Document:

Exhibit
10.10

 

LOAN
AGREEMENT

 

 

 

Dated
as of August 3, 2015

 

 

 

between

 

 

 

KNIGHT
THERAPEUTICS INC.

 

 

 

as
Lender

 

 

 

-
and -

 

 

 

EMBER
THERAPEUTICS, INC.

 

 

 

as
Borrower

    

    	 	 	 

    

Table
of Contents

 

	ARTICLE 1 DEFINITIONS	1
	1.1 General Definitions	1
	1.2 Schedules and Exhibits	11
	1.3 Accounting Terms and Definitions	11
	1.4 Supplements, Re-enactments, Etc.	12
	1.5 Headings of Subdivisions	12
	1.6 Gender and Number	12
	1.7 Monetary References	12
	1.8 Actions on Days Other Than Business Days	12
	ARTICLE 2 TERMS OF THE LOAN	12
	2.1 The Loan	12
	2.2 Maturity Date	12
	ARTICLE 3 PAYMENT	13
	3.1 Payments on Principal	13
	3.2 General Matters	13
	ARTICLE 4 INTEREST, FEES AND CHARGES	13
	4.1 Interest Rate	13
	4.2 Payment of Interest	13
	4.3 Default Rate of Interest	13
	4.4 Computation of Interest and Fees	13
	4.5 Maximum Interest	14
	4.6 Origination Fee	14
	4.7 Work Fee	14
	4.8 Lender's Expenses	14
	4.9 Illegality	14
	ARTICLE 5 TERMINATION AND REDUCTION	15
	5.1 Termination	15
	5.2 Continuing Obligations	15
	ARTICLE 6 SECURITY AND COLLATERAL	15
	6.1 Security Delivered on the Closing Date	15
	6.2 Further Assurances	15
	6.3 Security Effective Notwithstanding Date of Loan	16
	6.4 No Merger	16
	6.5 Release of Security	16
	ARTICLE 7 REPRESENTATIONS AND WARRANTIES	16
	7.1 Representations and Warranties	16
	7.2 Survival of Representations and Warranties	22
	ARTICLE 8 SCHEDULES AND REPORTS	23
	8.1 Financial Information	23
	8.2 Compliance Certificate	23
		

 

    	 	i	 

    	 	 	 

    

	8.3 Other Matters	23
	ARTICLE 9 COVENANTS	23
	9.1 Positive Covenants of the Borrower	23
	9.2 Negative Covenants of the Borrower	29
	9.3 Entitled to Perform Covenants	30
	9.4 Covenants of the Lender	31
	ARTICLE 10 CONDITIONS PRECEDENT	31
	10.1 Conditions Precedent to Loan	31
	ARTICLE 11 EVENTS OF DEFAULT	33
	11.1 Events of Default	33
	11.2 Acceleration and Termination of Rights	35
	11.3 Remedies Cumulative and Waivers	35
	11.4 Saving	36
	11.5 Third Parties	36
	11.6 Set-Off or Compensation	36
	ARTTCLE 12 INDEMNIFICATION, ETC.	36
	12.1 General lndemnity	36
	12.2 Taxes	37
	ARTICLE 13 GENERAL PROVISIONS	37
	13.1 Notice	37
	13.2 Choice of Governing Law and Construction	38
	13.3 Attornment	38
	13.4 Press Releases	38
	13.5 Modification and Benefit of Agreement	39
	13.6 Waivers, Confidentiality, Information Sharing	39
	13.7 Judgment Currency	40
	13.8 Severability	40
	13.9 Conflicts	40
	13.10 Entire Agreement	40
	13.11 Counterpart Execution/Electronic Delivery	40

 

    	 	ii	 

    	 	 	 

    

LOAN
AGREEMENT

 

THIS
LOAN AGREEMENT is
made with effect
as of the
3rd day of
August, 2015, by
and between EMBER THERAPEUTICS, INC.,
a company incorporated under the laws of Delaware (the "Borrower")
and KNIGHT THERAPEUTICS INC., a corporation formed under the laws of Canada,
and one or more Persons to whom the foregoing or their permitted assigns may from
time to time assign an interest in the Loan Documents (as defined below) (collectively,
the "Lender").

 

RECITALS

 

WHEREAS
the Borrower desires
that the Lender extend the
Loan (as defined
below) to the Borrower and the
Lender has indicated
its willingness to
lend on the
terms and conditions set forth
herein; and

 

WHEREAS
the parties wish
to provide for
the terms and conditions
upon which the
Loan will be
made;

 

NOW
THEREFORE, in consideration
of the premises
and the mutual
covenants hereinafter contained
and for other
good and valuable
consideration, the receipt
and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.

 

ARTICLE
1

DEFINITIONS

 

		1.1	General
                                         Definitions

 

In
this Agreement the
following terms will
have the following
meanings:

 

"Acquisition" means, with respect to any Person, any purchase or other acquisition by such Person,
regardless of how accomplished or
effected (including any such purchase or other acquisition effected by way of
amalgamation, merger, arrangement, business combination or other form
of corporate reorganization or by way of purchase, lease
or other acquisition arrangements),
of (a) any other Person (including any purchase or acquisition of such number of
the issued and outstanding securities of, or such portion of an Equity Interest
in, such other Person so that such other Person becomes a Subsidiary of the
purchaser or of any of its Affiliates)
or of all or substantially all of the
Property of any other Person, or
(b) any division, business, operation or undertaking of any other Person or of all
or substantially all of the
Property of any division, business, operation or
undertaking of any other Person.

 

"Action
Request" means any
request from any
Governmental Authority under
any Environmental Law whereby
such body or
agency requests that
the Person requested
takes action or
steps or does
acts or things in respect of any Property
in its charge, management or control to
remediate a matter which is not or
is alleged not to be
in compliance with
all Environmental Laws, except where such
non-compliance would not reasonably be expected to have a Material Adverse
Effect.

 

"Affiliate"
means: (a) any Person
which, directly or
indirectly, controls, is
controlled by or
is under common control
with any other Person; (b) any Person
which beneficially owns or holds, directly
or indirectly, 50% or more
of any class of voting shares or Equity
Interest (including partnership interests) of any other Person; or (c) any Person, 50% or more of any class of the
voting shares (or if such Person is not a corporation, 50% or more
of the Equity Interest, including partnership
interests) of which is beneficially owned or held, directly or indirectly,
by any other Person. For the purposes of this definition, control of any Person (including
the terms "controlled by" and "under common control with") means the possession, directly or
indirectly, of the power to elect or appoint
a majority of the board of directors

    	 	1	 

    	 	 	 

    

 

 

of,
or persons performing
similar functions in
respect of, such
Person, whether through
the ownership of voting
securities, by contract,
or otherwise.

 

"Agreement"
means
this agreement and
all schedules attached hereto;
the expressions "hereof",
"herein", "hereto", "hereunder", "hereby" and
similar expressions refer
to this Agreement, as
amended, restated or supplemented from time to time, as a whole and not to any
particular Article, Section, Schedule, or
other portion hereof or thereof.

 

"Applicable
Law" means (a) any domestic or foreign statute, law (including common and civil law), treaty,
code, ordinance, rule, regulation, restriction or
by-law (zoning or otherwise); (b)
any judgment, order, writ, injunction, decision, ruling, decree
or award; (c) any regulatory policy, practice, guideline or
directive; or (d)    any franchise, licence, qualification,
authorization, consent, exemption, waiver, right, permit or other approval of any
Governmental Authority, binding on or
affecting the Person referred to in the context in which the term is used or binding on or affecting the property of such
Person, in each case whether or not having the force of law.

 

"Audited
Financial Statements" means
the audited Consolidated
statement of financial
position of the Borrower
for the Fiscal
Year ended December 31, including,
without limitation, balance sheet, statement of income and retained earnings and statements
of cash flows for such
Fiscal Year prepared in accordance with
GAAP.

 

"BMP-7"
means Bone Morphogenic
Protein 7.

 

"Board"
means the Borrower's
board of directors.

 

"Borrower"
means
Ember Therapeutics, Inc.,
a company incorporated
under the laws
of Delaware, and its
permitted successors and assigns.

 

"Business"
means
the development and
commercialization of pharmaceutical products
including, without limitation, MT-006,
MT-007 and MT-008.

 

"Business
Day" means
a day (other
than Saturday or
Sunday) on which
banks are generally
open for business in Montreal,
Quebec and New York, New York.

 

"Capital
Expenditures" means,
for any period,
any expenditure made
by any Person
for the purchase, lease,
acquisition, licence, erection, development, improvement, construction, repair
or replacement of capital assets, and
any expenditure related to
a Capital Lease or
any other expenditure required to be capitalized, all as determined
in accordance with GAAP.

 

"Capital
Lease" means,
with respect to
any Person, any
lease of (or
other agreement conveying
the right to use)
any real or personal property by such
Person that, in conformity with
GAAP, is or should be accounted for as a capital lease on
the balance sheet of that Person.

 

"Cash
Balance Statement" has the
meaning ascribed to
it in Section
9.1(z).

 

"Change
of Control" means,
with respect to
the Borrower, the
acquisition by any
Person or group
of Persons who act together in
concert for such purpose
of (a) shares or other voting Equity Interests of the Borrower to which are
attached more than 50% of the votes that
may be cast to elect directors or other Persons charged with the direction of
the management of the Borrower and which, if
exercised, are sufficient to elect a
majority of such directors or
other management Persons, or (b) any other
right to

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appoint
a majority of
such directors or
other management Persons
or with respect
to any Person
who from time to time
has previously met the foregoing test
the further acquisition by such Person or group of Persons who act together in concert
for such purpose of any further units or other
voting Equity Interests of the Borrower.

 

"Closing
Date" means August
4, 2015 or
such other date
on which the
Loan is made.

 

"Collateral"
means
all of the undertaking
and Property, present and
future, real, immovable, personal
and movable, of Borrower or
its Affiliates, now
or hereafter pledged,
hypothecated, granted or
assigned to the Lender
to secure, either
directly or indirectly , repayment on
account of payment of any of the Obligations.

 

"Compliance
Certificate" means
the certificate required
pursuant to Section
8.2, substantially in
the form annexed
as Schedule
8.2 and signed by a
director of the Borrower.

 

"Consolidated"
means,
when used to modify
a financial term,
test, statement, or
report of a
Person, the application or preparation
of such term,
test, statement or report (as applicable) based upon the consolidation,
in accordance with GAAP, of the financial condition or operating results of
such Person.

 

"Contingent
Obligation" means,
as to any
Person, any obligation,
whether secured or
unsecured, of such Person
guaranteeing or indemnifying
, or in effect guaranteeing or indemnifying, any indebtedness, leases,
dividends, letters of credit or other monetary obligations (the "primary obligations")
of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including any
obligation of such Person as an account
party in respect of a letter of
credit or letter of guarantee issued to assure payment
by the primary obligor of any such primary obligation
and any obligations of such Person, whether or not contingent, (a) to purchase
any such primary obligation or any Property constituting
direct or indirect security therefor,
(b) to advance or supply funds for the
purchase or payment of any such primary obligation
or to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor,
(c) to purchase Property, Equity
Interests or services primarily for
the purpose of assuring the obligee under any such primary obligation of the
ability of the primary obligor to make payment
of such primary obligation , or (d) otherwise
to assure or hold harmless the
obligee under such primary obligation against
loss in respect of such primary obligation; provided, however, that the term "Contingent
Obligation" will not include endorsements of instruments for deposit
or collection in the ordinary course of business.

 

"Controlled
Group" means,
in
respect of the
Borrower operating in
the United States,
all members of
a controlled group of
corporations and all trades or businesses
(whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as
a single employer under Sections 414(b) and (c) of the
Revenue Code.

 

"Debt" means, with respect to any Person, without duplication, the aggregate of the following amounts ,
at the date of determination: (a) all indebtedness
of such Person for borrowed money;
(b) all obligations of such Person for
the deferred purchase price of Property or services
which constitute indebtedness; (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments; (d) all
obligations of such Person created or arising under any conditional
sale or other title retention agreement
with respect to Property acquired by such Person (whether
or not the rights and remedies of the
seller or lender under such agreement in the event of default are limited
to repossession or sale of such
Property); (e)    all obligations of
such Person as lessee under
leases that have been or should be,
in accordance with GAAP, recorded as
finance leases; (f) all reimbursement obligations , contingent or otherwise, of such Person under acceptance, letter of
credit and similar facilities; (g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any partnership or shareholder or other

    	 	3	 

    	 	 	 

    

 

equity
interests of such
Person (for greater
certainty, not including obligations
with respect to unexercised options and
rights of first
refusal and where
conditions precedent to the
purchase, redemption, retirement, defeasance or other acquisition of such obligations have not
occurred); (h) all Contingent Obligations of such Person in respect of Debt
of another Person; and (i) any other obligation arising under arrangements or
agreements that, in substance, provide
financing to such
Person.

 

"Deemed
Interest Rate" means
the interest rate
applicable to the
Loan as set
out in Section
4.1 or 4.3, as
the case may
be, from time to time.

 

"Default"
means
any event or
condition which, with
the giving of
notice, the lapse
of time or
both, would constitute an Event
of Default.

 

"Disposition"
means
any sale, assignment,
transfer, conveyance, lease
or other disposition of
any asset of Borrower
in a single transaction or
a series of related transactions and the word "Dispose"
has a correlative meaning.

 

"Distribution" means, with respect to any Person, any payment, directly or indirectly, by such Person:
(a)    of any dividends
on any shares of
its capital, other than dividends
payable in shares; (b)
on account of, or for the purpose of
setting apart any property for a sinking or other analogous fund for, the purchase, redemption, retirement or other
acquisition of any Equity Interests; (c) of any other distribution in
respect of any Equity Interests; or (d) of any management, consulting or similar fee or compensation or
any bonus payment or comparable payment, or by
way of gift or other gratuity, to any
Affiliate of such Person or to any director, officer
or member of the management of such Person or an Affiliate of such Person or to any Person not
dealing at arm's length with such first Person
(for greater certainty,
compensation (including bonuses)
paid by Borrower in the course of its business
to directors, officers and members of management of Borrower will not constitute Distributions hereunder).

 

"Environmental Laws" means
all Applicable Laws
relating to Materials
of Environmental Concern,
pollution or protection
of health, safety
or the environment
(including ambient air, surface water,
ground water, land surface or subsurface strata), including without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the manufacturing, processing, distribution,
use, treatment, storage, disposal or transport of Materials of Environmental Concern.

 

"Equipment"
means
all machinery, apparatus,
equipment, fittings, furniture, fixtures,
motor vehicles and other
tangible personal or movable
Property (other than Inventory)
of every kind and description
used in a Person's operations or owned by such Person or in which such Person
has an interest, whether now owned or hereafter
acquired by such Person and wherever located, and
all parts, accessories and tools
and all increases and accessories thereto
and substitutions and replacements therefor.

 

"Equity
Commitment" has the
meaning ascribed to
it in Section
9.4(a)(i).

 

"Equity
Raise" has the
meaning ascribed to
it in Section
9.1(x).

 

"Equity
Interests" means
(a) in the
case of any
corporation or company,
all shares or
capital stock and any
securities exchangeable for
or convertible into shares
or capital stock,
(b) in the case of an association
or business entity, any and all shares, interests, participation rights or
other equivalents of corporate stock
(however designated) in or to
such association or entity,
(c) in the case of a partnership, limited liability company or unlimited liability
company, partnership or membership interests (whether general or limited), as
applicable, and (d) any other
interest or participation that confers
on a Person the

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right
to receive a
share of the
profits and losses
of, or distribution
of assets of,
the issuing Person,
and including, in all
of the foregoing cases described in
clauses (a) to (d), any warrants, rights or
other options to purchase or otherwise acquire any of the interests described in
any of the foregoing cases.

 

"ERISA"
means the Employee
Retirement Income Safety
Act of 1974
of the United
States, together withthe regulations
thereunder as the
same may be amended from
time to time.

"ERISA
Plan" means
any employee pension
benefit plan covered
by Title IV
of ERISA or
subject to the minimum
funding standards under Section
412 of the Revenue Code
(other than a multiemployer plan) that
either (a) is maintained by
the Borrower, or (b) with respect
to which the Borrower has or may have
liability.

 

"Event
of Default" has
the meaning ascribed
to it in
Section 11.1.

 

"Financial
Statements" means
the statements of
financial position of
the Borrower, including
without limitation, the balance
sheet, statement of
income and retained earnings and
statement of cash flows of the Borrower, the Cash Balance Statement, all
prepared in accordance with GAAP and consistent
with the approach used by the Borrower in its Audited Financial Statements.

 

"Fiscal
Quarter" means
any of the
quarterly accounting periods
of the Borrower
ending on March
31, June 30, September
30, and December 31 of
each year.

 

"Fiscal
Year" means
any period of
twelve consecutive months
ending on December
31 of any
calendar year.

 

"GAAP"
means United States
generally accepted accounting
principles applied on
a consistent basis.

 

"Governmental
Authority" means
the government of
Canada, the United
States or any
other nation,
or of any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government, including any supranational
bodies such as the European Union
or the European Central Bank and including a
Minister of the Crown, Superintendent of Financial Institutions or other comparable
authority or agency.

 

"Indemnified
Party" has the
meaning ascribed to it
in Section 12.1.

 

"Intellectual
Property" means
the intellectual property
in patents, patent
applications, trade-marks, trade-
mark applications, trade
names, service marks,
copyrights, copyright registrations
and trade secrets including, without limitation, customer lists
and information and business opportunities,
industrial designs, proprietary software, technology, recipes and formulae and other
similar intellectual property rights.

 

"Interest
Payment Date" means
the days falling
three months, six
months, nine months
and 12 months after
the Closing Date,
and the anniversary
of each of those dates
in each year until the Maturity Date.

 

"Inventory"
means,
with respect to
any Person, all
inventory of such
Person, whether now
owned or hereafter acquired including,
but not limited to, all goods intended for sale or lease by such Person, or for display
or demonstration; all work in process; all raw materials and other materials and supplies of every nature and description used
or which might be used in connection with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in
such Person's business.

 

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"Lender"
means
Knight Therapeutics Inc.,
a corporation formed
under the laws
of Canada, and
one or more Persons
to whom the foregoing or their permitted
assigns may from time to time
assign an interest in the Loan
Documents.

 

"Lender
Distribution Agreement" means
the proposed license
and distribution agreement between Borrower and
Lender by which
Lender will have
the exclusive distribution rights to the Licensed
Products, as such term is defined therein.

 

"Lender's
Nominee" has the
meaning ascribed to it
in Section 9.1(aa).

 

"LIBOR"
means the Intercontinental
Exchange London Interbank
Offered Rate.

 

"Lien"
means:
(a) any interest
in Property securing
an obligation owed
to, or a
claim by, a
Person, whether such interest is based on the common law, civil law, statute,
or contract, and including, without limitation, a security
interest, charge, claim, hypothec or
lien arising from a mortgage, deed of trust,
hypothec, encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security purposes;
and (b) to the extent
not included under
clause (a), (i) any rights of repossession
or similar rights of unpaid suppliers,
(ii) any reservation, exception, encroachment, easement, right-of-way, covenant, condition,
restriction, lease or other title exception or encumbrance affecting Property, and (iii) any other lien, hypothec, charge,
privilege, secured claim, title retention, garnishment right, deemed trust, encumbrance or other
right affecting Property, choate or inchoate, whether or not crystallized or
fixed, whether or not for amounts due or accruing due, arising by any statute or law of any jurisdiction, at law, in equity or
by any agreement.

 

"Loan"
has the meaning
ascribed to it
in Section 2.1
hereof.

 

"Loan
Documents" means
(a) this Agreement
and the Security
Documents; and (b)
all present and
future security, agreements
and documents labelled by Borrower and Lender as a Loan Document; in
each case as the same may from time to time be supplemented,
amended or restated, and "Loan Document"
means any one of the
Loan Documents.

 

"Losses"
has the meaning
ascribed to it in
Section 12.1.

 

"Make-whole
Payment" means,
in the event
of the repayment
of the Loan
prior to the
Maturity Date, an amount
equal to the interest payable on
the outstanding principal amount
of the Loan calculated at
the interest rate set forth in Section 4.1
from the date of repayment
until the Maturity Date.

 

"Mariel"
means Mariel Therapeutics,
Inc., the parent
company of the
Borrower.

 

"Mariel
Guaranty" means
the guaranty between
Mariel and the
Lender pursuant to
which Mariel has guaranteed
all of the obligations of Borrower hereunder.

 

"Material
Adverse Effect" means
(a) a material
adverse effect on
the business, operations,
properties, assets, or financial condition
of the Borrower or any Affiliate of the
Borrower who has provided Collateral on a consolidated basis, (b) an adverse
effect on the legality, validity or
enforceability of any of the Loan Documents which could reasonably
be considered material having regard to the Loan Documents considered as a
whole, including the validity, enforceability, perfection or priority of any Lien created under any
of the Security which could reasonably
be considered material having regard to
the Security considered as a whole and
(c) a material adverse
effect on the ability of
Borrower to pay or perform any

    	 	6	 

    	 	 	 

    

 

 

of
its debts, liabilities
or obligations under
any of the
Loan Documents, which
could reasonably be considered
material.

 

"Material
Contracts" means,
collectively, each written
agreement (or multiple
agreements with the
same Person), arrangement or
understanding entered into
by Borrower and
any Affiliate of
the Borrower who has provided Collateral which, if not complied with, or expires,
or is terminated, could reasonably be expected to have a Material Adverse Effect.

 

"Material
Licences" means,
collectively, each licence, permit
or approval issued
by any Governmental Authority
or any applicable
stock exchange or
securities commission to Borrower
and any other Affiliate of the Borrower who has provided Collateral, the breach or
default of which, or termination of, could reasonably be expected to result in a Material Adverse
Effect.

 

"Materials
of Environmental Concern"
means
any chemicals, pollutants,
contaminants, wastes, toxic substances,
petroleum, petroleum products,
together with any hazardous, toxic
or dangerous substances, materials and wastes, including, without
limitation, hydrocarbons (including naturally
occurring or man- made petroleum and hydrocarbons), flammable explosives, asbestos,
urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated
biphenyls, pesticides, herbicides and any
other kind and/or type of pollutants or contaminants (including, without limitation,
materials which include hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other
similar substances, materials or wastes and including any other substances,
materials or wastes that are or become regulated under any laws relating to the protection
of the environment or maintenance of occupational
safety (including, without limitation, any that are or become classified as hazardous
or toxic under any such laws).

 

"Maturity
Date" has the meaning
ascribed to it
in Section 2.2.

 

"Obligations"
means
all present and
future obligations and
indebtedness, of any
and every kind
and nature, of Borrower
to the Lender arising
under this Agreement and the other
Loan Documents, whether now or hereafter existing, whether now due or to
become due, whether primary, secondary, direct, indirect, absolute, contingent
or otherwise (including without limitation,
obligations of performance), whether several or joint or joint and
several.

 

"OFAC"
means The Office
of Foreign Assets
Control of the
US Department of
the Treasury.

 

"Organizational
Documents" means,
with respect to
any applicable Person,
such Person's articles
or other charter or
constitutional documents, by-laws,
shareholder agreement, partnership agreement, joint venture agreement, limited liability
company agreement or trust agreement, as applicable, and any and all other similar
agreements, documents and instruments relative to such Person.

 

"Patriot
Act" has the
meaning ascribed to
it in Section
9.1(v).

 

"PBGC"
means
the Pension Benefit
Guaranty Corporation or
any Person succeeding
to any or
all of its functions
under ERISA.

 

"Pension
Plan" means
(a) a "pension plan" or "plan" which is subject to the funding requirements of
applicable pension benefit legislation in any jurisdiction as
is applicable to the employees of Borrower; or (b)    any pension benefit
plan or similar agreement applicable to employees of Borrower, other than a plan
sponsored by a Governmental Authority which, for greater certainty, includes an ERISA Plan.

    	 	7	 

    	 	 	 

    

 

"Permitted
Debt" means:

 

		(a)	Debt
                                         under this
                                         Agreement;

 

		(b)	Debt
                                         in respect
                                         of Purchase
                                         Money Security
                                         Interests and
                                         Capital Leases
                                         in an outstanding
                                         amount not
                                         to exceed $25,000 in aggregate at any
                                         time;

 

		(c)	Subordinated
                                         Debt;

 

		(d)	Debt
                                         consented to
                                         in writing
                                         by the
                                         Lender from
                                         time to
                                         time and
                                         subject to
                                         the terms imposed
                                         by the
                                         Lender in connection with such consent;
                                         and

 

		(e)	to
                                         the extent
                                         included as
                                         Debt, accounts
                                         payable that
                                         arise, and
                                         accrued expenses incurred
                                         in, the
                                         ordinary course
                                         of business
                                         including any indebtedness incurred in connection with an Equity
                                         Raise.

 

"Permitted
Disposition" means
(a) the Disposition
of Inventory in
the ordinary course of business;
(b) the Disposition of
used, worn-out or
surplus Equipment in the ordinary
course of business; (c) other Dispositions
to the extent that no Default
or Event of Default
exists and the fair market value of the assets Disposed of pursuant to this
clause (c) does not exceed during any Fiscal Year $25,000; and (e) a Disposition under a distribution agreement
contemplated by the Lender Distribution Agreement;

 

"Permitted
Distribution" means
fees and compensation
(including bonuses) paid
by Borrower in
the course of its
business to directors, officers and members
of management of Borrower in accordance
with Schedule 9.2(p);

 

"Permitted
Liens" means, with
respect to any
Person, the following:

 

		(a)	any
                                         lien arising
                                         by operation
                                         of law
                                         and in
                                         the ordinary
                                         course of
                                         trading and
                                         not as
                                         a result of
                                         any default or omission by
                                         the Borrower;

 

		(b)	any
                                         Lien arising
                                         under any
                                         retention of
                                         title, hire
                                         purchase or
                                         conditional sale arrangement
                                         or arrangements
                                         having similar
                                         effect in respect of goods supplied
                                         to the Borrower in the ordinary course of trading and on the supplier's standard or usual
                                         terms and not arising as a result of any default or omission by the Borrower;

 

		(c)	liens
                                         for Taxes
                                         not yet
                                         due or
                                         for which
                                         installments have
                                         been paid based
                                         on reasonable estimates
                                         pending final
                                         assessments, or if due, the validity
                                         of which is being contested diligently and
                                         in good
                                         faith by appropriate proceedings by
                                         that Person for which reasonable reserves
                                         under GAAP
                                         are maintained;

 

		(d)	undetermined
                                         or inchoate
                                         liens, rights of
                                         distress and
                                         charges incidental
                                         to current operations
                                         which have
                                         not at
                                         such time
                                         been filed or
                                         exercised and of
                                         which the
                                         Lender has been given notice, or which relate
                                         to obligations not due or payable, or if. due, the validity
                                         of which is being contested
                                         diligently and in good faith
                                         by appropriate proceedings by that Person;

 

		(e)	reservations,
                                         limitations, provisos
                                         and conditions
                                         expressed in
                                         any original
                                         grants from the
                                         Crown or other
                                         grants of real
                                         or immovable
                                         property, or interests therein;

    	 	8	 

    	 	 	 

    

 

		(f)	zoning,
                                         land use
                                         and building
                                         restrictions, by-laws,
                                         regulations and
                                         ordinances of
                                         federal, provincial, state,
                                         municipal and
                                         other Governmental
                                         Authorities, licences,
                                         easements, servitudes, rights-of-way
                                         and rights
                                         in the nature of
                                         easements (including, without limiting the generality of the foregoing, licences,
                                         easements, servitudes, rights-of-way and
                                         rights in the nature of easements for railways, sidewalks, public ways, sewers,
                                         drains, gas, steam
                                         and water mains or electric light and power,
                                         or telephone and telegraph conduits, poles, wires and cables) which do not
                                         materially impair the use of the affected
                                         land for the purpose for which it is used
                                         by that Person;

 

		(g)	title
                                         defects, encroachments
                                         or irregularities
                                         or other
                                         matters relating
                                         to title which
                                         are of a
                                         minor nature
                                         and which
                                         in the
                                         aggregate do not materially impair
                                         the use of
                                         the affected property
                                         for the purpose for which it is used
                                         by that
                                         Person;

 

		(h)	the
                                         right reserved to
                                         or vested
                                         in any
                                         municipality or
                                         governmental or
                                         other public authority
                                         by the
                                         terms of
                                         any lease,
                                         licence, contract,
                                         franchise, grant or permit
                                         acquired by that Person
                                         or by
                                         any statutory provision
                                         to terminate any such lease,
                                         licence, contract, franchise, grant
                                         or permit,
                                         or to require annual or other
                                         payments as a condition to the continuance
                                         thereof;

 

		(i)	the
                                         Lien resulting
                                         from the
                                         deposit of
                                         cash or
                                         securities in
                                         connection with
                                         contracts, tenders or
                                         expropriation proceedings,
                                         or to
                                         secure workers
                                         compensation, employment insurance, surety, appeal bonds or costs of litigation
                                         when required by law not to exceed $25,000
in aggregate outstanding
at any time,
liens and claims
incidental to current construction,
mechanics', warehousemen's, carriers'
and other similar liens, and public, statutory and other like obligations incurred
in the ordinary course of business;

 

		(j)	security
                                         given to
                                         a public
                                         utility or
                                         any municipality
                                         or Governmental
                                         Authority when required by
                                         such utility
                                         or authority
                                         in connection
                                         with the operations of that Person
                                         in the ordinary course of its business provided that such
                                         security does not materially impair
                                         the use of the affected property
                                         for the purpose for which it is used
                                         by that Person;

 

		(k)	the
                                         Lien created
                                         by a
                                         judgment of
                                         a court
                                         of competent
                                         jurisdiction, as
                                         long as
                                         the judgment is
                                         being contested
                                         diligently and in good faith by appropriate
                                         proceedings by that Person and does not result
                                         in an Event of Default;

 

		(l)	the
                                         Security;

 

		(m)	Purchase
                                         Money Security
                                         Interests and
                                         Capital Leases,
                                         provided that
                                         such Liens
                                         secure Permitted Debt;

 

		(n)	The
                                         liens taken
                                         by Stryker
                                         Biotech L.L.C.
                                         and Stryker
                                         Corporation for
                                         which a
                                         cession of rank
                                         will be
                                         granted pursuant
                                         to the
                                         lntercreditor and
                                         Subordination Agreement
                                         dated the date
                                         hereof; and

 

		(o)	such
                                         other Liens
                                         as agreed
                                         to in
                                         writing by
                                         the Lender
                                         in accordance
                                         with this Agreement.

 

"Person"
 means
any  individual, sole
proprietorship,  partnership, joint
 venture,  trust, 
unincorporated organization, association,
corporation, institution, entity,
party or foreign or local government (whether

    	 	9	 

    	 	 	 

    

 

 

federal,
provincial, state, county,
city, municipal or
otherwise), including, without
limitation, any instrumentality, division,
agency, body or
department thereof.

 

"Product"
means
each current and
future product, process
or service under
development, developed, manufactured,
licensed, distributed, marketed or
sold by Borrower and any other current ·or future products or services in which
Borrower has any proprietary rights or beneficial interests.

 

"Prohibited
Transaction" means
any transaction set
forth in Section
406 of ERISA,
or Section 4975
of the Revenue Code, to
the extent that such transaction is not otherwise exempt by Applicable
Law.

 

"Property"
means,
with respect to
any Person, all
or any portion
of its undertaking,
property or asset, whether
real, immovable, personal,
movable, or mixed, tangible or intangible, including for greater certainty
any Equity Interests of a corporation or ownership interest in any other Person.

 

"Purchase
Money Security Interest"
means
a Lien created
or assumed by
Borrower securing Debt incurred
to finance the
unpaid acquisition price of
personal Property provided that
(a) such Lien is created concurrently with or before the acquisition of such personal Property, (b) such Lien does not at
any time encumber any Property
other than the Property financed or refinanced (to the extent the
principal amount is not increased) by such Debt, (c) the principal amount of
Debt secured thereby is
not increased subsequent to such acquisition, and
(d) the principal amount of Debt
secured by any such Lien at no time exceeds
100% of the original purchase price of such personal Property at
the time it was acquired, and for the purposes of this definition the
term "acquisition" includes a Capital Lease and the term "acquire" will
have a corresponding meaning.

 

"Regulatory
Authority" means
any Governmental Authority
that has responsibility
in any country
or group of countries
over the development, manufacture
or commercialization of a Product, including
the

U.S.
Food
and Drug Administration,
Health Canada and the European Medicines
Agency and any
successor agency thereof.

 

"Reportable
Event" means
any of the
events set forth
in Section 4043
of ERISA, other
than an event
for which the provision
of notice has
been waived.

 

"Requirements
of Law" means,
as to any
Person, the Organizational
Documents of such
Person and any Applicable
Law, or determination of a Governmental
Authority, in each case, applicable to or binding upon such Person or any of
its business or Property
or to which such Person or any of
its business or Property is subject.

 

"Revenue
Code" means
the United States
Internal Revenue Code
of 1986, as
amended from time
to time, or any successor statute
thereto, and the regulations and published interpretations thereof.

 

"Sanctioned
Entity" means
(a) a country or
a government of
a country, (b) an agency
of the government of
a country, (c)
an organization directly
or indirectly controlled by a country
or its government, (d) a Person resident in a country, in each case,
that is subject to a country sanctions program administered and enforced by OFAC.

 

"Sanctioned
Person" means
a person named
on the list
of Specially Designated
Nationals maintained by OFAC.

 

"Security"
means the Liens
created by the
Security Documents.

    	 	10	 

    	 	 	 

    

 

"Security
Documents" means the
documents set out
in Section 6.1.

 

"Subordinated
Debt" means
Debt that is
subordinated to the
Obligations on terms
acceptable to the Lender.

 

"Subsidiary"
means,
with respect to
a Person, any
corporation of which
more than 50%
of the outstanding capital
stock having ordinary voting
power to elect a majority of the board
of directors of such corporation (irrespective of
whether at the time stock
of any other class of such
corporation will have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly,
owned by the Person or by any
partnership or other corporate entity of which
more than 50% of the outstanding equity
interests are at the time, directly or indirectly, owned by the
Person.

 

"Taxes"
has the meaning ascribed
to it in
Section 12.2

 

"Violation
Notice" means
any notice received
by a Person,
from any Governmental
Authority under any Environmental
Law that such
Person or any of its
Property is not in compliance with
the requirements of any Environmental Law, if
such non-compliance would reasonably be expected to have a Material Adverse Effect.

 

"Warrant"
means
the common stock
purchase warrants of
the Borrower is
favour of the
Lender issued in connection
with an Equity Raise,
as defined in Section 9.1(y).

 

"Welfare
Plan" means
any medical, health,
hospitalization, insurance or
other employee benefit or welfare
plan, agreement or
arrangement subject to
ERISA and applicable
to employees of Borrower and includes a "welfare
plan" as defined in Section 3(1)
of ERISA.

 

		1.2	Schedules
                                         and Exhibits

 

The
following are the
Exhibits and Schedules
to this Agreement,
which are deemed
to be a
part of this Agreement:

 

Schedule
7.1(f)–Intellectual Property

Schedule
7.1(g)–Current and Prior Names

Schedule
7.1(j)–Material Contracts and Material Licences

Schedule
7.1(r)–Location of Collateral

Schedule
7.1(z)–Insurance

Schedule
7.1(cc)–Quality and Quantity of BMP 7

Schedule
8.2–Compliance Certificate

Schedule
9.1(f) –Use of Proceeds

Schedule
9.2(p)–Directors Fees and Management Compensation

Schedule
11.1(f)–Excluded Payments

 

		1.3	Accounting
                                         Terms and
                                         Definitions

 

Unless
otherwise defined or
specified herein,
all defined terms
in Section 1.1
as used in
this Agreement will
have the meanings
set out in such
paragraph, and all accounting terms used in
this Agreement will be construed
in accordance with GAAP, applied on a basis consistent in all material respects with
the annual Audited Financial Statements, except as otherwise specifically prescribed herein. All accounting determinations for
purposes of determining compliance with the financial
covenants contained herein will be made
in accordance with GAAP as in effect on
the Closing Date (unless and to the
extent otherwise stipulated herein) and applied on a basis
consistent in all material respects with the Audited Financial

    	 	11	 

    	 	 	 

    

 

Statements,
except as otherwise
specifically prescribed herein.
Except as otherwise
specified herein, the financial
statements required to
be delivered hereunder
from and after the Closing
Date, and all
financial records, will be maintained in accordance with sound
accounting practices including, if
applicable, GAAP.

 

		1.4	Supplements,
                                         Re-enactments, Etc.

 

References
herein to any
document or legislation
are, unless otherwise stated,
to be construed
as references to such
document or legislation
as amended, restated or supplemented
from time to time and references to any enactment include re-enactments, amendments and extensions thereof.

 

		1.5	Headings
                                         of Subdivisions

 

The
headings of subdivisions
in this Agreement
are for convenience
of reference only, and
will not govern the
interpretation of any
of the provisions of this
Agreement.

 

		1.6	Gender
                                         and Number

 

Words
importing the singular
include the plural and
vice versa and
words importing gender
include all genders.

 

		1.7	Monetary
                                         References

 

Any
reference in this
Agreement to "Dollars",
"dollars" or the sign
"$" will be
deemed to be a
reference to lawful money of
the United States,
unless otherwise expressly stated.

 

		1.8	Actions
                                         on Days
                                         Other Than
                                         Business Days

 

Except
as otherwise specifically
provided herein, where
any payment is required to
be made or any
other action is required
to be taken
on a particular day
and such day is not a Business Day and,
as a result, such payment cannot be made or action cannot be taken on such
day, then this Agreement will be deemed to provide that
such payment will be made or
such action will be taken
on the first Business
Day after such day.

 

ARTICLE
2 

TERMS
OF THE LOAN

 

		2.1	The
                                         Loan

 

Subject
to the terms
and conditions of
this Agreement and
the other Loan
Documents, the Lender
agrees to loan to
the Borrower in
lawful money of the
United States the
principal amount of $1,000,000 to
or for the account of the Borrower (the "Loan") on the Closing Date
and the Borrower hereby irrevocably authorizes the Lender to
make the Loan on
the Closing Date.

 

		2.2	Maturity
                                         Date

 

The
maturity date (the
"Maturity Date") will be
August 3, 2016
.

    	 	12	 

    	 	 	 

    

 

ARTICLE
3

PAYMENT

 

		3.1	Payments
                                         on Principal

 

		(a)	The
                                         Borrower will
                                         pay in
                                         full to the
                                         Lender the
                                         outstanding principal amount
                                         on the
                                         Loan, together with
                                         all accrued
                                         and unpaid
                                         interest thereon
                                         and any
                                         other accrued and
                                         unpaid Obligations on the earliest to occur of:
                                         (i) the Maturity Date; and (ii) the
                                         date of the acceleration of the Obligations pursuant to
                                         Section 11.1(r) of this Agreement.

 

		(b)	All
                                         payments to
                                         be made
                                         by the
                                         Borrower to
                                         the Lender
                                         hereunder will
                                         be made
                                         to the Lender
                                         by wire
                                         transfer in
                                         accordance with the
                                         wire instructions
                                         given by
                                         the Lender
                                         to the Borrower in writing from time to time.

 

		(c)	The
                                         principal amount
                                         of the
                                         Loan may
                                         not be
                                         prepaid unless
                                         it is
                                         accompanied with
                                         a Make-whole Payment.

 

		3.2	General
                                         Matters

 

All
payments made by the
Borrower will be
made without set-off,
recoupment or counterclaim
. The Loan made by the Lender,
including rates of interest, fees and other charges, may be
evidenced by entries upon the books and
records maintained by the Lender which books and
records will constitute conclusive evidence thereof in the absence
of manifest error.

 

ARTICLE
4

INTEREST,
FEES AND
CHARGES

 

		4.1	Interest
                                         Rate

 

Subject
to Section 4.3, the
principal amount of
the Loan and
other outstanding Obligations
(including, for avoidance
of doubt, any
overdue and unpaid
interest) will bear
interest from the
Closing Date to the
date paid at a rate per
annum equal to the greater of (a) 12.5% and (b) the 1-year LIBOR rate plus
10%. In each case such interest will be payable in arrears in accordance with Section 4.2
and calculated in accordance with Section 4.4.

 

		4.2	Payment
                                         of Interest

 

The
Borrower will pay
the Lender all
accrued and unpaid
interest on the
principal amount of
the Loan quarterly in
arrears in cash on each Interest Payment
Date.

 

		4.3	Default
                                         Rate
                                         of Interest

 

Upon
and after the occurrence
and during the continuation
of an Event
of Default under
Section 11.1, the
principal amount of
the Loan and
the other Obligations will bear
interest at a rate per annum equal
to the interest rate otherwise payable pursuant
to Section 4.1
plus 5% and such
interest will be calculated daily and compounded quarterly and will be payable
on demand by the
Lender.

 

		4.4	Computation
                                         of Interest
                                         and Fees

 

Interest
hereunder will be
determined daily and
compounded quarterly not
in advance, both
before and after demand,
default and judgment
and will be
computed on the actual number of
days elapsed over a year
of three hundred and 365 days or three hundred
and 366 days, as the case may be.

    	 	13	 

    	 	 	 

    

 

 

		4.5	Maximum
                                         Interest

 

It
is the intent
of the parties
that the rate
of interest and
the other charges
to the Borrower
under this Agreement will be lawful;
therefore, if for any reason the interest
or other charges payable under this Agreement
are found by a
court of competent jurisdiction,
in a final
determination, to exceed the limit
which the Lender may lawfully charge the Borrower, then the obligation to pay interest
and other charges will automatically be
reduced with retroactive effect to such limit and, if any amount in excess of such limit will have been paid, then such amount
will be refunded to the Borrower.

 

		4.6	Origination
                                         Fee

 

The
Borrower will pay
to the Lender
an origination fee
equal to $40,000,
being 4% of
the Loan amount,
which will be payable on the Closing Date.

 

		4.7	Work
                                         Fee

 

The
Borrower will pay
to the Lender
a cash work
fee equal to
$10,000, being 1%
of the Loan amount, which will be
payable on the Closing Date. For greater
certainty, the said fee is payable whether or not the Closing Date occurs.

 

		4.8	Lender's
                                         Expenses

 

The
Borrower will reimburse the Lender for all reasonable costs and expenses (including without
limitation, reasonable consultant's fees and expenses and
reasonable legal fees and expenses in each applicable jurisdiction) incurred by
the Lender in connection with: (a) the documentation and
consummation of this transaction (whether or not this transaction is consummated)
including, without limitation, security and other public record searches, lien
filings, express mail or similar express or messenger  delivery, due diligence
costs and  expenses, up to the aggregate
maximum amount of $75,000, and (b) in
seeking to collect, protect or
enforce any rights in or to
the Collateral or incurred by the Lender in
seeking to collect any Obligations and to administer and enforce any of
its rights under this Agreement and the other Loan Documents. All such
costs, expenses and charges incurred after the Closing Date will constitute
Obligations hereunder, will be payable by
the Borrower to the Lender within three Business Days of demand and,
if overdue by 30 days or more,
until paid, will bear interest at the Deemed Interest Rate.

 

		4.9	Illegality

 

If
any Applicable Law
coming into force
after the Closing
Date, or if
any change in
any existing Applicable Law
or in the
interpretation or application thereof by
any court or Governmental Authority, now or hereafter makes it unlawful for
the Lender to have advanced or acquired interest in
the Loan or to give effect to its obligations in respect thereof, the Lender may,
by written notice thereof to the Borrower, declare its obligations under this Agreement
to be terminated, and the Borrower will prepay, within the time
required by such law, the principal amount of
the Loan together with accrued
interest thereon and any other amounts owing under this
Agreement as may be applicable to the
date of such payment.
If any such event will, in the opinion of the Lender, only affect part of its
obligations under this Agreement, the remainder of this Agreement will be unaffected
and the obligations of the Borrower under the Loan Documents
will continue.

    	 	14	 

    	 	 	 

    

 

ARTICLE
5

TERMINATION
AND REDUCTION

 

		5.1	Termination

 

This
Agreement will be
in effect from
the date hereof
until the repayment
and performance in
full of the Obligations
upon the Maturity
Date or if the due date
of the Obligations is accelerated pursuant
to Article 11 hereof, this Agreement will terminate on the date that all such Obligations
are paid in full. At such time as the
Borrower has repaid all
of the Obligations and this Agreement has
terminated the Lender
will, at the Borrower's cost and expense, deliver to the Borrower a termination,
discharge and release of all security in form and substance reasonably satisfactory to the
Borrower and such
other documents and instruments as
the Borrower may reasonably request in
order to effect
or evidence the termination of this Agreement and the security.

 

		5.2	Continuing
                                         Obligations

 

Nothing
in Section 5.1
will affect any
liabilities and obligations
of Borrower or
the Lender set
out in this Agreement
or in any other Loan Document
which are stated to
survive payment of the Obligations and termination
of this Agreement or the Loan Documents, as the case may be.

 

ARTICLE
6

SECURITY
AND COLLATERAL

 

		6.1	Security
                                         Delivered on
                                         the Closing
                                         Date

 

On
the Closing Date,
as continuing collateral security
for the payment
and satisfaction of all
Obligations of the Borrower
to the Lender,
the Borrower will
deliver or cause
to be delivered to
the Lender the following Security, all
of which will be in form and
substance satisfactory to the Lender
(collectively, the "Security Documents"):

 

		(a)	a
                                         general security
                                         agreement from
                                         Borrower and
                                         Mariel in
                                         favor of
                                         the Lender
                                         constituting first priority
                                         Lien (subject
                                         only to
                                         Permitted Liens)
                                         on all
                                         of the present and
                                         future Property of the Borrower and
                                         Mariel;

 

		(b)	a
                                         collateral assignment
                                         from Borrower
                                         of its
                                         interests in
                                         all Material
                                         Contracts and Material
                                         Licences;

 

		(c)	the
                                         Intercreditor and
                                         Subordination Agreement
                                         among Stryker
                                         Corporation/Stryker Biotech L.L.C.,
                                         the Borrower
                                         and Mariel
                                         Therapeutics, Inc.
                                         in favour of
                                         the Lender;

 

		(d)	the
                                         Mariel Guaranty;
                                         and

 

		(e)	such
                                         other agreements as
                                         the Lender
                                         may reasonably
                                         require from
                                         time to
                                         time.

 

		6.2	Further
                                          Assurances

 

The
Borrower will take
or cause to
be taken such
action and execute
and deliver or cause to
be executed and delivered
to the Lender
such agreements, documents
and instruments as
the Lender may
reasonably request, and register, file
or record the same (or
a notice or financing statement
in respect thereof) in all offices where such action, execution, delivery, registration, filing or recording is, in the opinion
of the Lender or Lender's counsel, necessary or advisable to constitute, perfect and maintain the Security

Documents
referred to in
Section 6.1 as
first-ranking Liens of
Borrower or the
Person granting such
Liens,

    	 	15	 

    	 	 	 

    

 

subject
only to the
Permitted Liens, in
all jurisdictions reasonably
required by the
Lender, in each
case within a reasonable
time after the request
therefor by the Lender or Lender's counsel, and in each case in form and substance
satisfactory to the Lender and Lender's counsel,
acting reasonably .

 

6.3               
Security Effective Notwithstanding
Date of Loan

 

The
Security will be
effective and the
undertakings in this
Agreement and the
other Loan Documents
with respect thereto will
be continuing, whether the
monies hereby or thereby secured or any part
thereof will be advanced before or after
or at the same time as
the creation of any such Security
or before or
after or upon the date
of execution of this Agreement. The Security will
not be affected by any payments
on this Agreement or
any of the
other Loan Documents, but will constitute
continuing security to and in favour
of the Lender for the Obligations from time to
time.

 

6.4               
No Merger

 

No
judgment obtained by
or on behalf
of the Lender
will in any
way affect any
of the provisions
of this Agreement, the other Loan
Documents or the Security . For greater certainty, no judgment obtained by or on behalf of the Lender will in any way affect
the obligation of the Borrower to pay interest or other amounts at the rates,
times and in the manner provided in this Agreement.

 

6.5
 Release of
Security

 

Following
due payment and
performance in full
of all Obligations
of the Borrower
under this Agreement and
the other Loan
Documents, the Lender will, at the
cost and expense of the Borrower, release
and discharge the right and interest of the Lender in
the Collateral, following indefeasible payment and performance
in full of all Obligations of the
Borrower under this Agreement
and the other Loan Documents.

 

In
addition, if any
Property of Borrower
is Disposed of
as permitted by
this Agreement or is
otherwise released from the Security
at the direction or with the consent
of the Lender, at the request, cost
and expense of the Borrower (on satisfaction , or on being assured of concurrent satisfaction,
of any condition to or obligation imposed with
respect to such Disposition), the Lender
will discharge such Property from the
Security and deliver and re-assign to
the Borrower or its Subsidiaries (without
any representation or warranty) any of
such Property as is then in the possession of the Lender.

 

ARTICLE
7

REPRESENTATIONS
AND WARRANTIES

 

		7.1	Representations
                                         and Warranties

 

The
Borrower hereby makes
the following representations
, warranties and covenants:

 

		(a)	Existence
                                         and Qualification
                                         . The Borrower (i)
                                         has been
                                         duly incorporated,
                                         and is
                                         validly existing and in
                                         good standing as a
                                         corporation in the State of Delaware,
                                         (ii) is duly qualified to carry on
                                         its business in each jurisdiction in
                                         which it carries on business
                                         or will carry on business except
                                         where the failure to be so qualified could not reasonably be expected
                                         to have a Material Adverse Effect,
                                         and (iii) has
                                         all required Material
                                         Licences.

 

		(b)	Power
                                         and Authority.
                                         The Borrower
                                         has the
                                         corporate power
                                         and authority
                                         (i) to
                                         enter into, and
                                         to exercise
                                         its rights
                                         and perform its obligations under,
                                         the Loan Documents to
                                         which it is a
                                         party and
                                         all other
                                         instruments and
                                         agreements delivered
                                         by it pursuant to

    	 	16	 

    	 	 	 

    

 

any
of the Loan
Documents, and (ii)
to own its
Property and carry
on its business
as currently conducted.

 

		(c)	Execution,
                                         Delivery, Performance
                                         and Enforceability
                                         of Documents.
                                         The execution, delivery
                                         and performance
                                         of each
                                         of the
                                         Loan Documents to
                                         which Borrower is a
                                         party has been duly authorized
                                         by all corporate
                                         actions required, and each of
                                         such documents has been duly executed
                                         and delivered by it. Each Loan Document to which
                                         Borrower is a party constitutes the
                                         legal, valid and
                                         binding obligation of
                                         Borrower, enforceable
                                         against Borrower in
                                         accordance with its respective terms
                                         (except, in any
                                         case, as such enforceability may be limited by applicable bankruptcy, insolvency,
                                         reorganization or similar laws affecting
                                         creditors' rights generally and by principles of equity) .

 

		(d)	Compliance with Applicable
Laws, Organizational Documents
and Contractual Obligations. None of
the execution or
delivery of, the consummation of
the transactions contemplated in, or the
compliance with the terms, conditions
and provisions of any of, the Loan Documents
by Borrower conflicts with or will
conflict with, or results or will result
in any breach of, or constitutes
a default under or contravention
of, any Requirement of Law in any material respect, Borrower's Organizational Documents
or any Material Contract or Material Licence,
or results or will result in the creation or imposition of any Liens
upon any of its Property except for Permitted Liens.

 

		(e)	Consent
                                         Respecting Loan
                                         Documents. The Borrower
                                         has obtained,
                                         made or taken
                                         all consents, approvals,
                                         authorizations, declarations,
                                         registrations, filings,
                                         notices and other actions
                                         whatsoever required (except
                                         for registrations or
                                         filings which may be
                                         required in respect of
                                         the Security Documents) to
                                         enable it to execute and
                                         deliver each of
                                         the Loan Documents
                                         to which it is a
                                         party and to consummate the transactions
                                         contemplated in the Loan Documents
                                         and to
                                         consummate the transactions
                                         contemplated in such instruments and
                                         agreements except
                                         where the failure
                                         to do so
                                         is immaterial.

 

(f)             Intellectual
Property

 

		(i)	The
                                         Borrower and
                                         any Affiliate
                                         of the
                                         Borrower who
                                         has provided
                                         Collateral possesses, and
                                         will continue
                                         to possess,
                                         adequate Intellectual Property
                                         to continue to conduct their
                                         Business as heretofore conducted by
                                         it, details of all of which as of the Closing Date are described on Schedule 7.1(f).

 

		(ii)	Except
as set forth
in Schedule 7.1(f),
Borrower will be entitled
to continue to
use, practice and
exercise rights in, all of the
Intellectual Property.

 

		(g)	Current
and Prior Names.
The Borrower's current and prior
names, trade-names and
division names are
described on Schedule 7.1(g).

 

		(h)	Corporate
Structure. Except for Mariel, the
Borrower does not
have any Subsidiaries
or Affiliates and is
not engaged in
any joint venture or partnership with any other
Person.

 

		(i)	Litigation.
                                         To the
                                         best of
                                         Borrower's knowledge
                                         after due
                                         inquiry, there
                                         are no
                                         actions, suits, counterclaims
                                         or proceedings
                                         which are
                                         pending or
                                         threatened against Borrower or management
                                         of the Borrower which, if adversely determined, would have a Material Adverse Effect.

    	 	17	 

    	 	 	 

    

 

		(j)	Material
                                         Contracts and Licences. Schedule
                                         7.1(j) (as
                                         amended from time to time and updated
                                         in accordance with delivery of a Compliance
                                         Certificate pursuant to Section 8.2), accurately sets out all
                                         Material Contracts and Material Licences.
                                         A true and complete certified copy of each Material Contract and Material Licence existing
                                         at the Closing Date has been delivered to the Lender and each Material Contract and Material
                                         Licence is in full force and effect. No event has occurred and is continuing which would
                                         constitute a material breach of or a default
                                         under any such Material Contract or Material Licence. Each Material Contract to which
                                         Borrower [and any other Affiliate of the Borrower who has provided Collateral] is a party
                                         is binding upon Borrower [and any other Affiliate of the Borrower who has provided Collateral
                                         (as the case may be)] and, to its knowledge, is a binding agreement of
                                         each other Person who is a party to
                                         the Material Contract. It has obtained, as
                                         of the Closing Date, all necessary consents,
                                         including consents of landlords to the granting of a security interest in each Material
                                         Contract and Material Licence pursuant to the Security Documents .

		(k)	No
                                         Liens.
                                         No security agreement,
                                         financing statement
                                         or analogous
                                         instrument exists
                                         as at
                                         the Closing
                                         Date with respect
                                         to any of
                                         the Collateral
                                         other than any security agreement,
                                         financing statement or analogous instrument evidencing Permitted Liens.

 

		(1)	Title
                                         to Collateral.
                                         The Borrower
                                         or Mariel (as
                                         the case
                                         may be) is the
                                         lawful owner
                                         of all Collateral
                                         now purportedly
                                         owned or
                                         hereafter purportedly
                                         acquired by
                                         it, free from all Liens, whether voluntarily
                                         or involuntarily created and whether or
                                         not perfected, other than Permitted
                                         Liens.

 

		(m)	Financial
Information. All of the quarterly
and annual Financial
Statements or other financial
information which have
been furnished to
the Lender in connection
with this Agreement are complete in all material respects and such Financial Statements or other financial information
give a true and fair view (in the case of audited
financial statements) or fairly represent (in all other cases) the results of operations
and financial position of the Borrower as of the date referred to therein and have been prepared in accordance with GAAP. All
other financial information provided to the Lender are complete in all material respects
and based on reasonable assumptions and expectations .

 

		(n)	Permitted
                                         Debt. As
                                         of the
                                         Closing Date
                                         (giving effect
                                         to the
                                         making of
                                         the Loan),
                                         the Borrower is
                                         not obligated,
                                         whether directly
                                         or indirectly
                                         , for any Debt other than the Permitted
                                         Debt.

 

		(o)	Taxes.
                                         the Borrower
                                         has duly
                                         and timely
                                         filed all
                                         Tax returns
                                         required to
                                         be filed
                                         by it
                                         and has paid
                                         or made
                                         adequate provision for the payment of
                                         all Taxes levied
                                         on its
                                         Property or income
                                         which are showing therein as due and
                                         payable, including interest and penalties, or has accrued such amounts in its financial
                                         statements for the payment of such Taxes except
                                         for Taxes
                                         which are not material in amount or
                                         which are not delinquent or if
                                         delinquent are being contested, and
                                         there is no material
                                         action (except, after the date of
                                         this Agreement, as is disclosed to the Lender in writing), suit, proceeding, investigation,
                                         audit or claim
                                         now pending, or
                                         to its knowledge, threatened by any
                                         Governmental Authority regarding any Taxes nor has it agreed to waive or extend any
                                         statute of limitations
                                         with respect to the
                                         payment or collection
                                         of Taxes.

 

		(p)	Full
                                         Disclosure. All
                                         information provided
                                         or to
                                         be provided to
                                         the Lender
                                         by or
                                         on behalf of
                                         Borrower in
                                         connection with
                                         the Loan
                                         is, to
                                         Borrower's knowledge,
                                         true and
                                         correct in

    	 	18	 

    	 	 	 

    

 

all
material respects and
none of the
documentation furnished to
the Lender by
or on behalf of
it, to Borrower's
knowledge, omits or
will omit as of
such time, a material fact necessary to
make the statements contained therein not misleading in any material way, and all expressions
of expectation, intention, belief and opinion
contained therein were honestly
made on reasonable grounds (and any other Person who furnished such material
on behalf of it).

 

		(q)	Insolvency.
                                         The Borrower
                                         (i) has
                                         not committed
                                         any act
                                         of bankruptcy,
                                         (ii) is
                                         not insolvent, nor
                                         has proposed,
                                         nor given notice of its intention
                                         to propose, a compromise
                                         or arrangement to its creditors generally,
                                         nor (iii)
                                         has any petition for a
                                         receiving order in bankruptcy filed against
                                         it, made a voluntary assignment in bankruptcy,
                                         taken any proceeding
                                         with respect to any
                                         compromise or arrangement, taken any proceeding
                                         to have itself declared bankrupt or wound-up, taken any proceeding to have a receiver
                                         appointed of any part of its Property.

 

		(r)	Location
                                         of Collateral.
                                         The offices
                                         where Borrower
                                         and any
                                         other Affiliate
                                         of the Borrower
                                         who has
                                         provided Collateral
                                         keeps its
                                         books, records
                                         and accounts
                                         (or copies thereof) concerning their
                                         Collateral, Borrower's and any other Affiliate
                                         of the Borrower who has provided Collateral
                                         principal place of business and all of Borrower's and any other Affiliate of the Borrower
                                         who has provided Collateral other significant places of business and significant
                                         locations of Collateral, are as set
                                         forth in Schedule 7.1(r).

 

		(s)	Owned
                                         Real Property.
                                         The Borrower
                                         does not
                                         own real
                                         property.

 

		(t)	Leased
                                         Real Property.
                                         The Borrower does
                                         not lease
                                         real property.

 

		(u)	Environmental
                                         Laws. The
                                         Borrower complied
                                         with all
                                         Environmental Laws
                                         applicable to the
                                         construction and
                                         operation of
                                         its Property
                                         and businesses,
                                         except where any non- compliance would not reasonably be expected to have
                                         a Material Adverse Effect; the Borrower
                                         has no material
                                         contingent liability with respect
                                         to non-compliance with Environmental Laws
                                         or the generation, handling, use, storage,
                                         or disposal of Materials of Environmental
                                         Concern. And, without limiting the generality of the foregoing, except
                                         as would not reasonably be expected
                                         to have a Material Adverse Effect, the Borrower:

 

		(i)	has
                                         not received
                                         any Action
                                         Request, Violation
                                         Notice, summons,
                                         complaint, order or
                                         other notice
                                         that it
                                         is not
                                         in compliance with, or
                                         that any Governmental Authority is
                                         investigating its compliance with, Environmental
                                         Laws:

 

		(ii)	has
                                         no knowledge or reason to believe that operations or any Property of or occupied by the
                                         Borrower or in the Borrower's charge, management or control are not in compliance with
                                         all applicable Environmental Laws and each of its Properties is free:

 

		(A)	from
                                         contamination by, and
                                         there has
                                         not been thereon
                                         a release, discharge
                                         or emission
                                         of, any
                                         Materials of
                                         Environmental Concern
                                         which is prohibited,
                                         controlled or regulated under any
                                         Environmental Law; and

 

		(B)	of
                                         underground storage
                                         tanks, landfills,
                                         land disposals
                                         and dumps;

    	 	19	 

    	 	 	 

    

 

		(iii)	has
                                         not filed
                                         any notice,
                                         or received
                                         notice, under
                                         any Applicable
                                         Law, including any
                                         Environmental Law, indicating
                                         past or
                                         present treatment,
                                         storage or
                                         disposal of a Material of Environmental
                                         Concern or reporting any spill or release of
                                         a Material of Environmental Concern into
                                         the environment;

 

		(iv)	has
                                         no contingent
                                         liability of
                                         which the
                                         Borrower has
                                         knowledge or
                                         reasonably should have
                                         knowledge in
                                         connection with
                                         any release
                                         of any Material of Environmental Concern;

 

		(v)	does
                                         not generate,
                                         transport, treat
                                         or dispose
                                         of any
                                         Material of
                                         Environmental Concern in
                                         any manner which
                                         is not
                                         in compliance with all
                                         applicable Environmental Laws; and

 

		(vi)	has
                                         not disposed
                                         of any
                                         Material of
                                         Environmental Concern
                                         in or
                                         on the
                                         ground of Borrower's
                                         real properties
                                         or premises
                                         leased by
                                         Borrower.

 

(v)            Labour
Matters.

 

		(i)	There
                                         is no
                                         collective bargaining
                                         agreement or other
                                         labour contract
                                         covering employees
                                         of Borrower.

 

		(ii)	There
                                         is no
                                         pending or,
                                         to the
                                         best of
                                         its knowledge,
                                         threatened strike,
                                         work stoppage, material
                                         unfair labour
                                         practice claims, or other material
                                         labour dispute against or affecting Borrower
                                         or its employees which would reasonably be
                                         expected to have a Material Adverse Effect.

 

		(iii)	There
                                         are no
                                         controversies pending
                                         or threatened
                                         between Borrower
                                         and any
                                         of its employees,
                                         other than
                                         employee grievances
                                         arising in
                                         the ordinary course of business
                                         which would not reasonably be expected
                                         to have a Material Adverse Effect.

 

		(iv)	The
                                         Borrower is
                                         in compliance
                                         in all
                                         material respects
                                         with all
                                         Applicable Laws respecting
                                         employment and
                                         employment terms,
                                         conditions and
                                         practices, except where the
                                         failure to so comply would not reasonably
                                         be expected to have a Material Adverse Effect.

 

		(w)	Pension
                                         Plans. The
                                         Borrower does
                                         not sponsor
                                         or maintain
                                         or contribute
                                         to a
                                         Pension Plan. With
                                         respect to
                                         any Pension Plan adopted or to which Borrower
                                         may become obliged to contribute, no failure
                                         to remit contributions (other than immaterial amounts)
                                         has occurred with respect to any such
                                         Pension Plan, that is sufficient to give
                                         rise to a
                                         Lien under any Applicable Laws of
                                         any jurisdiction (other than a Permitted
                                         Lien), and no condition exists and no event
                                         or transaction has occurred with respect
                                         to any such Pension Plan which could result
                                         in the incurrence by Borrower
                                         of any material liability, fine or
                                         penalty. Each Pension Plan is in compliance
                                         in all material respects with all Applicable
                                         Laws pertaining to pension
                                         benefits and Tax laws, (i) all contributions
                                         (including employee contributions made by
                                         authorized payroll deductions or other withholdings) required to be made to the appropriate
                                         funding agency in accordance with all Applicable Laws and the terms of
                                         such Pension Plan have been made in
                                         accordance with all Applicable Laws and the
                                         terms of such
                                         Pension Plan, except
                                         for amounts which are immaterial, (ii) all liabilities under
                                         such Pension Plan are fully funded, on a
                                         going

    	 	20	 

    	 	 	 

    

 

 

concern
and solvency basis,
in accordance with
the terms of
the respective Pension Plans,
the requirements of
applicable pension benefits
laws and of
applicable regulatory authorities and
the most recent actuarial report filed with respect to the
Pension Plan. No event has occurred and no conditions exist with respect
to any such Pension Plan that has resulted
or could reasonably be
expected to result in such Pension Plan having its registration revoked or refused for the purposes of
any applicable pension benefits or
tax laws or being placed under the administration of any
relevant pension benefits regulatory
authority or being required to pay any taxes or penalties under any applicable pension
benefits or tax laws.

 

		(x)	ERISA.
                                         (i) With
                                         respect to
                                         each ERISA
                                         Plan, it
                                         and each
                                         other member
                                         of its
                                         Controlled Group has
                                         fulfilled its obligations
                                         under the
                                         minimum funding standards
                                         of and is in compliance in all material respects with ERISA
                                         and the Revenue
                                         Code to the extent applicable to it and has not
                                         incurred any
                                         liability to the PBGC
                                         or under Title IV of ERISA, other than
                                         a liability to the
                                         PBGC for premiums under Section
                                         4007 of ERISA; (ii) it does not have
                                         any contingent liabilities with respect to
                                         any post-retirement benefits under a Welfare Plan,
                                         other than liability for
                                         continuation coverage
                                         described in Part 6 of Title
                                         I of ERISA or
                                         as required under Applicable Law requirements
                                         for health continuation coverage, (iii)
                                         neither a Reportable Event nor a Prohibited Transaction
                                         has occurred and is
                                         continuing with respect to any ERISA Plan;
                                         (iv) no notice of intent to terminate
                                         an ERISA Plan has been filed, nor has any ERISA
                                         Plan been terminated; (v)
                                         no circumstances exist which constitute grounds
                                         entitling the PBGC to institute proceedings
                                         to terminate, or appoint
                                         a trustee to administer, ERISA Plan,
                                         nor has the
                                         PBGC instituted any
                                         such proceedings; (vi) neither it nor
                                         any member of
                                         its Controlled Group
                                         has completely or partially withdrawn
                                         from a multiemployer plan; (vii) it and all
                                         members of its Controlled Group have met their
                                         minimum funding requirements under
                                         ERISA with respect to all of their ERISA Plans and the
                                         present value of all vested benefits under each ERISA Plan exceeds the fair
                                         market value of all
                                         such ERISA Plan assets
                                         allocable to such benefits, as determined
                                         on the most recent valuation date of
                                         such ERISA Plan and in accordance with
                                         the provisions of
                                         ERISA; and neither it nor any
                                         member of its Controlled Group has incurred any
                                         liability to the PBGC under ERISA.

 

		(y)	Computer
                                         Software. The
                                         Borrower owns
                                         or has
                                         licensed for
                                         use or
                                         otherwise has
                                         the right to
                                         use or
                                         to acquire
                                         or licence
                                         all of the material
                                         software necessary
                                         to conduct
                                         its businesses. All computer equipment
                                         owned or used
                                         by Borrower and necessary for
                                         the conduct of business
                                         has been properly maintained
                                         and is in good working
                                         order for the purposes
                                         of on-going operation, subject
                                         to ordinary wear and
                                         tear for computer equipment of comparable age.

 

		(z)	Insurance.
                                         Schedule
                                         7.1(z)
                                         lists
                                         all existing
                                         insurance policies
                                         maintained by
                                         Borrower as
                                         of the Closing Date.

 

		(aa)	OFAC.
                                         The
                                         Borrower is not
                                         in violation of
                                         any of
                                         the country
                                         or list
                                         based economic
                                         and trade sanctions
                                         administered and
                                         enforced by
                                         OFAC. The Borrower (i) is
                                         not a Sanctioned
                                         Person or a Sanctioned Entity, (ii) has no more than
                                         10% of its assets located in Sanctioned Entities,
                                         or (iii) derives no more than 10% of its
                                         revenues from investments in, or transactions
                                         with Sanctioned Persons or Sanctioned Entities.

  

		(bb)	No
                                         Margin Stock.
                                         The Borrower
                                         is not
                                         engaged in
                                         the business
                                         of extending
                                         credit for the
                                         purpose of
                                         purchasing or carrying margin stock.
                                         None of the proceeds of the
                                         Loan will be
used to purchase
or carry, or
to reduce or
retire or refinance
any credit incurred
to purchase or carry,
any margin stock
(within the meaning of
Regulations U and X of the Board of Governors
of the Federal Reserve System of
the United States)
or to extend credit to others for the purpose of purchasing or carrying any margin stock.

    	 	21	 

    	 	 	 

    

 

		(cc)	Quality
and Quantity of
BMP-7.  Mariel currently
is the owner
and has in
its possession no less
than 13 grams of BMP-7. The specific characteristics of the BMP-7, including pertinent
information regarding the expiry dates of
 BMP-7,  is set forth 
on Schedule 7.1(cc).

		(dd)	No Material
Adverse Effect. No event
has occurred which
has had or
could reasonably be expected
to have a
Material Adverse Effect.

 

		(ee)	No
Event of Default.
No Event of
Default has occurred and
is continuing. 

 

		(ff)	Regulatory Matters

 

		(i)	Each
                                         Product that
                                         is subject to
                                         the Applicable
                                         Laws promulgated
                                         by a
                                         Regulatory Authority , is manufactured,
                                         packaged, labelled, imported,
                                         exported, stored, distributed, sold
                                         (whether or not for consideration), advertised and marketed in compliance
                                         with all such
                                         Applicable Laws, (except for immaterial non-
                                         compliance) as well as all material terms and conditions
                                         imposed in any licenses and permits
                                         issued in respect
                                         of the Products.

 

		(ii)	Neither
                                         the Borrower
                                         nor, to
                                         the knowledge
                                         of the
                                         Borrower, any
                                         officer, employee, contractor
                                         or agent
                                         of the
                                         Borrower has
                                         ever made
                                         an untrue statement of
                                         material fact or
                                         fraudulent statement to a
                                         Regulatory Authority or failed to disclose
                                         a material fact required to
                                         be disclosed to
                                         a Regulatory Authority.

 

		(iii)	No
                                         Product has
                                         been recalled,
                                         withdrawn, suspended
                                         or discontinued
                                         (other than for
                                         commercial or
                                         business reasons)
                                         by Borrower
                                         at any
                                         time, and Borrower
                                         has not received any information or report from any Governmental Authority, indicating
                                         that any of the Products, or ingredients therein, are unsafe or unsuitable
                                         for its intended use or pose
                                         an unacceptable health risk.

 

		(iv)	To
the knowledge of
Borrower after due
inquiry, none of the
Products or ingredients
therein have been
the subject of
a warning, consumer alert or other
cautionary statement issued by any Governmental Authority nor is there any ongoing complaint
or investigation by any Governmental
Authority relating to the advertising or marketing practices used for any Product.
The Borrower is not aware of any facts that
would indicate that any Governmental Authority has
or will prohibit or materially restrict the marketing, sale, distribution or use in
the United States, Canada or Europe
of any Product or the operation
or use of any facility currently used
to produce, manufacture or distribute the Products.

 

		7.2	Survival
                                         of Representations
                                         and Warranties

 

The
 Borrower,  for 
itself  and  on 
behalf  of  Borrower, 
represents,  warrants  and 
covenants  that  all representations,
warranties and covenants
contained in this
Agreement (whether appearing in Article 7 or

    	 	22	 

    	 	 	 

    

 

elsewhere)
will be true,
correct and complete
at the time
of the Borrower's
execution of this
Agreement, and will survive
the execution, delivery
and acceptance hereof
by the parties hereto and the closing
of the transactions described herein
or related hereto until the repayment and performance in
full of all of the Obligations and
termination of this Agreement.

 

ARTICLE
8 

SCHEDULES
AND REPORTS

 

		8.1	Financial
                                         Information

 

The
Borrower will deliver
to the Lender
the following financial
information:

 

		(a)	no
                                         later than
                                         60 days
                                         after the
                                         end of
                                         the Borrower's
                                         first three
                                         Fiscal Quarters
                                         each year, copies
                                         of internally
                                         prepared Consolidated
                                         Financial Statements
                                         of the
                                         Borrower;

 

		(b)	no
                                         later than
                                         120 days
                                         after the
                                         end of
                                         each Fiscal
                                         Year of
                                         the Borrower, copies of
                                         annual Consolidated Audited
                                         Financial Statements
                                         of the
                                         Borrower; and

 

		(c)	no
                                         later than
                                         30 days
                                         after the
                                         end of
                                         each calendar
                                         month, copies
                                         of the
                                         Cash Balance Statements.

 

		8.2	Compliance
                                         Certificate

 

The
Compliance Certificate with
respect to the
Cash Balance Statement
will be delivered
monthly when due under
Section 8.1(c).

 

		8.3	Other Matters

 

At
such times as
may be reasonably
requested by the
Lender from time
to time hereafter,
the Borrower will deliver
to the Lender
(a) such additional
schedules, certificates, reports and
information with respect to the Collateral as the Lender
may from time to time reasonably require,
including, but not limited
to, non-consolidated Financial Statements of the Borrower;
and (b) a collateral assignment of any
or all items of property held
by Borrower, from
time to time, to the Lender
or as the Lender may direct necessary
to perfect the security interests in favor
of the Lender in such property
in accordance with this Agreement (to
the extent not otherwise previously perfected
under a Loan Document). All schedules, certificates,
reports and assignments and other items delivered
by the Borrower to the Lender hereunder
will be executed by an authorized representative
of the Borrower, and
will be in such
form and contain such information as
the Lender will reasonably request. The
Lender, through its officers, employees
or agents, will
have the right, upon reasonable notice at
any time and
from time to time
in the Lender's name, in the name of
a nominee of the Lender or in Borrower's name,
to verify the validity, amount or any
other matter relating to any of the Collateral, by mail, telephone,
telegraph or otherwise. The Borrower
will reimburse the Lender, on demand, for all reasonable receipted costs,
fees and expenses incurred by the Lender in this regard.

 

ARTICLE
9

COVENANTS

 

		9.1	Positive
                                         Covenants of the
                                         Borrower

 

Until
payment and performance
in full of
all Obligations and
termination of this
Agreement, unless the Borrower
obtains the prior written
consent of the Lender waiving or
modifying any covenants hereunder in any specific instance, the Borrower will:

    	 	23	 

    	 	 	 

    

 

 

		(a)	Timely
                                         Payment. Make
                                         due and
                                         timely payment
                                         of the
                                         Obligations required
                                         to be
                                         paid by it
                                         hereunder.

 

		(b)	Conduct
                                         of Business,
                                         Maintenance of
                                         Existence, Compliance
                                         with Laws.
                                         Carry on and
                                         conduct its
                                         business and
                                         operations in
                                         a proper, efficient and
                                         businesslike manner, in accordance
                                         with good business practice except for non-compliance which would not reasonably be expected
                                         to have a
                                         Material Adverse Effect;
                                         preserve, renew and keep
                                         in full force and effect its existence;
                                         and take all reasonable action to maintain
                                         all rights, privileges and franchises necessary
                                         or desirable in the normal conduct of its
                                         business and to comply in all material respects
                                         with its Material Contracts, Material
                                         Licences and Requirements
                                         of Law.

 

		(c)	Further
                                         Assurances. Provide
                                         the Lender
                                         with such
                                         other documents,
                                         consents, acknowledgements and
                                         agreements as
                                         are reasonably
                                         necessary to
                                         implement this Agreement and the other Loan Documents from time to time.

 

		(d)	Access
                                         to Information.
                                         Promptly provide the
                                         Lender with
                                         all information
                                         reasonably requested
                                         by the
                                         Lender from time to time concerning its financial
                                         condition and Property, and during
                                         normal business hours and from time to
                                         time upon
                                         reasonable notice, permit representatives of the
                                         Lender to inspect any of its
                                         Property and to examine and
                                         take extracts from its financial books,
                                         accounts and records including but not limited
                                         to accounts and records stored
                                         in computer data banks and computer software systems, and to discuss its
                                         financial affairs, its business or any part of its Property with
                                         its senior officers. Provided that a Default or Event of Default is then continuing,
                                         the Borrower will pay all reasonable expenses
                                         incurred by such representatives in order
                                         to visit Borrower's premises or attend at the Borrower's principal office, as applicable,
                                         for such purposes.

 

		(e)	Obligations
                                         and Taxes.
                                         Pay or
                                         discharge or
                                         cause to be
                                         paid or
                                         discharged, before
                                         the same will
                                         become delinquent
                                         (i) all
                                         Taxes imposed
                                         upon it
                                         or upon its income or profits or in
                                         respect of its business or Property and file all tax returns in respect thereof; (ii)
                                         all lawful claims for labour,
                                         materials and supplies;
                                         (iii) all
                                         required payments under any of its
                                         Debt, and (iv) all other
                                         obligations; provided, however that
                                         it will not
                                         be required
                                         to pay or discharge or
                                         to cause to
                                         be paid
                                         or discharged any such
                                         amount so
                                         long as
                                         the validity or amount thereof will be contested in good faith by appropriate
                                         proceedings and, in the case of clause (i) above,
                                         an adequate reserve in accordance
                                         with GAAP has been established in its
                                         books and records.

 

		(f)	Use
                                         of Proceeds.
                                         The proceeds of the Loan shall be used only in the manner set out in Schedule
                                         9.1(f), subject
                                         to any minor deviations which may
                                         arise from
                                         time to
                                         time. Any other use of the proceeds
                                         shall be subject to the Lender's consent.

 

		(g)	Insurance.
                                         Within 60
                                         days of
                                         the Closing,
                                         obtain product
                                         liability insurance
                                         covering at least
                                         $1,250,000 per
                                         claim. Maintain
                                         or cause
                                         to be
                                         maintained with
                                         reputable insurers coverage
                                         against risk
                                         of loss or damage to its Property (including
                                         public liability and damage to property
                                         of third parties) covering at least
                                         $1,250,000 per claim and business interruption
                                         insurance covering at
                                         least $1,250,000 per claim of such
                                         types as
                                         is customary for and
                                         would be maintained by a corporation with
                                         an established reputation engaged in the
                                         same or similar
                                         business in similar locations and
                                         provide to the Lender, as requested
                                         (acting reasonably),
                                         evidence of such coverage. The Borrower
                                         will, before the expiry
                                         or replacement
                                         of any insurance
                                         policy, notify the Lender of the
                                         replacement

    	 	24	 

    	 	 	 

    

 

and
at the Lender's
request send copies
of all replacement
policies to the
Lender. Without limiting the
generality of the
foregoing, the Borrower will maintain in effect
all insurance coverage reasonable and prudent for a
business similar to the Business
conducted in similar locations. The Lender will be indicated in all insurance policies,
as applicable, as first loss payee and additional insured, and all
policies will contain such standard
mortgage clauses as the Lender will reasonably require
for the Lender's protection.

 

		(h)	Notice
                                         of Default
                                         or Event
                                         of Default.
                                         Promptly and,
                                         in any event
                                         within two
                                         Business Days of
                                         becoming aware
                                         of any
                                         Default or Event of Default, notify
                                         the Lender of such Default
                                         or Event of
                                         Default which notice
                                         shall include the action
                                         to be taken by Borrower to remedy any
                                         such Default or Event of
                                         Default.

 

		(i)	Notice
                                         of Material
                                         Adverse Effect.
                                         Promptly notify
                                         the Lender
                                         of any
                                         Material Adverse Effect
                                         of which
                                         it becomes
                                         aware.

 

		(j)	Notice
                                         of Litigation.
                                         Promptly notify the
                                         Lender on
                                         becoming aware
                                         of the occurrence
                                         of any litigation, dispute,
                                         arbitration, proceeding
                                         or other
                                         circumstance the
                                         result of
                                         which if determined adversely would
                                         or could reasonably be
                                         expected to
                                         result in (a) a judgment or award
                                         against it in excess of $25,000 or
                                         (b) a Material Adverse Effect, and
                                         from time to time provide the Lender with
                                         all reasonable information requested by it concerning
                                         the status of any such
                                         proceeding.

 

		(k)	Other
                                         Notices. Promptly,
                                         upon having knowledge
                                         , give notice to
                                         the Lender
                                         of:

 

		(i)	any
                                         notice of
                                         expropriation affecting
                                         Borrower;

 

		(ii)	any
                                         Action Request
                                         or Violation
                                         Notice;

 

		(iii)	any
                                         violation of
                                         any Applicable
                                         Law which
                                         reasonably could
                                         be expected
                                         to have a
                                         Material Adverse
                                         Effect on
                                         Borrower;

 

		(iv)	any
                                          default 
                                         under  any 
                                         Debt  in
                                         a  principal
                                         amount  greater 
                                         than  $25,000 
                                         of Borrower;

 

		(v)	any
                                         termination before
                                         maturity of
                                         or material
                                         default under
                                         a Material
                                         Contract or any
                                         termination, lapse,
                                         rescission or default
                                         under a
                                         Material Licence;

 

		(vi)	any
                                         damage to
                                         or destruction
                                         of any
                                         Property, of Borrower
                                         having a
                                         replacement cost
                                         in excess
                                         of $25,000;

 

		(vii)	the
                                         acquisition of
                                         any real property
                                         by Borrower;

 

		(viii)	the
                                         receipt of insurance proceeds
                                         by Borrower
                                         in excess
                                         of $25,000;

 

		(ix)	any
                                         Lien registered
                                         against any
                                         Property of
                                         Borrower, other
                                         than a
                                         Permitted Lien;

 

		(x)	the
                                         occurrence of
                                         any event
                                         referred to
                                         in Section 7.1(w);

    	 	25	 

    	 	 	 

    

 

		(xi)	a
                                         Product being
                                         recalled, withdrawn,
                                         suspended or
                                         discontinued or is
                                         under consideration of
                                         being recalled,
                                         withdrawn, suspended or
                                         discontinued;

 

		(xii)	a
                                         Product being
                                         the subject
                                         of a
                                         warning, consumer
                                         alert or
                                         other cautionary statement
                                         issued by
                                         any Governmental
                                         Authority;

 

		(xiii)	any
                                         information or
                                         report from
                                         any Governmental
                                         Authority, indicating
                                         that any
                                         of the Products
                                         are, unsafe
                                         or unsuitable
                                         for its
                                         intended use
                                         or pose an unacceptable health
                                         risk;

 

		(xiv)	any
                                         entering into
                                         of a
                                         Material Contract
                                         or Material
                                         Licence;

 

		(xv)	any
                                         material adverse
                                         change in,
                                         or material
                                         adverse amendment
                                         to, or termination
                                         of a
                                         Material Contract
                                         or Material
                                         Licence;

 

		(xvi)	the
                                         occurrence of
                                         any of
                                         the above
                                         events that
                                         would reasonably
                                         be likely
                                         to have Material
                                         Adverse Effect
                                         on Mariel
                                         or on
                                         the Collateral.

 

		(l)	Environmental
                                         Compliance. Operate
                                         its business in
                                         compliance with
                                         Requirements of Environmental
                                         Laws (except where the failure
                                         to do
                                         so would
                                         not have a
                                         Material Adverse Effect) and operate all Property
                                         owned, leased or otherwise used by
                                         it such that no obligation, including a clean-up
                                         or remedial obligation, would knowingly arise
                                         under any Requirements of Environmental Law;
                                         provided, however, that if any such claim is made or any
                                         such obligation arises, the Borrower will
                                         promptly satisfy,
                                         address or contest such claim or obligation at its own cost
                                         and expense. It will promptly notify the Lender upon: (i) learning of the existence
                                         of any Materials of Environmental Concern
                                         located on, above or below
                                         the surface of any land which it owns,
                                         leases, operates, occupies or controls (except
                                         those being stored, used
                                         or otherwise handled
                                         in compliance with Requirements of Environmental
                                         Law), or contained in
                                         the soil or water constituting such land; and (ii) learning of
                                         the occurrence of any reportable release,
                                         spill, leak, emission, discharge,
                                         leaching, dumping or disposal of Materials of Environmental
                                         Concern that has occurred on or from
                                         such land, which, in
                                         either the case
                                         of (i) or (ii), is likely to result
                                         in liability under Requirements of Environmental Law in excess of $25,000.

 

		(m)	Security.
                                         With respect
                                         to the
                                         Security :

 

		(i)	provide
                                         to the
                                         Lender the
                                         Security required
                                         from time to
                                         time pursuant
                                         to Article
                                         6 in accordance
                                         with the
                                         provisions of
                                         such Article, accompanied by
                                         supporting resolutions, certificates and opinions
                                         in form and substance reasonably satisfactory
                                         to the Lender;

 

		(ii)	maintain
                                         at all
                                         times at
                                         least 13
                                         grams of
                                         commercial grade
                                         BMP-7in the Borrower's
                                         or Mariel's
                                         possession and
                                         control; and

 

		(iii)	do, execute and
deliver all such
things, documents, security,
agreements and assurances as
may from time
to time be
reasonably requested by
the Lender to ensure that the Lender holds at all times valid, enforceable,
perfected first-priority Liens (subject only to Permitted Liens) on the Collateral
meeting the requirements of Article 6.

    	 	26	 

    	 	 	 

    

 

		(n)	Maintenance
                                         of Property.
                                         Keep all
                                         Property useful
                                         and necessary
                                         in its
                                         business in good
                                         working order
                                         and condition, normal wear and tear
                                         excepted, and maintain all Intellectual Property
                                         necessary to carry on its
                                         business.

 

		(o)	Landlord
                                                                                                                                                                 Consents .   If required, use its commercial efforts to obtain, in favor of the Lender, a
                                                                                                                                                                 consent agreement from a landlord of premises that are leased at any time and from
                                                                                                                                                                 time to time by Borrower.

 

		(p)	Material
                                         Contracts. Ensure that
                                         any Material
                                         Contract is
                                         specifically assigned
                                         by way
                                         of security
                                         in favour of
                                         the Lender by the Borrower or the Borrower's
                                         Affiliate party to such Material Contract,
                                         and to obtain, in favor of the Lender, if
                                         necessary to assign properly such
                                         Material Contract, an acknowledgement
                                         of a Person or Governmental Authority to such
                                         assignment.

 

		(q)	Employee
                                         Benefit and
                                         Pension Plans.
                                         Maintain all
                                         employee benefit
                                         and Pension Plans
                                         relating to
                                         its business
                                         in compliance with
                                         all Applicable Laws except for immaterial non-compliance.

 

		(r)	Additional
                                         Information. Promptly provide
                                         the Lender,
                                         after the
                                         sending or
                                         filing thereof,
                                         with copies
                                         of all
                                         material reports,
                                         notices, prospectuses 
                                         and  registration 
                                         statements which Borrower files with
                                         a securities commission or securities regulatory
                                         authority in any Province of
                                         Canada or any other
                                         securities commission.

 

		(s)	Material
                                         Contracts and
                                         Material Licences.
                                         At the reasonable
                                         request of
                                         the Lender from time
                                         to time,
                                         provide to
                                         the Lender
                                         certified copies of all Material Contracts
                                         and Material Licences.

 

		(t)	Regulatory
                                         Matters. Ensure
                                         that (i)
                                         all non-compliance
                                         (other than
                                         immaterial non- compliance)
                                         with regulatory
                                         matters as
                                         identified in Schedule
                                         7.1(ff)
                                         is remedied within a reasonable
                                         period of time following the Closing
                                         Date, and (ii) all existing
                                         and future Products are licensed and/or
                                         registered, as applicable, in compliance
                                         with Applicable Laws.

 

		(u)	ERISA.
                                         Promptly pay
                                         and discharge
                                         all obligations 
                                         and liabilities
                                         arising under
                                         ERISA of a
                                         character which
                                         if unpaid
                                         or unperformed could result
                                         in the imposition of
                                         a Lien other than
                                         a Permitted Lien against any of
                                         its Properties; promptly
                                         notify the Lender of (i) the occurrence
                                         of any Reportable Event with respect to
                                         an ERISA Plan that could
                                         reasonably be expected to result in
                                         material liability, (ii) receipt of
                                         any notice from the PBGC
                                         of its intention to
                                         seek termination
                                         of any
                                         ERISA Plan or appointment of a trustee
                                         therefor, (iii) its intention to
                                         terminate or withdraw from any ERISA Plan
                                         or multiemployer plan that could
                                         reasonably be expected to
                                         result in material liability,
                                         and (iv) the occurrence of any event with respect
                                         to any ERISA Plan or multiemployer
                                         plan which would result in
                                         the incurrence by it or any Subsidiary of
                                         any material liability, fine
                                         or penalty, and (v) any material increase
                                         in its contingent liability
                                         with  respect to 
                                         any  post-retirement 
                                         Welfare Plan benefit.

 

		(v)	Patriot
                                         Act. In
                                         the case
                                         of Borrower,
                                         the Borrower acknowledges
                                         and agrees
                                         that pursuant
                                         to the
                                         provisions of the
                                         USA Patriot Act (Title III of the Pub.
                                         L. 107-56) signed into
                                         law October 26,
                                         2001 (the " Patriot Act"), the
                                         Lender may
                                         be required
                                         to obtain,
                                         verify and record information with
                                          respect to Borrower;
                                         and the Borrower hereby agrees

    	 	27	 

    	 	 	 

    

 

to
cooperate with the
Lender and provide
them with all
information that may
be required in order
to fulfil their
obligations under the
Patriot Act; and
without limiting the generality of
the foregoing, the Borrower agrees to use commercially reasonable efforts
to obtain the consent of any of
their respective officers, directors and employees
whose consent to the disclosure of any
such information is required under applicable privacy legislation in Canada.

 

		(w)	Books
                                         and Records.
                                         At
                                         all times
                                         keep accurate
                                         and complete
                                         books, records
                                         and accounts with
                                         respect to
                                         all of its business activities, in accordance with sound accounting practices
                                         and, where applicable, GAAP
                                         consistently applied, and will keep
                                         such books, records and
                                         accounts, and any copies thereof,
                                         only at the addresses indicated for such purpose on Schedule 7.1(r).

 

		(x)	Equity
                                         Raise. Borrower
                                         will use
                                         commercially reasonable
                                         efforts to
                                         raise a
                                         minimum of $45,000,000 pursuant
                                         to the
                                         issuance of
                                         new Equity
                                         Interests (the
                                         "Equity
                                         Raise") on or before
                                         the date falling six months after the Closing Date. For greater certainty, such $45,000,000
                                         minimum amount will not include any amount provided by the Lender in connection
                                         with the Equity Raise or in connection with the Equity Commitment.

		(y)	Warrants.
                                         On
                                         the date
                                         the Equity
                                         Raise is
                                         complete, the
                                         Borrower will
                                         either issue
                                         to Lender, for
                                         no additional
                                         consideration, such number of common
                                         stock purchase warrants of the Borrower with
                                         an exercise price equal to the Equity Raise price per share such that a five-year Black-Scholes
                                         valuation using a 60% volatility
                                         and 1.75% risk-free rate would generate
                                         an expected value of $200,000 (the "Warrants"). The Warrants will expire on the date which is five years after the date
                                         on which they were issued.

 

		(z)	Financial
                                         Covenants Borrower
                                         will maintain
                                         at all
                                         times a
                                         minimum positive
                                         cash balance equal
                                         to $50,000
                                         or such
                                         lower amount as is agreed to
                                         by the Lender acting reasonably
                                         (the "Cash Balance Statement").

 

	(aa)		Board
                                         Observer. Until
                                         the repayment
                                         and performance
                                         in full
                                         of all
                                         of the
                                         Obligations, the termination of
                                         this Agreement and
                                         the Lender
                                         having less
                                         than 5% of the Equity Interests of the
                                         Borrower on a fully diluted basis (which, for the purposes
                                         of calculating the foregoing percentage,
                                         shall include any Equity Interests issuable
                                         to the Lender upon the exercise
                                         of the Warrant), the Lender will
                                         be entitled to designate one
                                         individual (the "Lender's Nominee"),
                                         to be an observer and to serve as an observer
                                         on the Board's Audit and Compensation
                                         Committee. The Borrower will notify the Lender in writing immediately upon
                                         determining the date of any meeting
                                         of its shareholders at which directors of
                                         the Borrower are to be elected. The
                                         Borrower shall have the right to exclude any Lender or Lender's Nominee from any
                                         portion of any meeting and redact any information
                                         from any written materials (i) in order to preserve any attorney-client
                                         privilege (based on the advice of
                                         counsel) or (ii) at or in which strategies
                                         with respect to Obligations.

 

	(bb)		Financial
                                         Statements. The
                                         Borrower shall
                                         deliver audited
                                         financial statements
                                         of the Borrower
                                         for the
                                         years  ended 
                                         December 31, 2013 and December 31,
                                         2014 within 30 days of the Closing Date.

 

	(cc)		Merger
with Mariel Therapeutics. The
Borrower shall merge
with Mariel Therapeutics, Inc.
within 60 days of the
Closing Date.

    	 	28	 

    	 	 	 

    

 

 

		9.2	Negative
                                         Covenants of
                                         the Borrower

 

So
long as this
Agreement is in
force and except
as otherwise permitted
by the prior
written consent of the
Lender, neither the Borrower
nor Mariel will:

 

		(a)	Disposition
of Property. Except for Permitted
Dispositions, dispose of,
in one transaction or
a series of transactions,
all or any part of its Property, whether now owned or hereafter acquired.

 

		(b)	No
                                         Consolidation, Amalgamation,
                                         etc. Consolidate,
                                         amalgamate or
                                         merge with
                                         any other Person,
                                         export a
                                         corporation into
                                         a jurisdiction
                                         outside of the United States,
                                         enter into any corporate reorganization or other transaction
                                         intended to effect
                                         or otherwise permit a change in its existing
                                         corporate or
                                         capital structure, liquidate, wind-up or
                                         dissolve itself, or permit any liquidation, winding-up or
                                         dissolution unless prior written approval (which
                                         will not be unreasonably withheld)
                                         has been received by the Lender and such
                                         documentation as is required by counsel to
                                         the Lender is delivered concurrently with such transaction.

 

		(c)	No
                                         Change of
                                         Name. Change
                                         its name
                                         or change
                                         its jurisdiction
                                         of incorporation
                                         or formation in
                                         each case without
                                         providing the Lender with
                                         15 days' prior written notice thereof.

 

		(d)	No
                                         Debt. Create,
                                         incur, assume
                                         or permit
                                         any Debt
                                         to remain
                                         outstanding, other
                                         than Permitted Debt.

 

		(e)	Operating
                                         Leases. Create,
                                         incur, assume
                                         or permit
                                         obligations outstanding
                                         in respect
                                         to operating leases
                                         (which, for
                                         greater certainty,
                                         does not include
                                         leases of real property) such
                                         that the aggregate annual payments
                                         due on
                                         such leases exceeds $25,000.

 

		(f)	No
                                         Distributions. Make any
                                         Distribution except Permitted
                                         Distributions.

 

		(g)	No
                                                                                                                                                                 Lien. Create, incur, assume or permit to exist any Lien upon any of its
                                                                                                                                                                 Property except a Permitted
                                                                                                                                                                 Lien.

 

		(h)	Acquisitions.
                                         Make
                                         any Acquisitions,
                                         except, provided
                                         that no
                                         Event of
                                         Default has
                                         occurred and
                                         is continuing
                                         or would result from such
                                         Acquisition, an
                                         Acquisition of any other Person
                                         or of all or part of the Property
                                         of any other Person
                                         or of all or part of any division,
                                         business, operation or
                                         undertaking of any
                                         other Person where the business of
                                         such Person is the same or substantially the
                                         same as, similar, complementary or related
                                         to, the Business or
                                         the business of the Borrower and
                                         the aggregate consideration payable
                                         in respect of such Acquisition (including, without
                                         limitation, any deferred consideration) is not more than $50,000, and further
                                         provided that any property acquired pursuant to such
                                         Acquisition becomes Collateral subject to
                                         the Security (including, without limitation,
                                         any shares of any Subsidiary).

 

		(i)	No
                                         Change to
                                         Year End.
                                         Make any
                                         change to
                                         its Fiscal
                                         Year.

 

		(j)	Location
                                         of Assets
                                         in Other
                                         Jurisdictions. Except
                                         for any
                                         Property in
                                         transit in
                                         the ordinary course
                                         of business,
                                         acquire any
                                         Property outside
                                         of the jurisdictions identified in Schedule 7.1(r) or move
                                         any Property
                                         from one jurisdiction to another jurisdiction where the movement
                                         of such Property would
                                         cause the Lien of the Security over
                                         such Property

    	 	29	 

    	 	 	 

    

 

to
cease to be
perfected under Applicable
Law, or suffer
or permit in
any other manner any
of its Property to not be subject
to the Lien of the Security or to be or become located in a
jurisdiction as a result of which the Lien of Security over such Property is not
perfected, unless (i) Borrower has first given 30 days'
prior written notice thereof to the Lender, and
(ii) the Borrower has first executed and delivered
to the Lender
all Security and all financing or registration
statements in form and substance satisfactory to the Lender which the Lender or its counsel,
acting reasonably, from time to time deem necessary or advisable to ensure that the Security at
all times constitutes a perfected
first-priority Lien (subject only to Permitted Liens)
over such Property notwithstanding the movement or
location of such Property as aforesaid together
with such supporting certificates , resolutions, opinions and other documents
as the Lender may deem necessary or desirable
in connection with such security and registrations.

 

		(k)	Amendments
                                         to Organizational
                                         Documents. Amend
                                         any of
                                         its Organizational Documents
                                         in a
                                         manner that
                                         would be
                                         materially prejudicial
                                         to the
                                         interests of the Lender under the Loan
                                         Documents.

 

		(l)	Amendments
                                         to other Documents.
                                         Amend, vary
                                         or alter
                                         any Material Contract
                                         or Material Licence
                                         in a
                                         manner that
                                         would reasonably be
                                         expected to
                                         have a
                                         Material Adverse Effect.

 

		(m)	Non-Arm's
                                         Length Transactions.
                                         Except as
                                         contemplated by
                                         Section 9.2(f),
                                         effect any transactions
                                         with any
                                         Person not
                                         dealing at
                                         arm's length
                                         unless such transaction is on market
                                         terms and consistent with transactions with Persons
                                         at arm's length.

 

		(n)	Sale
                                         and Leaseback.
                                         Enter into
                                         any arrangement
                                         with any
                                         Person providing
                                         for the leasing
                                         by Borrower,
                                         as lessee,
                                         of Property which has
                                         been or
                                         is to be sold or transferred by Borrower to such Person or to any other Person
                                         to whom funds have been or are to be advanced
                                         by such Person on the security of such Property or the lease obligation of Borrower.

 

		(o)	New
                                         Subsidiaries. Create
                                         or acquire
                                         any Subsidiary
                                         after the
                                         date of
                                         this Agreement, including
                                         in respect
                                         of any
                                         Subsidiaries acquired as part of
                                         an Acquisition permitted under this Agreement, unless: (i) such Subsidiary
                                         exists pursuant to the laws of a state of
                                         the United States
                                         of America ; (ii) all
                                         of the issued and outstanding Equity
                                         Interests of such Subsidiary is owned by
                                         the Borrower; (iii) such new Subsidiary provides
                                         a legal, valid and enforceable guarantee in
                                         favour of the Lender and first-ranking security in
                                         form and substance satisfactory to the Lender; and in each case appropriate legal opinions
                                         are delivered by Borrower's counsel to the Lender.

 

		(p)	Compensation.
                                         Until such
                                         time that
                                         the Equity
                                         Raise is
                                         completed and
                                         the Loan
                                         is repaid, the
                                         directors and
                                         the management of
                                         the Borrower shall not receive any fees, salaries or other forms of compensation
                                         from the Borrower other than what is set forth in Schedule 9.2(p).

 

9.3
 Entitled to Perform
Covenants

 

If
the Borrower fails to
perform any covenant
contained in this Article
9, or in
any other provision
hereof or of any
of the other Loan Documents, the
Lender may perform in any manner deemed
fit by it without thereby waiving any rights
to enforce this Agreement or the other
Loan Documents, any such covenant

    	 	30	 

    	 	 	 

    

 

capable
of being performed
by it and
if any such
covenant requires the
payment of money,
the Lender may make
such payments. All sums so expended
by the Lender
will be deemed
to form part of the Obligations, will bear
interest at the same rate as the Loan and
will be payable by the Borrower on demand.

 

		9.4	Covenants
                                         of the
                                         Lender

 

		(a)	Subject
                                         to compliance
                                         with Applicable
                                         Laws (including,
                                         for greater
                                         certainty, applicable securities
                                         laws) and
                                         Section 9.4(b):

 

		(i)	The
                                         Lender will
                                         commit a
                                         minimum of
                                         $2,500,000 to
                                         participate in
                                         the initial public
                                         offering of
                                         Equity Interests of the Borrower, if the price per share offered to the Lender
                                         is equal to a 20%
                                         discount to the initial
                                         public offering price (the "Equity
                                         Commitment").

 

		(ii)	The
                                         Lender may,
                                         in its
                                         sole discretion,
                                         commit up
                                         to an
                                         additional $2,500,000
                                         to participate in
                                         the initial
                                         public offering
                                         of the
                                         Equity Interests of
                                         the Borrower,
                                         if the price
                                         per share
                                         offered to the Lender
                                         is equal to
                                         a 20% discount
                                         to the initial public offering price.

 

		(b)	Notwithstanding
                                         Section 9.4(a),
                                         the Lender
                                         will only
                                         participate in
                                         the Borrower's
                                         initial public offering, if
                                         and only
                                         if the
                                         Equity Interests
                                         issued to the Lender in connection therewith will not be subject to a lock-up
                                         or hold period and thus be
                                         freely tradable immediately following the completion of the initial public offering.

 

		(c)	For
                                         the purposes
                                         of this
                                         Article 9,
                                         an initial
                                         public offering
                                         shall mean
                                         an initial
                                         public offering of
                                         the common shares
                                         of the Borrower or
                                         other form of going-public transaction (including, without limitation, a
                                         reverse take-over) where
                                         the proceeds
                                         received by the Borrower
                                         are no less than $45,000,000, exclusive
                                         of the Equity Commitment, and
                                         the Equity interests of the Borrower are posted and listed for trading on any
                                         one of the NYSE, NASDAQ, TSX or any other exchange approved by the Lender.

 

ARTICLE
10 

CONDITIONS
 PRECEDENT

 

		10.1	Conditions
                                         Precedent to
                                         Loan

 

The
obligations of the
Lender to fund
the Loan are
subject to the
satisfaction or waiver
on or before the Closing
Date of the
following conditions precedent:

 

		(a)	this
                                         Agreement will
                                         have been
                                         executed and
                                         delivered by
                                         all parties
                                         hereto;

 

		(b)	the
                                         Lender Distribution
                                         Agreement will
                                         have been
                                         executed and
                                         delivered by
                                         all parties thereto;

 

		(c)	the
                                         Lender will
                                         have received
                                         certified copies
                                         of the
                                         Organizational Documents
                                         of Borrower and
                                         Mariel, the
                                         resolutions authorizing
                                         the execution,
                                         delivery and performance of Borrower's
                                         and Mariel's respective obligations under the Loan Documents and the transactions contemplated
                                         herein, and the incumbency of the officers
                                         of Borrower;

    	 	31	 

    	 	 	 

    

 

		(d)	copies
                                         of all
                                         shareholder agreements
                                         and partnership
                                         agreements, if
                                         any, applicable
                                         to Borrower and
                                         Mariel,
                                         certified by Borrower
                                         to be
                                         true, will have
                                         been delivered
                                         to the Lender's satisfaction;

 

		(e)	Borrower
                                         and any
                                         other Affiliate
                                         of the
                                         Borrower who
                                         has provided
                                         Collateral will
                                         be in compliance
                                         in all
                                         material respects
                                         with all (if any) Material Contracts
                                         and Material Licences to the reasonable satisfaction of the Lender and copies of all
                                         Material Contracts and Material Licences if any,
                                         applicable to Borrower and any other Affiliate of the Borrower who has provided
                                         Collateral, will have been delivered to the Lender;

 

		(f)	evidence
                                         that
                                         all necessary
                                         or required
                                         consents or
                                         approvals of
                                         any Governmental
                                         Authority or
                                         other Person
                                         in connection with the delivery of the Loan Documents have been obtained;

 

		(g)	releases,
                                         discharges, estoppels
                                         and postponements
                                         with respect
                                         to all
                                         Liens which
                                         are not Permitted
                                         Liens, if
                                         any, will have been delivered to the
                                         Lender;

 

		(h)	duly
                                         executed copies
                                         of the
                                         Security and
                                         the Security
                                         Documents will
                                         have been delivered
                                         to the
                                         Lender and
                                         such financing statements or other registrations of
                                         such Security, or notice thereof, will have
                                         been filed, registered, entered or recorded in all offices of public record
                                         necessary or
                                         desirable in the opinion of the
                                         Lender to preserve or protect the charges and security
                                         interests created thereby;

 

		(i)	a
                                         currently dated
                                         letter of
                                         opinion of
                                         counsel to
                                         the Borrower
                                         and Mariel;

 

		(j)	no
Default or Event
of Default has
occurred and is
continuing on the
Closing Date or would
result from making the Loan and a senior officer of the Borrower will have certified the same to the Lender;

 

		(k)	all
                                         representations and
                                         warranties made
                                         by Borrower
                                         in the
                                         Loan Documents
                                         are true and
                                         correct in
                                         all material respects;

 

		(l)	no
                                         Material Adverse
                                         Effect has
                                         occurred;

 

		(m)	the
Lender will have received such
 additional evidence,
documents or undertakings as
the Lender will reasonably request
to establish the consummation of the transactions
contemplated hereby and be satisfied, acting reasonably, as to the taking of all proceedings
in connection herewith in compliance with the conditions set forth in this Agreement;

 

		(n)	the
                                         Lender will
                                         have completed
                                         all due
                                         diligence which
                                         it considers
                                         necessary or appropriate
                                         in its
                                         discretion in
                                         regard to
                                         Borrower and its Property,
                                         books and
                                         records, operations, prospects and condition
                                         (financial or otherwise),
                                         including, without limitation, in regards
                                         to past
                                         and ongoing compliance with
                                         Applicable Laws (including Environmental
                                         Laws), union and labour relations and
                                         pension matters; and

 

		(o)	the
                                         Lender will
                                         have received
                                         evidence that
                                         the Origination
                                         Fee (Section
                                         4.6), the
                                         Work Fee (Section 4.7)
                                         and the
                                         Lender's Expenses
                                         (Section 4.8) have
                                         been paid or
                                         are being paid concurrently with the provision of the
                                         Loan.

    	 	32	 

    	 	 	 

    

 

ARTICLE
11 

EVENTS
OF DEFAULT

 

		11.1	Events
                                         of Default

 

The
occurrence  of any 
one or  more of
the following  events
will  constitute  an
"Event  of  Default"
hereunder:

 

		(a)	the
                                         failure
                                         of the
                                         Borrower to
                                         pay any
                                         principal hereunder
                                         when due;
                                         or

 

		(b)	the
                                         failure of
                                         the Borrower
                                         to pay
                                         any interest
                                         or other
                                         Obligations (other
                                         than principal hereunder)
                                         when due;
                                         or

 

		(c)	the
                                         failure of
                                         the Borrower
                                         to perform,
                                         keep or
                                         observe any
                                         covenant, condition,
                                         promise, agreement or
                                         obligation under
                                         this Agreement (other
                                         than as described in Sections 9.1 11.1(a)
                                         and (b))
                                         or in
                                         any of the Loan Documents,
                                         in each case which failure is not
                                         cured within 15 days of
                                         receipt of written notice from the
                                         Lender of such
                                         failure; or

 

		(d)	the
                                         making or
                                         furnishing by
                                         Borrower or
                                         any director
                                         or officer
                                         thereof to
                                         the Lender
                                         of any representation,
                                         warranty, certificate,
                                         schedule, report
                                         or other
                                         communication of
                                         a material nature
                                         within or in connection with this Agreement
                                         or the Loan Documents, which is untrue or misleading in any material respect when made;
                                         provided that, no Event of Default under
                                         this Section 11.1(d) will occur if such
                                         representation, warranty
                                         or other
                                         communication is capable of being
                                         corrected within 30 days of being made and is diligently corrected within such 30 day
                                         period; or

 

		(e)	if
                                         Borrower or
                                         Mariel ceases
                                         or threatens
                                         to cease
                                         to carry
                                         on business
                                         generally or admits
                                         it inability
                                         or fails
                                         to pay its
                                         debts generally; or

 

		(f)	if
                                         (i) other
                                         than the
                                         payments listed
                                         on Schedule
                                         11.1(f),
                                         the Borrower
                                         fails to
                                         make any
                                         payment when
                                         such payment is due and payable to
                                         any Person in relation to any indebtedness for borrowed
                                         money or other indebtedness
                                         or liabilities arising in respect
                                         of any other Debt which in the aggregate
                                         principal amount then
                                         outstanding is in excess of $25,000
and such payment is not made within any applicable cure or grace period; or
(ii) the Borrower defaults in the observance or performance of any other agreement or
condition in relation to any such indebtedness to any Person which
in the aggregate principal amount then outstanding is in excess of $25,000 or contained in any instrument or agreement evidencing,
securing or relating thereto and such default is not waived or cured within any applicable cure or grace period and the
obligations hereunder are accelerated by such Person; or

 

		(g)	if
                                         Borrower or
                                         Mariel denies
                                         its obligations
                                         under any
                                         of the
                                         Loan Documents
                                         or claims any
                                         of the
                                         Loan Documents to be invalid or withdrawn
                                         in whole or in part; or

 

		(h)	any
                                         of the
                                         Loan Documents
                                         or any
                                         material provision
                                         of any
                                         of them
                                         becomes unenforceable, unlawful
                                         or is
                                         changed by
                                         virtue of
                                         legislation or by
                                         a court, statutory board or
                                         commission, in each case in a manner that is adverse to the Lender, if Borrower
                                         or Mariel does not, within 15 Business Days
                                         of receipt of notice of such Loan Document or material provision becoming unenforceable,
                                         unlawful or being
                                         changed and being provided with any
                                         required new agreement or amendment for execution
                                         by the Lender (acting reasonably), replace
                                         such Loan Document with
                                         a new agreement that is in form

    	 	33	 

    	 	 	 

    

 

and
 substance  satisfactory 
to  the  Lender 
or  amend  such 
Loan  Document  to 
the satisfaction of the
Lender; or

 

		(i)	if
                                         a decree
                                         or order
                                         of a
                                         court of
                                         competent jurisdiction
                                         is entered
                                         adjudging Borrower
                                         or Mariel a
                                         bankrupt or
                                         insolvent or
                                         approving a
                                         petition seeking
                                         the winding-up of .Borrower or Mariel
                                         under the United States Bankruptcy Code
                                         or any other bankruptcy, insolvency or
                                         analogous laws or issuing sequestration or
                                         process of execution against any substantial part of the
                                         Collateral or ordering the winding up or liquidation of
                                         its affairs; or

 

		(j)	if
                                         Borrower or
                                         Mariel becomes
                                         insolvent, makes
                                         any assignment
                                         in bankruptcy
                                         or makes any
                                         other similar
                                         assignment for
                                         the benefit
                                         of creditors,
                                         makes any proposal
                                         under the United States Bankruptcy
                                         Code or any comparable law, seeks relief
                                         under any other bankruptcy, insolvency or analogous
                                         law, is adjudged bankrupt,
                                         files a petition
                                         or proposal to take advantage of any
                                         act of insolvency, consents to
                                         or acquiesces in the appointment of
                                         a trustee, receiver, receiver and manager, interim receiver, custodian, sequestrator
                                         or other Person with similar powers of itself or of all or any substantial portion
                                         of its
                                         assets, or files a
                                         petition or otherwise
                                         commences any proceeding
                                         seeking any reorganization, arrangement,
                                         composition or readjustment under any applicable
                                         bankruptcy, insolvency, moratorium, reorganization or other similar law affecting creditors'
                                         rights or consents to, or acquiesces in, the
                                         filing of such a petition;
                                         or

 

		(k)	if
                                         any proceeding
                                         or filing
                                         will be
                                         instituted or
                                         made against
                                         Borrower or
                                         Mariel seeking
                                         to have an
                                         order for
                                         relief entered against Borrower or
                                         Mariel as
                                         debtor or to adjudicate it bankrupt or insolvent, or seeking liquidation, winding-up,
                                         reorganization, arrangement, adjustment or composition
                                         under any law relating to bankruptcy, insolvency,
                                         reorganization or relief or debtors (including,
                                         without limitation, the United States Bankruptcy
                                         Code or seeking appointment
                                         of a
                                         receiver, trustee, custodian
                                         or other similar official for
                                         Borrower or for any
                                         substantial part of
                                         its properties or
                                         assets unless the same is being contested
                                         actively and diligently in
                                         good faith by appropriate and
                                         timely proceedings and is dismissed, vacated or permanently stayed within 60
                                         days of institution; or

 

		(l)	if
                                         a Person
                                         takes possession
                                         by appointment
                                         of a
                                         receiver, receiver
                                         and manager,
                                         or otherwise of
                                         any material portion
                                         of the
                                         Property of Borrower or
                                         Mariel; or

 

		(m)	if
                                         a final
                                         judgment, execution,
                                         writ of
                                         seizure and
                                         sale,
                                         sequestration or decree
                                         for the
                                         payment of
                                         money due will
                                         have been obtained or entered against
                                         the Borrower or Mariel in an amount in excess
                                         of $50,000 and such judgment, execution, writ of
                                         seizure and sale, sequestration or decree will not
                                         have been and remain vacated, satisfied, discharged
                                         or stayed pending appeal within the applicable appeal period or is not otherwise covered
                                         by insurance; or

 

		(n)	if
                                         any of
                                         the Security
                                         will cease
                                         to be
                                         a valid
                                         and perfected
                                         first-priority security
                                         interest subject only
                                         to Permitted Liens and the
                                         Borrower will have failed to
                                         remedy such
                                         default within 10 Business Days of
                                         the Borrower becoming aware of such fact;
                                         or

 

		(o)	if
                                         an event
                                         of default occurs
                                         under any
                                         Material Contract
                                         or Material
                                         Licence and
                                         which is committed
                                         by Borrower or
                                         any other
                                         Affiliate of
                                         the Borrower
                                         who has
                                         provided Collateral (other
                                         than an event of default specifically
                                         dealt with in this Section) and
                                         such event of

    	 	34	 

    	 	 	 

    

 

default
has or would
reasonably be expected
to have a
Material Adverse Effect
and is not remedied
within 30 days
after the Borrower becomes aware
of such event
of default; or

 

		(p)	if
                                         a Change
                                         of Control
                                         occurs; or

 

		(q)	all
                                         or any material
                                         part of
                                         the Property
                                         of Borrower
                                         or Mariel
                                         will be
                                         nationalized, expropriated or
                                         condemned, seized
                                         or otherwise
                                         appropriated, or custody or control of such Property of Borrower or Mariel will
                                         be assumed by
                                         any Governmental Authority or any court of competent jurisdiction
                                         at the instance of any Governmental Authority, in each case which has or would
                                         reasonably be expected to have a Material
                                         Adverse Effect except where contested
                                         in good faith by proper proceedings
                                         diligently pursued where a stay of enforcement is in effect; or

 

		(r)	if
                                         any order
                                         is made
                                         by any
                                         Governmental Authority
                                         in relation
                                         to the
                                         Borrower or
                                         Mariel, or there
                                         is any
                                         change of
                                         law, or
                                         the interpretation or administration therefore, in
                                         each case, which in the reasonable
                                         opinion of the Lender,
                                         operates to prevent or restrict the
                                         trading of the common shares of the Borrower.

 

		11.2	Acceleration
                                         and Termination
                                         of Rights

 

If
any Event of
Default occurs and
continues, all Obligations
owing by the
Borrower under the
Loan Documents will, at
the option of the Lender,
become immediately due and payable, all
without notice, presentment, protest, demand, notice
of dishonour or any other demand or
notice whatsoever, all of which are hereby
expressly waived by Borrower; provided, if any Event of Default described 
in Section 11.1(e), 11.1(i) through 11.1(k) with respect to the Borrower
occurs, the outstanding principal amount of
the Loan and all other Obligations
will automatically be and become immediately
due and payable. In such event the Lender may, in its discretion, exercise any
right or recourse and/or proceed by any action, suit, remedy or proceeding against
Borrower or Mariel authorized or permitted by law for the recovery of all the Obligations of the Borrower or Mariel to the Lender
and proceed to exercise any and all rights hereunder and under
the Security and no such remedy for the
enforcement of the rights of
the Lender will be exclusive of or dependent on any other remedy but any one or more of such remedies may from time to
time be exercised independently or in combination.

 

		11.3	Remedies
                                         Cumulative and
                                         Waivers

 

For
greater certainty, it
is expressly understood
and agreed that
the rights and
remedies of the
Lender hereunder or under
any other Loan Document or instrument executed
pursuant to this Agreement are cumulative
and are in addition to
and not in substitution for
any rights or remedies provided
by law or by equity; and any
single or partial exercise by the
Lender of any right or
remedy for a
default or breach
of any term, covenant, condition or agreement contained in this Agreement
or any other Loan Document will not be deemed to be a waiver
of or to alter, affect or prejudice any
other right or remedy or other rights
or remedies to which the Lender may be lawfully
entitled for such default or breach.
Any waiver by the Lender of the
strict observance, performance or
compliance with any
term, covenant, condition or other matter
contained herein and any indulgence granted, either expressly
or by course
of conduct, by the Lender will be effective
only in the specific instance and for the
purpose for which it was given and will be deemed
not to be a waiver of any
rights and remedies of the Lender under
this Agreement or any other Loan Document
as a result of any other default or breach hereunder or thereunder.

    	 	35	 

    	 	 	 

    

 

		11.4	Saving

 

The
Lender will not be
under any obligation
to the Borrower
or any other
Person to realize
any Collateral or enforce the Security
or any part thereof or to allow any of the Collateral to be sold, dealt with or otherwise disposed of. The Lender
will not be responsible or liable
to Borrower or any other Person
for any loss or damage upon the realization
or enforcement of,
the failure to
realize or enforce
the Collateral or any part thereof or
the failure to allow
any of the Collateral to
be sold, dealt with or otherwise disposed of or for
any act or omission on their
respective parts or on
the part of any director, officer,
agent, servant or adviser in connection
with any of the foregoing, except that the Lender
may be responsible or
liable for any loss or damage arising
from the wilful misconduct or gross negligence
of Lender.

 

		11.5	Third
                                         Parties

 

No
Person dealing with
the Lender or
any agent of
the Lender will
be required to
inquire whether the Security
has become enforceable, or whether the powers which the Lender is purporting
to exercise have been exercisable, or whether any Obligations
remain outstanding upon the security thereof,
or as to the necessity or expediency of
the stipulations and conditions subject
to which any sale
will be made, or otherwise as to
the propriety or regularity
of any sale or other
disposition or any other
dealing with the Collateral charged
by such Security or any part thereof.

 

		11.6	Set-Off
                                         or Compensation

 

In
addition to and
not in limitation
of any rights
now or hereafter
granted under Applicable
Law, if repayment is
accelerated pursuant to Section 11.1(r), the Lender may at any time and from
time to time without notice to the
Borrower or any other Person, any notice being
expressly waived by the Borrower,
set-off and compensate and apply any and all deposits, general or special,
time or demand, provisional or final, matured or unmatured, and any other indebtedness at any time owing
by the Lender, to or for the credit of
or the account of the Borrower, against and on account of
the Obligations notwithstanding that any of them are contingent
or unmatured.

 

ARTICLE
12 

INDEMNIFICATION,
ETC.

 

		12.1	General
                                         Indemnity

 

The
Borrower agrees indemnify
and hold harmless
the Lender, and
each of its
Affiliates, and Subsidiaries, and
its respective officers, directors, employees and
agents (each an "Indemnified Party") from and against any and all
obligations , losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or
nature (including, without limitation, the disbursements and the fees (on a
solicitor-client basis) of one legal counsel (unless it would be
inappropriate for one counsel
to represent all Indemnified
Parties due to a conflict of
interest or otherwise in which case, all
legal counsel for each Indemnified Party)
in connection with any investigative, administrative
or judicial proceedings, whether or not any Indemnified Party
will be designated a party thereto), (collectively, "Losses")
which may be imposed on, incurred by, or asserted against, any Indemnified Party
(whether direct, indirect or consequential
and whether based on any federal, provincial, state
or local laws or regulations, including, without limitation, securities, environmental
and commercial laws and regulations, under common law or in equity, or based on contract or otherwise) in any manner relating
to or arising out of this Agreement or any other Loan Document, or
any act, event or transaction related or
attendant thereto, the making and/or
the management of the Loan or the use or intended use of the
proceeds of the Loan; provided, however that the
Borrower will have no obligation hereunder
to any Indemnified Party to the extent that such Losses were caused by
or resulted from the wilful misconduct or gross negligence of

    	 	36	 

    	 	 	 

    

 

such
Indemnified Party. To
the extent that
the undertaking to indemnify
set forth in
the preceding sentence may
be unenforceable against
the Borrower because it violates
any law or public policy, the Borrower will satisfy such undertaking to the maximum
extent permitted by Applicable Law. Any Losses covered by this indemnity will be paid
to each Indemnified Party on demand, and, failing prompt payment, will, together with interest
thereon at the Deemed Interest Rate from
the date incurred by each Indemnified Party until
paid in full, be added to the Obligations and be
secured by the Collateral. The provisions
of this Section 12.1 will survive the satisfaction and payment of all
Obligations and the termination of this Agreement.

 

		12.2	Taxes

 

All
payments made by
the Borrower under
this Agreement and
the Loan Documents
will be made
free and clear of,
and without deduction
or withholding for or on
account of, any present or
future income, stamp or other taxes, levies, assessments, imposts, deductions,
charges, or withholdings imposed by any foreign, federal, provincial, state, local or other
jurisdiction or any Governmental Authority thereof or political subdivision or taxing
authority therein, excluding taxes imposed
on the net income or the capital of the Lender (all such non-excluded taxes being hereinafter
called "Taxes"). If any Taxes are required to be withheld from any
amounts so payable to the
Lender hereunder or under any Loan
Documents the amounts so payable will be increased to the extent necessary to yield
to the recipient (after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts
specified in this Agreement or any other
Loan Documents. If the Borrower is required
by Applicable Law to make any deduction or withholding
on account of any Taxes or other amount from any sum paid or expressed to be payable to the Lender under
this Agreement or any other Loan Document,
then: (a) the Borrower will notify the Lender of any such requirement or any
change in any such requirement as soon as it becomes aware of it; (b) the Borrower will pay any such Taxes or other amount
before the date on which penalties attached
thereto become due and payable; (c)
the sum payable by the
Borrower in respect of which the relevant deduction, withholding or payment
is required will be increased to the extent necessary to ensure that, after
the making of that deduction, withholding
or payment, the recipient
receives on the due
date and retains (free from any liability in respect of any such deduction,
withholding or payment) a sum equal to that which
it would have received and so retained had no such deduction, withholding
or payment been required or made;
and (d) within 30 days after payment of
any sum from which the
Borrower is required by Applicable Law to
make any deduction or withholding, and within 30 days after the due date of payment of any Taxes
or other amount which it is required by clause (b) above to pay, it will deliver
to the Lender all such certified documents
and other evidence as to the making of
such deduction, withholding or payment
as (i) are reasonably satisfactory to
the Lender as proof
of such deduction, withholding or
payment and of the remittance
thereof to the relevant taxing
or other authority and
(ii) are reasonably required by the
Lender to enable it to
claim a tax credit
with respect to such
deduction, withholding or payment. If the Borrower fails to pay any Taxes when
due to the appropriate taxing authority, the Borrower will indemnify the Lender for
any incremental taxes, interest or penalties
that may become payable by the Lender
as a result of any such failure. The provisions of this Section
12.2 will survive the satisfaction and payment of all Obligations and the termination
of this Agreement.

 

ARTICLE
13 

GENERAL
 PROVISIONS

 

		13.1	Notice

 

Any
notice or other
communication required or
permitted to be
given hereunder will
be in writing
and will be given
by facsimile or other means of electronic
communication or by hand delivery as hereinafter provided. Any
such notice, if sent by fax or
other means of electronic communication,
will be deemed to

 

    	 	37	 

    	 	 	 

    

 

have
been received on
the day of
sending, or if
delivered by hand
will be deemed
to have been
received at the time
it is delivered
to the applicable
address noted below. Notices
of change of address
will also be governed by this Section 13.1.
Notices and other communications will be addressed as follows:

 

if
to the Borrower:

 

Ember
Therapeutics, Inc.

138
East 57th Street

New
York, NY 10022

 

Attention:
 Joseph Hernandez

Email:hernanez_joe@yahoo.com

if
to the Lender:

 

Knight
Therapeutics Inc.

376
Victoria Avenue, Suite
220

Westmount, Quebec H3Z 1C3 Canada

Attention:
 Jeffrey Kadanoff

 

Email:
 jkadanoff@gud-knight.com

With
a copy to (which
shall not constitute
notice):

Dentons Canada LLP

1
Place Ville Place

39th
Floor

Montreal,
Quebec  H3B 4M7

 

Email:charles.spector@dentons.com

 

		13.2	Choice
                                         of Governing
                                         Law and
                                         Construction

 

This
 Agreement  and
any  non-contractual  obligations
 arising  out
of or in
connection  with  it will 
be governed by the
laws of the
State of New York.

 

		13.3	Attornment

 

The
Parties hereto irrevocably
submit and attorn
to the non-exclusive
jurisdiction of the
courts of the State of
New York for all
matters arising out
of, or in connection with,
this Agreement.

 

		13.4	Press
                                         Releases

 

Each
party hereto agrees
that it will promptly
provide the other
party with drafts
of any press
releases relating to the subject
matter hereof, including the entering
into of this Agreement, for review and comment before the issuance thereof, such
review and comments not to be unreasonably
withheld or delayed.

    	 	38	 

    	 	 	 

    

 

		13.5	Modification
                                         and Benefit
                                         of Agreement

 

This
Agreement and the
other Loan Documents
may not be
modified, altered or
amended except by
an agreement in writing
signed by the Borrower and the Lender. The Borrower may not sell, assign or
transfer this Agreement, or the other
Loan Documents or any portion thereof
including, without limitation, the Borrower's right, title, interest, remedies, powers
or duties thereunder. The sale, assignment, transfer or other disposition by the
Lender, at any time and from time to time hereafter,
of this Agreement, or the other Loan Documents,
or of any portion thereof, or participation
therein including, without limitation,
the right, title, interest, remedies, powers
and/or duties of the Lender thereunder
will require the prior written consent
of the Borrower (not to be unreasonably
withheld or delayed), unless an Event of
Default is continuing or unless such sale, assignment, transfer or other disposition is to an
Affiliate of the Lender. The Borrower agrees that
it will execute and deliver such
documents as the Lender may request in connection with
any such sale, assignment, transfer
or other disposition. This Agreement will
inure to the benefit of, and be binding upon, the parties hereto and their successors and
permitted assigns.

 

		13.6	Waivers,
                                         Confidentiality, Information
                                         Sharing

 

		(a)	In
                                         no event
                                         will any party
                                         hereto be
                                         liable for
                                         lost profits
                                         or other
                                         special or
                                         consequential damages.

 

		(b)	To
                                         the maximum
                                         extent permitted
                                         by Applicable
                                         Law, the
                                         Borrower hereby
                                         waives all rights
                                         to a
                                         hearing of
                                         any kind
                                         before the exercise by the Lender
                                         of its rights to repossess the
                                         Collateral without judicial
                                         process or to
                                         reply, attach or levy upon such Collateral
                                         without prior notice or
                                         hearing.

 

		(c)	To
                                         the maximum extent
                                         permitted by
                                         Applicable Law,
                                         the Borrower
                                         hereby waives demand,
                                         presentment, protest
                                         and notice
                                         of nonpayment.

 

		(d)	Failure
of the Lender,
at any time
or times hereafter, to require strict
performance by the Borrower of
any provision of
this Agreement or any
of the other Loan Documents will
not waive, affect or diminish any right of the Lender thereafter to demand strict compliance and performance therewith. Any suspension
or waiver by the Lender of a Default or Event of Default under
this Agreement or any default under
any of the Loan Documents will not
suspend, waive or affect any other
Default or Event
of Default under
this Agreement or any other default
under any of other Loan Documents, whether
the same is prior
or subsequent thereto and whether of the
same or of a different kind
or character. No delay on the part of the Lender in the exercise of any right
or remedy under this Agreement or any other Loan Documents will preclude any other or further exercise thereof or the exercise
of any right or remedy. None of the undertakings, agreements, warranties, covenants
and representations of the Borrower
contained in this Agreement or any
of the other Loan Documents and no Default or Event of Default under this Agreement
or default under any of the other Loan Documents will be deemed to have been
suspended or waived by the Lender unless such suspension or
waiver is in writing, signed by duly
authorized officer(s) of the Lender and directed
to the Borrower specifying such suspension
or waiver.

 

		(e)	The
                                         Borrower hereby
                                         agrees and
                                         acknowledges that
                                         the Lender
                                         will be
                                         permitted to share
                                         with any
                                         of its
                                         Affiliates, any information concerning
                                         the Borrower, Borrower, this Agreement
                                         and all other Loan Documents, and the subject matter
                                         thereof, that the Lender has or will
                                         have in its possession.

 

    	 	39	 

    	 	 	 

    

 

		13.7	Judgment
                                         Currency

 

If
in the recovery
by the Lender
of any amount
owing hereunder in
any currency, judgment
can only be obtained in another
currency and because
of changes in the exchange rate of such
currencies between the date
of judgment and payment in full of
the amount of such judgment, the amount
of recovery under the judgment differs from
the full amount owing hereunder, the Borrower will pay any such shortfall to
the Lender, and such shortfall can be claimed by the Lender against the Borrower as an alternative or additional cause of action
and any surplus received by the Lender will be repaid to the Borrower.

 

		13.8	Severability

 

If
any provision of
this Agreement is
held to be
prohibited by or
invalid under Applicable
Law, such provision will
be ineffective only
to the extent
of such prohibition
or invalidity, without invalidating the
remainder of such provision or remaining provisions of this Agreement.

 

		13.9	Conflicts

 

In
the event there occurs
any conflict or
inconsistency between any
provision hereof and
any provision of the
other Loan Documents,
the provision hereof,
to the extent of any
such conflict or inconsistency, will govern.

 

		13.10	Entire
                                         Agreement

 

This
Agreement and the other
Loan Documents embody the entire
agreement and understanding between
the parties hereto
and thereto and
supersede all prior
agreements and understandings
between such parties relating to the subject matter
hereof and thereof and may
not be contradicted by evidence of
prior or contemporaneous agreements of the
parties. There are no unwritten oral agreements between the parties related to the
subject matter of this Agreement and the other Loan
Documents.

 

		13.11	Counterpart
                                         Execution/Electronic Delivery

 

This
Agreement may be
executed in counterpart
and delivered by
fax or other
electronic means of delivery.

 

[Signature
Page Follows]

    	 	40	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the
Borrower has duly
executed this Agreement
as of the
date set out
on the first page hereof.

 

	EMBER THERAPEUTICS, INC.

    

    

    Per: /s/ Joseph Hernandez

    Name: Joseph Hernandez

    Title: Executive Chairman

 

IN
WITNESS WHEREOF, the Lender has duly executed this Agreement as of the date set out on the first page hereof.

 

	KNIGHT
                                         THERAPEUTICS, INC.

                                         

                                         

                                         Per: /s/ Jeffrey Kadanoff

                                         Name: Jeffrey Kadanoff

                                         Title: CFO

 

 

Signature
Page to the Loan Agreement 

    	 	41Exhibit
10.11

 

GENERAL SECURITY AGREEMENT 

 

This
General Security Agreement is dated as of August 3, 2015.

FROM:

EMBER
THERAPEUTICS, INC., a Delaware corporation ("Ember") 

and

MARIEL
THERAPEUTICS, INC., a Delaware corporation ("Mariel") who along with Ember are collectively referred to as the
"Debtor")

 

TO:

 

KNIGHT
THERAPEUTICS INC., a corporation formed under the laws of Canada 

(the "Secured Party") 

 

The
Debtor and the Secured Party agree as follows :

 

1.               
Security Interest. The Debtor hereby grants to the Secured Party a security interest ("Security Interest") in
all right, title and interest of the Debtor in all personal property of the following types, wherever located and whether now
owned or hereafter owned or acquired by the Debtor, in all Proceeds and Products thereof in any form, in all parts, accessories,
attachments, special tools, additions, replacements, substitutions and accessions thereto or therefor, in all supporting obligations
thereof and in all increases or profits received therefrom, including, WITHOUT LIMITATION: Goods (including, but not limited to,
Equipment and Inventory); Accounts; Chattel Paper; Documents; Instruments; Investment Property; General Intangibles; Deposit Accounts;
and Letter-of-Credit Rights ("Collateral"). To the extent that any of the Collateral consisting of contractual rights
(other than Material Contracts (as defined in the Loan Agreement defined below)), licences or permits (excluding, in each case,
any proceeds relating thereto or arising therefrom) (the "Unassigned Property") may not be assigned to the Secured Party
because (i) the same is not assignable without the consent of the other party or parties thereto and such consent has not been
obtained as of the date hereof; (ii) the same is not assignable without complying with stated conditions and such conditions have
not been satisfied as of the date hereof; (iii) the same is the subject of an express prohibition against assignment which has
not been waived as of the date hereof; or (iv) the assignment of the same would otherwise constitute a breach or permit the acceleration
or termination of such Unassigned Property, the Security Interest created hereby on any such Unassigned Property will, until such
consent to such assignment, compliance with such conditions or waiver of such express prohibition, breach or right to accelerate
or terminate has been obtained, be suspended and will take effect as of the date hereof when such consent or waiver has been obtained
or such compliance has been effectuated. Any such Unassigned Property will, to the fullest extent permitted by law, be held by
the Debtor as mandatory for the Secured Party and such Unassigned Property will be for the account of the Secured Party, subject
to the terms of this Agreement.

 

2.                
Indebtedness Secured. The Security Interest secures payment of any and all of the Obligations (as defined in that certain
Loan Agreement dated as of the date hereof, executed by and between the Debtor and the Secured Party (as amended, modified and
restated from time to time, the "Loan Agreement")).

 

3.                
Representations and Warranties of the Debtor. The Debtor represents and warrants, and, so long as this Security Agreement
is in effect, shall be deemed continuously to represent and warrant that: (a) any and all trade names, division names, assumed
names or other names under which the Debtor transacts any part of its business are specified in an appropriate schedule hereto;
the Debtor's business address and chief executive office or principal office are specified above or on an appropriate schedule
hereto; the Debtor's form and State or jurisdiction of organization are specified in an appropriate schedule hereto, the Debtor's
Tax ID Number and Organizational Number, if any, are specified on
the Schedule hereto, and the Debtor's records concerning the Collateral are kept at one of the addresses specified above; (b)
each Account, General Intangible and Chattel Paper constituting Collateral is genuine and enforceable in accordance with its terms
against the party obligated to pay it ("Account Debtor"); and no Account Debtor has any defense, setoff, claim or counterclaim
against the Debtor which can be asserted against the Secured Party, whether in any proceeding to enforce the Collateral or otherwise;
(c) the amounts represented from time to time by the Debtor to the Secured Party as owing by each Account Debtor or by all Account
Debtors will be and are the correct amounts actually and unconditionally owing by such Account Debtor or Debtors individually
and in the aggregate, except for normal cash discounts where applicable; (d) each Instrument and each Document constituting Collateral
is genuine and in all respects what it purports to be; and (e) any Collateral which is a Deposit Account, Commodity Account, Securities
Account or letter of credit is specifically described on an appropriate schedule hereto. 

    	 	1	 

     

    

 

4.               
Covenants of the Debtor. So long as this Security Agreement is in effect, the Debtor: 

(a)           
will defend the Collateral against the claims and demands of all other parties, including, without limitation, defenses, setoffs,
claims and counterclaims asserted by any Account Debtor against the Debtor or the Secured Party, except, as to Inventory, purchasers
and lessees in the ordinary course of the Debtor's business; (b) will send to the Secured Party upon demand, all Documents and
all Chattel Paper (duly endorsed to the Secured Party) constituting, representing or relating to the Collateral or any part thereof,
and any schedules, invoices, shipping documents, delivery receipts, purchase orders, contracts or other documents representing
or relating to the Collateral or any part thereof; (c) will send to the Secured Party, on request following an Event of Default
which has not been waived and is continuing, all credit and other information respecting the financial condition of any Account
Debtor; (d) will keep the Collateral in good condition and repair; and will not use the Collateral in violation of any provisions
of this Security Agreement, of any applicable statute, regulation or ordinance or of any policy insuring the Collateral; (e) will
prevent the Collateral or any part thereof from being or becoming an accession to other goods not covered by this Security Agreement;
(f) in connection herewith, will authorize or otherwise execute and deliver to the Secured Party such financing statements, assignments
and other documents and do such other things relating to the Collateral and the Security Interest as the Secured Party may reasonably
request, and pay all costs of title searches and filing financing statements, assignments and other documents in all public offices
requested by the Secured Party; and will not, without the prior written consent of the Secured Party, file or authorize or permit
to be filed in any public office any financing statement covering any of the Collateral and naming the Debtor as debtor and not
naming the Secured Party as secured party; (g) will notify the Secured Party of the particulars of the Debtor's rights under any
Commercial Tort Claims promptly after such rights arise; (h) will not place the Collateral in any warehouse which may issue a
negotiable document with respect thereto; and (i) will cooperate with the Secured Party in obtaining control of Collateral consisting
of Deposit Accounts (in accordance with the Loan Agreement), Investment Property, Letter-of-Credit Rights or Electronic Chattel
Paper including, but not limited to, entering into one or more control agreements or assignments, as the Secured Party may request.

 

5.                
Verification of Collateral. The Secured Party shall have the right to verify all or any Collateral in any manner and through
any medium the Secured Party may consider appropriate, and the Debtor agrees to furnish all assistance and information and perform
any acts which the Secured Party may reasonably require in connection therewith and to pay all of the Secured Party's reasonable
costs therefor.

 

6.               
Notification
and Payments.

 

Following
the occurrence of an Event of Default which has not been waived or cured and is continuing, the Secured Party may (i) notify all
or any Account Debtors of the Security Interest and may also direct such Account Debtors to make all payments on Collateral to
the Secured Party; and (ii) enforce obligations of an Account Debtor or other person obligated on Collateral and exercise the
rights of the Debtor with respect to the obligation of the Account Debtor, and with respect to property that secures

    	 	2	 

     

    

 

 

the
obligation of an Account Debtor or other persons obligated on the Collateral. All payments on and from Collateral received by
the Secured Party directly or from the Debtor shall be applied to the Obligations in such order and manner and at such time as
the Secured Party shall, in its sole discretion, determine. The Secured Party may demand of the Debtor in writing, before or after
notification to Account Debtors and without waiving in any manner the Security Interest, that any payments on and from the Collateral
received by the Debtor: (i) shall be held by the Debtor in trust for the Secured Party in the same medium in which received; (ii)
shall not be commingled with any assets of the Debtor; and (iii) shall be delivered to the Secured Party in the form received,
properly endorsed to permit collection, not later than the next business day following the day of their receipt; and the Debtor
shall comply with such demand. The Debtor shall also promptly notify the Secured Party of the return to or repossession by the
Debtor of Goods underlying any Collateral, and the Debtor shall hold the same in trust for the Secured Party and shall dispose
of the same as the Secured Party directs.

 

7.               
Registered
Holder of Collateral. If any Collateral consists of investment securities, the Debtor authorizes the Secured Party, following
the occurrence of an Event of Default which has not been waived or cured and is continuing, to transfer the same or any part thereof
into its own name or that of its nominee so that the Secured Party or its nominees may appear of record as the sole owner thereof,
and the Debtor waives all rights to be advised of or to receive any notices, statements or communications received by the Secured
Party or its nominees as such record owner, and agrees that no proxy or proxies given by the Secured Party to the Debtor or its
designee as aforesaid shall thereafter be effective.

 

8.                 Income
from and Interest on Collateral Consisting of Instruments.

 

(a)          
At all times other than the during the continuance of an Event of Default, the Debtor reserves the right to receive all income
from or interest on the Collateral consisting of Instruments, and if the Secured Party receive any such income or interest prior
to such Event of Default, the Secured Party shall pay the same promptly to the Debtor.

 

(b)          
Following the occurrence of an Event of Default which has not been waived or cured and is continuing, the Debtor will not demand
or receive any income from or interest on such Collateral, and if the Debtor receives any such income or interest without any
demand by it, same shall be held by the Debtor in trust for the Secured Party in the same medium in which received, shall not
be commingled with any assets of the Debtor and shall be delivered to the Secured Party in the form received, properly endorsed
to permit collection, not later than the next business day following the day of its receipt. The Secured Party may apply the net
cash receipts from such income or interest to payment of any of the Obligations, provided that the Secured Party shall account
for and pay over to the Debtor any such income or interest remaining after payment in full of the Obligations.

 

9.
                Increases,
Profits, Payments or Distributions.

 

(a)           
Following the occurrence of an Event of Default which has not been waived or cured and is continuing, the Debtor authorizes the
Secured Party: (i) to receive any increase in or profits on the Collateral (including, without limitation, any stock issued as
a result of any stock split or dividend, any capital distributions and the like), and to hold the same as part of the Collateral;
and (ii) to receive any payment or distribution on the Collateral upon redemption by, or dissolution and liquidation of, the issuer;
to surrender such Collateral or any part thereof in exchange therefor; and to hold the net cash receipts from any such payment
or distribution as part of the Collateral.

 

(b)           
If the Debtor receives any such increase, profits, payments or distributions, the Debtor will receive and deliver same promptly
to the Secured Party on the same terms and conditions set forth in paragraph 8(b) hereof respecting income or interest, to be
held by the Secured Party as part of the Collateral.

 

10.           
Events of Default; Remedies.

    	 	3	 

     

    

 

 

(a)          
Any Event of Default (as defined in the Loan Agreement) shall constitute an event of default under this Security Agreement (an
"Event of Default").

 

(b)          
All or any part of any Obligations not payable on demand shall be immediately due and payable without demand or notice of any
kind upon the happening of one or more Events of Default under Sections 11.1(i), (j) or (k) of the Loan Agreement. The provisions
of this paragraph are not intended in any way to affect any rights of the Secured Party with respect to any Obligations which
may now or hereafter be payable on demand.

 

(c)          
The Secured Party's rights and remedies with respect to the Collateral shall be those of a secured party under the Uniform Commercial
Code and under any other applicable law, as each of the same may from time to time be in effect, in addition to those rights granted
herein and in any other agreement now or hereafter in effect between the Debtor and the Secured Party. Following the occurrence
of an Event of Default which has not been waived or cured and is continuing, the Secured Party may require the Debtor to assemble
the Collateral and make it available to the Secured Party at a place or places designated by the Secured Party, and the Secured
Party may use and operate the Collateral, render the Collateral unusable or dispose of the Collateral in a commercially reasonable
manner.

 

(d)          
Without in any way requiring notice to be given in the following time and manner, the Debtor agrees that any notice by the Secured
Party of sale, disposition or other intended action hereunder or in connection herewith, whether required by the Uniform Commercial
Code or otherwise, shall constitute reasonable notice to the Debtor if such notice is mailed by regular or certified mail, postage
prepaid, at least ten (10) days prior to such action, to either of the Debtor's address or addresses specified above or to any
other address which the Debtor has specified in writing to the Secured Party as the address to which notices hereunder shall be
given to the Debtor.

 

(e)          
The Secured Party shall have no obligation to clean up or otherwise prepare the Collateral for sale, and such inaction will not
be considered adversely to affect the commercial reasonableness of any such sale of the Collateral.

 

(f)           
The Secured Party may comply with any applicable law requirements in connection with a disposition of the Collateral, and such
compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

 

(g)          
The Secured Party may sell the Collateral without giving any warranties. The Secured Party may specifically disclaim any warranties
of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the
Collateral.

 

(h)          
If the Secured Party sells any of the Collateral on credit, the Debtor will be credited only with payments actually made by the
purchaser, received by the Secured Party and applied to the Obligations . If the purchaser fails to pay for the Collateral, the
Secured Party may resell the Collateral, and the Debtor shall be credited with the proceeds of the sale.

 

(i)            
The Debtor agrees to pay on demand all costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by
the Secured Party in enforcing this Security Agreement, in realizing upon or protecting any Collateral and in enforcing and collecting
any of the Obligations or any guaranty thereof, including, without limitation, if the Secured Party retains counsel for advice,
suit, appeal, insolvency or other proceedings under the federal Bankruptcy Code or otherwise, or for any of the above purposes,
the reasonable attorneys' fees and expenses incurred by the Secured Party. Payment of all costs and expenses hereunder is secured
by the Collateral.

 

11.           
Miscellaneous.

 

(a)          
The Debtor hereby authorizes the Secured Party, at the Debtor's expense, at any time and from time to time to file in any relevant
jurisdiction in the United States any financing statement or statements relating to the Collateral, and amendments thereto or
other documents as the

    	 	4	 

     

    

 

 

Secured
Party at its option may deem appropriate, (A) that contain the information required by Article 9 of the Uniform Commercial Code
of each such applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral, including
without limitation, whether the Debtor is an organization, the type of organization and any organizational identification number
issued to the Debtor, (B) without the Debtor's signature thereon, and (C) that contain a description or indication of collateral
as "all assets now owned or hereafter acquired by the Debtor or in which the Debtor otherwise has rights" or "all
personal property of the Debtor, now owned or hereafter acquired" or words of similar import, and (ii) appoints the Secured
Party as the Debtor's attorney-in-fact (without requiring the Secured Party) to perform all other acts which the Secured Party
deem appropriate to perfect and continue the Security Interest and to protect, preserve and realize upon the Collateral. This
power of attorney shall not be affected by the subsequent disability or incompetence of the Debtor. Additionally, the Debtor hereby
ratifies its authorization for the Secured Party to file in any relevant jurisdiction any financing statements relating to the
Collateral if filed prior to the date hereof.

 

(b)          
Following the occurrence of an Event of Default which has not been waived and is continuing, the Secured Party may demand, collect
and sue on any of the Accounts, Chattel Paper, Instruments and General Intangibles (in either the Debtor's or the Secured Party's
name at the latter's option); may enforce, compromise, settle or discharge such Collateral without discharging the Obligations
or any part thereof; and may endorse the Debtor's name on any and all checks, commercial paper, and any other Instruments pertaining
to or constituting Collateral.

 

(c)            
As further security for payment of the Obligations, the Debtor hereby grants to the Secured Party a Security Interest in and
lien on any and all property of the Debtor which is or may hereafter be in the possession or control of the Secured Party in any
capacity or of any third party acting on its behalf, including, without limitation, all deposit and other accounts and all moneys
owed or to be owed by the Secured Party to the Debtor; and with respect to all of such property, the Secured Party shall have
the same rights hereunder as it has with respect to the Collateral. Without limiting any other right of the Secured Party, whenever
the Secured Party have the right to declare any of the Obligations to be immediately due and payable (whether or not it has so
declared), the Secured Party at its sole election may set off against the Obligations any and all moneys then or thereafter owed
to the Debtor by the Secured Party in any capacity, whether or not the Obligations or the obligation to pay such moneys owed by
the Secured Party is then due, and the Secured Party shall be deemed to have exercised such right of set off immediately at the
time of such election even though any charge therefor is made or entered on the Secured Party's records subsequent thereto.

 

(d)          
Upon the Debtor's failure to perform any of its duties hereunder, the Secured Party may, but shall not be obligated to, perform
any or all such duties, including, without limitation, payment of taxes, assessments, insurance and other charges and expenses
as herein provided, and the Debtor shall pay an amount equal to the cost thereof to the Secured Party on demand by the Secured
Party. Payment of all moneys hereunder shall be secured by the Collateral.

 

(e)           
No course of dealing between the Debtor and the Secured Party and no delay or omission by the Secured Party in exercising any
right or remedy hereunder or with respect to any of the Obligations or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. The Secured
Party may remedy any default by the Debtor hereunder or with respect to any of the Obligations in any reasonable manner without
waiving the default remedied and without waiving any other prior or subsequent default by the Debtor. All rights and remedies
of the Secured Party hereunder are cumulative and may be exercised simultaneously.

 

(f)           
The Secured Party shall have no obligation to take, and the Debtor shall have the sole responsibility for taking, any and all
steps to preserve rights against any and all prior parties to any Instrument, Document or Chattel Paper constituting Collateral
whether or not in the Secured Party's possession. The Secured Party shall not be responsible to the Debtor for loss or damage
resulting from the Secured Party's failure to enforce or collect any such Collateral or to collect any moneys due or to become
due thereunder. The Debtor waives protest of any Instrument constituting Collateral at any time held by the

    	 	5	 

     

    

 

 

Secured
Party on which the Debtor is in any way liable and waives notice of any other action taken by the Secured Party.

 

(g)          
The Debtor authorizes the Secured Party, without notice or demand and without affecting the Debtor's obligations hereunder, from
time to time, following the occurrence of an Event of Default which has not been waived or cured and is continuing: (i) to exchange,
enforce or release any collateral or any part thereof taken from any party for payment of the Obligations or any part thereof;
(ii) to release, substitute or modify any obligation of any endorser, guarantor or other party in any way obligated to pay the
Obligations or any part thereof, or any party who has given any security, mortgage or other interest in any other collateral as
security for the payment of the Obligations or any part thereof; (iii) following the occurrence of an Event of Default which has
not been waived and is continuing as hereinabove provided, to direct the order or manner of disposition of the Collateral and
any and all other collateral and the enforcement of any and all endorsements, guaranties and other obligations relating to the
Obligations or any part thereof, as the Secured Party, in its sole discretion, may determine; and (iv) to determine how, when
and what application of payments and credits, if any, shall be made on the Obligations or any part thereof.

 

(h)           
The rights and benefits of the Secured Party hereunder shall, if the Secured Party so direct, inure to any party acquiring any
interest in the Obligations or any part thereof.

 

(i)            
The Secured Party and the Debtor as used herein shall include the heirs, executors or administrators, or successors or assigns,
of those parties.

 

(j)           
If
more than one debtor executes this Security Agreement, the term "Debtor" shall include each as well as all of them and
their obligations, warranties and representations hereunder shall be joint and several.

 

(k)          
No modification, rescission, waiver, release or amendment of any provision of this Security Agreement shall be made, except by
a written agreement subscribed or otherwise authenticated by the Debtor and by duly authorized officers of the Secured Party.

 

(l)                   
This Security Agreement shall be governed by and construed in accordance with the laws of the State of New York, including without
limitation the provisions of New York General Obligations Law Section 5-1401 and 5-1402. The Debtor hereby irrevocably and unconditionally
attorns and submits to the non-exclusive jurisdiction of the courts of the State of New York, provided that nothing herein shall
prevent the Secured Party from proceeding at its election against the Debtor in the courts of any other state, country or jurisdiction.

 

(m)         
All capitalized terms, unless otherwise defined in this Security Agreement, shall have the definitions set forth in the Uniform
Commercial Code adopted in the State of New York, as the same may from time to time be in effect.

 

(n)           
The Debtor hereby irrevocably appoints the Secured Party as the Debtor's agent with full power, in the same manner, to the same
extent and with the same effect as if the Debtor were to do the same: to receive and collect all mail addressed to the Debtor;
to direct the place of delivery thereof to any location designated by the Secured Party; to open such mail; to remove all contents
therefrom; to retain all contents thereof constituting or relating to the Collateral; and to perform all other acts which the
Secured Party deem appropriate to protect, preserve and realize upon the Collateral. The agency hereby created is unconditional
and shall not terminate until all of the Obligations is paid in full and until all commitments by the Secured Party to lend funds
to the Debtor have expired or been terminated. This power of attorney shall not be affected by the subsequent disability or incompetence
of the Debtor.

    	 	6	 

     

    

  

(o)          
This Security Agreement is and is intended to be a continuing Security Agreement and shall remain in full force and effect until
the Secured Party shall actually receive from the Debtor written notice of its discontinuance; provided, however, this Security
Agreement shall remain in full force and effect thereafter until all of the Obligations outstanding, or contracted or committed
for (whether or not outstanding and whether absolute or contingent, direct or indirect), before the receipt of such notice by
the Secured Party, and any extensions or renewals thereof (whether made before or after receipt of such notice), together with
interest accruing thereon after such notice, shall be finally and irrevocably paid in full. If, after receipt of any payment of
all or any part of the Obligations, the Secured Party is for any reason compelled to surrender such payment to any person or entity,
because such payment is determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds,
or for any other reason, this Security Agreement shall continue in full force notwithstanding any contrary action which may have
been taken by the Secured Party in reliance upon such payment, and any such contrary action so taken shall be without prejudice
to the Secured Party's rights under this Security Agreement and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.

 

(p)          
In the event of any inconsistency, contradiction or conflict between the provisions hereof and those of the Loan Agreement, the
provisions of the Loan Agreement will prevail to the extent of such inconsistency, contradiction or conflict, save and except
if such provision relates strictly to or is legally required for the creation or enforcement of the security interest created
and granted hereunder.

 

(q)          
This Security Agreement may be executed in any number of counterparts, all of which when taken together shall constitute one agreement.
Any signatory hereto may deliver an executed copy of this agreement by facsimile or electronic mail to a party hereto provided
that in such event that party shall promptly deliver to such party an originally executed copy of this agreement.

 

(r)            
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEBTOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF REFERENCE IS MADE TO THE INTERCREDITOR AND SUBORDINATION AGREEMENT DATED
AS OF THE DATE HEREOF. (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR
AGREEMENT"), AMONG STRYKER BIOTECH L.L.C., STRYKER CORPORATION, KNIGHT THERAPEUTICS INC., EMBER THERAPEUTICS, INC. and
MARIEL THERAPEUTICS, INC. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE
SECURED PARTY (AS DEFINED BELOW), PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE SECURED PARTY ARE
SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL
CONTROL. 

 

 

[Signature
Page Follows]

    	 	7	 

     

    

 

IN
WITNESS WHEREOF  Debtor and Secured Party have executed this Agreement as of the day and year first above written.

 

	Ember’s Address
    for Notice	 	EMBER THERAPEUTICS, INC.,
    as Debtor
	 	 	 
	 	 	By: /s/ Joseph Hernandez
	 	 	Name: Joseph Hernandez
	 	 	Title: Executive Chairman
	Attention:	 	 
	Email	 	 
	 	 	 
	Mariel's Address for Notice	 	MARIEL THERAPEUTICS, INC., as Debtor
	 	 	 
	 	 	By: /s/ Joseph Hernandez
	 	 	Name: Joseph Hernandez
	 	 	Title: Executive Chairman
	 	 	 
	Attention:	 	 
	Email	 	 
	 	 	 
	Secured Party's Address for Notice	 	KNIGHT THERAPEUTICS INC., as Secured
    Party
	 	 	 
	376 Victoria Avenue

	 	By: /s/ Jeffrey Kadanoff
	Suite 220	 	Name: Jeffrey Kadanoff
	Westmount, Quebec H3Z 1C3	 	Title: CFO
	 	 	 
	Attention: Jeffrey Kadanoff	 	 
	Email: jkadanoff@gud-knight.com	 	 

 

[Signature
Page to General Security Agreement]

    	 	8

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