definiens: means amounts due and owing by the Corporation to traders, suppliers and other Persons in the ordina ry course of operation of the Business ; means accounts receivable, ta x credits receivable, bills receivable, trade accounts, book debts and insura nce claims recorded as receivable in the Books and Records and any other amount due to the Corporation including any refunds and rebates and the benefit of all security ( including cash deposits ), guarantees and other collateral held by the Corporation ; means accrued liabilities of the Corporation including accruals for vacation pay, accrued legal expenses and brok erage fees, accrued payroll and expenses incurred but not yet invoiced and the aggr egate amount of any indebtedness ( including any interest accrued thereon ) payable on or prior to December 31, 2005 ( but for greater certainty shall not include any amounts ow ing, as at the Effective Time, under the Working Capital Financing ) ; has the meaning ascribed thereto in Section 4.2(2 ) ; has the meaning ascribed thereto in Section 6.2 ; is a trademarked name for aerosoli zed liposome encapsulated fentanyl for delivery via inhalation ; means affiliates as defined in the OBCA ; or means this agreement and all schedules and exhibits attached hereto ; means the Alternative Investment Market of the London Stock Exchange ; means the amalgamated company fo rmed by the amalgamation of the Corporation and Subco ; means the common shares in the capital of Amalco ; means the amalgamation of the Co rporation and Subco pursuant to Section 174 of the OBCA on the terms a nd conditions set out in the Amalgamation Agreement, subject to any amendments or va riations thereto made in accordance with this Agreement ; - 3 - TOR_P2Z:1267367.9 means the agreement, substantially in the form of Exhibit 1 attached hereto, to be dated the Effective Date between the Corporation and Subco with respect to the amalgamation of the Corporation and Subco ; means the American Stock Exchange ; means the Merger Support Agreement, the Amalgamation Agreement and the Escrow Agreement ; means the articles of amalga mation of Amalco required to be sent to the Director pursua nt to Section 178 of the OBCA ; means all of the undertakin g, property and assets of the Corporation of any kind whatsoever ; means, with respect to any Pers on, any authorization, order, permit, approval, grant, licence, consent, right, franch ise, privilege, certificate, judgment, writ, injunction, award, determination, direction, decr ee, or by - law, rule or regulation of any government entity, whether or not having the force of law, having jurisdiction over such person ; has the meaning ascribed thereto in Section 3.1(31 ) ; means all books of account, accoun ting records, f iles, data and other financial information and writings ; list s and files of past, pr esent and prospective clients and contacts, purchasing and marketi ng records and personnel and payroll records ; and all data stored on computer support devices relating to any of the foregoing ; means the business carried on by the Co rporation which, as of the date hereof, is comprised primarily of the resear ch and development of proprietary products that enhance efficacy and safety for patients and use the lung as the portal for delivery ; means any day other than a day wh ich is a Saturday, a Sunday or a statutory holiday in the C ity of Toronto, Ontario ; means the certificate of amalgamation issued by the Director in accordance with Section 178 of the OBCA ; has the meaning ascribed thereto in Section 4.2(1 ) ; means the common shares in the capital of the Corporation ; has the meaning ascribed thereto in Section 3.1(31 ) ; of the Corporation means the condition of the assets, liabi lities, operations, activities, earnings, prospects, affairs or financial position of the Corporation ; has the meaning ascribed thereto in Section 2.2(1 ) ; - 4 - TOR_P2Z:1267367.9 means, with respect to any corporation, the ownership of more than 50 % of the voting shares of that co rporation, including any shares which are voting only upon the occurrence of a contingency where such c ontingency has occurred and is continuing ; means the secured convertible debentures issued by the Corporation to ETSIF, BDC and NewGen on December 6, 2004 and March 29, 2005, respectively, in aggregate principal amount of $ 1,400,000 ; means the notice of the Delex Meeting and the information circular and proxy to be sent to Delex Shareholders in connection with the solicitation of proxies by mana gement of the Corporation fo r use at the Delex Meeting ; means the special meeting of Dele x Shareholders to consider the Merger ; means outstanding options to purcha se Common Shares pursuant to the Delex Plan ; means the Corporation ’s June 12, 2001 stock option plan, as amended June 14, 2002 ; means Persons who hold Delex Options ; means any Person who owns Dele x Shares immediately prior to the Effective Date ; means all of the issued and outstan ding shares of the Corporation, including any and all classes of shares ; means the special resolution to effect the Amalgamation to be considered and, if approved, passed by Delex Shareholders ; means the technology developed by the Corporation prior to the Effective Date, as more particul arly set out in Schedule 3.1(27 ) ; means the Director appointed under Section 278 of the OBCA ; means the disclosure letter delivered by the Major Shareholders to YM dated the date hereof ; means the rights of di ssent to be provided to Delex Shareholders under Section 185 of the OBCA in re spect of the Amalgamation ; means the date shown on the Certificate of Amalgamation to be issued under the OBCA giving effect to the Transaction, which date shall be determined in accordance with Section 6.1 ; has the meaning ascribed thereto in Section 6.1 ; - 5 - TOR_P2Z:1267367.9 means mortgages, charges, pledges, security interests, liens, encumbrances, actions, claims, demands and equities of any nature whatsoever or howsoever arising and any right s or privileges capable of becoming any of the foregoing ; means all applicable federal, provi ncial, state, municipal or local laws, statutes, regulations or ordinances rela ting to the environment, occupational safety and health ; has the meaning ascribed thereto in Section 2.3(2 ) ; has the meaning ascribed thereto in Section 2.3(2 ) ; means the reduction in Net Working Capital ( as incurred in the ordinary course of the Business ) during the peri od of time commencing on February 1, 2005 and ending on the Effective Date, including expe nses incurred in connection with the issuance of convertible debentures in aggregate principal amount of $ 1,400,000.00 and the accrual of interest on such debentures ; means the United States Food and Drug Administration and any successor entity thereto ; means the audited financial statements of the Corporation as at and for each of the fiscal years ended December 31, 2004 and December 31, 2003, each consisting of a balance sheet, a statement of operations and deficit and a statement of cash flows, together with notes thereto, a c opy of each of which has been delivered to YM ; means the accounting principles so described and promulgated by the Canadian In stitute of Chartered Accountants which are applicable as at the date on which any calculation made hereunde r is to be effective or as at the date of any financial statements referred to herein, as the case may be ; means ( i ) any domestic or forei gn national, federal, provincial, state, county, local, municipal or regional government or body, ( ii ) any multinational, multilateral or international body, ( iii ) any subdivision, agency, commission, board, instrumentality or authority of any of th e foregoing governments or bodies, ( iv ) any quasi - governmental or private body exercising any regulato ry, expropriation or taxing authority under or for the account of any of the foregoing governments or bodies, ( v ) any domestic, foreign, international, multilateral or multinational judicial, quasi - judicial, arbitration or administrative court, tribunal, commission, boa rd or panel, or ( vi ) any person employed by, acting for, or on behalf of, any of the foregoing bodies ; means any liquid, gaseous or solid matter, vibration, ray, heat, odour, radiation or energy whic h is or is deemed by law to be, alone or in any combination, hazardous, hazardous waste, toxic, a pollutant, a deleterious substance, a contaminant or a source of contaminant ; means Health Canada ; - 6 - TOR_P2Z:1267367.9 means ; means an Investigational New Drug Applic ation ( of any category or type ) issued by the FDA ; has the meaning ascribed thereto in Section 7.5 ; means such auditing firm as the parties may agree ( and which does not act for one of such pa rties in connection with the su bject matter of the dispute ) ; means : ( a ) all inventions ( whether patentable or unpatentable and whether or not reduced to practice ) and all patents, patent applications and patent and invention disclosures owned, licen sed, or otherwise used by the Corporation, and all other rights of inventorship, together with all reissuances, continuations, continuati ons - in - part, divisions, revisions, supplementary protection certificates, extensions and re - examinations thereof ( ) ; ( b ) all trade - marks, service marks, trade names, brands, trade dress, logos, business, corporate and product names, slogans, domain names, and other commercial symbols and indicia of origin, and registrations and applications for registration thereof, owned, licensed, or otherwise used by the Corporation ( ) ; ( c ) all copyrights and all other rights of authorship owned, licensed, or otherwise used by the Corporation, other than those described in subsection ( f ) below, and all applica tions, registrations and renewals in connection therewith ( ) ; ( d ) all industrial designs or design patents or similar rights owned, licensed, or otherwise used by the Corporation, and all applications, registrations and renewals in connection therewith ( ) ; ( e ) all trade secrets and confidential business, scientific and technical information owned, licensed, or otherw ise used by the Corporation, other than those described in subsection ( f ) below ( including ideas, research and development, clinical research, pl ans for research, know - how, formulas, compositions, manufacturing and produc tion processes and techniques, technical data, engineering, production and other designs, plans, drawings, engineering, scientific and/or labo ratory notebooks, industrial models, specifications, financial, marketing and business data, pricing and cost information, business and marketing pl ans and customer and supplier lists and information ) ( ) ; ( f ) all computer and electronic data, data processing programs, documentation and software, both source code and obj ect code ( including flow charts, diagrams, descriptive texts and progra ms, computer databases and similar - 7 - TOR_P2Z:1267367.9 items ), computer applications an d operating programs, used by the Corporation in connection with the Business save and except for third party programs that are : ( A ) licensed pursuant to, or similar agreements and licen sed without customization ; or ( B ) not material to the Busine ss of the Corporation ; and all copies and tangible embodiments of any or all of the foregoing ( in whatever form or medium, including electronic media ) ; means all laws, statutes, codes, ordina nces, decrees, rules, regulations, by - laws, statutory rules, judicial or arbitral or admi nistrative or ministeria l or departmental or regulatory judgments, orders, decisions, rulings or awards, including general principles of common and civil law, and terms and conditions of any grant of approval, permission, authority or licence of any Governmental Body, statutory body or self - regulatory authority, and the term with resp ect to such Laws and in the context that refers to one or more Persons, means that su ch Laws apply to such Person or Persons or its or their business, unde rtaking, property or secur ities and emanate from a Governmental Body having jurisdiction over the Person or Persons or its or their business, undertaki ng or securities ; means all of the licences, registrations and qualifications to do business held by the Corporation ; means Intellectual Property that is licensed to the Corporation, or used with the consent of th e owner of the Intellectual Property by the Corporation, and does not include Owned Intellectual Property ; means, collectively, ETSIF, BDC and NewGen and means any one of them ; means any material adverse effect on or change in the business, affairs, prospects, operations, assets ( whether tangible or intangible, including Licences, permits, rights, privileges or ot her Intellectual Prope rty Rights, whether contractual or otherwise ), capit alization, or financial conditio n, of the specified entity or in the ability of such entity to consumma te the transactions contemplated by this Agreement and the Ancillary Agreements ; provided, however, none of the following shall be deemed, either alone or in combin ation, to constitute and none of the following shall be taken into account in determining wh ether there has been or will be, a Material Adverse Change on an entity : ( a ) any change in the market price or tr ading volume of such entity ’s stock other than such change that can reasonabl y be attributed to an event or fact that would constitute a Material Adverse Change ; ( b ) any failure by such entity to meet internal projections, budgets or forecasts ; - 8 - TOR_P2Z:1267367.9 ( c ) any adverse change, event or effect attributable or relating to the announcement or pendency of this Agr eement or the Merger ; other than with respect to Intellectual Property Rights ; ( d ) any adverse change, event or effect a ttributable or rela ting to conditions affecting the industry or industry sector in which such entity participates, or the United States or Ca nadian economy as a whole ; ( e ) any adverse change, event or effect a ttributable or relating to customary and usual out of pocket fees and e xpenses ( including legal, accounting, investment banking and other fees and expenses, incurred in connection with the transaction contempl ated by this Agreement ) ; or ( f ) any adverse change, event or effect a ttributable or relating to compliance with the terms of, or taking of any action required by, this Agreement or the taking of any action consented to in writing by the other parties to this Agreement ; or ( g ) any adverse change, event or effect attributable or relating to actions required to be taken under applicable Laws applicable as of the date hereof ; means the merger support agreement substantially in the form attached hereto as Exhibit 2 made and entered into by YM and the Principal Shareholders ; means a New Drug Application ( under the United States Food, Drug and Cosmetic Act ) ; means : ( a ) the value of all A ccounts Receivable plus ( b ) the value of all of the Corporation ’s prepaid expe nses plus ( c ) cash balances in all accounts and ( d ) petty cash less the aggregate va lue of all Accounts Payable and Accrued Liabilities ; means the Business Corporations Act ( Ontario ), as amended ; means May 2, 2005 or such later da te as the parties may agree ; means Intellectual Property in which the Corporation owns the intellectual property rights ; means and includes any individual, corporation, partnership, firm, joint venture, syndicate, association, trust, gove rnment, governmental agency or board or commission or authority, and any other form of entity or organization ; means each shareholder of the Corporation that has entered into the Merger Support Agreement ; means approvals or registrati ons required for the possession, investigation, sale, distribution, marketing a nd / or storage of a drug product by the Food - 9 - TOR_P2Z:1267367.9 and Drugs Act, the Controlled Drugs and Substances Act, and the Health Regulatory Authority ; has the meaning ascribed thereto in Section 2.4 ; means a statement of the auditor of YM, prepared in connection with its audit of the annual financial statements of YM for the first full fiscal year of YM completed following the Effective Date, which shows, to the extent permitted in accordance with ge nerally accepted accounting principles, the Net Working Capital as at the Effective Date, with adjustments for experience with respect to Accounts Receivables, Accounts Paya ble and Accrued Liabilities ; means the amount of Net Working Capital, as at the Effective Date, but as determined as at the Reconciliation Date, as shown on the Reconciliation Date Working Capital Statement ; has the meaning ascribed thereto in Section 2.5 ; has the meaning ascribed thereto in subsection 3.1(14 ) ; means and includes all taxe s, fees, levies, duties, ta riffs, imposts, premiums and governmental impositions or charges of any kind payable to any federal, provincial, state, local or foreign taxing authority including : ( i ) income, capital, business, franchise, profits, gross receipts, ad valorem, goods a nd services, customs, net worth, value added, sales, use, service, real or personal propert y, special assessments, capital stock, licence, payroll, withholding, employme nt, social security, Workplace Safety and Insurance, Canada Pension Plan, employment insura nce or compensation, utility, severance, production, excise, stamp, occupation, premiu ms, environmental, recapture, windfall profits, transfer and gains taxes, fees, le vies, duties, tariffs, imposts, premiums and governmental impositions ; and ( ii ) interest, pena lties, additional taxes, and additions to tax imposed with respect thereto ; and shall mean returns, reports, declarations, and information statements with respect to Taxes required to be filed with any authority, domes tic or foreign . ; means the Toronto Stock Exchange ; has the meaning ascribed thereto in Section 7.5(6 ) ; means a claim made by either YM or any of the Major Shareholders based on or with respect to the inaccuracy or breach of any representation or warranty made by the other party contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby ; means, at any date, the we ighted average closing price at which the relevant shares ha ve traded on the TSX ( or, if the shares are not so listed, then on AMEX, or if the shares are not so liste d, then on AIM, or if the shares are not so listed, then on the recognized stock exchange on which such shares are listed on which the greatest volume of them were traded dur ing the period referenced below or, if such shares are not so listed on any recognized st ock exchange, then on the over - the - counter - 10 - TOR_P2Z:1267367.9 market on which they are traded as selected by action of the directors acting reasonably for such purpose ), during the five most recent trading days ending on the last trading day immediately before such date on which there ha s occurred at least one trade of at least one board lot of such shares pr ior to such date, such weighted average closing price to be determined by dividing the aggregate sale price of all such shares sold in board lots on such exchange or market, as the case may be, during the said five trading days, by the number of such shares so sold ; means an unsecured loan, in the aggregate principal amount of approximately $ 4,640,000.00 to the Corpor ation, such amount to be confirmed by the parties hereto on the Effective Date ; has the meaning ascribed thereto in Section 6.2 ; means the common shares in the capital of YM, as currently constituted ; means a Material Adverse Change affecting YM ; and means the YM share option plan