Document:

Pledge and Security Agreement

 Exhibit 10.3 

PLEDGE AND SECURITY AGREEMENT 

THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the “Security Agreement”) is
entered into as of September 23, 2010 by and between DDi Toronto Corp. (the “Grantor”), a corporation organized under the law of Ontario and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the
“Administrative Agent”) for and on behalf of the Canadian Lender Parties. 
 PRELIMINARY STATEMENT 

The Grantor, as Canadian Borrower, the Administrative Agent, the Loan Parties, the Canadian Lenders and certain other financial
institutions party thereto are entering into a Credit Agreement dated as of the date hereof (as it may be amended or modified from time to time, the “Credit Agreement”). The Grantor is entering into this Security Agreement in order
to induce the Canadian Lenders to enter into and extend credit to the Grantor under the Credit Agreement and to secure the Canadian Secured Obligations. 

ACCORDINGLY, the Grantor and the Administrative Agent, on behalf of the Canadian Lenders, hereby agree as follows: 

ARTICLE I 

DEFINITIONS 

1.1. Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement. 
 1.2. Terms Defined in PPSA. Terms defined in the PPSA which are not
otherwise defined in this Security Agreement are used herein as defined in the PPSA. 
 1.3. Definitions of Certain Terms
Used Herein. As used in this Security Agreement, in addition to the terms defined in the Preliminary Statement, the following terms shall have the following meanings: 

“Accounts” shall have the meaning set forth in the PPSA. 

“Article” means a numbered article of this Security Agreement, unless another document is specifically referenced.

 “Assigned Contracts” means, collectively, all of the Grantor’s rights and remedies under, and
all moneys and claims for money due or to become due to the Grantor under all material contracts and any and all amendments, supplements, extensions, and renewals thereof including all rights and claims of the Grantor now or hereafter existing:
(a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in connection with
any of the foregoing contracts; (c) to all other amounts from time to time paid or payable under or in connection with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges
thereunder. 
 “Canadian Collection Account” shall have the meaning set forth in Section 7.1(b).

 “Chattel Paper” shall have the meaning set forth in the PPSA. 

“Closing Date” means the date of the Credit Agreement. 

“Collateral” shall have the meaning set forth in Article II. 

 “Collateral Deposit Account” shall have the meaning set forth in
Section 7.1(a). 
 “Collateral Report” means any certificate (including any Borrowing Base Certificate),
report or other document delivered by the Grantor to the Administrative Agent or any Canadian Lender with respect to the Collateral pursuant to any Loan Document. 

“Commercial Tort Claims” means the existing commercial tort claims of the Grantor listed in Exhibit C together with all
other commercial tort claims pledged from time to time hereunder. 
 “Control” shall have the meaning set forth
in Article 8 or, if applicable, the STA. 
 “Copyright Security Agreement” means each Copyright Security
Agreement, in form and substance satisfactory to the Administrative Agent, executed and delivered by the Grantor and Administrative Agent. 

“Copyrights” means, with respect to any Person, all of such Person’s right, title, and interest in and to the
following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and
payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future
infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world. 

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default. 
 “Deposit Accounts” means all bank accounts having
a depository function and domiciled in Canada. 
 “Deposit Account Control Agreement” means an agreement, in
form and substance reasonably satisfactory to the Administrative Agent, among any Loan Party, a banking institution holding such Loan Party’s funds, and the Administrative Agent with respect to collection and control of all deposits and
balances held in a deposit account maintained by any Loan Party with such banking institution. 
 “Documents”
shall mean “documents of title” (as defined in the PPSA). 
 “Equipment” shall have the meaning set
forth in the PPSA. 
 “Excluded Collateral” means all of the following: (i) Equipment; (ii) real
property; (iii) leasehold improvements or (iv) any rights or interest in any contract, lease, permit, license, or license agreement covering personal property of the Grantor if under the terms of such contract, lease, permit, license,
or license agreement, or applicable law with respect thereto, the grant of a security interest or lien therein is prohibited as a matter of law or under the terms of such contract, lease, permit, license, or license agreement and such prohibition or
restriction has not been waived or the consent of the other party to such contract, lease, permit, license, or license agreement has not been obtained (provided, that, (A) the foregoing exclusions of this clause (iv) shall in no way be
construed (1) to apply to the extent that any described prohibition or restriction is unenforceable under applicable law, or (2) to apply to the extent that any consent or waiver has been obtained that would permit Administrative
Agent’s security interest or lien notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license, or license agreement and (B) the foregoing exclusions of clause (i) through (iv) shall in no
way be construed to limit, impair, or otherwise affect any of Administrative Agent’s or any Canadian Lender Parties’ continuing security interests in and liens upon any rights or interests of the Grantor in or to (1) monies due
or to become due under or in connection with any described contract, lease, permit, license, license agreement, or (2) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license or license
agreement. 
  

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 “Excluded Deposit Accounts” means the collective reference to
(i) Deposit Accounts of the Grantor specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the Grantor’s employees; and; (ii) solely for the period commencing on the date
hereof and ending on December 31, 2010, the Deposit Account maintained at RBC Royal Bank with account number 0026492-4002689, and accounts EUR 54370144 and BGP 90798789 maintained with Barclays Bank or any affiliate, subsidiary or parent
thereof; provided that the aggregate amount of funds on deposit in any such account shall not exceed the amount necessary to cover checks written against such account plus $100,000. 

“Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.

 “General Intangibles” shall mean “intangibles” (as defined in the PPSA). 

“Goods” shall have the meaning set forth in the PPSA. 

“Instruments” shall have the meaning set forth in the PPSA. 

“Inventory” shall have the meaning set forth in the PPSA. 

“Investment Property” shall have the meaning set forth in the PPSA. 

“Letter-of-Credit Rights” shall have the meaning set forth in Section 4.9 of this Security Agreement. 

“Licenses” means, with respect to any Person, all of such Person’s right, title, and interest in and to
(a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto,
including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof. 

“Lock Boxes” shall have the meaning set forth in Section 7.1(a). 

“Lock Box Agreements” shall have the meaning set forth in Section 7.1(a). 

“Patent Security Agreement” means each Patent Security Agreement, in form and substance satisfactory to the
Administrative Agent, executed and delivered by the Grantor and Administrative Agent. 
 “Patents” means, with
respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions,
continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments
for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world. 

“Pledged Collateral” means all Instruments, Securities and other Investment Property of the Grantor, whether or not
physically delivered to the Administrative Agent pursuant to this Security Agreement. 
 “PPSA” means the
Personal Property Security Act (Ontario), or to the extent applicable, similar legislation of any other jurisdiction, as amended from time to time, and includes the Civil Code of Quebec, where applicable. 

 

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 “Receivables” means the Accounts, Chattel Paper, Documents, Investment
Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral. 

“Required Secured Parties” means (a) prior to an acceleration of the Obligations under the Credit Agreement,
the Required Lenders, (b) after an acceleration of the Obligations under the Credit Agreement but prior to the date upon which the Credit Agreement has terminated by its terms and all of the obligations thereunder have been paid in full,
Lenders holding in the aggregate at least a majority of the total of the Aggregate Credit Exposure, and (c) after the Credit Agreement has terminated by its terms and all of the Obligations thereunder have been paid in full (whether or not the
Obligations under the Credit Agreement were ever accelerated), Lenders holding in the aggregate at least a majority of the aggregate net early termination payments and all other amounts then due and unpaid from the Grantor to the Lenders under Swap
Agreements, as determined by the Administrative Agent in its reasonable discretion. 
 “Section” means a
numbered section of this Security Agreement, unless another document is specifically referenced. 
 “Security”
has the meaning set forth in the PPSA. 
 “STA” means Securities Transfer Act (Ontario), or to the extent
applicable, similar legislation of any other jurisdiction, as amended from time to time. 
 “Stock Rights”
means all dividends, instruments or other distributions and any other right or property which the Grantor shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity
Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which the Grantor now have or hereafter acquire any right, issued by an issuer of such Equity Interest. 

“Trademark Security Agreement” means each Trademark Security Agreement, in form and substance satisfactory to the
Administrative Agent, executed and delivered by the Grantor and Administrative Agent. 
 “Trademarks” means,
with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for
registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments
now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing,
including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world. 

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. 

ARTICLE II 

GRANT OF SECURITY INTEREST 

The Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Canadian
Lender Parties, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favour of the Grantor (including under any
trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, the Grantor, and regardless of where located (all of which will be collectively referred to as the “Collateral”), including:

  

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	 	(i)	all Accounts; 

  

	 	(ii)	all Chattel Paper; 

  

	 	(iii)	all Copyrights, Patents and Trademarks; 

  

	 	(iv)	all Documents; 

  

	 	(v)	all General Intangibles; 

  

	 	(vi)	all Goods (other than Equipment and fixtures); 

  

	 	(vii)	all Instruments; 

  

	 	(viii)	all Inventory; 

  

	 	(ix)	all Investment Property; 

  

	 	(x)	all cash or cash equivalents; 

  

	 	(xi)	all letters of credit, Letter-of-Credit Rights; 

  

	 	(xii)	all Deposit Accounts with any bank or other financial institution; 

  

	 	(xiii)	all Commercial Tort Claims; 

  

	 	(xiv)	all Assigned Contracts; 

  

	 	(xv)	and all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books
and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing; 

to secure the prompt and complete payment and performance of the Canadian Secured Obligations. Notwithstanding anything contained in the Security
Agreement to the contrary, the term “Collateral” shall not include any Excluded Collateral. 
 ARTICLE III

 REPRESENTATIONS AND WARRANTIES 

The Grantor represents and warrants to the Administrative Agent and the Canadian Lenders that: 

3.1. Title, Perfection and Priority. The Grantor has good and valid rights in or the power to transfer the Collateral and title to
the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the
security interest in such Collateral pursuant hereto. When financing statements have been filed in the appropriate offices against the Grantor in the locations listed on Exhibit F, the Administrative Agent will have a fully perfected first
priority security interest in that Collateral of the Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e). 

3.2. Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of the Grantor, its
province of organization and the organizational number issued to it by its province of organization are set forth on Exhibit A. 
  

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 3.3. Principal Location. As of the date hereof, the Grantor’s mailing address
and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), is disclosed in Exhibit A; the Grantor has no other places of business except those set forth in
Exhibit A. 
 3.4. Collateral Locations. As of the date hereof, all of the Grantor’s locations where
Collateral is located are listed on Exhibit A. All of said locations are owned by the Grantor except for locations (i) which are leased by the Grantor as lessee and designated in Part VII (b) of Exhibit A and
(ii) at which Inventory is held in a public warehouse or is otherwise held by a bailee or processor or on consignment as designated in Part VII(c) of Exhibit A. 

3.5. Deposit Accounts. As of the date hereof, all of the Grantor’s Deposit Accounts are listed on Exhibit B.

 3.6. Exact Names. The Grantor’s name in which it has executed this Security Agreement is the exact name as it
appears in the Grantor’s organizational documents, as amended, as filed with the Grantor’s jurisdiction of organization. The Grantor has not, during the past five years, been known by or used any other corporate or fictitious name, or been
a party to any merger or consolidation, or been a party to any acquisition. 
 3.7. Letter-of-Credit Rights and Chattel
Paper. As of the date hereof, Exhibit C lists all Letter-of-Credit Rights and Chattel Paper of the Grantor. All action by the Grantor necessary or desirable to protect and perfect the Administrative Agent’s Lien on each item listed
on Exhibit C (including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have a fully perfected first priority security interest in the
Collateral listed on Exhibit C, subject only to Liens permitted under Section 4.1(e). 
 3.8. Accounts and
Chattel Paper. 
 (a) The names of the obligors, amounts owing, due dates and other information with respect
to its Accounts and Chattel Paper are and will be correctly stated in all material respects in all records of the Grantor relating thereto and in all invoices and Collateral Reports with respect thereto furnished to the Administrative Agent by the
Grantor from time to time. As of the time when each Account or each item of Chattel Paper arises, the Grantor shall be deemed to have represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto,
are genuine and in all respects what they purport to be. 
 (b) With respect to its Accounts, except as
specifically disclosed on the most recent Collateral Report, (i) all Accounts are Eligible Accounts; and (ii) all Accounts represent bona fide sales of Inventory or rendering of services to Account Debtors in the ordinary course of the
Grantor’s business and are not evidenced by a judgment, Instrument or Chattel Paper. 
 (c) In addition,
with respect to all of its Accounts, (i) no payments have been or shall be made thereon except payments immediately delivered to a Lock Box or a Collateral Deposit Account as required pursuant to Section 7.1; and (ii) to the
Grantor’s knowledge, all Account Debtors have the capacity to contract. 
 3.9. Inventory. With respect to any of
its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit) is located at one of the Grantor’s locations set forth on Exhibit A (as such Exhibit may be updated from
time to time under the terms of this Security Agreement), (b) no Inventory (other than Inventory in transit) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g),
(c) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and merchantable quality, free from any defects, (d) such Inventory has been produced in accordance with all laws,
rules, regulations and orders applicable to such production and (e) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following an Event of Default shall not require the consent of any Person
and shall not 
  

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constitute a breach or default under any contract or agreement to which the Grantor is a party or to which such property is subject. 

3.10. Intellectual Property. As of the date hereof, the Grantor does not have any interest in, or title to, any registered Patent,
Trademark (other than trade names) or Copyright except as set forth in Exhibit D. Each Copyright Security Agreement, Patent Security Agreement and Trademark Security Agreement is effective to create a valid and continuing Lien and, upon the
filing of the appropriate financing statements in the offices listed on Exhibit F, fully perfected, first priority security interests in favour of the Administrative Agent on the Grantor’s Patents, Trademarks and Copyrights, such
perfected security interests are enforceable as such as against any and all creditors of and purchasers from the Grantor; and all action necessary or desirable to protect and perfect the Administrative Agent’s Lien on the Grantor’s
Patents, Trademarks or Copyrights shall have been duly taken. 
 3.11. Intentionally Deleted. 

3.12. No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any portion of
the Collateral which has not lapsed or been terminated naming the Grantor as debtor has been filed or is of record in any jurisdiction except (a) for financing statements or security agreements naming the Administrative Agent on behalf of the
Canadian Lender Parties as the secured party and (b) as permitted by Section 4.1(e). 
 3.13. Pledged
Collateral. 
 (a) As of the date hereof, Exhibit E sets forth a complete and accurate list of all
Pledged Collateral owned by the Grantor. The Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit E as being owned by it, free and clear of any Liens, except for the security
interest granted to the Administrative Agent for the benefit of the Canadian Lender Parties hereunder. The Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the
extent such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates delivered to the Administrative Agent representing an Equity
Interest, either such certificates are Securities as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, the Grantor has so informed the Administrative Agent so that the Administrative Agent may take steps to
perfect its security interest therein as a General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a control agreement among the Grantor, the securities intermediary and the Administrative Agent
pursuant to which the Administrative Agent has Control and (iv) all Pledged Collateral which represents Indebtedness owed to the Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the
legal, valid and binding obligation of such issuer and such issuer is not in default thereunder. 
 (b) In
addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject,
(ii) there are existing no options, warrants, calls or commitments of any character whatsoever relating to such Pledged Collateral or which obligate the issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity
Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by the Grantor of such Pledged Collateral pursuant to
this Security Agreement or for the execution, delivery and performance of this Security Agreement by the Grantor, or for the exercise by the Administrative Agent of the voting or other rights provided for in this Security Agreement or for the
remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally. 

(c) Except as set forth in Exhibit E, the Grantor owns 100% of the issued and outstanding Equity Interests which
constitute Pledged Collateral owned by it and none of the Pledged Collateral which 
  

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represents Indebtedness owed to the Grantor is subordinated in right of payment to other Indebtedness or subject to the terms of an indenture. 

ARTICLE IV 

COVENANTS 

From the date of this Security Agreement, and thereafter until this Security Agreement is terminated, the Grantor agrees that:

 4.1. General. 

(a) Collateral Records. The Grantor will keep its books and records with respect to the Collateral owned by it in
accordance with GAAP, and furnish to the Administrative Agent, with sufficient copies for each of the Canadian Lenders, such reports relating to such Collateral as the Administrative Agent shall from time to time request. 

(b) Authorization to File Financing Statements; Ratification. The Grantor hereby authorizes the Administrative
Agent to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain a first
perfected security interest in and, if applicable, Control of, the Collateral owned by the Grantor. Any financing statement filed by the Administrative Agent may be filed in any filing office in any PPSA jurisdiction and may (i) indicate the
Grantor’s Collateral (1) as all assets of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of the PPSA or such jurisdiction, or (2) by any other
description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by the PPSA for the sufficiency or filing office acceptance of any financing statement or amendment,
including whether the Grantor is an organization, the type of organization and any organization identification number issued to the Grantor. The Grantor also agrees to furnish any such information to the Administrative Agent promptly upon request.
The Grantor also ratifies its authorization for the Administrative Agent to have filed in any PPSA jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof. 

(c) Further Assurances. The Grantor will, if so requested by the Administrative Agent in its Permitted Discretion,
furnish to the Administrative Agent, as often as the Administrative Agent requests in its Permitted Discretion, statements and schedules further identifying and describing the Collateral owned by it and such other reports and information in
connection with its Collateral as the Administrative Agent may reasonably request, all in such detail as the Administrative Agent may specify. The Grantor also agrees to take any and all actions necessary to defend title to the Collateral against
all persons and to defend the security interest of the Administrative Agent in its Collateral and the priority thereof against any Lien not expressly permitted hereunder. 

(d) Disposition of Collateral. The Grantor will not sell, lease or otherwise dispose of the Collateral owned by it
except for dispositions specifically permitted pursuant to Section 6.05 of the Credit Agreement. 
 (e)
Liens. The Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest created by this Security Agreement, and (ii) other Permitted Liens. 

(f) Other Financing Statements. The Grantor will not authorize the filing of any financing statement naming it as
debtor covering all or any portion of the Collateral owned by it, except as permitted by Section 4.1(e). The Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with
respect to any financing statement of Administrative Agent without the prior written consent of the Administrative Agent, subject to the Grantor’s rights under the PPSA. 

 

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 (g) Locations. The Grantor will not (i) maintain any Collateral
owned by it at any location other than those locations listed on Exhibit A (as updated from time to time as permitted under clause (ii) of this Section 4.1(g); (ii) otherwise change, or add to, such locations without the
Administrative Agent’s prior written consent (and if the Administrative Agent gives such consent, the Grantor will concurrently therewith obtain a Collateral Access Agreement to the extent required by Section 4.13), or
(iii) change its principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by Section 4.15. 

(h) Compliance with Terms. The Grantor will perform and comply with all obligations in respect of the Collateral
owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral, to the extent the failure to do so would have a Material Adverse Effect. 

4.2. Receivables. 

(a) Certain Agreements on Receivables. The Grantor will not make or agree to make any discount, credit, rebate or
other reduction in the original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof, except that, prior to the occurrence of an Event of Default, the Grantor may reduce the amount of Accounts
arising from the sale of Inventory in accordance with its present policies and in the ordinary course of business. 

(b) Collection of Receivables. Except as otherwise provided in clause (a) of this Section 4.2, the
Grantor will collect and enforce, at the Grantor’s sole expense, all amounts due or hereafter due to the Grantor under the Receivables owned by it. 

(c) Delivery of Invoices. The Grantor will deliver to the Administrative Agent immediately upon its request after
the occurrence and during the continuation of an Event of Default duplicate invoices with respect to each Account owned by it bearing such language of assignment as the Administrative Agent shall specify. 

(d) Disclosure of Counterclaims on Receivables. If (i) any discount, credit or agreement to make a rebate or
to otherwise reduce the amount owing on any Receivable owned by the Grantor exists or (ii) if, to the knowledge of the Grantor, any dispute, setoff, claim, counterclaim or defence exists or has been asserted or threatened with respect to any
such Receivable, the Grantor will disclose such fact to the Administrative Agent in writing at the time of submission to the Administrative Agent of the next Borrowing Base Certificate in accordance with the terms of the Credit Agreement. The
Grantor shall send the Administrative Agent a copy of each credit memorandum in excess of $200,000 promptly after issued, and the Grantor shall promptly report each credit memo and each of the facts required to be disclosed to the Administrative
Agent in accordance with this Section 4.2(d) on the Borrowing Base Certificates submitted by it. 
 4.3.
Inventory and Equipment. 
 (a) Maintenance of Goods. The Grantor will do all things necessary to
maintain, preserve, protect and keep its Inventory and the Equipment in good repair and working and saleable condition, except for damaged or defective goods arising in the ordinary course of the Grantor’s business and except for ordinary wear
and tear in respect of the Equipment. 
 (b) Returned Inventory. If an Account Debtor returns any
Inventory to the Grantor when no Event of Default exists, then the Grantor shall promptly determine the reason for such return and shall issue a credit memorandum to the Account Debtor in the appropriate amount. The Grantor shall promptly report to
the Administrative Agent any return involving an amount in excess of $100,000. Each such report shall indicate the reasons for the returns and the locations and condition of the returned Inventory. In the event any Account Debtor returns Inventory
to the Grantor when an Event of Default exists, the Grantor, upon the request of the 
  

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Administrative Agent, shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) segregate all returned Inventory from all of its other property;
(iii) dispose of the returned Inventory solely according to the Administrative Agent’s written instructions; and (iv) not issue any credits or allowances with respect thereto without the Administrative Agent’s prior written
consent. All returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with
respect to such returned Inventory and such returned Inventory shall not be Eligible Inventory. 
 (c)
Inventory Count; Perpetual Inventory System. The Grantor will conduct a physical count of its Inventory at least once per fiscal year, and after and during the continuation of an Event of Default, at such other times as the Administrative
Agent requests. The Grantor, at its own expense, shall deliver to the Administrative Agent the results of each physical verification, which the Grantor has made, or has caused any other Person to make on its behalf, of all or any portion of its
Inventory. The Grantor will maintain a perpetual inventory reporting system at all times. 
 (d)
Equipment. The Grantor shall promptly inform the Administrative Agent of any additions to or deletions from its Equipment which individually exceed $1,000,000. 

4.4. Delivery of Instruments, Securities, Chattel Paper and Documents. The Grantor will (a) deliver to the Administrative
Agent immediately upon execution of this Security Agreement the originals of all Chattel Paper, Securities and Instruments constituting Collateral owned by it (if any then exist) to the extent the aggregate value or face amount for all such Chattel
Paper, Securities and Instruments for the Grantor exceeds $100,000, (b) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent any such Chattel Paper, Securities and Instruments
constituting Collateral to the extent the aggregate value or face amount for all such Chattel Paper, Securities and Instruments for the Grantor exceeds $100,000, (c) upon the Administrative Agent’s request, deliver to the Administrative
Agent (and thereafter hold in trust for the Administrative Agent upon receipt and immediately deliver to the Administrative Agent) any Document evidencing or constituting Collateral to the extent the aggregate value or face amount for all such
Documents for the Grantor exceeds $100,000, and (d) upon the Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Security Agreement, in the form of Exhibit G hereto (the
“Amendment”), pursuant to which the Grantor will pledge such additional Collateral. The Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral
owned by it set forth in such Amendments shall be considered to be part of the Collateral. 
 4.5. Uncertificated Pledged
Collateral. With respect to any Pledged Collateral owned by it, the Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged Collateral and (b) any securities intermediary which is
the holder of any such Pledged Collateral, to cause the Administrative Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing, the Grantor will, with respect to any such Pledged Collateral held with a
securities intermediary, cause such securities intermediary to enter into a control agreement with the Administrative Agent, in form and substance satisfactory to the Administrative Agent, giving the Administrative Agent Control. 

4.6. Pledged Collateral. 

(a) Changes in Capital Structure of Issuers. Except as otherwise expressly permitted under the Credit Agreement,
the Grantor will not (i) permit or suffer any issuer of an Equity Interest constituting Pledged Collateral owned by it to dissolve, merge, liquidate, retire any of its Equity Interests or other Instruments or Securities evidencing ownership,
reduce its capital, sell or encumber all or substantially all of its assets (except for Permitted Liens and sales of assets permitted pursuant to Section 4.1(d)) or merge or consolidate with any other entity, or (ii) vote any such
Pledged Collateral in favour of any of the foregoing. 
 (b) Issuance of Additional Securities. Except as
otherwise expressly permitted under the Credit Agreement, the Grantor will not permit or suffer the issuer of an Equity Interest constituting Pledged 

 

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Collateral owned by it to issue additional Equity Interests, any right to receive the same or any right to receive earnings, except to the Grantor. 

(c) Registration of Pledged Collateral. After the occurrence and during the continuance of an Event of Default, the
Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Administrative Agent or its nominee at any time at the option of the Required Secured Parties. 

(d) Exercise of Rights in Pledged Collateral. 

(i) Without in any way limiting the foregoing and subject to clause (ii) below, the Grantor shall have the right to
exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Security Agreement, the Credit Agreement or any other Loan Document; provided however, that no vote
or other right shall be exercised or action taken which would have the effect of impairing the rights of the Administrative Agent in respect of such Pledged Collateral. 

(ii) The Grantor will permit the Administrative Agent or its nominee at any time after the occurrence and during the
continuance of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options
pertaining to any Equity Interest or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof. 

(iii) The Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect
of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement other than any of the following distributions and payments (collectively referred to as the “Excluded Payments”): (A) dividends
and interest paid or payable other than in cash in respect of such Pledged Collateral, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and
other distributions paid or payable in cash in respect of such Pledged Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer; and
(C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, such Pledged Collateral; provided however, that until actually paid, all rights to such distributions shall remain
subject to the Lien created by this Security Agreement; and 
 (iv) All Excluded Payments and all other
distributions in respect of any of the Pledged Collateral owned by the Grantor, whenever paid or made, shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by the Grantor, be received in trust for the
benefit of the Administrative Agent, be segregated from the other property or funds of the Grantor, and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

 4.7. Intellectual Property. 

(a) The Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment
to or benefit of the Administrative Agent of any License material to the conduct of its business or operations held by the Grantor and to enforce the security interests granted hereunder. 

(b) The Grantor shall notify the Administrative Agent immediately if it knows or has reason to know that any material
application or material registration relating to any Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office, the Canadian Intellectual 

 

 11 

 
Property Office or any court) regarding the Grantor’s ownership of any material Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same. 

(c) Within 20 days after the end of each calendar month and at such other times as may be requested by the Administrative
Agent, the Grantor shall provide the Administrative Agent with a list of all applications for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office, the Canadian
Intellectual Property Office or any similar office or agency, made in the prior month, and upon request of the Administrative Agent, the Grantor shall execute and deliver any and all security agreements as the Administrative Agent may request to
evidence the Administrative Agent’s first priority security interest on such Patent, Trademark or Copyright, and the General Intangibles of the Grantor relating thereto or represented thereby. 

(d) The Grantor shall take all actions necessary or requested by the Administrative Agent to maintain and pursue each
application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of
noncontestability and opposition and interference and cancellation proceedings unless the Grantor shall determine that such Patent, Trademark or Copyright is not material to the conduct of the Grantor’s business. 

(e) The Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material
to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Administrative
Agent shall deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that the Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or
misappropriated or diluted by a third party, the Grantor shall comply with Section 4.8. 
 4.8 Commercial Tort
Claims. The Grantor shall promptly, and in any event within two Business Days after the same is acquired by it in excess of $50,000 in the aggregate in value for all such Commercial Tort Claims, notify the Administrative Agent of any Commercial
Tort Claim acquired by it and, unless the Administrative Agent otherwise consents, the Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit G hereto, granting to Administrative Agent a first priority
security interest in such commercial tort claim. 
 4.9. Letter-of-Credit Rights. If the Grantor is or becomes the
beneficiary of a letter of credit, it shall promptly, and in any event within two Business Days after becoming a beneficiary, notify the Administrative Agent thereof and cause the issuer and/or confirmation bank to (i) consent to the assignment
of any rights of the Grantor under such letter of credit (the “Letter of Credit Rights”) to the Administrative Agent and (ii) agree to direct all payments thereunder to a Deposit Account at the Administrative Agent or subject to a
Deposit Account Control Agreement for application to the Canadian Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all in form and substance reasonably satisfactory to the Administrative Agent; provided that the
Grantor shall not be required to take such actions with respect to letters of credit (or Letter-of-Credit Rights) of less than $50,000 in aggregate face amount for all such letters of credit. 

4.10. Federal, Provincial or Municipal Claims. The Grantor will promptly notify the Administrative Agent of any Collateral which
constitutes a claim against the Canadian government or any provincial or local government or any instrumentality or agency thereof, the assignment of which claim is restricted by federal, provincial or municipal law. 

4.11. No Interference. The Grantor agrees that it will not interfere with any right, power and remedy of the Administrative Agent
provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.

  

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 4.12. Insurance. (a) All insurance policies required hereunder and under
Section 5.09 of the Credit Agreement shall name the Administrative Agent (for the benefit of the Administrative Agent and the Lender Parties) as an additional insured or as loss payee, as applicable, and shall contain loss payable clauses or
mortgagee clauses, through endorsements in form and substance satisfactory to the Administrative Agent, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to the Administrative Agent; (ii) no
such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy; and (iii) such policy and lender loss payable clauses may be canceled, amended, or terminated only upon at least thirty
days prior written notice given to the Administrative Agent. To the extent any Lender receives any such proceeds thereunder; Lender will remit such proceeds to the Administrative Agent for application to the Canadian Secured Obligations (or return
to the Grantor) in accordance with the applicable provisions of the Credit Agreement. 
 (b) All premiums on any
such insurance shall be paid when due by the Grantor, and copies of the policies delivered to the Administrative Agent. If the Grantor fails to obtain any insurance as required by this Section, the Administrative Agent may obtain such insurance at
the Borrower’s expense. By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay any premiums therefor. 

4.13. Collateral Access Agreements. Unless otherwise agreed to by the Administrative Agent in its Permitted Discretion, the
Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement, from the lessor of each leased property, mortgagee of owned property or bailee or consignee with respect to any warehouse, processor or converter facility or
other location where Collateral is stored or located, which agreement or letter shall provide access rights, contain a waiver or subordination of all Liens or claims that the landlord, mortgagee, bailee or consignee may assert against the Collateral
at that location, and shall otherwise be reasonably satisfactory in form and substance to the Administrative Agent. With respect to such locations or warehouse space leased as of the Closing Date and thereafter, if the Administrative Agent has not
received a Collateral Access Agreement as of the Effective Date (or, if later, as of the date such location is acquired or leased), the Grantor’s Eligible Inventory at that location shall be subject to such Reserves as may be established by the
Administrative Agent. After the Closing Date, no real property or warehouse space shall be leased by the Grantor and no Inventory shall be shipped to a processor or converter under arrangements established after the Closing Date, unless and until a
satisfactory Collateral Access Agreement shall first have been obtained with respect to such location or if it has not been obtained, Borrower’s Eligible Inventory at that location shall be subject to the establishment of Reserves acceptable to
the Administrative Agent. The Grantor shall timely and fully pay and perform its material obligations under all leases and other agreements with respect to each leased location or third party warehouse where any Collateral is or may be located.

 4.14. Deposit Account Control Agreements. The Grantor will provide to the Administrative Agent upon the Administrative
Agent’s request, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit account of the Grantor (other than Excluded Deposit Accounts) as set forth in the Security Agreement. 

4.15. Change of Name or Location; Change of Fiscal Year. The Grantor shall not (a) change its name as it appears in official
filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business, corporate offices, or the location of its records concerning the Collateral, (c) change the type of entity that
it is, (d) change its organization identification number, if any, issued by its province of incorporation or other organization, or (e) change its province of incorporation or organization, in each case, unless the Administrative Agent
shall have received at least thirty days prior written notice of such change and the Administrative Agent shall have acknowledged in writing that either (1) such change will not adversely affect the validity, perfection or priority of the
Administrative Agent’s security interest in the Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or taken (including any action to continue the perfection of any
Liens in favour of the Administrative 
  

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Agent, on behalf of Canadian Lenders, in any Collateral), provided that, any new location shall be in Canada. The Grantor shall not change its fiscal year which currently ends on [December
31.] 
 4.16 Assigned Contracts. Upon request by the Administrative Agent after the occurrence and during the
continuation of an Event of Default, the Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of the Administrative Agent of any Assigned Contract held by the
Grantor and to enforce the security interests granted hereunder. The Grantor shall fully perform all of its obligations under each of its Assigned Contracts, and shall enforce all of its rights and remedies thereunder, in each case, as it deems
appropriate in its business judgment; provided however, that the Grantor shall not take any action or fail to take any action with respect to its Assigned Contracts which would cause the termination of an Assigned Contract. Without
limiting the generality of the foregoing, the Grantor shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially adverse effect upon, the full enforcement of all indemnification rights
under its Assigned Contracts. The Grantor shall notify the Administrative Agent and the Canadian Lenders in writing, promptly after the Grantor becomes aware thereof, of any event or fact which could give rise to a material claim by it for
indemnification under any of its Assigned Contracts, and shall diligently pursue such right and report to the Administrative Agent on all further developments with respect thereto. The Grantor shall deposit into a Deposit Account at the
Administrative Agent or subject to a Deposit Account Control Agreement for application to the Canadian Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all amounts received by the Grantor as indemnification or
otherwise pursuant to its Assigned Contracts. If the Grantor shall fail after the Administrative Agent’s demand to pursue diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Administrative Agent may,
and at the direction of the Required Secured Parties shall, directly enforce such right in its own or the Grantor’s name and may enter into such settlements or other agreements with respect thereto as the Administrative Agent or the Required
Secured Parties, as applicable, shall determine. In any suit, proceeding or action brought by the Administrative Agent for the benefit of the Canadian Lender Parties under any Assigned Contract for any sum owing thereunder or to enforce any
provision thereof, the Grantor shall indemnify and hold the Administrative Agent and Canadian Lenders harmless from and against all expense, loss or damage suffered by reason of any defence, setoff, counterclaims, recoupment, or reduction of
liability whatsoever of the obligor thereunder arising out of a breach by the Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing from the Grantor to or in favour of such obligor or
its successors. All such obligations of the Grantor shall be and remain enforceable only against the Grantor and shall not be enforceable against the Administrative Agent or the Canadian Lenders. Notwithstanding any provision hereof to the contrary,
the Grantor shall at all times remain liable to observe and perform all of its duties and obligations under its Assigned Contracts, and the Administrative Agent’s or any Canadian Lender’s exercise of any of their respective rights with
respect to the Collateral shall not release the Grantor from any of such duties and obligations. Neither the Administrative Agent nor any Canadian Lender shall be obligated to perform or fulfill any of the Grantor’s duties or obligations under
its Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file
any claim, or to take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property. 

4.17 Securities. The Grantor shall ensure that any Equity Interest which is included within the Collateral shall at no time
constitute a Security and the issuer of any such Equity Interest shall at no time take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting such Security have been delivered to the
Administrative Agent under the PPSA, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a control agreement with the issuer of such Security or with a securities intermediary
relating to such Security under the PPSA, whether as a result of actions by the issuer thereof or otherwise. 
 ARTICLE V 

 EVENTS OF DEFAULT AND REMEDIES 
  

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 5.1. Intentionally Omitted. 

5.2. Remedies. 

(a) Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may exercise any or
all of the following rights and remedies: 
 (i) those rights and remedies provided in this Security Agreement,
the Credit Agreement, or any other Loan Document; provided that, this Section 5.2(a) shall not be understood to limit any rights or remedies available to the Administrative Agent and the Canadian Lenders prior to an Event of Default;

 (ii) those rights and remedies available to a secured party under the PPSA (whether or not the PPSA applies to
the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement; 

(iii) give notice of sole control or any other instruction under any Deposit Account Control Agreement or other control
agreement with any securities intermediary and take any action therein with respect to such Collateral; 
 (iv)
without notice (except as specifically provided in Section 8.1 or elsewhere herein), demand or advertisement of any kind to the Grantor or any other Person, enter the premises of the Grantor where any Collateral is located (through self-help
and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more
parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at the Grantor’s premises or elsewhere), for cash, on credit or for future delivery without
assumption of any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable; and 

(v) concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its
nominee the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all other
rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Administrative Agent was the
outright owner thereof. 
 (b) The Administrative Agent, on behalf of the Canadian Lenders, may comply with any
applicable provincial or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. 

(c) The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by law,
upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the Canadian Lender Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the
Grantor hereby expressly releases. 
 (d) Until the Administrative Agent is able to effect a sale, lease, or
other disposition of Collateral, the Administrative Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose

  

 15 

 
deemed appropriate by the Administrative Agent. The Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of
the Administrative Agent’s remedies (for the benefit of the Administrative Agent and Canadian Lender Parties), with respect to such appointment without prior notice or hearing as to such appointment. 

(e) If, after the Credit Agreement has terminated by its terms and all of the Canadian Secured Obligations have been paid
in full, there remain Swap Obligations of the Grantor outstanding, the Required Secured Parties may exercise the remedies provided in this Section 5.2 upon the occurrence of any event which would allow or require the termination or acceleration
of any such Swap Obligations pursuant to the terms of the applicable Swap Agreement. 
 (f) Notwithstanding the
foregoing, neither the Administrative Agent nor the Canadian Lenders shall be required to (i) make any demand upon, or pursue or exhaust any of their rights or remedies against, the Grantor, any other obligor, guarantor, pledgor or any other
Person with respect to the payment of the Canadian Secured Obligations or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or
any guarantee of the Canadian Secured Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral. 

(g) The Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged
Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. The Grantor also acknowledges that any private sale may result in prices and other terms less favourable to the seller
than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The
Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the Grantor or the issuer of the Pledged Collateral to register such securities for public sale under
applicable securities laws, even if the applicable Grantor and the issuer would agree to do so. 
 5.3. Grantor’s
Obligations Upon Default. Upon the request of the Administrative Agent after the occurrence and during the continuance of an Event of Default, the Grantor will: 

(a) assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto at
any place or places specified by the Administrative Agent, whether at the Grantor’s premises or elsewhere; 

(b) permit the Administrative Agent, by the Administrative Agent’s representatives and agents, to enter, occupy and
use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or
any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy; 

(c) prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the applicable government agency,
registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as the Administrative Agent may request, all in form and substance satisfactory to the Administrative Agent, and furnish to the
Administrative Agent, or cause an issuer of Pledged Collateral to furnish to the Administrative Agent, any information regarding the Pledged Collateral in such detail as the Administrative Agent may specify; 

(d) take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the
Pledged Collateral to enable the Administrative Agent to consummate a public sale or other disposition of the Pledged Collateral; and 
  

 16 

 (e) at its own expense, cause the independent certified public accountants
then engaged by the Grantor to prepare and deliver to the Administrative Agent and each Canadian Lender, at any time, and from time to time, promptly upon the Administrative Agent’s request, the following reports with respect to the Grantor:
(i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts. 

5.4. Grant of Intellectual Property License. For the purpose of enabling the Administrative Agent to exercise the rights and
remedies under this Article V at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, the Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative
Agent and the Canadian Lender Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantor) to use, license or sublicense any Intellectual Property rights now owned or hereafter acquired
by the Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout
thereof and (b) irrevocably agrees that the Administrative Agent may sell any of the Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s Inventory from the
Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to the Grantor and any Inventory that is
covered by any Copyright owned by or licensed to the Grantor and the Administrative Agent may finish any work in process and affix any Trademark owned by or licensed to the Grantor and sell such Inventory as provided herein. 

ARTICLE VI 

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY 

6.1. Account Verification. The Administrative Agent may at any time, in the Administrative Agent’s own name, in the name of a
nominee of the Administrative Agent, or in the name of the Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of the Grantor, parties to contracts with the Grantor and obligors in respect of Instruments of the
Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables. 

6.2. Authorization for Secured Party to Take Certain Action. 

(a) The Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion
of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of the Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole
discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) upon the occurrence and during the continuation of an Event of Default, to endorse and collect any
cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement
or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the
Administrative Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged
Collateral as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Administrative Agent to the Canadian Secured Obligations as provided
in Section 7.3, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder), (vii) upon the occurrence and during the continuation of an Event
of Default, to contact Account Debtors for any reason, (viii) upon the occurrence and during the continuation of an Event of Default, to demand payment or enforce payment 

 

 17 

 
of the Receivables in the name of the Administrative Agent or the Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables,
(ix) upon the occurrence and during the continuation of an Event of Default, to sign the Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and
verifications of Receivables, (x) upon the occurrence and during the continuation of an Event of Default, to exercise all of the Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral,
(xi) upon the occurrence and during the continuation of an Event of Default, to settle, adjust, compromise, extend or renew the Receivables, (xii) upon the occurrence and during the continuation of an Event of Default, to settle, adjust or
compromise any legal proceedings brought to collect Receivables, (xiii) upon the occurrence and during the continuation of an Event of Default, to prepare, file and sign the Grantor’s name on a proof of claim in bankruptcy or similar
document against any Account Debtor of the Grantor, (xiv) upon the occurrence and during the continuation of an Event of Default, to prepare, file and sign the Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables, (xv) upon the occurrence and during the continuation of an Event of Default, to change the address for delivery of mail addressed to the Grantor to such address as the Administrative Agent
may designate and to receive, open and dispose of all mail addressed to the Grantor, and (xvi) to do all other acts and things necessary to carry out this Security Agreement; and the Grantor agrees to reimburse the Administrative Agent on
demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that, this authorization shall not relieve the Grantor of any of its obligations under this Security Agreement
or under the Credit Agreement. 
 (b) All acts of said attorney or designee are hereby ratified and approved. The
powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and Canadian Lender Parties, under this Section 6.2 are solely to protect the Administrative Agent’s interests in the Collateral and shall not impose
any duty upon the Administrative Agent or any Canadian Lender to exercise any such powers. 
 6.3. Proxy. THE GRANTOR
HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER
OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES
TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND
WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE
OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT. 
 6.4. Nature of Appointment; Limitation of Duty. THE
APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY CANADIAN LENDER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR
POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS
FINALLY DETERMINED BY A COURT OF 
  

 18 

 
COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES. 

ARTICLE VII 

COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS 

7.1. Collection of Receivables. 

(a) On or before the Closing Date, the Grantor shall (a) execute and deliver to the Administrative Agent Deposit
Account Control Agreements for each Deposit Account maintained by the Grantor (other than Excluded Deposit Accounts) into which all cash, checks or other similar payments relating to or constituting payments made in respect of Receivables (other
than such amounts as are permitted to be deposited into Excluded Deposit Accounts) will be deposited (a “Collateral Deposit Account”), which Collateral Deposit Accounts are identified as such on Exhibit B, and
(b) establish lock box service (the “Lock Boxes”) with the bank(s) set forth in Exhibit B, which lock boxes shall, upon notice from the Administrative Agent during any Dominion Trigger Period, be subject to irrevocable
lockbox agreements in the form provided by or otherwise reasonably acceptable to the Administrative Agent and shall be accompanied by an acknowledgment by the bank where the Lock Box is located of the Lien of the Administrative Agent granted
hereunder and of irrevocable instructions, upon notice from the Administrative Agent during any Dominion Trigger Period, to wire all amounts collected therein to the Canadian Collection Account (a “Lock Box Agreement”). After the
Closing Date, the Grantor will comply with the terms of Section 7.2. 
 (b) The Grantor shall direct all of
its Account Debtors to forward payments directly to Lock Boxes subject to Lock Box Agreements. Upon notice from the Administrative Agent during any Dominion Trigger Period, the Administrative Agent shall have sole access to the Lock Boxes at all
times and the Grantor shall take all actions necessary to grant the Administrative Agent such sole access. At no time, after notice from the Administrative Agent during any Dominion Trigger Period, shall the Grantor remove any item from a Lock Box
or from a Collateral Deposit Account without the Administrative Agent’s prior written consent. If the Grantor should refuse or neglect to notify any Account Debtor to forward payments directly to a Lock Box subject to a Lock Box Agreement after
notice from the Administrative Agent, the Administrative Agent shall be entitled to make such notification directly to Account Debtor. If notwithstanding the foregoing instructions, the Grantor receives any proceeds of any Receivables, the Grantor
shall receive such payments as the Administrative Agent’s trustee, and shall immediately deposit all cash, checks or other similar payments related to or constituting payments made in respect of Receivables received by it to a Collateral
Deposit Account. Upon notice from the Administrative Agent during any Dominion Trigger Period, all funds deposited into any Lock Box subject to a Lock Box Agreement or a Collateral Deposit Account will be swept on a daily basis into a collection
account maintained by the Grantor with the Administrative Agent (each such account, a “Canadian Collection Account”). The Administrative Agent shall hold and apply funds received into the Canadian Collection Accounts as provided by
the terms of Section 7.3. 
 7.2. Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or replacing
any Collateral Deposit Account, other Deposit Account, or establishing a new Lock Box, the Grantor shall (a) in the case of any Collateral Deposit Account or Lock Box obtain the Administrative Agent’s consent in writing to the opening of
such Collateral Deposit Account or Lock Box, and (b) cause each bank or financial institution in which it seeks to open (i) a Deposit Account, (other than an Excluded Deposit Account), to enter into a Deposit Account Control Agreement with
the Administrative Agent in order to give the Administrative Agent Control of such Deposit Account, or (ii) a Lock Box, to enter into a Lock Box Agreement with the Administrative Agent in order to give the Administrative Agent Control of the
Lock Box. In the case of Deposit Accounts or Lock Boxes maintained with Canadian Lenders, the terms of such letter shall be subject to the provisions of the Credit Agreement regarding setoffs. 

7.3. Application of Proceeds; Deficiency. During any Dominion Trigger Period, all amounts deposited in the Canadian Collection
Account shall be deemed received by the Administrative Agent in 
  

 19 

 
accordance with Section 2.18 of the Credit Agreement and shall, after having been credited to the Canadian Collection Account, be applied (and allocated) by Administrative Agent in
accordance with Section 2.10(b) of the Credit Agreement. The Grantor shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Canadian Secured Obligations, including any
attorneys’ fees and other expenses incurred by Administrative Agent or any Canadian Lender to collect such deficiency. 

ARTICLE VIII 

GENERAL PROVISIONS 

8.1. Waivers. The Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale
or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantor, addressed as set forth in Article IX, at
least fifteen days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, the Grantor waives all claims,
damages, and demands against the Administrative Agent or any Canadian Lender arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Administrative
Agent or such Canadian Lender as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, the Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert
against the Administrative Agent or any Canadian Lender, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defences it may have as a surety now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise. Except as otherwise specifically provided
herein, the Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral. 

8.2. Limitation on Administrative Agent’s and Canadian Lenders’ Duty with Respect to the Collateral. The Administrative
Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each Canadian Lender shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the
Administrative Agent nor any Canadian Lender shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such Canadian Lender, or any income
thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, the
Grantor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw
material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove
Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists,
(v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as the Grantor,
for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature,
(viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets,
(ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative
Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or 

 

 20 

 
disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral. The Grantor acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive indications of what actions or omissions by
the Administrative Agent would be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 8.2. Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to the Grantor or to impose any duties on the Administrative
Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 8.2. 

8.3. Compromises and Collection of Collateral. The Grantor and the Administrative Agent recognize that setoffs, counterclaims,
defences and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a
disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, the Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of
Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any such
action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith based on information known to it at the time it takes any such action. 

8.4. Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent may perform
or pay any obligation which the Grantor has agreed to perform or pay in this Security Agreement and has failed to so perform or pay, and the Grantor shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant
to this Section 8.4. The Grantor’s obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall be a Canadian Secured Obligation payable on demand. 

8.5. Specific Performance of Certain Covenants. The Grantor acknowledges and agrees that a breach of any of the covenants
contained in Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7 or in Article VII will cause irreparable injury to the Administrative Agent and the Canadian Lenders, that the Administrative Agent
and Canadian Lenders have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative Agent or the Canadian Lenders to seek and obtain specific performance of other obligations of the
Grantor contained in this Security Agreement, that the covenants of the Grantor contained in the Sections referred to in this Section 8.5 shall be specifically enforceable against the Grantor. 

8.6. Dispositions Not Authorized. The Grantor is not authorized to sell or otherwise dispose of the Collateral except as set forth
in Section 4.1(d) and notwithstanding any course of dealing between the Grantor and the Administrative Agent or other conduct of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in
Section 4.1(d)) shall be binding upon the Administrative Agent or the Canadian Lenders unless such authorization is in writing signed by the Administrative Agent with the consent or at the direction of the Required Secured Parties. 

8.7. No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any Canadian Lender to
exercise any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not
preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing signed
by the Administrative Agent with the concurrence or at the direction of the Canadian Lenders required under Section 9.02 of the Credit Agreement and then only to the extent specifically set forth in such writing. All rights and remedies
contained 
  

 21 

 
in this Security Agreement or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Canadian Lenders until the Canadian Secured Obligations have been
paid in full. 
 8.8. Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this
Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of
law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in this Security
Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Security Agreement are declared to be severable. 

8.9. Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any petition
be filed by or against the Grantor for liquidation or reorganization, should the Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part
of the Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Canadian Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of the Canadian Secured Obligations, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Canadian Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. 

8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of
the Grantor, the Administrative Agent and the Canadian Lender Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that Grantor shall not have the right to assign
its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement
governing the Canadian Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the Canadian Lender Parties, hereunder.

 8.11. Survival of Representations. All representations and warranties of the Grantor contained in this Security
Agreement shall survive the execution and delivery of this Security Agreement. 
 8.12. Taxes and Expenses. Any taxes
(including income taxes) payable or ruled payable by federal or provincial authority in respect of this Security Agreement shall be paid by the Grantor, together with interest and penalties, if any. The Grantor shall reimburse the Administrative
Agent for any and all out-of-pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable time charges of attorneys, paralegals, auditors and accountants who may be employees of
the Administrative Agent) paid or incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit (subject to the limitations
contained in Section 5.11 of the Credit Agreement), analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit (subject to the limitations
contained in Section 5.11 of the Credit Agreement) of the Collateral). Any and all costs and expenses incurred by the Grantor in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantor. 

8.13. Headings. The title of and section headings in this Security Agreement are for convenience of reference only, and shall not
govern the interpretation of any of the terms and provisions of this Security Agreement. 
  

 22 

 8.14. Termination. This Security Agreement shall continue in effect (notwithstanding
the fact that from time to time there may be no Canadian Secured Obligations outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Canadian Secured Obligations have been indefeasibly
paid and performed in full (or with respect to any outstanding Letters of Credit, a cash deposit or supporting Letter of Credit has been delivered to the Administrative Agent as required by the Credit Agreement) and no commitments of the
Administrative Agent or the Canadian Lenders which would give rise to any Canadian Secured Obligations are outstanding. 
 8.15.
Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantor and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between the Grantor
and the Administrative Agent relating to the Collateral. 
 8.16. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE THEREIN, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTERESTS HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE PROVINCE OF ONTARIO. 

8.17. CONSENT TO JURISDICTION. THE GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF COURTS OF THE
PROVINCE OF ONTARIO OR OF THE FEDERAL COURTS OF CANADA THEREIN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND THE GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY CANADIAN LENDER TO BRING PROCEEDINGS AGAINST THE GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE GRANTOR AGAINST THE ADMINISTRATIVE AGENT
OR ANY CANADIAN LENDER OR ANY AFFILIATE OF THE AGENT OR ANY CANADIAN LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN THE PROVINCE OF ONTARIO. 
 8.18. WAIVER OF JURY TRIAL. THE GRANTOR HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS SECURITY AGREEMENT, OTHER LOAN DOCUMENTS, THE OBLIGATIONS OF THE GRANTOR, THE
COLLATERAL, OR ANY INSTRUMENT, DOCUMENT OR GUARANTEE DELIVERED PURSUANT HERETO OR TO ANY OF THE FOREGOING, OR THE VALIDITY, PROTECTION, INTERPRETATION, ADMINISTRATION, COLLECTION OR ENFORCEMENT HEREOF OR THEREOF, OR ANY OTHER CLAIM OR DISPUTE
HEREUNDER OR THEREUNDER. THE GRANTOR AGREES THAT IT WILL NOT ASSERT AGAINST THE ADMINISTRATIVE AGENT ANY CLAIM FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR PUNITIVE DAMAGES IN CONNECTION WITH THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. NO OFFICER OF THE ADMINISTRATIVE AGENT HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION. 
  

 23 

 8.19. Indemnity. The Grantor hereby agrees to indemnify the Administrative Agent and
the Canadian Lenders (each, an “Indemnified Person”), and their respective successors, assigns, agents and employees and such, from and against any and all liabilities, damages, penalties, suits, costs, and expenses of any kind and
nature (including, without limitation, all expenses of litigation or preparation therefor whether or not the Administrative Agent or any Canadian Lender is a party thereto) imposed on, incurred by or asserted against the Administrative Agent or the
Canadian Lenders, or their respective successors, assigns, agents and employees, in any way relating to or arising out of this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether or not discoverable by the Administrative Agent or the Canadian Lenders or the Grantor, and any claim for
Patent, Trademark or Copyright infringement); provided that, in no event shall Grantor be required to indemnify the Indemnified Person from any liabilities, damages, penalties, suits, costs, and expenses resulting from the gross negligence or
willful misconduct, as finally determined by a court of competent jurisdiction, of such Indemnified Person. 
 8.20.
Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such
counterpart. 
 ARTICLE IX 

NOTICES 

9.1. Sending Notices. Any notice required or permitted to be given under this Security Agreement shall be sent by mail,
telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received (a) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail or (b) when sent, if
sent by telecopier (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient), in each case addressed to the Grantor at the
notice address set forth on Exhibit A, and to the Administrative Agent and the Canadian Lenders at the addresses set forth in accordance with Section 9.01 of the Credit Agreement. 

9.2. Change in Address for Notices. Each of the Grantor, the Administrative Agent and the Canadian Lenders may change the address
for service of notice upon it by a notice in writing to the other parties. 
 ARTICLE X 

THE ADMINISTRATIVE AGENT 

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Canadian Lenders hereunder pursuant to Article VIII of the
Credit Agreement. It is expressly understood and agreed by the parties to this Security Agreement that any authority conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Canadian
Lenders to the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article
VIII. Any successor Administrative Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Administrative Agent hereunder. 

[Signature Page Follows] 
  

 24 

 IN WITNESS WHEREOF, the Grantor and the Administrative Agent have executed this Security
Agreement as of the date first above written. 
  

			
	DDI TORONTO CORP. an Ontario Corporation:
		
	By:	 	/s/ J. Michael Dodson
	Name:	 	J. Michael Dodson
	Title:	 	Chief Financial Officer
	
	 ADMINISTRATIVE AGENT:
  

JPMORGAN CHASE BANK, N.A.,
 As Administrative
Agent

		
	By:	 	/s/ Teresa B. Keckler
	Name:	 	Teresa B. Keckler
	Title:	 	Vice PresidentSales Agreement

 Exhibit 10.1 

CARDIUM THERAPEUTICS, INC. 

DOCS®
 financing facility 
 Shares of Common Stock, 

$0.0001 par value 

SALES AGREEMENT 

September 28, 2010 

 THIS SALES AGREEMENT (the “Agreement”) dated as of
September 28, 2010 is made and entered into by and between Brinson Patrick Securities Corporation, having its principal office at 1515 Broadway,
11th Floor, New York, New York 10036 (the “Sales
Manager”) and Cardium Therapeutics, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”). 

WHEREAS, the Company desires to issue and sell through the Sales Manager, as agent, shares of its Common Stock, $0.0001 par value (the
“Stock”), on the terms set forth in Article II below. 
 IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Sales Manager agree as follows: 
 ARTICLE I 

REPRESENTATIONS AND WARRANTIES 

OF THE COMPANY 

1.1 For purposes of this Agreement, unless the context requires to the contrary, the term “Company” shall also include all
significant subsidiaries (as defined by Section 1-02 of Regulation S-X) of the Company. The Company represents and warrants to, and agrees with, the Sales Manager that: 

(a) The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as amended (the “Act”), and the
rules and regulations thereunder (“Rules and Regulations”), and the Company is eligible to use Form S-3 for the transactions contemplated by this Agreement. A registration statement on Form S-3 (Registration No. 333-168693) with
respect to, among other securities, the Stock, including a form of prospectus, has been prepared by the Company in conformity with the requirements of the Act and the Rules and Regulations, has been filed with the Securities and Exchange Commission
(the “Commission”) and has been declared effective by the Commission. No stop order suspending the effectiveness of such registration statement has been issued, and no proceeding for that purpose has been instituted or, to the knowledge of
the Company, threatened by the Commission. Such registration statement, as it may have heretofore been or may hereafter be amended, is referred to herein as the “Registration Statement,” and the final form of prospectus included in the
Registration Statement for purposes of offers and sales of the Stock contemplated herein, as amended or supplemented from time to time, is referred to herein as the “Prospectus.” Any reference herein to the Registration Statement, the
Prospectus, or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated (or deemed to be incorporated) by reference therein, and any reference herein to the terms “amend,” “amendment”
or “supplement” with respect to the Registration Statement or Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein.

 (b) Each part of the Registration Statement, when such part became or becomes effective, and the Prospectus and any amendment
or supplement thereto, on the date of filing thereof with the Commission and at each Settlement Date (as hereinafter defined), conformed or will conform in all material respects with the requirements of the Act and the Rules and Regulations; each
part of the Registration Statement, when such part became or becomes effective, did not or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendment or supplement thereto, on the date of filing thereof with the Commission and at each Settlement Date, did not or will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing shall not apply to statements in or omissions from any such document in reliance upon,
and in conformity with, written information furnished to the Company by or on behalf of the Sales Manager, specifically for use in the Registration Statement, the Prospectus or any amendment or supplement thereto. There are no Commission comments to
any part of the Registration Statement, Prospectus or any amendment or supplement thereto, that have not been resolved as of the date hereof. 
  

 -1- 

 (c) The documents incorporated by reference in the Registration Statement or the Prospectus,
or any amendment or supplement thereto, when they were or are filed with the Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), conformed or will conform in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder. 
 (d) The financial
statements of the Company, together with the related schedules and notes thereto, set forth or included in the Registration Statement and Prospectus, fairly present the financial condition of the Company as of the dates indicated and the results of
operations, changes in financial position, stockholders’ equity, and cash flows for the periods therein specified, in conformity with United States generally accepted accounting principles consistently applied throughout the periods involved
(except as otherwise stated therein). The summary and selected financial and statistical data, if any, included in the Registration Statement and the Prospectus present fairly the information shown therein and, to the extent based upon or derived
from the financial statements, have been compiled on a basis consistent with the financial statements presented therein. As of the date hereof, there are no comments pending from the Commission that, if not resolved favourably to the Company, could
have the effect of requiring a restatement of financial statements of the Company. 
 (e) The accountants who certified the
financial statements and the supporting schedules included in the Registration Statement are and, during the periods covered by their reports, were qualified and independent public accountants as required by Rule 2-01 of Regulation S-X and by the
rules of the Public Company Accounting Oversight Board. 
 (f) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The Company is duly qualified and in good standing as a foreign corporation in each jurisdiction in which the character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification necessary (including every jurisdiction in which it owns or leases real property), except for such jurisdictions where the failure to so qualify would not have a Material Adverse
Effect on the Company. For purposes of this Agreement, “Material Adverse Effect” means (i) any adverse effect on the assets or properties, business, results of operations, financial condition of the Company that is material to the
Company, and/or (ii) any material adverse effect on the transactions contemplated under this Agreement or any other agreement or document contemplated hereby or thereby. Each of the Company’s significant subsidiaries is validly existing
and in good standing as a corporation, limited liability company or partnership, as applicable, in its respective jurisdiction of formation. Schedule 1.1(f) hereto identifies each of the Company’s subsidiaries that is a significant subsidiary
(as defined in Section 1-02 of Regulation S-X) of the Company. Except as otherwise disclosed in the Registration Statement and the Prospectus, all of the issued and outstanding capital stock, limited liability company interests or partnership
interests, as applicable, of each significant subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company, directly or indirectly, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. The Company has all requisite corporate power and authority and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits of and from all governmental orders or regulatory
bodies or any other person or entity, to own, lease, license and operate its assets and properties and conduct its business as now being conducted and as described in the Registration Statement and the Prospectus; except for such authorizations,
approvals, consents, orders, licenses, certificates and permits the absence of which would not have a Material Adverse Effect. 
  

 -2- 

 (g) The Company has good and marketable title to, or leasehold interests in, all properties
and assets as described in the Registration Statement and the Prospectus as owned by the Company, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and the Prospectus and
except such as would not have a Material Adverse Effect on the Company. 
 (h) The Company has been subject to the requirements
of Section 12 of the Exchange Act during the period commencing 12 months preceding the filing of the Registration Statement and ending on the date hereof (the “Reporting Period”) and during such Reporting Period the Company has timely
filed all material and reports required under Sections 13(a), 14 and/or 15(d) of the Exchange Act, except that the pro forma financial statements for the disposition of assets reported in the Company’s current report on Form 8-K filed
July 29, 2009 were filed by amendment on Form 8-K/A on August 25, 2009. All such materials and reports conformed in form and substance to the requirements of the Exchange Act and the rules and regulations thereunder. As of the date hereof,
either (A) the aggregate market value of all securities sold by or on behalf of the Company pursuant to General Instruction I.B.6. of Form S-3 under the Act during the period of twelve calendar months immediately prior to, and including, the
date hereof (including without limitation any Stock sold prior to the date hereof or to be sold on the date hereof pursuant to this Agreement, if applicable), in each case calculated in accordance with Instruction 2 to General Instruction I.B.6. of
Form S-3, is not more than one-third of the aggregate market value of the voting and non-voting “common equity” (as such term is defined in Rule 405 under the Act) held by non-affiliates of the Company calculated in accordance with
Instruction 1 to General Instruction I.B.6. of Form S-3 (the “Public Float”) or (B) the Public Float is at least $75 million. The Company is not, and has not previously been in the last 12 months, a “shell company” (as such
term is defined in Rule 405 under the Act). 
 (i) There is no litigation or governmental or other proceeding or investigation
before any court or before or by any public body or board pending or, to the knowledge of the Company, threatened against, or involving the assets, properties or businesses of the Company which, if resolved against the Company, would have a Material
Adverse Effect on the Company or the offering contemplated by this Agreement, except as described in the Registration Statement. 
  

 -3- 

 (j) The Company maintains insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally deemed adequate for its businesses and, to the knowledge of the Company, consistent with insurance coverage maintained by similar companies in similar businesses, including, but not limited
to, product liability insurance covering the Company’s products, insurance covering real and personal property owned or leased by the Company against theft, damage, destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect. 
 (k) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as described therein, (i) there has not been any material adverse change in the assets or properties, business, results of operations, or financial condition of the Company, whether or
not arising from transactions in the ordinary course of business; (ii) the Company has not sustained any material loss or interference with its assets, businesses or properties (whether owned or leased) from fire, explosion, earthquake, flood
or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree; (iii) the Company has not undertaken any liability or obligation, direct or contingent,
except such liabilities or obligations undertaken in the ordinary course of business; and (iv) there has not been any transaction that is material to the Company, except transactions in the ordinary course of business or as otherwise disclosed
in the Registration Statement and the Prospectus. 
 (l) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that is not described or filed in the manner and within the time periods required under the Exchange Act. Each document, instrument,
contract and agreement of the Company described in the Registration Statement or the Prospectus or incorporated by reference therein or listed as exhibits to the Registration Statement is in full force and effect and is valid and enforceable by and
against the Company in accordance with their terms, assuming the due authorization, execution and delivery thereof by each of the other parties thereto, except as otherwise disclosed in the Registration Statement or Prospectus. The Company is not,
nor to the knowledge of the Company is any other party, in default in the observance or performance of any term or obligation to be performed by it under any such agreement, and no event has occurred which with notice or lapse of time or both would
constitute such a default, which default or event would have a Material Adverse Effect. No default exists, and no event has occurred which with notice or lapse of time or both would constitute a default, in the due performance and observance of any
term, covenant or condition, by the Company of any other agreement or instrument to which the Company is a party or by which it or its properties or business may be bound or affected, which default or event would have a Material Adverse Effect.

 (m) The Company is not in violation of any term or provision of its charter, by-laws or operating agreement, as applicable.
The Company is not in violation of any franchise, license, permit, judgment, decree, order, statute, rule or regulation, where the consequences of such violation would have a Material Adverse Effect. The Company’s common stock is duly listed
and registered on the Trading Market (as defined below) and the Company is not in breach or violation of, or in default under, any of the rules and regulations of the Trading Market. The Company has not received any notice from the Trading Market
regarding the delisting or the potential delisting of the Company’s common stock from the Trading Market except as disclosed in the Registration Statement. 
  

 -4- 

 (n) Except as described in the Prospectus, neither the execution, delivery and performance
of this Agreement by the Company nor the consummation of any of the transactions contemplated hereby (including, without limitation, the issuance and sale by the Company of the Stock) will give rise to a right to terminate or accelerate the due date
of any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge, encumbrance, claim, security interest, restriction or defect upon any properties or assets of the Company pursuant to the terms of, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which the Company is bound, or any of its properties are bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or
violate any provision of the charter or by-laws of the Company, except for such consents or waivers which have already been obtained and are in full force and effect. 

(o) All of the outstanding shares of common stock of the Company have been duly authorized and validly issued and are fully paid and
nonassessable and none of such shares were issued in violation of any pre-emptive or other similar right. The Stock, when issued and sold pursuant to this Agreement, will be duly authorized and validly issued, fully paid and nonassessable and will
not be issued in violation of any pre-emptive or other similar right. Except as disclosed in the Registration Statement and the Prospectus, there is no outstanding option, warrant or other right calling for the issuance of, and there is no
commitment or arrangement to issue, any capital stock of the Company or any security convertible into or exercisable or exchangeable for such capital stock, except for standard dividend reinvestment plans. The Stock conforms in all material respects
to all statements relating thereto contained in the Registration Statement and the Prospectus. All stock options issued by the Company have been issued in compliance with law; and the terms and provision of such stock options were established in
compliance with law. 
 (p) Subsequent to the respective dates as of which information is given in the Registration Statement
and the Prospectus, except as (x) described or referred to therein, or (y) are not material (as to clauses (i) and (ii) only), are consistent with past practice (as to clauses (i) and (ii) only), and are publicly
disclosed, the Company has not (i) issued any securities (except as would have been permitted pursuant to the proviso contained in Section 3.1(k) of this Agreement) or incurred any liability or obligation, direct or contingent, except such
liabilities or obligations incurred in the ordinary course of business including, without limitation, debt financing to acquire and develop properties, (ii) entered into any transaction not in the ordinary course of business or
(iii) declared or paid any dividend or made any distribution on any shares of its capital stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares of its capital stock. 

 

 -5- 

 (q) Except as disclosed in the Registration Statement and Prospectus, no holder of any
security of the Company has the right, which has not been waived, to have any security owned by such holder included in the Registration Statement. 

(r) All necessary corporate action has been duly and validly taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Stock by the Company. This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes and will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except insofar as enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors
generally or (ii) principles or rules of law governing specific performance, injunctive relief or the availability of other equitable remedies. Except for any “blue sky” filings or Trading Market (as defined below) listing
applications to be filed pursuant hereto), each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions contemplated hereby and the issuance and sale of the Stock by the Company has been obtained or made and is in full force and effect. The Company will use commercially
reasonable efforts to cause the Stock to be listed for trading on the Trading Market. For purposes of this Agreement, the “Trading Market” is (i) the NYSE Amex, and (ii) each other national securities exchange or market on which
the common stock of the Company trades or is admitted for trading. 
 (s) The Company has not incurred any liability for a fee,
commission or other compensation on account of the employment of a broker or finder in connection with the transactions contemplated by this Agreement other than as contemplated hereby or as described in the Registration Statement. 

(t) The Company is conducting its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it
is conducting business, except where the failure to be so in compliance would not have a Material Adverse Effect. 
 (u) No
transaction has occurred between or among the Company and any of its officers or directors or any affiliate or affiliates of any such officer or director that is required to be described in and is not described in the Registration Statement and the
Prospectus. 
 (v) The Company has not taken, nor will it take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the common stock of the Company to facilitate the sale or resale of any of
the Stock. 
 (w) The Company has filed all federal, state, local and foreign tax returns that are required to be filed through
the date hereof (and will file all such tax returns when and as required to be filed after the date hereof), or has received extensions thereof, and has paid all taxes shown on such returns to be due on or prior to the date hereof (and will pay all
taxes shown on such returns to be due after the date hereof) and all assessments received by it to the extent that the same are material and have become due except where the failure to file such a return or pay such amount would not have a Material
Adverse Effect. 
  

 -6- 

 (x) The Company owns or has valid, binding and enforceable licenses or other rights to use
the patents and patent applications, inventions, copyrights, trademarks, service marks, trade names, service names, technology and know-how (including without limitation trade secrets and other unpatented and/or unpatentable proprietary rights but
excluding generally commercially available “off the shelf” software programs licensed pursuant to shrink wrap or “click and accept” licenses) necessary to conduct the business of the Company in the manner described in the
Registration Statement and the Prospectus (collectively, the “Company Intellectual Property”), except for any Company Intellectual Property the absence of which, individually or in the aggregate, would not have a Material Adverse Effect.
Except as described in the Prospectus, the Company Intellectual Property is free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest, whether imposed by agreement, contract, understanding, law, equity or
otherwise, except for (i) liens for taxes not yet due, (ii) mechanics liens and similar liens for labor, materials or supplies incurred in the ordinary course of business for amounts that are not delinquent and (iii) any liens that
individually or in the aggregate are not material (a “Permitted Liens”) or where any failure to have such adequate licenses or other rights of use to such Intellectual Property, individually or in the aggregate, would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. The Company is not obligated to pay a royalty, grant a license or provide other consideration to any third party in connection with the Company Intellectual Property
other than as disclosed in the Registration Statement and the Prospectus. Except as disclosed in the Registration Statement and the Prospectus or as would not have a Material Adverse Effect, (i) the Company has not received any notice of
infringement or conflict with asserted rights of others with respect to any Company Intellectual Property, (ii) the conduct of the business of the Company in the manner described in the Registration Statement and the Prospectus does not and, to
the knowledge of the Company, will not, infringe, interfere or conflict with any valid issued patent claim or other Intellectual Property right of any third party and (iii) no third party, including without limitation any academic or
governmental organization, possesses or could obtain rights to the Company Intellectual Property which, if exercised, could enable such party to develop products competitive to those of the Company, other than rights arising under applicable law in
connection with government sponsorship of Company research activities. Except as disclosed in the Registration Statement and the Prospectus, the Company has not received any notice or has any knowledge of (i) any potential infringement or
misappropriation by others of the Company Intellectual Property or (ii) any Intellectual Property of others that potentially conflicts or interferes with the Company Intellectual Property, that might reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. To the Company’s knowledge, no claim of any patent or patent application (assuming the claims of patent applications issue as currently pending) included in the Company Intellectual Property is
unenforceable or invalid, except for such unenforceability or invalidity that would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect. Each former and current key employee and key independent
contractor of the Company has signed and delivered one or more written contracts with the Company pursuant to which such employee or independent contractor assigns to the Company all of his, her or its rights in and to any inventions, discoveries,
improvements, works of authorship, know-how or information made, conceived, reduced to practice, authored or discovered in the course of employment by or performance of services for the Company and any and all patent rights, copyrights, trademark
and other intellectual property rights therein or thereto. 
  

 -7- 

 (y) Except as described in the Registration Statement and the Prospectus, the Company
possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, including without limitation all such
certificates, authorizations and permits required by the United States Food and Drug Administration (the “FDA”) or any other federal, state or foreign agencies or bodies engaged in the regulation of medical devices, pharmaceuticals or
biohazardous materials, except where the failure to so possess such certificates, authorizations and permits, individually or in the aggregate, would not result in a Material Adverse Effect. Except as described in the Registration Statement and the
Prospectus, the Company has not received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, individually or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a Material Adverse Effect. 
 (z) Except as described in the Registration Statement and the Prospectus,
the Company and the Subsidiaries and, to the Company’s knowledge, any third party manufacturer of Company products are, and at all times have been, in material compliance with all regulatory requirements applicable to the business, including
the registration and listing requirements set forth in 21 C.F.R. part 807. Except as described in the Registration Statement and the Prospectus, the Company and the Subsidiaries are, and at all times have been, in compliance with the written
procedures, record-keeping, and FDA reporting requirements for Medical Device Reporting set forth in 21 C.F.R. part 803 and similar adverse event reporting requirements outside of the United States. 

(aa) Except to the extent disclosed in the Registration Statement and the Prospectus, the Company has not received any written notices or
statements from the FDA, the European Medicines Agency (“EMEA”) or any other governmental agency, and otherwise has no knowledge or reason to believe, that (i) any marketing authorization application for any medical device, drug
candidate or combination therapy of the Company described in the Registration Statement or Prospectus (each a “Potential Product”) may or will be rejected or determined to be non-approvable; (ii) a delay in time for review and/or
approval of a marketing authorization application or marketing approval application in any jurisdiction for Potential Product is or may be required, requested or being implemented; (iii) one or more clinical studies for Potential Product shall
or may be requested or required in addition to the clinical studies submitted to the FDA prior to the date hereof as a precondition to or condition of issuance or maintenance of a marketing approval for Potential Product; (iv) any license,
approval, permit or authorization to conduct any clinical trial of or market any product or potential product of the Company has been, will be or may be suspended, revoked, modified or limited, except in the cases of clauses (i), (ii),
(iii) and (iv) where such rejections, determinations, delays, requests, suspensions, revocations, modifications or limitations might not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 (bb) Except to the extent disclosed in the Registration Statement and the Prospectus, to the Company’s knowledge, the
preclinical and clinical testing, application for marketing approval of, manufacture, distribution, promotion and sale of the products and Potential Products of the Company is in compliance, in all material respects, with all laws, rules and
regulations applicable to such activities, except for such non-compliance as would not, individually or in the aggregate, have a Material Adverse Effect. The descriptions of the results of such tests and trials contained in the Registration
Statement and the Prospectus are complete and accurate in all material respects such that there would be no untrue statement of a material fact or an omission of a material fact necessary to make the statements in the Registration Statement and
Prospectus, in light of the circumstances under which they are made, not misleading. The Company is not aware of any studies, tests or trials the results of which reasonably call into question the results of the tests and trials conducted by or on
behalf of the Company that are described or referred to in the Registration Statement or the Prospectus. Except to the extent disclosed in the Registration Statement and the Prospectus, the Company has not received notice of adverse finding, warning
letter or clinical hold notice from the FDA or any non-U.S. counterpart of any of the foregoing, or any untitled letter or other correspondence or notice from the FDA or any other governmental authority or agency or any institutional or ethical
review board alleging or asserting noncompliance with any law, rule or regulation applicable in any jurisdiction, except notices, letters, and correspondences and non-U.S. counterparts thereof alleging or asserting such noncompliance as would not,
individually or in the aggregate, have a Material Adverse Effect. Except to the extent disclosed in the Registration Statement and the Prospectus, the Company has not, either voluntarily or involuntarily, initiated, conducted or issued, or caused to
be initiated, conducted or issued, any recall, field correction, market withdrawal or replacement, safety alert, warning, “dear doctor” letter, investigator notice, or other notice or action relating to an alleged or potential lack of
safety or efficacy of any product or potential product of the Company, any alleged product defect of any product or potential product of the Company, or any violation of any material applicable law, rule, regulation or any clinical trial or
marketing license, approval, permit or authorization for any product or potential product of the Company, and the Company is not aware of any facts or information that would cause it to initiate any such notice or action and has no knowledge or
reason to believe that the FDA, the EMEA or any other governmental agency or authority or any institutional or ethical review board or other non-governmental authority intends to impose, require, request or suggest such notice or action. 

 

 -8- 

 (cc) The Company is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. 
 (dd) The Company’s systems of internal accounting controls taken as a whole
are sufficient to meet the broad objectives of internal accounting control insofar as those objectives pertain to the prevention or detection of errors or irregularities in amounts that would be material in relation to the Company’s financial
statements; and, to the best of the Company’s knowledge, neither the Company nor any employee or agent thereof has made any payment of funds of the Company or received or retained any funds, and no funds of the Company have been set aside to be
used for any payment, in each case in violation of any law, rule or regulation. 
 (ee) The Company is not involved in any labor
dispute and, to the knowledge of the Company, no such dispute has been threatened, except for such disputes as would not have a Material Adverse Effect on the Company, or subject the Company or its shareholders to any material liability or
disability. 
  

 -9- 

 (ff) Except as disclosed in the Registration Statement or the Prospectus, (i) there has
been no storage, disposal, generation, manufacture, refinement, transportation, handling or treatment of toxic wastes, hazardous wastes or hazardous substances by the Company (or to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased by the Company in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which would not have a Material Adverse Effect; (ii) there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the environment surrounding such property of any toxic wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company, except for any such
spill, discharge, leak emission, injection, escape, dumping or release which would not have a Material Adverse Effect; and (iii) the terms “hazardous wastes,” “toxic wastes” and “hazardous substances” shall have
the meanings specified in any applicable local, state, federal and foreign laws or regulations with respect to environmental protection. 

(gg) There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities
as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including without limitation Section 402 related to loans and
Sections 302 and 906 related to certifications. 
 ARTICLE II 

SALE AND DELIVERY OF SECURITIES 

2.1 Sale and Delivery of Securities. 

(a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell through the Sales Manager, as agent, and the Sales Manager agrees to sell, as agent for the Company, on a best efforts basis, shares of the Stock during the term of this Agreement on the terms set forth
herein. The Stock will be sold from time to time, pursuant to the Registration Statement and Prospectus and/or in any other manner permitted by law (including, without limitation, privately negotiated transactions) at prices prevailing at the time
of sale and in such amounts as directed by the Company and as agreed to by the Sales Manager. 
 (b) The Company or the Sales
Manager may, upon notice to the other party hereto by telephone (confirmed promptly by facsimile), at any time and from time to time suspend the offering of shares of the Stock; provided, however, that such suspension shall not affect
or impair the parties’ respective obligations with respect to the Stock sold hereunder prior to the giving of such notice. 

(c) The compensation to the Sales Manager for sales of shares of the Stock shall be at a fixed commission rate of four and one-half
percent (4.5%) of the gross sales price per share for the Stock sold under this Agreement, up to the first Seven Million Dollars ($7,000,000) of aggregate gross offering proceeds, and thereafter at a rate of three and one-half percent
(3.5%) of the gross sales price per share for all other sales of shares of the Stock sold under this Agreement. The remaining proceeds, after further deduction for any transaction fees imposed by any governmental or self-regulatory organization
in respect to such sale shall constitute the net proceeds to the Company for such Stock (the “Net Proceeds”). 
  

 -10- 

 (d) The Company shall open and maintain a trading account (the “Trading Account”)
at a clearing agent designated by the Sales Manager to facilitate the transactions contemplated by this Agreement. The Company shall, with respect to each sale of shares of the Stock, effect delivery of the applicable number of shares of Stock to
the Trading Account, on or before the third business day (or such other day as is industry practice for regular-way trading) following each sale of the Stock (each, a “Settlement Date”). The Net Proceeds from the sale of the Stock shall be
available in the Trading Account following the settlement of the sale on the Settlement Date. The Sales Manager’s compensation shall be withheld from the sales proceeds on each Settlement Date and shall be paid to the Sales Manager. 

(e) At each Settlement Date, the Company shall be deemed to have affirmed each representation, warranty, covenant and other agreement
contained in this Agreement. Any obligation of the Sales Manager under this Agreement shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations
hereunder and to the continuing satisfaction of the additional conditions specified in Article IV below. 
 (f) If the Company
shall default on its obligation to deliver Stock on any Settlement Date, the Company shall (i) hold the Sales Manager harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) pay the
Sales Manager any commission to which it would otherwise be entitled absent such default. 
 ARTICLE III 

COVENANTS OF THE COMPANY 

3.1 The Company covenants and agrees with the Sales Manager that: 

(a) As promptly as practicable after the date of this Agreement, the Company will file a supplement to the Prospectus under Rule 424(b)
of the Act naming the Sales Manager, as an underwriter, to permit sales of the Stock under the Act. 
 (b) During the period in
which the Sales Agent has been requested to offer and sell Stock, the Company will notify the Sales Manager promptly of the time when any subsequent amendment to the Registration Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information. The Company will prepare and file with the Commission, promptly upon the
Sales Manager’s reasonable request, any amendments or supplements to the Registration Statement or Prospectus that, in the Sales Manager’s reasonable opinion, may be necessary or advisable in connection with the sale of the Stock pursuant
to this Agreement. The Company will not file any amendment or supplement to the Registration Statement or Prospectus (other than a supplement to the Prospectus that (i) relates solely to the issuance of securities other than the Stock of the
Company pursuant to this Agreement and (ii) does not materially change the information about the Company or its business, operations, properties or financial condition disclosed in the Registration Statement or Prospectus previously thereto (an
“Excluded Supplement”)) unless a copy thereof has been submitted to the Sales Manager a reasonable period of time before the filing and the Sales Manager has not reasonably objected thereto; and it will notify the Sales Manager at the time
of filing thereof of any document that, upon filing, is deemed to be incorporated by reference in the Registration Statement or Prospectus (unless such document is available on the SEC’s EDGAR database, in which case no notification shall be
required). The Company will cause each amendment to the Registration Statement or supplement to the Prospectus, and each filing or report incorporated therein, to be prepared in form and substance as required by the Act, the Rules and Regulations,
the Exchange Act and the rules and regulations thereunder, and to be timely filed with the Commission. Any press releases or similar publicity by the Company related to this offering that is not covered by the preceding provisions of this
Section 3(b) must be reasonably acceptable to the Sales Manager. 
  

 -11- 

 (c) The Company will advise the Sales Manager, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Stock for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. 

(d) Within the time during which a prospectus relating to the Stock is required to be delivered under the Act, the Company will comply
with all requirements imposed upon it by the Act and by the Rules and Regulations, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Stock as contemplated by the provisions hereof and the
Prospectus, including compliance with the requirement that the Company has not sold within the twelve calendar months immediately prior to, and including, each sale of shares of the Stock, securities with an aggregate market value in excess of the
amount allowed under General Instruction I.B.6. of Form S-3 under the Act. If during such period any event occurs as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with
the Act, the Company will promptly notify the Sales Manager to suspend the offering of shares of the Stock during such period and the Company will amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance and will use commercially reasonable efforts to have any amendment or supplement to the Registration Statement or Prospectus declared effective as soon as possible, unless the Company has
reasonable business reasons to defer public disclosure of the relevant information. 
 (e) The Company will use commercially
reasonable efforts to qualify the Stock for sale under the securities laws of such jurisdictions as the Sales Manager designates in writing and to continue such qualifications in effect so long as required for the sale of the Stock, except that the
Company shall not be required in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction. 

 

 -12- 

 (f) The Company will furnish to the Sales Manager and its legal counsel (at the expense of
the Company) copies of the Registration Statement and the Prospectus during the period in which a prospectus relating to the Stock is required to be delivered under the Act, in each case as soon as available and in such quantities as the Sales
Manager may from time to time reasonably request, and in the case when the Trading Market is a national securities exchange, the Company will also furnish copies of the Prospectus to such exchange in accordance with Rule 153 under the Act.

 (g) The Company will make generally available to its security holders as soon as practicable, but in any event not later than
15 months after the end of the Company’s current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period that satisfies the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations. 
 (h) The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is
terminated, will pay all of its expenses incident to the performance of its obligations hereunder (including, but not limited to, any transaction fees imposed by any governmental or self-regulatory organization with respect to transactions
contemplated by this Agreement and any blue sky fees) and will pay the expenses of printing all documents relating to the offering. The Company will reimburse the Sales Manager for its reasonable out-of-pocket costs and expenses incurred in
connection with entering into this Agreement, including, without limitation, reasonable travel, reproduction, printing and similar expenses, initial and ongoing due diligence, and reasonable fees and disbursements of its legal counsel, up to an
aggregate amount of $50,000. In addition, without limiting the foregoing, the Company will pay, or reimburse the Sales Manager for, any filing fees incurred by the Sales Manager in connection with filings (if any) required to be made by the Sales
Manager with FINRA. 
 (i) The Company will use commercially reasonable efforts to maintain the quotation of the Stock on the
Trading Market and to file with the Trading Market all documents and notices required by the Trading Market of companies quotations for which are reported by the Trading Market. 

(j) The Company will apply the Net Proceeds from the sale of the Stock as set forth in the Prospectus. 

(k) The Company will not, directly or indirectly, offer or sell any shares of common stock (other than the Stock) or securities
convertible into or exchangeable for, or any rights to purchase or acquire, common stock, during the period from the date of this Agreement through the final Settlement Date for the sale of shares of the Stock hereunder without (i) giving the
Sales Manager at least eight hours prior written notice specifying the nature of the proposed sale and the date of such proposed sale and (ii) suspending activity under this program for such period of time as may reasonably be determined by
agreement of the Company and the Sales Manager; provided, however, that no such notice and suspension shall be required in connection with the Company’s issuance or sale of (i) shares of common stock pursuant to any employee
or director stock option or benefits plan, stock ownership plan, dividend reinvestment plan, as such plans may be amended from time to time, (ii) common stock, options and equity-based awards issued pursuant to the exception contained in
Section 711(a) of the NYSE Amex Company Guide, and (iii) common stock issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding on the date hereof. Notwithstanding the foregoing,
this paragraph (k) shall not apply during periods that the Company is neither selling Stock through the Sales Manager nor has requested the Sales Manager to sell Stock. 

 

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 (l) The Company will, at any time during the term of this Agreement, as supplemented from
time to time, advise the Sales Manager immediately after it shall have received notice or obtained knowledge thereof, of any information or fact that would materially alter or affect any opinion, certificate, letter and other document provided to
the Sales Manager pursuant to Article IV below. 
 (m) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (other than an Excluded Supplement) and on the dates specified in Section 4.1(f) below, the Company shall (unless the Company is not then selling Stock through the Sales Manager and has not requested the Sales Manager to
sell Stock) furnish or cause to be furnished to the Sales Manager forthwith a certificate, in form and substance satisfactory to the Sales Manager, to the effect that the statements contained in the certificates referred to in Section 4.1(f)
below that were last furnished to the Sales Manager are true and correct at the time of such amendment, supplement, filing, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificates, certificates of the same tenor as the certificates referred to in said Section 4.1(f) below, modified as necessary to relate
to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate. 
 (n)
Each time that a post-effective amendment to the Registration Statement is declared effective or the Company files an Annual Report on Form 10-K, and at such other times as may be reasonably requested by the Sales Manager, the Company shall (unless
the Company is not then selling Stock through the Sales Manager and has not requested the Sales Manager to sell Stock) furnish or cause to be furnished forthwith to the Sales Manager and to its legal counsel, a written opinion of Sheppard, Mullin,
Richter & Hamilton LLP (“Company Counsel”), or other counsel reasonably satisfactory to the Sales Manager, dated the date of effectiveness of such amendment or the date of filing with the Commission of such document, as the case
may be, in form and substance satisfactory to the Sales Manager, of the same tenor as the opinion referred to in Section 4.1(d) below, but modified as necessary to relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion. In addition, at each such time, the Company shall cause to be forwarded to the Sales Manager such opinions of special counsel to the Company as may be reasonably requested by the Sales Manager.

 (o) Each time that a post-effective amendment to the Registration Statement is declared effective or the Company files an
Annual Report on Form 10-K, and at such other times as may be reasonably requested by the Sales Manager, the Company shall (unless the Company is not then selling Stock through the Sales Manager and has not requested the Sales Manager to sell Stock)
cause Marcum LLP, or other independent accountants then retained by the Company, forthwith to furnish to the Sales Manager a letter, dated the date of effectiveness of such amendment, or the date of filing of such supplement or other document with
the Commission, as the case may be, in form and substance satisfactory to the Sales Manager, of the same tenor as the letter referred to in Section 4.1(e) below but modified to relate to the Registration Statement and the Prospectus, as amended
and supplemented to the date of such letter. 
  

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 (p) The Company represents and agrees that, unless it obtains the prior consent of the Sales
Manager, and the Sales Manager represents and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to shares of the Stock to be sold pursuant to this Agreement that would constitute an
Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Sales
Manager is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433 (“Rule 433”), and has complied and will comply with the requirements of Rules 164 and 433, as applicable to any Permitted Free Writing Prospectus, including timely Commission filings where required, legending and
record keeping. 
 For the purposes of this Section, “Issuer Free Writing Prospectus” means any
“issuer free writing prospectus,” as defined in Rule 433 under the Act, relating to the Stock in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g). 
 ARTICLE IV 

CONDITIONS OF THE SALES MANAGER’S OBLIGATIONS 

4.1 The obligations of the Sales Manager to sell the Stock as provided in this Agreement shall be subject to the accuracy, as of the date
hereof, and as of each Settlement Date contemplated under this Agreement, of the representations and warranties of the Company in this Agreement, to the performance by the Company of its obligations in this Agreement and to the following additional
conditions: 
 (a) The Registration Statement has been declared effective. No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the Company or the Sales Manager, threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the Sales Manager’s reasonable satisfaction. The supplement to the Prospectus contemplated by Section 3.1(a) above
has been filed. 
 (b) The Sales Manager shall not have advised the Company that the disclosures in the Registration Statement
or the Prospectus are not reasonably acceptable to the Sales Manager. 
 (c) Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any material adverse change in the capital stock of the Company, or any material adverse change, or any
development that may reasonably be expected to cause a material adverse change, in the condition (financial or other), business, prospects, net worth or results of operations of the Company, or any adverse change in the rating assigned to any debt
securities of the Company, if any. 
  

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 (d) The Sales Manager shall have received at the date of the first sale of shares of the
Stock hereunder (the “Commencement Date”) and at every other date specified in Section 3.1(n) above, opinions of Company Counsel and special counsel, dated as of the Commencement Date and dated as of such other date, in form and
substance reasonably acceptable to the Sales Manager. 
 (e) At the Commencement Date and at such other dates specified in
Section 3.1(o) above, the Sales Manager shall have received a “comfort letter” from Marcum LLP, independent public accountants for the Company, or other independent accountants then retained by the Company, dated the date of delivery
thereof, in form and substance satisfactory to the Sales Manager. 
 (f) The Sales Manager shall have received from the Company
a certificate, or certificates, signed by (i) the Chief Financial Officer and (ii) the President and Chief Executive Officer or any Vice President of the Company, dated as of the Commencement Date and (unless the Company is not then
selling Stock through the Sales Manager and has not requested the Sales Manager to sell Stock) dated as of the first business day of each calendar month thereafter (each, a “Certificate Date”), to the effect that, to the best of their
knowledge based upon reasonable investigation: 
 (i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the Commencement Date or the Certificate Date (as the case may be), and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Commencement Date and each such Certificate Date (as the case may be); 
 (ii) No
stop order suspending the effectiveness of the Registration Statement has been issued, and no proceeding for that purpose has been instituted or, to the knowledge of such officer after due inquiry, is threatened, by the Commission; 

(iii) Since the date of this Agreement there has occurred no event required to be set forth in an amendment or supplement
to the Registration Statement or Prospectus that has not been so set forth and there has been no document required to be filed under the Exchange Act and the rules and regulations of the Commission thereunder that upon such filing would be deemed to
be incorporated by reference in the Prospectus that has not been so filed; and 
 (iv) Since the date of this
Agreement, there has not been any material adverse change in the assets or properties, business, prospects, results of operations, or condition (financial or otherwise) of the Company, which has not been described in an amendment or supplement to
the Registration Statement or Prospectus (directly or by incorporation). 
  

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 (g) At the Commencement Date and on each Settlement Date, the Company shall have furnished
to the Sales Manager such appropriate further information, officers’ certificates and similar documents as the Sales Manager may reasonably request. 

(h) At the Commencement Date and on each Settlement Date, the Company shall have listed for quotation the Stock on the Trading Market.

 All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they
are satisfactory in form and substance to the Sales Manager. The Company will furnish the Sales Manager with such conformed copies of such opinions, certificates, letters and other documents, as the Sales Manager shall reasonably request.

 ARTICLE V 

INDEMNIFICATION AND CONTRIBUTION 

5.1 The Company agrees to indemnify and hold harmless the Sales Manager and each person, if any, who controls the Sales Manager within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act (collectively, the “Sales Manager Indemnitees”), as follows: 

(a) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; 

(b) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the Company; and 
 (c) against any and all expense
whatsoever, as incurred (including, subject to Section 5.3 below, the reasonable fees and disbursements of legal counsel chosen by the Sales Manager), reasonably incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above; 
 provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Sales Manager
expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). 

 

 -17- 

 5.2 The Sales Manager agrees to indemnify and hold harmless the Company and its directors
and each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 5.1 above, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by the Sales Manager expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). The total liability of the Sales Manager under this Section 5.2 shall not exceed the Net Proceeds in
respect of the Stock sold by the Sales Manager that is the subject of the dispute. 
 5.3 Any indemnified party that proposes to
assert the right to be indemnified under this Article V will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Article V,
notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from any liability that it might have to any
indemnified party to the extent it is not materially prejudiced as a result thereof. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to
participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly
notified, to assume the defense of the action, with legal counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses except as provided below. The indemnified party will have the right to employ its own legal counsel in any such action, but the fees, expenses and other charges of such
legal counsel will be at the expense of such indemnified party unless (1) the employment of legal counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded
(based on the written advice of legal counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential
conflict exists (based on the written advice of legal counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on
behalf of the indemnified party) or (4) the indemnifying party has not in fact employed legal counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases
the reasonable fees, disbursements and other charges of legal counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm (together with associated local counsel, if any) at any one time for all such indemnified party or parties. All
such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party will not be liable for any settlement of any action or claim effected without its written consent (which
consent will not be unreasonably withheld). 
  

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 5.4 In order to provide for just and equitable contribution in circumstances in which the
indemnification provided for in the foregoing paragraphs of this Article V is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Sales Manager, the Company and the Sales Manager will
contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company from persons other than the Sales Manager, such as persons who control the Company within the meaning of the Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution) to which the Company and the Sales Manager may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one
hand and the Sales Manager on the other. The relative benefits received by the Company on the one hand and the Sales Manager on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total compensation (before deducting expenses) received by the Sales Manager from the sale of shares of the Stock on behalf of the Company. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Sales Manager, on the other, with respect to the statements or omission which resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or the Sales Manager, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Sales Manager agree that it would not
be just and equitable if contributions pursuant to this Section 5.4 were to be determined by pro rata allocation or by any other method of allocation, which does not take into account, the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, liability, expense or damage, or action in respect thereof, referred to above in this Section 5.4 shall be deemed to include, for the purpose of this Section 5.4, any
legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the foregoing provisions of this Section 5.4, the Sales Manager shall not be required
to contribute any amount in excess of the amount by which the total actual sales price at which Stock sold by the Sales Manager exceeds the amount of any damages that the Sales Manager has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5.4, any person who controls a party to this Agreement within the meaning of the Act will have the same rights to contribution as that party, and each officer and director of the
Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made under this Section 5.4, will notify any such party or parties from whom contribution may be sought, but the omission so to notify will not relieve that party or parties
from whom contribution may be sought from any other obligation it or they may have under this Section 5.4. No party will be liable for contribution with respect to any action or claim settled without its written consent (which consent will not
be unreasonably withheld). 
  

 -19- 

 5.5 The indemnity and contribution provided by this Article V shall not relieve the Company
and the Sales Manager from any liability the Company and the Sales Manager may otherwise have (including, without limitation, any liability the Sales Manager may have for a breach of its obligations under Article II above). 

ARTICLE VI 

REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY 

6.1 All representations, warranties and agreements of the Company herein or in certificates delivered pursuant hereto, and the agreements
of the Sales Manager contained in Article V above, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Sales Manager or any controlling persons, or the Company (or any of their officers,
directors or controlling persons), and shall survive delivery of and payment for the Stock. 
 ARTICLE VII 

TERMINATION 

7.1 The Company shall have the right, by giving notice as hereinafter specified, to terminate this Agreement in its sole discretion at
any time. Any such termination shall be without liability of any party to any other party except that the provisions of Section 3.1(h), Article V and Article VI above shall remain in full force and effect notwithstanding such termination.

 7.2 The Sales Manager shall have the right, by giving notice as hereinafter specified, to terminate this Agreement in its
sole discretion at any time. Any such termination shall be without liability of any party to any other party except that the provisions of Section 3.1(h), Article V and Article VI above shall remain in full force and effect notwithstanding such
termination. 
 7.3 This Agreement shall remain in full force and effect unless terminated pursuant to Sections 7.1 or 7.2 above
or otherwise by mutual agreement of the parties; provided that any such termination by mutual agreement shall in all cases be deemed to provide that Section 3.1(h), Article V and Article VI above shall remain in full force and effect.

  

 -20- 

 7.4 Any termination of this Agreement shall be effective on the date specified in such
notice of termination; provided that such termination shall not be effective until the close of business on the date of receipt of such notice by the Sales Manager or the Company, as the case may be. If such termination shall occur during a period
when sales of shares of the Stock are being made pursuant to this Agreement, any sales of shares of the Stock made prior to the termination of this Agreement shall settle in accordance with the provisions of this Agreement. 

ARTICLE VIII 

NOTICES 

8.1 All notices or communications hereunder shall be in writing and if sent to the Sales Manager shall be mailed,
delivered or facsimiled and confirmed to the Sales Manager at Brinson Patrick Securities Corporation, 1515 Broadway,
11th Floor, New York, New York 10036, facsimile number
(212) 453-5555, Attention: Corporate Finance, or if sent to the Company, shall be mailed, delivered or telecopied and confirmed to the Company at 12255 El Camino Real, Suite 250, San Diego, California 92130, Attention: Tyler M. Dylan; facsimile
number (858) 436-1011. Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. 

ARTICLE IX 

MISCELLANEOUS 

9.1 This Agreement shall inure to the benefit of and be binding upon the Company and the Sales Manager and their respective successors
and the controlling persons, officers and directors referred to in Article V above, and no other person will have any right or obligation hereunder. 

9.2 Indemnification pursuant to Section 5.1 hereof will not constitute the exclusive remedy available to the Sales Manager
Indemnitees for any breach or alleged breach by the Company of any representation, warranty, covenant or agreement contained in this Agreement. 

9.3 This Agreement constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both
written and oral, between the parties hereto with regard to the subject matter hereof. 
 9.4 THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. 

9.5 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. The parties agree that this Agreement will be considered signed when the signature of a party is delivered by facsimile transmission. Such facsimile transmission shall be treated in all respects as
having the same effect as an original signature. 
 [Remainder of this page intentionally left blank.] 

 

 -21- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the date hereof. 
  

			
	CARDIUM THERAPEUTICS, INC.
		
	By:	 	 /s/ Tyler Dylan-Hyde

		 	Name: Tyler Dylan-Hyde
		 	Title: Chief Business Officer
	
	BRINSON PATRICK SECURITIES CORPORATION
		
	By:	 	 /s/ Todd Wyche

		 	Name: Todd Wyche
		 	Title: Managing Director

  

 -22- 

 SCHEDULE 1.1(f) 

List of Significant Subsidiaries 

Tissue Repair Company 
  

 -1-

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