Icagen, Inc. (FRA:ICFN) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement.

Securities Purchase Agreement and Notes

On May 15, 2017, Icagen, Inc., a Delaware corporation (the
Parent), and its wholly owned subsidiary,
Icagen-T, Inc. (Icagen-T), a Delaware
corporation ( Icagen-T), entered into a
Securities Purchase Agreement (the Securities Purchase
Agreement) with GPB Debt Holdings II, LLC (the
Purchaser), to which (i) the Parent issued to
the Purchaser for an aggregate purchase price payable in cash to
the Parent of $1,920,000, before reimbursement of expenses: (a) a
Senior Secured Convertible Note in the aggregate principal amount
of $2,000,000 (the Parent Note), which Parent
Note is convertible into the Parents shares of common stock,
$0.001 par value per share (Common Stock) at a
conversion price of $3.50 per share, and (b) a warrant to
purchase initially up to 857,143 shares of Common Stock (the
Warrant) (the shares of Common Stock issuable to
the terms of the Warrant, including, without limitation, upon
exercise or otherwise, collectively, the Warrant
Shares) in accordance with the terms of the Warrant; and
(ii) Icagen-T issued to the Purchaser for an aggregate purchase
price payable in cash to Icagen-T of $7,680,000, before
reimbursement of expenses, a Senior Secured Convertible Note of
Icagen-T (the Icagen-T Note and together with
the Parent Note, the Notes), in the aggregate
principal amount of $8,000,000, which Icagen-T Note is
convertible into shares of Common Stock of the Parent at a
conversion price of $3.50 per share (the shares of Common Stock
issuable to the terms of the Icagen-T Note and the Parent Note,
including without limitation, upon conversion or otherwise,
collectively, the Parent Conversion Shares) in
accordance with Icagen-T Note and the Parent Note.

Each Note was issued with a four (4%) percent original issue
discount. The Notes have a maturity date of May 15, 2020 (the
Maturity Date) and bear interest at a rate equal
to 13% per annum (which interest rate is increased to 18% per
annum upon the occurrence of an Event of Default (as defined in
the Notes) (the Interest). The Purchaser may
elect to have the Parent and/or Icagen-T redeem the respective
Note upon the occurrence of certain events, including upon
certain Events of Default (as defined in the Notes). The Notes
contain customary Events of Default.

In addition, any time after issuance, so long as no Event of
Default has occurred and/or is continuing, the Parent and
Icagen-T, respectively, has the right to redeem all or part of
the Conversion Amount (as defined below) of each Note then
outstanding (the Company Optional Redemption
Amount), with a minimum prepayment amount of $500,000,
at any time upon five (5) business days notice to the Purchaser
by paying an amount in cash equal to a range between 101% and
103% of the Conversion Amount being redeemed if paid in full and
if an Event of Default has occurred and is continuing the
Purchaser has the right to require the Company to redeem the
Conversion Amount for an amount of cash equal to a range between
116% and 118% of the Conversion Amount being redeemed. The
Conversion Amount means the sum of (a)
theportion of the principal to be converted, redeemed or
otherwise with respect to which this determination is being made,
(b)all accrued and unpaid Interest with respect to such portion
of such principal, (c) all accrued and unpaid late charges with
respect to such portion of such principal and such Interest, if
any, and (d) all other amounts due hereunder.

The Notes contain certain covenants, such as restrictions on the
incurrence of indebtedness, the existence of liens, the payment
of restricted payments, redemptions, the payment of cash
dividends and the transfer of assets. If the Parent fails to
timely deliver the shares underlying the Notes, it will be
subject to certain buy-in provisions.

In addition, to the Securities Purchase Agreement, the Parent and
Icagen-T have agreed to provide certain registration rights with
respect to the Conversion Shares underlying the Icagen-T Note
and, if Rule 144 under the Securities Act of 1933, as amended
(the Securities Act), is unavailable, for the
Warrant Shares and Parent Conversion Shares underlying the Parent
Note.

In addition, to the Notes, neither the Parent nor Icagen-T shall
enter into or be party to a Fundamental Transaction (as defined
in the Notes) unless (i) the Successor Entity (as defined in the
Notes) assumes in writing all of the obligations of the Parent,
Icagen-T and each Subsidiary (the Subsidiaries)
under the Notes and the other Transaction Documents (as defined
in the Notes) to written agreements in form and substance
reasonably satisfactory to the Purchaser and approved by the
Purchaser prior to such Fundamental Transaction, including
agreements to deliver to the Purchaser in exchange for this Note
and securities of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to the
Notes (which, for the avoidance of doubt, shall not include any
terms or conditions less favorable to the Purchaser in any
material respect than the terms and conditions set forth in the
Notes), including, without limitation, having principal amounts,
interest rates and late charges equal to the payment rights and
amounts, principal amounts then outstanding, the interest rates
and late charges in the Notes as well as having the conversion
rights, redemption rights, rankings, Events of Default the same
as in the Notes and satisfactory to the Purchaser, and (ii) the
Successor Entity is a trading issuer whose common stock is
registered under Section 12 of the Securities Exchange Act of
1934, as amended, and is quoted and/or listed for trading on a
Qualifying Market (as defined in the Notes).

The Notes also contain certain anti-dilution provisions that
apply in connection with any stock split, stock dividend, stock
combination, recapitalization and sales of securities below the
conversion price of the Notes.

In addition, subject to limited exceptions, a holder of the
Parent Note and Icagen-T Note will not have the right to convert
any portion of such note if such holder, together with its
affiliates, would beneficially own in excess of 4.99% of the
number of shares of the Common Stock outstanding immediately
after giving effect to its conversion (the Beneficial
Ownership Limitation). A holder of the Parent Note and
Icagen-T Note may adjust the Beneficial Ownership Limitation upon
not less than 61 days prior notice to the Parent, provided that
such Beneficial Ownership Limitation in no event shall exceed
9.99%.

The Parent intends to use the proceeds from this financing to
repay $1,500,000 aggregate principal amount of 8% notes sold by
the Parent in an April 2017 bridge financing and all accrued but
unpaid interest thereon, and the balance for general corporate
and working capital purposes, including payments in the amount of
$500,000 owed by the Parent to the terms of a settlement
agreement (the Settlement Agreement), and
Icagen-T intends to use the net proceeds from the purchase price
paid to Icagen-T for general corporate and working capital
purposes of Icagen-T; provided, however, neither
the Parent nor Icagen-T will use any of their respective net
proceeds for (a) the repayment of any Indebtedness other than
Permitted Indebtedness (as defined in the Notes), (b) the
redemption or repurchase of any securities of the Parent,
Icagen-T and the Subsidiaries, or (c) except for the payments to
the Settlement Agreement, the settlement of any outstanding
litigation; provided, further, Icagen-T will not
use any of such proceeds in violation of its arrangements with
Sanofi US Services, Inc.

The Purchaser was reimbursed for legal and due diligence fees and
expenses from this private placement.

Warrant

The Parent issued the Warrant to the Purchaser at an initial
exercise price of $3.50 per share (subject to applicable
adjustments) (the Exercise Price). The Warrant
expires on May 15, 2022.

In addition, subject to limited exceptions, a holder of the
Warrant will not have the right to exercise any portion of the
Warrant if such holder, together with its affiliates, would
beneficially own in excess of the Beneficial Ownership
Limitation. A holder of the Warrant may adjust the Beneficial
Ownership Limitation upon not less than 61 days prior notice to
the Parent, provided that such Beneficial Ownership Limitation in
no event shall exceed 9.99%.

The Warrant also contain certain anti-dilution provisions that
apply in connection with any stock split, stock dividend, stock
combination, recapitalization and issuances of securities at
prices below the conversion price or similar transactions.

If, at the time a holder exercises its Warrant, there is no
effective registration statement registering available for an
issuance of the shares underlying the Warrant to the holder, then
in lieu of making the cash payment otherwise contemplated to be
made to the Parent upon such exercise in payment of the aggregate
exercise price, the holder may elect instead to receive upon such
exercise (either in whole or in part) the net number of shares of
Common Stock determined according to a formula set forth in the
Warrant. If the Parent fails to timely deliver the shares
underlying the Warrant, it will be subject to certain buy-in
provisions.

The Warrant also provides that the Parent will not enter into or
be party to a Fundamental Transaction unless (i) the Successor
Entity (as defined in the Warrant) assumes in writing all of the
obligations of the Parent under the Warrant and the other
Transaction Documents (as defined in the Securities Purchase
Agreement) to written agreements in form and substance
satisfactory to the Purchaser, including agreements to deliver to
the Purchaser in exchange for the Warrant a security of the
Successor Entity evidenced by a written instrument substantially
similar in form and substance to the Warrant; (ii) the Parent or
the Successor Entity (as the case may be) agrees at the election
of the Parent or the Successor Entity (as the case may be) to
purchase the Warrant from the Purchaser by paying to the
Purchaser cash in an amount equal to the Black Scholes Value (as
defined in the Warrant); or (iii) the Purchaser, at its election,
requires the Parent or the Successor Entity (as the case may be)
to purchase the Warrant from the Purchaser by paying to the
Purchaser cash in an amount equal to the Black Scholes Value.

Security and Pledge Agreements, Guaranties and Deed
of Trust

The Parent Note is secured by a security interest in all of the
existing and future assets of the Parent and the Domestic
Subsidiaries (as defined in the Parent Security Agreements)
(other than Icagen-T), including a pledge of all of the capital
stock of each of the Domestic Subsidiaries (other than Icagen-T),
subject to existing security interests (the Parent
Collateral), for the benefit of the Purchaser, to secure
the Parents obligations under the Parent Note, as evidenced by
(i) a security and pledge agreement (the Parent Security
Agreement), and (ii) a guaranty executed by each
Domestic Subsidiary (other than Icagen-T) (the Parent
Guaranty) to which the Domestic Subsidiaries (other than
Icagen-T) guarantees all obligations of the Parent under the
Transaction Documents.

The Icagen-T Note is secured by a security interest in all of the
existing and future assets of the Parent, Icagen-T and the other
Domestic Subsidiaries (as defined in the Icagen-T Security
Agreement), including a pledge of all of the capital stock of
each of the Domestic Subsidiaries (other than Icagen-T), subject
to existing security interests (Icagen-T
Collateral and together with the Parent Collateral, the
Collateral), for the benefit of the Purchaser,
to secure Icagen-Ts obligations under the Icagen-T Note, as
evidenced by (i) a security and pledge agreement (the
Icagen-T Security Agreement), and (ii) a
guaranty executed by the Parent and each Domestic Subsidiary
(other than Icagen-T) (the Icagen-T Guaranty) to
which the Parent and the Domestic Subsidiaries (other than
Icagen-T) guarantees all of the obligations of Icagen-T under the
Transaction Documents.

In addition, the Parent and Icagen-T entered into a Subordinated
Deed of Trust, Assignment of Rents, Fixture Filing and Security
Agreement (the Deed of Trust) with the trustee
named therein and the Purchaser as beneficiary, securing all of
Icagen-Ts obligations to the Purchaser by a senior priority
security interest in the Property/Facilities (as defined in the
Deed of Trust), which is subordinated only to a Deed of Trust
entered into with Sanofi US Services, Inc. The Parent and
Icagen-T also executed an Affidavit of Confession of Judgment to
secure their obligations under the Parent Note and Icagen-T Note.

Upon an Event of Default (as defined in the Notes), the Purchaser
may, among other things, collect or take possession of the Parent
Collateral or Icagen-T Collateral, as the case may be, proceed
with the foreclosure of the security interest in the Collateral
or sell, lease or dispose of the Collateral. Each of the
Subsidiaries has also guaranteed all of the Parents obligations
under the Note to the terms of the Parent Guaranty and the
Icagen-T Guaranty.

The foregoing description of the terms of the Parent Note, the
Icagen-T Note, the Securities Purchase Agreement, the Parent
Security Agreement, the Icagen-T Security Agreement, the Parent
Guaranty, Icagen-T Guaranty, the Warrant, the Deed of Trust and
Affidavit of Confession of Judgment do not purport to be complete
and are qualified in their entirety by reference to the
provisions of such agreements, the forms of which are filed as
exhibits 4.1, 4.2, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 and
10.8, respectively, to this Current Report on Form 8-K.

The transactions contemplated by the Securities Purchase
Agreement closed and funded on May 15, 2017.

Settlement and Release Agreement

On May 11, 2017, the Parent entered into a Settlement and Release
Agreement (the Agreement) with Dentons US LLP (Dentons) relating
to disputes arising between them under a Settlement and Release
Agreement, dated July 5, 2013 (the 2013 Settlement Agreement), a
judgment thereafter obtained by Dentons on May 7, 2014 in the
Circuit Court of Cook County, Illinois, Lawsuit based upon the
2013 Settlement in the amount of Three Million and Fifty Thousand
Dollars ($3,050,000) (the Judgment), and a lawsuit filed by the
Parent in San Francisco Superior Court (the California Lawsuit)
in or about April 2014 against Dentons. In connection with the
Agreement, the Parent has agreed to pay Dentons the sum of One
Million Four Hundred Thousand Dollars ($1,400,000) over a
fourteen month period of which: (i) $250,000 is due no later than
May 15, 2017; and (ii) $250,000 is due no later than June 1, 2017
or the date of the closing of a debt financing by the Parent,
whichever is sooner. In addition, to secure its obligations under
the Agreement, the Parent executed and delivered to Dentons a
Confession of Judgment Affidavit in Support of Confession of
Judgment (the Confession of Judgment) in the amount of
$3,891,549.32, representing the amount of the Judgment that had
been obtained plus the costs of suit and interest accrued through
May 15, 2017. The Confession of Judgment is not to be filed
unless the Parent defaults on its obligations under the Agreement
and it will be returned to the Parent upon payment in full under
the Agreement. The Agreement included mutual releases of claims
each party had against the other and the parties also agreed to
dismiss the litigation between them with prejudice; provided,
that Dentons obligations commence after it has received $500,000
of the payments from the Parent described above. The foregoing
description of the Agreement and Confession of Judgment are
qualified in its entirety to the full text of the Agreement and
Confession of Judgment, copies of which are filed as Exhibit
10.9, respectively, to this Current Report on Form 8-K.

Item 2.03. Creation of a Direct Financial Obligation or
an Obligation Under an Off-Balance Sheet Arrangement of a
Registrant.

The information required by this Item 2.03 is set forth under
Item 1.01 above and is hereby incorporated by reference in
response to this Item 2.03.

Item3.02.Unregistered Sales of Equity
Securities.

The information set forth in Item1.01 of this Current Report on
Form 8-K is incorporated herein by reference into this Item3.02
in its entirety. The Notes and the Warrant were, and any shares
of Common Stock underlying the Notes and Warrant will be, issued
in a transaction exempt from registration under the Securities
Act in reliance on Section4(a)(2) thereof and Rule 506 of
Regulation D thereunder. The Purchaser represented that it was an
accredited investor, as defined in Regulation D, and was
acquiring the securities described herein for investment only and
not with a view towards, or for resale in connection with, the
public sale or distribution thereof. Accordingly, the Notes and
Warrant and any shares of Common Stock underlying the Notes and
Warrant have not been registered under the Securities Act and may
not be offered or sold in the United States absent registration
or an exemption from registration under the Securities Act and
any applicable state securities laws. Neither this Current Report
on Form 8-K nor the exhibits attached hereto is an offer to sell
or the solicitation of an offer to buy Notes, Warrants or shares
of Common Stock or any other securities of the Parent.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are filed with this Current Report on Form
8-K:

* Certain information in this exhibit has been omitted and filed
separately with the Securities and Exchange Commission to a
Confidential Treatment Request submitted to the Securities and
Exchange Commission to Rule24b-2 under the Securities Exchange
Act of 1934, as amended.

Icagen, Inc. (FRA:ICFN) Recent Trading Information

Icagen, Inc. (FRA:ICFN) closed its last trading session at 4.20 with shares trading hands.