Exhibit 10.7

EXECUTION COPY

GUARANTY AGREEMENT

GUARANTY AGREEMENT dated as of March 31, 2010 from Atossa HealthCare, Inc., a
Delaware corporation (“Healthcare”), MDRNA Research, Inc., a Delaware
corporation (“Research”), and Calais Acquisition Corp., a Delaware corporation
(“Merger Sub”) (Healthcare, Research and Merger Sub being hereinafter referred
to, collectively, as “Guarantors” and, individually, as a “Guarantor”), to
Cequent Pharmaceuticals, Inc., a Delaware corporation (“Lender”).

WITNESSETH:

WHEREAS, MDRNA, Inc., a Delaware corporation (“Borrower”), and Lender are
entering into that certain Loan Agreement dated as of the date hereof (as
amended, restated, supplemented and/or otherwise modified from time to time, the
“Loan Agreement”), pursuant to which Lender will establish a facility for a term
loan (the “Loan”) that may be advanced to the Borrower in installments; and

WHEREAS, the Loan is evidenced by the Borrower’s promissory note (as amended,
restated, supplemented and/or otherwise modified from time to time, the “Note”)
in an aggregate face principal amount of $3,000,000, payable to the order of
Lender; and

WHEREAS, in order to induce the Lender to enter into the Loan Agreement, the
Borrower has agreed to obtain and deliver this Agreement; and

WHEREAS, the Guarantors are wholly-owned subsidiaries of the Borrower and
participate in a common business enterprise with the Borrower; and

WHEREAS, the Lender’s agreement to enter into the Loan Agreement is and will be
beneficial to each Guarantor, as each Guarantor has a significant economic
interest in the strength and success of the Borrower;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantors hereby jointly and severally
agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

Section 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings set out respectively after each:

“Agreement” – This Guaranty Agreement, as same may be from time to time amended.

“Business Day” – As defined in the Loan Agreement.

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“Environmental Event” – Each of (i) the generation, storage, disposal, removal,
transportation or treatment of Hazardous Substances on any property owned,
occupied or operated by any Guarantor or any Subsidiary of a Guarantor; (ii) the
receipt by any Guarantor or by any Subsidiary of a Guarantor of any notice or
claim of any violation of any Environmental Law or of any action based upon
nuisance, negligence or other tort theory alleging liability on the basis of
improper generation, storage, disposal, removal, transportation or treatment of
Hazardous Substances on any affected property; or (iii) the presence or release
of Hazardous Substances at or upon any property owned, occupied or operated by
any Guarantor or any Subsidiary of a Guarantor that has resulted in
contamination or deterioration of any property resulting in a level of
contamination greater than the levels permitted or established by any
Governmental Authority of competent jurisdiction.

“Governmental Authority” – As defined in the Loan Agreement.

“Guaranteed Obligations” – Any and all indebtedness, liabilities or obligations
of the Borrower, joint or several, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, to or for the benefit
of the Lender arising out of or provided for in any of the Loan Documents or the
Merger Agreement, such term to include obligations to perform acts and refrain
from taking action as well as obligations to pay money.

“Guarantors’ Agreements” – Collectively, this Agreement, the Security Agreement
and any other instrument, document or other agreement between any one or more of
the Guarantors and the Lender or given by any one or more of the Guarantors to
the Lender, whether now existing or hereafter arising.

“Guaranty” – The guaranty of the Guarantors set forth in Section 2.01 below.

“Hazardous Substances” – As defined in the Loan Agreement.

“Indebtedness” – As defined in the Loan Agreement.

“Loan Documents” – The Loan Agreement, the Note, the Security Agreement and any
other instruments, documents or other agreements made by the Borrower with or in
favor of the Lender in connection with the Loan, whether now existing or
hereafter entered into or delivered.

“Merger Agreement” – As defined in the Loan Agreement.

“Person” – As defined in the Loan Agreement.

“Security Agreement” – The Security Agreement (All Assets) of even date herewith
given by the Borrower and the Guarantors to the Lender.

Capitalized terms defined in the Loan Agreement and not otherwise defined herein
shall have the respective meanings set forth in the Loan Agreement.

Section 1.02. Use of Defined Terms. Any defined term used in the plural preceded
by the definite article shall be taken to encompass all members of the relevant
class. Any defined

 

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term used in the singular preceded by “any” shall be taken to indicate any
number of the members of the relevant class.

ARTICLE II

THE GUARANTY

Section 2.01. Guaranty. In consideration of the Lender entering into the Loan
Agreement, the Guarantors hereby jointly and severally guaranty to the Lender
the due and punctual payment of all of the Guaranteed Obligations, as and when
the same shall become due and payable, whether on demand or at maturity, by
declaration or otherwise, according to the terms thereof, and all losses, costs,
expenses and reasonable attorneys’ fees and disbursements incurred by reason of
a default under any of said Guaranteed Obligations. In case of any failure by
the Borrower punctually to pay any of the Guaranteed Obligations, the Guarantors
unconditionally, jointly and severally agree to cause such payment to be made
punctually as and when the same shall become due, whether at maturity or by
declaration or otherwise, and as if such payment were made by the Borrower. This
Guaranty is an absolute, unlimited, unconditional and continuing guaranty of the
full and punctual payment by the Borrower of the Guaranteed Obligations and not
merely of their collectibility, and is in no way conditioned upon any
requirement that the Lender first collect or attempt to collect the Guaranteed
Obligations or any portion thereof from the Borrower or from any other guarantor
(nor, as to any Guarantor, from any other Guarantor) of any of same or resort to
any security or other means of obtaining payment of any of the Guaranteed
Obligations that the Lender now has or may acquire after the date hereof, or
upon any other contingency whatsoever. Upon the occurrence of any Event of
Default (as defined herein) and written notice thereof to the Guarantors, all
liabilities and obligations of each Guarantor to the Lender shall, at the option
of the Lender, become due and payable to the Lender without further demand or
notice of any nature, all of which are expressly waived by the Guarantors.
Payments by the Guarantors hereunder may be required by the Lender on any number
of occasions.

Section 2.02. Guarantors’ Further Agreements to Pay. The Guarantors further
jointly and severally agree, as principal obligors and not as guarantors, to pay
to the Lender, on demand, in funds immediately available to the Lender, all
costs and expenses (including court costs and reasonable attorneys’ fees and
disbursements) incurred or expended by the Lender in connection with the
enforcement of this Guaranty, together with interest on any sum now or hereafter
payable by the Guarantors under this Agreement, such interest to accrue from the
date of demand for any payment to the date of actual payment. Such interest will
be payable at the rate set forth in Section 6.04 below.

Section 2.03. Freedom to Deal with Borrower and Other Parties. The Lender shall
be at liberty, without giving notice to or obtaining the assent of any Guarantor
and without relieving any Guarantor of any liability hereunder, to deal with
each other Guarantor, with the Borrower and with each other party who now is or
after the date hereof becomes liable in any manner for any of the Guaranteed
Obligations in such manner as the Lender in its sole discretion deems fit. The
Lender may in its sole discretion (to the extent permitted by the Loan
Agreement) do any or all of the following things, none of which shall discharge
or affect any Guarantor’s liability

 

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hereunder: (i) extend credit, make loans and afford other financial
accommodations to the Borrower at such times, in such amounts and on such terms
as the Lender may approve; (ii) modify, amend, vary the terms and grant
extensions or renewals of any present or future indebtedness or of all or any of
the Guaranteed Obligations held by Lender or any instrument relating to or
securing same; (iii) grant time, waivers and other indulgences in respect
thereto; (iv) vary, exchange, release or discharge, wholly or partially, or
delay or abstain from perfecting and enforcing any security or guaranty held by
Lender (including, as to any Guarantor, varying, exchanging, releasing,
discharging or delaying or abstaining to enforce this Guaranty with respect to
any other Guarantor ) or other means of obtaining payment of any of the
Guaranteed Obligations that the Lender now has or acquires after the date
hereof; (v) take or omit to take any of the actions referred to in the Loan
Documents or other instrument evidencing, securing or relating to any of the
Guaranteed Obligations or any actions under this Agreement; (vi) fail, omit or
delay to enforce, assert or exercise any right, power or remedy conferred on the
Lender in this Agreement or in any other Loan Document or other instrument
evidencing, securing or relating to any of the Guaranteed Obligations or take or
refrain from taking any other action; (vii) accept partial payments from the
Borrower or any other party; (viii) as to any Guaranteed Obligations held by
Lender, release or discharge, wholly or partially, any other Guarantor, any
endorser or any guarantor, or accept additional collateral for the payment of
any Guaranteed Obligations held by Lender; (ix) compromise or make any
settlement or other arrangement with the Borrower or any other Person as to the
Guaranteed Obligations held by Lender; and (x) consent to and participate in the
proceeds of any assignment, trust or mortgage for the benefit of creditors as to
the Guaranteed Obligations held by Lender.

Section 2.04. Unenforceability of Guaranteed Obligations; Invalidity of Security
or Other Guaranties. If for any reason now or hereafter the Borrower has no
legal existence or is under no legal obligation to discharge any of the
Guaranteed Obligations undertaken or purported to be undertaken by it or on its
behalf, or if any of the moneys included in the Guaranteed Obligations have
become irrecoverable from the Borrower by operation of law or for any other
reason, this Agreement shall nevertheless be binding on the Guarantors jointly
and severally to the same extent as if the Guarantors at all times had been the
joint and several principal debtors on all of the Guaranteed Obligations (and no
invalidity or unenforceability as to one Guarantor shall affect the obligations
of any other Guarantor hereunder). This Agreement shall be in addition to any
other guaranty or other security for the Guaranteed Obligations, and it shall
not be prejudiced or rendered unenforceable by the invalidity of any such other
guaranty or security. The liability of each Guarantor under this Agreement shall
remain in full force and effect until payment and performance in full of all of
the Guaranteed Obligations. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be restored or returned by
the Lender upon the insolvency, bankruptcy or reorganization of the Borrower,
any Guarantor or otherwise, all as though such payment had not been made.

Section 2.05. Waivers by Guarantors. Each Guarantor waives: notice of acceptance
hereof and reliance hereon, notice of any action taken or omitted by the Lender
in reliance hereon, any requirement that the Lender be diligent or prompt in
making demands hereunder, any requirement as to any presentment, demand,
protest, giving notice of any default by the Borrower (except as otherwise
specifically required under the Loan Agreement) or asserting any other right

 

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of the Lender hereunder and all demands, notices (except as aforesaid) and all
suretyship defenses generally. Each Guarantor also irrevocably waives, to the
fullest extent permitted by law, all defenses which at any time may be available
in respect of such Guarantor’s obligations hereunder by virtue of any statute of
limitations, valuation, stay, homestead or moratorium law or other similar law
now or hereafter in effect.

Without limiting the generality of the foregoing provisions of this Agreement,
the liability of each Guarantor shall not be released, discharged or otherwise
affected by:

(i) any extension, renewal, settlement, compromise, waiver or release in respect
of any obligation of the Borrower, any other Guarantor or any other guarantor of
any of the Guaranteed Obligations;

(ii) any change in the time, manner, amount or place of payment of any
Guaranteed Obligation or any modification or amendment of or supplement to any
Loan Document or this Agreement;

(iii) any release, non-perfection or invalidity of any direct or indirect
security for any obligation of the Borrower, any Guarantor or any other
guarantor of any of the Guaranteed Obligations;

(iv) any change in the legal existence, structure, record or beneficial
ownership or control of the Borrower, any Guarantor or any other guarantor of
any of the Guaranteed Obligations, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting any such Person or its assets;

(v) the existence of any claim, set-off or other rights that any Guarantor may
have at any time against the Borrower, the Lender, any Guarantor or any other
guarantor of any of the Guaranteed Obligations or any other Person, whether or
not arising in connection with this Agreement;

(vi) any invalidity or unenforceability relating to or against the Borrower or
any Guarantor for any reason under any Loan Document or under this Agreement; or
any provision of applicable law or regulation purporting to prohibit the payment
by any Person of the principal of or interest on the Note or any other amount
payable under any Loan Document or under this Agreement; or

(vii) any other act or omission to act or delay of any kind by the Borrower, any
other Guarantor, the Lender, or any other Person or any other circumstances
whatsoever that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of any Guarantor’s obligations hereunder.

Section 2.06. Subrogation. Unless and until all Guaranteed Obligations shall
have been indefeasibly paid in full and discharged, each Guarantor hereby
irrevocably and unconditionally waives enforcement of any and all rights of
subrogation, contribution or similar rights that, but for this Section 2.06,
such Guarantor might otherwise have in relation to the Borrower, any other
Guarantor or any other guarantor as a result of this Agreement. No right of
subrogation,

 

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contribution or any similar rights will in any event be deemed to give any
Guarantor any cause of action against the Lender or any of its respective
officers, employees or agents for any act or omission on the part of the Lender;
the Lender may, without liability, release or fail to perfect any security
interest and may take or omit to take any action under any of the Loan
Documents, even if same would reduce the value of any Guarantor’s subrogation or
similar rights.

Section 2.07. No Contest with Lender. No set-off, counterclaim, reduction or
diminution of any obligation, or any claim or defense of any kind or nature that
any Guarantor has or may have against the Borrower, any other Guarantor, any
other guarantor, or the Lender, as the case may be, shall be available hereunder
to any Guarantor. No Guarantor will, in any proceedings under the Bankruptcy
Code or insolvency proceedings of any nature, prove in competition with the
Lender in respect of any payment hereunder or be entitled to have the benefit of
any counterclaim or proof of claim or dividend or payment by or on behalf of the
Borrower or the benefit of any other security for any Guaranteed Obligation
that, now or hereafter, any Guarantor may hold in competition with the Lender.

Section 2.08. Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrower under any Loan Document is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable jointly and severally by the Guarantors hereunder
forthwith on demand by the Lender.

Section 2.09. Payments. All payments by any Guarantor to the Lender hereunder
shall be made, without withholding, deduction or offset of any sort, in lawful
currency of the United States in immediately available funds at the offices of
the Lender at One Kendall Square, Building 700, Cambridge, MA 02139, or such
other place as the Lender may designate. Whenever any payment hereunder shall be
due on a day that is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day, and any interest payable thereon
shall be payable for such extended time at the specified rate. Any payments
received after 2:00 p.m. on any day will be deemed received on the next
succeeding Business Day.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.01. Representations and Warranties. Each Guarantor hereby represents
and warrants that:

(a) Each Guarantor (i) is a corporation, duly incorporated, validly existing and
in good standing under the laws of the jurisdiction indicated in the
introductory sentence of this Agreement, (ii) has the corporate power and
authority to own its assets and to transact the business in which it is now
engaged and to enter into and perform this Agreement and each of the other
Guarantors’ Agreements in which such Guarantor is named as a party, and (iii) is
duly qualified as a foreign corporation (or company, as the case may be) and in
good standing under the laws of each jurisdiction in which failure to be so
qualified could have a material adverse effect on the business, assets or
condition of such Guarantor. At the date of this Agreement, no

 

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Guarantor has any Subsidiaries, except as shown on item 3.01(a) of the attached
Disclosure Schedule.

(b) The owners of all of the equity securities of each Guarantor are set forth
on item 3.01(b) of the attached Disclosure Schedule.

(c) The execution, delivery and performance by each Guarantor of this Agreement
and each of the other Guarantors’ Agreements in which such Guarantor is named as
a party have been duly approved by such Guarantor’s Board of Directors (and, if
required, by such Guarantor’s shareholders) and do not and will not:

(i) contravene such Guarantor’s charter documents or by-laws;

(ii) violate any provision of, or require any filing, registration, consent or
approval under, any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to such
Guarantor;

(iii) result in a breach of or constitute a default or require any consent (not
heretofore obtained) under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which such Guarantor is a party or by
which such Guarantor or any of its properties may be bound or affected; or

(iv) result in, or require, the creation or imposition of any lien, security
interest or other encumbrance upon or with respect to any of the properties now
owned or hereafter acquired by such Guarantor.

(d) This Agreement has been duly executed and delivered on behalf of each
Guarantor and is the legal, valid and binding joint and several obligation of
the Guarantors, enforceable against the Guarantors in accordance with its terms.
Each of the other Guarantors’ Agreements in which any Guarantor is named as a
party has been duly executed and delivered on behalf of each such Guarantor and
is the legal, valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms.

(e) Each Guarantor is an affiliate of the Borrower and wishes to enter into this
Agreement in furtherance of its corporate purposes. Each Guarantor has a
substantial interest in the continued financial strength of the Borrower and, in
particular, its financing arrangements with the Lender, and the execution and
delivery of this Agreement is a substantial inducement for the Lender to enter
into the Loan Agreement. Each Guarantor has determined the execution, delivery
and performance of this Agreement to be necessary and convenient to the conduct,
promotion and attainment of the businesses of such Guarantor and the Borrower.

(f) Except as described on item 3.01(f) of the attached Disclosure Schedule,
there are no actions, suits, proceedings or investigations pending or, to the
knowledge of any Guarantor, threatened by or against any Guarantor or any
Subsidiary of a Guarantor before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, which
could hinder or prevent the consummation of the transactions contemplated hereby
or call into question the validity of this Agreement or any action taken or to
be taken in

 

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connection with the transactions contemplated hereby or which in any single case
or in the aggregate might result in any material adverse change in the business,
condition, affairs or operations of any Guarantor or any such Subsidiaries.

(g) After giving effect to this Agreement and the transactions contemplated
hereby, each Guarantor (i) is and will be able to pay its debts as they become
due, (ii) has and will have funds and capital sufficient to carry on its
business as now conducted or as contemplated to be conducted, (iii) owns
property having a value both at fair valuation and at present fair salable value
greater than the amount required to pay its debts as they become due, and
(iv) is not insolvent and will not be rendered insolvent as determined by
applicable law, after taking into account the reasonable likelihood of payments
being required hereunder.

ARTICLE IV

COVENANTS

Section 4.01. Guarantors’ Covenants Effective Regardless of Status of Merger
Agreement. Without limitation of any other covenants and agreements contained
herein or elsewhere, so long as the Loan Agreement is in effect or any of the
Guaranteed Obligations remain outstanding:

(a) Covenants Incorporated by Reference. Each Guarantor (i) will perform (and
will cause each of its Subsidiaries to perform) all affirmative agreements and
covenants applicable to it set forth in the Merger Agreement, and (ii) will not
violate or suffer or permit the violation of any of the negative covenants or
agreements applicable to it contained in the Merger Agreement by itself or by
any of such Guarantor’s Subsidiaries; all of which affirmative and negative
covenants and agreements (together with the related definitions contained in the
Merger Agreement) are incorporated herein by this reference as effectively as if
set forth at length herein. Said agreements and covenants (and the related
definitions) are incorporated herein as they exist in the Merger Agreement at
the date hereof and without regard for any future termination or waiver of the
Merger Agreement.

(b) Further Assurances. Each Guarantor will execute and deliver, or cause to be
executed and delivered, to the Lender from time to time, promptly upon request
therefor, any and all other and further instruments (including correction
instruments and supplemental security documents) that may be reasonably
requested by the Lender to cure any deficiency in the execution and delivery of
this Agreement or any of the other Guarantors’ Agreements in which such
Guarantor is named as a party or more fully to describe or give effect to
particular aspects of any of the agreements and undertakings of such Guarantor
provided in this Agreement or any of the other Guarantors’ Agreements or
intended to be so provided.

Section 4.02 Guarantors’ Covenants Effective Upon Termination of the Merger
Agreement. Without limitation of any other covenants and agreements contained
herein or elsewhere, so long as the Loan Agreement is in effect or any of the
Guaranteed Obligations remain outstanding, the Guarantors will observe and
perform each of the covenants and agreements contained in the Loan Agreement and
relevant to the Guarantors, all such covenants

 

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and agreements of the Loan Agreement (together with the related definitions)
being incorporated herein by this reference as effectively as if set forth at
length herein.

ARTICLE V

DEFAULT AND REMEDIES

Section 5.01. Events of Default. An Event of Default will be deemed to have
occurred under this Agreement upon the occurrence of any one or more of the
following:

(i) Any Guarantor shall fail to make any monetary payment hereunder when due; or

(ii) Any representation or warranty of any Guarantor contained herein or made in
connection herewith shall at any time prove to have been incorrect in any
material respect when made; or

(iii) Any Guarantor shall fail to perform or observe any obligation or agreement
under Section 4.01 or Section 4.02 and such failure shall, as to any provision
incorporated herein by reference to the Loan Agreement and/or the Merger
Agreement, continue beyond the expiration of the notice and/or grace period (if
any) provided for the corresponding provision in the Loan Agreement or the
Merger Agreement, as applicable; or

(iv) Any Guarantor shall fail to perform or observe any other obligation or
agreement contained in this Agreement and such failure shall continue uncured
for ten (10) Business Days after written notice of such failure is given to such
Guarantor; or

(v) Any default on the part of any Guarantor or any Subsidiary of any Guarantor
shall exist, and shall remain unwaived or uncured beyond the expiration of any
applicable notice and/or grace period, under any other contract, agreement or
undertaking now existing or hereafter entered into with or for the benefit of
the Lender (or any affiliate of the Lender); or

(vi) Any default shall exist and remain unwaived or uncured beyond the
expiration of any applicable notice and/or grace period with respect to any
other Indebtedness of any Guarantor or any Subsidiary of any Guarantor that
would constitute an “Event of Default” under and as defined in the Loan
Agreement; or

(vii) Any Guarantor, other than Healthcare, shall be dissolved; or any Guarantor
or any Subsidiary of any Guarantor shall become insolvent or bankrupt or shall
cease paying its debts as they mature or shall make an assignment for the
benefit of creditors; or a trustee, receiver or liquidator shall be appointed
for any Guarantor or any Subsidiary of any Guarantor or for a substantial part
of the property of any of the foregoing; or bankruptcy, reorganization,
arrangement, insolvency or similar proceedings shall be instituted by or against
any Guarantor or any such Subsidiary under the laws of any jurisdiction (except
for an involuntary proceeding filed against any Guarantor or any

 

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Subsidiary of any Guarantor that is dismissed within 60 days following the
institution thereof); or

(viii) Any final uninsured judgment shall be entered against any Guarantor or
any Subsidiary of any Guarantor which would constitute an “Event of Default”
under and as defined in the Loan Agreement; or

(ix) Any Guarantor or any Subsidiary of any Guarantor shall fail to meet its
minimum funding requirements under ERISA with respect to any employee benefit
plan (or other class of benefit which the PBGC has elected to insure) or any
such plan shall be the subject of termination proceedings (whether voluntary or
involuntary) and there shall result from such termination proceedings a
liability of any Guarantor or any Subsidiary of any Guarantor to the PBGC which
in the reasonable opinion of the Lender may have a material adverse effect upon
the financial condition of any Guarantor and its Subsidiaries, taken as a whole;
or

(x) An Environmental Event shall have occurred that in the reasonable opinion of
the Lender materially adversely affects the financial condition, prospects,
business or operations of any Guarantor or any of its Subsidiaries or any of
their respective premises; or

(xi) There shall occur any other material adverse change in the condition
(financial or otherwise), operations, properties, assets, liabilities or
earnings of any Guarantor and its Subsidiaries, taken as a whole.

Section 5.02. Rights and Remedies Upon Default. Upon the occurrence of any Event
of Default and at any time thereafter during the continuance thereof, in
addition to any other rights and remedies available to the Lender hereunder or
otherwise, the Lender may exercise any one or more of the following rights and
remedies (all of which shall be cumulative):

(a) Enforce the provisions of this Agreement by legal proceedings for the
specific performance of any covenant or agreement contained herein or for the
enforcement of any other appropriate legal or equitable remedy, and the Lender
may recover damages caused by any breach by any Guarantor of the provisions of
this Agreement, including court costs, reasonable attorneys’ fees and other
costs and expenses incurred in the enforcement of the obligations of any
Guarantor hereunder.

(b) Exercise all rights and remedies hereunder, under the Guarantors’ Documents,
under the Loan Documents, and under any other agreement with the Lender, and
exercise all other rights and remedies that the Lender may have under applicable
law.

Section 5.03. Set-off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default and during the continuance thereof, the
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Guarantor or to
any other Person, all of which are hereby expressly waived, to set off and to
appropriate and apply

 

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any and all deposits and any other Indebtedness at any time held or owing by the
Lender or any affiliate of the Lender to or for the credit or the account of any
Guarantor against and on account of the obligations and liabilities of any
Guarantor to the Lender, under this Agreement or otherwise, although said
obligations, liabilities or claims, or any of them, may then be contingent or
unmatured and without regard for the availability or adequacy of other
collateral. ANY AND ALL RIGHTS TO REQUIRE THE LENDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES ANY OF THE OBLIGATIONS
PRIOR TO THE EXERCISE BY THE LENDER OF ITS RIGHT OF SET-OFF UNDER THIS SECTION
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

Section 5.04. Distribution. All cash actually received by the Lender pursuant to
this Agreement or the exercise of its rights hereunder shall be applied by the
Lender in the manner set forth in Section 1.5 of the Loan Agreement.

ARTICLE VI

MISCELLANEOUS

Section 6.01. No Waiver; Cumulative Remedies. No failure or delay on the part of
any party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law or otherwise
available to the Lender. Such remedies may be exercised without resort or regard
to the other source of satisfaction of any liabilities of any Guarantor to the
Lender. The provisions of this Agreement are not limited by nor in limitation of
any additional or inconsistent provisions contained in the Loan Agreement or
elsewhere.

Section 6.02. Amendments, Waivers and Consents. Neither this Agreement nor any
provision hereof may be amended, waived discharged or terminated orally. Any
such amendment, waiver, discharge or termination must be in writing signed by
the party against whom enforcement of the amendment, waiver, discharge or
termination is sought. Any waiver or consent may be given subject to
satisfaction of conditions stated therein and any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

Section 6.03. Addresses for Notices, etc. Except as otherwise expressly provided
in this Agreement, all notices, requests, demands and other communications
provided for hereunder shall be in writing and shall be mailed or delivered to
the applicable party at the address indicated below:

 

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If to the Guarantors:

Atossa HealthCare, Inc.

MDRNA Research, Inc.

Calais Acquisition Corp.

c/o MDRNA, Inc.

3830 Monte Villa Parkway

Bothell, Washington 98021

Attention: J. Michael French, President

and Chief Executive Officer

If to the Lender:

Cequent Pharmaceuticals, Inc.

One Kendall Square

Building 700

Cambridge, MA 02139

Attention: Peter D. Parker, President

and Chief Executive Officer

or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other party complying as to delivery with
the terms of this Section. Except as otherwise provided herein, all such
notices, requests, demands and other communications shall be deemed delivered on
the earlier of (i) the date received or (ii) the date of delivery, refusal or
non-delivery indicated on the return receipt if deposited in the United States
mails, sent postage prepaid, registered or certified mail, return receipt
requested, postage and registration or certification charges prepaid, addressed
as aforesaid. If any such notice, request, demand or other communication is
hand-delivered or delivered by overnight delivery service, same shall be
effective upon receipted delivery.

Section 6.04. Costs, Expenses and Taxes. The Guarantors jointly and severally
agree to pay all costs and expenses (including, without limitation, reasonable
legal fees) incurred by the Lender in connection with the preparation, execution
and delivery of this Agreement and all other instruments and documents to be
delivered in connection herewith and any amendments or modifications of any of
the foregoing, as well as the costs and expenses incurred by the Lender in
connection with the administration, default, collection, waiver or amendment of
any terms of this Agreement and/or such other instruments and documents, or in
connection with the Lender’s exercise, preservation or enforcement of any of its
rights, remedies or options hereunder or thereunder, including, without
limitation, fees of outside legal counsel or the allocated costs of in-house
legal counsel, accounting, consulting, brokerage or other similar professional
fees or expenses, and any fees or expenses associated with travel or other costs
relating to any appraisals or examinations conducted in connection with this
Agreement or any collateral therefor, all whether or not legal action is
instituted. In addition, the Guarantors shall be jointly and severally obligated
to pay any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement and all other
instruments and documents to be delivered in connection with any Guaranteed
Obligation. Any fees, expenses or

 

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other charges that the Lender is entitled to receive from any Guarantor
hereunder shall bear interest from the date of any demand for payment until paid
at a rate per annum equal to the rate that would be then applicable to the Loan
or that would have been then applicable to the Loan, if the Loan is not then
outstanding.

Section 6.05. Representations and Warranties. All covenants, agreements,
representations and warranties made herein or in any other document delivered by
or on behalf of any Guarantor pursuant to or in connection with this Agreement
are material and shall be deemed to have been relied upon by the Lender,
notwithstanding any investigation heretofore or hereafter made by the Lender and
shall survive the issuance of any Guaranteed Obligations, and shall continue in
full force and effect so long as the Loan Agreement is in effect or any of the
Guaranteed Obligations remain outstanding and unpaid or any facility for the
making of loans to the Borrower remains in effect. All statements contained in
any certificate or other paper delivered to the Lender at any time by or on
behalf of any Guarantor pursuant hereto shall constitute representations and
warranties by such Guarantor hereunder. All representations, warranties,
covenants, agreements and obligations of the Guarantors contained herein shall
be deemed to be joint and several representations, warranties, covenants and
agreements of the Guarantors, whether or not expressly so stated herein.

Section 6.06. Binding Effect; Assignment. This Agreement shall be binding upon
each Guarantor and its respective successors and assigns and shall inure to the
benefit of the Lender and its successors and assigns. No Guarantor may assign
this Agreement or any rights hereunder without the express written consent of
the Lender.

Section 6.07. Reproduction of Agreement. This Agreement and all other
instruments, documents and papers which relate thereto that have been or may be
hereafter furnished to the Lender may be reproduced by the Lender by any
photographic, photostatic, micro-card, miniature photographic, xerographic or
similar process, and the Lender may destroy the original from which any document
was so reproduced. Any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made in the
regular course of business).

Section 6.08. Replacement Documents. Upon receipt of an affidavit of an officer
of the Lender as to the loss, theft, destruction or mutilation of this Agreement
or of any other document delivered pursuant hereto that is not of public record
and, in the case of any such mutilation, upon surrender and cancellation of this
Agreement or such other document, the Guarantors will issue, in lieu thereof, a
replacement Guaranty Agreement or other document.

Section 6.09. Consent to Jurisdiction. Each Guarantor irrevocably submits to the
non-exclusive jurisdiction of any Massachusetts court or any federal court
sitting within The Commonwealth of Massachusetts over any suit, action or
proceeding arising out of or relating to this Agreement. Each Guarantor
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. Each Guarantor agrees that
final judgment in any such suit, action or proceeding brought in such a court
shall be enforced in any court of proper

 

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jurisdiction by a suit upon such judgment, provided that service of process in
such action, suit or proceeding shall have been effected upon such Guarantor in
one of the manners specified in the following paragraph of this Section 6.09 or
as otherwise permitted by law.

Each Guarantor hereby consents to process being served in any suit, action or
proceeding of the nature referred to in the preceding paragraph of this
Section 6.09 either (i) by mailing a copy thereof by registered or certified
mail, postage prepaid, return receipt requested, to it at its address set forth
in Section 6.03 or (ii) by serving a copy thereof upon it at its address set
forth in Section 6.03. Each Guarantor irrevocably waives, to the fullest extent
permitted by law, all claims of error by reason of any service as contemplated
herein and agrees that such service shall (x) be deemed in every respect
effective service upon such Guarantor in any such suit, action or proceeding and
(y) to the fullest extent permitted by law, be taken and held to be valid
personal service upon and personal delivery to such Guarantor.

Section 6.10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of The Commonwealth of Massachusetts (without
giving effect to conflict of laws principles).

Section 6.11. Severability. In the event that any provision of this Agreement or
the application thereof to any Person, property or circumstances shall be held
to any extent to be invalid or unenforceable, the remainder of this Agreement
and the application of such provision to Persons, properties or circumstances
other than those as to which it has been held invalid or unenforceable shall not
be affected thereby, and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.

Section 6.12. Usury. It is expressly stipulated and agreed to be the intent of
each Guarantor and the Lender at all times to comply with applicable state law
or applicable United States federal law (to the extent that it permits the
Lender to contract for, charge, take, reserve or receive a greater amount of
interest than under state law) and that this Section shall control every other
covenant and agreement in this Agreement and the other Loan Documents. If
applicable state or federal law should be at any time be judicially interpreted
so as to render usurious any amount called for under this Agreement, or any of
the other Loan Documents, or contracted for, charged, taken, reserved or
received with respect to this Agreement, or if the acceleration of any
Guaranteed Obligation, or any prepayment, results in any Guarantor having paid
any interest in excess of that permitted by applicable law, then it is the
Lender’s express intent that all excess amounts theretofore actually collected
by the Lender from such Guarantor and then retained by the Lender shall be
credited on the principal balance of the indebtedness guaranteed hereby, and the
provisions of this Agreement shall immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new documents, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder or thereunder. All sums paid or agreed to be paid by any
Guarantor to the Lender for the use or forbearance of the Guaranteed Obligations
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term of the Guaranteed
Obligations until payment in full so that the rate or amount of interest
collected under this Agreement does not exceed the maximum lawful rate from time
to time in effect and applicable to the obligations payable under this
Agreement.

 

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Section 6.13. Headings. Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

Section 6.14. WAIVER OF JURY TRIAL. THE GUARANTORS AND THE LENDER WAIVE TRIAL BY
JURY IN RESPECT OF ANY DISPUTE OR CLAIM HEREUNDER OR UNDER ANY OF THE OTHER LOAN
DOCUMENTS AND ANY ACTION ON SUCH DISPUTE. THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY MADE BY THE GUARANTORS AND THE LENDER, AND THE GUARANTORS AND
THE LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE PARTIES ENTERING INTO THE LOAN DOCUMENTS. THE GUARANTORS AND THE LENDER ARE
EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. EACH GUARANTOR FURTHER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS
HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF
ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL.

Section 6.15. Integration. This Agreement and any other documents delivered
herewith are intended by the parties as the final, complete and exclusive
statement of the transactions evidenced by this Agreement. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superseded by this Agreement and the other documents
delivered herewith.

Section 6.16. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.

[Signature pages follow.]

 

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IN WITNESS WHEREOF, the Guarantors have executed this Agreement, as an
instrument under seal, as of the day and year first above written.

 

ATOSSA HEALTHCARE, INC. By:  

/s/ J. Michael French

Name:   J. Michael French Title:   President MDRNA RESEARCH, INC. By:  

/s/ J. Michael French

Name:   J. Michael French Title:   President CALAIS ACQUISITION CORP. By:  

/s/ J. Michael French

Name:   J. Michael French Title:   President

Signature Page to Guaranty Agreement

--------------------------------------------------------------------------------

Accepted:

 

CEQUENT PHARMACEUTICALS, INC. By:  

/s/ Peter D. Parker

Name:   Peter D. Parker Title:   President and Chief Executive Officer

Signature Page to Guaranty Agreement

--------------------------------------------------------------------------------

DISCLOSURE SCHEDULE

 

Item 3.01(a)   - Subsidiaries of Guarantors Item 3.01(b)   - Ownership of Stock
of Guarantors Item 3.01(f)   - Litigation and Administrative Proceedings

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Item 3.01(a)

Subsidiaries of Guarantors

None

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Item 3.01(b)

Ownership of Stock of Guarantors

 

Guarantor:

  

Stockholder:

  

Number of Shares/Class:

   Percent
Ownership:   Atossa HealthCare, Inc.    MDRNA, Inc.    100 / Common    100 % 
MDRNA Research, Inc.    MDRNA, Inc.    360,000 / Common    100 %     MDRNA, Inc.
   1,839,080 / Series A Participating Preferred    100 %  Calais Acquisition
Corp.    MDRNA, Inc.    1,000 / Common    100 % 

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Item 3.01(f)

Litigation and Administrative Proceedings

None