(6)	NOTE PAYABLE

On December 20, 2012, the Company entered into a loan agreement with HealthCare Royalty Partners ("HC Royalty"), as lender, under which it agreed to borrow $50.0 million in two $25.0 million tranches (the "HC Royalty Loan"). The Company received $23.4 million in net proceeds from the first tranche of the loan at closing in December 2012. The Company's loan agreement with HC Royalty includes a variety of affirmative and negative covenants, including the use of commercially reasonable efforts to exploit RP103 in specific markets and compliance with laws, as well as restrictions on mergers and sales of assets, incurrence of liens, incurrence of indebtedness and transactions with affiliates and other requirements. To secure the performance of its obligations under the HC Royalty Loan, the Company granted a security interest to HC Royalty in substantially all of its assets, the assets of its subsidiaries and a pledge of stock of certain of its domestic subsidiaries. The Company's failure to comply with the terms of the HC Royalty Loan agreement and related documents, the occurrence of a change of control of the Company or the occurrence of an uncured material adverse effect on the Company, or the occurrence of certain other specified events, could result in an event of default under the HC Royalty Loan agreement that, if not cured or waived, could result in the acceleration of the payment of all of its indebtedness to HC Royalty and interest thereon. Under the terms of the security agreement, in an event of default, the lender could potentially take possession of, foreclose on, sell, assign or grant a license to use, the Company's pledged collateral and assign and transfer the pledged stock of certain of its subsidiaries. Further, HC Royalty may terminate its commitment to fund the second $25.0 million tranche upon the occurrence of any such event prior to the funding of such tranche.

The loan bears interest at an annual fixed rate of 10.75%, and includes a synthetic royalty component based on net product sales in a calendar year. With respect to the first $25.0 million tranche, for each calendar year (prorated for any portion thereof), the loan bears a royalty rate of 6.25% of the first $25.0 million of product net revenues, 3.0% of product net revenues for such calendar year in excess of $25.0 million and below $50.0 million, and 1.0% of product net revenues for such calendar year in excess of $50.0 million, payable quarterly. As of December 31, 2012 there were no royalty payments since the Company had no approved products that generate revenue. Upon regulatory approval of RP103 for cystinosis, such synthetic royalty will be due to HC Royalty. Principal payments under the HC Royalty Loan will become due beginning on the ninth quarterly payment date occurring after the date the second $25.0 million tranche is funded and, in the case of the first tranche loan, in no event later than March 31, 2017.

Interest expense on the loan for the four months ended December 31, 2012 was approximately $0.1 million.

The loan and the Company's obligation to make any payments shall terminate immediately when all payments received by HC Royalty equal $97.5 million. If, by December 20, 2014, net revenue for the immediately preceding four fiscal quarters exceed $100.0 million, then the loan and the Company's obligation to make any payments shall terminate immediately when all payments received by HC Royalty from the Company equal $90.0 million. Debt issuance costs, which were capitalized and included in other long-term assets, are being amortized over the life of the loan to interest expense using the interest method.

Unamortized debt issuance costs totaled $2.0 million as of December 31, 2012. Amortization expense was nominal for the four months ended December 31, 2012.