Document:

Banc
    of America Leasing & Capital, LLC	Master
    Loan and Security Agreement Number: 26928-70000

 

This
Master Loan and Security Agreement, dated as of March 19. 2014 (this “Agreement”), is by and between
Banc of America Leasing & Capital, LLC, a Delaware limited liability company having an office at 125 Dupont Drive,
Providence, R1 02907 (together with its successors and assigns, “Lender”), and Psychemedics Corporation
(as “Borrower”), a Corporation existing under the laws of the state of Delaware, and having
its chief executive office and any organizational identification number as specified with its execution of this Agreement below.
Certain defined terms used herein are identified in bold face and quotation marks throughout this Agreement and in Section
14 below. This Agreement sets forth the terms and conditions for the financing of Equipment between Lender and Borrower pursuant
to one or more “Equipment Notes” incorporating by reference the terms of this Agreement, together with all exhibits,
addenda, schedules, certificates, riders and other documents and instruments executed and delivered in connection with such Equipment
Note (as amended from time to time, an “Equipment Note”). Each Equipment Note constitutes a separate, distinct
and independent financing of Equipment and contractual obligation of Borrower. This Agreement is not an agreement or commitment
by Lender or Borrower to enter into any future Equipment Notes or other agreements, or for Lender to provide any financial accommodations
to Borrower. Lender shall not be obligated under any circumstances to advance any progress payments or other funds for any Equipment
or to enter into any Equipment Note if there shall have occurred a material adverse change in the operations, business, properties
or condition, financial or otherwise, of Borrower or any Guarantor. This Agreement and each Equipment Note shall become effective
only upon Lender’s acceptance and execution thereof at its corporate offices set forth above.

 

1.           Equipment
Notes; Grant of Security Interest.. Lender and Borrower agree to finance Equipment described in one or more Equipment
Notes entered into from time to time, together with all other documentation from Borrower required by Lender with respect to such
Equipment Note. Upon receipt of any item or group of Equipment intended for financing hereunder, Borrower shall execute an Equipment
Note, with all information fully completed and irrevocably accepting such Equipment for Equipment Note, and deliver such Equipment
Note to Lender for its review and acceptance To secure the punctual payment and performance of Borrower’s Obligations under
each Equipment Note and, as a separate grant of security, to secure the payment and performance of all other Obligations owing
to Lender, Borrower grants to Lender a continuing security interest in all of Borrower’s right, title and interest in and to all
Equipment, together with: (i) all parts, attachments, accessories and accessions to, substitutions and replacements for, each
item of Equipment; (ii) all accounts, chattel paper, and general intangibles arising from or related to any sale, lease, rental
or other disposition of any Equipment to third parties, or otherwise resulting from the possession, use or operation of any Equipment
by third parties, including instruments, investment property, deposit accounts, letter of credit rights, and supporting
obligations arising thereunder or in connection therewith; (iii) all insurance, warranty and other claims against third parties
with respect to any Equipment; (iv) all software and other intellectual property rights used in connection therewith; (v) proceeds
of all of the foregoing, including insurance proceeds and any proceeds in the form of goods, accounts, chattel paper, documents,
instruments, general intangibles, investment properly, deposit accounts, letter of credit rights and supporting obligations; and
(vi) all books and records regarding the foregoing, in each case, now existing or hereafter arising (the “Collateral”).
Provided that there then exists no Event of Default, Lender’s security interest in Collateral subject to an Equipment
Note shall terminate upon the payment and performance of all Obligations of Borrower under the applicable Equipment Note. Notwithstanding
the grant of a security interest in any Collateral, Borrower shall have no right to sell, lease, rent, dispose or surrender possession,
use or operation of any Equipment to any third parties without the prior written consent of Lender.

 

2.           Payments.
  Each Equipment Note shall provide for scheduled “Payments” of principal and interest payable by Borrower
to Lender in the amounts and at the times during the “Equipment Note Term” through and including the “Maturity
Date”, all as provided in the Equipment Note. If any Payment or other amount payable hereunder is not paid within 10
days of its due date, Borrower shall pay an administrative late charge of 5% of the amount not timely paid. Such amount shall
be payable in addition to all amounts payable by Borrower as a result of the exercise of any of the remedies herein provided.
All Payments and other amounts payable under an Equipment Note shall be made in immediately available funds at Lender’s
address above or such other place as Lender shall specify in writing. Except as specifically provided in the applicable Equipment
Note, Borrower shall not have a right to prepay any Equipment Note. It is the intention of Lender to comply with all applicable
usury laws and, accordingly, it is agreed that notwithstanding anything to the contrary contained herein or in any Equipment Note,
in no event shall any provision herein or therein require or permit interest in excess of the maximum amount permitted by applicable
law. If necessary to give effect to these provisions, Lender will, at its option, in accordance with applicable law, either refund
any amount to Borrower to the extent in excess of that allowed by applicable law, or credit such excess amount against the then
unpaid principal balance under the applicable Equipment Note(s). Unless otherwise provided herein, all amounts received under
any Equipment Note will be applied, first, to accrued late charges, fees and other costs and expenses due and owing, second,
to accrued interest and, third. to unpaid principal.

 

3.           Unconditional
Financing; Disclaimer Of Warranties. Borrower’s Obligations under each Equipment Note (i) shall be non-cancelable, absolute
and unconditional under all circumstances for the entire Equipment Note Term, (ii) shall be unaffected by the loss or destruction
of any Equipment, and (iii) shall not be subject to any abatement, deferment, reduction, set-off, counterclaim, recoupment or
defense for any reason whatsoever. LENDER IS NOT A VENDOR OR AGENT OF THE EQUIPMENT VENDOR, AND HAS NOT ENGAGED IN THE SALE OR
DISTRIBUTION OF ANY EQUIPMENT. LENDER MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO TITLE, MERCHANTABILITY,
PERFORMANCE, CONDITION, EXISTENCE, FITNESS OR SUITABILITY FOR BORROWER’S PURPOSES OF ANY EQUIPMENT, PATENT, TRADEMARK OR COPYRIGHT
INFRINGEMENTS, THE CONFORMITY OF THE EQUIPMENT TO THE DESCRIPTION THEREOF IN ANY EQUIPMENT NOTE OR ANY OTHER REPRESENTATION OR
WARRANTY OF ANY KIND WITH RESPECT TO THE EQUIPMENT. If Equipment is not delivered or properly installed, does not operate as warranted,
becomes obsolete, or is unsatisfactory for any reason, Borrower shall make all claims on account thereof solely against Vendor
and not against Lender. Borrower is solely responsible for the selection, shipment, delivery and installation of the Equipment
and its Vendors, expressly disclaims any reliance upon any statements or representations made by Lender in connection therewith,
and has received and approved the terms of any purchase orders, warranties, licenses or agreements with respect to the Equipment.
To the extent that the manufacturer of Equipment provides any warranties with respect thereto, Borrower shall enforce such warranties
and obtain at its own

 

    	Master Loan and Security Agreement – 4.1.06	1	 

    	 

    

 

4.           Use;
Maintenance; Location; Inspection. Borrower shall: (i) use, operate, protect and maintain the Equipment (a) in good operating
order, repair, condition and appearance, in the same condition as when received, ordinary wear and tear excepted, (b) consistent
with prudent industry practice (but in no event less than the extent to which Borrower maintains other similar equipment in the
prudent management of its assets and properties), and (c) in compliance with all applicable
insurance policies, laws, ordinances, rules, regulations and manufacturer’s recommended maintenance and repair procedures, and
(ii) maintain comprehensive books and records regarding the use, operation, maintenance and repair of the Equipment. The Equipment
shall be used only within the 48 contiguous United States, solely for business purposes (and not for any consumer, personal,
home, or family purpose), and shail not be abandoned or used for any unlawful purpose. Borrower shall not discontinue use of any
Equipment except for normal maintenance nor, through modifications, alterations or otherwise, impair the current or residual value,
useful life, utility or originally intended function of any Equipment without Lender’s prior consent. Any replacement or substitution
of parts, improvements, upgrades, or additions to the Equipment during the Equipment Note Term shall be part of the Collateral
subject to Lender’s security interest and subject to the Equipment Note, except that if no Event of Default exists, Borrower
may at its expense remove improvements or additions provided by Borrower that can be readily removed without impairing the value,
function or remaining useful life of the Equipment. Borrower shall not change the location or, in the ease of over-the-road vehicles,
the base of any Equipment specified in its Equipment Note without Lender’s prior written consent. Lender shall have the right
to enter any premises where Equipment is located and inspect it (together with related books and records) at any reasonable time.

 

5.           Loss
And Damage. Borrower assumes all risk of (and shall promptly notify Lender in writing of any occurrence of) any damage to
or loss, theft, confiscation or destruction of any Equipment from any cause whatsoever (a “Casualty”). If any
Equipment suffers a Casualty which Lender determines is reparable, Borrower shall at its expense promptly place the same in good
repair, condition or working order. If any Equipment suffers a Casualty which Lender determines is beyond repair or materially
impairs its residual value (a “Total Loss”), Borrower shall at Lender’s option either (a) promptly replace
such Equipment with a similar item reasonably acceptable to Lender having an equivalent value, utility and remaining useful life
of such Equipment, whereupon such replacement items shall constitute Equipment and Collateral for all purposes hereunder and the
applicable Equipment Note, or (b) on the Payment date following such Casualty pay Lender the Prepayment Amount for such Equipment,
together with the Payment scheduled for payment on such date, and all accrued interest, late charges and other amounts then due
and owing under the Equipment Note. Upon such payment following a Total Loss, the Equipment Note with respect to the Equipment
suffering a Total Loss shall be deemed discharged, and Lender’s security interest in such Equipment shall terminate. If
less than all Equipment under a Equipment Note suffers a Total Loss, (i) the Prepayment Amount with respect to any such item of
Equipment shall be calculated by reference to the allocable portion of the unpaid principal balance of the applicable Equipment
Note, as reasonably determined by Lender, and (ii) the remaining Payments under the Equipment Note shall be proportionately reduced
as reasonably calculated by Lender upon Lender’s receipt of the payments described above.

 

6.           Insurance.
Borrower, at its own expense, shall keep each item of Equipment insured against all risks for its replacement value, and in
no event less than its Prepayment Amount, and shall maintain public liability and, with respect to any Equipment that is over-the-road
vehicles, automotive liability’ insurance against such risks and for such amounts as Lender may require. All such insurance shall
(a) be with companies rated “A-” or better by A.M. Best Company, in such form as Lender shall approve, (b) specify
Lender and Borrower as insureds and provide that it may not be canceled or altered in any way that would affect the interest of
Lender without at least 30 days’ prior written notice to Lender (10 days’ in the case of nonpayment of premium), (c) be primary,
without right of contribution from any other insurance carried by Lender and contain waiver of subrogation and “breach of
warrant)’” provisions satisfactory to Lender, (d) provide that all amounts payable by reason of loss or damage to Equipment
shall be payable solely to Lender, unless Lender otherwise agrees, and (e) contain such other endorsements as Lender may reasonably
require. Borrower shall provide Lender with evidence satisfactory to Lender of the required insurance upon the execution of any
Equipment Note and promptly upon any renewal of any required policy.

 

7.           Indemnities;
Taxes. Borrower’s indemnity and reimbursement obiigations set forth below shall survive the cancellation, termination or expiration
of any Equipment Note or this Agreement.

 

(a)     General
Indemnity. Borrower shall indemnify, on an after-tax basis, defend and hold harmless Lender and its respective officers, directors,
employees, agents and Affiliates (“Indemnified Persons”) against all claims, liabilities, losses and expenses
whatsoever (except those determined by final decision of a court of competent jurisdiction to have been directly and primarily
caused by the Indemnified Person’s gross negligence or willful misconduct), including court costs and reasonable attorneys’ fees
and expenses (together, “Attorneys’ Fees”), in any way relating to or arising out of the Equipment or
any Equipment Note at any time, or the ordering, acquisition, rejection, installation, possession, maintenance, use, ownership,
condition, destruction or return of the Equipment, including any claims based in negligence, strict liability in tort, environmental
liability or infringement.

 

(b)     General
Tax Indemnity. Borrower shall pay or reimburse Lender, and indemnify, defend and hold Lender harmless from, on an after-tax
basis, all taxes, assessments, fees and other governmental charges paid or required to be paid by Lender or Borrower in any way
arising out of or related to the Equipment or any Equipment Note before or during the Equipment Note Term or after the Equipment
Note Term following an Event of Default, including foreign. Federal, state, county and municipal fees, taxes and assessments, and
property, value-added, sales, use, gross receipts, excise, stamp and documentary taxes, and all related penalties, fines, additions
to tax and interest charges (“Impositions”), excluding only Federal and state taxes based on Lender’s net income.
Upon Lender’s request, Borrower shall furnish proof of its payment of any Imposition.

 

8.           Borrower
Representations and Agreements. Borrower represents, warrants and agrees
that: (a) Borrower has had for the previous 5 years (except as previously disclosed to Lender in writing) the legal name
and form of business organization in the state described above; (b) Borrower’s chief executive office and notice address,
taxpayer identification number and any organizational identification number is as described with its execution of this Agreement
below; (c) Borrower shall notify Lender in writing at least 30 days before changing its legal name, state of organization, chief
executive office location or organizational identification number; (d) Borrower is duly organized and existing in good standing
under the laws of the state described above and all other jurisdictions where legally required in order to carry on its business,
shall maintain its good standing in all such jurisdictions, and shall conduct its businesses and manage its properties in compliancc
with all applicable laws, rules or regulations binding on Borrower; (e) the execution, delivery and performance of this Agreement,
each Equipment Note and Related Agreement to which it is a party has been duly authorized by Borrower, each of which are and will
be binding on and enforceable against Borrower in accordance with their terms, and do not and will not contravene any other instrument
or agreement binding on Borrower; and (f) there is no pending litigation, tax or environmental claim, proceeding, dispute or regulatory
or enforcement action (and Borrower shall promptly notify Lender of any of the same that may hereafter arise) that may adversely
affect any Equipment or Borrower’s financial condition or impair its ability to perform its Obligations.

 

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9.           Title;
Personal Property. Borrower shall be the sole owner of Equipment free and clear of all liens or encumbrances, other than Lender’s
rights under the Equipment Note. Borrower will not create or permit to exist any lien, security interest, charge or encumbrance
on any Equipment except those in favor of Lender. The Equipment shall remain personal property at all times, notwithstanding the
manner in which it may be affixed to realty. Borrower shall obtain and record such instruments and take such steps as may be necessary
to (i) prevent any creditor, landlord, mortgagee or other entity (other than Lender) from having any lien, charge, security interest
or encumbrance on any Equipment, and (ii) ensure Lender’s right of access to and removal of Equipment in accordance with the terms
hereof.

 

10.         Default.
Each of the following (a ’’Default”) shall, with the giving of any notice or passage of any time period
specified, constitute an “Event of Default” hereunder and under all Equipment Notes: (1) Borrower fails to pay
any Payments or other amount owing under any Equipment Note within 10 days of its due date; (2) Borrower fails to maintain insurance
as required herein, or sells, leases, assigns, conveys, or suffers to exist any lien, charge, security interest or encumbrance
on, any Equipment without Lender’s prior consent, or any Equipment is subjected to levy, seizure or attachment; (3) Borrower fails
to perform or comply with any other covenant or obligation under any Equipment Note or Related Agreement and, if curable, such
failure continues for 30 days after written notice thereof by Lender to Borrower; (4) any representation, warranty or other written
statement made to Lender by Borrower in connection with this Agreement, any Equipment Note, Related Agreement or other Obligation,
or by any Guarantor pursuant to any Guaranty (including financial statements) proves to have been incorrect in any material respect
when made; (5) Borrower (w) enters into any merger or consolidation with, or sells or transfers all or any substantial portion
of its assets to, or enters into any partnership or joint venture other than in the ordinary course of business with, any entity,
(x) dies (if a natural person), dissolves, liquidates or ceases or suspends the conduct of business, or ceases to maintain its
existence, (y) if Borrower is a privately held entity, enters into or suffers any transaction or series of transactions as a result
of which Borrower is directly or indirectly controlled by persons or entities not directly or indirectly controlling Borrower as
of the date hereof, or (z) if Borrower is a publicly held entity, there shall be a change in the ownership of Borrower’s stock
or other equivalent ownership interest such that Borrower is rio longer subject to the reporting requirements of, or no longer
has a class of equity securities registered under, the Securities Act of 1933 or the Securities Exchange Act of 1934; (6) Borrower
undertakes any general assignment for the benefit of creditors or commences any voluntary case or proceeding for relief under the
federal bankruptcy code, or any other law for the relief of debtors, or takes any action to authorize or implement any of the foregoing;
(7) the filing of any petition or application against Borrower under any law for the relief of debtors, including proceedings under
the federal bankruptcy code, or for the subjection of property of Borrower to the control of any court, receiver or agency for
the benefit of creditors if such petition or application is consented to by Borrower or is otherwise not dismissed within 60 days
from the date of filing; (8) any default occurs under any other lease, credit or other agreement or instrument to which Borrower
and Lender or any Affiliate of Lender are now or hereafter party; (9) any default occurs under any other agreement or instrument
to which Borrower is a party and under which there is outstanding, owing or committed an aggregate amount greater than $500,000;
(10) any attempted repudiation, breach or default of any Guaranty; or (11) the occurrence of any event described in clauses (4)
through (9) above with reference to any Guarantor or any controlling shareholder, general partner or member of Borrower. Borrower
shall promptly notify Lender in writing of any Default or Event of Default.

 

11.         Remedies.
(a) Upon the occurrence of an Event of Default, Lender may, in its discretion, exercise any one or more of the following remedies
with respect to any or all Equipment Notes or Equipment: (1) accelerate the maturity of any Equipment Note and declare the Prepayment
Amount thereof to be immediately due and payable together with any other unpaid principal, accrued interest or other amounts due
and owing thereunder; (2) cause Borrower to promptly discontinue use of or disable any Equipment, and, at Borrower’s expense,
have the Equipment assembled, prepared and adequately protected for shipment (together with all related manuals, documents and
records, and any other Collateral), and either surrendered to Lender in place or shipped (freight and insurance pre-paid) to such
location as Lender may designate within the forty-eight contiguous United States, in the condition required under Section 4 hereof,
qualified for the manufacturer’s (or its authorized servicing representative’s) then available service contract or
warranty, and able to be put into immediate service and to perform at manufacturer’s rated levels (if any); (3) remedy such
Event of Default or proceed by court action, either at law or in equity, to enforce performance of the applicable provisions of
any Equipment Note; (4) with or without court order, enter upon the premises where Equipment is located and repossess and remove
the same, all without liability for damage to such premises or by reason such entry or repossession, except for Lender’s gross
negligence or willful misconduct; (5) dispose of any Equipment in a public or private transaction, or hold, use, operate or keep
idle the Equipment, free and clear of any rights or interests of Borrower therein; (6) recover direct, incidental, consequential
and other damages for the breach of any Equipment Note, including the payment of all unpaid principal, accrued interest and other
amounts payable thereunder, and all costs and expenses incurred by Lender in exercising its remedies or enforcing its rights thereunder
(including all Attorneys’ Fees); (7) without notice to Borrower, apply or set-off against any Obligations all security deposits,
advance payments, proceeds of letters of credit, certificates of deposit (whether or not matured), securities or other additional
collateral held by Lender or otherwise credited by or due from Lender to Borrower; or (8) pursue all other remedies provided under
the UCC or other applicable law. Borrower shall pay interest equal to the lesser of (a) 12% per annum, or (b) the highest rate
permitted by applicable law (“Default Rate”) on (i) any amount other than Payments owing under any Equipment
Note and not paid when due, (ii) any Payment not paid within 30 days of its due date, and (iii) any amount required to be paid
upon acceleration of any Equipment Note under this Section 11. Any payments received by Lender after an Event of Default, including
proceeds of any disposition of Equipment, shall be applied in the following order: (A) to all of Lender’s costs (including Attorneys’
Fees), charges and expenses incurred in taking, removing, holding, repairing and selling or leasing the Equipment or other Collateral
or enforcing the provisions hereof; (B) to the satisfaction of all outstanding Obligations; and (C) the balance, if any, shall
be disbursed to Borrower unless otherwise required by law. Lender shall account to Borrower for any surplus realized upon such
sale or other disposition, and Borrower shall remain liable for any deficiency with respect to the Obligations.

 

(b)
No remedy referred to in this Section 11 shall be exclusive, each shall be cumulative (but not duplicative of recovery of any Obligation)
and in addition to any other remedy referred to above or otherwise available to Lender at law or in equity, and all such remedies
shall survive the acceleration of any Equipment Note. Lender’s exercise or partial exercise of, or failure to exercise, any
remedy shall not restrict Lender from further exercise of that remedy or any other available remedy. No extension of time for payment
or performance of any Obligation shall operate to release, discharge, modify, change or affect the original liability of Borrower
for any Obligations, either in whole or in part. Lender may proceed against any Collateral or Guarantor, or may proceed contemporaneously
or in the first instance against Borrower, in such order and at such times following an Event of Default as Lender determines in
its sole discretion. In any action to repossess any Equipment or other Collateral, Borrower waives any bonds and any surety or
security required by any applicable laws as an incident to such repossession. Notices of Lender’s intention to accelerate, acceleration,
nonpayment, presentment, protest, dishonor, or any other notice whatsoever (other than notices of Default specifically required
of Lender pursuant to Section 10 above) are waived by Borrower and any Guarantor. Any notice given by Lender of any disposition
of Collateral or other intended action of Lender which is given in accordance with this Agreement at least 5 business days prior
to such action, shall constitute fair and reasonable notice of such action.

 

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12.          Assignment.
Lender and any Assignee may assign or transfer any of Lender’s interests in any Equipment Note or Equipment without notice
to Borrower,. Borrower agrees that: (i) the rights of any Assignee shall not be affected by any breach or default of Lender or
any prior Assignee, and Borrower shall not assert any defense, rights of set-off or counterclaim against any Assignee, nor hold
or attempt to hold such Assignee liable for any such breach or default; (ii) unless otherwise agreed by Lender and Assignee, Lender
shall have no duties or responsibilities as a secured party with respect to the applicable Equipment or Collateral after such
assignment and Lender shall be released from such duties or responsibilities, and (iii) Borrower shall execute and deliver upon
request such additional documents, instruments and assurances as Lender deems necessary in order to (y) acknowledge and confirm
all of the terms and conditions of any Equipment Note and Lender’s or such Assignee’s rights with respect thereto, and Borrower’s
compliance with all of the terms and provisions thereof, and (z)
preserve, protect and perfect Lender’s or Assignee’s right, title or interest hereunder and in any Equipment, including,
without limitation, such UCC financing statements or amendments, control agreements, corporate or member resolutions, votes, notices
of assignment of interests, and confirmations of Borrower’s obligations and representations and warranties with respect
thereto as of the dates requested. Lender may disclose to any potential Assignee any information regarding Borrower, any Guarantor
and their Affiliates. Borrower shall not sell, assign, pledge, hypothecate or in any way dispose of any of its rights or obligations
under any Equipment Note, or enter into any lease of any Equipment, without Lender’s prior written consent. Any purported sale,
assignment, pledge, hypothecation, disposal or lease by Borrower made without Lender’s prior written consent shall be null
and void.

 

13.          Financial
and Other Data. (a) During any Equipment Note Term, Borrower shall (i) maintain books and records in accordance with generally
accepted accounting principles consistently applied (“GAAP”) and prudent business practice; (ii) promptly provide
Lender, within 120 days after the close of each fiscal year, and, upon Lender’s request, within 45 days of the end of each quarter
of Borrower’s and any Guarantor’s fiscal year, a copy of financial statements for Borrower and each Guarantor requested
by Lender, in each case prepared in accordance with GAAP and (in the case of annual statements) audited by independent certified
public accountants and (in the case of quarterly statements) certified by the chief financial officer of Borrower or Guarantor,
as applicable; provided, however, that for so long as Borrower or any such Guarantor is legally and timely filing annual
and quarterly financial reports on Forms 10-K and 10-Q with the Securities and Exchange Commission which are readily available
to the public, the filing of such reports shall satisfy the foregoing financial statement reporting requirements for such entity;
and (iii) furnish Lender all other financial information and reports and such other information as Lender may reasonably request
concerning Borrower, any Guarantor and their respective affairs, or the Equipment or its condition, location, use or operation.

 

(b)           Borrower
represents and warrants that all information and financial statements at any time furnished by or on behalf of Borrower or any
Guarantor are accurate and reasonably reflect as of their respective dates, results of operations and the financial condition of
Borrower, such Guarantor or other entity they purport to cover. Credit and other information regarding Borrower, any Guarantor
or their Affiliates, any Equipment Note or Equipment may be disclosed by Lender to its Affiliates, agents and potential Assignees,
notwithstanding anything contained in any agreement that may purport to limit or prohibit such disclosure.

 

14.          Definitions

 

As
used herein, the following terms shall have the meanings assigned or referred to them below:

 

“Affiliate”
means any entity controlling, controlled by or under common control with the referent entity; “control” includes
(i) the ownership of 25% or more of the voting stock or other ownership interest of any entity and (ii) the status of a general
partner of a partnership or managing member of a limited liability company.

 

“Assignee”
means any assignee or transferee of all or any of Lender’s right, title and interest in any Equipment Note or any Equipment.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Equipment”
means the items, units and groups of personal property, licensed materials and fixtures described in each Equipment Note, together
with all replacements, parts, additions, accessories and substitutions therefor; and “item of Equipment” means
a commercial unit of such property which in commercial usage is treated as a single whole, division of which materially
impairs its character or value on the market or in use, and includes each functionally integrated and separately marketable group
or unit of Equipment and may be a single article (such as a machine) or a set of articles (such as a suite of furniture or a line
of machinery).

 

“Guarantor”
means any guarantor, surety, endorser, general partner or co-lessee of Borrower, or other party liable in any capacity, or
providing additional collateral security for, the payment or performance of any Obligations of Borrower.

 

“Guaranty”
means any guaranty, surety instrument, security, indemnity, “keep-well” agreement or other instrument or arrangement
from or with any Guarantor.

 

“Obligations”
means and includes all obligations of Borrower owing to Lender under this Agreement, any Equipment Note or Related Agreement, or
of any Guarantor owing to Lender under any Guaranty, together with all other obligations, indebtedness and liabilities of Borrower
to Lender under any other financings, leases, loans, notes, progress payment agreements, guaranties or other agreements, of every
kind and description, now existing or hereafter arising, direct or indirect, joint or several, absolute or contingent, whether
for payment or performance, regardless of how the same may arise or by what instrument, agreement or book account they may be evidenced,
including without limitation, any such obligations, indebtedness and liabilities of Borrower to others which may be obtained by
Lender through purchase, negotiation, discount, transfer, assignment or otherwise.

 

“Prepayment
Amount” means, collectively, the entire unpaid principal balance of any Equipment Note as of any particular date, together
with (a) all accrued interest and other charges then owing under such Equipment Note, and (b) the prepayment charge provided in
the applicable Equipment Note, if any.

 

“Related
Agreement” means and includes any Guaranty and any approval letter or progress payment, assignment, security or other
agreement or addendum related to this Agreement, any Equipment Note or any Collateral to which Borrower or any Guarantor is a party.

 

“UCC”
means the Uniform Commercial Code in effect in the state specified in Section 15(f) of this Agreement.

 

“Vendor”
means the manufacturer, distributor, supplier or other seller (whether or not a merchant or dealer) of the Equipment and any sales
representative or agent thereof.

 

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15.         Miscellaneous.
(a) At Lender’s request, Borrower shall execute, deliver, file and record such financing statements and other documents
as Lender deems necessary to protect Lender’s interest in the Equipment and to effectuate the purposes of any Equipment Note or
Related Agreement, and Borrower authorizes, and irrevocably appoints Lender as its agent and attorney-in-fact, with right of substitution
and coupled with an interest, to (i) execute, deliver, file, and record any such item, and to take such action for Borrower and
in Borrower’s name, place and stead, (ii) make minor corrections to manifest errors in factual data in any Equipment Note
and any addenda, attachments, exhibits and riders thereto, and (iii) after the occurrence of an Event of Default, enforce claims
relating to the Equipment against insurers, Vendors or other persons, and to make, adjust, compromise, settle and receive payment
under such claims; but without any obligation to do so.

 

(b)           Federal
law requires all financial institutions to obtain, verify and record information that identifies each entity that obtains a loan
or other financial accommodation. The first time Borrower requests a financial accommodation from Lender, the Lender may ask for
Borrower’s (or any Guarantor’s) iegal name, address, tax ID number and other identifying information. Borrower shall
promptly provide copies of business licenses or other documents evidencing the existence and good standing of Borrower or any Guarantor
requested by Lender.

 

(c)           Time
is of the essence in the payment and performance of all of Borrower’s Obligations under any Equipment Note or Related Agreement.
This Agreement, and each Equipment Note or Related Agreement may be executed in one or more counterparts, each of which shall constitute
one and the same agreement. All demands, notices, requests, consents, waivers and other communications concerning this Agreement
and any Equipment Note or Related Agreement shall be in writing and shall be deemed to have been duly given when received, personally
delivered or three business days after being deposited in the mail, first class postage prepaid, or the business day after delivery
to an express carrier, charges prepaid, addressed to each party at the address provided herein, or at such other address as may
hereafter be furnished in writing by such party to the other.

 

(d)           Except
as otherwise agreed between Borrower and Lender in writing, Borrower shall reimburse Lender upon demand for costs and expenses
incurred by Lender in connection with the execution and delivery of this Agreement, any Equipment Note or Related Agreement. Borrower
shall reimburse Lender on demand for all costs (including Attorneys’ Fees) incurred by Lender in connection with Borrower’s
exercise of any purchase or extension option under any Equipment Note, or any amendment or waiver of the terms of this Agreement
or any Equipment Note or Related Agreement requested by Borrower.

 

(e)           Any
provisions of this Agreement or any Equipment Note or Related Agreement which are unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions thereof,
and any such unenforceability shall not render unenforceable such provisions in any other jurisdiction. Any requirement for the
execution and delivery of any document, instrument or notice may be satisfied, in Lender’s discretion, by authentication
as a record within the meaning of, and to the extent permitted by, Article 9 of the UCC.

 

(f)
THIS AGREEMENT AND ANY EQUIPMENT NOTE OR RELATED AGREEMENT, AND THE LEGAL RELATIONS OF THE PARTIES THERETO, SHALL IN ALL RESPECTS
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF RHODE ISLAND, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES;
THE PARTIES CONSENT AND SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS OF SUCH STATE FOR THE PURPOSES OF ANY SUIT,
ACTION OR OTHER PROCEEDING ARISING THEREFROM, AND EXPRESSLY WAIVE ANY OBJECTIONS THAT IT MAY HAVE TO THE VENUE OF SUCH COURTS.
THE PARTIES EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT THERETO. IN NO EVENT’ SHALL LENDER
HAVE ANY LIABILITY TO BORROWER FOR INCIDENTAL, GENERAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES. Any cause of action by Borrower
against Lender relating to this Agreement or any Equipment Note or Related Agreement shall be brought within one year after any
such cause of action first arises, and Borrower hereby waives the benefit of any longer period provided by statute.

 

(g)
EACH EQUIPMENT NOTE, TOGETHER WITH THIS AGREEMENT AND ANY RELATED AGREEMENTS, (i) CONSTITUTES THE FINAL AND ENTIRE AGREEMENT BETWEEN
THE PARTIES SUPERSEDING ALL CONFLICTING TERMS OR PROVISIONS OF ANY PRIOR PROPOSALS, APPROVAL LETTERS, TERM SHEETS OR OTHER AGREEMENTS
OR UNDERSTANDINGS BETWEEN THE PARTIES, (ii) MAY NOT BE CONTRADICTED BY EVIDENCE OF (y) ANY PRIOR WRITTEN OR ORAL AGREEMENTS OR
UNDERSTANDINGS, OR (z) ANY CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS BETWEEN THE PARTIES; and (iii) MAY NOT
BE AMENDED, NOR MAY ANY RIGHT’S THEREUNDER BE WAIVED, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY CHARGED WITH SUCH
AMENDMENT’OR WAIVER.

 

In
Witness Whereof, Lender and Borrower have executed this Agreement as of the date first above written.

 

	BANC OF AMERICA LEASING & CAPITAL, LLC
    (Lender)	 	Psvchemedics Corporation (Borrower)
	 	 	 	 	 
	By:	 /s/
    Patricia Smith-Disu	 	By:	 /s/ Neil Lerner
	Print Name:	Patricia Smith-Disu	 	Print Name:	Neil Lerner
	Title:	Vice President	 	Title:	VP -  Finance
	 	 	 	Taxpayer ID#:	58-1701987
	 	 	 	Org. ID # (if any)	 
	 	 	 	Chief Executive Office:	125 Nagog
Park, #200
	 	 	 	 	Acton, MA 01720

 

    	Master Loan and Security Agreement – 4.1.06	5	 

    	 

    

 

	Banc of America Leasing & Capital. LLC	Addendum to Master Loan and Security Agreement No. 26928-70000

 

This
Addendum (“Addendum”) to Master Loan and Security Agreement No. 26928-70000 dated as of March 19.
2014 (the ’‘Agreement”) is by and between Banc of America Leasing & Capital, LLC (“BALC”)
and Psychemedics Corporation (“Customer”), who have determined that it is to their mutual benefit
to make certain amendments to the Agreement. All capitalized terms used herein without definition shall have the respective meaning
set forth or referred to them in the Agreement. For purposes of this Addendum, all financial terms contained herein that are not
specifically defined herein shall have the meanings and values determined in accordance with generally accepted accounting principles
in the United Slates, as defined by controlling pronouncements of the financial Accounting Standards Board, as from time to time
supplemented and amended, and consistently applied. Accordingly, for good and valuable consideration, intending to be legally
bound and pursuant to the terms and conditions of the Agreement, it is hereby agreed as follows:

 

For
so long as any Obligations of the Customer owing to BALC remain outstanding. Customer covenants and agrees that
it shall:

 

		1.	Covenants:

 

		a.	Funded Debt to EBITDA: maintain a ratio of funded Debt to EBITDA of less than or equal to
                                                                                  3.00 to 1:00 measured as of each quarter end and based upon the prior twelve (12) months activity, “Funded Debt”
                                                                                  means all outstanding liabilities for borrowed money and other interest bearing liabilities, including current and long term
                                                                                  debt. “EBITDA” means net income, less income or plus loss from discontinued operations and extraordinary items,
                                                                                  plus cash income taxes, plus interest expense, plus depreciation, depletion, amortization and other non-cash charges.

 

		b.	Fixed Charge Coverage Ratio: maintain a fixed Charge Coverage Ratio of greater than or equal to
1.50 to 1:00 measured as of each quarter end based on the prior twelve (12) month activity. Fixed Charge Coverage Ratio is defined
as A) EBITDA (as defined above in Section l.a.) plus lease/rent expense, minus cash income taxes, minus unfinanced capital expenditures
and other distributions to B) interest expense plus lease/rent expense, plus the current portion of long term debt actually paid
or scheduled to be paid during the measurement period, and the current portion of capitalized lease obligations.

 

		2.	Comnliance Certificates:   
                                         provide BALC within 120 days after the close of each fiscal year and within 45 days of
                                         the end of each fiscal quarter of Customer one or more compliance certificates in form
                                         and substance satisfactory in all respects to BALC. together with supporting financial
                                         information and statements certified by Customer’s chief financial officer, certifying
                                         as to Customer’s compliance with the financial covenants set forth above and that no
                                         Event of Default, or event or condition which, with notice or the passage of time or
                                         both could become an Event of Default, exists under the Agreement.

 

This
Addendum shall be deemed a “Related Agreement” as defined in the Agreement, and is subject to all of the terms
and provisions applicable to Related Agreements provided in the Agreement. It is expressly agreed by the parties that this Addendum
is supplemental to the Agreement and made a part thereof and all the terms, conditions and provisions thereof, unless specifically
modified herein, are to remain in full force and effect. In the event of any conflict, inconsistency or incongruity between the
provisions of this Addendum and any of the provisions of the Agreement, the provisions of this Addendum shall in all respects govern
and control.

 

IN
WITNESS WHEREOF, the parties have caused this Addendum to be executed on the dates set forth below.

 

	Customer: Psychemdics Corporation	 	Banc of America Leasing & Capital, LLC
	 	 	 
	By:	/s/ Neil Lerner	 	By:	/s/ Patricia Smith-Disu
	Print Name:	Neil Lerner	 	Print Name: 	Patricia Smith-Disu
	Title:	 VP- Finance	 	Title:	Vice President
	Date:	3/20/2014	 	Date:	3/24/14

 

    	Addendum Group 2 & 3 Conditions 4.1.06	Page 1 of 1Banc
    of America Leasing & Capital, LLC	Equipment
    Security Note Number 001

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	Equipment Security Note 10.6.10	Page 1 of 3	 

    	 

    

 

		(a)	Interest
                                         Rate.

 

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

  

		(b)	Payment Amount.

  

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

  

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

 

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

 

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

 

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

 

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

 

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

  

    	Equipment Security Note 10.6.10	Page 2 of 3	 

    	 

    

 

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

 

    	Equipment Security Note 10.6.10	Page 3 of 3

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