 	 Name:
	 	Robert J. Jakobs
	 Title:
	 	Chief Financial Officer	 	 	 	 Title:
	 	Sr. Director of Finance

  

 - 2 -

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