Exhibit 10.60
 
SECURITY AGREEMENT
 
This SECURITY AGREEMENT (as amended, restated, supplemented or otherwise
modified from time to time in accordance herewith and including all attachments,
exhibits and schedules hereto, the “Agreement”), dated as of July 2, 2012, is
made by VistaGen Therapeutics, Inc., a Nevada corporation (the “Grantor”), in
favor of Platinum Long Term Growth VII, LLC, a Delaware limited liability
company (together with its successors and assigns, the “Secured Party”).
 
WHEREAS, the Grantor has issued a secured convertible promissory note to the
Secured Party in the aggregate principal amount of $300,000, and intends to
issue an additional secured convertible promissory note to the Secured Party in
the aggregate principal amount of $200,000 (each as amended, restated,
supplemented or otherwise modified, the “Note”, and collectively, the “Notes”);
and
 
WHEREAS, it is a condition precedent to the Secured Party making the loans
evidenced by the Notes to the Grantor that the Grantor execute and deliver to
the Secured Party a security agreement providing for the grant to the Secured
Party of a continuing security interest in all personal property and assets of
the Grantor, in substantially the form hereof, to secure all amounts due under
the terms of the Notes.
 
NOW, THEREFORE, the parties agree as follows:
 
ARTICLE I.                                       Definitions
 
Section 1.1. Definition of Terms Used Herein.  All capitalized terms used herein
shall have the meanings set forth below in Section 1.2.  All terms defined in
the Uniform Commercial Code (hereinafter defined) as in effect from time to time
and used herein and not otherwise defined herein (whether or not such terms are
capitalized) have the same definitions herein as specified therein.
 
Section 1.2. Definition of Certain Terms Used Herein.  As used herein, the
following terms have the following meanings:
 
"Collateral" means all of the Grantor’s now owned or hereafter acquired right,
title and interest in and to the Grantor’s personal property, whether now owned
or hereafter acquired, and wherever located, including, without limitation, the
following: (a) Accounts; (b) equipment; (c) fixtures; (d) general intangibles;
(e) inventory; (f)  deposit accounts; (g) cash; (h) goods; and other tangible
and intangible personal property of Grantor whether now or hereafter owned or
existing, leased, consigned by or to, or acquired by, Grantor and wherever
located; (i) Licenses; (j) Patent Licenses; (k) Patents; (l) Trademark Licenses;
(m) Trademarks; (n) Securities; (o) Financial Assets; (p) letter of credit
rights; (q) Contract Rights; and (r) all products, proceeds, additions,
replacements and substitutions of and to all of the Foregoing.
 
“Contract Rights” means all of Grantor’s rights in, to and under all documents
and instruments, whether now existing or hereafter arising, including, without
limitation, all rights to payments, claims, rights, powers, privileges and
remedies, including, without limitation, rights to make elections and
determinations.
 
“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured, waived, or otherwise remedied
during such time) constitute an Event of Default.
 

 
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“Event of Default” means (a) any Event of Default specified in the Notes; (b)
any failure of Grantor to comply with its obligations hereunder; (c) any failure
of the Secured Party’s lien on the Collateral constituting a valid, perfected
security interest at all times; and (d) any failure of any representation or
warranty of Grantor made herein to be true, correct and complete in all repects.
 
“Indemnitees” has the meaning specified in Section 7.5(b).
 
 “Licenses” means any Patent License, Trademark License or other license of
rights or interests.
 
“Lien” means: (i) any interest in property securing an obligation owed to, or a
claim by, a person other than the owner of the property, whether such interest
is based on the common law, statute, or contract, and including a security
interest, charge, claim, or lien arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes; (ii) to the extent not included under
clause (i), any reservation, exception, encroachment, easement, right-of-way,
covenant, condition, restriction, lease or other title exception or encumbrance
affecting property; and (iii) any contingent or other agreement to provide any
of the foregoing.
 
"Notes" has the meaning assigned to such term in the first recital of this
Agreement.
 
“Obligations” means (a) all amounts due and owing under the terms of the Notes
including without limitation Secured Party’s costs and expenses of enforcement
of Secured Party’s rights under the Notes, and (b) costs and expenses incurred
by Secured Party in connection with (i) enforcement of Secured Party’s rights
hereunder, (ii) preservation, protection and maintenance of Collateral, and
(iii) discharging liens other than Permitted Liens.
 
“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence or a Patent application is
pending, in which agreement Grantor now holds or hereafter acquires any
interest.
 
“Patents” means all letters patent of, or rights corresponding thereto, in the
United States or in any other country, all registrations and recordings thereof,
and all applications for letters patent of, or rights corresponding thereto, in
the United States or any other country.
 
"Permitted Liens" shall mean (a) liens subordinate to the Secured Party’s liens
pursuant to a subordination agreement in form and substance satisfactory to
Secured Party, and (b) purchase money security interests in an amount not to
exceed $500,000 secured only by the assets financed by such purchase money
security interest holders.
 
 “Registered Organization” means an entity formed by filing a registration
document with a United States Governmental Authority, such as a corporation,
limited partnership or limited liability company.
 
"Security Interest" has the meaning specified in Section 2.1 of this Agreement.
 
“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration, now owned or hereafter acquired by Grantor
or in which Grantor now holds or hereafter acquires any interest.
 
“Trademarks” means all trademarks (registered, common law or otherwise) and any
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof.
 

 
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 “Uniform Commercial Code” means the Uniform Commercial Code from time to time
in effect in the State of New York.
 
ARTICLE II.                                       Security Interest
 
2.1           Security Interest.  As security for the payment and performance,
in full of the Obligations, and any extensions, renewals, modifications or
refinancings of the Obligations, the Grantor hereby bargains, sells, conveys,
assigns, sets over, mortgages, pledges, hypothecates and transfers to the
Secured Party, and hereby grants to the Secured Party, and Secured Party’s
successors and assigns, a security interest in, all of such Grantor's right,
title and interest in, to and under the Collateral (the "Security Interest").
 
Section 2.1. No Assumption of Liability.  The Security Interest is granted as
security only and shall not subject the Secured Party to, or in any way alter or
modify, any obligation or liability of the Grantor with respect to or arising
out of the Collateral.
 
ARTICLE III.                                       Representations and
Warranties
 
The Grantor represents and warrants to the Secured Party that:
 
Section 3.1. Title and Authority.  The Grantor has good and valid rights in and
title to the Collateral with respect to which it has purported to grant a
security interest hereunder and has full power and authority to grant to the
Secured Party the Security Interest and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other person other than any consent or approval which has
been obtained.
 
Section 3.2. Filings; Actions to Achieve Perfection.  Fully executed Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations containing a
description of the Collateral have been delivered to the Secured Party for
filing in each United States governmental, municipal or other office specified
in Schedule A, which are all the filings, recordings and registrations that are
necessary to publish notice of and protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Secured Party in
respect of all Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or with
respect to the filing of amendments or new filings to reflect the change of the
Grantor's name, location, identity or corporate structure.  The Grantor’s name
is listed in the preamble of this Agreement identically to how it appears on its
certificate of incorporation or other organizational documents and Grantor has
not changed its name or jurisdiction of incorporation during the last
year.  Schedule 3.2 hereto contains a true, correct and complete list of all
Patents, Patent Applications, Patent Licenses, Trademarks, Trademark
Applications, and Trademark Licenses of Grantor.
 
Section 3.3. Validity and Priority of Security Interest.  The Security Interest
constitutes a legal and valid first-priority security interest in all the
Collateral securing the payment and performance of the Obligations.
 

 
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Section 3.4. Absence of Other Liens.  The Collateral is owned by the Grantor
free and clear of any any and all Liens.  Without limiting the foregoing, the
Grantor has not filed or consented to any filing described in Section 3.2 in
favor of any person other than the Secured Party, nor permitted the granting or
assignment of a security interest or permitted perfection of any security
interest in the Collateral in favor of any person or entity other than the
Secured Party.  The Secured Party’s having possession of all instruments and
cash constituting Collateral from time to time and the filing of financing
statements in the offices referred to in Schedule A hereto results in the
perfection of such security interest.  Such security interest is, or in the case
of Collateral in which the Grantor obtain rights after the date hereof, will be,
a perfected security interest.  Such notices, filings and all other action
necessary or desirable to perfect and protect such security interest have been
duly taken.
 
Section 3.5. Valid and Binding Obligation.  This Agreement constitutes the
legal, valid and binding obligation of the Grantor, enforceable against the
Grantor in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in this Agreement may be limited by applicable federal or
state securities laws.
 
ARTICLE IV.                                       Covenants
 
Section 4.1. Change of Name; Location of Collateral; Place of Business, State of
Formation or Organization.
 
(a) The Grantor shall notify the Secured Party in writing promptly of any change
(i) in its corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of its chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
(including the establishment of any such new office or facility), (iii) in its
identity or corporate structure such that a filed filing made under the Uniform
Commercial Code becomes misleading or (iv) in its Federal Taxpayer
Identification Number.  In extension of the foregoing, the Grantor shall not
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Secured Party to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral.
 
(b) Without limiting Section 4.1(a), without the prior written consent of the
Secured Party in each instance, the Grantor shall not change its (i) place of
business, if it has only one place of business and is not a Registered
Organization, (ii) principal place of business, if it has more than one place of
business and is not a Registered Organization, or (iii) state of incorporation,
formation or organization, if it is a Registered Organization.
 
Section 4.2. Records.  The Grantor shall maintain, at its own cost and expense,
such complete and accurate records with respect to the Collateral owned by it as
is consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which the Grantor is engaged, but in any event to include complete accounting
records indicating all payments and proceeds received with respect to any part
of the Collateral, and, at such time or times as any of the Secured Party may
reasonably request, promptly to prepare and deliver to such Secured Party a duly
certified schedule or schedules in form and detail satisfactory to such Secured
Party showing the identity, amount and location of any and all Collateral.
 

 
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Section 4.3. Periodic Certification; Notice of Changes.  In the event there
should at any time be any change in the information represented and warranted
herein or in the documents and instruments executed and delivered in connection
herewith, the Grantor shall immediately notify the Secured Party in writing of
such change (this notice requirement shall be in extension of and shall not
limit or relieve the Grantor of any other covenants hereunder).
 
Section 4.4. Protection of Security.  The Grantor shall, at its own cost and
expense, (a) take any and all actions necessary to defend title to the
Collateral against all persons and entities and to defend the Security Interest
of the Secured Party in the Collateral and the priority thereof against any Lien
other than Permitted Liens, and (b) keep the Collateral insured against loss,
theft and damage pursuant to insurance policies that name the Secured Party as
loss Payee and additional insured and which shall not be cancelled without 30
days’ prior notice to Secured Party.  Notwithstanding any such cancellation of
any insurance policy, Grantor shall cause the Collateral to be continuously
insured at all times.
 
Section 4.5. Inspection and Verification.  The Secured Party and such persons as
the Secured Party may reasonably designate shall have the right to inspect the
Collateral, all records related thereto (and to make extracts and copies from
such records) and the premises upon which any of the Collateral is located, to
discuss the Grantor's affairs with the officers of the Grantor and its
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Collateral, including, in the case of collateral in the
possession of any third Person and upon an Event of Default, by contacting any
account debtor or third Person possessing such Collateral for the purpose of
making such a verification.  Out-of-pocket expenses in connection with any
inspections by representatives of the Secured Party shall be (a) the obligations
of the Grantor with respect to any inspection after the Secured Party’ demand
payment of the Notes or (b) the obligation of the Secured Party in any other
case.
 
Section 4.6. Taxes; Encumbrances.  At its option, the Secured Party may
discharge Liens, other than Permitted Liens, at any time levied or placed on the
Collateral and may pay for the maintenance and preservation of the Collateral to
the extent the Grantor fails to do so and the Grantor shall reimburse the
Secured Party on demand for any payment made or any expense incurred by the
Secured Party pursuant to the foregoing authorization; provided, however, that
nothing in this Section shall be interpreted as excusing the Grantor from the
performance of, or imposing any obligation on the Secured Party to cure or
perform, any covenants or other obligation of the Grantor with respect to any
Lien or maintenance or preservation of Collateral as set forth herein.
 
Section 4.7. Use and Disposition of Collateral.  The Grantor shall not make or
permit to be made an assignment, pledge or hypothecation of any Collateral or
grant any other Lien in respect of the Collateral other than Permitted Liens
without the prior written consent of the Secured Party.  The Grantor shall not
make or permit to be made any transfer or sale of any Collateral to any person
or entity other than Secured Party and the Grantor shall remain at all times in
possession of the Collateral owned by it, other than with respect Permitted
Liens.
 
ARTICLE V.                                       Further Assurances
 
Section 5.1. Further Assurances.  Grantor shall, at its own expense, execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all such actions as the Secured Party may from time to time
reasonably request to better assure, preserve, protect, perfect and continue the
perfection of the Security Interest, to ensure that Secured Party has “control”
(as defined in the Uniform Commercial Code) over the Collateral, and to assure,
preserve and protect Secured Party’s rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith, including without limitation the
recordation of the Security Interest with the United States Patent and Trademark
Office.  If any amount payable under or in connection with any of the Collateral
shall be or become evidenced by any promissory note or other instrument, such
note or instrument shall be immediately pledged and delivered to the Secured
Party, duly endorsed in a manner satisfactory to the Secured Party.
 

 
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ARTICLE VI.                                       Remedies
 
Section 6.1. Remedies upon Default.
 
(a) Upon the occurrence and during the continuance of an Event of Default,
Grantor agrees to deliver each item of its Collateral to the Secured Party on
demand, and it is agreed that the Secured Party shall have the right to take any
of or all the following actions at the same or different times: with or without
legal process and with or without prior notice or demand for performance, to
take possession of the Collateral and without liability for trespass to enter
any premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral, exercise Grantor's right to bill and
receive payment for completed work and, generally, to exercise any and all
rights afforded to a secured party under the Uniform Commercial Code or other
applicable law.  Without limiting the generality of the foregoing, Grantor
agrees that the Secured Party shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any part
of the Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the Secured
Party shall deem appropriate.  The Secured Party shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consum­mation of any such sale the
Secured Party shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at
any such sale shall hold the property sold absolutely, free from any claim or
right on the part of Grantor, and Grantor hereby waives (to the extent permitted
by law) all rights of redemption, stay and appraisal which Grantor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.
 
(b) The Secured Party shall give Grantor ten (10) days' written notice (which
Grantor agrees is reasonable notice within the meaning of Section 9-612  of the
Uniform Commercial Code) of the Secured Party’s intention to make any sale of
Collateral.  Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange.  Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Secured Party may fix and state in the notice (if any) of such sale.  At
any such sale, the Collateral, or portion thereof, to be sold may be sold in one
lot as an entirety or in separate parcels, as the Secured Party may (in its sole
and absolute discretion) determine.  The Secured Party shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given.  The
Secured Party may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned.  In case any sale
of all or any part of the Collateral is made on credit or for future delivery,
the Collateral so sold may be retained by the Secured Party until the sale price
is paid by the purchaser or purchasers thereof, but the Secured Party shall not
incur any liability in case any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice.  At any public (or, to the extent
permitted by law, private) sale made pursuant to this Section, the Secured Party
may bid for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of Grantor (all said rights
being also hereby waived and released to the extent permitted by law), the
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to the Secured Party from
Grantor as a credit against the purchase price, and the Secured Party may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to Grantor therefor.  For purposes hereof, a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Secured Party shall be free to carry out such
sale pursuant to such agreement and Grantor shall not be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Secured Party shall have entered into such an agreement all
 

 
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Obligations have been paid in full.  As an alternative to exercising the power
of sale herein conferred upon it, the Secured Party may proceed by a suit or
suits at law or in equity to foreclose this Agreement and to sell the Collateral
or any portion thereof pursuant to a judgment or decree of a court or courts
having competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver.
 
Section 6.2. Application of Proceeds.  The Secured Party shall apply the
proceeds of any collection or sale of the Collateral, as well as any Collateral
consisting of cash, as follows:
 
(a) FIRST, to the payment of all costs and expenses incurred by the Secured
Party in connection with such collection or sale or otherwise in connection with
this Agreement or any of the Obligations, including all court costs and the fees
and expenses of its agents and legal counsel, and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder, under
the Exchange Agreement dated as of June 29, 2012, between the Grantor and the
Secured Party (the “Exchange Agreement”) and the Notes;
 
(b) SECOND, to the payment in full of the Obligations; and
 
(c) THIRD, to Grantor, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent jurisdiction
may otherwise direct.
 
Subject to the foregoing, the Secured Party shall have absolute discretion as to
the time of application of such proceeds, moneys or balances in accordance with
this Agreement.  Upon any sale of the Collateral by the Secured Party (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of any such proceeds, moneys or balances by the Secured Party or of
the officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Secured Party or such officer or be answerable in any way for the
misapplication thereof.
 
ARTICLE VII.                                       Miscellaneous
 
Section 7.1. Notices.  All communications and notices hereunder to the Grantor
and to the Secured Party shall (except as otherwise expressly permitted herein)
be in writing and delivered to the Grantor or the Secured Party, as the case may
be, as provided in the Notes.
 
Section 7.2. Security Interest Absolute.  All rights of the Secured Party
hereunder, the Security Interest and all obligations of Grantor hereunder shall
be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Notes, or any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Notes, or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Grantor in respect of the Obligations
or this Agreement.
 

 
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Section 7.3. Survival of Agreement.  All covenants, agreements, representations
and warranties made by Grantor herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Secured Party and
shall survive the making of the loans and the execution and delivery to the
Secured Party of the Notes, regardless of any investigation made by the Secured
Party or on their behalf; and shall continue in full force and effect until this
Agreement shall terminate.
 
Section 7.4. Binding Effect; Several Agreement; Successors and Assigns.  This
Agreement shall become effective as to Grantor when a counterpart hereof
executed on behalf of Grantor shall have been delivered to the Secured Party and
a counterpart hereof shall have been executed on behalf of the Secured Party,
and thereafter shall be binding upon Grantor and the Secured Party and their
respective successors and assigns, and shall inure to the benefit of Grantor,
the Secured Party and their respective successors and assigns, except that
Grantor shall not have the right to assign or transfer its rights or obligations
hereunder or any interest herein or in the Collateral (and any such assignment
or transfer shall be void) except as expressly contemplated by this Agreement
and the Notes.
 
Section 7.5. Secured Party’ Fees and Expense; Indemnification.
 
(a) Grantor agrees to pay upon demand to the Secured Party the amount of any and
all reasonable expenses, including all reasonable fees, disbursements and other
charges of its counsel and of any experts or agents, which the Secured Party may
incur in connection with (i) the administration of this Agreement (including the
customary fees and charges of the Secured Party for any audits conducted by them
or on their behalf with respect to the accounts inventory), (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Secured Party hereunder or (iv) the failure of Grantor to perform
or observe any of the provisions hereof.
 
(b) Grantor agrees to indemnify the Secured Party and the agent, contractors and
employees of the Secured Party (collectively, the “Indemnitees”) against, and
hold each of them harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable fees, disbursements and
other charges of counsel, incurred by or asserted against any of them arising
out of, in any way connected with, or as a result of, the execution, delivery,
or performance of this Agreement or any agreement or instrument contemplated
hereby or any claim, litigation, investigation or proceeding relating hereto or
to the Collateral, whether or not any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
 
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby.  The provisions of this Section shall remain
operative and in full force and effect regardless of the termination of this
Agreement and the Notes, the consummation of the transactions contemplated
hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or the Notes, or any
investigation made by or on behalf of the Secured Party.  All amounts due under
this Section shall be payable on written demand therefor.
 
Section 7.6. GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
 

 
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Section 7.7. Waivers; Amendment.
 
(a) No failure or delay of the Secured Party in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of
the Secured Party hereunder are cumulative and are not exclusive of any rights
or remedies that they would otherwise have.  No waiver of any provisions of this
Agreement, or the Notes or consent to any departure by Grantor therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  No notice to or demand on Grantor
in any case shall entitle Grantor to any other or further notice or demand in
similar or other circumstances.
 
(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements, in writing entered into
by the Secured Party and Grantor.
 
Section 7.8. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTES.  EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE NOTES, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
Section 7.9. Severability.  In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction).  The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
 
Section 7.10. Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract.  Each party shall be entitled
to rely on a facsimile signature of any other party hereunder as if it were an
original.

 
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Section 7.11. Jurisdiction; Consent to Service of Process.
 
(a) Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the Notes, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement shall affect any right that the
Secured Party may otherwise have to bring any action or proceeding relating to
this Agreement or the Notes against Grantor or its properties in the courts of
any jurisdiction.
 
(b) Grantor hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement, the Exchange Agreement, or the Notes in
any New York State or Federal court.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
 
(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 7.1.  Nothing in this Agreement will
affect the right of any party to this Agreement to process in any other manner
permitted by law.
 
Section 7.12. Termination.  This Agreement and the Security Interest shall
terminate when all the Obligations have been paid and satisfied in full, at
which time the Secured Party shall execute and deliver to Grantor, at Grantor’s
expense, all Uniform Commercial Code termination statements and similar
documents which Grantor shall reasonably request to evidence such
termination.  Any execution and delivery of termination statements or documents
pursuant to this Section shall be without recourse to or warranty by the Secured
Party.
 
Section 7.13. Prejudgment Remedy Waiver.  Grantor acknowledges that this
Agreement, the Exchange Agreement and the Notes evidence a commercial
transaction and that it could, under certain circumstances have the right, to
notice of and hearing on the right of the Secured Party to obtain a prejudgment
remedy, such as attachment, garnishment and/or replevin, upon commencing any
litigation against Grantor.  Notwithstanding, Grantor hereby waives all rights
to notice, judicial hearing or prior court order to which it might otherwise
have the right under any state or federal statute or constitution in connection
with the obtaining by the Secured Party of any prejudgment remedy by reason of
this Agreement, the Notes or by reason of the Obligations or any renewals or
extensions of the same.  Grantor also waives any and all objection, which it
might otherwise assert, now or in the future, to the exercise or use by the
Secured Party of any right of setoff, repossession or self help as may presently
exist under statute or common law.
 
[Signature page follows]
 

 
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IN WITNESS WHEREOF, the parties have duly executed this Security Agreement as of
the day and year first written above.
 

VISTAGEN THERAPEUTICS, INC.
 
By:/s/ Jerrold D. Dotson
      Name: Jerrold D. Dotson
      Title: Chief Financial Officer

PLATINUM LONG TERM GROWTH VII, LLC
 
By: /s/ Joseph Finestone
      Name:  Joseph Finestone
      Title:  Associate
 

 
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SCHEDULE A
 
Places of Business; Chief Executive Office; Filing Locations
 
State of Incorporation:
Nevada

Chief Executive Office:
California
 
Filing Locations:
Secretary of State of the State of Nevada