Document:

Exhibit 10.3

 

Execution Version

 

Dated September 30, 2016

 

Amended
and Restated

Portfolio Management Agreement

 

between

 

34th
Street Funding, LLC

a Delaware limited liability company

 

CĪON
Investment Management, LLC

a Delaware limited liability company

 

     

     

    

 

Table of Contents

 

	 	 	Page
	 	 	 
	Section 1	General Duties of the Portfolio Manager	1
	 	 	 
	Section 2	Duties and Obligations of the Portfolio Manager with Respect to the Administration of the Company	3
	 	 	 
	Section 3	Authority to Bind the Company; No Joint Venture	4
	 	 	 
	Section 4	Limitations Relating to Portfolio Investments	5
	 	 	 
	Section 5	Brokerage	6
	 	 	 
	Section 6	Compensation	6
	 	 	 
	Section 7	Expenses	7
	 	 	 
	Section 8	Services to Other Companies or Accounts; Conflicts of Interest	7
	 	 	 
	Section 9	Duty of Care and Loyalty; Exculpation of Liability	8
	 	 	 
	Section 10	Indemnification	8
	 	 	 
	Section 11	Term of Agreement; Events Affecting the Portfolio Manager; Survival of Certain Terms; Delegation	10
	 	 	 
	Section 12	Power of Attorney; Further Assurances	12
	 	 	 
	Section 13	Amendment of this Agreement; Assignment	13
	 	 	 
	Section 14	Notices	13
	 	 	 
	Section 15	Binding Nature of Agreement; Successors and Assigns	14
	 	 	 
	Section 16	Entire Agreement	14
	 	 	 
	Section 17	Costs and Expenses	14
	 	 	 
	Section 18	Books and Records	14
	 	 	 
	Section 19	Titles Not to Affect Interpretation	14
	 	 	 
	Section 20	Provisions Separable	14
	 	 	 
	Section 21	Governing Law	14
	 	 	 
	Section 22	Execution in Counterparts	14
	 	 	 
	Section 23	Third Party Rights; Benefits of Agreement	14
	 	 	 
	Section 24	Representations and Warranties of the Portfolio Manager	15
	 	 	 
	Section 25	Conflict with the Loan and Security Agreement	15
	 	 	 
	Section 26	Subordination	15
	 	 	 
	Section 27	No Proceedings	15

 

    (i) 

     

    

 

AMENDED AND RESTATED PORTFOLIO MANAGEMENT
AGREEMENT

 

This Amended and Restated
Portfolio Management Agreement (the “Agreement”), dated as of September 30, 2016, is made by and between 34TH
STREET FUNDING, LLC (the “Company”), a Delaware limited liability company, and CĪON INVESTMENT MANAGEMENT,
LLC (the “Portfolio Manager”), a Delaware limited liability company. Reference is made to that certain Amended
and Restated Loan and Security Agreement, dated as of the date hereof, among the Company, the Portfolio Manager, the lenders party
thereto (the “Lenders”), JPMorgan Chase Bank, National Association, as administrative agent (the “Administrative
Agent”), U.S. Bank National Association (“USB”), as collateral agent (in such capacity, the “Collateral
Agent”), USB, as collateral administrator (in such capacity, the “Collateral Administrator”) and USB,
as securities intermediary (in such capacity, the “Securities Intermediary”) (as the same may be amended from
time to time, the “Loan and Security Agreement”). Unless otherwise specified, capitalized terms used but not
otherwise defined in this Agreement shall have the meanings given to them in the Loan and Security Agreement or if not defined
therein, shall have the meanings given to them in the Amended and Restated Limited Liability Company Agreement of the Company dated
as of the date hereof (as the same may be amended from time to time, the “Operating Agreement”). References
herein to the Loan and Security Agreement shall be applicable solely while it is in effect.

 

PRELIMINARY STATEMENT

 

WHEREAS, the Company
and the Portfolio Manager previously entered into a portfolio management agreement, dated as of August 26, 2016 (the “Original
PMA”);

 

WHEREAS, the Company
and the Portfolio Manager now desire to enter into this Agreement to amend, restate and supersede the Original PMA in its entirety;

 

WHEREAS, by its execution
as a counterparty to this Agreement, the Administrative Agent hereby consents to the amendments set forth herein;

 

NOW THEREFORE, in consideration
of the mutual agreements herein set forth, the parties hereto agree that the Original PMA shall be and is, amended and restated
as follows.

 

Section 1        General
Duties of the Portfolio Manager. Subject to the direction and control of the Company and subject to and in accordance with
the terms of the Loan and Security Agreement, the Operating Agreement, the policies adopted or approved by the Company and the
terms of this Agreement, the Portfolio Manager agrees to (x) supervise and direct the investment and reinvestment of the Portfolio
Investments, manage, service, administer and make collections on the Portfolio Investments and perform its duties set forth herein,
and shall perform on behalf of the Company those investment and leverage-related duties and functions of the Company as shall
be assigned to the Company or the Portfolio Manager in the Loan and Security Agreement or as delegated from time to time to the
Portfolio Manager by the Company and (y) comply with all covenants and restrictions with respect to the investment activities
imposed on the Company under the Loan and Security Agreement. The Portfolio Manager shall endeavor to comply in all material respects
with all applicable federal and state laws and regulations. Subject to the foregoing, the other provisions of this Agreement and
the terms of the Loan and Security Agreement, the Portfolio Manager is hereby appointed as the Company’s agent and attorney-in-fact
with authority to negotiate, execute and deliver all documents and agreements on behalf of the Company and to do or take all related
acts, with the power of substitution, to acquire, dispose of or otherwise take action with respect to or affecting the Portfolio
Investments, including, without limitation:

 

(a)         identifying
and originating Portfolio Investments to be purchased by the Company, selecting the dates for such purchases, and purchasing or
directing the purchase of such Portfolio Investments on behalf of the Company;

 

    	 	 	 

     

    

 

(b)          identifying
Portfolio Investments owned by the Company to be sold by the Company, selecting the dates for such sales, and selling such Portfolio
Investments on behalf of the Company;

 

(c)          negotiating
and entering into, on behalf of the Company, documentation providing for the purchase and sale of Portfolio Investments, including
without limitation, confidentiality agreements and commitment letters;

 

(d)          structuring
the terms of, and negotiating, entering into and/or consenting to, on behalf of the Company, documentation relating to Portfolio
Investments to be purchased, held, exchanged or sold by the Company, including any amendments, modifications or supplements with
respect to such documentation;

 

(e)          exercising,
on behalf of the Company, rights and remedies associated with Portfolio Investments, including without limitation, rights to petition
to place an obligor or issuer in bankruptcy proceedings, to vote to accelerate the maturity of a Portfolio Investment, to waive
any default, including a payment default, with respect to a Portfolio Investment and to take any other action which the Portfolio
Manager deems necessary or appropriate in its discretion in connection with any restructuring, reorganization or other similar
transaction involving an obligor or issuer with respect to a Portfolio Investment, including without limitation, initiating and
pursuing litigation;

 

(f)          responding
to any offer in respect of Portfolio Investments by tendering the affected Portfolio Investments, declining such offer, or taking
such other actions as the Portfolio Manager may determine;

 

(g)         exercising
all voting, consent and similar rights of the Company on its behalf and advising the Company with respect to matters concerning
the Portfolio Investments;

 

(h)         advising
and assisting the Company with respect to the valuation and rating of the Portfolio Investments;

 

(i)          retaining
legal counsel and other professionals (such as financial advisers) to assist in the structuring, negotiation, documentation, administration
and modification and restructuring of Portfolio Investments;

 

(j)          directing,
or causing to be directed, all obligors to pay Interest Proceeds and Principal Proceeds (collectively, “Collections”)
directly to the appropriate Account, depositing all Collections received directly by it into the appropriate Account promptly upon
receipt thereof and, promptly after receipt, into the appropriate Account, identifying all Collections received by it as Interest
Proceeds or Principal Proceeds. If notwithstanding the foregoing the Portfolio Manager at any time thereafter receives any Collections
or any other proceeds of any Portfolio Investments constituting Interest Proceeds or Principal Proceeds, the Portfolio Manager
shall direct or cause to be directed, the related obligor to make such payments to the Accounts and shall promptly, after receipt
thereof, deposit or cause to be deposited all such amounts into the appropriate Account;

 

(k)         cooperating
with the Collateral Agent in connection with the preparation of the reports set forth in Exhibit B of the Loan and Security Agreement
and any supplement thereto and (i) supplying any information maintained by it that the Collateral Agent may from time to time reasonably
request with respect to the Collateral and reasonably needs to complete the reports, calculations and certificates required to
be prepared by the Collateral Agent hereunder or required to permit the Collateral Agent to perform its obligations hereunder,
and (ii) reviewing and verifying the contents of the aforesaid reports, instructions, statements and certificates;

 

    	 	2	 

     

    

 

(l)          causing
the Company to pay, perform and discharge or cause to be paid, performed and discharged promptly all (i) all federal, state, county,
city, municipal, local, foreign or other governmental taxes; (ii) all levies, assessments, charges, or claims of any governmental
entity or any claims of statutory lienholders, the nonpayment of which could give rise by operation of law to a Lien on the Portfolio
Investments or any other property of the Company and (iii) any such taxes, levies, assessment, charges or claims which constitute
a lien or encumbrance on any property of the Company (collectively, “Charges”)
payable by it, except where the failure to so pay, discharge or otherwise satisfy such Charge would not, individually or in the
aggregate, be expected to have a Material Adverse Effect; and

 

(m)         in
the Portfolio Manager’s discretion, performing such actions on behalf of the Company as permitted in the Loan and Security
Agreement and making such determinations as necessary (in the Portfolio Manager’s discretion) to carry out the Company’s
business under the Loan and Security Agreement.

 

In performing its duties
hereunder, the Portfolio Manager shall seek to maximize the value of the Collateral for the benefit of the Company, taking into
account the investment criteria and limitations set forth herein and in the Loan and Security Agreement; provided, that
the Portfolio Manager shall not be responsible if such objectives are not achieved so long as the Portfolio Manager performs its
duties under this Agreement and the Loan and Security Agreement in the manner provided for herein and therein. In no event whatsoever
shall there be recourse to the Portfolio Manager or any of its Affiliates for any amounts payable on the Advances or the other
payment obligations of the Company under the Loan and Security Agreement or any of the other documents executed and delivered by
the Company in connection with the transactions contemplated by the Loan and Security Agreement. For the avoidance of doubt, the
Portfolio Manager does not guarantee the performance of any obligations of any other Person under any Loan Document.

 

Section 2        Duties
and Obligations of the Portfolio Manager with Respect to the Administration of the Company. To the extent requested by the
Company, the Portfolio Manager agrees to provide the following administrative services:

 

(a)          maintain
or oversee the maintenance of the books and records of the Company and maintain (or oversee maintenance by other persons) such
other books and records required by law or for the proper operation of the Company;

 

(b)          to
the extent prepared or filed by the Company, oversee the preparation and filing, and in all events review and ensure the timely
filing, of all federal, state and local income Tax returns required to be filed by the Company and any other required Tax returns
or reports;

 

(c)          review
the appropriateness of and arrange for payment of the Company’s expenses;

 

(d)          prepare
for review and approval by officers and other authorized persons of the Company (collectively, the “Authorized
Signatories”) financial information for the Company’s financial statements (if the Company prepares separate
financial statements) and such other reports, forms and filings, as may be mutually agreed upon or as may be required by law or
the Loan and Security Agreement;

 

(e)          prepare
reports relating to the business and affairs of the Company as may be mutually agreed upon and not otherwise prepared by others;

 

    	 	3	 

     

    

 

(f)          make
recommendations to the Company concerning the performance and fees of any of the Company’s service providers as the Company
may reasonably request or deem appropriate;

 

(g)         oversee
and review calculations of fees paid to the Company’s service providers;

 

(h)          consult
with the Authorized Signatories, and the Company’s independent accountants, legal counsel, custodian and other service providers
in establishing the accounting policies of the Company and monitor financial accounting services;

 

(i)          determine
the amounts available for distribution as dividends and distributions to be paid by the Company to Parent;

 

(j)          prepare
such information and reports as may be required under the Loan and Security Agreement;

 

(k)          provide
such assistance to the Company’s custodian, counsel, auditors and other service providers as generally may be required to
properly carry on the business and operations of the Company;

 

(l)          respond
to, or refer to the Company’s officers or Authorized Signatories, inquiries relating to the Company;

 

(m)        supervise
any other aspects of the Company’s administration as may be agreed to by the Company and the Portfolio Manager; and

 

(n)         provide
notices, from time to time, required to be provided by the Company under the Loan and Security Agreement.

 

All services are to
be furnished through the medium of any officers, Authorized Signatories or employees of the Portfolio Manager or its affiliates
as the Portfolio Manager deems appropriate in order to fulfill its obligations hereunder.

 

The Company shall,
upon demand, reimburse the Portfolio Manager or its affiliates for all out-of-pocket expenses incurred by them in connection with
the performance of the administrative services described in this Section 2.

 

Section 3        Authority
to Bind the Company; No Joint Venture. (a)  Except as provided in or pursuant to Section 1, 4 and 12
hereof, the Portfolio Manager shall have no authority to bind or obligate the Company. All acts of the Portfolio Manager (other
than as provided in the Loan and Security Agreement, the Operating Agreement or in Section 1 or Section 12 hereof
with respect to any Portfolio Investment) shall require the Company’s consent and approval to bind the Company. Nothing
in this Agreement shall be deemed to create a joint venture or partnership between the parties with respect to the arrangements
set forth in this Agreement. For all purposes hereof, the Portfolio Manager shall be deemed to be an independent contractor and,
unless otherwise provided herein or specifically authorized by the Company from time to time, shall have no authority to act for
or represent the Company.

 

    	 	4	 

     

    

 

(b)         The
Portfolio Manager shall act in conformity with the written instructions and directions of the Company delivered in accordance with
the terms and conditions hereof, except to the extent that authority has been delegated to the Portfolio Manager pursuant to the
terms of this Agreement or the Operating Agreement. Subject to the Fiduciary duty of the Member, the Company agrees that it shall
not permit any amendment to the Operating Agreement that materially affects the rights or duties of the Portfolio Manager to become
effective unless the Portfolio Manager has been given prior written notice of such amendment and has consented thereto in writing.
The Portfolio Manager may, with respect to the affairs of the Company, consult with such legal counsel, accountants and other advisors
as may be selected by the Portfolio Manager. The Portfolio Manager shall be fully protected, to the extent permitted by Applicable
Law, in acting or failing to act hereunder if such action or inaction is taken or not taken in good faith by the Portfolio Manager
in accordance with the advice or opinion of such counsel, accountants or other advisors. The Portfolio Manager shall be fully protected
in relying upon any writing signed in the appropriate manner with respect to any instruction, direction or approval of the Company
and may also rely on opinions of the Portfolio Manager’s counsel with respect to such instructions, directions and approvals.
The Portfolio Manager shall also be fully protected when acting upon any instrument, certificate or other writing the Portfolio
Manager believes in good faith to be genuine and to be signed or presented by the proper person or persons. The Portfolio Manager
shall be under no duty to make any investigation or inquiry as to any statement contained in any such writing and may accept the
same as conclusive evidence of the truth and accuracy of the statements therein contained if the Portfolio Manager in good faith
believes the same to be genuine.

 

Section 4         Limitations
Relating to Portfolio Investments.

 

(a)         Portfolio
Investments. Except as otherwise provided in this Section 4 and subject to the requirements of the Loan and Security
Agreement, the Operating Agreement and Applicable Law, the Portfolio Manager may cause the Company (which term shall include, for
all purposes relating to the purchase and sale of Portfolio Investments and the duties and obligations of the Portfolio Manager
set forth in Section 1 hereof, the Company and its consolidated subsidiaries, if any) from time to time to purchase Portfolio
Investments.

 

(b)          Transaction,
Director, Consulting, Advisory, Closing and Break- up Fees. The Company shall receive its pro-rata share, measured by
the amount invested or proposed to be invested by the Company in any Portfolio Investment, of any transaction, director, consulting,
advisory, closing and break-up fees, or similar fees (“Additional Fees”)
payable with respect to any Portfolio Investment. Notwithstanding anything herein or in the Operating Agreement to the contrary,
to the extent that any Additional Fees with respect to the Company’s share of such Investment are paid to the Portfolio Manager
or any of its Affiliates, the Portfolio Manager shall deposit such amounts, or cause such amounts to be deposited, into the Collection
Account for application as Interest Proceeds.

 

(c)          Other
Agreements of the Portfolio Manager. The Portfolio Manager agrees to the following:

 

(i)          the
Portfolio Manager shall cause any purchase or sale of any Portfolio Investment to be conducted on terms and conditions no less
favorable to the Company than those available on an arm’s length basis;

 

(ii)         the
Portfolio Manager shall provide to the Collateral Administrator all reports, data and other information (including, without limitation,
any letters of representations) that the Collateral Administrator may reasonably request in connection with its duties under the
Loan and Security Agreement, to the extent reasonably available to the Portfolio Manager; and

 

(iii)        the
Portfolio Manager shall notify the Company of any change in control of the Portfolio Manager within a reasonable time after such
change in control occurs.

 

    	 	5	 

     

    

 

(d)          Other
Obligations of the Portfolio Manager. Subject to the terms of the Loan and Security Agreement and to Section 9
and Section 10 hereof, the Portfolio Manager shall use commercially reasonable efforts to ensure that no action is taken
by it, and shall not willfully or in a grossly negligent manner take any action which would (a) materially adversely affect the
status of the Company for purposes of U.S. federal or state law or any other law which, in the Portfolio Manager’s good faith
judgment, is applicable to the Company, (b) not be permitted by the Company’s organizational documents, (c) violate any law,
rule or regulation of any governmental body or agency having jurisdiction over the Company, including, without limitation, actions
which would violate any U.S. federal, state or other applicable securities law the violation of which would adversely affect, in
any material respect, any Lender, the business, operations, assets or financial condition of the Company, or the ability of the
Portfolio Manager to perform its obligations hereunder and the Loan and Security Agreement, (d) require registration of the Company
as an “investment company” under the Investment Company Act of 1940, as amended, (e) adversely affect the Administrative
Agent in any material respect, (f) result in the Company violating the terms of the Loan and Security Agreement, (g) adversely
affect the interests of the Secured Parties in the pool of Collateral in any material respect (other than actions permitted hereunder
or under the Loan and Security Agreement) or (h) cause (i) the Company to take any action or make an election to classify itself
as an association taxable as a corporation for federal, state or any applicable tax purposes or (ii) otherwise cause adverse tax
consequences to the Company, it being understood that, in all circumstances, in connection with the foregoing, the Portfolio Manager
shall not be required to make any independent investigation of any facts or laws not otherwise known to it in connection with its
obligations under this Agreement and the Loan and Security Agreement or the conduct of its business generally. In addition, the
Portfolio Manager need not take such action unless arrangements satisfactory to it are made to insure or indemnify the Portfolio
Manager from any liability it may incur as a result of such action. The Portfolio Manager and its Affiliates and their respective
members, managers, directors, officers, stockholders, employees and agents shall not be liable to the Company, the Administrative
Agent, any Secured Party or any other Person except as provided in Section 9 and Section 10. The Portfolio Manager
covenants that it shall comply in all material respects with Applicable Laws and regulations relating to its performance under
this Agreement. Notwithstanding anything contained in this Agreement to the contrary, any indemnification of the Portfolio Manager
provided for in this Section 4 shall be payable by the Company in accordance with the Loan and Security Agreement.

 

Section 5        Brokerage.
The Portfolio Manager shall use commercially reasonable efforts to effect all purchases and sales of securities in a manner consistent
with the principles of best execution. Subject to the objective of obtaining the best execution, the Portfolio Manager may, in
the allocation of business, take into consideration all factors that it deems relevant, including, without limitation, the price,
the size of the transaction, the nature of the market for the security, the amount of the commission, the amount of any assignment
or transaction fees, the timing of the transaction taking into account market prices and trends, the reputation, experience and
financial stability of the broker or dealer involved, the quality of service rendered by the broker or dealer in other transactions
and other research and other brokerage services furnished to the Portfolio Manager or its Affiliates by brokers and dealers, in
connection with the duties of the Portfolio Manager hereunder or otherwise, in each case in compliance with Section 28(e) of the
Securities Exchange Act of 1934, as amended. In this regard, the Portfolio Manager may effect transactions which cause the Company
to pay a commission in excess of a commission which another broker or other intermediary would have charged; provided,
however, that the Portfolio Manager shall have first determined that such commission is reasonable in relation to the value
of the brokerage or research services performed by that broker or other intermediary or that the Company is the sole beneficiary
of the services provided. Such brokerage services may be used by the Portfolio Manager or its Affiliates in connection with its
other advisory activities or investment operations.

 

Section 6        Compensation.
The Company agrees to pay to the Portfolio Manager on each Interest Payment Date, each Additional Distribution Date and the Maturity
Date, and the Portfolio Manager agrees to accept as compensation for all services rendered by the Portfolio Manager as such, to
the extent not waived or deferred, an amount as agreed to by the Company and the Portfolio Manager, from time to time, not to
exceed, with respect to each Calculation Period, 0.50% per annum multiplied by the daily average aggregate principal amount
of the Portfolio Investments during such Calculation Period (the “Management Fee”). The Management Fee will
be calculated on the basis of a calendar year consisting of 360 days and the actual number of days elapsed. The Portfolio Manager
may waive the Management Fee payable in respect of any Calculation Period in its sole discretion.

 

    	 	6	 

     

    

 

Section 7        Expenses.
Other than as set forth below, the Company will be responsible for paying all of its expenses. On behalf of the Company, the Portfolio
Manager may advance payment of any expenses, and the Company shall, upon request, reimburse the Portfolio Manager therefor within
30 days following written request from the Portfolio Manager. Nothing in this Section 7 shall limit the ability of the
Portfolio Manager to be reimbursed by any Person other than the Company (including issuers or obligors of securities, instruments
or obligations owned by the Company) for out-of-pocket expenses incurred by the Portfolio Manager in connection with the performance
of services hereunder. The Portfolio Manager shall maintain complete and accurate records with respect to costs and expenses and
shall furnish the Company with receipts or other written vouchers with respect thereto upon request of the Company. The Company
shall bear the reasonable costs and expenses of all audits and inspections permitted by Section 6.02 of the Loan and Security
Agreement.

 

Section 8        Services
to Other Companies or Accounts; Conflicts of Interest. (a)  The Portfolio Manager and its Affiliates, employees
or associates are in no way prohibited from, and intend to, spend substantial business time in connection with other businesses
or activities, including, but not limited to, managing investments, advising or managing entities whose investment objectives
are the same as or overlap with those of the Company, participating in actual or potential investments of the Company, providing
consulting, merger and acquisition, structuring or financial advisory services, including with respect to actual, contemplated
or potential investments of the Company, or acting as a director, officer or creditors’ committee member of, advisor to,
or participant in, any corporation, company, trust or other business entity. The Portfolio Manager and its Affiliates may, and
expect to, receive fees or other compensation from third parties for any of these activities unrelated to the Company, which fees
will be for the benefit of their own account and not the Company.

 

(b)          In
addition, the Portfolio Manager and its Affiliates may manage other investment vehicles and separate accounts (“Other
Accounts”) that invest in assets eligible for purchase by the Company. The Company may have the ability, under
certain circumstances, to take certain actions that would have an adverse effect on Other Accounts. In these circumstances, the
Portfolio Manager and its affiliated persons will act in a manner believed to be equitable to the Company and such Other Accounts,
including co-investment in accordance with applicable laws, including the conditions of any exemptive relief obtained by the Company
and the Portfolio Manager. The allocation of investment opportunities among the Company and Other Accounts will be made in good
faith pursuant to the Portfolio Manager’s written allocation policies. The Portfolio Manager may combine purchase or sale
orders on behalf of the Company with orders for Other Accounts, and allocate the assets so purchased or sold among such accounts
in an equitable manner. The Company may invest in portfolio companies in which Other Accounts have or are concurrently making the
same investment or a different investment (e.g., an investment that is junior to the Company’s
investment). In such situations, the Company and the Other Accounts may potentially have conflicting interests. If any matter arises
that the Portfolio Manager determines in its good faith judgment constitutes an actual conflict of interest, the Portfolio Manager
may take such actions as may be necessary or appropriate to ameliorate the conflict. These actions may include, by way of example
and without limitation, disposing of the asset giving rise to the conflict of interest, appointing an independent fiduciary, or
delegating decisions relating to the asset giving rise to the conflict of interest to a subcommittee of the Portfolio Manager.
The Portfolio Manager shall have no liability arising out of such potential or actual conflicts of interest; provided,
that nothing in this Section 8(b) shall be construed as altering the duties of the Portfolio Manager as set forth in this
Agreement or any other Loan Document or the requirements of any law, rule, or regulation applicable to the Portfolio Manager.

 

    	 	7	 

     

    

 

(c)          Any
purchase or disposition of a Portfolio Investment shall be made on terms no less favorable to the Company than those available
on an arm’s length basis. Any purchase or disposition of a Portfolio Investment effected on behalf of the Company with the
Portfolio Manager or any Affiliate thereof will be effected in accordance with all applicable laws and on terms as favorable to
the Company as would be the case if such Person were not so affiliated.

 

Section 9        Duty
of Care and Loyalty; Exculpation of Liability. The Portfolio Manager shall exercise its discretion and authority in accordance
with Applicable Law, the terms of the Loan Documents, all customary and usual servicing practices for loans similar to the Portfolio
Investments and (i) with reasonable care, using a degree of skill and diligence not less than that with which the Company or Portfolio
Manager, as applicable, services and administers loans for its own account or for the account of its Affiliates having similar
lending objectives and restrictions, and (ii) to the extent not inconsistent with clause (i), in a manner consistent with the
customary standards, policies and procedures followed by institutional managers of national standing relating to assets of the
nature and character of the Portfolio Investments and without regard to any relationship that the Portfolio Manager or any Affiliate
thereof may have with any underlying obligor or any Affiliate of an obligor. The Portfolio Manager assumes no responsibility under
this Agreement or any other Loan Document other than to render the services called for hereunder and under the terms thereunder,
subject to the standard of conduct described in the next succeeding sentence, and shall not be responsible for (i) any action
of the Company or the Collateral Agent in following or declining to follow any advice, recommendation or direction of the Portfolio
Manager or (ii) any action taken or omitted to be taken by the Portfolio Manager at the express direction of the Company, the
Collateral Agent, the Administrative Agent, any Lender or any Secured Party or any other Person entitled under the Loan and Security
Agreement to give direction to the Portfolio Manager. The Portfolio Manager and its Affiliates and their respective principals,
partners, members, stockholders, directors, managers, managing directors, officers, employees and agents shall not be liable to
the Company, the Collateral Agent, the Administrative Agent, any Lender or any Secured Party or any other Person for any Losses
(as defined below) incurred, or for any decrease in the value of the Portfolio Investments, as a result of the actions taken or
recommended, or for any omissions (including any failure to act if such action would be prohibited by the Loan Documents or this
Agreement), by the Portfolio Manager or its Affiliates or their respective principals, partners, members, stockholders, directors,
managers, managing directors, officers, employees or agents under this Agreement or any Loan Document, except by reason of acts
or omissions which constitute bad faith, willful misconduct or gross negligence in the performance of, or reckless disregard with
respect to, its obligations hereunder.

 

Section 10        Indemnification.   (a) To the fullest extent permitted by Applicable Law, the Company, the Administrative Agent and the Lenders under the Loan and
Security Agreement (solely with respect to this Section 10, together with the Company and the Administrative Agent, the
“Indemnified Parties” and each, an “Indemnified Party”) shall be held harmless and indemnified
by the Portfolio Manager against any claims, demands, costs, liabilities and expenses, including amounts paid in satisfaction
of judgments, in compromise or as fines and penalties, and counsel fees incurred by the Indemnified Parties (“Losses”)
in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court
or administrative or investigative body in which any Indemnified Party may be or may have been involved as a party or otherwise
or with which any Indemnified Party may be or may have been threatened, in each case arising directly by reason of acts or omissions
of the Portfolio Manager which constitute bad faith, willful misconduct or gross negligence in the performance of, or reckless
disregard with respect to, its obligations hereunder or under the Original PMA, provided,
however, to the fullest extent permitted by Applicable Law, that any Indemnified Party
shall not be indemnified hereunder if there has been a determination by a final decision on the merits by a court or other body
of competent jurisdiction before whom the issue of entitlement to indemnification was brought that such Losses have been primarily
attributable to such Indemnified Party’s willful misfeasance, bad faith, gross negligence in performance, or reckless disregard,
of its obligations; provided further, that the Portfolio Manager will not be required
to indemnify any Indemnified Party with respect to any Losses (i) arising out of an action or claim brought against such Indemnified
Party by the Portfolio Manager or its Affiliates, or (ii) resulting from the performance or non-performance of the Portfolio Investments.
In no event shall the Portfolio Manager be liable for any consequential, punitive, exculpatory or treble damages or lost profits.

 

    	 	8	 

     

    

 

Indemnification under
this Section 10(a) shall survive the termination of this Agreement and shall include reasonable fees and expenses of counsel
and expenses of litigation.

 

(b)         (i)          To
the fullest extent permitted by Applicable Law, each of the Portfolio Manager, and its Affiliates, or any officer, director, member,
manager, employee, stockholder, assign, representative or agent of any such Person (each a “CIM Indemnified Person,”
and collectively, the “CIM Indemnified Persons”) shall be held harmless and indemnified by the Company (the
“Indemnifying Party”) (solely out of the Portfolio Investments and in accordance with the Loan and Security
Agreement, and not (solely for the purposes of this Agreement) out of the separate assets of the Parent) against any claims, demands,
costs, liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties,
and counsel fees incurred by such CIM Indemnified Person in connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or investigative body in which such CIM Indemnified Person
may be or may have been involved as a party or otherwise (other than as authorized by the directors of the Parent, as the plaintiff
or complainant) or with which such CIM Indemnified Person may be or may have been threatened, while acting in such Person’s
capacity as a CIM Indemnified Person in connection with the establishment, management or operations of the Company or the management
of the Portfolio Investments, provided, however, that a CIM Indemnified Person shall not be indemnified hereunder if and to the
extent resulting from such CIM Indemnified Person’s bad faith, fraud, willful misfeasance, gross negligence or reckless disregard;
provided further, that the Company will not be required to indemnify the CIM Indemnified Persons with respect to any Losses (i)
arising out of an action or claim brought against any CIM Indemnified Person by the Company or its Affiliates, or (ii) resulting
from the performance or non-performance of the Portfolio Investments. Any payments pursuant to Section 10(b)(i)
while the Loan and Security Agreement is in effect will be paid solely in accordance with the Loan and Security Agreement (subject
to the availability of funds and to the conditions set forth in the Loan and Security Agreement).

 

(ii)         The
rights accruing to any Indemnified Party or any CIM Indemnified Person under these provisions shall not exclude any other right
to which such Indemnified Party or such CIM Indemnified Person may be lawfully entitled.

 

(iii)        Each
CIM Indemnified Person (other than the Portfolio Manager) shall, in the performance of its duties, be fully and completely justified
and protected with regard to any act or any failure to act resulting from reliance in good faith upon the books of account or other
records of the Company, upon an opinion of counsel, or upon reports made to the Company by any of the Company’s officers
or employees or by any advisor, administrator, manager, distributor, selected dealer, accountant, appraiser or other expert or
consultant selected with reasonable care by the directors of the Parent, officers or employees of the Company, regardless of whether
such counsel or other person may also be a director of the Parent. The Portfolio Manager shall, in the performance of its duties,
be fully and completely justified and protected with regard to any act or any failure to act resulting from reliance in good faith
upon any books of account or other records of the Company that were prepared by an agent or other third party, upon an opinion
of counsel, or upon reports made to the Company by any advisor, administrator, manager, distributor, selected dealer, accountant,
appraiser or other expert or consultant selected with reasonable care by the directors of the Parent, officers or employees of
the Company, regardless of whether such counsel or other person may also be a director of the Parent. The Company shall, in the
performance of its duties, be fully and completely justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon its books of account or other records of the Company prepared by a third party; provided
such third party is an advisor, administrator, manager, distributor, selected dealer, accountant, appraiser or other expert or
consultant selected by the Company with reasonable care.

 

    	 	9	 

     

    

 

(iv)        Neither
any Indemnified Party nor any CIM Indemnified Person shall, without the prior written consent of the Portfolio Manager or the Indemnifying
Party, as applicable, which consent shall not be unreasonably withheld or delayed, settle or compromise any claim giving rise to
a claim for indemnity hereunder, or permit a default or consent to the entry of any judgment in respect thereof, unless such settlement,
compromise or consent includes, as an unconditional term thereof, the giving by the claimant to the Portfolio Manager or the Indemnifying
Party, as applicable, of a release from liability substantially equivalent to the release given by the claimant to such Indemnified
Party or such CIM Indemnified Person in respect of such claim.

 

(v)         In
the event that any Indemnified Party or any CIM Indemnified Person waives its right to indemnification hereunder, the Portfolio
Manager or the Indemnifying Party, as applicable, shall not be entitled to appoint counsel to represent such Indemnified Party
or such CIM Indemnified Person nor shall the Portfolio Manager or the Indemnifying Party, as applicable, reimburse such Indemnified
Party or such CIM Indemnified Person for any costs of counsel to such Indemnified Party or such CIM Indemnified Person.

 

Section 11        Term
of Agreement; Events Affecting the Portfolio Manager; Survival of Certain Terms; Delegation. (a)  This Agreement
shall become effective as of the date hereof and, unless sooner terminated by the Company or the Portfolio Manager as provided
herein, shall continue in effect during the existence of the Company. Notwithstanding the foregoing, this Agreement may be terminated
by the Company without the payment of any penalty, upon the occurrence of a “cause” event. A “cause” event
for purposes of this Section 11(a) shall have occurred by reason of:

 

(i)          the
conviction (or plea of no contest) for a felony of the Portfolio Manager;

 

(ii)         the
conviction (or plea of no contest) for a felony of an officer or a member of the board of directors of the Portfolio Manager, if
the employment or other affiliation of such Person so convicted is not terminated by the Portfolio Manager within 30 days of such
conviction and the Parent votes thereafter to invoke this termination provision;

 

(iii)        the
Portfolio Manager or an officer or a member of the board of directors of the Portfolio Manager has engaged in gross negligence
or willful misconduct with respect to the Company that has resulted in a material adverse effect on the Company or the Portfolio
Investments, or has committed a knowing material violation of securities laws, each as determined by a final decision of a court
or binding arbitration decision unless, in the case of such natural persons, their employment or other affiliation with the Portfolio
Manager is terminated or suspended within 30 days after discovery by the Portfolio Manager;

 

(iv)        the
Portfolio Manager shall willfully violate or breach any material provision of this Agreement or the Loan and Security Agreement
applicable to it;

 

    	 	10	 

     

    

 

(v)         the
Portfolio Manager shall violate or breach any provision of this Agreement or any term of the Loan and Security Agreement applicable
to it (including, but not limited to, any breach of a material representation, warranty or certification of the Portfolio Manager
hereunder or thereunder, but other than as covered in Section 11(a)(iv), and it being understood that the failure of the
Borrowing Base Test or any Eligibility Criteria or the occurrence of a Market Value Event is not a violation or breach, other than
a willful violation or breach of the Eligibility Criteria at the time of the acquisition of any Portfolio Investment), which violation
or breach (1) has a material adverse effect on the Lenders and (2) if capable of being cured, is not cured within 30 days of the
Portfolio Manager becoming aware of, or its receiving notice from the Company or the Administrative Agent of, such violation or
breach, or, if such violation or breach is not capable of being cured within 30 days but is capable of being cured in a longer
period, it fails to cure such violation or breach within the period in which a reasonably prudent person could cure such violation
or breach, but in no event greater than 60 days;

 

(vi)        the
Portfolio Manager is wound up or dissolved or there is appointed over it or a substantial part of its assets a receiver, administrator,
administrative receiver, trustee or similar officer; or the Portfolio Manager (i) ceases to be able to, or admits in writing its
inability to, pay its debts as they become due and payable, or makes a general assignment for the benefit of, or enters into any
composition or arrangement with, its creditors generally; (ii) applies for or consents (by admission of material allegations of
a petition or otherwise) to the appointment of a receiver, trustee, assignee, custodian, liquidator or sequestrator (or other similar
official) of the Portfolio Manager or of any substantial part of its properties or assets, or authorizes such an application or
consent, or proceedings seeking such appointment are commenced without such authorization, consent or application against the Portfolio
Manager and continue undismissed for 60 days; (iii) authorizes or files a voluntary petition in bankruptcy, or applies for or consents
(by admission of material allegations of a petition or otherwise) to the application of any bankruptcy, reorganization, arrangement,
readjustment of debt, insolvency or dissolution, or authorizes such application or consent, or proceedings to such end are instituted
against the Portfolio Manager without such authorization, application or consent and are approved as properly instituted and remain
undismissed for 60 days or result in adjudication of bankruptcy or insolvency; or (iv) permits or suffers all or any substantial
part of its properties or assets to be sequestered or attached by court order and the order remains undismissed for 60 days; or

 

(vii)       the
occurrence of any event specified in clause (a) of the definition of Event of Default in the Loan and Security Agreement which
default is primarily the result of any act or omission of the Portfolio Manager resulting from a breach of its duties under this
Agreement or under the Loan and Security Agreement (but not as a result of any default of any Collateral Obligation).

 

The Portfolio Manager
shall promptly provide written notice to the Member upon the occurrence of a “cause” event.

 

(b)          Notwithstanding
anything herein to the contrary, Section 7, Section 9 and Section 10 of
this Agreement shall survive any termination hereof.

 

    	 	11	 

     

    

 

(c)          From
and after the effective date of termination of this Agreement, the Portfolio Manager and its Affiliates shall not be entitled to
compensation for further services hereunder, but shall be paid all compensation and reimbursement of expenses accrued to the date
of termination. Upon such termination and upon request by the Borrower, the Portfolio Manager shall deliver as directed copies
of all documents, books, records and other information prepared and maintained by or on behalf of the Company with respect to an
Portfolio Investment (“Records”) within five Business Days after demand therefor
and a computer tape or diskette (or any other means of electronic transmission acceptable to the successor portfolio manager) containing
as of the close of business on the date of demand all of the data maintained by the Portfolio Manager in computer format in connection
with managing the Portfolio Investments. The Portfolio Manager agrees to use reasonable efforts to cooperate with any successor
portfolio manager in the transfer of its responsibilities hereunder, and will, among other things, provide upon receipt of a written
request by such successor portfolio manager any information available to it regarding any Portfolio Investments. The Portfolio
Manager agrees that, notwithstanding any termination, it will reasonably cooperate in any proceeding arising in connection with
this Agreement, the Loan and Security Agreement or any Portfolio Investment (excluding any such proceeding in which claims are
asserted against the Portfolio Manager or any Affiliate of the Portfolio Manager) upon receipt of appropriate indemnification in
accordance with Section 10 and expense reimbursement.

 

(d)          Until
a successor portfolio manager has commenced investment management activities in the place of CĪON
Investment Management, LLC, CĪON Investment Management, LLC shall not resign
as Portfolio Manager hereunder. Notwithstanding anything contained herein to the contrary and to the extent permitted by Applicable
Law without causing the Portfolio Manager to have liability, the resignation of the Portfolio Manager shall not become effective
until an entity approved by the Company and the Member and shall have assumed the responsibilities and obligations of the Portfolio
Manager.

 

(e)          For
the avoidance of doubt, none of the Administrative Agent nor any Lender shall have the right to remove the Portfolio Manager under
this Agreement.

 

Section 12        Power
of Attorney; Further Assurances. In addition to the power of attorney granted to the Portfolio Manager in Section 1
of this Agreement, the Company hereby makes, constitutes and appoints the Portfolio Manager, with full power of substitution,
as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, in accordance with
the terms of this Agreement (a) to sign, execute, certify, swear to, acknowledge, deliver, file, receive and record any and all
documents which the Portfolio Manager reasonably deems necessary or appropriate in connection with its investment management duties
under this Agreement and (b) to (i) subject to any policies adopted by the Parent or the Company with respect thereto, exercise
in its discretion any voting or consent rights associated with any securities, instruments or obligations included in the Company’s
assets, (ii) execute proxies, waivers, consents and other instruments with respect to such securities, instruments or obligations,
(iii) endorse, transfer or deliver such securities, instruments and obligations and (iv) participate in or consent (or decline
to consent) to any modification, work-out, restructuring, bankruptcy proceeding, class action, plan of reorganization, merger,
combination, consolidation, liquidation or similar plan or transaction with regard to such securities, instruments and obligations.
To the extent permitted by Applicable Law, this grant of power of attorney is irrevocable and coupled with an interest, and it
shall survive and not be affected by the subsequent dissolution or bankruptcy of the Company; provided that this grant
of power of attorney will expire, and the Portfolio Manager will cease to have any power to act as the Company’s attorney-in-fact,
upon termination of this Agreement in accordance with its terms. The Company shall execute and deliver to the Portfolio Manager
all such other powers of attorney, proxies, dividend and other orders, and all such instruments, as the Portfolio Manager may
reasonably request for the purpose of enabling the Portfolio Manager to exercise the rights and powers which it is entitled to
exercise pursuant to this Agreement. Each of the Portfolio Manager and the Company shall take such other actions, and furnish
such certificates, opinions and other documents, as may be reasonably requested by the other party hereto in order to effectuate
the purposes of this Agreement and to facilitate compliance with applicable laws and regulations and the terms of this Agreement.

 

    	 	12	 

     

    

 

Section 13        Amendment
of this Agreement; Assignment. (a) No provision of this Agreement
may be amended, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which
enforcement of the amendment, waiver, discharge or termination is sought and with the prior written consent of the Administrative
Agent.

 

Neither the failure nor
any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege
with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.
No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

(b)          The
Portfolio Manager may not, directly or indirectly, assign all or any part of its rights and duties under this Agreement to any
Person without the prior consent of the Company; provided, however, that the no such consent shall be required in
connection with (x) an assignment of the role of Portfolio Manager to an Affiliate of CĪON
Investment Management, LLC or (y) a merger of CĪON Investment Management, LLC
with another business development company sponsored by CĪON Investment Corporation
or other fundamental change transaction the result of which effectively combines the ownership and/or assets of CĪON
Investment Management, LLC and a business development company sponsored by CĪON
Investment Corporation, or merges or consolidates their respective collateral advisors or sub-advisors.

 

Section 14        Notices.
Unless expressly provided otherwise herein, any notice, request, direction, demand or other communication required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly given, made and received if sent by hand or by
overnight courier, when personally delivered, if sent by telecopier, when receipt is confirmed by telephone, or if sent by registered
or certified mail, postage prepaid, return receipt requested, when actually received if addressed as set forth below:

 

	(a)	If to the Company:
	 	 
	 	34th Street Funding, LLC
	 	3 Park Avenue, 36th Floor
	 	New York, New York 10016
	 	Attention: Credit Team
	 	Email:  CIONAgentNotices@iconinvestments.com
	 	 
	(b)	If to the Portfolio Manager:
	 	 
	 	CĪON Investment Management, LLC
	 	3 Park Avenue, 36th Floor
	 	New York, New York 10016
	 	Attention: Keith Franz
	 	Email:  Kfranz@iconinvestments.com

 

(c)          If
to the Administrative Agent, the Collateral Agent, the Collateral Administrator or any Lender under the Loan and Security Agreement,
as provided in the Loan and Security Agreement, as may be amended therein.

 

Either party to this Agreement may alter
the address to which communications or copies are to be sent to it by giving notice of such change of address in conformity with
the provisions of this Section 14.

 

    	 	13	 

     

    

 

Section 15        Binding
Nature of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns as provided herein.

 

Section 16        Entire
Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or
implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control
and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof.

 

Section 17        Costs
and Expenses. The costs and expenses (including the fees and disbursements of counsel and accountants) incurred in connection
with the negotiation, preparation and execution of this Agreement, and all matters incident thereto, shall be borne by each party
hereto.

 

Section 18        Books
and Records. In compliance with the requirements of Rule 31a-3 under the Investment Company Act of 1940, as amended, the Portfolio
Manager hereby agrees that all records which it maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any such records upon the Company’s request. The Portfolio Manager further agrees to preserve
for the periods prescribed by Rule 31a-2 under the Investment Company Act of 1940, as amended the records maintained by it in
its capacity as Portfolio Manager that are required to be maintained by Rule 31a-1 under the Investment Company Act of 1940, as
amended.

 

Section 19        Titles
Not to Affect Interpretation. The titles of sections contained in this Agreement are for convenience only, and they neither
form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

 

Section 20        Provisions
Separable. The provisions of this Agreement are independent of and separable from each other, and, to the extent permitted
by Applicable Law, no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

 

Section 21        Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 22        Execution
in Counterparts. This Agreement may be executed in separate counterparts, each of which shall be an original and all of which
taken together shall constitute one and the same instrument.

 

Section 23        Third
Party Rights; Benefits of Agreement. Other than as set forth in this Section 23, none of the provisions of this Agreement
shall be for the benefit of or enforceable by any creditor of the Company or by any creditor of the Member.

 

The Portfolio Manager
hereby acknowledges that (a) the Collateral Agent is the beneficiary of a collateral assignment of this Agreement pursuant to Section
8.02 of the Loan and Security Agreement and (b) the Administrative Agent shall be an express third party beneficiary of Sections
1, 2, 4, 9, 10, 13, 23, 24, 25, 26 and 27, subject, in
the case of clause (a), to each of the limitations, restrictions and conditions set forth in the Loan and Security Agreement with
respect to the collateral assignment of this Agreement, and for the avoidance of doubt, excluding any right of the Company to replace
or terminate the Portfolio Manager; provided that, such collateral assignment and such third party beneficiary rights shall
automatically terminate upon the irrevocable payment in full of the Secured Obligations (other than contingent indemnity obligations
as to which no claim has been made) and the termination of the Financing Commitments in full.

 

    	 	14	 

     

    

 

Section 24        Representations
and Warranties of the Portfolio Manager. The Portfolio Manager represents, warrants and covenants as of the Effective Date
and each Trade Date (and such other date as may be expressly set forth below) as to itself:

 

(a)          Due
Qualification. It is duly qualified to do business as a Delaware limited liability company in good standing and has
obtained all necessary licenses and approvals in all jurisdictions where the failure to do so would have a Material Adverse Effect;

 

(b)          Investment
Company Status. It is not required to be registered as an “investment company” within the meaning of the
Investment Company Act of 1940, as amended;

 

(c)          Information
True and Correct. All information heretofore or hereafter furnished by or on behalf of the Portfolio Manager in writing
to any Lender, the Collateral Agent, the Collateral Administrator or the Administrative Agent in connection with this Agreement
or any transaction contemplated hereby (including for use in any Notice of Acquisition delivered under the Loan and Security Agreement)
is and will be (when taken as a whole) true, complete and correct in all material respects as of the date furnished; provided
that, to the extent any such information was furnished to the Portfolio Manager by an un-Affiliated third part, such information
is as of its delivery date true, complete and correct in all material respects to the knowledge of the Portfolio Manager.

 

(d)          Eligibility
of Portfolio Investments. As of the Trade Date and Settlement Date for each Portfolio Investment purchased, such Portfolio
Investment meets all of the applicable Eligibility Criteria (unless otherwise consented to by the Administrative Agent) and, except
as otherwise permitted under the Loan and Security Agreement, the Concentration Limitations shall be satisfied (unless otherwise
consented to by the Administrative Agent).

 

(e)          Collections.
The Portfolio Manager acknowledges that all amounts received by it or its Affiliates with respect to the Collateral are held and
shall be held in trust for the benefit of the Secured Parties until deposited into the Collection Account; and

 

(f)          Allocation
of Charges. There is not any agreement or understanding between the Portfolio Manager and the Company (other than as
expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations
to make payments or otherwise in respect of any Taxes, fees, assessments or other governmental charges.

 

Section 25        Conflict
with the Loan and Security Agreement. In the event that this Agreement requires any action to be taken with respect to any
matter and the Loan and Security Agreement requires that a different action be taken with respect to such matter, and such actions
are mutually exclusive, the provisions of the Loan and Security Agreement in respect thereof shall control.

 

Section 26        Subordination.
The Portfolio Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement shall be subordinated
to the extent set forth in, and the Portfolio Manager agrees to be bound by the provisions of, the Loan and Security Agreement
(including, without limitation, the Priority of Payments).

 

Section 27        No
Proceedings. The Portfolio Manager hereby agrees that it will not institute against the Company, or join any other Person
in instituting against the Company, any insolvency proceeding (namely, any proceeding of the type referred to in clause (d) or
(e) of the definition of Event of Default) so long as any Advances or other amounts due from the Company under the Loan Documents
shall be outstanding or there shall not have elapsed one year plus one day since the last day on which any such Advances or other
amounts shall be outstanding. The foregoing shall not limit the Portfolio Manager’s right to file any claim in or otherwise
take any action with respect to any insolvency proceeding that was instituted by any Person other than the Portfolio Manager.

 

    	 	15	 

     

    

 

[Remainder of page intentionally
left blank.]

 

    	 	16	 

     

    

 

IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	 	34TH STREET FUNDING, LLC, as Company
	 	 	 
	 	By	/s/ Michael A. Reisner
	 	 	Name: Michael A. Reisner
	 	 	Title: Co-President and Co-CEO
	 	 	 
	 	CĪON investment management, llc, as Portfolio Manager
	 	 	 
	 	By	/s/ Michael A. Reisner
	 	 	Name: Michael A. Reisner
	 	 	Title: Co-President and Co-CEO

 

Signature Page to A&R Portfolio Management
Agreement

 

     

     

    

 

	 	Consented to and Agreed,
	 	As of the date first written above
	 	 
	 	JPMorgan Chase Bank, National Association, as Administrative Agent
	 	 	 
	 	By	/s/ Louis Cerrotta
	 	 	Name: Louis Cerrotta
	 	 	Title: Executive Director

 

Signature Page to A&R Portfolio Management
AgreementExhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

     THIS SECURITIES  PURCHASE  AGREEMENT,  dated as of September 26, 2016 (this
"Agreement"),  is entered into by and between  Trident  Brands  Incorporated,  a
Nevada  corporation  (the  "Company"),  and LPF (MCTECH)  Investment  Corp. (the
"Purchaser").

                              W I T N E S S E T H:

     WHEREAS,  the Company and the Purchaser are executing and  delivering  this
Agreement in accordance  with and in reliance upon the exemption from securities
registration  for offers and sales in an  "offshore  transaction"  to a non-U.S.
Person afforded,  inter alia, by Rule 904 under Regulation S ("Regulation S") as
promulgated by the United States Securities and Exchange  Commission (the "SEC")
under the  Securities  Act of 1933, as amended (the "1933 Act"),  and/or Section
4(2) of the 1933 Act;

     WHEREAS,  the  Purchaser  wishes  to  purchase  one  or  more  separate  8%
Convertible  Promissory  Notes of the Company  (collectively,  the  "Notes," and
each, a "Note"),  subject to and upon the terms and conditions of this Agreement
and  acceptance of this  Agreement by the Company,  on the terms and  conditions
referred to herein; and

     WHEREAS,  the Company's  obligations  to repay the Notes will be secured by
certain of the assets of the Company pursuant to the General Security  Agreement
dated as at the initial  Closing  Date,  with respect to each Note,  between the
Company and the Purchaser (the "Security Agreement").

     NOW THEREFORE,  in consideration of the mutual covenants and the agreements
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. AGREEMENT TO PURCHASE; PURCHASE AMOUNT.

     (a) PURCHASE.

     (i) Subject to the terms and  conditions  of this  Agreement  and the other
Transaction Documents, the Company will issue, sell and deliver to the Purchaser
and the Purchaser hereby agrees to purchase the Notes in the aggregate principal
amount of up to US$10,000,000  (the "Purchase Amount") with terms and conditions
as set forth in the Notes, which Notes shall be paid for, funded and issuable as
follows:

     (A)  US$4,100,000 of the principal  amount of the Notes shall be funded and
issued on September 26, 2016;

     (B) the balance of the of the principal amount of the Notes shall be funded
and issued at the  election  of the  Company,  in one or more  tranches  (each a
"TRANCHE")  from time to time  during  the Term,  within 30 days  following  the
notice by the  Company  to the  Purchaser  requesting  same,  with  such  notice
providing  details of the use of the funds to the satisfaction of the Purchaser,
and  provided  that no  Tranche  requested  by the  Company  shall be less  than
$1,500,000 or in excess of $4,400,000; and
<PAGE>
     (C) The following  restrictions  shall apply to the funding and issuance of
Tranches:

     I.   the Purchaser  shall not be required to fund any Tranche until January
          1, 2017 following  issuance of the first  $4,100,000  Note pursuant to
          above  Section 1 (a)(i)(A),  with the  exception  of the  contemplated
          Oceans Omega  transaction to be funded by the  Purchaser,  in its sole
          and absolute discretion;

     II.  the Purchaser  shall not be required to fund more than one (1) Tranche
          during any consecutive 60 day period during the Term (beginning on the
          date a Tranche becomes due);

     III  the  funding  of any  Tranche  other  than the first  $4,100,000  Note
          pursuant  to  Section  1(a)(i)(A)  above  is  subject  to  the  mutual
          agreement  by the  Purchaser  and  the  Company  as to the use of such
          funds, it being  understood and agreed that the Purchaser shall not be
          required to fund for purposes  which it is not agreeable to,  provided
          that,  within 10 business days  following the first Closing Date,  the
          parties shall enter into good faith  negotiations  and shall use their
          mutual best efforts to establish,  within 120 days following the first
          Closing  Date,  mutually  pre-approved  and  commercially   reasonable
          performance  metrics  and/or  uses of  proceeds,  each of which  shall
          satisfy the criteria  for the funding of future  Tranches the purposes
          of this Section 1. Thereafter, the Purchaser shall use its good faith,
          commercially   reasonable   efforts   to   evaluate   alternative   or
          supplementary  funding  purposes on a case by case basis, the approval
          of which shall not be unreasonably withheld.

     IV   any Tranche  requested by notice  delivered prior to the expiration of
          the Term shall remain due and payable  notwithstanding  the expiration
          of the Term.

     (ii) The Notes  referred to herein  shall be in the form of Annex I annexed
hereto. The Purchase Amount for each Note shall be the applicable portion of the
principal  amount  thereof.  The Notes will be secured by a pledge of certain of
the Company's assets pursuant to the Security Agreement in the form of Annex II.

     (iii)  The  purchase  of the  Notes  and  the  issuance  of the  underlying
Conversion  Shares  to the  Purchaser  and the other  transactions  contemplated
hereby are sometimes  referred to herein and in the other Transaction  Documents
as the purchase and sale of the Securities (as defined below),  and are referred
to collectively as the "Transactions".

     (b) CERTAIN  DEFINITIONS.  As used herein,  each of the following terms has
the meaning set forth below, unless the context otherwise requires:

                                       2
<PAGE>
     "1933 Act" has the meaning set forth in the recitals hereof.

     "1934 Act" has the meaning set forth in Section 3(a).

     "Additional Shares" has the meaning set forth in Section 9.

     "Affiliate"  means,  with respect to a specific  Person  referred to in the
relevant provision,  another Person who or which controls or is controlled by or
is under common control with such specified Person.

     "Agreement" has the meaning set forth in the preamble hereof.

     "Certificate" means each original signed Note duly executed by the Company.

     "Claim Notice" has the meaning set forth in Section 11(b)(i).

     "Closing Date" means the date of the closing of the issuance of each of the
respective Notes and/or the funding of each Tranche thereunder.

     "Common  Stock" all of the issued and  outstanding  shares of the  Company,
issued in one class, as of the date hereof and hereafter from time to time.

     "Common  Stock  Equivalents"  means any  securities  of the  Company or the
Subsidiaries  which  would  entitle  the  holder  thereof to acquire at any time
Common Stock,  including without limitation,  any debt, preferred stock, rights,
options,  warrants or other  instrument that is at any time  convertible into or
exchangeable  for, or otherwise  entitles the holder thereof to receive,  Common
Stock.

     "Company" has the meaning set forth in the preamble hereto.

     "Company Control Person" means each director,  executive officer, promoter,
and such other  Persons as may be deemed in control of the  Company  pursuant to
Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as defined below).

     "Conversion Shares" means shares of Common Stock underlying the Notes.

     "Damages" has the meaning set forth in Section 11(a).

     "Dispute Period" has the meaning set forth in Section 11(b)(i).

     "Effective Date" means the date of this Agreement.

     "GAAP" has the meaning set forth in Section 3(i).

     "Holder" means the Person  holding the relevant  Securities at the relevant
time.

                                       3
<PAGE>
     "Indemnified  Parties" or "Indemnified  Party" has the meaning set forth in
Section 11(a)(i).

     "Indemnifying Party" has the meaning set forth in Section 11(b)(i).

     "Indemnity Notice" has the meaning set forth in Section 11(b)(ii).

     "Last Audited Date" means November 30, 2015,

     "Material  Adverse  Effect" means an event or combination of events,  which
individually or in the aggregate,  would reasonably be expected to (w) adversely
affect the legality,  validity or enforceability of the Securities or any of the
Transaction  Documents,  (x) have or result in a material  adverse effect on the
results of operations,  assets, prospects, or condition (financial or otherwise)
of the Company and its subsidiaries,  taken as a whole, (y) adversely impair the
Company's  ability to perform fully on a timely basis its obligations  under any
of the Transaction  Documents or the Transactions  contemplated  thereby, or (z)
materially and adversely affect the value of the rights granted to the Purchaser
in the Transaction Documents.

     "Note" or "Notes" has the meaning set forth in the recitals hereof.

     "Notice(s)" or "notice(s)" has the meaning set forth in Section 14.

     "Person"  means  any  living  person  or  any  entity,  such  as,  but  not
necessarily limited to, a corporation, partnership or trust.

     "Principal  Trading  Market" means the Over the Counter  Bulletin  Board or
such  other  market  on which  the  Common  Stock is  principally  traded at the
relevant time.

     "Purchase Amount" has the meaning set forth in Section 1(a)(i).

     "Purchaser" has the meaning set forth in the preamble hereof.

     "Purchaser   Control  Person"  means  each  director,   executive  officer,
promoter,  and such other  Persons as may be deemed in control of the  Purchaser
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

     "Registrable Securities" has the meaning set forth in Section 10(a).

     "Regulation S" has the meaning set forth in the recitals hereof.

     "Rule 144" has the meaning set forth in Section 4(a).

     "SEC" has the meaning set forth in the recitals hereof.

     "SEC Documents" has the meaning set forth in Section 2(d).

     "SEC Reports" has the meaning set forth in Section 3(i).

                                       4
<PAGE>
     "Securities"  means the Note, the Conversion  Shares,  and any Common Stock
that may be issued to the  Purchaser  in  connection  with any other  agreements
between the parties.

     "Security Agreement" has the meaning set forth in the recitals hereof.

     "State of Incorporation" means the State of Nevada.

     "Subsidiary" means any subsidiary of the Company.

     "Term" means the period  beginning on the Effective  Date and ending on the
two (2) year anniversary of the Effective Date.

     "Third Party Claim" has the meaning set forth in Section 11(b)(i).

     "Trading Day" means any day during which the Principal Trading Market shall
be open for business.

     "Transaction Documents" means this Agreement,  the Note, Security Agreement
and includes all ancillary documents referred to in those agreements.

     "Transactions" has the meaning set forth in Section 1(a)(iii).

     "Transfer  Agent" means,  at any time, the transfer agent for the Company's
Common Stock.

     "U.S. Person" has the meaning set forth in Section 2(b).

     "US$" means legal currency of the United States of America.

     "Violation" has the meaning set forth in Section 10(d)(i).

     (c) FORM OF PAYMENT; DELIVERY OF CERTIFICATES.

     (i) The Purchaser  shall pay the applicable  portion of the Purchase Amount
by delivering  immediately  available good funds in United States Dollars to the
Company on the applicable Closing Date.

     (ii)  On the  applicable  Closing  Date,  the  Company  shall  deliver  the
applicable  Certificate,  each duly  executed  on behalf of the  Company  to the
Purchaser.

     (iii) By signing  this  Agreement,  each of the  Purchaser  and the Company
agrees to all of the terms and conditions of the Transaction  Documents,  all of
the  provisions  of which are  incorporated  herein by this  reference as if set
forth in full.

     (d) METHOD OF PAYMENT. Payment of the Purchase Amount shall be made by wire
transfer of funds to:

                                       5
<PAGE>
          Trident Brands Canada Limited
          Bank Information:

          Royal Bank of Canada
          Oakville-Cornwall & Trafalgar Branch
          361 Cornwall Rd Unit 107
          Oakville, Ontario
          L6J 7Z5
          Swift Code - ROYCCAT2
          Bank Information (ABA#) - 005330003
          U.S. Dollar Account Number -

     2. PURCHASER REPRESENTATIONS AND WARRANTIES.

     The  Purchaser  represents  and warrants to, and covenants and agrees with,
the Company as follows:

     (a) Without limiting  Purchaser's right to sell the Securities  pursuant to
an effective  registration  statement or otherwise in  compliance  with the 1933
Act,  the  Purchaser  is  purchasing  the  Securities  for its own  account  for
investment  only and not with a view  towards  the public  sale or  distribution
thereof and not with a view to or for sale in connection  with any  distribution
thereof.

     (b) The  Purchaser  is (i) not a "U.S.  Person"  as that term is defined in
Rule 502 of Regulation S, (ii)  experienced  in making  investments  of the kind
described in this Agreement and the related documents,  (iii) able, by reason of
the business and financial experience of its officers and professional  advisors
(who are not affiliated  with or compensated in any way by the Company or any of
its  Affiliates or selling  agents),  to protect its own interests in connection
with the Transactions  described in this Agreement,  and the related  documents,
and to evaluate the merits and risks of an  investment  in the  Securities,  and
(iv) able to afford the entire loss of its investment in the Securities.

     (c) The Purchaser  understands  that the  Securities  are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state  securities  laws and that the Company is relying upon
the  truth  and  accuracy  of,  and  the   Purchaser's   compliance   with,  the
representations,  warranties, agreements,  acknowledgments and understandings of
the Purchaser set forth herein in order to determine  the  availability  of such
exemptions and the eligibility of the Purchaser to acquire the Securities.

     (d) The  Purchaser and its advisors,  if any, have been  furnished  with or
have been given access to all materials  relating to the business,  finances and
operations  of the Company and  materials  relating to the offer and sale of the
Securities which have been requested by the Purchaser, including those set forth
on in any annex attached  hereto.  The Purchaser and its advisors,  if any, have
been afforded the opportunity to ask questions of the Company and its management
and have  received  complete  and  satisfactory  answers to any such  inquiries.
Without limiting the generality of the foregoing, the Purchaser has also had the
opportunity   to  obtain   and  to  review  the   Company's   filings  on  EDGAR
(collectively, the "SEC Documents").

                                       6
<PAGE>
     (e)  The  Purchaser  understands  that  its  investment  in the  Securities
involves a high degree of risk.

     (f) The Purchaser  hereby  represents that, in connection with its purchase
of the Securities,  it has not relied on any statement or  representation by the
Company  or  any  of its  officers,  directors  and  employees  or any of  their
respective attorneys or agents, except as specifically set forth herein.

     (g) The Purchaser understands that no United States federal or state agency
or any  other  government  or  governmental  agency  has  passed  on or made any
recommendation or endorsement of the Securities.

     (h) This  Agreement  and the  other  Transaction  Documents  to  which  the
Purchaser is a party, and the Transactions  contemplated thereby, have been duly
and validly  authorized,  executed and  delivered on behalf of the Purchaser and
are valid and binding agreements of the Purchaser enforceable in accordance with
their respective terms,  subject as to  enforceability to general  principles of
equity  and  to  bankruptcy,  insolvency,  moratorium  and  other  similar  laws
affecting the enforcement of creditors' rights generally.

     3. COMPANY  REPRESENTATIONS  AND  WARRANTIES.  The Company  represents  and
warrants to the Purchaser as of the date hereof and as of each Closing Date.

     (a) STATUS.  The Company:  (a) is a  corporation  duly  organized,  validly
existing and in good standing under the laws of the State of  Incorporation  and
has the  requisite  corporate  power to own its  properties  and to carry on its
business as now being conducted;  (b) is duly qualified as a foreign corporation
to do business and is in good standing in each jurisdiction  where the nature of
the  business  conducted  or  property  owned  by it  makes  such  qualification
necessary,  other than those  jurisdictions  in which the  failure to so qualify
would not have or result in a Material  Adverse  Effect;  (c) has all  requisite
power and authority and the legal right to own, pledge, mortgage and operate its
property,  to lease or sublease any property it operates under lease or sublease
and to conduct its business as now or currently  proposed to be  conducted;  and
(d) is in compliance with its constituent  documents.  In addition,  the Company
has registered its stock and is obligated to file reports pursuant to Section 12
or Section 15(d) of the  Securities  Exchange Act of 1934, as amended (the "1934
Act").  The Common Stock is, or immediately  following the initial  Closing Date
will be, quoted on the  Principal  Trading  Market.  The Company has received no
notice, either oral or written, with respect to the continued eligibility of the
Common Stock for such quotation on the Principal Trading Market, and the Company
has  maintained  all  requirements  on its  part  for the  continuation  of such
quotation.

     (b) AUTHORIZED SHARES.

     (i) The  authorized  capital stock of the Company  consists of  300,000,000
shares of Common  Stock,  US$0.001  par value,  of which  34,534,719  shares are
outstanding as of the date hereof.

     (ii) The Company has sufficient  authorized  and unissued  shares of Common
Stock as may be necessary to effect the issuance of the Conversion Shares on the
conversion of the Notes.

                                       7
<PAGE>
     (iii) As of each Closing Date, the applicable  Conversion Shares shall have
been  duly  authorized  by all  necessary  corporate  action  on the part of the
Company,  and,  when issued on the  conversion of the Notes or pursuant to other
relevant  provisions of the  Transaction  Documents,  in each case in accordance
with their respective  terms,  shall be duly and validly issued,  fully paid and
non-assessable.

     (c) TRANSACTION  DOCUMENTS AND STOCK.  This Agreement and each of the other
Transaction Documents, and the Transactions contemplated thereby, have been duly
and validly authorized by the Company, this Agreement has been duly executed and
delivered  by the  Company and this  Agreement  is, and the Note and each of the
other Transaction  Documents,  when executed and delivered by the Company,  will
be, valid and binding  agreements of the Company  enforceable in accordance with
their respective terms,  subject as to  enforceability to general  principles of
equity  and to  bankruptcy,  insolvency,  moratorium,  and  other  similar  laws
affecting the enforcement of creditors' rights generally.

     (d) FILINGS.  None of the SEC  Documents  contained,  at the time they were
filed,  any untrue statement of a material fact or omitted to state any material
fact  required to be stated  therein or  necessary to make the  statements  made
therein  in  light  of  the  circumstances  under  which  they  were  made,  not
misleading.

     (e) ABSENCE OF CERTAIN CHANGES. Since the Last Audited Date, there has been
no material adverse change and no Material  Adverse Effect,  except as disclosed
in the SEC Documents. Since the Last Audited Date, except as provided in the SEC
Documents,  the Company has not (i)  incurred or become  subject to any material
liabilities (absolute or contingent) except liabilities incurred in the ordinary
course of business consistent with past practices;  (ii) discharged or satisfied
any material lien or  encumbrance  or paid any material  obligation or liability
(absolute or contingent),  other than current  liabilities  paid in the ordinary
course of business  consistent with past  practices;  (iii) declared or made any
payment or  distribution  of cash or other  property  to its  shareholders  with
respect to its capital stock,  or purchased or redeemed,  or made any agreements
to purchase or redeem,  any shares of its capital stock; (iv) sold,  assigned or
transferred any other tangible assets, or canceled any debts owed to the Company
by any third party or claims of the Company  against any third party,  except in
the ordinary course of business  consistent with past practices;  (v) waived any
rights of material value, whether or not in the ordinary course of business,  or
suffered the loss of any  material  amount of existing  business;  (vi) made any
increases in employee  compensation,  except in the ordinary  course of business
consistent with past practices;  or (vii) experienced any material problems with
labor or  management  in  connection  with the  terms  and  conditions  of their
employment.

     (f) ABSENCE OF LITIGATION. There is no action, suit, proceeding, inquiry or
investigation  before or by any court,  public  board or body pending or, to the
knowledge of the Company,  threatened against or affecting the Company before or
by any governmental authority or nongovernmental department,  commission, board,
bureau,  agency or instrumentality  or any other person,  wherein an unfavorable
decision,  ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability  of, or the authority or ability
of the  Company  to  perform  its  obligations  under,  any  of the  Transaction
Documents.  The  Company is not aware of any valid basis for any such claim that

                                       8
<PAGE>
(either  individually  or in the  aggregate  with  all  other  such  events  and
circumstances)  could  reasonably be expected to have a Material Adverse Effect.
There are no outstanding  or  unsatisfied  judgments,  orders,  decrees,  writs,
injunctions  or  stipulations  to which the Company is a party or by which it or
any of its properties is bound, that involve the transaction contemplated herein
or  that,  alone or in the  aggregate,  could  reasonably  be  expect  to have a
Material Adverse Effect.

     (g) NO  UNDISCLOSED  LIABILITIES  OR EVENTS.  To the best of the  Company's
knowledge,  the  Company  has no  liabilities  or  obligations  other than those
disclosed in the Transaction Documents or the SEC Documents or those incurred in
the ordinary  course of the Company's  business  since the Last Audited Date, or
which  individually  or in the  aggregate,  do not or would not have a  Material
Adverse Effect. No event or circumstances has occurred or exists with respect to
the Company or its properties,  business,  operations,  condition  (financial or
otherwise),  or results of  operations,  which,  under  applicable  law, rule or
regulation,  requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed.  There
are no proposals  currently under  consideration or currently  anticipated to be
under  consideration by the Board of Directors or the executive  officers of the
Company  which  proposal  would  (x)  change  the  articles  or  certificate  of
incorporation  or other  charter  document  or by-laws of the  Company,  each as
currently in effect,  with or without shareholder  approval,  which change would
reduce or otherwise  adversely  affect the rights and powers of the shareholders
of the Common Stock or (y)  materially  or  substantially  change the  business,
assets or capital of the Company, including its interests in subsidiaries.

     (h) AUTHORIZATION; ENFORCEMENT.

     (i) The Company has the  requisite  corporate  power and authority to enter
into and to consummate the Transactions  contemplated by each of the Transaction
Documents and otherwise to carry out its obligations  thereunder.  The execution
and  delivery  of each  of the  Transaction  Documents  by the  Company  and the
consummation  by it of the  Transactions  contemplated  thereby  have  been duly
authorized  by all  necessary  action on the part of the  Company and no further
action is required  by the Company in  connection  therewith.  Each  Transaction
Document has been (or upon delivery will have been) duly executed by the Company
and, when  delivered in accordance  with the terms hereof,  will  constitute the
valid and binding obligation of the Company  enforceable  against the Company in
accordance  with its terms,  except (x) as  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  and other laws of general  application
affecting  enforcement of creditors' rights generally and (y) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

     (ii)  The  execution,  delivery  and  performance  by  the  Company  of the
Transaction  Documents and the  consummation  of the  Transactions  contemplated
therein:  (x) do not (A) contravene  the Company's  constituent  documents,  (B)
violate any applicable  requirement of law, except for any such violations which
would not  individually  or in the aggregate,  have or reasonably be expected to
have, a Material  Adverse Effect,  (C) conflict with,  contravene,  constitute a
default or breach under,  or result in or permit the termination or acceleration
of, any  contractual  obligation of the Company other than those that would not,
individually  or in the  aggregate,  have or  reasonably  be expected to have, a
Material  Adverse  Effect and are not created or caused by a  conflict,  breach,
default or termination or acceleration event, or (D) result in the imposition of

                                       9
<PAGE>
any lien, security interest,  mortgage, deed of trust, priority, pledge, charge,
right of first refusal or other  encumbrance or similar right of others,  or any
agreement to give any of the  following  upon the  Securities or any property of
the  Company;  and (y) do not  require  any  Permit  of,  or  filing  with,  any
governmental  authority or any consent of, or notice to, any Person  (other than
with respect to the  Purchaser's  acquisition  of the  Securities),  the filings
that, if not obtained,  would not,  individually  or in the  aggregate,  have or
reasonably be expected to have, a Material Adverse Effect.  For purposes of this
Agreement,  a  "Permit"  means any  permit,  approval,  authorization,  license,
registration,  certificate, concession, grant, franchise, variance or permission
from, and any other  contractual  obligation  with, any  governmental  authority
(excluding  any  contractual  obligations  with  "pools" and other  governmental
authorities entered into in the ordinary course of business consistent with past
practices),  in each case whether or not having the force of law and  applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

     (i) SEC REPORTS;  FINANCIAL  STATEMENTS.  The Company has filed all reports
required  to be filed by it under the 1934 Act,  including  pursuant  to Section
13(a) or 15(d)  thereof,  for the two years  preceding  the date hereof (or such
shorter  period as the Company was required by law to file such  material)  (the
foregoing materials, including the exhibits thereto, being collectively referred
to  herein  as the "SEC  Reports")  on a timely  basis or has  received  a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension.  As of their respective dates, the SEC Reports
complied in all material  respects with the requirements of the 1934 Act and the
rules and  regulations of the SEC  promulgated  thereunder,  and none of the SEC
Reports,  when  filed,  contained  any untrue  statement  of a material  fact or
omitted to state a material fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not misleading.  The financial  statements of the Company comply
in all material respects with applicable  accounting  requirements and the rules
and  regulations  of the SEC with  respect  thereto  as in effect at the time of
filing.  Such financial  statements have been prepared in accordance with United
States generally  accepted  accounting  principles applied on a consistent basis
during the periods involved  ("GAAP"),  except as may be otherwise  specified in
such  financial  statements  or the notes  thereto  and  except  that  unaudited
financial  statements may not contain all footnotes required by GAAP, and fairly
present in all material  respects the financial  position of the Company and its
consolidated  subsidiaries  as of and for the dates  thereof  and the results of
operations  and cash flows for the periods then ended,  subject,  in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

     (j)  SOLVENCY.  Both before and after giving  effect to (i) the issuance of
the  Securities,  (b) the  consummation  of the  Purchaser's  acquisition of the
Securities,  and  (ii) the  payment  and  accrual  of all  transaction  costs in
connection with the foregoing, the Company on a consolidated basis in accordance
with GAAP, is solvent.

     (k) INVESTMENT  COMPANY ACT. The Company is not an "investment  company" as
such term is defined in the Investment Company Act of 1940, as amended.

     (l) FULL DISCLOSURE. The written information prepared or furnished by or on
behalf of the Company in connection with any Transaction Document, when taken as
a whole when furnished  (including the  consummation of the  Transactions or any

                                       10
<PAGE>
other transaction contemplated therein) does not contain any untrue statement of
a  material  fact  or omit  to  state a  material  fact  necessary  to make  the
statements  contained  therein,  in light of the  circumstances  when made,  not
misleading;  provided, however, that projections contained therein are not to be
viewed as factual and that actual results during the periods covered thereby may
differ from the results set forth in such projections by a material amount.  All
projections that are part of such information  (including those set forth in any
projections  delivered subsequent to the Closing Date) are based upon good faith
estimates and stated  assumptions  believed by the Company to be reasonable  and
fair as of the date made in light of conditions  and facts then known and, as of
such date,  reflect good faith  estimates of the  information  projected for the
periods set forth therein.

     (m) NO BROKERS. Neither the Company nor any of its subsidiaries,  employees
or agents has employed or incurred any liability to any broker,  finder or agent
for any brokerage fees, finder's fees, commissions or other amounts with respect
to the  Transaction  Documents  or  the  Transactions.  The  Company  agrees  to
indemnify and hold harmless the Purchaser  from any liability for any commission
or  compensation in the nature of a finder's or broker's fee arising out of this
transaction  (and the costs and expenses of defending  against such liability or
asserted  liability) for which the Company or any of its officers,  employees or
representatives is responsible.

     (n)  OFFERING  OF  SECURITIES;  SUBSEQUENT  OFFERS  AND  SALES.  It is  not
necessary in connection  with the offer,  sale and delivery of the Securities to
the  Purchaser to register the offer and sale of the  Securities  under the 1933
Act. The Company has not, directly or indirectly, offered, sold or solicited any
offer to buy and will not,  directly or indirectly,  offer,  sell or solicit any
offer to buy, any  security of a type or in a manner  which would be  integrated
with the sale of the  Common  Stock  and  require  any of the  Securities  to be
registered  under the 1933 Act. Neither the Company nor any Person acting on its
behalf has engaged or will engage in any form of general solicitation or general
advertising (within the meaning of Rule 502(c) under the 1933 Act) in connection
with the offering of the  Securities.  In addition,  all  subsequent  offers and
sales of the Securities by the Company shall be made pursuant to registration of
the  relevant  Securities  under the 1933 Act or pursuant to an  exemption  from
registration.

     (o) PATRIOT ACT.

     (i) Neither the Company nor any of their  respective  directors,  officers,
agents,  employees or Affiliates (and, to the knowledge of the Company, no joint
venture or subsidiary  thereof) is in violation in any material  respects of any
United  States  requirements  of law relating to  terrorism,  sanctions or money
laundering,  including the United States  Executive Order No. 13224 on Terrorist
Financing and the PATRIOT Act.

     (ii) Neither any (A) director, officer, agent, employee or Affiliate of the
Company nor (B) any material  supplier or customer of the  Company,  is a Person
with whom dealings are prohibited under any sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury  Department ("OFAC") or any other
applicable  U.S.  sanctions  laws;  and  neither  the  Company  nor any of their
respective directors, officers, agents, employees or Affiliates will directly or
indirectly use the proceeds  derived from any of the  Transactions  or otherwise
make  available  such  proceeds to any Person,  for the purpose of financing the

                                       11
<PAGE>
activities of any Person in violation of sanctions  administered  by OFAC or any
other applicable U.S. sanction laws.

     (iii) The Company is in  compliance,  in all  material  respects,  with the
PATRIOT  Act. No part of the  proceeds  of the Common  Stock will be used by the
Company or any of its  directors,  officers,  agents,  employees or  Affiliates,
directly or indirectly, for any payments to any Person, including any government
official or employee,  political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States  Foreign  Corrupt  Practices Act of 1977, as amended or any
other applicable anti-corruption law.

     (p) NO VIOLATION.  The entering into and  performance  of this Agreement by
the Company  will not result in any  violation of the articles or by-laws of the
Company or of the terms of any  agreement or instrument by which the Company are
bound or of any judgment or order to which the Company is subject.

     (q) BANKRUPTCY. No bankruptcy,  insolvency or receivership proceedings have
been  instituted  or are pending  against  Company and it is able to satisfy his
liabilities as they become due.

     (r) EMPLOYEES, ETC.

     (i) The Company is not party to any written  contracts of  employment  with
any of  its  employees  or any  oral  contracts  of  employment  which  are  not
terminable on the giving of reasonable notice and/or severance pay in accordance
with  applicable law and no inducements  to accept  employment  with the Company
were offered to such employees which have the effect of increasing the period of
notice of  termination  to which any such employee is entitled.  The Company has
deducted  and  remitted to the  relevant  governmental  authority  or entity all
income taxes, employment or unemployment insurance contributions, Canada Pension
Plan contributions,  provincial employer health tax remittances and any taxes or
deductions  or other  amounts  which it is  required  by statute or  contract to
collect and remit to any  governmental  authority  or other  entity  entitled to
receive payment of such deduction.  The Company has not entered into any written
or other  contracts of employment  with any employees  which the Company has not
disclosed in writing to the Purchaser;

     (ii)  The  Company  has  paid to the date of this  Agreement,  all  amounts
payable on account of salary,  bonus  payments and commission to or on behalf of
all of its employees;

     (iii) All levies,  if any,  under the Workplace  Safety and Insurance  Act,
1997 (Ontario) have been paid by the Company.

     (s) MATERIAL CONTRACTS. Each contract to which the Company is a party is in
good standing and in full force and effect  unamended and no material default or
breach  exists in respect of them on the part of any of the  parties to them and
no event has  occurred  which,  after the giving  notice or the lapse of time or
both, would constitute a default thereunder.

                                       12
<PAGE>
     (t) NO TRADEMARKS.  The Company does not own or claim any right or title in
or to any trademark, whether registered or unregistered.

     (u) RELATED PARTY INDEBTEDNESS. None of the indebtedness listed in Annex IV
attached hereto which is to be repaid from the proceeds of the first $4,100,000.
Note  issued put to Section  1(a)(i)(A)  is owed to a person who does not act at
arm's  length  with either the Company or any of its  principal  or  controlling
shareholders  (including Anthony Pallante), as such term is defined for purposes
of the INCOME TAX ACT (Canada) and the regulations made thereunder.

     (v)  FDA  APPROVAL.  None  of the  products  which  the  Company  currently
manufactures,   distributes   and/or   sells  or   contemplates   manufacturing,
distributing  and/or selling require any approvals from either the Food and Drug
Administration  or any other  governmental  agency in the United States prior to
such manufacturing, selling or distributing.

     4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

     (a)  TRANSFER  RESTRICTIONS.   The  Purchaser  acknowledges  that  (1)  the
Securities  have not been and are not being  registered  under the provisions of
the  1933 Act  and,  the  Conversion  Shares  have  not  been and are not  being
registered  under  the  1933  Act,  and  may  not  be  transferred   unless  (A)
subsequently  registered thereunder or (B) the Purchaser shall have delivered to
the Company an opinion of counsel,  reasonably  satisfactory in form,  scope and
substance  to the  Company,  to the  effect  that the  Securities  to be sold or
transferred  may be sold or  transferred  pursuant  to an  exemption  from  such
registration;  (2) any  sale of the  Securities  made in  reliance  on Rule  144
promulgated  under the 1933 Act ("Rule 144") may be made only in accordance with
the terms of Rule 144 and further, if Rule 144 is not applicable,  any resale of
such Securities under  circumstances in which the seller,  or the Person through
whom the sale is made, may be deemed to be an underwriter,  as that term is used
in the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and  regulations  of the SEC  thereunder;  and (3)  neither the
Company nor any other Person is under any  obligation to register the Securities
(other than  pursuant to Section 10 hereof) under the 1933 Act or to comply with
the terms and conditions of any exemption thereunder.

     (b)  RESTRICTIVE  LEGEND.  The Purchaser  acknowledges  and agrees that the
certificates and other instruments representing any of the Securities shall bear
a restrictive  legend in  substantially  the following form (and a stop-transfer
order may be placed against transfer of any such Securities):

     "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
     1933, AS AMENDED,  OR THE SECURITIES  LAWS OF ANY STATE AND MAY NOT BE
     SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN  EFFECTIVE  REGISTRATION
     STATEMENT  FOR THE  SECURITIES  OR AN  OPINION  OF  COUNSEL  OR  OTHER
     EVIDENCE  ACCEPTABLE  TO THE  COMPANY  THAT SUCH  REGISTRATION  IS NOT
     REQUIRED."

                                       13
<PAGE>
     (c)  FILINGS.  The  Company  undertakes  and  agrees to make all  necessary
filings in connection with the sale of the Securities to the Purchaser under any
United States laws and regulations applicable to the Company, or by any domestic
securities  exchange  or trading  market,  and to provide a copy  thereof to the
Purchaser promptly after such filing.

     (d) REPORTING STATUS. So long as the Purchaser beneficially owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant  to  Section  13 or 15(d) of the 1934 Act,  shall  take all  reasonable
action under its control to ensure that adequate current public information with
respect to the Company,  as required in  accordance  with Rule  144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required  to file  reports  under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination.  The Company will take
all  reasonable  action under its control to maintain the continued  listing and
quotation and trading of its Common Stock on the Principal  Trading  Market or a
listing  on the  NASDAQ/Small  Cap  or  National  Markets  and,  to  the  extent
applicable  to it,  will  comply in all  material  respects  with the  Company's
reporting,  filing  and  other  obligations  under the  by-laws  or rules of the
Principal Trading Market and/or the National  Association of Securities Dealers,
Inc.,  as the  case  may  be,  applicable  to it for so  long  as the  Purchaser
beneficially owns any of the Securities.

     (e) USE OF PROCEEDS.  The Company will use the proceeds received  hereunder
(excluding  amounts  paid by the Company for legal fees in  connection  with the
sale of the Securities) as follows:

     (i) the funds from the first  $4,100,000  Note  issued  pursuant to Section
1(a)(i)(A) shall any be used for the purposes outlined in Annex IV; and

     (ii)  thereafter,  all other funds shall any be used in the manner mutually
agreed to by the Company and the Purchaser.

     (f) TAXES.  The Company shall be responsible for any liability with respect
to any  transfer,  stamp or  similar  non-income  taxes  that may be  payable in
connection with the execution, delivery and performance of this Agreement.

     5. TRANSFER AGENT INSTRUCTIONS.

     (a) The Company  warrants that, with respect to the Securities,  other than
the stop transfer  instructions  to give effect to Section 4(a) hereof,  it will
give its transfer agent no instructions  inconsistent with instructions to issue
Common Stock to the  Purchaser as  contemplated  in the  Transaction  Documents.
Nothing in this Section shall affect in any way the Purchaser's  obligations and
agreement  to comply  with all  applicable  securities  laws upon  resale of the
Securities.  If the  Purchaser  provides  the Company with an opinion of counsel
reasonably  satisfactory  to the Company  that  registration  of a resale by the
Purchaser of any of the  Securities in accordance  with clause (1)(B) of Section
4(a) of this  Agreement  is not required  under the 1933 Act, the Company  shall
(except as provided in clause (2) of Section 4(a) of this Agreement)  permit the
transfer  or  reissue  of the  Conversion  Shares  represented  by  one or  more

                                       14
<PAGE>
certificates for Common Stock without legend (or where applicable, by electronic
registration)  in  such  name  and in such  denominations  as  specified  by the
Purchaser.

     (b) The Company  will  authorize  the  Transfer  Agent to give  information
relating  to  the  Company   directly  to  the  Purchaser  or  the   Purchaser's
representatives upon the request of the Purchaser or any such representative, to
the extent such information  relates to (i) the status of shares of Common Stock
issued or claimed to be issued to the Purchaser in connection  with a Conversion
Notice (as defined in the Notes) of the option to convert the Conversion Shares,
or the transfer of  Conversion  Shares to the  Purchaser,  or (ii) the aggregate
number of outstanding  shares of Common Stock of all  shareholders  (as a group,
and not individually) as of a current or other specified date. At the request of
the  Purchaser,  the  Company  will  provide  the  Purchaser  with a copy of the
authorization so given to the Transfer Agent.

     6. CLOSING DATE.

     (a) The respective Closing Date shall occur as indicated in Section 1(a)(i)
after each of the conditions  contemplated by Sections 7 and 8 hereof shall have
either been satisfied or been waived by the party in whose favor such conditions
run.

     (b) The closing of the Transactions  shall occur on the respective  Closing
Date at the  offices  of the  Purchaser  and shall take place no later than 3:00
P.M.,  PST,  on such day or such other time as is  mutually  agreed  upon by the
Company and the Purchaser.

     7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

     The Purchaser  understands that the Company's  obligation to sell each Note
(and/or  to fund  each  Tranche)  and the  applicable  Conversion  Shares to the
Purchaser pursuant to this Agreement on each Closing Date is conditioned upon:

     (a) The execution and delivery of this Agreement by the Purchaser;

     (b)  Delivery by the  Purchaser  to the Company of good funds as payment in
full of an amount  equal to the  applicable  portion of the  Purchase  Amount in
accordance with this Agreement;

     (c) The  accuracy  on each such  Closing  Date of the  representations  and
warranties of the Purchaser contained in this Agreement, each as if made on such
date,  and the  performance  by the  Purchaser  on or  before  such  date of all
covenants and agreements of the Purchaser  required to be performed on or before
such date; and

     (d) There shall not be in effect any law, rule or regulation prohibiting or
restricting the Transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained.

                                       15
<PAGE>
     8. CONDITIONS TO THE PURCHASER'S OBLIGATION TO PURCHASE.

     The Company  understands  that the Purchaser's  obligation to purchase each
Note and its acceptance of any shares of the Company's  Common Stock that may be
issued in  connection  with any  agreements  between the parties  hereto on each
Closing Date is conditioned upon:

     (a) The execution and delivery of this Agreement and the other  Transaction
Documents by the Company;

     (b)  Delivery  by the  Company  to the  Purchaser  of the  Certificates  in
accordance with this Agreement or any other agreements between the parties;

     (c)  The  execution  and  delivery  of the  Security  Agreement  and  UCC-1
Financing Statement on certain of the Company's assets;

     (d) The execution and delivery of the Convertible Promissory Note Amendment
Agreement attached hereto as Annex III;

     (e) The Notes to be issued shall be senior to all other debt of the Company

     (f) The  accuracy  in all  material  respects  on the  Closing  Date of the
representations and warranties of the Company contained in this Agreement,  each
as if made on such date,  and the  performance  by the Company on or before such
date of all covenants and agreements of the Company  required to be performed on
or before such date;

     (g) The Company must be current with all required 1934 Act filings;

     (h) There shall not be in effect any law, rule or regulation prohibiting or
restricting the Transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained;

     (i) From and after the date hereof to and including each Closing Date, each
of the following conditions will remain in effect: (i) the trading of the Common
Stock  shall  not have been  suspended  by the SEC or on the  Principal  Trading
Market;  (ii) trading in securities  generally on the Principal  Trading  Market
shall not have been suspended;  and (iii) there shall not have been any Material
Adverse Effect in regards to the Company; and

     (j) the Company  shall not be in default in respect of any  obligations  it
has to the Purchaser under this Agreement, any Note or any other agreement, note
or instrument that the Company has with the Purchaser.

     9. PRE-EMPTIVE RIGHTS. In the event the Company sells any additional Common
Stock (the "Additional Shares"), the Company will offer Additional Shares to the
Purchaser  (such right of the Purchaser,  a  "Pre-Emptive  Right") in accordance
with  paragraphs  (a)  through  (d) below.  Notwithstanding  the  failure of the
Purchaser to  participate  in any offer of  Additional  Shares from the Company,
this Pre-Emptive  Right does not terminate,  and otherwise  expires one (1) year
from the date hereof.

                                       16
<PAGE>
     (a) After or  immediately  prior to the  conclusion  of a new  offering  of
Additional  Shares,  the Company will deliver a notice by certified  mail to the
Purchaser stating (i) the number of Additional Shares sold in the offering, (ii)
the price and terms of the offering,  and (iii) the number of Additional  Shares
which the  Purchaser  would be entitled  to  purchase  in order to maintain  the
Purchaser's PRO RATA interest in the Company.  The Purchaser's PRO RATA interest
is defined as the  Purchaser's  percentage  ownership  of the total  outstanding
Common  Stock and  Conversion  Shares in the  Company  immediately  prior to the
offering of the Additional Shares.

     (b)  Within  ten (10)  calendar  days  after  receipt  of the  Notice,  the
Purchaser  may elect to purchase at the price and on the terms  specified in the
Notice,  the number of Additional Shares necessary for the Purchaser to maintain
the Purchaser's PRO RATA interest in the Company.

     (c) The Company will not enter into any agreement  that restricts or in any
way diminishes the Purchaser's protections or rights under this Section 9.

     (d) If the  Purchaser  does not  participate  in an offering of  Additional
Shares,  the  Purchaser  will be entitled to receive  notices of any  subsequent
offerings.

     10. REGISTRATION RIGHTS.

     (a) COMPANY  REGISTRATION.  If the Company  proposes to register any of its
Common Stock under the 1933 Act in connection  with the public  offering of such
securities, the Company shall, at such time, promptly give the Purchaser written
notice of such  registration.  Upon the written  request of the Purchaser  given
within twenty (20) days after the Company  mails such notice,  the Company shall
cause to be registered under the 1933 Act all of the Conversion  Shares that the
Purchaser has requested to be registered (the "Registrable Securities").

     (b) COMPANY OBLIGATIONS. Whenever required under this Section to effect the
registration of the Purchaser's  Registrable  Securities,  the Company shall, as
expeditiously as reasonably possible:

     (i) Prepare and file with the SEC a registration  statement with respect to
such Registrable  Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the Purchaser, keep such
registration statement effective for up to ninety (90) days;

     (ii) Prepare and file with the SEC such  amendments and supplements to such
registration   statement  and  the  prospectus  used  in  connection  with  such
registration  statement as may be necessary to comply with the provisions of the
1933 Act with  respect  to the  disposition  of all  securities  covered by such
registration statement for up to ninety (90) days;

     (iii)  Furnish to the  Purchaser  such  numbers of copies of a  prospectus,
including a preliminary  prospectus,  in conformity with the requirements of the
1933 Act, and such other  documents as the Purchaser may  reasonably  request in
order to facilitate  the  disposition  of  Registrable  Securities  owned by the
Purchaser;

                                       17
<PAGE>
     (iv) In the  event of any  underwritten  public  offering,  enter  into and
perform its obligations under an underwriting  agreement, in usual and customary
form,  with  the  managing  underwriter  of such  offering.  The  Purchaser,  if
participating  in such  underwriting,  shall  also enter  into and  perform  its
obligations under such an agreement;

     (v) Notify the  Purchaser  at any time when a  prospectus  relating  to the
registration  statement  is required to be  delivered  under the 1933 Act of the
happening  of any  event as a result of which the  prospectus  included  in such
registration  statement,  as then in effect,  includes an untrue  statement of a
material fact or omits to state a material fact required to be stated therein or
necessary  to make the  statements  therein not  misleading  in the light of the
circumstances then existing, such obligation to continue for ninety (90) days;

     (vi) Cause all such Registrable Securities registered pursuant hereunder to
be listed on each securities  exchange on which similar securities issued by the
Company are then listed;

     (vii) Provide a transfer agent and registrar for all Registrable Securities
registered  pursuant  hereunder  and a CUSIP  number  for all  such  Registrable
Securities, in each case not later than the effective date of such registration;
and

     (viii) Use its best efforts to furnish, at the request of the Purchaser, if
requesting  registration of Registrable  Securities pursuant to this Section, on
the date that such Registrable  Securities are delivered to the underwriters for
sale  in  connection  with a  registration  pursuant  to this  section,  if such
securities are being sold through  underwriters,  or, if such securities are not
being sold through  underwriters,  on the date that the  registration  statement
with respect to such securities  becomes effective,  (x) an opinion,  dated such
date,  of the  counsel  representing  the  Company  for  the  purposes  of  such
registration,  in form and substance as is customarily  given to underwriters in
an underwritten public offering,  addressed to the underwriters,  if any, and to
the  Purchaser  requesting  registration  of  Registrable  Securities  and (y) a
letter,  dated  such  date,  from the  Company's  independent  certified  public
accountants,  in form and  substance  as is  customarily  given  by  independent
certified public accountants to underwriters in an underwritten public offering,
addressed  to  the  underwriters,  if  any,  and  to  the  Purchaser  requesting
registration of Registrable Securities.

     (c) REGISTRATION  EXPENSES.  The Company shall pay all expenses incurred in
connection  with  any  registration,  filing  or  qualification  of  Registrable
Securities with respect to the  registrations  pursuant hereto for the Purchaser
(which right may be assigned),  including, without limitation, all registration,
filing,  and  qualificaftion  fees,  printers' and  accounting  fees relating or
apportionable  thereto and the reasonable fees and  disbursements of one counsel
for the Purchaser,  if selling,  as selected by the Purchaser with the Company's
approval,  which  approval  shall not be  unreasonably  withheld,  but excluding
underwriting discounts and commissions relating to Registrable Securities.

     (d)  INDEMNIFICATION.  If any  Registrable  Securities  are  included  in a
registration statement under this Section:

                                       18
<PAGE>
     (i) To the extent  permitted by law, the Company  shall  indemnify and hold
harmless the  Purchaser,  any  underwriter  (as defined in the 1933 Act) for the
Purchaser  and each Person,  if any, who controls the  Purchaser or  underwriter
within the meaning of the 1933 Act or the 1934 Act, against any losses,  claims,
damages,  or  liabilities  (joint or several)  to which they may become  subject
under the 1933 Act, the 1934 Act or other federal or state law,  insofar as such
losses,  claims,  damages,  or liabilities (or actions in respect thereof) arise
out  of or  are  based  upon  any  of the  following  statements,  omissions  or
violations (collectively a "Violation"):  (x) any untrue statement of a material
fact  contained  in  such  registration  statement,  including  any  preliminary
prospectus  or  final  prospectus   contained   therein  or  any  amendments  or
supplements  thereto, (y) the omission to state therein a material fact required
to  be  stated  therein,  or  necessary  to  make  the  statements  therein  not
misleading,  or (z) any  violation by the Company of the 1933 Act, the 1934 Act,
any state securities law or any rule or regulation  promulgated under any of the
foregoing; and the Company will pay to the Purchaser, underwriter or controlling
Person, as incurred,  any legal or other expenses reasonably incurred by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however, that the indemnity agreement contained
in this subsection (i) shall not apply to amounts paid in settlement of any such
loss, claim, damage,  liability or action if such settlement is effected without
the Company's consent,  which shall not be unreasonably  withheld, nor shall the
Company be liable in any such case for any such loss, claim, damage,  liability,
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in  conformity  with written  information  furnished
expressly for use in connection  with such  registration  by any the  Purchaser,
underwriter or controlling Person.

     (ii) To the extent permitted by law, the Purchaser shall indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the registration statement, each Person, if any, who controls the Company within
the  meaning  of the 1933 Act,  any  underwriter  against  any  losses,  claims,
damages, or liabilities (joint or several) to which any of the foregoing Persons
may become  subject,  under the 1933 Act, the 1934 Act or other federal or state
law,  insofar as such losses,  claims,  damages,  or liabilities  (or actions in
respect  thereto) arise out of or are based upon any Violation,  in each case to
the extent (and only to the extent) that such Violation  occurs in reliance upon
and  in  conformity  with  written  information  that  the  Purchaser  furnished
expressly for use in connection with such  registration;  and the Purchaser will
pay, as incurred,  any legal or other expenses reasonably incurred by any Person
intended to be indemnified  pursuant to this subsection (ii), in connection with
investigating or defending any such loss, claim, damage,  liability,  or action;
provided,  however,  that the indemnity  agreement  contained in this subsection
(ii)  shall not apply to amounts  paid in  settlement  of any such loss,  claim,
damage,  liability  or  action  if  such  settlement  is  effected  without  the
Purchaser's  consent,  which  shall  not  be  unreasonably  withheld;  provided,
further, that, in no event shall any indemnity under this subsection (ii) exceed
the net proceeds from the offering received by the Purchaser.

     (e) ASSIGNMENT OF REGISTRATION  RIGHTS.  The Purchaser may assign (but only
with all  related  obligations)  the  rights to cause the  Company  to  register
Registrable Securities pursuant to this section by the Purchaser to a transferee
or assignee;  provided, that the Company is, within a reasonable time after such
transfer,  furnished  with  written  notice  of the  name  and  address  of such
transferee  or  assignee  and  the   securities   with  respect  to  which  such
registration  rights  are  being  assigned;  and  provided,  further,  that such
assignment  shall be effective only if  immediately  following such transfer the

                                       19
<PAGE>
further  disposition  of  such  securities  by the  transferee  or  assignee  is
restricted  under the 1933 Act.  For the purposes of  determining  the number of
shares of Registrable  Securities held by a transferee or assignee, the holdings
of  transferees  and  assignees  of a  partnership  who are  partners or retired
partners  of  such  partnership   (including   spouses  and  ancestors,   lineal
descendants  and  siblings of such  partners or spouses who acquire  Registrable
Securities by gift, will or intestate  succession) shall be aggregated  together
and with the partnership; provided, that all assignees and transferees who would
not qualify  individually  for  assignment of  registration  rights shall have a
single  attorney-in-fact  for the purpose of  exercising  any rights,  receiving
notices or taking any action under this Section.

     11. INDEMNIFICATION AND REIMBURSEMENT.

     (a) (i) The Company agrees to indemnify and hold harmless the Purchaser and
its officers,  directors,  employees,  and agents,  and each  Purchaser  Control
Person  (collectively,  the  "Indemnified  Parties"  and each,  an  "Indemnified
Party") from and against any losses,  claims,  damages,  liabilities or expenses
incurred (collectively,  "Damages"), joint or several, and any action in respect
thereof to which any  Indemnified  Party  becomes  subject to,  resulting  from,
arising  out of or  relating  to any  misrepresentation,  breach of  warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
the Company contained in this Agreement, as such Damages are incurred, except to
the extent such Damages result primarily from the Indemnified Party's failure to
perform any covenant or agreement contained in this Agreement or the Indemnified
Party's  negligence,  recklessness  or bad faith in performing  its  obligations
under this Agreement.

     (ii) The Company hereby agrees that, if the Purchaser, other than by reason
of its negligence, illegal or willful misconduct (in each case, as determined by
a non-appealable  judgment to such effect), (x) becomes involved in any capacity
in any action,  proceeding or  investigation  brought by any  shareholder of the
Company,  in  connection  with  or  as a  result  of  the  consummation  of  the
Transactions  contemplated by this Agreement or the other Transaction Documents,
or if the Purchaser is impleaded in any such action, proceeding or investigation
by any Person, or (y) becomes involved in any capacity in any action, proceeding
or investigation  brought by the SEC, any self-regulatory  organization or other
body having jurisdiction, against or involving the Company or in connection with
or as a result of the  consummation  of the  Transactions  contemplated  by this
Agreement or the other  Transaction  Documents,  or (z) is impleaded in any such
action,  proceeding or investigation  by any Person,  then in any such case, the
Company shall indemnify, defend and hold harmless the Purchaser from and against
and in respect of all losses, claims, liabilities, damages or expenses resulting
from,  imposed upon or incurred by the Purchaser,  directly or  indirectly,  and
reimburse such Purchaser for its reasonable legal and other expenses  (including
the cost of any investigation and preparation) incurred in connection therewith,
as such expenses are incurred. The indemnification and reimbursement obligations
of the Company  under this  paragraph  (a) shall be in addition to any liability
which the  Company  may  otherwise  have,  shall  extend upon the same terms and
conditions to any  Affiliates  of the  Purchaser who are actually  named in such
action, proceeding or investigation,  and partners, directors, agents, employees
and Purchaser Control Persons (if any), as the case may be, of the Purchaser and
any such  Affiliate,  and shall be binding  upon and inure to the benefit of any
successors,  assigns,  heirs and personal  representatives  of the Company,  the
Purchaser,  any such Affiliate and any such Person. The Company also agrees that

                                       20
<PAGE>
neither the Purchaser nor any such Affiliate, partner, director, agent, employee
or  Purchaser  Control  Person  shall have any  liability  to the Company or any
Person  asserting  claims on behalf of or in right of the Company in  connection
with  or as a  result  of the  consummation  of  this  Agreement  or  the  other
Transaction  Documents,  except as may be expressly and specifically provided in
or contemplated by this Agreement.

     (b) All claims for  indemnification  by any  Indemnified  Party (as defined
below) under this Section shall be asserted and resolved as follows:

     (i) In the  event  any claim or  demand  in  respect  of which  any  Person
claiming  indemnification  under any provision of this Section (an  "Indemnified
Party")  might seek  indemnity  under  paragraph (a) of this Section is asserted
against or sought to be collected from such Indemnified  Party by a Person other
than a party  hereto or an  Affiliate  thereof  (a  "Third  Party  Claim"),  the
Indemnified Party shall deliver a written notification,  enclosing a copy of all
papers  served,  if any, and  specifying  the nature of and basis for such Third
Party Claim and for the Indemnified  Party's claim for  indemnification  that is
being  asserted  under any  provision  of this  Section  against any Person (the
"Indemnifying  Party"),  together  with the  amount  or, if not then  reasonably
ascertainable,  the estimated  amount,  determined in good faith,  of such Third
Party Claim (a "Claim  Notice") with reasonable  promptness to the  Indemnifying
Party.  If the  Indemnified  Party  fails  to  provide  the  Claim  Notice  with
reasonable  promptness after the Indemnified Party receives notice of such Third
Party Claim,  the  Indemnifying  Party shall not be  obligated to indemnify  the
Indemnified  Party with respect to such Third Party Claim to the extent that the
Indemnifying  Party's  ability to defend has been  prejudiced by such failure of
the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party
as soon as  practicable  within the period  ending  thirty  (30)  calendar  days
following  receipt  by the  Indemnifying  Party of  either a Claim  Notice or an
Indemnity  Notice  (as  defined  below)  (the  "Dispute   Period")  whether  the
Indemnifying  Party disputes its liability or the amount of its liability to the
Indemnified Party under this Section and whether the Indemnifying Party desires,
at its sole cost and expense, to defend the Indemnified Party against such Third
Party Claim. The following provisions shall also apply.

     (x) If the  Indemnifying  Party notifies the Indemnified  Party within
     the Dispute Period that the  Indemnifying  Party desires to defend the
     Indemnified  Party with  respect to the Third Party Claim  pursuant to
     this paragraph (b) of this Section,  then the Indemnifying Party shall
     have the right to defend, with counsel reasonably  satisfactory to the
     Indemnified  Party,  at the sole cost and expense of the  Indemnifying
     Party,  such Third Party Claim by all appropriate  proceedings,  which
     proceedings  shall be  vigorously  and  diligently  prosecuted  by the
     Indemnifying  Party to a final  conclusion  or will be  settled at the
     discretion of the Indemnifying Party (but only with the consent of the
     Indemnified  Party in the case of any settlement that provides for any
     relief other than the payment of monetary damages or that provides for
     the  payment of  monetary  damages as to which the  Indemnified  Party
     shall not be  indemnified  in full  pursuant to paragraph  (a) of this
     Section).  The  Indemnifying  Party  shall  have full  control of such
     defense  and  proceedings,  including  any  compromise  or  settlement
     thereof;  provided,  however,  that the Indemnified  Party may, at the
     sole cost and expense of the  Indemnified  Party, at any time prior to
     the  Indemnifying  Party's  delivery of the notice  referred to in the

                                       21
<PAGE>
     first sentence of this  subparagraph  (x), file any motion,  answer or
     other  pleadings or take any other action that the  Indemnified  Party
     reasonably  believes  to  be  necessary  or  appropriate  protect  its
     interests; and provided further, that if requested by the Indemnifying
     Party, the Indemnified Party will, at the sole cost and expense of the
     Indemnifying Party, provide reasonable cooperation to the Indemnifying
     Party in contesting any Third Party Claim that the Indemnifying  Party
     elects to contest.  The Indemnified  Party may participate in, but not
     control, any defense or settlement of any Third Party Claim controlled
     by the  Indemnifying  Party  pursuant to this  subparagraph  (x),  and
     except as provided in the preceding  sentence,  the Indemnified  Party
     shall  bear  its  own  costs  and   expenses   with  respect  to  such
     participation.  Notwithstanding  the foregoing,  the Indemnified Party
     may take over the  control  of the  defense or  settlement  of a Third
     Party  Claim  at any  time  if it  irrevocably  waives  its  right  to
     indemnity  under  paragraph  (a) of this  Section with respect to such
     Third Party Claim.

     (y) If the  Indemnifying  Party fails to notify the Indemnified  Party
     within the  Dispute  Period  that the  Indemnifying  Party  desires to
     defend  the  Third  Party  Claim  pursuant  to  paragraph  (b) of this
     Section,  or if the Indemnifying  Party gives such notice but fails to
     prosecute  vigorously  and diligently or settle the Third Party Claim,
     or if the  Indemnifying  Party  fails  to give any  notice  whatsoever
     within the Dispute Period,  then the Indemnified  Party shall have the
     right to  defend,  at the sole cost and  expense  of the  Indemnifying
     Party,  the Third Party Claim by all  appropriate  proceedings,  which
     proceedings  shall  be  prosecuted  by  the  Indemnified  Party  in  a
     reasonable  manner  and in  good  faith  or  will  be  settled  at the
     discretion  of  the  Indemnified   Party  (with  the  consent  of  the
     Indemnifying Party, which consent will not be unreasonably  withheld).
     The  Indemnified  Party  will have full  control of such  defense  and
     proceedings, including any compromise or settlement thereof; provided,
     however,  that if requested by the Indemnified Party, the Indemnifying
     Party will,  at the sole cost and expense of the  Indemnifying  Party,
     provide  reasonable  cooperation  to the  Indemnified  Party  and  its
     counsel in  contesting  any Third Party  Claim  which the  Indemnified
     Party is contesting.  Notwithstanding the foregoing provisions of this
     subparagraph   (y),  if  the  Indemnifying   Party  has  notified  the
     Indemnified  Party  within the Dispute  Period  that the  Indemnifying
     Party disputes its liability or the amount of its liability  hereunder
     to the Indemnified Party with respect to such Third Party Claim and if
     such  dispute is  resolved in favor of the  Indemnifying  Party in the
     manner provided in subparagraph (z) below, the Indemnifying Party will
     not be  required  to bear the costs and  expenses  of the  Indemnified
     Party's  defense   pursuant  to  this   subparagraph  (y)  or  of  the
     Indemnifying Party's  participation therein at the Indemnified Party's
     request,  and the Indemnified  Party shall reimburse the  Indemnifying
     Party in full for all  reasonable  costs and expenses  incurred by the
     Indemnifying   Party  in   connection   with  such   litigation.   The
     Indemnifying Party may participate in, but not control, any defense or
     settlement  controlled  by the  Indemnified  Party  pursuant  to  this
     subparagraph (y), and the Indemnifying  Party shall bear its own costs
     and expenses with respect to such participation.

                                       22
<PAGE>
     (z) If the Indemnifying  Party notifies the Indemnified  Party that it
     does not dispute its  liability or the amount of its  liability to the
     Indemnified  Party  with  respect  to  the  Third  Party  Claim  under
     paragraph (a) of this Section or fails to notify the Indemnified Party
     within the Dispute Period whether the Indemnifying  Party disputes its
     liability or the amount of its liability to the Indemnified Party with
     respect to such Third Party Claim, the amount of Damages  specified in
     the Claim  Notice  shall be  conclusively  deemed a  liability  of the
     Indemnifying  Party  under  paragraph  (a) of  this  Section  and  the
     Indemnifying  Party  shall  pay  the  amount  of such  Damages  to the
     Indemnified  Party on  demand.  If the  Indemnifying  Party has timely
     disputed its liability or the amount of its liability  with respect to
     such claim,  the  Indemnifying  Party and the Indemnified  Party shall
     proceed in good  faith to  negotiate  a  resolution  of such  dispute;
     provided,  however,  that if the dispute is not resolved within thirty
     (30) days after the date of the Claim Notice,  the Indemnifying  Party
     shall  be  entitled  to  institute  such  legal  action  as  it  deems
     appropriate.

     (ii) In the event any Indemnified Party should have a claim under paragraph
(a) of this Section against the Indemnifying Party that does not involve a Third
Party Claim,  the  Indemnified  Party shall deliver a written  notification of a
claim for indemnity under paragraph (a) of this Section specifying the nature of
and basis for such claim,  together  with the amount or, if not then  reasonably
ascertainable, the estimated amount, determined in good faith, of such claim (an
"Indemnity  Notice") with reasonable  promptness to the Indemnifying  Party. The
failure by any Indemnified  Party to give the Indemnity  Notice shall not impair
such party's rights hereunder  except to the extent that the Indemnifying  Party
demonstrates  that  it  has  been  irreparably   prejudiced   thereby.   If  the
Indemnifying  Party notifies the Indemnified  Party that it does not dispute the
claim or the amount of the claim described in such Indemnity  Notice or fails to
notify the Indemnified  Party within the Dispute Period whether the Indemnifying
Party disputes the claim or the amount of the claim  described in such Indemnity
Notice,  the  amount  of  Damages  specified  in the  Indemnity  Notice  will be
conclusively deemed a liability of the Indemnifying Party under paragraph (a) of
this Section and the Indemnifying  Party shall pay the amount of such Damages to
the Indemnified Party on demand.  If the Indemnifying  Party has timely disputed
its  liability or the amount of its  liability  with respect to such claim,  the
Indemnifying  Party and the  Indemnified  Party  shall  proceed in good faith to
negotiate a resolution of such dispute;  provided,  however, that it the dispute
is not resolved within thirty (30) days after the Claim Notice, the Indemnifying
Party shall be entitled to institute such legal action as it deems appropriate.

     (c) The indemnity  agreements  contained herein shall be in addition to (i)
any cause of action or  similar  rights of the  indemnified  party  against  the
indemnifying  party or others,  and (ii) any liabilities the indemnifying  party
may be subject to.

     12. JURY TRIAL WAIVER.  The Company and the Purchaser  hereby waive a trial
by jury in any  action,  proceeding  or  counterclaim  brought  by either of the
parties  hereto  against  the other in respect of any matter  arising  out or in
connection with the Transaction Documents.

                                       23
<PAGE>
     13. GOVERNING LAW: MISCELLANEOUS.

     (a) (i) This Agreement  shall be governed by and  interpreted in accordance
with the laws of the State of New York for  contracts to be wholly  performed in
such state and without  giving effect to the  principles  thereof  regarding the
conflict of laws. Each of the parties consents to the exclusive  jurisdiction of
the federal courts whose districts encompass any part of the state courts of the
State of New York as in connection with any dispute arising under this Agreement
or any of the other  Transaction  Documents  and hereby  waives,  to the maximum
extent  permitted by law, any objection,  including any objection based on FORUM
NON CONVENIENS,  to the bringing of any such proceeding in such jurisdictions or
to any claim that such venue of the suit,  action or proceeding is improper.  To
the extent  determined by such court,  the Company shall reimburse the Purchaser
for any  reasonable  legal fees and  disbursements  incurred by the Purchaser in
enforcement  of or protection of any of its rights under any of the  Transaction
Documents.  Nothing  in this  Section  shall  affect or limit any right to serve
process in any other manner permitted by law.

     (ii) The Company and the Purchaser  acknowledge and agree that  irreparable
damage would occur in the event that any of the  provisions of this Agreement or
the other  Transaction  Documents  were not performed in  accordance  with their
specific terms or were  otherwise  breached.  It is accordingly  agreed that the
parties  shall be entitled to an injunction  or  injunctions  to prevent or cure
breaches of the provisions of this Agreement and the other Transaction Documents
and to enforce  specifically the terms and provisions  hereof and thereof,  this
being in  addition  to any other  remedy to which any of them may be entitled by
law or equity.

     (b) If any provision of this Agreement shall be invalid or unenforceable in
any  jurisdiction,  such  invalidity  or  unenforceability  shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

     (c) This  Agreement may be amended only by an instrument in writing  signed
by the party to be charged with enforcement thereof.

     14. NOTICES.  Any notice required or permitted  hereunder shall be given in
writing  (unless  otherwise  specified  herein) and shall be deemed  effectively
given on the earliest of:

     (a) the date  delivered,  if  delivered  by  personal  delivery  as against
written receipt therefor or by confirmed facsimile transmission,

     (b) the fifth Trading Day after  deposit,  postage  prepaid,  in the United
States Postal Service by registered or certified mail, or

     (c) the third  Trading  Day after  mailing  by  domestic  or  international
express courier, with delivery costs and fees prepaid,

in each case,  addressed to each of the other parties thereunto  entitled at the
following  addresses (or at such other  addresses as such party may designate by
ten (10)  days'  advance  written  notice  similarly  given to each of the other
parties hereto):

                                       24
<PAGE>
COMPANY:             Trident Brands Incorporated
                     200 South Executive Drive, Suite 101
                     Brookfield, WI 53005
                     U.S.A.
                     Tel: 262-789-6689
                     Fax: 262-789-6689
                     Attention: Michael Browne

PURCHASER:           LPF (MCTECH) Investment Corp.
                     1315 North Service Rd. East, 6th Floor
                     Oakville, ON, L6H 1A7
                     CANADA
                     Tel: 289-291-3666
                     Fax: 289-291-0651
                     Attention : Administrator and Controller

     15.  SURVIVAL OF  REPRESENTATIONS  AND  WARRANTIES.  The  Company's and the
Purchaser's  representations  and warranties  herein shall survive the execution
and  delivery of this  Agreement  and the delivery of the  Certificates  and the
payment of the Purchase Amount,  and shall inure to the benefit of the Purchaser
and the Company and their respective successors and assigns.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

                                       25
<PAGE>
     IN WITNESS WHEREOF,  this Agreement has been duly executed by the Purchaser
and the Company as of the date set first above written.

                                 LPF (MCTECH) INVESTMENT CORP.

                                 By:/s/ Joseph Mancinello
                                    --------------------------------------------
                                    Name:  Joseph Mancinelli
                                    Title: President

                                 By:/s/ Carmen Principato
                                    --------------------------------------------
                                    Name:  Carmen Principato
                                    Title: Director

                                 TRIDENT BRANDS INCORPORATED

                                 By:/s/ Mark Holcombe
                                    --------------------------------------------
                                     Name:  Mark Holcombe
                                     Title: Chairman

                                       26
<PAGE>
                                     ANNEX I

                                  FORM OF NOTES

                      FORM OF CONVERTIBLE PROMISSORY NOTES

THESE  CONVERTIBLE  PROMISSORY  NOTES (THE "NOTES," AND EACH, A "NOTE") HAVE NOT
BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"),
OR  APPLICABLE  STATE  SECURITIES  LAWS,  AND MAY NOT BE SOLD,  TRANSFERRED,  OR
OTHERWISE  DISPOSED  OF IN THE  ABSENCE OF SUCH  REGISTRATION  OR RECEIPT BY THE
COMPANY OF AN OPINION OF  COUNSEL IN THE FORM,  SUBSTANCE  AND SCOPE  REASONABLY
SATISFACTORY  TO THE  COMPANY  THAT  EACH  NOTE  MAY BE  SOLD,  TRANSFERRED,  OR
OTHERWISE  DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION  UNDER THE 1933 ACT
AND SUCH STATE SECURITIES LAWS.

                           TRIDENT BRANDS INCORPORATED

               Convertible Promissory Note for up to US$10,000,000

Dated: September 26, 2016                                          US$10,000,000

     For value received, TRIDENT BRANDS INCORPORATED,  a Nevada corporation (the
"Company"), hereby promises to pay to the order of LPF (MCTECH) Investment Corp.
(together  with its  successors,  representatives,  and permitted  assigns,  the
"Holder"),  in accordance with the terms hereinafter  provided for the Notes, up
to an aggregate of TEN MILLION  (US$10,000,000)  (the  "Principal  Amount") plus
accrued and unpaid Interest (as defined in below Section 1.2) in accordance with
the grid  attached  hereto as Exhibit A (the  "Grid")  and  subject to the terms
hereof.  The  applicable  portion  of the  Principal  Amount  and  the  Interest
outstanding  shall be due and  payable  on  September  30,  2019  subject to the
conversion terms hereof.  The due date, with respect to each applicable Note, of
any  outstanding  Principal  Amount and  Interest  is  referred to herein as the
"Maturity  Date." The "Issuance  Date," with respect to the Note for the portion
of the  Principal  Amount  equal to  US$4,100,000,  is the date  hereofand  with
respect to any portion of the Principal  Amount advanced  hereafter shall be the
date that such Principal Amount is advanced as set out in the Grid.

     All  payments  under or pursuant to each Note refer to and shall be made in
United  States  Dollars  in  immediately  available  funds to the  Holder at the
address of the Holder first set forth above or at such other place as the Holder
may designate from time to time in writing to the Company.

                                    ARTICLE I

                                  GENERAL TERMS

     Section 1.1 Purchase  Agreement.  Each Note has been executed and delivered
pursuant to the Note  Purchase  Agreement  dated as of  September  26,  2016(the
"Purchase  Agreement")  by and  between the  Company  and the  purchaser  listed
therein.  Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement.

     Section 1.2 Interest.  Each portion of the Principal  Amount  applicable to
each Note advanced to the Company pursuant to the Purchase  Agreement shall bear
interest from the applicable Issuance Date at the rate of eight percent (8%) per
annum,  calculated daily in arrears based on a three hundred and sixty (360) day
year (the "Interest").
<PAGE>
     Section 1.3 Payment on Non-Business  Days.  Whenever any payment to be made
shall be due on a  Saturday,  Sunday or a public  holiday  under the laws of the
State of New York, such payment may be due on the next succeeding  Business Day.
The term "Business Day" shall mean any day except  Saturday,  Sunday and any day
that shall be a federal legal holiday or a day on which banking  institutions in
the state of New York are  authorized  or required by law or other  governmental
action to close.

     Section  1.4  Transfer.  Each  Note may be  transferred  or sold,  pledged,
hypothecated or otherwise granted as security by the Holder,  either in whole or
in part, subject to the provisions of Section 4.8 hereof, and to prior notice of
same to the Company in accordance with Section 4.1 hereof.

     Section 1.5  Replacement.  Upon receipt of a duly  executed,  notarized and
unsecured  written  statement from the Holder with respect to the loss, theft or
destruction  of the applicable  Note (or any  replacement  hereof),  and without
requiring an indemnity bond or other  security,  or, in the case of a mutilation
of this  applicable  Note,  upon surrender and  cancellation  of such applicable
Note,  the Company shall issue a new Note, of like tenor and amount,  in lieu of
such lost, stolen, destroyed or mutilated applicable Note.

     Section 1.6 Security. To secure the due payment of the Principal Amount and
Interest  payable  under the  applicable  Note,  the  Company  shall cause to be
provided to the Holder  contemporaneously  with the execution of this Agreement,
the General Security Agreement annexed hereto as Exhibit C granting the Holder a
security  interest in all of the present and after  acquired  personal  property
(the "Security") of the Company.

                                   ARTICLE II

                           EVENTS OF DEFAULT; REMEDIES

     Section  2.1 Events of  Default.  The  occurrence  of any of the  following
events shall be an "Event of Default" under the applicable Note:

     (a) the Company shall fail to make the payment of any outstanding Principal
Amount or Interest on the date such payment is due hereunder;

     (b) the suspension from listing,  without subsequent listing on any one of,
or the failure of the Company's  common stock, par value US$0.001 per share (the
"Common  Stock") to be listed on at least one of the OTC Markets (QB or QX), the
OTC Bulletin Board, NASDAQ Capital Market,  NASDAQ Global Market,  NASDAQ Global
Select  Market,  NYSE MKT or The New York Stock  Exchange,  Inc. for a period of
five (5) consecutive Trading Days (as defined under Section 3.2(b));

     (c)  the  Company's  notice  to the  Holder,  including  by  way of  public
announcement,  at any time,  of its  inability to comply or its intention not to
comply with proper requests for conversion of the applicable Note into shares of
Common Stock;

     (d) the Company shall fail to (i) timely deliver the shares of Common Stock
upon  conversion  of the  applicable  Note, or (ii) make the payment of any fees
and/or liquidated  damages under the applicable Note or the Purchase  Agreement,
which  failure in the case of items (i) and (ii) of this  Section  2.1(d) is not
remedied within three (3) Business Days after the incurrence thereof;

     (e)  default  shall be made in the  performance  or  observance  of (i) any
covenant, condition or agreement contained in the applicable Note (other than as
set forth in clause (d) of this Section 2.1) and such default is not fully cured
within five (5) Business Days after the occurrence thereof or (ii) any covenant,
condition  or  agreement  contained  in the  Purchase  Agreement,  the  Security
Agreement,   or  all  ancillary   documents  referred  to  in  those  agreements
(collectively,  the "Transaction  Documents,"  which is not covered by any other

                                       2
<PAGE>
provisions  of this  Section 2.1 and such default is not fully cured within five
(5) Business Days after the occurrence thereof;

     (f) any representation,  warranty or covenant made by the Company herein or
in the Purchase Agreement or any other Transaction  Document shall prove to have
been false or incorrect or breached on the date as of which made;

     (g) the Company  shall (i) apply for or consent to the  appointment  of, or
the taking of possession by, a receiver,  custodian,  trustee, liquidator or the
like of itself or of all or a substantial  part of its property or assets,  (ii)
make a general  assignment  for the benefit of its  creditors,  (iii) commence a
voluntary case under the U.S. Bankruptcy Code (as now or hereafter in effect) or
under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a
petition  seeking to take advantage of any bankruptcy,  insolvency,  moratorium,
reorganization  or other  similar law affecting  the  enforcement  of creditors'
rights  generally,  (v) acquiesce in writing to any petition filed against it in
an involuntary  case under U.S.  Bankruptcy Code (as now or hereafter in effect)
or under the comparable  laws of any  jurisdiction  (foreign or domestic),  (vi)
issue a notice of bankruptcy or winding down of its  operations or issue a press
release  regarding  same,  or  (vii)  take  any  action  under  the  laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing;

     (h) a  proceeding  or case shall be  commenced  in respect of the  Company,
without its  application  or consent,  in any court of  competent  jurisdiction,
seeking (i) the liquidation,  reorganization,  moratorium,  dissolution, winding
up, or  composition  or  readjustment  of its debts,  (ii) the  appointment of a
trustee, receiver, custodian,  liquidator or the like of itself or of all or any
substantial part of its property or assets in connection with the liquidation or
dissolution  of the Company or (iii)  similar  relief in respect of it under any
law providing for the relief of debtors,  and such  proceeding or case described
in clause (i),  (ii) or (iii) shall  continue  undismissed,  or unstayed  and in
effect, for a period of sixty (60) days or any order for relief shall be entered
in an  involuntary  case  under U.S.  Bankruptcy  Code (as now or  hereafter  in
effect) or under the comparable laws of any  jurisdiction  (foreign or domestic)
against the  Company or action  under the laws of any  jurisdiction  (foreign or
domestic)  analogous to any of the foregoing  shall be taken with respect to the
Company and shall continue  undismissed,  or unstayed and in effect for a period
of sixty (60) days;

     (i) the failure of the Company to pay any amounts due to the Holder  (other
than outstanding  Principal  Amount and Interest  referred to in Section 2.1(a),
the  failure of which to pay when due shall be an  immediate  Event of  Default)
herein within three (3) Business Days of receipt of notice to the Company;

     (j) actions,  suits,  proceedings,  claims or disputes pending,  at law, in
equity, in arbitration or before any governmental  authority,  arise against the
Company,  which  result in  equitable  relief or monetary  judgment(s)  or liens
against the Company;

     (k) the Collateral fails to perfect, or is delayed from perfection; or

     (l) the  Company  fails to perform or comply  with any term,  provision  or
condition of any other  agreement,  document or other  instrument  evidencing or
supporting  any  indebtedness  owing  from the  Company to the  Holder,  whether
currently existing or incurred after the date of this Agreement.

     Section 2.2 Remedies Upon An Event of Default. If an Event of Default, with
respect to each  applicable  Note,  shall have occurred and shall be continuing,
the Holder may at any time at its option,  (a) declare the entire unpaid balance
of the  Principal  Amount and all  Interest  accrued but unpaid  thereon of each
applicable  Note, and all other amounts owing or payable  hereunder or under any
Transaction  Document,  due and  payable,  and  thereupon,  the  same  shall  be
accelerated and so due and payable,  without  presentment,  demand,  protest, or
notice, all of which are hereby expressly unconditionally and irrevocably waived

                                       3
<PAGE>
by the  Company;  provided,  however,  that upon the  occurrence  of an Event of
Default described in (i) Section 2.1(g) or 2.1(h) (in the case of Section 2.1(h)
upon the expiration of the 60-day period  mentioned  therein),  the  outstanding
Principal  Amount and all Interest accrued but unpaid thereon of each applicable
Note, and all other amounts owing or payable  hereunder or under any Transaction
Document,  shall be automatically due and payable,  and (ii) Sections 2.1(a)-(f)
and 2.1(i)  demand the  prepayment of each  applicable  Note pursuant to Section
3.6,  (b)  subject to Section  3.4,  demand  that the  Principal  Amount and all
Interest  accrued  but unpaid  thereon of each  applicable  Note,  and all other
amounts  owing  or  payable   hereunder  or  under  any  Transaction   Document,
then-outstanding  shall be converted into shares of Common Stock at a Conversion
Price (as defined in Section  3.2(a)  hereof) per share  calculated  pursuant to
Section 3.1 hereof  assuming  that the date that the Event of Default  occurs is
the  Conversion  Date (as defined in Section  3.1), or (c) exercise or otherwise
enforce any one or more of the Holder's rights, powers, privileges, remedies and
interests under this Note, the Purchase Agreement, other Transaction Document or
applicable law. If the entire unpaid balance of the Principal  Amount,  together
with  accrued and unpaid  Interest  thereon,  is not paid when due at  maturity,
whether on the Maturity Date or any earlier date as a result of  acceleration of
the applicable Note(s) pursuant to the terms hereof,  then interest shall accrue
on the  outstanding  Principal  Amount from the date of such Event of Default at
the rate of 18% per annum.  No course of delay on the part of the  Holder  shall
operate as a waiver thereof or otherwise  prejudice the right of the Holder.  No
remedy  conferred  hereby shall be  exclusive  of any other  remedy  referred to
herein or now or hereafter available at law, in equity, by statute or otherwise.

                                   ARTICLE III

                      CONVERSION; ANTIDILUTION; PREPAYMENT

     Section 3.1 Conversion.  On any date(s) (each a "Conversion  Date") elected
by the Holder following the applicable Issuance Date, each Note may be converted
at the option of the Holder  from time to time,  in whole or in part,  into such
number of fully paid and non-assessable  shares of Common Stock as is determined
by dividing that portion of the  outstanding  Principal  Amount plus any accrued
Interest under each applicable Note as of such Conversion Date by the Conversion
Price (as  defined in Section  3.2(a))  then in effect on the  Conversion  Date;
provided,  however,  that the Conversion Price shall be subject to adjustment as
described  in  Section  3.4 below.  The  Holder  shall  deliver  each  Note,  as
applicable,  to the Company at the address  designated in the Purchase Agreement
at such time that each Note, as applicable,  is fully converted. With respect to
partial  conversions  of the  applicable  Note,  the Company  shall keep written
records of the amount of the  applicable  Note  converted as of each  Conversion
Date.

     Section 3.2 Conversion Price.

     The term  "Conversion  Price"  shall  mean the price that is equal to a 25%
discount to the  average  closing  price of the Common  Stock for the 10 Trading
Days  immediately  prior to the date upon  which the  first  installment  of the
Purchase Amount (as defined in the Purchase Agreement) is paid to the Company in
accordance with the Purchase Agreement.

     The term  "Trading  Day" shall  mean any day on which the  Common  Stock is
listed or quoted and traded on any other national securities  exchange,  market,
trading  or  quotation  facility  on which the  Common  Stock is then  listed or
traded, or, if the Common Stock is not then listed or traded, any Business Day.

     Section 3.3 Mechanics of Conversion.

     (a) Not later than five (5) Trading  Days after any  Conversion  Date,  the
Company or its designated transfer agent, as applicable, shall issue and deliver
to the Holder, as specified in the Holder's Conversion Notice, registered in the

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name of the  Holder or its  designee,  the  number of shares of Common  Stock to
which the  Holder  shall be  entitled,  that  represent  the number of shares of
Common Stock being  acquired  upon the  conversion of the  applicable  Note (the
"Delivery  Date").  If in the case of any  Conversion  Notice such Common  Stock
certificate or certificates are not delivered to or as directed by the Holder by
the Delivery Date, the Holder shall be entitled by written notice to the Company
at any time on or  before  its  receipt  of such  Common  Stock  certificate  or
certificates thereafter,  to rescind such conversion, in which event the Company
shall  immediately  return  the  applicable  Note if  tendered  for  conversion,
whereupon the Company and the Holder shall each be restored to their  respective
positions  immediately  prior to the  delivery of such notice of  revocation.  A
"Conversion Notice" means the notice of conversion, substantially in the form of
Exhibit B, delivered by the Holder to the Company on the Conversion Date.

     Section 3.4 Adjustment of Conversion Price.

     (a) The Conversion  Price shall be subject to adjustment  from time to time
as follows:

     (i) Adjustments for Stock Splits and Combinations.  If the Company shall at
any time or from time to time after the initial  Issuance  Date,  effect a stock
split of the outstanding Common Stock, the applicable Conversion Price in effect
immediately prior to the stock split shall be proportionately  decreased. If the
Company shall at any time or from time to time after the initial  Issuance Date,
combine the outstanding shares of Common Stock, the applicable  Conversion Price
in  effect  immediately  prior  to  the  combination  shall  be  proportionately
increased.  Any adjustments  under this Section  3.4(a)(i) shall be effective at
the close of business on the date the stock split or combination occurs.

     (ii) Adjustments for Certain  Dividends and  Distributions.  If the Company
shall at any time or from time to time after the initial  Issuance Date, make or
issue or set a record  date for the  determination  of holders  of Common  Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock,  then,  and in each  event,  the  applicable  Conversion  Price in effect
immediately  prior  to such  event  shall  be  decreased  as of the time of such
issuance  or, in the event such  record  date shall have been  fixed,  as of the
close of business on such record date, by multiplying, the applicable Conversion
Price then in effect by a fraction:

     (1) the  numerator  of which shall be the total  number of shares of Common
Stock issued and outstanding  immediately  prior to the time of such issuance or
the close of business on such record date; and

     (2) the  denominator of which shall be the total number of shares of Common
Stock issued and outstanding  immediately  prior to the time of such issuance or
the close of  business  on such  record date plus the number of shares of Common
Stock issuable in payment of such dividend or distribution.

     (iii)  Adjustment  for Other  Dividends and  Distributions.  If the Company
shall at any time or from time to time after each applicable Issuance Date, make
or issue or set a record date for the  determination  of holders of Common Stock
entitled to receive a dividend or other  distribution  payable in any form other
than shares of Common Stock, then, and in each event, an appropriate revision to
the applicable  Conversion  Price shall be made and provision  shall be made (by
adjustments  of the  Conversion  Price or  otherwise)  so that the Holder  shall
receive upon conversions  thereof, in addition to the number of shares of Common
Stock  receivable  thereon,  the number of  securities  of the Company which the
Holder would have received had this Note been converted into Common Stock on the
date of such event and had  thereafter,  during the period from the date of such
event to and including the Conversion Date,  retained such securities  (together
with any distributions  payable thereon during such period),  giving application
to all adjustments called for during such period under this Section  3.4(a)(iii)

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with respect to the rights of the Holder; provided, however, that if such record
date  shall  have been  fixed  and such  dividend  is not fully  paid or if such
distribution is not fully made on the date fixed therefor,  the Conversion Price
shall be adjusted pursuant to this Section  3.4(a)(iii) as of the time of actual
payment of such dividends or distributions.

     (iv) Adjustments for  Reclassification,  Exchange or  Substitution.  If the
Common Stock  issuable upon  conversion of each  applicable  Note at any time or
from time to time  after  the  Issuance  Date  shall be  changed  to the same or
different  number  of  shares  of any class or  classes  of  stock,  whether  by
reclassification,  exchange,  substitution or otherwise  (other than by way of a
stock split or combination of shares or stock dividends provided for in Sections
3.4(a)(i), (ii) and (iii), or a reorganization,  merger, consolidation,  or sale
of assets  provided  for in Section  3.4(a)(v)),  then,  and in each  event,  an
appropriate  revision to the Conversion Price shall be made and provisions shall
be made (by adjustments of the Conversion Price or otherwise) so that the Holder
shall have the right  thereafter to convert each  applicable  Note into the kind
and   amount  of  shares  of  stock  and  other   securities   receivable   upon
reclassification,  exchange,  substitution  or other  change,  by holders of the
number of shares of Common Stock into which each such applicable Note might have
been   converted   immediately   prior  to  such   reclassification,   exchange,
substitution  or other  change,  all subject to further  adjustment  as provided
herein.

     (v)  Adjustments  for  Reorganization,  Merger,  Consolidation  or Sales of
Assets.  If at any time or from time to time after the Issuance Date there shall
be a capital  reorganization  of the Company (other than by way of a stock split
or combination  of shares or stock  dividends or  distributions  provided for in
Section  3.4(a)(i),   (ii)  and  (iii),  or  a  reclassification,   exchange  or
substitution  of shares  provided  for in  Section  3.4(a)(iv)),  or a merger or
consolidation of the Company with or into another  corporation where the holders
of  outstanding  voting  securities  of the  Company  prior  to such  merger  or
consolidation  do not own over fifty  percent  (50%) of the  outstanding  voting
securities of the merged or consolidated  entity,  immediately after such merger
or  consolidation,  or the  sale of all or  substantially  all of the  Company's
properties or assets to any other person (an "Organic  Change"),  then as a part
of such Organic Change an appropriate  revision to the Conversion Price shall be
made and provision  shall be made (by  adjustments  of the  Conversion  Price or
otherwise)  so that the Holder shall have the right  thereafter  to convert each
applicable Note into the kind and amount of shares of stock and other securities
or property of the Company or any successor  corporation  resulting from Organic
Change.  In  any  such  case,  appropriate  adjustment  shall  be  made  in  the
application  of the  provisions  of this Section  3.4(a)(v)  with respect to the
rights of the Holder after the Organic  Change to the end that the provisions of
this Section  3.4(a)(v)  (including any adjustment in the applicable  Conversion
Price  then in effect  and the  number  of  shares of stock or other  securities
deliverable upon conversion of each applicable Note) shall be applied after that
event in as nearly an equivalent manner as may be practicable.

     (vii)  Consideration  for Stock.  In case any shares of Common Stock or any
Common Stock Equivalents (as defined in the Purchase  Agreement) shall be issued
or sold:

     (1) in connection with any merger or  consolidation in which the Company is
the surviving  corporation  (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Company shall be changed to
or exchanged  for the stock or other  securities  of another  corporation),  the
amount of  consideration  therefor  shall be,  deemed to be the fair  value,  as
determined  reasonably  and in good  faith  by the  Board  of  Directors  of the
Company,  of  such  portion  of the  assets  and  business  of the  nonsurviving
corporation as such Board of Directors may determine to be  attributable to such
shares of Common Stock, Common Stock Equivalents, rights or warrants or options,
as the case may be; or

     (2) in the event of any consolidation or merger of the Company in which the
Company is not the surviving corporation or in which the previously  outstanding

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shares of Common Stock of the Company shall be changed into or exchanged for the
stock or other securities of another corporation, or in the event of any sale of
all or  substantially  all of the  assets  of the  Company  for  stock  or other
securities  of any  corporation,  the  Company  shall be deemed to have issued a
number of shares of its Common Stock for stock or securities  or other  property
of the other  corporation  computed on the basis of the actual exchange ratio on
which the transaction was predicated,  and for a consideration equal to the fair
market value on the date of such  transaction of all such stock or securities or
other  property of the other  corporation.  If any such  calculation  results in
adjustment of the applicable Conversion Price, or the number of shares of Common
Stock issuable upon conversion of each Note, the determination of the applicable
Conversion  Price  or the  number  of  shares  of  Common  Stock  issuable  upon
conversion of the Note immediately prior to such merger,  consolidation or sale,
shall be made after giving effect to such  adjustment of the number of shares of
Common Stock issuable upon  conversion of the Note. In the event Common Stock is
issued  with other  shares or  securities  or other  assets of the  Company  for
consideration which covers both, the consideration  computed as provided in this
Section  3.5(vii)  shall be  allocated  among  such  securities  and  assets  as
determined in good faith by the Board of Directors of the Company.

     (b) Record  Date.  In case the Company  shall take record of the holders of
its Common Stock for the purpose of entitling  them to subscribe for or purchase
Common Stock or Common Stock Equivalents,  then the date of the issue or sale of
the shares of Common Stock shall be deemed to be such record date.

     (c)   Certain   Issues   Excepted.   Anything   herein   to  the   contrary
notwithstanding, the Company shall not be required to make any adjustment to the
Conversion Price in connection with (i) securities  issued (other than for cash)
in connection with a merger, acquisition,  or consolidation,  except as provided
for in  Section  3.4(a)(v),  (ii)  securities  issued  pursuant  to a bona  fide
firm-underwritten public offering of the Company's securities,  (iii) securities
issued  pursuant to the  conversion or exercise of  convertible  or  exercisable
securities  issued  or  outstanding  on or prior to the date  hereof  or  issued
pursuant to the Purchase  Agreement,  (iv) securities  issued in connection with
strategic  license  agreements or other partnering  arrangements so long as such
issuances are not for the purpose of raising capital, (v) Common Stock issued or
options to purchase  Common Stock  granted or issued  pursuant to the  Company's
stock option plans and employee  stock purchase plans as they now exist and (vi)
the payment of any accrued  interest in shares of Common Stock  pursuant to each
Note.

     (d) No Impairment.  The Company shall not, by amendment of its  Certificate
of   Incorporation   or  through   any   reorganization,   transfer  of  assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company,  but will at all
times in good faith,  assist in the carrying out of all the  provisions  of this
Section  3.4  and in the  taking  of all  such  action  as may be  necessary  or
appropriate  in order to protect  the rights of the Holder  under the  Agreement
against impairment.

     (e)  Certificates as to Adjustments.  Upon occurrence of each adjustment or
readjustment  of the  Conversion  Price or number  of  shares  of  Common  Stock
issuable upon  conversion of each  applicable Note pursuant to this Section 3.4,
the  Company  at  its  expense  shall  promptly   compute  such   adjustment  or
readjustment  in  accordance  with the terms  hereof and furnish to the Holder a
certificate  setting forth such adjustment and  readjustment,  showing in detail
the facts upon which such  adjustment  or  readjustment  is based.  The  Company
shall, upon written request of the Holder,  at any time,  furnish or cause to be
furnished to the Holder a like  certificate  setting forth such  adjustments and
readjustments,  the applicable  Conversion  Price in effect at the time, and the
number of shares of Common Stock and the amount,  if any, of other securities or
property  which  at the time  would be  received  upon  the  conversion  of each
applicable  Note.  Notwithstanding  the  foregoing,  the  Company  shall  not be
obligated to deliver a  certificate  unless such  certificate  would  reflect an
increase or decrease of at least one percent (1%) of such adjusted amount.

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     Section 3.5 Taxes; No Fractional Shares; Reservation of Shares.

     (a) Issue Taxes.  The Company  shall pay any and all issue and other taxes,
excluding  federal,  state or local income taxes, that may be payable in respect
of any issue or delivery of shares of Common  Stock on  conversion  of each Note
pursuant thereto; provided,  however, that the Company shall not be obligated to
pay any transfer taxes  resulting  from any transfer  requested by the Holder in
connection with any such conversion.

     (b) Fractional Shares. No fractional shares of Common Stock shall be issued
upon conversion of each Note.

     (c)  Reservation of Common Stock.  The Company shall at all times when each
Note shall be outstanding,  reserve and keep available out of its authorized but
unissued Common Stock,  such number of shares of Common Stock as shall from time
to time be sufficient to effect the  conversion of each Note;  provided that the
number of shares of Common  Stock so reserved  shall at no time be less than two
hundred  percent  (200%) of the  number of shares of Common  Stock for which the
applicable Note is at any time convertible. The Company shall, from time to time
in accordance  with Nevada  corporate  law, with  applicable  securities law and
regulations, and with its constitutive documents, increase the authorized number
of shares  of  Common  Stock if at any time the  unissued  number of  authorized
shares shall not be sufficient to satisfy the Company's  obligations  under this
Section 3.5(c).

     (d) Regulatory Compliance. If any shares of Common Stock to be reserved for
the purpose of  conversion  of each  applicable  Note  require  registration  or
listing with or approval of any governmental authority,  stock exchange or other
regulatory body under any federal or state law or regulation or otherwise before
such shares may be validly  issued or  delivered  upon  conversion,  the Company
shall,  at its sole cost and  expense,  in good  faith and as  expeditiously  as
possible, endeavor to secure such registration, listing or approval, as the case
may be.

     Section 3.6 Prepayment.

     (a) Prepayment  Upon an Event of Default.  Notwithstanding  anything to the
contrary contained herein,  upon the occurrence of an Event of Default described
in  Sections  2.1(a)-(i),  the Holder  shall have the  right,  at such  Holder's
option,  to require the Company to prepay  (prior to the Maturity  Date) in cash
all or a portion of the applicable  Note at a price equal to one hundred percent
(100%) of the  aggregate  outstanding  Principal  Amount and  accrued but unpaid
Interest  of each  applicable  Note (the "Event of Default  Prepayment  Price").
Nothing in this Section  3.6(a) shall limit the  Holder's  rights under  Section
2.2.

     (b) Prepayment at the Election of the Company.  Notwithstanding anything to
the contrary  contained in the Notes, at any time during the period beginning on
the advance date of any  installment  of the  Purchase  Amount and ending on the
date that is prior to the  Conversion  Date,  the Company  shall have the right,
exercisable  on not less than three (3) Trading Days prior written notice to the
Holder, to prepay in cash the applicable portion of the then-outstanding portion
of the  Purchase  Amount  plus the  then-outstanding  portion of any accrued and
unpaid  Interest  thereon  as at the date  fixed  for  prepayment,  in full,  in
accordance  with  this  Section  3.6  (such  prepayment  amount,  the  "Optional
Prepayment Amount"). Any notice of prepayment hereunder (an "Optional Prepayment
Notice")  shall be  delivered  by the  Company to the  Holder at its  registered
addresses  and shall  state:  (1) that the  Company is  exercising  its right to
prepay each applicable  Note, and (2) the date of prepayment  which shall be not
more  than  three (3)  Trading  Days  from the date of the  Optional  Prepayment
Notice.

     Section 3.7 Inability to Fully Convert.

     (a) Holder's Option if Company Cannot Fully Convert. If, upon the Company's
receipt of a Conversion  Notice, the Company cannot issue shares of Common Stock

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for any reason, including, without limitation,  because the Company (w) does not
have a sufficient number of shares of Common Stock authorized and available,  or
(x) is otherwise  prohibited by applicable law or by the rules or regulations of
any  stock  exchange,  interdealer  quotation  system  or other  self-regulatory
organization  with  jurisdiction  over the Company or any of its securities from
issuing all of the Common Stock which is to be issued to the Holder  pursuant to
a Conversion Notice, then the Company shall issue as many shares of Common Stock
as it is able to issue in accordance  with the Holder's  Conversion  Notice and,
with  respect  to the  unconverted  portion  of each Note (as  applicable),  the
Holder, solely at its option, can elect to:

     (i) require the Company to prepay that portion of each  applicable Note for
which the  Company  is  unable  to issue  Common  Stock in  accordance  with the
Holder's  Conversion  Notice (the "Mandatory  Prepayment") in an amount equal to
Optional Prepayment Amount as of such Conversion Date (the "Mandatory Prepayment
Price"), plus an amount equal to the Holder's out-of-pocket expenses incurred in
connection  with the  transactions  (which are  contemplated  by the Transaction
Documents) and enforcing its rights hereunder;

     (ii) void the Conversion  Notice and retain or have  returned,  as the case
may be, each applicable Note that was to be converted pursuant to the Conversion
Notice  (provided  that the  Holder's  voiding its  Conversion  Notice shall not
affect the Company's  obligations  to make any payments which have accrued prior
to the date of such notice).

     (b)  Mechanics  of  Fulfilling   Holder's   Election.   The  Company  shall
immediately  send via facsimile to the Holder,  upon receipt of a facsimile copy
of a  Conversion  Notice  from the Holder  which  cannot be fully  satisfied  as
described in Section 3.7(a) above, a notice of the Company's  inability to fully
satisfy the Conversion  Notice (the "Inability to Fully Convert  Notice").  Such
Inability to Fully Convert  Notice shall indicate (i) the reason why the Company
is unable to fully satisfy the Holder's  Conversion  Notice,  (ii) the amount of
the applicable Note which cannot be converted and (iii) the applicable Mandatory
Prepayment  Price. The Holder shall notify the Company of its election  pursuant
to Section  3.7(a)  above by  delivering  written  notice via  facsimile  to the
Company (the "Notice in Response to Inability to Convert").

     (c) Payment of  Prepayment  Price.  If the Holder  shall elect to have each
applicable Note prepaid  pursuant to Section  3.7(a)(i) above, the Company shall
pay the  Mandatory  Prepayment  Price to the Holder  within ten (10) days of the
Company's  receipt of the Notice in Response to Inability  to Convert,  provided
that prior to the  Company's  receipt of the Notice in Response to  Inability to
Convert  the Company has not  delivered a notice to the Holder  stating,  to the
satisfaction  of the  Holder,  that the  event  or  condition  resulting  in the
Mandatory Prepayment has been cured and all Conversion Shares (as defined in the
Purchase  Agreement)  issuable  to the Holder can and will be  delivered  to the
Holder in accordance  with the terms of the Notes.  If the Company shall fail to
pay the applicable Mandatory Prepayment Price to the Holder on a timely basis as
described in this  Section  3.7(c)  (other than  pursuant to a dispute as to the
determination of the arithmetic  calculation of the Mandatory Prepayment Price),
in addition to any remedy the Holder may have under each applicable Note and the
Purchase Agreement,  such unpaid amount shall bear interest at the rate of 0.67%
per month  (prorated  for  partial  months)  until paid in full.  Until the full
Mandatory  Prepayment  Price is paid in full to the  Holder,  the Holder may (i)
void the Mandatory  Prepayment  with respect to that portion of each  applicable
Note for which the full  Mandatory  Prepayment  Price  has not been  paid,  (ii)
receive back each such Note, and (iii) require that the Conversion Price of such
returned Note be adjusted to the lesser of (A) the Conversion Price as in effect
on the date on which the Holder  voided  the  Mandatory  Prepayment  and (B) the
lowest average closing price of the Common Stock for the Trading Days during the
period beginning on the Conversion Date and ending on the date the Holder voided
the Mandatory Prepayment.

     Section 3.8 No Rights as Shareholder.  Nothing contained in each Note shall
be construed as  conferring  upon the Holder,  prior to the  conversion  of each
Note,  the right to vote or to  receive  dividends  or to  consent or to receive

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notice as a  shareholder  in respect  of any  meeting  of  shareholders  for the
election of directors of the Company or of any other matter, or any other rights
as a shareholder of the Company.

                                   ARTICLE IV

                                  MISCELLANEOUS

     Section 4.1 Notices.

     (a) Any notice, demand,  request, waiver or other communication required or
permitted to be given  hereunder  shall be in writing and shall be effective (a)
upon hand delivery by telex (with  correct  answer back  received),  telecopy or
facsimile  at the address or number  designated  in the Purchase  Agreement  (if
delivered on a Business Day during normal business hours where such notice is to
be received),  or the first  Business Day following  such delivery (if delivered
other than on a Business Day during normal  business  hours where such notice is
to be received) or (b) on the second  Business Day following the date of mailing
by express courier service,  fully prepaid,  addressed to such address,  or upon
actual receipt of such mailing,  whichever  shall first occur.  The Company will
give  written  notice to the  Holder at least ten (10) days prior to the date on
which  the  Company  takes  a  record  (x)  with  respect  to  any  dividend  or
distribution   upon  the  Common  Stock,  (y)  with  respect  to  any  PRO  RATA
subscription  offer to holders of Common Stock or (z) for determining  rights to
vote  with  respect  to  any  Major  Transaction,  dissolution,  liquidation  or
winding-up and in no event shall such notice be provided to such holder prior to
such  information  being made known to the public.  The  Company  will also give
written  notice to the  Holder at least ten (10) days prior to the date on which
any Major  Transaction,  dissolution,  liquidation or winding-up will take place
and in no event  shall  such  notice be  provided  to the  Holder  prior to such
information being made known to the public.

     (b) A "Major  Transaction" shall be deemed to have occurred at such time as
any of the following events:

     (i) the consolidation,  merger or other business combination of the Company
with or into  another  person  (other than (A)  pursuant  to a migratory  merger
effected solely for the purpose of changing the jurisdiction of incorporation of
the Company or (B) a  consolidation,  merger or other  business  combination  in
which the Company is the surviving  entity and the shareholders of the Company's
voting power immediately prior to the transaction continue after the transaction
to hold,  directly or  indirectly,  the voting power of the surviving  entity or
entities  necessary to elect a majority of the members of the board of directors
(or their equivalent if other than a corporation) of such entity or entities);

     (ii) the sale or transfer of more than fifty percent (50%) of the Company's
assets  (based  on the fair  market  value as  determined  in good  faith by the
Company's  Board of Directors)  other than  inventory in the ordinary  course of
business in one or a related series of transactions; or

     (iii)  closing  of a  purchase,  tender  or  exchange  offer  made  to  the
shareholders  of more than  fifty  percent  (50%) of the  outstanding  shares of
Common Stock in which more than fifty percent (50%) of the outstanding shares of
Common Stock were tendered and accepted.

     Section 4.2 Governing  Law. The Notes shall be governed by and construed in
accordance  with the  internal  laws of the  State of New York,  without  giving
effect to any of the  conflicts  of law  principles  which  would  result in the
application of the substantive law of another jurisdiction.  The Notes shall not
be interpreted or construed with any  presumption  against the party causing the
Notes to be drafted.

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     Section  4.3  Headings.  Article  and  section  headings  in the  Notes are
included  herein for purposes of  convenience  of  reference  only and shall not
constitute a part of these Notes for any other purpose.

     Section 4.4 Remedies,  Characterizations,  Other Obligations,  Breaches and
Injunctive Relief. The remedies provided in the Notes shall be cumulative and in
addition to all other remedies  available  under the Notes,  at law or in equity
(including,  without limitation,  a decree of specific  performance and/or other
injunctive  relief),  no  remedy  contained  herein  shall be deemed a waiver of
compliance  with the  provisions  giving rise to such remedy and nothing  herein
shall limit the Holder's  right to pursue actual  damages for any failure by the
Company to comply with the terms of the Notes. Amounts set forth or provided for
herein with respect to payments,  conversion  and the like (and the  computation
thereof) shall be the amounts to be received by the Holder and shall not, except
as expressly  provided herein, be subject to any other obligation of the Company
(or the performance  thereof).  The Company  acknowledges that a breach by it of
its obligations hereunder will cause irreparable and material harm to the Holder
and that the remedy at law for any such breach may be inadequate.  Therefore the
Company agrees that, in the event of any such breach or threatened  breach,  the
Holder  shall be  entitled,  in  addition  to all  other  available  rights  and
remedies,  at law or in  equity,  to seek  and  obtain  such  equitable  relief,
including  but not  limited  to an  injunction  restraining  any such  breach or
threatened  breach,  without the necessity of showing  economic loss and without
any bond or other security being required.

     Section 4.5 Enforcement  Expenses.  The Company agrees to pay all costs and
expenses of enforcement of the Notes, including, without limitation,  reasonable
attorneys' fees and expenses.

     Section 4.6 Binding  Effect.  The obligations of the Company and the Holder
set forth herein shall be binding upon the  successors  and assigns of each such
party,  whether or not such  successors  or assigns are  permitted  by the terms
hereof.

     Section  4.7  Amendments.  The Notes may not be  modified or amended in any
manner except in writing executed by the Company and the Holder.

     Section 4.8 Compliance with Securities Laws. The Holder  acknowledges  that
the Notes are being  acquired  solely for the  Holder's own account and not as a
nominee for any other party,  and for investment,  and that the Holder shall not
offer,  sell or otherwise  dispose of the Notes except in accordance with and in
reliance upon the exemption from securities registration for offers and sales in
an "offshore transaction" to a non-U.S. Person afforded, inter alia, by Rule 904
under  Regulation  S  ("Regulation  S")  as  promulgated  by the  United  States
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 Act"),  and/or  Section 4(2) of the 1933 Act.  [NTD:  NEED
CONFIRMATION  OF HOW THIS  APPLIES  TO LPF.] The  Notes  and any Note  issued in
substitution or replacement therefor shall be stamped or imprinted with a legend
in substantially the following form:

     "EACH  CONVERTIBLE  PROMISSORY  NOTE ("NOTE") HAS NOT BEEN  REGISTERED
     UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED (THE "1933  ACT"),  OR
     APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,  TRANSFERRED OR
     OTHERWISE  DISPOSED OF IN THE ABSENCE OF SUCH  REGISTRATION OR RECEIPT
     BY THE  COMPANY OF AN OPINION  OF COUNSEL IN THE FORM,  SUBSTANCE  AND
     SCOPE  REASONABLY  SATISFACTORY  TO THE COMPANY  THAT EACH NOTE MAY BE
     SOLD,  TRANSFERRED,  OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM
     REGISTRATION UNDER THE 1933 ACT AND SUCH STATE SECURITIES LAWS."

                                       11
<PAGE>
     Section 4.9 Consent to Jurisdiction. Each of the Company and the Holder (i)
hereby irrevocably submits to the non-exclusive jurisdiction of the State of New
York for the  purposes  of any suit,  action  or  proceeding  arising  out of or
relating to these Notes and (ii) hereby waives,  and agrees not to assert in any
such suit, action or proceeding,  any claim that it is not personally subject to
the jurisdiction of such court,  that the suit,  action or proceeding is brought
in an inconvenient  forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Holder consents to process being served in
any such suit,  action or  proceeding by mailing a copy thereof to such party at
the address in effect for notices to it under the Purchase  Agreement and agrees
that such service shall  constitute  good and sufficient  service of process and
notice  thereof.  Nothing in this Section 4.9 shall affect or limit any right to
serve process in any other manner  permitted by law. Each of the Company and the
Holder hereby agree that the prevailing party in any suit,  action or proceeding
arising out of or relating to these Notes shall be entitled to reimbursement for
reasonable legal fees from the non-prevailing party.

     Section 4.10 Parties in Interest. The Notes shall be binding upon, inure to
the  benefit  of and be  enforceable  by  the  Company,  the  Holder  and  their
respective successors and permitted assigns.

     Section 4.11 Failure or Indulgence  Not Waiver.  No failure or delay on the
part of the Holder in the exercise of any power,  right or  privilege  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.

     Section 4.12 Company  Waivers.  Except as otherwise  specifically  provided
herein, the Company and all others that may become liable for all or any part of
the obligations evidenced by this Note, hereby waive presentment, demand, notice
of nonpayment, protest and all other demands' and notices in connection with the
delivery, acceptance,  performance and enforcement of these Notes, and do hereby
consent to any number of renewals of  extensions  of the time or payment  hereof
and agree that any such renewals or extensions may be made without notice to any
such persons and without affecting their liability herein and do further consent
to the release of any person liable hereon,  all without affecting the liability
of the other  persons,  firms or the  Company  liable  for the  payment of these
Notes, AND DO HEREBY WAIVE TRIAL BY JURY.

     (a) No delay or omission on the part of the Holder in exercising its rights
under these Notes,  or course of conduct  relating  hereto,  shall  operate as a
waiver of such rights or any other right of the Holder,  nor shall any waiver by
the Holder of any such right or rights on any one occasion be deemed a waiver of
the same right or rights on any future occasion.

     (b) THE COMPANY  ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THESE NOTES ARE
A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW,
HEREBY  WAIVES ITS RIGHT TO NOTICE AND HEARING WITH  RESPECT TO ANY  PREJUDGMENT
REMEDY WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

                                 TRIDENT BRANDS INCORPORATED

                                 By: /s/ Mark Holcombe
                                    --------------------------------------
                                    Name: Mark Holcombe
                                    Title: Chairman

                                       12
<PAGE>
                                    EXHIBIT A

                              ADVANCES AND PAYMENT

DATE: ? August 31st, 2016

                                                                 Total Principal
                                  Total Principal                  and Accrued
                     Amount        Outstanding        Accrued       Interest
Issuance Dates    Advanced (US$)     (US$)         Interest (US$)     (US$)
--------------    --------------     -----         --------------     -----

The Date Hereof     4,100,000     4,100,000

                                   Annex I- 1
<PAGE>
                                    EXHIBIT B

                            FORM OF CONVERSION NOTICE

(To be executed  by the  registered  Holder in order to convert  the  applicable
Note)

The undersigned hereby  irrevocably elects to convert $ ________________  of the
Principal Amount of the above Note for __________________________ into shares of
Common Stock of TRIDENT BRANDS INCORPORATED  according to the conditions hereof,
as of the date written below.

Conversion Date: ___________________________________________

Applicable Conversion Price: _______________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the Conversion Date:

Signature:___________________________________________

Print Name:__________________________________________

Address:_____________________________________________

                                   Annex I- 2
<PAGE>
                                    EXHIBIT C

                       FORM OF GENERAL SECURITY AGREEMENT

                                  SEE ATTACHED

                                   Annex I- 3
<PAGE>
                                    ANNEX II

                           FORM OF SECURITY AGREEMENT

                    ANNEX II TO SECURITIES PURCHASE AGREEMENT

                EXHIBIT C TO SECURED CONVERTIBLE PROMISSORY NOTES

                           GENERAL SECURITY AGREEMENT

     THIS GENERAL SECURITY AGREEMENT made as of the 26th day of September,  2016
(this "AGREEMENT")

     BETWEEN:

          TRIDENT BRANDS INCORPORATED

          (the "GUARANTOR")

     AND:

          LPF (MCTECH) INVESTMENT CORP.

          (the "SECURED PARTY")

     WHEREAS:

     As evidenced by a secured Convertible Promissory Note dated for reference ?

     A.  ,  and a  secured  Convertible  Promissory  Note  dated  for  reference
September 26, 2016, as the same may be amended, supplemented, extended, renewed,
restated,  replaced or superseded from time to time  (collectively,  the "NOTES"
and each, a "NOTE") between the Guarantor,  as borrower,  and the Secured Party,
as lender,  the Guarantor has obtained loans in the minimum amount of $4,100,000
and the maximum aggregate amount $10,000,000 ;

     B. As a material inducement to the Secured Party to purchase the Notes, the
Guarantor  has  agreed  to  provide  a  security  agreement  securing  the loans
documented by the Notes. FOR VALUE RECEIVED,  the Guarantor  covenants,  agrees,
warrants,  represents,  acknowledges, and confirms to and with the Secured Party
and creates and grants the mortgages, pledges, charges, transfers,  assignments,
and security interests as follows:

1. SECURITY INTEREST.

     As security for the payment and  performance of the Obligations (as defined
in Section 3), the  Guarantor,  subject to the  exceptions set out in Section 2,
does:

     1.1 Grant to the Secured  Party a lien on, and a security  interest in, and
mortgages,  pledges,  charges,  transfers  and  assigns  absolutely,  all of the
<PAGE>
Guarantor's  present and after  acquired  personal  property,  and all  personal
property  in which the  Guarantor  has rights,  of  whatever  nature or kind and
wherever  situated,  including,  without  limitations,  all of the following now
owned or in future owned or acquired by or on behalf of the  Guarantor;

     (a)  all goods, including:

     (i)  all  inventory  of  whatever  kind and  wherever  situate,  including,
          without  limitation,  goods  acquired  or held  for  sale or  lease or
          furnished or to be furnished under contracts of rental or service, all
          raw  materials,  work in progress,  finished  goods,  returned  goods,
          repossessed  goods  and  all  packaging   materials,   supplies,   and
          containers  relating to or used or consumed in connection  with any of
          the foregoing (collectively, the "Inventory");

     (ii) all  equipment  of whatever  kind and  wherever  situated,  including,
          without limitation, all machinery,  tools, apparatus, plant, fixtures,
          furniture,  furnishings,  chattels, motor vehicles, vessels, and other
          tangible personal  property of whatever nature or kind  (collectively,
          the "EQUIPMENT");

     (b)  all book accounts and book debts and  generally  all accounts,  debts,
          dues,  claims,  choses in action, and demands of every nature and kind
          however arising or secured  including letters of credit and advices of
          credit,  which are now due, owing, or accruing,  or growing due to, or
          owned by, or which may in future become due,  owing,  or accruing,  or
          growing due to, or owned by the Guarantor (the "ACCOUNTS");

     (c)  all  contractual  rights,  insurance,   claims,  licenses,   goodwill,
          patents,  trademarks, trade names, copyrights, and other industrial or
          intellectual  property of the  Guarantor or in which the Guarantor has
          an interest, all other choses in action of the Guarantor of every kind
          which now are,  or which may in future be, due or owing to or owned by
          the  Guarantor,  and all other  intangible  property of the  Guarantor
          which is not Accounts, Chattel Paper, Instruments, Documents of Title,
          securities, or Money;

     (d)  all Money;

     (e)  all property  described in Schedule "A" to this  Agreement,  or in any
          schedule  now or at any time in future  annexed to this  Agreement  or
          agreed to form part of this Agreement;

     (f)  the undertaking of the Guarantor;

     (g)  all Chattel  Paper,  Documents of Title  (whether  negotiable or not),
          Instruments,  intangibles, and securities now owned or in future owned
          or acquired by or on behalf of the Guarantor (including those returned
          to or  repossessed  by the  Guarantor)  and  all  other  goods  of the
          Guarantor that are not Equipment, Inventory, or Accounts;

     (h)  all deeds,  documents,  writings,  papers, books of account, and other
          books  and  electronically  recorded  data  relating  to  any  of  the
          foregoing  or by which  any of the  foregoing  is or may in  future be
          secured, evidenced, acknowledged, or made payable; and

     (i)  all renewals, accretions and substitutions of any of the foregoing and
          all after acquired personal property and fixtures and farm products in
          any form  derived  directly or  indirectly  from any dealing  with the
          Collateral  (as  defined in Section  1.2) or the  Proceeds,  including
          rights  to  insurance  payments  and any other  payments  representing
          indemnity or compensation  for loss or damage to the Collateral or the
          Proceeds.

     1.2 The security  interests  created or granted  under  Section 1.1 of this
Agreement are  collectively  called the "SECURITY  INTEREST",  and all property,
assets, interests, and undertakings (including Proceeds) subject to the Security
Interest or  otherwise  charged or secured by this  Agreement or expressed to be
charged, assigned or transferred,  or secured by any Instruments supplemental to
this Agreement or in  implementation  of this Agreement are collectively  called
the "COLLATERAL".

                                       2
<PAGE>
2. EXCEPTIONS AND DEFINITIONS.

     2.1 Any  reference in this  Agreement to the "UNIFORM  COMMERCIAL  CODE" or
"UCC" means the Uniform Commercial Code, as adopted and enacted and as in effect
from time to time in the State of Nevada. Terms used herein which are defined in
the UCC and not  otherwise  defined  herein shall have the  respective  meanings
ascribed to such terms in the UCC.

     2.2 The Security  Interest  granted by this  Agreement  shall not extend or
apply to and the Collateral  shall not extend to the last day of the term of any
lease or  agreement  to lease real  property,  but upon the  enforcement  of the
Security  Interest the Guarantor shall stand possessed of such last day in trust
to assign and dispose thereof as the Secured Party shall direct.

     2.3 The  Security  Interest  shall not render the Secured  Party  liable to
observe or perform any term or covenant or condition of any agreement,  document
or  Instrument  to which the  Guarantor  is a party or by which it is bound.  In
addition,  the  Security  Interests  do not and shall  not  extend  to,  and the
Collateral shall not include, any agreement, right, franchise, licence or permit
(the  "CONTRACTUAL  RIGHTS") to which the  Guarantor  is a party or of which the
Guarantor  has the  benefit,  to the extent that the  creation  of the  Security
Interests  herein would constitute a breach of the terms of or permit any person
to terminate the Contractual  Rights,  but the Guarantor shall hold its interest
therein in trust for the Secured Party and shall assign such Contractual  Rights
to the Secured Party  forthwith  upon obtaining the consent of all other parties
thereto.  The Guarantor  agrees that it shall, if required by the Secured Party,
use commercially reasonable efforts to obtain any consent required to permit any
Contractual Rights to be subject to the Security Interests herein.

     2.4 All Consumer Goods are excepted from the Security Interest.

     2.5 Any  reference in this  Agreement  to  "Collateral"  shall,  unless the
context  otherwise  requires,  be deemed a reference to  "Collateral or any part
thereof". The Collateral shall not include Consumer Goods of the Guarantor.

     2.6 The term "PROCEEDS",  whenever used and interpreted as above,  shall by
way of example include trade-ins, Equipment, cash, bank accounts, notes, Chattel
Paper,  goods,  contract rights,  Accounts,  and any other personal  property or
obligation  received  when such  Collateral  or  Proceeds  are sold,  exchanged,
collected, or otherwise disposed of.

3. OBLIGATIONS SECURED.

     This  Agreement  and the  Security  Interest  are in addition to and not in
substitution  for any  other  security  interest  now or in  future  held by the
Secured Party from the Guarantor,  or from any other person and shall be general
and continuing security for the payment of all indebtedness and liability of the
Guarantor to the Secured Party (including interest thereon),  present or future,
absolute or contingent,  joint or several,  direct or indirect,  matured or not,
extended or renewed,  wherever and however  incurred,  and any ultimate  balance
thereof,  including  all  advances on current or running  account and all future
advances and re-advances,  and whether the same is from time to time reduced and
thereafter increased or entirely extinguished and thereafter incurred again, and
whether the  Guarantor be bound alone or with another or others,  and whether as
principal or surety, and for the performance and satisfaction of all obligations
of the  Guarantor  to the  Secured  Party,  whether  or not  contained  in  this
Agreement or the Notes (all of which  indebtedness,  liability,  and obligations
are collectively the "OBLIGATIONS").

4. COVENANTS OF GUARANTOR.

           THE GUARANTOR COVENANTS AND AGREES WITH THE SECURED PARTY:

     (a)  not to change its name,  its  principal  place of business,  its chief
          executive  office or the  location  of any of the  Collateral  without
          giving 15 days' prior written notice thereof to the Secured Party;

     (b)  not to sell, exchange, transfer, assign, lease or otherwise dispose of
          or deal in any way  with  the  Collateral  or  release,  surrender  or
          abandon   possession  of  the  Collateral  or  move  or  transfer  the

                                       3
<PAGE>
          Collateral,  or enter into any agreement or  undertaking  to do any of
          the foregoing;

(c)       not to create or permit to exist any  encumbrance  against  any of the
          Collateral,  except the Security  Interests  created by this Agreement
          and other  permitted  encumbrances,  as set forth in Schedule "B" (the
          "Permitted Encumbrances");

(d)       to defend the title to the  Collateral  for the benefit of the Secured
          Party against all claims and demands;

(e)       that the Guarantor  shall  maintain the Security  Interest  created by
          this  Agreement as a perfected  security  having at least the priority
          described  in Section 12 and shall defend such  Security  Interest and
          such priority against the claims and demands of all persons;

(f)       to  promptly  pay  when due all  taxes,  assessments,  rates,  levies,
          payroll deductions,  workers' compensation assessments,  and any other
          charges  which could  result in the  creation  of a statutory  lien or
          deemed trust in respect of the Collateral;

(g)           to do, make, execute and deliver such further and other
          assignments, transfers, deeds, security agreements and other
          documents as may be required by the Secured Party to establish
          in favor of the Secured Party and perfect the Security
          Interest intended to be created hereby and to accomplish the
          intention of this Agreement and, if requested by the Secured
          Party, to specifically assign to the Secured Party, the
          Guarantor's rights and interests (but not the Guarantor's
          obligations) under any contracts to which the Guarantor is a
          party, which include the Guarantor instructing the transfer
          agent of the Guarantor:

     (i)  to comply  with the Secured  Party's  orders  without the  Guarantor's
          further consent; or

     (ii) that the Secured  Party has the same rights to the Security  Interests
          as the Guarantor;

     (h)  to  pay  all  expenses,  including  reasonable  solicitors'  fees  and
          disbursements,  receivers' fees and disbursements, and accounting fees
          and  disbursements  incurred by or on behalf of the Secured Party, its
          secured  parties,  or  any  Receiver,   as  hereinafter   defined,  in
          connection with inspecting the Collateral,  investigating title to the
          Collateral, the preparation, perfection, preservation, and enforcement
          of this Agreement, including taking, recovering and keeping possession
          of the  Collateral  and all  expenses  incurred by or on behalf of the
          Secured  Party,  its  agents or any  Receiver  (as  defined in Section
          11.1(a))  in  dealing  with  other   creditors  of  the  Guarantor  in
          connection with the  establishment and confirmation of the priority of
          the  Security  Interests,  all of  which  expenses  shall  be  payable
          forthwith upon demand with interest at the rate specified in the Notes
          and shall form part of the Obligations; and

     (i)  to observe and perform all of its  obligations  under or in connection
          with any other security  agreement  creating a security  interest over
          the Collateral or any part thereof.

                                       4
<PAGE>
5. ATTACHMENT.

     The Guarantor acknowledges and confirms that:

     (a)  there is no intention to delay the time of  attachment of the Security
          Interest  created by this Agreement,  and the Security  Interest shall
          attach at the earliest time permissible  under the laws governing this
          Agreement;

     (b)  that value has been given; and

     (c)  that the Guarantor has (or in the case of any after acquired property,
          will have at the time of acquisition) rights in the Collateral.

6. USE AND VERIFICATION OF COLLATERAL.

     The Guarantor may, until default, possess, operate, collect, use and enjoy,
and deal with the Collateral in the ordinary course of the Guarantor's  business
in any manner not inconsistent  with the provisions of this Agreement;  provided
always that the Secured  Party shall have the right at any time and from time to
time to verify  the  existence  and state of the  Collateral  in any  manner the
Secured  Party may consider  appropriate.  The  Guarantor  agrees to furnish all
assistance and information and to perform all such acts as the Secured Party may
reasonably  request in connection  therewith,  and for such purposes to grant to
the Secured Party or its agents access to all places where the Collateral may be
located and to all premises occupied by the Guarantor.

7. INCOME FROM AND INTEREST ON COLLATERAL.

     7.1 Until the  occurrence  of an Event of  Default  (as  defined in Section
10.1), the Guarantor reserves the right to receive any money constituting income
from or interest on the  Collateral  and if the Secured Party  receives any such
money  before the  occurrence  of an Event of Default,  the Secured  Party shall
either credit the amount of such money against the Obligations or pay the amount
of such money promptly to the Guarantor.  7.2 Upon the occurrence of an Event of
Default,  the  Guarantor  shall not  request or receive  any money  constituting
income from or interest on the Collateral and if the Guarantor receives any such
money in any event, the Guarantor shall hold that money in trust for the Secured
Party and shall pay the amount of that money promptly to the Secured Party.

     8. DISPOSITION OF MONIES.

     Subject to any applicable  requirements of the UCC, all monies collected or
received  by the Secured  Party  under or in exercise of any right it  possesses
with respect to  Collateral  shall be applied on account of the  Obligations  in
such  manner as the  Secured  Party  deems best or, at the option of the Secured
Party,  may be held  unappropriated  in a collateral  account or released to the
Guarantor, all without prejudice to the liability of the Guarantor or the rights
of the Secured  Party under this  Agreement,  and any surplus shall be accounted
for as required by law.

9. PERFORMANCE OF OBLIGATIONS.

     If the  Guarantor  fails  to  perform  any of its  obligations  under  this
Agreement,  the Secured  Party may, but shall not be obliged to,  perform any or
all of those  obligations  without prejudice to any other rights and remedies of
the Secured Party under this Agreement.

10. DEFAULT.

     10.1 Unless waived by the Secured Party  (whether in whole or in part),  it
shall be an event of default (an "EVENT OF DEFAULT")  under this  Agreement  and
the security constituted by this Agreement shall become enforceable if:

     (a)  an "Event of Default" (as that term is defined in the Notes,  only for
          purposes of this clause (a)) occurs under the Notes;

     (b)  any  term,  covenant,  representation  or  warranty  set  out in  this
          Agreement  is  breached  or if an Event of Default  occurs  under this
          Agreement;

                                       5
<PAGE>
     (c)  any amount owed to the Secured Party is not paid when due; or

     (d)  the Guarantor declares itself to be insolvent, makes an assignment for
          the  benefit  of  its  creditors,   is  declared  bankrupt,   declares
          bankruptcy,   makes  a  proposal,  or  otherwise  takes  advantage  of
          provisions  under the U.S.  Bankruptcy Code or similar  legislation in
          any  jurisdiction,  or fails to pay its debts generally as they become
          due; or

     (e)  a receiver or receiver-manager is appointed.

11. ENFORCEMENT.

     11.1 Upon the occurrence and during the  continuance of an Event of Default
under this Agreement, the Obligations shall, at the option of the Secured Party,
be immediately due and payable and the Security  Interests granted hereby shall,
at the option of the Secured Party, become immediately  enforceable.  To enforce
and realize on the security constituted by this Agreement, the Secured Party may
take any action permitted by law or in equity, as it may deem expedient,  and in
particular,  but without  limiting the generality of the foregoing,  the Secured
Party may do any of the following:

     (a)  appoint  by   instrument  a  receiver,   receiver   and  manager,   or
          receiver-manager (the person so appointed is called the "RECEIVER") of
          the  Collateral,  with  or  without  bond  as the  Secured  Party  may
          determine,  and from time to time in its  absolute  discretion  remove
          such Receiver and appoint another in its stead;

     (b)  enter upon any premises of the  Guarantor  and take  possession of the
          Collateral  with power to exclude the Guarantor,  its agents,  and its
          servants from those premises,  without  becoming liable as a mortgagee
          in possession;

     (c)  preserve,   protect,   and  maintain  the  Collateral  and  make  such
          replacements  and repairs and  additions as the Secured Party may deem
          advisable;

     (d)  sell,  lease,  or  otherwise  dispose  of  all  or  any  part  of  the
          Collateral,  whether by public or private sale or lease or  otherwise,
          in such manner,  at such price as can be reasonable  obtained,  and on
          such  terms  as to  credit  and  with  such  conditions  of  sale  and
          stipulations  as to  title  or  conveyance  or  evidence  of  title or
          otherwise as the Secured Party may deem  reasonable,  provided that if
          any sale, lease or other disposition is on credit, the Guarantor shall
          not be  entitled to be  credited  with the  proceeds of any such sale,
          lease or other  disposition  until the monies  therefor  are  actually
          received;

     (j)  exercise any of the powers set out in this Section  11.1,  without the
          appointment of a Receiver;

     (k)  institute  proceedings in any court of competent  jurisdiction for the
          appointment of a Receiver or for the sale of the Collateral;

     (l)  file proofs of claim and other  documents  in order to have the claims
          of the Secured Party lodged in any  bankruptcy,  winding-up,  or other
          judicial proceeding relating to each Guarantor; and

     (m)  exercise all of the rights and remedies  accorded to a "secured party"
          under the UCC.

     11.2 Any Receiver appointed by the Secured Party may be any person licensed
as a trustee under applicable law, and the Secured Party may remove any Receiver
so appointed and appoint another or others instead. Any Receiver appointed shall
act as the Secured  Party for the  Guarantor  for all  purposes,  including  the
occupation of any premises of the  Guarantor and in carrying on the  Guarantor's
business  and the  Secured  Party shall not be liable for any act or omission of
any  Receiver.  The  Guarantor  agrees to ratify and  confirm all actions of the
Receiver and to release and  indemnify  the  Receiver  and the Secured  Party in
respect of all such actions. Any Receiver so appointed shall have the power:

                                       6
<PAGE>
     (a)  to enter upon,  use, and occupy all premises  owned or occupied by the
          Guarantor;

     (b)  to take possession of the Collateral;

     (c)  to carry on the business of the Guarantor;

     (d)  to  borrow  money  required  for  the  maintenance,   preservation  or
          protection of the Collateral or for the carrying on of the business of
          the Guarantor,  and in the discretion of such Receiver,  to charge and
          grant further security  interests in the Collateral in priority to the
          Security Interests, as security for the money so borrowed;

     (e)  to sell,  lease, or otherwise dispose of the Collateral in whole or in
          part and for cash or  credit,  or part  cash and part  credit  on such
          terms  and  conditions  and  in  such  manner  as the  Receiver  shall
          determine in its discretion;

     (f)  to demand, commence, continue or defend any judicial or administrative
          proceedings  for  the  purpose  of  protecting,  seizing,  collecting,
          realizing or obtaining possession or payment of the Collateral, and to
          give valid and  effectual  receipts  and  discharges  therefor  and to
          compromise or give time for the payment or  performance  of all or any
          part of the Accounts or any other obligation of any third party to the
          Guarantor; and

     (g)  to exercise any rights or remedies  which could have been exercised by
          the Secured Party against the Guarantor or the Collateral.

     11.3  Subject to the claims,  if any,  of the  creditors  of the  Guarantor
ranking in priority to this Agreement, all amounts realized from the disposition
of Collateral under this Agreement shall be applied as the Secured Party, in its
absolute  discretion,  may direct.  Subject to applicable law and the claims, if
any, of other  creditors  of the  Guarantor,  any  surplus  shall be paid to the
Guarantor.

11.4 The  Guarantor  agrees that the Secured  Party may  exercise its rights and
remedies  under  this  Agreement  immediately  upon  default,  except  as may be
otherwise provided in the UCC, and the Guarantor expressly confirms that, except
as may be otherwise  provided in this Agreement or in the UCC, the Secured Party
has not given any  covenant,  express or implied,  and is under no obligation to
allow the Guarantor any period of time to remedy any Event of Default before the
Secured Party exercises its rights and remedies under this  Agreement.

     11.5 The Guarantor hereby irrevocably constitutes and appoints any officer,
for the time being,  of the Secured Party to be, upon the  occurrence and during
the  continuance  of an Event of  Default,  the true and lawful  attorney of the
Guarantor,  with full power of  substitution,  to do,  make and execute all such
statements,  assignments,  documents,  acts, matters of things with the right to
use the  name of the  Guarantor  whenever  and  wherever  the  officer  may deem
necessary or  expedient  and from time to time to exercise all rights and powers
and to perform all acts of ownership in respect to the  Collateral in accordance
with this Agreement.

     11.6 The  Secured  Party  shall not be liable  for any delay or  failure to
enforce any remedies  available to it or to institute any  proceedings  for such
purposes.  The Secured  Party may waive any Event of Default,  provided  that no
such waiver shall be binding upon the Secured  Party unless in writing nor shall
it affect the rights or  remedies of the Secured  Party in  connection  with any
other or subsequent Event of Default.

12. REPRESENTATIONS OF GUARANTOR.

     12.1 The Guarantor represents and warrants that:

     (a)  this  Agreement  is  granted in  accordance  with  resolutions  of the
          directors  (and of the  shareholders  as applicable) of the Guarantor,
          and all other matters and things have been done and performed so as to
          authorize and make the  execution  and delivery of this  Agreement and

                                       7
<PAGE>
          the performance of the obligations of the Guarantor  hereunder  legal,
          valid and binding;

     (b)  it lawfully owns and possesses all presently  held  Collateral and has
          good  title  thereto,  free  from  all  security  interests,  charges,
          encumbrances,  liens and claims, save only the Permitted  Encumbrances
          and has  good  right  and  lawful  authority  to  grant  the  Security
          Interests  hereunder,  free  and  clear  of  all  security  interests,
          charges,  encumbrances,  liens and  claims,  other than the  Permitted
          Encumbrances; and

     (c)  the locations  specified in the attached  Schedule "C" with respect to
          goods  constituting the Collateral and of the business  operations and
          records of the Guarantor are accurate and complete; and

     (d)  the Security Interest granted pursuant to this Agreement constitutes a
          valid  and  continuing  perfected  Security  Interest  in favor of the
          Secured   Party  in  the   Collateral,   subject  (for  the  following
          Collateral) to the occurrence of the following: (i) in the case of the
          Collateral  in which a Security  Interest may be perfected by filing a
          financing  statement  under the UCC, the completion of the filings and
          other actions  specified in this Agreement  (which, in the case of all
          filings and other documents  referred to in this Agreement,  have been
          delivered to the Secured Party in completed and duly authorized form),
          (ii) with respect to any Deposit  Account,  the execution of a control
          account,  (iii) in the case of all copyrights,  trademarks and patents
          for which UCC filings are insufficient, all appropriate filings having
          been  made  with the U.S.  Copyright  Office  or the U.S.  Patent  and
          Trademark Office, as applicable,  (iv) in the case of letter-of-credit
          rights that are not  supporting  obligations  of the  Collateral,  the
          execution of a contractual  obligation granting control to the Secured
          Party over such letter-of-credit rights, (v) in the case of Electronic
          Chattel Paper,  the completion of all steps necessary to grant control
          to the Secured Party over such Electronic  Chattel Paper,  and (vi) in
          the case of vehicles,  the actions  required  pursuant to the UCC. The
          Security Interest shall be prior to all other liens on the Collateral,
          except for permitted  liens having  priority over the Secured  Party's
          lien  by  operation  of  law  upon  (x)  in the  case  of all  pledged
          certificated  stock,  pledged debt Instruments and pledged  investment
          priority the delivery  thereof to the Secured Party of such consisting
          of Instruments and  certificates,  in each case properly  endorsed for
          transfer  to the  Secured  Party or in  blank,  (y) in the case of all
          pledged investment property not in certificated form, the execution of
          control agreements with respect to such investment  property,  and (z)
          in the case of all other  Instruments and Tangible  Chattel Paper that
          are not  pledged  certificated  stock,  pledged  debt  Instruments  or
          pledged investment property, the delivery thereof to the Secured Party
          of such Instruments and Tangible Chattel Paper. Except as set forth in
          this Section,  all actions by the Guarantor  necessary or desirable to
          protect and perfect the lien granted  hereunder on the Collateral have
          been duly taken.

13. DEFICIENCY.

     If the amounts  realized from the  disposition  of the  Collateral  are not
sufficient  to pay the  Obligations  in full,  the  Guarantor  shall  pay to the
Secured  Party the amount of such  deficiency  immediately  upon  demand for the
same.

                                       8
<PAGE>
14. RIGHTS CUMULATIVE.

     All rights and remedies of the Secured Party set out in this  Agreement are
cumulative, and no right or remedy contained in this Agreement is intended to be
exclusive,  but each right and remedy  shall be in addition to every other right
or remedy  contained in this  Agreement  or in any  existing or future  security
agreement or now or in future existing at law, in equity or by statute, or under
any other  agreement  between the Guarantor and the Secured Party that may be in
effect from time to time.

15. LIABILITY OF SECURED PARTY.

     The  Secured  Party  shall  not be  responsible  or  liable  for any  debts
contracted  by it,  for  damages  to  persons or  property  or for  salaries  or
non-fulfilment  of  contracts  during any period  when the  Secured  Party shall
manage the Collateral upon entry,  as provided in this Agreement,  nor shall the
Secured  Party be liable to account as mortgagee in  possession  or for anything
except  actual  receipts  or be liable  for any loss on  realization  or for any
default or  omission  for which a mortgagee  in  possession  may be liable.  The
Secured  Party  shall not be bound to do,  observe  or  perform or to see to the
observance  or  performance  by the  Guarantor of any  obligations  or covenants
imposed  upon  the  Guarantor,  nor  shall  the  Secured  Party,  in the case of
Securities, Instruments, or Chattel Paper, be obliged to preserve rights against
other  persons,  nor  shall  the  Secured  Party be  obliged  to keep any of the
Collateral  identifiable.  The Guarantor waives any applicable  provision of law
permitted to be waived by it which imposes  higher or greater  obligations  upon
the Secured Party than as contained in this Section.

16. ACCOUNTS.

     Notwithstanding  any other provision of this  Agreement,  the Secured Party
may collect,  realize,  sell, or otherwise deal with the Accounts or any part of
them in such manner, upon such terms and conditions,  and at such time or times,
whether  before or after an Event of Default,  as may seem to it advisable,  and
without  notice to the  Guarantor,  except in the case of  disposition  after an
Event of Default and then  subject to the  provisions  of Part 6 of Article 9 of
the UCC.  All monies or other  forms of payment  received  by the  Guarantor  in
payment of any Account  shall be received and held by the Guarantor in trust for
the Secured Party.

17. APPROPRIATION OF PAYMENTS.

     Any and all payments made in respect of the  Obligations  from time to time
and monies realized from the Security  Interest held therefor  (including monies
collected in accordance  with or realized on any  enforcement of this Agreement)
may be applied to such part or parts of the Obligations as the Secured Party may
see fit, and the Secured Party may at all times and from time to time change any
appropriation as the Secured Party may see fit.

18. WAIVER.

     The  Secured  Party may from time to time and at any time waive in whole or
in part any right,  benefit or default under any Section of this Agreement,  but
any such  waiver of any right,  benefit,  or default  on any  occasion  shall be
deemed not to be a waiver of any such right, benefit, or default thereafter,  or
of any other  right,  benefit  or  default,  as the case may be, and no delay or
omission  by the  Secured  Party in  exercising  any right or remedy  under this
Agreement or with respect to any default shall operate as a waiver thereof or of
any other right or remedy.

19. NOTICE.

     Any notice,  demand,  or other  communication  required or  permitted to be
given under this Agreement  shall be  effectually  made or given if delivered by
prepaid  private  courier or by  facsimile  transmission  to the address of each
party set out below:

To the Guarantor:        Trident Brands Incorporated
                         200 South Executive Drive, Suite 101
                         Brookfield, WI 53005
                         U.S.A.
                         Tel: 262-789-6689
                         Fax: 262-789-6689
                         Attention: Michael Browne

                                       9
<PAGE>
To the Secured Party:    LPF (MCTECH) Investment Corp.
                         1315 North Service Rd. East, 6th Floor
                         Oakville, ON, L6H 1A7
                         CANADA
                         Tel: 289-291-3666
                         Fax: 289-291-0651
                         Attention: Administrator and Controller

or to such other  address or facsimile  number as either party may  designate in
the manner set out above. Any notice,  demand, or other  communication  shall be
deemed to have been given and  received  on the day of prepaid  private  courier
delivery or facsimile transmission.

20. EXTENSIONS.

     The Secured Party may grant extensions of time and other indulgences,  take
and give up security, accept compositions,  compound,  compromise, settle, grant
releases and discharges,  refrain from  perfecting or maintaining  perfection of
the Security Interest, and otherwise deal with the Guarantor, account debtors of
the  Guarantor,  sureties,  and others  and with the  Collateral,  the  Security
Interest,  and other  security  interests as the Secured  Party sees fit without
prejudice to the liability of the Guarantor or the Secured Party's right to hold
and realize on the security constituted by this Agreement.

21. NO MERGER.

     This  Agreement  shall not operate to create any merger or discharge of any
of the Obligations, or of any assignment,  transfer,  guarantee, lien, mortgage,
contract,  promissory note, bill of exchange,  or security  interest of any form
held or which may in future be held by the Secured  Party from the  Guarantor or
from any other  person.  The  taking of a  judgment  with  respect to any of the
Obligations  shall not operate as a merger of any of the covenants  contained in
this Agreement.

22. SATISFACTION AND DISCHARGE.

     Any partial payment or satisfaction of the  Obligations,  or any ceasing by
the Guarantor to be indebted to the Secured  Party,  shall be deemed not to be a
redemption or discharge of this Agreement.  The Guarantor shall be entitled to a
release and discharge of this  Agreement upon full payment and  satisfaction  of
all  Obligations  and upon written  request by the  Guarantor and payment to the
Secured Party of all costs, charges,  expenses, and legal fees and disbursements
(on a  solicitor  and  own  client  basis)  incurred  by the  Secured  Party  in
connection with the Obligations and such release and discharge.

23. INUREMENT.

     This  Agreement  shall  inure to the  benefit  of and be  binding  upon the
parties  and  their  respective  heirs,  executors,   personal  representatives,
successors, and permitted assigns.

24. INTERPRETATION.

     24.1 In this  Agreement the word  "including",  when  following any word or
words,  is not to be construed as limiting the preceding word or words,  but the
preceding word or words are to be construed as referring to all items or matters
that could fall within the broadest  possible  interpretation  of the  preceding
word or words.

     24.2 Words and expressions used in this Agreement that have been defined in
the UCC shall be interpreted in accordance with their respective  meanings given
in the UCC, whether  expressed in this Agreement with or without initial capital
letters and whether in the singular or the plural,  unless otherwise  defined in
this  Agreement  or unless the context  otherwise  requires,  and,  wherever the
context so requires,  in this  Agreement  the  singular  shall be read as if the
plural were  expressed,  and  vice-versa,  and the  provisions of this Agreement
shall be read with all grammatical  changes necessary  dependent upon the person
referred to being a male, female, firm, or corporation.

                                       10
<PAGE>
     24.3 Should any provision of this  Agreement be declared or held invalid or
unenforceable in whole or in part or against or with respect to the Guarantor by
a court of competent jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of any or all of the remaining  provisions
of this  Agreement,  which  shall  continue  in full  force  and  effect  and be
construed  as  this   Agreement  had  been  executed   without  the  invalid  or
unenforceable provision.

     24.4 The headings of the Sections of this  Agreement have been inserted for
reference only and do not define,  limit,  alter,  or enlarge the meaning of any
provision of this Agreement.

     24.5 This Agreement  shall be governed by the laws of the State of New York
and the federal laws of the United States applicable therein.

25. MISCELLANEOUS.

     25.1 The  Guarantor  authorizes  the Secured  Party to file such  financing
statements,  financing change statements, and other documents, and do such acts,
matters, and things as the Secured Party may deem appropriate,  to perfect on an
ongoing  basis and continue the Security  Interest,  to protect and preserve the
Collateral, and to realize upon the Security Interest.

     25.2 The Guarantor waives protest of any Instrument constituting Collateral
at any time held by the Secured  Party on which the  Guarantor is any way liable
and,  subject to the provisions of the UCC,  notice of any other action taken by
the Secured Party.

     25.3 The Guarantor  covenants that it shall not  amalgamate  with any other
company or entity  without first  obtaining  the written  consent of the Secured
Party.  The Guarantor  acknowledges  and agrees that if it amalgamates  with any
other  company or  companies,  then it is the  intention of the parties that the
term  "Guarantor"  when  used  in  this  Agreement  shall  apply  to each of the
amalgamating  companies  and to the  amalgamated  company,  so that the Security
Interest granted by this Agreement:

     (a)  shall  extend to the  "Collateral"  (as that term is  defined  in this
          Agreement)  owned  by  each  of the  amalgamating  companies  and  the
          amalgamated   company  at  the  time  of   amalgamation   and  to  any
          "Collateral" owned or acquired by the amalgamated  company thereafter,
          and

     (b)  shall  secure  the  "Obligations"  (as that  term is  defined  in this
          Agreement) of each of the  amalgamating  companies and the amalgamated
          company  to the  Secured  Party  at the time of  amalgamation  and any
          "Obligations" of the amalgamated  company to the Secured Party arising
          thereafter.  The Security Interest shall attach to "Collateral"  owned
          by  each  company   amalgamating  with  the  Guarantor,   and  by  the
          amalgamated company, at the time of amalgamation,  and shall attach to
          any  "Collateral"  thereafter  owned or  acquired  by the  amalgamated
          company when that Collateral becomes owned or is acquired.

     25.4 The Guarantor  authorizes  the Secured Party to provide a copy of this
Agreement and such other  information  and documents  specified under the UCC to
any person entitled under the UCC to demand and receive them.

26. COPY OF AGREEMENT AND FINANCING STATEMENT.

     The Guarantor:

     (a)  acknowledges receiving a copy of this Agreement, and

     (b)  waives  all  rights to receive  from the  Secured  Party a copy of any
          financing  statement,  financing  change  statement,  or  verification
          statement  filed,  issued,  or obtained at any time in respect of this
          Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       11
<PAGE>
         IN WITNESS  WHEREOF the Guarantor  has executed  this  Agreement on the
date indicated above.

TRIDENT BRANDS INCORPORATED, by its authorized signatory:

By: /s/ Mark Holcombe
   ----------------------------------------
      Name: Mark Holcombe
      Title: Chairman

LPF (MCTECH) INVESTMENT CORP., by its authorized signatory:

By: /s/ Joseph Mancinelli
   ----------------------------------------
      Name: Joseph Mancinelli
      Title: President

                                       12
<PAGE>
                                  SCHEDULE "A"

                            DESCRIPTION OF COLLATERAL

                                  Annex II - 1
<PAGE>
                                  SCHEDULE "B"

                             PERMITTED ENCUMBRANCES

"PERMITTED ENCUMBRANCES" means any of the following:

     a)   liens for taxes,  assessments or governmental charges or levies not at
          the time due and  delinquent or the validity of which the Guarantor is
          contesting  in good faith and in respect of which such  Guarantor  has
          set aside, on its books,  reserves considered by the Guarantor and the
          Secured Party as adequate therefor;

     b)   undetermined  or  inchoate  liens and  charges  incidental  to current
          operations  which have not been filed  against the  Guarantor or which
          relate to obligations not due or delinquent;

     c)   the  right  reserved  to or  vested  in  any  governmental  or  public
          authority by any lease, license, franchise, grant, permit or statutory
          provision to terminate any lease, license, franchise, grant or permit,
          or to require  annual or other  period  payments as a condition of the
          continuance thereof;

     d)   the  encumbrance  resulting from the deposit of cash or obligations as
          security  when a Guarantor  is required  to do so by  governmental  or
          other public  authority or by normal  business  practice in connection
          with contracts, licenses or tenders or similar matters in the ordinary
          course of  business  and the  purpose  of  carrying  on the same or to
          secure  workers'  compensation,  surety or  appeal  bonds or to secure
          costs of litigation when required by law; and

     e)   security  given to any  public  utility or any  governmental  or other
          public  authority when required in connection with the operations of a
          Guarantor.

                                  Annex II - 2
<PAGE>
                                  SCHEDULE "C"

                             LOCATION OF COLLATERAL

LOCATION OF GUARANTOR'S BUSINESS OPERATION

       REGISTERED AGENT'S OFFICE:

       11 S. Carson Street, Suite 4. Carson City, NV 89701

       OPERATIONS OFFICE:

       200 South Executive Drive, Suite 101
       Brookfield, WI 53005

       OTHER LOCATION: N/A

       LOCATIONS OF RECORDS RELATING TO COLLATERAL

       OPERATIONS OFFICE:

       200 South Executive Drive, Suite 101
       Brookfield, WI 53005

       OTHER LOCATION: N/A

       LOCATIONS OF COLLATERAL

       OPERATIONS OFFICE:

       200 South Executive Drive, Suite 101
       Brookfield, WI 53005

       OTHER LOCATION: N/A

                                  Annex II - 3
<PAGE>
                                    ANNEX III

                 CONVERTIBLE PROMISSORY NOTE AMENDMENT AGREEMENT

                 CONVERTIBLE PROMISSORY NOTE AMENDMENT AGREEMENT

THIS AGREEMENT (the "AMENDING AGREEMENT") made the 26th day of September, 2016.

BETWEEN:

          TRIDENT BRANDS INCORPORATED,  of 200 South Executive Drive, Suite 101,
          Brookfield, WI 53005

          (the "COMPANY")

AND:

          LPF (MCTECH)  INVESTMENT  CORP.,  of 1315 North  Service Rd.  East,
          6th Floor, Oakville, ON, L6H 1A7

          ("LPF")

WHEREAS LPF is the holder of convertible  promissory  notes of the Company dated
January  29,  2016 and March 31,  2016,  in the  original  principal  amounts of
US$1,800,000 and US$500,000, respectively (the "LPF NOTES"):

AND WHEREAS,  as an  inducement  to LPF  providing  additional  financing to the
Company pursuant to that Securities  Purchase  Agreement between the Company and
LPF dated concurrently herewith, the parties wish to amend the LPF Notes;

THEREFORE in  consideration  of the premises and mutual covenants and agreements
herein  contained,  and for other good and valuable  consideration,  the parties
hereto agree as follows:

the second  sentence  of the LPF Notes shall be deleted  and  replaced  with the
following:

     "The  applicable   portion  of  the  Principal   Amount  and  the  Interest
     outstanding  shall be due and payable on September  30, 2019 subject to the
     conversion terms hereof."

Section 1.2 of the LPF Notes shall be deleted and replaced with the following:

     "Section 1.2 Interest.  Each portion of the Principal Amount  applicable to
     each Note advanced to the Company pursuant to the Purchase  Agreement shall
     bear interest from the  applicable  Issuance Date to August 31, 2016 at the
     rate of six  percent  (6%) per  annum and  thereafter  at the rate of eight
     percent  (8%)  per  annum,  calculated  daily in  arrears  based on a three
     hundred and sixty (360) day year (the "Interest").".

Section 1.4 of the LPF Notes shall be deleted and replaced with the following:

                                  Annex II - 4
<PAGE>
     Transfer.  Each Note may be transferred or sold,  pledged,  hypothecated or
     otherwise  granted as security  by the Holder,  either in whole or in part,
     subject to the  provisions  of Section 4.8 hereof,  and to prior  notice of
     same to the Company in accordance with Section 4.1 hereof.

Section 4.8 of the LPF Notes shall be deleted and replaced with the following:

     Compliance with Securities Laws. The Holder acknowledges that the Notes are
     being acquired solely for the Holder's own account and not as a nominee for
     any other party,  and for investment,  and that the Holder shall not offer,
     sell or  otherwise  dispose of the Notes except in  accordance  with and in
     reliance upon the exemption  from  securities  registration  for offers and
     sales in an "offshore  transaction" to a non-U.S.  Person  afforded,  inter
     alia, by Rule 904 under Regulation S ("Regulation S") as promulgated by the
     United  States  Securities  and Exchange  Commission  (the "SEC") under the
     Securities Act of 1933, as amended (the "1933 Act"), and/or Section 4(2) of
     the 1933 Act. The Notes and any Note issued in  substitution or replacement
     therefor shall be stamped or imprinted with a legend in  substantially  the
     following form:

     "EACH  CONVERTIBLE  PROMISSORY NOTE ("NOTE") HAS NOT BEEN REGISTERED  UNDER
     THE  SECURITIES  ACT OF 1933,  AS AMENDED (THE "1933 ACT"),  OR  APPLICABLE
     STATE  SECURITIES  LAWS,  AND MAY NOT BE  SOLD,  TRANSFERRED  OR  OTHERWISE
     DISPOSED OF IN THE ABSENCE OF SUCH  REGISTRATION  OR RECEIPT BY THE COMPANY
     OF AN  OPINION  OF  COUNSEL  IN THE FORM,  SUBSTANCE  AND SCOPE  REASONABLY
     SATISFACTORY  TO THE COMPANY  THAT EACH NOTE MAY BE SOLD,  TRANSFERRED,  OR
     OTHERWISE  DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE 1933
     ACT AND SUCH STATE SECURITIES LAWS."

The  parties  further  agree that the intent and the wording of the LPF Notes be
and are  hereby  amended  for such  additional  changes as may be  necessary  or
incidental  in order to give  effect  to the  foregoing  agreement  between  the
parties.

Except as hereby  amended,  the LPF Notes shall  remain  un-amended  and in full
force and effect.

This Amending  Agreement  shall be subject to, and become  effective  upon,  the
initial Closing Date (as defined therein) of the Securities  Purchase  Agreement
dated September 26, 2016 between the Company and LPF.

This Amending  Agreement shall enure to the benefit of, and be binding upon, the
parties hereto and their respective successors and permitted assigns.

This Amending  Agreement  shall be construed and  interpreted in accordance with
the laws of the State of Nevada.

                                  Annex II - 5
<PAGE>
IN WITNESS WHEREOF the parties have properly executed this amending agreement as
of the day and year first above written.

TRIDENT BRANDS INCORPORATED.

Per: /s/ Mark Holcombe
    -----------------------------------
    Chairman

LPF (MCTECH) INVESTMENT CORP.

Per: /s/ Joseph Mancinelli
    -----------------------------------
    President

Per: /s/ Carmen Principato
    -----------------------------------
    Director

                                  Annex II - 6
<PAGE>
                                    ANNEX IV

                             [TABLE TO BE INSERTED]

                                  Annex II - 7

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