Document:

Mortgage and Security Agreement

 Exhibit 10.10 
  

	
	 Prepared by:

	
	 /s/ John N. Malyska

	 John N. Malyska, Esq.

 MORTGAGE AND SECURITY AGREEMENT 
 ON PROPERTY IN BERLIN, CAMDEN COUNTY, NEW JERSEY 
 GIVEN BY 
 PROCATH CORPORATION 
 SUBORDINATION
OF LEASE 
 AND 
 CONSENT TO ALL TERMS AND CONDITIONS OF MORTGAGE 
 GIVEN BY 
 EP MEDSYSTEMS, INC. 
  

			
	Date:	 	as of February 28, 2008
		
	MORTGAGEE:	 	KELTIC FINANCIAL PARTNERS, LP, a Delaware limited partnership, with a place of business at 580 White Plains Road, Suite 610, Tarrytown, New York 10591
		
	MORTGAGOR:	 	PROCATH CORPORATION, a New Jersey corporation bearing federal employer identification number 22-3261466 and New Jersey state organizational number 0100568383 and having its
principal place of business at 575 Route 73 North, Building D, Township of West Berlin, Camden County, New Jersey 08091
		
	EACH A BORROWER, COLLECTIVELY	 	
	BORROWERS:	 	EP MEDSYSTEMS, INC., a New Jersey corporation bearing federal employer identification number 22-3212190 and New Jersey state organizational number 0100541773 and having its
principal place of business at 575 Route 73 North, Building D, Township of West Berlin, Camden County, New Jersey 08091
		
		 	and
		
		 	PROCATH CORPORATION, a New Jersey corporation bearing federal employer identification number 22-3261466 and New Jersey state organizational number 0100568383 and having its
principal place of business at 575 Route 73 North, Building D, Township of West Berlin, Camden County, New Jersey 08091

					
	MORTGAGED	 	Municipality:	 	Township of Berlin
	PREMISES	 	County:	 	Camden
		 	State:	 	New Jersey 08091
			
		 	Common Name:	 	575 Route 73 North, Building D, Township of West Berlin, Camden County, New Jersey 08091
			
		 	Tax Map Designation:	 	Tract One: Tax Block 1002, Lot 6CD1
		 		 	Tract Two: Tax Block 1002, Lot 6CD2
		 		 	Tract Three: Tax Block 1002, Lot 6CD3
		 		 	Tract Four: Tax Block 1002, Lot 6CD4
		 		 	Tract Five: Tax Block 1002, Lot 6CD6
		 		 	Tract Six: Tax Block 1002, Lot 6CD6
		 		 	Township of Berlin
		 		 	Camden County, New Jersey 08091
			
		 	Legal Designation:	 	Attached hereto as Schedule “A”

 1. DEBT; LOAN DOCUMENTS. 
 1.1 (a) Borrowers are jointly and severally indebted to Mortgagee in the principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($1,500,000.00), or so much thereof that may be outstanding from time to time, together with interest thereon, the foregoing being owed under a certain revolving line of credit in the amount of ONE MILLION FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($1,500,000.00) (such revolving line of credit, together with all extensions, modifications [including modifications increasing or decreasing the amount thereof], refinancings, replacements, renewals and/or redatings thereof,
being hereinafter collectively called the “Revolving Loan”). 
 (b) The Revolving Loan is evidenced by that certain
promissory note entitled “Revolving Note” and dated as of even date herewith in the face amount of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00), jointly and severally executed by Borrowers (such note,
together with all extensions, modifications [including modifications increasing or decreasing the amount thereof], refinancings, replacements, renewals and/or redatings thereof, being hereinafter collectively called the “Revolving
Note”). 
 (c) The Revolving Loan indebtedness evidenced by the Revolving Note has been advanced pursuant to a
Revolving/Term Loan Agreement by and among Borrowers and Mortgagee dated as of even date herewith and a General Security Agreement by and among Borrowers and Mortgagee also dated as of even date herewith (such Revolving/Term Loan
Agreement and such General Security Agreement, together with all extensions, modifications [including modifications increasing or decreasing the amount of any financial accommodation provided thereunder], refinancings, replacements, renewals and/or
redatings thereof, being hereinafter collectively called the “Loan Agreement”). 
  

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 1.2 (a) Borrowers are also jointly and severally indebted to Mortgagee in the original
principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00), together with interest thereon, the foregoing being owed under a certain term loan in the amount of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($1,500,000.00), such term loan, together with all extensions, modifications [including modifications increasing or decreasing the amount thereof], refinancings, replacements, renewals and/or redatings thereof, being hereinafter
collectively called the “Term Loan”. 
 (b) The Term Loan is evidenced by that certain promissory note entitled
“Term Note” and dated as of even date herewith in the original principal amount of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00), jointly and severally executed by Borrowers (such note, together with
all extensions, modifications [including modifications increasing or decreasing the amount thereof], refinancings, replacements, renewals and/or redatings thereof, being hereinafter collectively called the “Term Note”).

 (c) The Term Loan indebtedness evidenced by the Term Note has been advanced in accordance with and pursuant to the Loan
Agreement. 
 1.3 The Term Loan and the Revolving Loan (together with all extensions, modifications [including modifications
increasing or decreasing the amount thereof], refinancings, replacements, renewals and/or redatings of either and/or both thereof) are hereinafter collectively called the “Loans”). 
 1.4 The Term Note and the Revolving Note (together with all extensions, modifications [including modifications increasing or decreasing the
amount thereof], refinancings, replacements, renewals and/or redatings of either and/or both thereof) are hereinafter collectively called the “Notes”. 
 1.5 As security for the payment and performance to Mortgagee of the Loans and the Notes and the other Obligations (as more fully defined
below and specifically including therein the definition of “Obligations” as set forth in the Loan Agreement), hereinafter collectively the “Obligations”, Borrowers have provided Mortgagee with the collateral
and security described in or accompanying the Loan Agreement. 
 1.6 As additional security for the payment and performance to Mortgagee of
the Loans and the Notes and the other Obligations, each Borrower as a primary obligor and not as a mere surety has in the Loan Agreement absolutely, unconditionally and irrevocably guaranteed to Mortgagee the other
Borrower’s punctual payment and performance of the Loans and the Notes and the other Obligations, each such guaranty, together with all extensions, modifications, refinancings, replacements, renewals and/or redatings
thereof, being hereinafter collectively called the “Guaranty”; 
  

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 1.7 (a) As a condition to Mortgagee’s extension of the Revolving Loan, Mortgagee has required
that Mortgagor secure with this Mortgage and Security Agreement (this “Mortgage”) on the Mortgaged Premises defined below both (1) the payment and performance of the Loans and the Notes and the other Obligations
and (2) Mortgagor’s obligations under its Guaranty. 
 (b) In satisfaction of such condition, Mortgagor now gives this
Mortgage to secure the payment and performance of the Loans and the Notes and the other Obligations as well as Mortgagor’s obligations under the Guaranty. 
 1.8 Terms not defined herein shall have the meaning given those terms in the Loan Agreement. 
 1.9 This Mortgage, the Loan Agreement, the Guaranty, the Notes and all other guarantees, documents, certificates and instruments executed
in connection therewith, and all extensions, modifications, refinancings, replacements, renewals and/or redatings of any of the foregoing, are sometimes hereinafter referred to collectively as the “Loan Documents” or individually as
a “Loan Document”. The terms of the Loan Documents are hereby made a part of this Mortgage to the same extent and with the same effect as if fully set forth herein. 
 1.10 The consideration for this Mortgage is the present and/or future advancements and re-advancement of funds to Borrowers by Mortgagee which
advancements and/or re-advancements Mortgagee makes in accordance with the provisions of the Loan Agreement and/or the Notes, and this Mortgage shall secure any and all such future advancements and re-advancements and the lien of each such
advancement and re-advancement shall relate back to the date of this Mortgage and this Mortgage shall have the full force, effect and benefits of an indenture to secure future advancements and re-advancements of money. 
 2. OBLIGATIONS; GRANT OF MORTGAGE. 
 2.1 Each and all of the following are hereinafter collectively called the “Obligations”: 
  

	 	(a)	the repayment of all sums, including principal, interest and any amounts, now or hereafter due from Borrowers under the Revolving Loan and the Revolving Note;

  

	 	(b)	the repayment of all sums, including principal, interest and any amounts, now or hereafter due from Borrowers under the Term Loan and the Term Note;

  

	 	(c)	the repayment of all sums, including principal, interest and any amounts, now or hereafter due under the Guaranty; 

  

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	 	(d)	the repayment of all sums now or hereafter due under this Mortgage (and all extensions, modifications, refinancings, replacements, renewals and/or redatings hereof made from time to
time hereafter); 

  

	 	(e)	the repayment of all sums, including principal, interest and any amounts, now or hereafter due under any of the other Loan Documents; 

  

	 	(f)	the performance of all terms, conditions and covenants now or hereafter set forth in the Loan Documents; 

  

	 	(g)	the payment and performance of all other loans, advances, debts, liabilities, obligations, covenants and duties owing to Mortgagee by Mortgagor and/or either Borrower, whether
jointly or severally, of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, whether or not arising under the Loan Agreement, the other Loan Documents or under any other agreement or by
operation of law, whether or not for the payment of money, whether arising by reason of an extension of credit, opening, guaranteeing or confirming of a letter of credit, loan, guaranty, indemnification or in any other manner, whether direct or
indirect (including those acquired by purchase or assignment), absolute or contingent, due or to become due, now due or hereafter arising and howsoever acquired including, without limitation, all interest, charges, expenses, commitment, facility,
collateral management or other fees, attorneys’ fees and expenses, consulting fees and expenses and any other sum chargeable to Mortgagor and/or either Borrower, whether jointly or severally, and whether under the Loan Agreement, the
other Loan Documents or any other agreement with Mortgagee. 

 2.2 To secure the payment and performance of each and all of the
Obligations, Mortgagor has mortgaged, granted and conveyed and by these presents does hereby mortgage, grant and convey to Mortgagee, its successors and assigns, all of Mortgagor’s right, title and interest now owned or hereafter acquired in
and to each of the following (collectively, the “Mortgaged Premises”): 
  

	 	(a)	all those certain tracts of land set forth above as the Mortgaged Premises and more particularly described in Schedule “A” attached hereto and made a part
hereof (collectively the “Real Estate”); 

  

	 	(b)	any and all buildings and improvements now or hereafter erected on, under or over the Real Estate (the “Improvements”); 

  

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	 	(c)	any and all fixtures, machinery, equipment and other articles of personal property, belonging to Mortgagor, at any time now or hereafter installed in, attached to or situated in or
upon the Real Estate, or the buildings and improvements now or hereafter erected thereon, or used or intended to be used in connection with the Real Estate, or in the operation of the buildings and improvements, plant, business or dwelling situate
thereon, whether or not such personal property is or shall be affixed thereto, and all replacements, substitutions and proceeds of the foregoing (all of the foregoing herein called the “Service Equipment”), including without
limitation: (1) all appliances, furniture and furnishings; all articles of interior decoration, floor, wall and window coverings; all office, restaurant, bar, kitchen and laundry fixtures, utensils, appliances and equipment; all supplies, tools
and accessories; all storm and screen windows, shutters, doors, decorations, awnings, shades, blinds, signs, trees, shrubbery and other plantings; (2) all building service fixtures, machinery and equipment of any kind whatsoever; all lighting,
heating, ventilating, air conditioning, refrigerating, sprinkling, plumbing, security, irrigating, cleaning, incinerating, waste disposal, communications, alarm, fire prevention and extinguishing systems, fixtures, apparatus, machinery and
equipment; all elevators, escalators, lifts, cranes, hoists and platforms; all pipes, conduits, pumps, boilers, tanks, motors, engines, furnaces and compressors; all dynamos, transformers and generators; (3) all building materials, building
machinery and building equipment delivered on site to the Real Estate during the course of, or in connection with any construction or repair or renovation of the buildings and improvements thereon; (4) all parts, fittings, accessories,
accessions, substitutions and replacements therefor and thereof; and (5) all files, books, ledgers, reports and records relating to any of the foregoing; 

  

	 	(d)	 any and all leases, subleases, tenancies, licenses, occupancy agreements or agreements to lease all or any portion of the Real Estate, Improvements, Service
Equipment or all or any other portion of the Mortgaged Premises and all extensions, renewals, amendments, modifications and replacements thereof, and any options, rights of first refusal or guarantees relating thereto (collectively, the
“Leases”); all rents, income, receipts, revenues, security deposits, escrow accounts, reserves, issues, profits, awards and payments of any kind payable under the Leases or otherwise arising from the Real Estate, Improvements,
Service Equipment or all or any other portion of the Mortgaged Premises including, without limitation, minimum rents, additional rents, percentage rents, parking, maintenance and deficiency rents (collectively, the “Rents”); all of
the following 

  

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personal property (collectively referred to as the “Contracts”): all accounts, general intangibles and contract rights (including any right
to payment thereunder, whether or not earned by performance) of any nature relating to the ownership or operation of the Real Estate, Improvements, Service Equipment or all or any other portion of the Mortgaged Premises or the use, occupancy,
maintenance, construction, repair or operation thereof; all management agreements, franchise agreements, utility agreements and deposits, building service contracts, maintenance contracts, construction contracts and architect’s agreements; all
maps, plans, surveys and specifications; all warranties and guaranties; all permits, licenses and approvals; and all insurance policies, books of account and other documents, of whatever kind or character, relating to the use, construction upon,
occupancy, leasing, sale or operation of the Real Estate, Improvements, Service Equipment or all or any other portion of the Mortgaged Premises; 

  

	 	(e)	any and all estates, rights, tenements, hereditament, privileges, easements, reversions, remainders and appurtenances of any kind benefiting or appurtenant to the Real Estate,
Improvements or all or any other portion of the Mortgaged Premises; all means of access to and from the Real Estate, Improvements or all or any other portion of the Mortgaged Premises, whether public or private; all streets, alleys, passages, ways,
water courses, water and mineral rights relating to the Real Estate, Improvements or all or any other portion of the Mortgaged Premises; all rights of Mortgagor as declarant or unit owner under any declaration of condominium or association
applicable to the Real Estate, Improvements or all or any other portion of the Mortgaged Premises including, without limitation, all development rights and special declarant rights; and all other claims or demands of Mortgagor, either at law or in
equity, in possession or expectancy of, in, or to the Real Estate, Improvements or all or any other portion of the Mortgaged Premises (all of the foregoing described in this Section herein called the “Appurtenances”); and

  

	 	(f)	 any and all “proceeds” of any of the above-described Real Estate, Improvements, Service Equipment, Leases, Rents, Contracts and Appurtenances, which term
“proceeds” shall have the meaning given to it in the New Jersey Uniform Commercial Code (collectively, the “Proceeds”) and shall additionally include whatever is received upon the use, lease, sale, exchange, transfer,
collection or other utilization or any disposition or conversion of any of the Real Estate, Improvements, Service Equipment, Leases, Rents, Contracts and Appurtenances, voluntary or involuntary, whether cash or non-cash, 

  

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including proceeds of insurance and condemnation awards, rental or lease payments, accounts, chattel paper, instruments, documents, contract rights, general
intangibles, equipment and inventory. 

 TO HAVE AND TO HOLD the above granted and conveyed Mortgaged Premises unto
and to the proper use and benefit of Mortgagee, its successors and assigns, forever. 
 3. FUTURE ADVANCES. This
Mortgage shall secure any additional loans as well as any and all present or future advances and readvances under the Obligations made by Mortgagee to or for the benefit of Mortgagor and/or either Borrower and/or the Mortgaged Premises,
including, without limitation: (a) principal, interest, late charges, fees and other amounts due under the Obligations or this Mortgage; (b) all advances by Mortgagee to Mortgagor and/or either Borrower or, to the extent permitted
by any Loan Documents, any other person to pay costs of erection, construction, alteration, repair, restoration, maintenance and completion of any improvements on the Mortgaged Premises; (c) all advances made or costs incurred by Mortgagee for
the payment of real estate taxes, assessments or other governmental charges, maintenance charges, insurance premiums, appraisal charges, environmental inspection, audit, testing or compliance costs, and costs incurred by Mortgagee for the
enforcement and protection of the Mortgaged Premises or the lien of this Mortgage; and (d) all legal fees, costs and other expenses incurred by Mortgagee by reason of any default or otherwise by Mortgagor and/or either Borrower in
connection with the Obligations. Mortgagor agrees that if, at any time during the term of this Mortgage or following a foreclosure hereof, Mortgagor and/or either Borrower fails to perform or observe any covenant or obligation under this
Mortgage including, without limitation, payment of any of the foregoing, Mortgagee may (but shall not be obligated to) take such steps as are reasonably necessary to remedy any such nonperformance or nonobservance and provide payment thereof. All
amounts advanced by Mortgagee pursuant to the Loan Documents shall be added to the amount secured by this Mortgage and the other Loan Documents, and shall be due and payable on demand, together with interest at the Default Rate set forth in the
Term Note or the Revolving Note (whichever is higher), such interest to be calculated from the date of such advance to the date of repayment thereof. Mortgagor’s obligations hereunder shall be continuing and shall survive
notwithstanding a foreclosure of this Mortgage. By their execution of this Agreement, Mortgagor (in its capacity as a Borrower under the Loan Agreement) and Borrower EP MEDSYSTEMS, INC. (signing this Mortgage so as to consent to all the terms
and conditions of this Mortgage and to subordinate its leasehold estate in the Mortgaged Premises) hereby authorize Mortgagee (as “Lender” under the Loan Agreement) to effect payment of the above in the manner specified in Section 3.9
of the Loan Agreement. 
 4. ASSIGNMENT OF LEASES. 
 4.1 (a) Mortgagor hereby conveys, transfers and assigns to Mortgagee all Leases and Rents. This conveyance, transfer and assignment are intended to be and
shall constitute an unconditional, absolute and present assignment from Mortgagor to Mortgagee of all of Mortgagor’s right, title and interest in and to the Leases and Rents (subject to subsections (b) and (c) hereof), and not an
assignment in the nature of a pledge of such Leases and Rents or the mere grant of a security interest therein. This conveyance, transfer and assignment are effective immediately 

  

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and shall continue in effect until the Obligations are paid in full and this Mortgage is canceled or discharged of record. Notwithstanding the foregoing, so
long as no Event of Default (as defined below) exists, Mortgagor shall have the privilege under a revocable license granted hereby to operate and manage the Mortgaged Premises and to collect, as they become due, but not prior to accrual, the Rents.
Such license granted to Mortgagor shall be immediately revoked without further notice or demand upon the occurrence of an Event of Default. In such event, Mortgagor shall receive and hold such Rents, as well as the privilege and license to receive
such Rents, in trust as a fund to be applied, and Mortgagor hereby covenants and agrees that such Rents shall be so applied, first to the operation, maintenance and repair of the Mortgaged Premises and the payment of interest, principal and other
sums becoming due under the Obligations, before retaining and/or disbursing any part of the Rents for any other purpose. 
 (b)
Notwithstanding any legal presumption to the contrary, Mortgagee shall not be obligated by reason of its acceptance of any Rent to perform any obligation of Mortgagor under any of the Leases, and Mortgagee shall not, prior to Mortgagee’s entry
upon and actually taking physical possession of the Mortgaged Premises, be deemed a mortgagee in possession. 
 (c) This conveyance,
transfer and assignment and/or the collection by Mortgagee of Rents hereunder are not intended, and they shall not be construed, to operate to place responsibility upon Mortgagee for: (1) the control, care, operation, management or repair of
the Mortgaged Premises; (2) the performance of any of the terms or conditions of the Leases; (3) any waste committed on, or any dangerous or defective condition at the Mortgaged Premises unless caused by Mortgagee; or (4) any
negligence in the control, care, operation, management or repair of the Mortgaged Premises, resulting in loss or injury or death to any tenant, licensee, employee or other person or loss of or damage to the Mortgaged Premises of any of the foregoing
unless caused by Mortgagee; it being the intent of the parties that the responsibility and liability for the aforesaid matters shall remain solely with Mortgagor. Mortgagee assumes no liability for any security deposited with Mortgagor by any tenant
unless and until such deposits are specifically transferred and delivered to Mortgagee. 
 4.2 Mortgagor represents and warrants to Mortgagee
as follows: (a) Mortgagor has title to and full right to assign presently, absolutely and unconditionally the Leases and the Rents thereunder; (b) no other assignment of any interest in any of the Leases or Rents has been made;
(c) there are no leases or agreements to lease all or any portion of such Mortgaged Premises now in effect, except Borrower EP MEDSYSTEMS, INC., leases/occupies the entirety of the Mortgaged Premises without benefit of any lease agreement,
all of which lease/occupancy rights have been made subordinate to this Mortgage by the Subordination of Lease given below by Borrower EP MEDSYSTEMS, INC.; (d) to Mortgagor’s knowledge, Mortgagor has not done anything which might
prevent Mortgagee from or limit Mortgagee in operating under or exercising the rights granted to Mortgagee hereunder; (e) Mortgagor has not accepted Rent or occupancy charges from Borrower EP MEDSYSTEMS, INC., more than thirty
(30) days in advance of its accrual, and payment thereof has not otherwise been forgiven, discounted or compromised; and (f) Mortgagor has not received any security funds or deposits from Borrower EP MEDSYSTEMS, INC. 
  

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 4.3 Mortgagor covenants and agrees that Mortgagor will perform all of its obligations, as landlord, under
the Leases and will enforce the performance by tenants of all of their respective obligations under the Leases, and will not do or permit to be done anything to impair the enforceability thereof. 
 4.4 (a) Mortgagor covenants and agrees that Mortgagor will not, without the prior written consent of Mortgagee in each instance: (1) accept or
collect the Rent under any Lease more than one month in advance of the due date thereof; (2) discount, forgive, encumber or assign the Rents or any part thereof or any Lease or any interest therein; (3) enter into a written lease agreement
with Borrower EP MEDSYSTEMS, INC.; (4) subordinate any Lease to any mortgage (except for this Mortgage) or other encumbrance; (5) consent to any assignment of or subletting under any Lease; (6) cancel or terminate any Lease or
accept a surrender thereof; (7) release any guarantor or surety of any tenant’s obligations under any of the Leases; or (8) enter into any Lease subsequent to the date hereof. 
 (b) Any of the foregoing acts, if done without the prior written consent of Mortgagee in each instance, shall be null and void. 
 4.5 Mortgagor covenants and agrees to furnish to Mortgagee, upon prior written request, but in no event more than three times per calendar year:
(a) a complete list, as of the date of such request, of all existing Leases and the Rents payable thereunder, and providing such further detail as Mortgagee may reasonably request; (b) executed or certified copies of all existing Leases
and any modifications or amendments thereto; and (c) specific, separate assignments of any future Leases duly executed and acknowledged by Mortgagor. 
 4.6 Mortgagee may elect, at its sole option (upon prior written notice prior to the occurrence of an Event of Default but without notice after the occurrence of an Event of Default), and without releasing Mortgagor
from any obligation hereunder or under the Leases, to discharge any obligation under the Leases which Mortgagor fails to discharge, including without limitation, defending, at its own cost and expense, any action brought against Mortgagor or
Mortgagee with respect thereto, and all sums expended by Mortgagee in connection therewith, including costs, expenses and reasonable attorneys’ fees, shall be included in the Obligations, and shall be due and payable on demand, together with
interest from the date of default at the Default Rate set forth in the Revolving Note or the Term Note (whichever is higher), such interest to be calculated from the date of such advance to the date of repayment thereof. This Section
shall survive the repayment of the Obligations and the release or discharge of this Mortgage. 
 5. SECURITY AGREEMENT.
This Mortgage constitutes a security agreement under the New Jersey Uniform Commercial Code (the “Code”) and shall be deemed to constitute a fixture financing statement. Mortgagor hereby grants to Mortgagee a security interest in
the personal and other property included in the Mortgaged Premises, and all replacements of, substitutions for, and additions to, such property, and the proceeds thereof. Mortgagor hereby authorizes Mortgagee, at Mortgagee’s expense, to
execute, deliver, file and refile any financing or continuation statements or other security agreements Mortgagee may require from time to time to perfect, confirm or maintain 

  

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the lien of this Mortgage with respect to such property. Without limiting the foregoing, Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact for
the foregoing purposes, which appointment, being for security, is coupled with an interest and shall be irrevocable. 
 6.
REPRESENTATIONS, WARRANTIES AND COVENANTS. 
 6.1 Payment and Performance. Mortgagor and/or
Borrowers shall (a) pay to Mortgagee all sums required to be paid by Mortgagor and/or either Borrower under the Loan Documents, in accordance with their stated terms and conditions; (b) perform and comply with all terms,
conditions and covenants set forth in this Mortgage; and (c) perform and comply with all of Mortgagor’s obligations and duties as landlord under any Leases. 
 6.2 Seisin and Warranty. Mortgagor is seized of an indefeasible estate in fee simple in, and warrants the title to, the Mortgaged Premises; has good and valid title to all rents, issues and
profits therefrom, and has the right, full power and lawful authority to grant, convey and assign the same to Mortgagee in the manner and form set forth herein; and this Mortgage is a valid and enforceable first lien on the Mortgaged Premises.
Mortgagor hereby covenants that Mortgagor shall (a) preserve such title and the validity and priority of the lien of this Mortgage and shall defend the same to Mortgagee against all lawful claims whatsoever; and (b) execute, acknowledge
and deliver all such further documents or assurances, and cause to be done all such further acts as may at any time hereafter be reasonably required by Mortgagee to protect fully the lien of this Mortgage. 
 6.3 Insurance. 
 (a)
Mortgagor shall obtain and maintain at all times throughout the term of this Mortgage the following insurance in amounts, with deductibles and with companies reasonably satisfactory to Mortgagee from time to time: (1) comprehensive general
public liability insurance covering all operations of Mortgagor; (2) “All-Risk” fire and extended coverage hazard insurance (together with vandalism and malicious mischief endorsements) in an aggregate amount not less than 100% of the
full insurable replacement value of the Mortgaged Premises, including coverage for loss of contents owned by Mortgagor; (3) during the course of any construction, reconstruction, remodeling or repair of Improvements on the Mortgaged Premises,
builders’ all-risk extended coverage insurance in amounts based upon the completed replacement value of the Improvements (excluding roads, foundations, parking areas, paths, walkways and like improvements), including coverage for loss of
contents and endorsed to provide that occupancy by any person shall not void such coverage; (4) if the Mortgaged Premises are required to be insured pursuant to the Flood Disaster Protection Act of 1973 or the National Flood Insurance Act of
1968, and the regulations promulgated thereunder, flood insurance in an amount at least equal to the lesser of the outstanding principal balance of this Mortgage or the maximum limit of coverage available; and (5) such other insurance as
Mortgagee may reasonably require, including without limitation, environmental liability insurance. 
 (b) Each insurance policy required
under this Section shall be written by an insurance company authorized or licensed to do business in New Jersey having an Alfred M. Best Company, Inc. rating of A or higher and a financial size category of not less than VII, and shall be on such
forms and written by such companies as shall be reasonably approved by Mortgagee. 
  

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 (c) Each insurance policy required under this Section providing insurance against loss or damage to
property, business interruption or rent loss shall be written or endorsed so as to (1) name Mortgagee as mortgagee under a New Jersey standard mortgagee or secured party endorsement, as the case may be, or its equivalent; and (2) for other
than claims payable to third parties for bodily injury sustained by any such third party (which will be made payable to such third parties), make all losses payable directly to Mortgagee, without contribution. 
 (d) Each insurance policy required under this Section providing public liability coverage shall be written and endorsed so as to name Mortgagee as a
certificate holder with thirty (30) days prior written notice of cancellation. 
 (e) Each insurance policy required under this Section
shall contain a provision (1) requiring the insurer to notify Mortgagee, in writing and at least thirty (30) days in advance, of any cancellation or material change in the policy; (2) waiving all rights of setoff, counterclaim,
deduction or subrogation against Mortgagor; and (3) excluding Mortgagee from the operation of any coinsurance clause. 
 (f) At least
thirty (30) days prior to the expiration of any insurance policy, Mortgagor shall furnish evidence satisfactory to Mortgagee that such policy has been renewed or replaced. 
 (g) Mortgagor shall not take out any separate or additional insurance with respect to the Mortgaged Premises which is contributing in the event of loss
unless approved by Mortgagee and in conformity with the requirements of this Section. 
 (h) Notwithstanding the foregoing, in the event
that Mortgagor fails to maintain insurance in accordance with this Section, and Mortgagee elects to obtain insurance to protect its interests hereunder, Mortgagee may obtain insurance in any amount and of any type Mortgagee deems appropriate to
protect Mortgagee’s interest only and Mortgagee shall have no duty or obligation to Mortgagor to maintain insurance in any greater amount or of any other type for the benefit of Mortgagor. All insurance premiums incurred or paid by Mortgagee
shall be at Mortgagor’s sole cost and expense in accordance with Section 3 hereof. Mortgagee’s election to obtain insurance shall not be deemed to waive any Event of Default (as hereinafter defined) hereunder. 
 6.4 Taxes and Other Charges. Mortgagor shall prepare and timely file all federal, state and local tax returns required to be filed
by Mortgagor and promptly pay and discharge when due all taxes, assessments, water and sewer rents, and other governmental charges, imposed upon the Mortgaged Premises and, until payment in full of the Notes, upon Mortgagor, but in no event
after interest or penalties commence to accrue thereon or become a lien upon such property, except for those taxes, assessments, water and sewer rents, and other governmental charges then being contested in good faith by Mortgagor by appropriate
proceedings and for which Mortgagor has established on its books or by deposit of cash with Mortgagee, at the request of Mortgagee, a reserve for the payment thereof in such amount as Mortgagee may require, and so long as such contest: (a)

  

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operates to prevent collection, stay and proceedings which may be instituted to enforce payment of such item, and prevent a sale of Mortgagor’s property
to pay such item; (b) is maintained and prosecuted with due diligence; and (c) shall not have been terminated or discontinued adversely to Mortgagor. Mortgagor shall submit to Mortgagee, upon prior written request, an affidavit signed by
Mortgagor certifying that all federal, state and local income tax returns required to have been filed have been filed to date and all real property taxes, assessments and other governmental charges with respect to Mortgagor’s properties have
been paid to date except for those taxes, assessments, water and sewer rents, and other governmental charges then being contested in good faith by Mortgagor in the manner aforesaid. 
 6.5 Escrows. If requested in writing by Mortgagee after the occurrence of an
Event of Default, Mortgagor shall pay to Mortgagee at the time of each installment of principal and interest due under the Notes, and commencing with the first payment due after the date of such written request, a sum equal to
one-twelfth ( 1/12th) of the estimated amount of real estate and school taxes, as well as any other governmental assessments for each year of the Loans. In addition, if requested in writing by Mortgagee after the occurrence of an Event of
Default, Mortgagor may also be required to deposit with Mortgagee, in escrow, with each monthly installment payment in the Loans, in addition to the foregoing, an amount equal to one-twelfth ( 1/12th) of the estimate
amount of hazard and liability insurance premiums in connection with the insurance required by Section 6.3 of this Mortgage. The escrow for such taxes and premiums, if required, will be subject to adjustment from time to time so that the amount
on deposit will be sufficient to pay such taxes and premiums, as the case may be, as they become due, plus a minimum equal to at least two (2) months’ escrow installments. If such escrow funds are not sufficient to pay such taxes and
assessments and/or insurance premiums, as applicable, as the same become due, Mortgagor shall pay to Mortgagee, upon request, such additional amounts as necessary to make up any deficiency. No amount paid to Mortgagee hereunder shall be deemed to be
trust funds but may be commingled with general funds of Mortgagee and no interest shall be payable thereon. Upon the occurrence of an Event of Default, Mortgagee shall have the right, at its sole discretion, to apply any amounts so held against the
Obligations. If Mortgagor is not required to pay tax escrows pursuant to this Section, Mortgagor shall promptly provide to Mortgagee on a quarterly basis, copies of receipted tax bills, canceled checks or other evidence reasonably satisfactory to
Mortgagee evidencing that such taxes and assessments have been timely paid. 
 6.6 Transfer of Title. 

(a) Mortgagor shall not without the prior written consent of Mortgagee in each instance cause or permit any transfer of the Mortgaged Premises or any
part thereof, whether voluntarily, involuntarily or by operation of law, nor shall Mortgagor enter into any agreement or transaction to transfer, or accomplish in form or substance a transfer, without the prior written consent of Mortgagee, of the
Mortgaged Premises. 
 (b) A “transfer” of the Mortgaged Premises includes: 
  

	 	(1)	the direct or indirect sale, transfer or conveyance of the Mortgaged Premises or any portion thereof or interest therein; 

  

 13 

	 	(2)	the execution of an installment sale contract or similar instrument affecting all or any portion of the Mortgaged Premises; 

  

	 	(3)	an agreement by Mortgagor leasing any part of the Mortgaged Premises to anyone other than Borrower EP MEDYSTEMS, INC., or a sale, assignment or other transfer of or the grant
of a security interest in and to any Leases; 

  

	 	(4)	if Mortgagor, or any stockholder of Mortgagor, is a corporation, partnership, limited liability company or other business entity, the transfer (whether in one transaction or a
series of transactions) of any stock, partnership, limited liability company or other ownership interests in such corporation, partnership, limited liability company or entity; and 

  

	 	(5)	if Mortgagor, or any stockholder of Mortgagor, is a corporation, partnership, limited liability company or other business entity, the creation or issuance of new stock or ownership
interests by which an aggregate of more than 10% of the ownership interests of such corporation, partnership, limited liability company or other business entity shall be vested in a party or parties who are not now stockholders or holders of
ownership interests. 

 6.7 No Encumbrances. 
 (a) Mortgagor shall not create or permit to exist any mortgage, pledge, lien, security interest (including, without limitation, a purchase money security
interest), encumbrance (other than utility easements granted to service the Mortgaged Premises), attachment, levy, distraint or other judicial process on or against the Mortgaged Premises or any part thereof (including, without limitation, fixtures
and other personalty), whether superior or inferior to the lien of this Mortgage, without the prior written consent of Mortgagee. If any lien or encumbrance is filed or entered without Mortgagor’s consent, Mortgagor shall have it removed of
record within thirty (30) days after it is filed or entered. 
 (b) By placing or accepting a mortgage, lien or encumbrance of any
type, whether voluntary or involuntary, against the Mortgaged Premises, the holder thereof shall be deemed to have agreed, without any further act or documentation being required, that its mortgage, lien or encumbrance shall be subordinate in lien
priority to this Mortgage and to any future amendments, consolidations or extensions hereof (including, without limitation, amendments which increase the interest rate on the Notes, extend the term of the Obligations, provide for future
advances secured by this Mortgage, or provide for the release of portions of the Mortgaged Premises with or without consideration). 
  

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 (c) The holder of any subordinate mortgage or other lien, whether or not consented to by Mortgagee,
expressly agrees by acceptance of such subordinate mortgage or other lien that it waives and relinquishes any rights it may have, whether under a legal theory of marshaling of assets or any other theory at law or in equity, to restrain Mortgagee
from, or recover damages from Mortgagee as a result of, Mortgagee exercising its various remedies hereunder or under any other documents evidencing or securing the Obligations, in such order and with such timing as Mortgagee deems appropriate in its
sole discretion. 
 (d) Mortgagee may, at any time or from time to time, renew, extend or increase the amount of this Mortgage, alter or
modify the terms hereof or of the Notes in any way, waive any of the terms, covenants or conditions hereof or of the Notes in whole or in part, release any portion of the Mortgaged Premises or any other security, and grant such
extensions and indulgences in relation to the Obligations as Mortgagee may determine, without the consent of any junior lienor or encumbrancer or any obligation to give notice of any kind thereto, and without in any manner affecting the priority or
the lien hereof on all or any part of the Mortgaged Premises. 
 6.8 Removal of Fixtures. Mortgagor shall not, without the
prior written consent of Mortgagee, remove or permit to be removed from the Mortgaged Premises any fixtures presently or in the future owned by Mortgagor as the term “fixtures” is defined by the law in New Jersey (unless such fixtures have
been replaced with similar fixtures of equal or greater utility and value). 
 6.9 Maintenance and Repair; Alterations.

 (a) Mortgagor shall (1) abstain from and not permit the commission of waste in or about the Mortgaged Premises; (2) keep the
Mortgaged Premises, at Mortgagor’s own cost and expense, in good and substantial repair, working order and condition, normal wear and tear excepted; (3) make or cause to be made, as and when necessary, all repairs and replacements, whether
or not insurance proceeds are available therefor; and (4) not remove, demolish, materially alter, discontinue the use of, permit to become vacant or deserted, or otherwise dispose of all or any part of the Mortgaged Premises. All alterations,
replacements, renewals or additions made pursuant to this Section shall automatically become a part of the Mortgaged Premises and shall be covered by the lien of this Mortgage. 
 (b) Mortgagee, and any persons authorized by Mortgagee, shall have the right, but not the obligation, to enter upon the Mortgaged Premises at all
reasonable times and upon prior notice to Mortgagor, to inspect and photograph its condition and state of repair. In the event any such inspection reveals, in the reasonable discretion of Mortgagee, the necessity for any repair, alteration,
replacement, clean-up or maintenance, Mortgagor shall, at the discretion of Mortgagee, either: (1) cause such work to be effected within a reasonable period of time; or (2) promptly establish an interest bearing reserve fund with Mortgagee
in an amount determined by Mortgagee to be used to pay for any such work to be completed upon the Mortgaged Premises. 
 6.10
Compliance with Applicable Laws. 
 (a) Mortgagor agrees to observe, conform and comply, and to cause its tenants to observe,
conform and comply with all federal, state, county, municipal and other 

  

 15 

 
governmental or quasi-governmental laws, rules, regulations, ordinances, codes, requirements, covenants, conditions, orders, licenses, permits, approvals and
restrictions, including without limitation, the Americans with Disabilities Act of 1990 (collectively, the “Legal Requirements”), now or hereafter affecting all or any part of the Mortgaged Premises, its occupancy or the business or
operations now or hereafter conducted thereon and the personalty contained therein, within such time as required by such Legal Requirements. 
 (b) To the best of Mortgagor’s knowledge, Mortgagor represents and warrants that it has caused the Mortgaged Premises to be designed, and the Mortgaged Premises currently is, in material and substantial compliance with all Legal
Requirements applicable to the Mortgaged Premises. Mortgagor further represents and warrants that, to the best of Mortgagor’s knowledge, any funds used to acquire the Mortgaged Premises were not obtained in violation of any Legal Requirements,
and that such funds, including any proceeds of the Loans, are not being used and are not intended to be used to facilitate any violations of any Legal Requirements. 
 6.11 Damage, Destruction and Condemnation. 
 (a) If all or any part of the Mortgaged Premises shall be damaged or destroyed, or if title to or the temporary use of the whole or any part of the Mortgaged Premises shall be taken or condemned by a competent
authority for any public or quasi-public use or purpose, there shall be no abatement or reduction in the amounts payable by Mortgagor under the Loan Documents and Mortgagor shall continue to be obligated to make such payments. 
 (b) If all or any part of the Mortgaged Premises is partially or totally damaged or destroyed, Mortgagor shall give prompt notice thereof to Mortgagee,
and Mortgagee may make proof of loss if not made promptly by Mortgagor. Mortgagor hereby authorizes and directs any affected insurance company to make payment under such insurance, including return of unearned premiums, to Mortgagee instead of to
Mortgagor and Mortgagee jointly, and Mortgagor appoints Mortgagee as Mortgagor’s attorney-in-fact to endorse any draft thereof, which appointment, being for security, is coupled with an interest and irrevocable. Mortgagee is hereby authorized
and empowered by Mortgagor to settle, adjust or compromise, in consultation with Mortgagor, any claims for loss, damage or destruction to the Mortgaged Premises. Mortgagor shall pay all costs of collection of insurance proceeds payable on account of
such damage or destruction. Mortgagor shall have no claim against the insurance proceeds, or be entitled to any portion thereof, and all rights to the insurance proceeds are hereby assigned to Mortgagee as additional security for payment of the
Obligations. Mortgagee shall have the option, in its sole discretion, of paying or applying all or any part of the insurance proceeds to: (1) reduction of the Obligations; (2) restoration, replacement or repair of the Mortgaged Premises in
accordance with Mortgagee’s standard construction loan disbursement conditions and requirements; or (3) Mortgagor. 
 (c) Promptly
upon obtaining knowledge of the institution of any proceeding for the condemnation of all or any part of the Mortgaged Premises, Mortgagor shall give notice to Mortgagee. Mortgagor shall, at its sole cost and expense, diligently prosecute any such
proceeding and shall consult with Mortgagee, its attorneys and experts, and shall cooperate with it in the defense of any such proceeding. Mortgagee may participate in any such proceeding and 

  

 16 

 
Mortgagor shall from time to time deliver to Mortgagee all instruments requested by it to permit such participation. Mortgagor shall not, without
Mortgagee’s prior written consent, which consent may not be unreasonably withheld, delayed or conditioned, enter into any agreement (1) for the taking or conveyance in lieu thereof of all or any part of the Mortgaged Premises, or
(2) to compromise, settle or adjust any such proceeding. All awards and proceeds of condemnation are hereby assigned to Mortgagee, and Mortgagor, upon request by Mortgagee, agrees to make, execute and deliver any additional assignments or
documents necessary from time to time to enable Mortgagee to collect the same. Such awards and proceeds shall be paid or applied by Mortgagee, in its sole discretion, to: (i) reduction of the Obligations; (ii) restoration, replacement or
repair of the Mortgaged Premises in accordance with Mortgagee’s standard construction loan disbursement conditions and requirements; or (iii) Mortgagor. 
 (d) Nothing is this Section shall relieve Mortgagor of its duty to repair, restore, rebuild or replace the Mortgaged Premises following damage or destruction or partial condemnation if no or inadequate insurance
proceeds or condemnation awards are available to defray the cost of repair, restoration, rebuilding or replacement. 
 6.12 Required
Notices. Mortgagor shall notify Mortgagee within ten (10) days of: (a) receipt of any written notice from any governmental or quasi-governmental authority alleging a violation of any Legal Requirement; (b) a substantial change
in the occupancy or use of all or any part of the Mortgaged Premises; (c) receipt of any written notice from the holder of any lien or security interest in all or any part of the Mortgaged Premises; (d) commencement of any litigation
affecting or potentially affecting either the financial ability of Mortgagor to repay the Notes or the value of the Mortgaged Premises; (e) a pending or threatened condemnation known to Mortgagor of all or any part of the Mortgaged
Premises; (f) a fire or other casualty causing damage to all or any part of the Mortgaged Premises; (g) receipt of any written notice with regard to any Release of Hazardous Substances (as such terms are defined in Section 9.2
hereof) or any other environmental matter affecting the Mortgaged Premises or Mortgagor’s interest therein; (h) receipt of any written request for information, demand letter or notification of potential liability from any entity relating
to potential responsibility for investigation or clean-up of Hazardous Substances on the Mortgaged Premises; (i) receipt of any notice from any tenant of all or any part of the Mortgaged Premises alleging a default, failure to perform or any
right to terminate its lease or to set-off rents; or (j) receipt of any notice of the imposition of, or of threatened or actual execution on, any lien on or security interest in all or any part of the Mortgaged Premises. 
 6.13 No Credits on Account of the Obligations. Mortgagor shall not claim or demand or be entitled to any credit on account of the
Obligations for any part of the taxes paid with respect to the Mortgaged Premises or any part thereof and no deduction shall otherwise be made or claimed from the taxable value of the Mortgaged Premises, or any part thereof, by reason of this
Mortgage. 
 6.14 Books and Records. Mortgagor shall keep and maintain complete and accurate books and records in accordance
with generally accepted accounting principles consistently applied, reflecting all of the financial affairs of Mortgagor and all items of income and expense in 

  

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connection with the operation of the Mortgaged Premises. Upon prior notice from Mortgagee to Mortgagor, Mortgagor shall permit representatives of Mortgagee
(a)_to examine and audit Mortgagor’s books and records relating to the aforesaid financial affairs of Mortgagor and items of income and expense arising from the operation of the Mortgaged Premises and (b) to inspect the Mortgaged Premises.
Nothing in the foregoing is intended to limit any rights of Mortgagee arising under the Loan Agreement. 
 6.15 Right to
Reappraise. Mortgagee shall have the right to conduct or have conducted, at Mortgagor’s expense, updated appraisals of the Mortgaged Premises by an independent appraiser reasonably acceptable to Mortgagee and in form and substance
satisfactory to Mortgagee. The cost of such appraisals, if not paid by Mortgagor within thirty (30)days of demand therefor, shall be added to the Obligations and shall be secured by this Mortgage in accordance with the provisions of
Section 3 hereof. By their execution of this Agreement, Mortgagor (in its capacity as a Borrower under the Loan Agreement) and Borrower EP MEDSYSTEMS, INC. (signing this Mortgage so as to consent to all the terms and conditions of
this Mortgage and to subordinate its leasehold estate in the Mortgaged Premises) hereby authorizes Mortgagee (as Lender under the Loan Agreement) to effect payment of the above in the manner specified in Section 3.9 of the Loan Agreement.

 7. DECLARATION OF NO OFFSET. Mortgagor represents to Mortgagee that Mortgagor has no knowledge of any offsets, counterclaims
or defenses to the Obligations either at law or in equity. Mortgagor shall, within five (5) days upon request in person or within ten (10) days upon request by mail, furnish to Mortgagee or Mortgagee’s designee a written statement in
form reasonably satisfactory to Mortgagee stating the amount due under the Obligations and whether there are offsets or defenses against the same, and if so, the nature and extent thereof. 
 8. CHANGE IN LAWS. In the event of the passage, after the date of this Mortgage, of any law changing in any way the laws now in force for
the taxation of mortgages or debts secured thereby, for state or local purposes, or the manner of the operation of any such taxes, so as to impose upon Mortgagee the obligation to pay the whole or any part of any taxes, assessments, charges or liens
or any other amounts (“Charges”) herein required to be paid by Mortgagor, then Mortgagor shall pay the full amount of the Charges; provided that if payment by Mortgagor of any Charges would be unlawful or usurious, Mortgagee may, at
Mortgagee’s option: (a) declare the Obligations to be immediately due and payable; or (b) pay that portion of the Charges as renders the Obligations unlawful or usurious, in which event Mortgagor shall concurrently therewith pay the
remaining lawful and nonusurious portion of said Charges. 
 9. ENVIRONMENTAL MATTERS. 
 9.1 Definitions. For purposes of this Section, “Applicable Environmental Laws” shall mean any and all existing or future
federal, state and local statutes, ordinances, regulations, rules, executive orders, standards and requirements, including the requirements imposed by common law, concerning or relating to industrial hygiene and the protection of health and the
environment including, without limitation: (a) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601 et seq. (“CERCLA”); (b) the Resource Conservation and
Recovery Act of 1976, as amended, 42 U.S.C. §6901 et seq.  

  

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(“RCRA”); (c) the Clean Air Act, as amended, 42 U.S.C. §7901 et seq.; (d) the Clean Water Act, as amended, 33 U.S.C.
§1251 et seq.; (e) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801 et seq.; (f) the New Jersey Industrial Site Recovery Act, formerly known as the Environmental Cleanup Responsibility Act, as
amended, N.J.S.A. 13:1K-6 et seq. (“ISRA”); (g) the New Jersey Spill Compensation and Control Act, as amended, N.J.S.A. 58:10-23.11b et seq. (“Spill Act”); (h) the New Jersey Underground
Storage of Hazardous Substances Act, as amended, N.J.S.A. 58:10A-21 et seq.; and (i) the New Jersey Water Pollution Control Act, as amended, N.J.S.A. 58:10A-1 et seq. Any terms mentioned in this Section which are defined in any
Applicable Environmental Law shall have the meanings ascribed to such terms in said laws; provided, however, that if any of such laws are amended so as to broaden any term defined therein, such broader meaning shall apply subsequent to the effective
date of such amendment. 
 9.2 Representations, Warranties and Covenants. To the best of Mortgagor’s knowledge,
Mortgagor represents, warrants, covenants and agrees as follows: 
 (a) Neither Mortgagor nor the Mortgaged Premises or any occupant thereof
are in violation of or subject to any existing, pending or to its knowledge threatened investigation or inquiry by any governmental authority pertaining to any Applicable Environmental Law. Mortgagor shall not cause or permit the Mortgaged Premises
to be in violation of, or do anything which would subject the Mortgaged Premises to any remedial obligations under, any Applicable Environmental Law, and shall promptly notify Mortgagee in writing of any existing, pending or to its knowledge
threatened investigation or inquiry by any governmental authority in connection with any Applicable Environmental Law. In addition, Mortgagor shall provide Mortgagee with copies of any and all material written communications with any governmental
authority in connection with any Applicable Environmental Law, concurrently with Mortgagor’s giving or receiving of same. 
 (b) There
are no underground storage tanks, radon, asbestos materials, polychlorinated biphenyls or urea formaldehyde insulation present at or installed in the Mortgaged Premises. Mortgagor covenants and agrees that if any such materials are found to be
present at the Mortgaged Premises in violation of law, Mortgagor shall remove or remediate the same promptly upon discovery at its sole cost and expense. 
 (c) Mortgagor has taken all reasonable steps to determine and has determined that there has been no release, spill, discharge, leak, disposal or emission (individually a “Release” and collectively,
“Releases”) of any Hazardous Material, Hazardous Substance or Hazardous Waste, including gasoline, petroleum products, explosives, toxic substances, solid wastes and radioactive materials (collectively, “Hazardous
Substances”) at, upon, under or within the Mortgaged Premises. The use which Mortgagor or any other occupant of the Mortgaged Premises during the term of the Notes makes or intends to make of the Mortgaged Premises will not result in
Release of any Hazardous Substances on or to the Mortgaged Premises. During the term of this Mortgage, Mortgagor shall take all steps necessary to determine whether there has been a Release of any Hazardous Substances on or to the Mortgaged Premises
and if Mortgagor finds a Release has occurred, Mortgagor shall remove or remediate the same promptly upon discovery at its sole cost and expense. 
  

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 (d) The Mortgaged Premises has not been used by the present or previous owners and/or operators and will
not be used in the future to refine, produce, store, handle, transfer, process, transport, generate, manufacture, heat, treat, recycle or dispose of Hazardous Substances (except for storage of such materials, products or substances as may be
utilized in the normal course of business and in compliance with all Applicable Environmental Laws (“Permitted Substances”)). 
 (e) Mortgagor has not received any notice of violation, request for information, summons, citation, directive or other communication, written or oral with respect to the Mortgaged Premises, from the New Jersey Department of Environmental
Protection or the United States Environmental Protection Agency concerning any intentional or unintentional act or omission on Mortgagor’s or any occupant’s part resulting in the Release of Hazardous Substances into the waters or onto the
lands within the jurisdiction of the State of New Jersey or into the waters outside the jurisdiction of the State of New Jersey resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air or other resources owned, managed, held
in trust or otherwise controlled by or within the jurisdiction of the State of New Jersey. 
 (f) The Mortgaged Premises has not been or is
not now being used as a Major Facility (as defined under the Applicable Environmental Laws of the State of New Jersey), and Mortgagor shall not use the Mortgaged Premises as a Major Facility in the future without the prior written consent of
Mortgagee. If Mortgagor ever becomes an owner or operator of a Major Facility, then Mortgagor shall furnish the New Jersey Department of Environmental Protection with all the information required by N.J.S.A. 58:10-23.11d, and shall duly file with
the Director of the Division of Taxation in the New Jersey Department of the Treasury a tax report or return, and shall pay all taxes due therewith, in accordance with N.J.S.A. 58:10-23.11h. 
 (g) Improvements constructed or to be constructed on the Mortgaged Premises are not and will not be located within a “freshwater wetlands” or
a “transition area”, each as defined by N.J.S.A. 13:9B-3 unless a permit is obtained therefor and a copy thereof is delivered to Mortgagee prior to construction under the terms of the New Jersey Freshwater Wetlands Protection Act, as
amended, N.J.S.A. 13:9B-1 et seq., or the rules and regulations promulgated thereunder. 
 (h) In connection with the purchase of the
Mortgaged Premises, Mortgagor required that the seller of said real property, including the Mortgaged Premises, comply with the provisions of ISRA and the seller did comply therewith. 
 (i) Mortgagor shall not conduct or cause or permit to be conducted on the Mortgaged Premises any activity which constitutes an Industrial Establishment,
as such term is defined in ISRA, without the prior written consent of Mortgagee. In the event that the provisions of ISRA become applicable to the Mortgaged Premises subsequent to the date hereof, Mortgagor shall give prompt written notice thereof
to Mortgagor and shall take immediate requisite action to insure full compliance therewith. Mortgagor shall deliver to Mortgagee copies of all correspondence, notices and submissions that it sends to or receives from the New Jersey Department of

  

 20 

 
Environmental Protection in connection with such ISRA compliance. Mortgagor’s obligation to comply with ISRA shall, notwithstanding its general
applicability, also specifically apply to a sale, transfer, closure or termination of operations associated with any foreclosure action, including, without limitation, a foreclosure action brought with respect to this Mortgage. 
 (j) The Mortgaged Premises: (1) is being and has been operated in compliance with all Applicable Environmental Laws, and all permits required
thereunder have been obtained and complied with in all material respects; and (2) does not have any Hazardous Substances present except the Permitted Substances. 
 (k) No lien has been attached to or, to Mortgagor’s knowledge, threatened to be imposed upon any revenue of Mortgagor or the Mortgaged Premises, and there is no basis for the imposition of any such lien based on
any governmental action under Applicable Environmental Laws. Mortgagor has no knowledge that any party has been involved in operations at the Mortgaged Premises which would lead to the imposition of environmental liability on Mortgagor, or on any
subsequent or former owner of the Mortgaged Premises, or the creation of an environmental lien on the Mortgaged Premises. Neither Mortgagor nor any other party under its direction or control will conduct operations at the Mortgaged Premises in a
manner which could lead to the imposition of environmental liability on Mortgagor or the creation of an environmental lien on the Mortgaged Premises. In the event that any such lien is filed, Mortgagor shall, within thirty (30) days from the
date that the Mortgagor is given notice of such lien (or within such shorter period of time as is appropriate in the event that the State of New Jersey or the United States has commenced steps to have the Mortgaged Premises sold), either:
(1) pay the claim and remove the lien from the Mortgaged Premises; or (2) furnish a cash deposit, bond or other security reasonably satisfactory in form and substance to Mortgagee in an amount sufficient to discharge the claim out of which
the lien arises. 
 (l) In the event that Mortgagor shall cause or permit to exist a Release of Hazardous Substances into the waters or onto
the lands within the jurisdiction of the State of New Jersey, or into the waters outside the jurisdiction of the State of New Jersey resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air or other resources owned, managed,
held in trust or otherwise controlled by or within the jurisdiction of the State of New Jersey, without having obtained a permit issued by the appropriate governmental authorities, Mortgagor shall promptly clean up such Release in accordance with
the provisions of all Applicable Environmental Laws. 
 9.3 Right to Inspect and Cure. Mortgagee shall have the right to
conduct or have conducted by its agents or contractors or require Mortgagor to conduct, such environmental inspections, audits and tests as Mortgagee shall deem necessary or advisable from time to time at the sole cost and expense of Mortgagor,
provided, however, that Mortgagor will not be required to pay such expense unless (a) an Event of Default has occurred or (2) Mortgagee has cause to believe in its reasonable judgment that there has been a Release of
Hazardous Substances at the Mortgaged Premises or (3) Mortgagee has cause to believe in its reasonable judgment that there has been a violation of any Applicable Environmental Law. The cost of such inspections, audits and tests, if chargeable
to Mortgagor as aforesaid, shall be added to the Obligations and shall be secured by this 

  

 21 

 
Mortgage. By their execution of this Agreement, Mortgagor (in its capacity as a Borrower under the Loan Agreement) and Borrower EP MEDSYSTEMS, INC.
(signing this Mortgage so as to consent to all the terms and conditions of this Mortgage and to subordinate its leasehold estate in the Mortgaged Premises) hereby authorizes Mortgagee (as Lender under the Loan Agreement) to effect payment of the
above in the manner specified in Section 3.9 of the Loan Agreement. Mortgagor shall, and shall cause each tenant of the Mortgaged Premises to, cooperate with such inspection efforts; such cooperation shall include, without limitation, supplying
all information reasonably requested concerning the operations conducted and Hazardous Substances located at the Mortgaged Premises. In the event that Mortgagor fails to comply with any Applicable Environmental Law, Mortgagee may, in addition to any
of its other remedies under this Mortgage, cause the Mortgaged Premises to be in compliance with such laws and the cost of such compliance shall be added to the sums secured by this Mortgage in accordance with the provisions of Section 3
hereof. By their execution of this Agreement, Mortgagor (in its capacity as a Borrower under the Loan Agreement) and Borrower EP MEDSYSTEMS, INC. (signing this Mortgage so as to consent to all the terms and conditions of this Mortgage and to
subordinate its leasehold estate in the Mortgaged Premises) hereby authorizes Mortgagee (as Lender under the Loan Agreement) to effect payment of the above in the manner specified in Section 3.9 of the Loan Agreement. 
 10. INDEMNIFICATION. 
 10.1
Mortgagor hereby indemnifies and agrees to protect, defend and hold harmless Mortgagee, any entity which “controls” Mortgagee, within the meaning of Section 15 of the Securities Act of 1933, as amended, or is under common control with
Mortgagee, and any member, officer, director, official, agent, employee or attorney of Mortgagee, and their respective heirs, administrators, executors, successors and assigns (collectively, the “Indemnified Parties”), from and
against any and all losses, damages, expenses or liabilities of any kind or nature and from any suits, claims or demands, including reasonable attorneys’ fees incurred in investigating or defending such claim, suffered by any of them and caused
by, relating to, arising out of, resulting from (unless determined by a final judgment of a court of competent jurisdiction to have been caused solely by the gross negligence or willful misconduct of the Indemnified Parties): (a) disputes with
any architect, general contractor, subcontractor, material man or supplier, or on account of any act or omission to act by Mortgagee in connection with the Mortgaged Premises; (b) losses, damages (including consequential damages), expenses or
liabilities sustained by Mortgagee in connection with any environmental inspection, monitoring, sampling or cleanup of the Mortgaged Premises required or mandated by any applicable environmental law; (c) any untrue statement of a material fact
contained in information submitted to Mortgagee by Mortgagor in connection with the Notes or the omission of any material fact necessary to be stated therein in order to make such statement not misleading or incomplete; (d) the failure
of Mortgagor to perform any obligations required to be performed by Mortgagor herein or in any of the Loan Documents; and (e) the ownership, construction, occupancy, operation, use or maintenance of the Mortgaged Premises. 
 10.2 In case any action shall be brought against Mortgagee or any other Indemnified Parties in respect to which indemnity may be sought against
Mortgagor, Mortgagee or such other Indemnified Parties shall promptly notify Mortgagor in writing and Mortgagor shall assume the defense thereof, including the employment of counsel selected by Mortgagor and 

  

 22 

 
reasonably satisfactory to Mortgagee, the payment of all costs and expenses, and the right to negotiate and consent to settlement. Unless such failure to
notify materially prejudices Mortgagor or its ability to defend (and then only to the extent of such prejudice), the failure of Mortgagee to so notify Mortgagor shall not relieve Mortgagor of any liability it may have under the foregoing
indemnification provisions or from any liability which it may otherwise have to Mortgagee or any of the other Indemnified Parties. Mortgagee shall have the right, at its sole option, to employ separate counsel in any such action and to participate
in the defense thereof, all at Mortgagor’s sole cost and expense. Mortgagor shall not be liable for any settlement of any such action effected without its consent (unless Mortgagor fails to defend such claim), but if settled with
Mortgagor’s consent, or if there be a final judgment for the claimant in any such action, Mortgagor agrees to indemnify and save harmless Mortgagee from and against any loss or liability by reason of such settlement or judgment. 
 10.3 The provisions of this Section shall survive the repayment of the Obligations and the release or discharge of this Mortgage. 
 11. EVENTS OF DEFAULT. Each of the following shall constitute a default (each, an “Event of Default”) hereunder:

 11.1 non-payment when due of any sum required to be paid to Mortgagee under any of the Loan Documents, including without limitation,
principal and interest; 
 11.2 a breach of any covenant contained in Section 6 hereof; 
 11.3 a breach by Mortgagor of any other term, covenant, condition, obligation or agreement under this Mortgage, and such breach continues beyond any
applicable grace or notice period, provided, however, that if no grace or notice period is expressly provided and Mortgagor’s breach is capable of cure, Mortgagee will provide Mortgagor notice and 5 days opportunity to cure before an Event of
Default is deemed to exist, provided further however that Mortgagee will not be required to provide the foregoing notice and opportunity to cure, together with any similar notice and opportunity to cure required under any other subsection of this
Section 11 or under any other Loan Document, more than twice in any one calendar year; 
 11.4 an Event of Default under any of
the other Loan Documents; 
 11.5 any representation or statement made by Mortgagor or by either Borrower in any Loan Document or to induce
Mortgagee to enter into the transactions contemplated hereunder shall prove to be false, incorrect or misleading in any material respect as of the date when made, or if of a continuing nature, becomes materially false; to the extent that any
aforementioned representation or statement is made to the best of the information, knowledge or belief of Mortgagor or either Borrower but the underlying representation or statement is nonetheless false or misleading in any material respect, an
Event of Default will be deemed to have occurred hereunder if Mortgagor or the applicable Borrower fails to correct the condition underlying the representation or statement within twenty (20) days after notice from Mortgagee to do so;

  

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 11.6 the filing by or against Mortgagor or either Borrower of a petition seeking relief, or the granting
of relief, under the Federal Bankruptcy Code or any similar federal or state statute; any assignment for the benefit of creditors made by Mortgagor or either Borrower; the appointment of a custodian, receiver, liquidator or trustee for Mortgagor or
either Borrower or for any of the property of Mortgagor or either Borrower, or any action by Mortgagor or either Borrower to effect any of the foregoing; or if Mortgagor or either Borrower becomes insolvent (however defined) or is not paying its
debts generally as they become due; 
 11.7 the dissolution, liquidation, merger, consolidation or reorganization of Mortgagor or either
Borrower or the institution of any proceeding to effect any of the foregoing; 
 11.8 a default under any other obligation by Mortgagor in
favor of Mortgagee not cured after notice and opportunity to cure to the extent, if any, provided in the Loan Documents, or under any document securing or evidencing such obligation, whether or not such obligation is secured by the Mortgaged
Premises; 
 11.9 the occurrence and continuance of any Material Adverse Effect (as defined in the Loan Agreement), provided, however, that
if the Material Adverse Effect is capable of cure, Lender will provide Mortgagor notice and 5 days opportunity to cure before an Event of Default is deemed to exist, provided further however that Mortgagee will not be required to provide the
foregoing notice and opportunity to cure, together with any similar notice and opportunity to cure required under any other subsection of this Section 11 or under any other Loan Document, more than twice in any one calendar year;

 11.10 (a) the filing, entry or issuance of any judgment, execution, garnishment, attachment, distraint or lien against Mortgagor or its
property; or 
 (b) the filing, entry or issuance of any judgment, execution, garnishment, attachment, distraint or lien against either
Borrower or its property; 
 11.11 a default under any other obligation secured by the Mortgaged Premises or any part thereof and such
default continues beyond any applicable grace or notice period. 
 12. REMEDIES. If an Event of Default shall have
occurred, Mortgagee may take any of the following actions (without the obligation to marshal): 
 12.1 Acceleration.
Mortgagee may declare the entire amount of the Obligations immediately due and payable, without presentment, demand, notice of any kind, protest or notice of protest, all of which are expressly waived, notwithstanding anything to the contrary
contained in any of the Loan Documents. Mortgagee may collect interest from the date of default on the unpaid balance of the Obligations, at the Default Rate set forth in the Term Note or the Revolving Note (whichever is higher).

 12.2 Possession. Mortgagee may enter upon and take possession of the Mortgaged Premises, with or without legal
action, lease the Mortgaged Premises, collect therefrom all rentals 

  

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and, after deducting all costs of collection and administration expense, apply the net rentals to any one or more of the following items in such manner and
in such order of priority as Mortgagee, in Mortgagee’s sole discretion, may elect: the payment of any sums due under any prior lien, taxes, water and sewer rents, charges and claims, insurance premiums and all other carrying charges, and to the
maintenance, repair or restoration of the Mortgaged Premises, or on account of the Obligations. Mortgagee is given full authority to do any act which Mortgagor could do in connection with the management and operation of the Mortgaged Premises. This
covenant becomes effective either with or without any action brought to foreclose this Mortgage and without applying for a receiver of such rents. 
 12.3 Foreclosure. Mortgagee may institute any one or more actions of mortgage foreclosure against all or any part of the Mortgaged Premises, or take such other action at law or in equity for the enforcement of this
Mortgage and realization on the security herein or elsewhere provided for, as the law may allow, and may proceed therein to final judgment and execution for the entire unpaid balance of the Obligations, together with all future advances and any
other sums due by Mortgagor in accordance with the provisions of this Mortgage, together with interest from the date of default at the Default Rate set forth in the Term Note or the Revolving Note (whichever is higher), all costs of
suit and attorneys’ fees. In case of any sale of the Mortgaged Premises by judicial proceedings, the Mortgaged Premises may be sold in one parcel or in such parcels, manner or order as Mortgagee in its sole discretion may elect. Mortgagor, for
itself and anyone claiming by, through or under it, hereby agrees that Mortgagee shall in no manner, in law or in equity, be limited, except as herein provided, in the exercise of its rights in the Mortgaged Premises or in any other security
hereunder or otherwise appertaining to the Obligations or any other obligation secured by this Mortgage, whether by any statute, rule or precedent which may otherwise require said security to be marshaled in any manner and Mortgagor, for itself and
others as aforesaid, hereby expressly waives and releases any right to or benefit thereof. The failure to make any tenant a defendant to a foreclosure proceeding shall not be asserted by Mortgagor as a defense in any proceeding instituted by
Mortgagee to collect the Obligations or any deficiency remaining unpaid after the foreclosure sale of the Mortgaged Premises. 
 12.4
Appointment of Receiver. Upon or at any time after Mortgagee has the right to file an action to foreclose this Mortgage, Mortgagee may petition the court in which such action is or might be filed to appoint a receiver of the
Mortgaged Premises. Such appointment may be made either before or after sale, without notice, without regard to the solvency or insolvency of Mortgagor at the time of application for such receiver, without regard to the then value of the Mortgaged
Premises or whether the Mortgaged Premises shall be then occupied as a homestead or not, and without regard to whether Mortgagor has committed waste or allowed deterioration of the Mortgaged Premises, and Mortgagee or any agent of Mortgagee may be
appointed as such receiver. Mortgagor hereby agrees that Mortgagee has a special interest in the Mortgaged Premises and absent the appointment of such receiver the Mortgaged Premises shall suffer waste and deterioration and Mortgagor further agrees
that it shall not contest the appointment of a receiver and hereby so stipulates to such appointment pursuant to this paragraph. Such receiver shall have the power to perform all of the acts permitted Mortgagee pursuant to Section 12.2
above and such other powers which may be necessary or customary in such cases for the protection, possession, control, management and operation of the Mortgaged Premises during such period. 
  

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 12.5 Rights as a Secured Party. Mortgagee shall have, in addition to other rights
and remedies available at law or in equity, the rights and remedies of a secured party under the Code. Mortgagee may elect to foreclose such of the Mortgaged Premises as then comprise fixtures pursuant either to the law applicable to foreclosure of
an interest in real estate or to that applicable to personal property under the Code. To the extent permitted by law, Mortgagor waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. 

12.6 Excess Monies. Mortgagee may apply on account of the Obligations any unexpended monies still retained by Mortgagee that were
paid by Mortgagor to Mortgagee: (a) for the payment of, or as security for the payment of taxes, assessments or other governmental charges, insurance premiums, or any other charges; or (b) to secure the performance of some act by
Mortgagor. 
 12.7 Other Remedies. Mortgagee shall have the right, from time to time, to bring an appropriate action to
recover any sums required to be paid by Mortgagor under the terms of this Mortgage, as they become due, without regard to whether or not any other Obligations shall be due, and without prejudice to the right of Mortgagee thereafter to bring an
action of mortgage foreclosure, or any other action, for any default by Mortgagor existing at the time the earlier action was commenced. In addition, Mortgagee shall have the right to set-off all or any part of any amount due by Mortgagor to
Mortgagee under any of the Obligations, against any indebtedness, liabilities or obligations owing by Mortgagee or any Affiliate in any capacity to Mortgagor, including any obligation to disburse to Mortgagor any funds or other property on deposit
with or otherwise in the possession, control or custody of Mortgagee. 
 13. CONTINUING ENFORCEMENT OF MORTGAGE. If,
after receipt of any payment of all or any part of the Obligations, Mortgagee is compelled or agrees, for settlement purposes, to surrender such payment to any person or entity for any reason (including, without limitation, a determination that such
payment is void or voidable as a preference or fraudulent conveyance, an impermissible setoff, or a diversion of trust funds), then this Mortgage and the other Loan Documents shall continue in full force and effect, and Mortgagor shall be liable
for, and shall indemnify, defend and hold harmless Mortgagee with respect to the full amount so surrendered. The provisions of this Section shall survive the cancellation or discharge of this Mortgage and shall remain effective notwithstanding the
payment of the Obligations, the cancellation of the Notes, the release of any security interest, lien or encumbrance securing the Obligations or any other action which Mortgagee may have taken in reliance upon its receipt of such payment. Any
cancellation, release or other such action by Mortgagee shall be deemed to have been conditioned upon any payment of the Obligations having become final and irrevocable. 
 14. MISCELLANEOUS. 
 14.1 Remedies Cumulative. The rights and
remedies of Mortgagee as provided in this Mortgage or in any other Loan Document shall be cumulative and concurrent, may be pursued separately, successively or together, may be exercised as often as occasion therefor shall arise, and 

  

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shall be in addition to any other rights or remedies conferred upon Mortgagee at law or in equity. The failure, at any one or more times, of Mortgagee to
assert the right to declare the Obligations due, grant any extension of time for payment of the Obligations, take other or additional security for the payment thereof, release any security, change any of the terms of the Loan Documents, or waive or
fail to exercise any right or remedy under any Loan Document shall not in any way affect this Mortgage or the rights of Mortgagee. 
 14.2
Integration. This Mortgage and the other Loan Documents constitute the sole agreement of the parties with respect to the transaction contemplated hereby and supersede all oral negotiations and prior writings with respect
thereto. 
 14.3 Attorneys’ Fees and Expenses. If Mortgagee retains the services of counsel by reason of the
occurrence of an Event of Default or a claim of the occurrence of an Event of Default hereunder or under any of the other Loan Documents, or on account of any matter involving Mortgagor’s title to the Mortgaged Premises or the security interest
intended to be granted hereby, or for examination of matters subject to Mortgagee’s approval under the Loan Documents, all costs of suit and all reasonable attorneys’ fees and such other reasonable expenses so incurred by Mortgagee shall
forthwith become due and payable, on demand, and shall be secured hereby. 
 14.4 No Implied Waiver. Mortgagee shall not
be deemed to have modified or waived any of its rights or remedies hereunder unless such modification or waiver is in writing and signed by Mortgagee, and then only to the extent specifically set forth therein. A waiver in one event shall not be
construed as continuing or as a waiver of or bar to such right or remedy on a subsequent event. 
 14.5 Partial
Invalidity. The provisions of this Mortgage are severable, and if any clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Mortgage in any jurisdiction. Each of the covenants,
agreements and conditions contained in this Mortgage is independent and compliance by Mortgagor with any of them shall not excuse non-compliance by Mortgagor with any other. All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Event of Default if
such action is taken or condition exists. In lieu of any invalid or unenforceable provision, there shall be added automatically a valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible.

 14.6 Binding Effect. The covenants, conditions, waivers, releases and agreements contained in this Mortgage shall
bind, and the benefits thereof shall inure to, the parties hereto and their respective heirs, executors, administrators, successors and assigns and are intended and shall be held to be real covenants running with the land; provided, however, that
this Mortgage cannot be assigned by Mortgagor without the prior written consent of Mortgagee, and any such assignment or attempted assignment by Mortgagor shall be void and of no effect with respect to Mortgagee. 
  

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 14.7 Certain Matters of Construction. The terms “herein”,
“hereof” and “hereunder” and other words of similar import refer to this Mortgage as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. Wherever appropriate
in the context, terms used herein in the singular also include the plural and vice versa. All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. Unless otherwise
provided, all references to any instruments or agreements to which Mortgagee is a party, including, without limitation, references to any of the Loan Documents, shall include any and all extensions, modifications, refinancings, replacements,
renewals and/or redatings thereof. 
 14.8 Modifications. This Mortgage may not be supplemented, extended, modified or
terminated except by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. 
 14.9 Affiliate. As used herein, “Affiliate” shall mean any direct and indirect affiliate and/or subsidiary of Mortgagee. 
 14.10 Commercial Loan. Mortgagor represents and warrants that the Loans and other financial accommodations included as
Obligations secured by this Mortgage were obtained solely for the purpose of carrying on or acquiring a business or commercial investment and not for residential, consumer or household purposes. 
 14.11 Modification of Mortgage. This Mortgage is subject to “modification” as such term is defined in P.L. 1985
c.353 (N.J.S.A. 46:9-8.1 et seq.) and shall be entitled to the benefits of the priority provisions thereof. 
 14.12
Jurisdiction. Mortgagor hereby consents that any action or proceeding against it be commenced and maintained in any court within the State of New Jersey or in the United States District Court for the District of New Jersey by
service of process on any such owner, partner and/or officer; and Mortgagor agrees that the courts of the State of New Jersey and the United States District Court for the District of New Jersey shall have jurisdiction with respect to the subject
matter hereof and the person of Mortgagor and all collateral securing the obligations of Mortgagor. To the extent permitted by law, Mortgagor agrees not to assert any defense to any action or proceeding initiated by Mortgagee based upon improper
venue or inconvenient forum. Mortgagor agrees that any action brought by Mortgagor shall be commenced and maintained only in a court in the federal district or county in which Mortgagee has its principal place of business in New Jersey. 

14.13 Notices. All notices and communications under this Mortgage shall be in writing and shall be given by either
(a) hand-delivery, (b) certified mail (return receipt requested, postage prepaid), or (c) reliable overnight commercial courier (charges prepaid), to the addresses listed in this Mortgage. Notice shall be deemed to have been given and
received: (i) if by hand delivery, upon delivery; (ii) if by mail, three (3) calendar days after the date first deposited in the United States mail; and (iii) if by overnight courier, on the date scheduled for delivery. A party
may change its address by giving written notice to the other party as specified herein. 
  

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 14.14 Governing Law. This Mortgage shall be governed by and construed in accordance
with the substantive laws of the State of New Jersey without reference to conflict of laws principles, or the laws of any state in which the Loans were made or are repayable, or the laws of any state in which any collateral for the
Notes is located, at the sole discretion of Mortgagee. 
 14.15 Joint and Several Liability. If Mortgagor
consists of more than one person or entity, the word “Mortgagor” shall mean each of them and their liability shall be joint and several. 
 14.16 Waiver of Jury Trial. MORTGAGOR AGREES (AND BY ITS ACCEPTANCE OF THIS MORTGAGE, MORTGAGEE ALSO AGREES) THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY MORTGAGEE OR MORTGAGOR ON OR WITH
RESPECT TO THIS MORTGAGE OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. MORTGAGOR (AND BY ITS ACCEPTANCE OF THIS MORTGAGE, MORTGAGEE) EACH HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, MORTGAGOR WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY
SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. MORTGAGOR ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS MORTGAGE
AND THAT MORTGAGEE WOULD NOT EXTEND CREDIT TO MORTGAGOR IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS MORTGAGE. 
 14.17 Release. This Mortgage shall terminate upon the payment in full of the Obligations and the fulfillment or performance of all of the conditions of this Mortgage and the Obligations. Thereupon, Mortgagee shall
release the Mortgaged Premises and shall execute at the request of Mortgagor a release of this Mortgage and any other instrument to that effect deemed necessary or desirable. 
 THIS IS THE LAST PAGE OF THIS DOCUMENT. 
 THE NEXT PAGE IS THE SIGNATURE PAGE.

  

 29 

 IN WITNESS WHEREOF, Mortgagor, intending to be legally bound, has duly executed and delivered this
Mortgage and Security Agreement as of the day and year first above written. 
  

							
	WITNESS:	 		 	PROCATH CORPORATION
				
	 /s/ David I. Bruce
	 		 	By:	 	 /s/ James J. Caruso

	David I. Bruce	 		 		 	James J. Caruso

  

 30 

 CONSENT TO ALL TERMS AND CONDITIONS OF MORTGAGE 
 AND SUBORDINATION OF LEASE 
 EP
MEDSYSTEMS, INC., hereby acknowledges the foregoing Mortgage and consents to all the terms and conditions thereof and agrees to be bound thereby. All rights of EP MEDSYSTEMS, INC., to occupy the Mortgaged Premises, whether those rights
are derived under lease or otherwise, are and shall at all times be subject and subordinate to the lien of the foregoing Mortgage and any and all other mortgages held by Mortgagee which may now or hereafter encumber or otherwise affect the Mortgaged
Premises and to any and all extensions, modifications [including modifications increasing or decreasing the amount thereof], refinancings, replacements, renewals and/or redatings of any of the foregoing. This agreement shall be self operative. No
further instrument of subordination is required from EP MEDSYSTEMS, INC., in order for this subordination to be effective. No instrument from Mortgagee affording EPMEDSYSTEMS, INC., rights of non-disturbance or quiet title is required
in order for this subordination to be effective. EPMEDSYSTEMS, INC., understands and agrees that if any proceedings are brought for the foreclosure of the Mortgage or any such other aforementioned mortgage, the rights of EP MEDSYSTEMS,
INC., under its lease will be foreclosed and its right of possession of the Mortgaged Premises ended. 
  

							
	WITNESS:	 		 	EP MEDSYSTEMS, INC.
				
	 /s/ David I. Bruce
	 		 	By:	 	 /s/ James J. Caruso

	David I. Bruce	 		 		 	James J. Caruso

  

 31 

 SCHEDULE “A” 
 DESCRIPTION OF MORTGAGED PREMISES 
 ALL that tract or parcel of land and
premises, situate, lying and being in the Township of Berlin, in the County of Camden and State of New Jersey, more particularly described as follows: 
 TRACT NO. 1 
 ALL THAT certain lot, piece or parcel of land, with the buildings and improvements thereon erected, situate,
lying and being in the TOWNSHIP OF BERLIN, COUNTY OF CAMDEN, STATE OF NEW JERSEY, and other appurtenances thereto, in fee simple, subject to the Provisions of the New Jersey Condominium Act (R.S. 46B-1, et seq.) as amended and to the provisions of
that certain Master Deed of Cooper Run Executive Park Condominium, a condominium, dated 2/1/89, recorded in the Office of the Register of Deeds of Camden County on 2/28/89, in Deed Book 4355 Page 183, which real property is more particularly
described as UNIT NO. D-1 of said Condominium, together with other appurtenances to said Unit, which Unit and appurtenances have been more specifically defined in the Master Deed, which is comprised of premises known as Block 1002 Lot 6 on the Tax
Map of Berlin Township, New Jersey, and including an undivided 4.166% fee interest in the general common elements of said Condominium appurtenant to said unit, which Unit and appurtenant general common elements have been more specifically defined in
the Master Deed and depicted on certain exhibits thereto. 
 BEING Tax Block 1002, Lot 6CD1. 
 TRACT NO. 2 
 ALL THAT certain lot, piece or parcel of land, with the buildings and improvements
thereon erected, situate, lying and being in the TOWNSHIP OF BERLIN, COUNTY OF CAMDEN STATE OF NEW JERSEY, and other appurtenances thereto, in fee simple, subject to the provisions of the New Jersey Condominium Act (R.S. 46B-1, et seq.) as amended
and to the provisions of that certain Master Deed of Cooper Run Executive Park Condominium, a condominium, dated 2/1/89, recorded in the Office of the Register of Deeds of Camden County on 2/28/89, in Deed Book 4355 Page 183, which real property is
more particularly described as UNIT NO. D-2 of said Condominium, together with other appurtenances to said Unit, which Unit and appurtenances have been more specifically defined in the Master Deed, which is comprised of premises known as Block 1002
Lot 6 on the Tax Map of Berlin Township, New Jersey, and including an undivided 4.166% fee interest in the general common elements of said Condominium appurtenant to said unit, which Unit and appurtenant general common elements have been more
specifically defined in the Master Deed and depicted on certain exhibits thereto. 
 BEING Tax Block 1002, Lot 6CD2. 
  

 32 

 TRACT NO. 3 
 ALL THAT certain lot, piece or parcel of land, with the buildings and improvements thereon erected, situate, lying and being in the TOWNSHIP OF BERLIN, COUNTY OF CAMDEN, STATE OF NEW JERSEY, and other appurtenances thereto, in fee simple,
subject to the provisions of the New Jersey Condominium Act (R.S. 46B-1, et seq.) as amended and to the provisions of that certain Master Deed of Cooper Run Executive Park Condominium, a condominium, dated 2/1/89, recorded in the Office of the
Register of Deeds of Camden County on 2/28/89, in Deed Book 4355 Page 183, which real property is more particularly described as UNIT NO. D-3 of said Condominium, together with other appurtenances to said Unit, which Unit and appurtenances have been
more specifically defined in the Master Deed, which is comprised of premises known as Block 1002 Lot 6 on the Tax Map of Berlin Township, New Jersey, and including an undivided 4.166% fee interest in the general common elements of said Condominium
appurtenant to said unit, which Unit and appurtenant general common elements have been more specifically defined in the Master Deed and depicted on certain exhibits thereto. 
 BEING Tax Block 1002, Lot 6CD3. 
 Title to
TRACT NOS. 1, 2 and 3 became vested in PROCATH CORPORATION by Deed from S & E Enterprises Inc. dated 2/26/99 and recorded 3/23/99 in Deed Book 5007, Page 30. 
 TRACT NO. 4 
 ALL THAT CERTAIN land and premises situate in the Township of BERLIN, County of CAMDEN and State of New Jersey,
bounded and described as follows: 
 BEING Unit Number D-4 as shown in the Master Deed creating and establishing the Cooper Run Executive Park Condominiums, a
condominium, given by A&D Development Company, dated 2/1/89 and recorded 2/28/89 in Deed Book 4355, Page 183 together with an undivided 4.166% interest in the common elements as would more fully appear in the above aforementioned Master Deed.

 BEING Tax Block 1002, Lot 6CD4. 
 Title to TRACT NO. 4 became vested in PROCATH CORPORATION by Deed from A&D DEVELOPMENT COMPANY, a New Jersey General Partnership, dated 1/31/97 and recorded 2/10/97 in Deed Book 4868 Page 601. 
 TRACT NO. 5 
 BEING Unit Number D-6 as shown in the
Master Deed creating and establishing the Cooper Run Executive Park Condominiums, a condominium, given by A&D Development Company, dated 2/1/89 and recorded 2/28/89 in Deed Book 4355, Page 183 together with an undivided 4.166% interest in the
common elements as would more fully appear in the above aforementioned Master Deed. 
 BEING Tax Block 1002, Lot 6CD6. 
  

 33 

 Title to TRACT NO. 5 became vested in PROCATH CORPORATION by Deed from A&D DEVELOPMENT COMPANY, a New
Jersey General Partnership, dated 1/31/97 and recorded 2/10/97 in Deed Book 4868 Page 604. 
 TRACT NO. 6 
 Tax Map Reference. The property being transferred hereby is situated in the Township of Berlin, and is designated on the Tax Map as Block No. 1002, Lot
No. 6CD5, hereinafter referred to as the “Property”. 
 Property. The Property consists of a condominium unit located in the Township of
Berlin, County of Camden and State of New Jersey, commonly known as Cooper Run Executive Park, 334 Cooper Road, Suite D-5, Berlin, NJ 08009. The legal description of the Property is: 
 Unit D-5 in Building D, together with an undivided 4.166% interest in the Common Elements of said condominium, all as more particularly described and designated in the Master Deed for Cooper Run Executive Park
Condominium, dated February 1, 1989, and recorded in the Office of the Register of Camden County in Deed Book 4355 Page 0183 et seq., as it may have been, or may hereafter be, amended (the “Master Deed”). 
 BEING Tax Block 1002 Lot 6CD5. 
 Title to TRACT NO. 6 became vested in
PROCATH CORPORATION by deed from JAMES A. STEEL, TRUSTEE dated 4/30/97 and recorded 5/14/97 in Deed Book 4884, Page 551. 
  

 34 

 CORPORATE ACKNOWLEDGMENT OF PROCATH CORPORATION 
 STATE OF NEW JERSEY, COUNTY OF CAMDEN, SS.: 
 BE IT
REMEMBERED, that on February 28, 2008, before me, the subscriber, personally appeared James Caruso who acknowledged under oath, to my satisfaction, that this person: (a) is the President of PROCATH CORPORATION, the corporation
named as “Mortgagor” in the within instrument; and (b) as such James Caruso, signed and delivered this instrument as the voluntary act and deed of PROCATH CORPORATION, made by virtue of authority from the board of
directors of said corporation. 
  

	
	
	 /s/ James T. Griffin

	James T. Griffin

  

 35 

 CORPORATE ACKNOWLEDGMENT OF EP MEDSYSTEMS, INC. 
 STATE OF NEW JERSEY, COUNTY OF CAMDEN, SS.: 
 BE IT
REMEMBERED, that on February 28, 2008, before me, the subscriber, personally appeared James Caruso who acknowledged under oath, to my satisfaction, that this person: (a) is the Vice President of EP MEDSYSTEMS, INC., the
corporation named in the potion of the foregoing instrument entitled “Consent to All Terms and Conditions of Mortgage and Subordination of Lease”; and (b) as such James Caruso, signed and delivered this instrument as the voluntary act
and deed of EP MEDSYSTEMS, INC., made by virtue of authority from the board of directors of said corporation. 
  

	
	
	 /s/ James T. Griffin

	James T. Griffin

  

 36 

  
 MORTGAGE AND SECURITY AGREEMENT 
 ON PROPERTY IN BERLIN, CAMDEN COUNTY, NEW JERSEY 

GIVEN BY 
 PROCATH CORPORATION 

 CONSENT TO ALL TERMS AND CONDITIONS OF MORTGAGE 
 AND 
 SUBORDINATION OF LEASE 
 GIVEN BY 
 EP MEDSYSTEMS, INC. 
 -to- 
 KELTIC FINANCIAL PARTNERS, LP

  
  
 Dated: as of February 28, 2008 
 RECORD AND RETURN TO: 
 MEYNER AND LANDIS LLP 
 One Gateway Center, Suite 2500 
 Newark, New Jersey 07102 
 Attn: John N. Malyska, Esq.Capella Education Company 1999 Stock Option Plan

 Exhibit 10.4 
 CAPELLA EDUCATION COMPANY 
 1999 STOCK OPTION PLAN 
 1. Purpose. The purpose of this 1999 Stock Option Plan (the “Plan”) is to promote the interests of Capella Education Company, a
Minnesota corporation (the “Company”), and its stockholders by providing personnel of the Company and any parent or subsidiaries thereof, and any other individuals and entities who provide services to the Company or any parent or
subsidiaries in the capacity of non-employee directors or advisors or consultants, with an opportunity to acquire a proprietary interest in the Company and thereby develop a stronger incentive to put forth maximum effort for the continued success
and growth of the Company. In addition, the opportunity to acquire a proprietary interest in the Company will aid in attracting and retaining personnel of outstanding ability. 
 2. Administration. 
 (a)
General. This Plan shall be administered by a committee of two or more directors of the Company (the “Committee”) appointed by the Company’s Board of Directors (the “Board”). If the Board has not appointed a committee
to administer this Plan, then the Board shall constitute the Committee. The Committee shall have the power, subject to the limitations contained in this Plan, to fix any terms and conditions for the grant or exercise of any award under this Plan. A
majority of the members of the Committee shall constitute a quorum for any meeting of the Committee, and the acts of a majority of the members present at any meeting at which a quorum is present or the acts unanimously approved in writing by all
members of the Committee shall be the acts of the Committee. Subject to the provisions of this Plan, the Committee may from time to time adopt such rules for the administration of this Plan as it deems appropriate. The decision of the Committee on
any matter affecting this Plan, or the rights and obligations arising under this Plan or any award granted hereunder, shall be final, conclusive and binding upon all persons, including without limitation the Company, stockholders and optionees.

 (b) Indemnification. To the full extent permitted by law, (i) no member of the Committee or person to whom authority under
this Plan is delegated shall be liable for any action, omission or determination taken or made in good faith with respect to this Plan or any award granted hereunder and (ii) the members of the Committee and each person to whom authority under
this Plan is delegated shall be entitled to indemnification by the Company against and from any loss incurred by such member or person by reason of any such actions and determinations. 
 (c) Delegation of Authority. The Committee may delegate all or any part of its authority under this Plan to the Chief Executive Officer of the
Company for purposes of granting and administering awards granted to persons other than persons who are then subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The Chief Executive Officer of the Company may, in turn, delegate all or a portion of the delegated authority to such other officer or officers of the Company as the Chief Executive Officer may determine. 
  

 (d) Committee Composition when Common Stock is Publicly Traded. At the time that the
Company’s common stock is publicly traded, any options granted to persons subject to Section 16 of the Exchange Act shall be granted by the Board or a Committee consisting of at least two or more Non-Employee Directors, in accordance with
Rule 16b-3 and any options intended to qualify as performance-based compensation within the meaning of Section 162(m) shall be granted by the Committee consisting of two or more Outside Directors, in accordance with Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”). 
 (e) Action by Board. Notwithstanding subparagraph 2(a)
above, any grant of awards hereunder to any director of the Company who is not an employee of the Company at the time of grant (“Non-Employee Director Award”), and any action taken by the Company with respect to any Non-Employee Director
Award, including any amendment thereto, and any acceleration of the vesting of any option constituting a Non-Employee Director Award, any extension of the time within which any option constituting a Non-Employee Director Award may be exercised, any
determination pursuant to paragraph 8 relating to the payment of the purchase price of Shares (as defined in paragraph 3 below) subject to an option constituting a Non-Employee Director Award, or any action pursuant to paragraph 9
relating to the payment of withholding taxes, if any, through the use of Shares with respect to a Non-Employee Director Award shall be subject to prior approval by the Board. 
 3. Shares. The shares that may be made subject to awards granted under this Plan shall be authorized and unissued shares of Common Stock of
the Company, par value $0.10 per share (“Shares,” and each individually a “Share”), and they shall not exceed 400,000 Shares in the aggregate, subject to adjustment as provided in paragraph 13, below, except that, if any
option lapses or terminates for any reason before such option has been completely exercised, the Shares covered by the unexercised portion of such option may again be made subject to options granted under this Plan. An Option may not be exercisable
for a fraction of a Share. 
 4. Eligible Participants. Options may be granted under this Plan to any employee of the Company,
or any parent or subsidiary thereof, including any such person who is also an officer or director of the Company or any parent or subsidiary thereof. Non-statutory stock options (as defined in subparagraph 5(a) below) also may be granted to
(i) any director of the Company who is not an employee of the Company or any parent or subsidiary thereof, (ii) other individuals or entities who are not employees but who provide services to the Company or a parent or subsidiary thereof
in the capacity of an advisor or consultant, and (iii) any individual or entity that the Company desires to induce to become an employee, but any such grant shall be contingent upon such individual or entity becoming employed by the Company or
a parent or subsidiary thereof. References herein to “employment” and similar terms (except “employee”) shall include the providing of services in the capacity of an advisor or consultant or as a director. The employees and other
individuals and entities to whom options may be granted pursuant to this paragraph 4 are referred to herein as “Eligible Participants.” 
  

 -2- 

 5. Terms and Conditions of Options. 
 (a) General. Subject to the terms and conditions of this Plan, the Committee may, from time to time during the term of this Plan, grant to Eligible
Participants options to purchase such number of Shares of the Company on such terms and conditions as the Committee may determine. In determining the Eligible Participants to whom options shall be granted and the number of Shares to be covered by
each option, the Committee may take into account the nature of the services rendered by the respective Eligible Participants, their present and potential contributions to the success of the Company, and such other factors as the Committee in its
sole discretion may deem relevant. The date and the time of approval by the Committee of the granting of an option shall be considered the date and the time of the grant of such option. The Committee in its sole discretion may designate whether an
option granted to an employee is to be considered an “incentive stock option” (as that term is defined in Section 422 of the Code, or any amendment thereto) or a non-statutory stock option (an option granted under this Plan that is
not intended to be an “incentive stock option”). The Committee may grant both incentive stock options and non-statutory stock options to the same employee. However, if an incentive stock option and a non-statutory stock option are awarded
simultaneously, such options shall be deemed to have been awarded in separate grants, shall be clearly identified, and in no event shall the exercise of one such option affect the right to exercise the other. To the extent that the aggregate Fair
Market Value (as defined in paragraph 7 below) of Shares with respect to which incentive stock options are exercisable for the first time by any employee during any calendar year (under all incentive stock option plans of the Company and its
parent and subsidiary corporations) exceeds $100,000, such options shall be treated as non-statutory stock options. Notwithstanding the foregoing, no incentive stock option may be granted under this Plan unless this Plan is approved by the
stockholders of the Company within twelve months after the effective date of this Plan. The maximum number of Shares subject to options that may be granted to any one individual under the Plan in any fiscal year of the Company (the “Maximum
Annual Grant”) is 400,000 Shares (subject to adjustment pursuant to paragraph 13 hereof). The granting of an option to a person shall give such person no rights as a stockholder except as to Shares issued to such person. 
 (b) Purchase Price. The purchase price of each Share subject to an option granted pursuant to this paragraph 5 shall be fixed by the
Committee, subject, however, to the remainder of this subparagraph 5(b). For non-statutory stock options, such purchase price may be set at any price the Committee may determine. In the case of a non-statutory stock option intended to qualify
as “performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per share on the date of grant. For incentive stock options, such
purchase price shall be no less than 100% of the Fair Market Value of a Share on the date of grant, provided that if such incentive stock option is granted to an employee who owns, or is deemed under Section 424(d) of the Code to own, at the
time such option is granted, stock of the Company (or 

  

 -3- 

 
of any parent or subsidiary of the Company) possessing more than 10% of the total combined voting power of all classes of stock therein (a “10%
Stockholder”), such purchase price shall be no less than 110% of the Fair Market Value of a Share on the date of grant. 
 (c)
Vesting. Each option agreement provided for in paragraph 6 shall specify when each option granted under this Plan shall become exercisable with respect to the Shares covered by the option. Each option agreement may specify certain
conditions under which options granted under this Plan shall be immediately exercisable, including the occurrence of a change in control of the Company. Notwithstanding the provisions of any option agreement provided for in paragraph 6, the
Committee may, in its sole discretion, declare at any time that any option granted under this Plan shall be immediately exercisable. Unless the Committee provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid
leave of absence. 
 (d) Termination. Each option granted pursuant to this paragraph 5 shall expire, and all rights to purchase
Shares thereunder shall terminate, on the earliest of: 
 (i) ten years after the date such option is granted (or in the case
of an incentive stock option granted to a 10% Stockholder, five years after the date such option is granted) or on such date prior thereto as may be fixed by the Committee on or before the date such option is granted; 
 (ii) the expiration of the period after the termination of the optionee’s employment within which the option is exercisable as
specified in paragraph 10(b) or 10(c), whichever is applicable (provided that the Committee may, in any option agreement provided for in paragraph 6 or by Committee action with respect to any outstanding option, extend the periods
specified in paragraph 10(b) and 10(c)); or 
 (iii) the date, if any, fixed for cancellation pursuant to
paragraph 11 or 12 below. 
 6. Option Agreements. All options granted under this Plan shall be evidenced by a written
agreement in such form or forms as the Committee may from time to time determine, which agreement shall, among other things, designate whether the options being granted thereunder are non-statutory stock options or incentive stock options.

 7. Fair Market Value. For purposes of this Plan, the “Fair Market Value” of a Share at a specified date
shall, unless otherwise expressly provided in this Plan, mean the closing or last sale price of a Share on the date immediately preceding such date or, if no sale of Shares shall have occurred on that date, on the next preceding day on which a sale
of Shares occurred, on the Composite Tape for New York Stock Exchange listed shares or, if Shares are not quoted on the Composite Tape for New York Stock Exchange listed shares, on the Nasdaq National Market or any similar system then in use or, if
Shares are not included in the Nasdaq 

  

 -4- 

 
National Market or any similar system then in use, on the Nasdaq SmallCap Market or any similar system then in use, provided that if the Shares in question
are not quoted on any such system, Fair Market Value shall be what the Committee determines in good faith to be 100% of the fair market value of a Share as of the date in question. Notwithstanding anything stated in this paragraph 7, if the
applicable securities exchange or system has closed for the day by the time the determination is being made, all references in this paragraph to the date immediately preceding the date in question shall be deemed to be references to the date in
question. 
 8. Manner of Exercise of Options. 
 (a) General. A person entitled to exercise an option granted under this Plan may, subject to its terms and conditions and the terms and conditions of this Plan, exercise it in whole at any time, or in part from
time to time, by delivery to the Company at its principal executive office, to the attention of its Secretary, of written notice of exercise, specifying the number of Shares with respect to which the option is being exercised and payment of the
purchase price of the Shares. 
 (b) Payment. The consideration to be paid for the Shares, including the method of payment, shall be
determined by the Committee (and in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (i) cash (including check, bank draft or money order); (ii) delivery of optionee’s
promissory note with such recourse, interest, security and redemption provisions as the Committee determines to be appropriate; (iii) cancellation of indebtedness; (iv) shares of Common Stock of the Company already owned by the optionee;
(v) authorization of the Company to retain from the total number of Shares as to which the Option is exercised that number of Shares having a Fair Market Value on the date of exercise equal to the exercise price for the total number of Shares
as to which the Option is exercised; (vi) any combination of the methods of payments described above; (vii) such other consideration and method of payment for the issuance of Shares to the extent permitted under applicable law.
Notwithstanding the foregoing, no person shall be permitted to pay any portion of the purchase price with Shares if the Committee, in its sole discretion, determines that payment in such manner is undesirable. 
 9. Tax Withholding. Delivery of Shares upon exercise of any non-statutory stock option granted under this Plan shall be subject to any
required withholding taxes. A person exercising a non-statutory stock option may, as a condition precedent to receiving the Shares, be required to pay the Company a cash amount equal to the amount of any required withholdings. In lieu of all or any
part of such a cash payment, the Committee may, but shall not be required to, provide in any option agreement provided for in paragraph 6 (or provide by Committee action with respect to any outstanding option) that a person exercising an option
may cover all or any part of the required withholdings, and any additional withholdings up to the amount needed to cover the individual’s full FICA and federal, state and local income tax liability with respect to income arising from the
exercise of the option, through the delivery to the Company of unencumbered Shares, through a reduction in the number of Shares delivered to the person exercising the option or through a subsequent return to the Company of Shares 

  

 -5- 

 
delivered to the person exercising the option (in each case, such Shares having an aggregate Fair Market Value on the date of exercise equal to the amount of
the withholding taxes being paid through such delivery, reduction or subsequent return of Shares). 
 10. Transferability and
Termination of Employment. 
 (a) Transferability. During the lifetime of an optionee, only such optionee or his or her
guardian or legal representative may exercise options granted under this Plan, and no option granted under this Plan shall be assignable or transferable by the optionee otherwise than by will or the laws of descent and distribution or, with respect
only to non-statutory stock options, pursuant to a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder; provided, however, that any optionee may transfer a
non-statutory stock option granted under this Plan to a member or members of his or her immediate family (i.e., his or her children, grandchildren and spouse) or to one or more trusts for the benefit of such family members or partnerships in which
such family members are the only partners, if (i) the option agreement with respect to such options expressly so provides either at the time of initial grant or by amendment to an outstanding option agreement and (ii) the optionee does not
receive any consideration for the transfer. Any options held by any such transferee shall continue to be subject to the same terms and conditions that were applicable to such options immediately prior to their transfer and may be exercised by such
transferee as and to the extent that such option has become exercisable and has not terminated in accordance with the provisions of the Plan and the applicable option agreement. For purposes of any provision of this Plan relating to notice to an
optionee or to vesting or termination of an option upon the death, disability or termination of employment of an optionee, the references to “optionee” shall mean the original grantee of an option and not any transferee. 
 (b) Termination of Employment During Lifetime. During the lifetime of an optionee who is an employee of the Company or any parent or subsidiary
thereof at the time of grant of an option, an option granted to such optionee may be exercised only while the optionee is employed by the Company or by a parent or subsidiary thereof, and only if such optionee has been continuously so employed since
the date the option was granted, except that: 
 (i) an option shall continue to be exercisable for three months after
termination of the optionee’s employment, but (x) only to the extent that the option was exercisable immediately prior to such optionee’s termination of employment, and (y) subject to any shorter time period for exercise provided
in paragraph 11 or 12; and 
 (ii) in the case of an optionee who is disabled (as hereinafter defined) while employed, an
option shall continue to be exercisable for one year after termination of such optionee’s employment. 
  

 -6- 

 (c) Termination Upon Death. With respect to an optionee whose employment terminates by reason of
death, any option granted to such optionee may be exercised within one year after the death of such optionee. 
 (d) Vesting Upon
Disability or Death. In the event of the disability (as hereinafter defined) or death of an optionee, any option granted to such optionee that was not previously exercisable shall become immediately exercisable in full if the disabled or
deceased optionee shall have been continuously employed by the Company or a parent or subsidiary thereof between the date such option was granted and the date of such disability or death. “Disability” of an optionee shall mean any physical
or mental incapacitation whereby such optionee is therefore unable for a period of twelve consecutive months or for an aggregate of twelve months in any twenty-four consecutive month period to perform his or her duties for the Company or any parent
or subsidiary thereof. “Disabled,” with respect to any optionee, shall mean that such optionee has incurred a Disability. 
 (e)
Transfers and Leaves of Absence. For purposes of this Plan none of the following shall be deemed a termination of employment: (1) the transfer of employment of a person between any combination of the Company, a parent corporation or a
subsidiary thereof or of the Company; (2) the change of status of a person from employee of the Company to consultant of the Company; or (3) a leave of absence granted to such person and approved by the Committee. The terms
“parent” or “parent corporation” and “subsidiary” as used in this Plan shall have the meaning ascribed to “parent corporation” and “subsidiary corporation”, respectively, in Sections 424(e) and
(f) of the Code. 
 (f) Right to Terminate Employment. Nothing contained in this Plan, or in any option granted pursuant to this
Plan, shall confer upon any optionee any right to continued employment by the Company or any parent or subsidiary of the Company or limit in any way the right of the Company or any such parent or subsidiary to terminate such optionee’s
employment at any time. 
 (g) Expiration Date. In no event shall any option be exercisable at any time after the time it shall have
expired in accordance with paragraph 5(d) of this Plan. When an option is no longer exercisable, it shall be deemed to have lapsed or terminated and will no longer be outstanding. 
 11. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the company, the Committee shall notify each
optionee as soon as practicable prior to the effective date of such proposed transaction. The Committee in its discretion may provide for an optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction
as to all of the Shares covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Committee may provide that any Company repurchase option applicable to the Shares shall lapse as to all such
Shares, provided that the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option will terminate immediately prior to the consummation of such proposed
action. 
  

 -7- 

 12. Merger. In the event of a merger of the Company with or into another corporation or
limited liability company, or the sale of substantially all of the assets of the Company, each outstanding Option shall be assumed or an equivalent option substituted by the successor entity or a parent or subsidiary of the successor entity. In the
event that the successor entity refuses to assume or substitute for the Option, the optionee shall fully vest in and have the right to exercise the Option as to all of the Shares, including Shares as to which it would not otherwise be vested or
exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Committee shall notify the optionee in writing or electronically that the Option shall be fully
vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following
the merger or sale of assets, the option confers the right to purchase or receive, for each Share covered by the option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, other securities or property) received
in the merger or sale of assets by holders of Common Stock of the Company for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor entity or its parent, the Committee may, with the consent of the successor
entity, provide for the consideration to be received upon the exercise of the Option, for each Share subject to the Option, to be solely common stock of the successor corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of assets. 
 13. Adjustments. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, or extraordinary dividend or divestiture (including a spin-off), or any other change in the
corporate structure or Shares of the Company, the Committee (or if the Company does not survive any such transaction, a comparable committee of the Board of Directors of the surviving corporation) shall, without the consent of any holder of an
option, make such adjustment as it determines in its discretion to be appropriate as to the number and kind of securities subject to and reserved under this Plan, the purchase price of each Share subject to outstanding options, the Maximum Annual
Grant and, in order to prevent dilution or enlargement of rights of participants in this Plan, the number and kind of securities issuable upon exercise of outstanding options and the exercise price thereof. 
 14. Substitute Options. Options may be granted under this Plan from time to time in substitution for stock options held by employees of
other corporations who are about to become employees of the Company, or any parent or subsidiary thereof, or whose employer is about to become a subsidiary of the Company, as the result of a merger or consolidation of the Company or a subsidiary of
the Company with another corporation, the acquisition by the Company or a 

  

 -8- 

 
subsidiary of the Company of all or substantially all the assets of another corporation or the acquisition by the Company or a subsidiary of the Company of
at least 50% of the issued and outstanding stock of another corporation. The terms and conditions of the substitute options so granted may vary from the terms and conditions set forth in this Plan to such extent as the Board at the time of the grant
may deem appropriate to conform, in whole or in part, to the provisions of the stock options in substitution for which they are granted, but with respect to stock options which are incentive stock options, no such variation shall be permitted which
affects the status of any such substitute option as an incentive stock option. 
 15. Compliance With Legal Requirements.

 (a) General. No certificate for Shares distributable under this Plan shall be issued and delivered unless the issuance of such
certificate complies with all applicable legal requirements including, without limitation, compliance with the provisions of applicable state securities laws, the Securities Act of 1933, as amended, and the Exchange Act. 
 (b) Rule 16b-3. With respect to Eligible Participants who are subject to the reporting requirements of Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent any provision of this Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the Committee. 
 16 Restrictions on Shares. At
the discretion of the Committee, the Company may reserve to itself and its assignees in the option agreement (a) a right of first refusal to purchase Shares that an optionee (or a subsequent transferee) may propose to transfer to a third party,
(b) a right to repurchase a portion of or all Shares held by an optionee, and (c) a restriction on the transfer of a portion of or all Shares. 
 17. Governing Law. To the extent that federal laws do not otherwise control, this Plan and all determinations made and actions taken under this Plan shall be governed by the laws of the State of
Minnesota without regard to the conflicts of law provisions thereof, and construed accordingly. 
 18. Amendment and Discontinuance of
Plan. The Board may at any time amend, suspend or discontinue this Plan; provided, however, that no amendment to this Plan shall, without the consent of the holder of the option, alter or impair any option previously granted under this Plan.
To the extent considered necessary to comply with applicable provisions of the Code, any such amendments to this Plan may be made subject to approval by the stockholders of the Company. 
 19. Term. 
 (a) Effective
Date. This Plan shall be effective as of January 1, 2000. 
  

 -9- 

 (b) Termination. This Plan shall remain in effect until all Shares subject to it are distributed
or this Plan is terminated under paragraph 18 above. No award of an incentive stock option shall be made under this Plan more than ten years after the effective date of this Plan (or such other limit as may be required by the Code) if such
limitation is necessary to qualify the option as an incentive stock option. 
  

 -10-

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