Securities Purchase Agreement



 Exhibit 10.1 
 SECURITIES PURCHASE AGREEMENT 
 This Securities Purchase Agreement (this
“Agreement”) is dated as of February 27, 2007 among Accentia Biopharmaceuticals, Inc., a Florida corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”). 
 WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement. 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each
Purchaser agree as follows: 
 ARTICLE I. 
 DEFINITIONS 
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement:
(a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Debentures (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1: 
 “Action” shall have the meaning ascribed to such term in Section 3.1(j). 
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same
investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. 
 “Business Day”
means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 “Closing Date” means the Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or
waived. 







 “Commission” means the Securities and Exchange Commission. 

“Common Stock” means the common stock of the Company, par value $.001 per share, and any other class of securities
into which such securities may hereafter be reclassified or changed into. 
 “Common Stock Equivalents” means
any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. 
 “Company Counsel” means Foley & Lardner, LLP, with offices located at 100 North Tampa St., Suite 2100, Tampa, FL 33602. 
 “Conversion Price” shall have the meaning ascribed to such term in the Debentures. 
 “Debentures” means the 8% Convertible Debentures due, subject to the terms therein, 4 years from their date of issuance, issued by the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.

 “Disclosure Schedules” shall have the meaning ascribed to such term in Section 3.1. 
 “Effective Date” means the date that the initial Registration Statement filed by the Company pursuant to the Registration
Rights Agreement is first declared effective by the Commission. 
 “Evaluation Date” shall have the meaning
ascribed to such term in Section 3.1(r). 
 “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder. 
 “Exempt Issuance” means the issuance of
(a) shares of Common Stock or options to employees, officers, consultants or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a
majority of the members of a committee of non-employee directors established for such purpose (provided that any such issuances to consultants shall not exceed 300,000 shares and/or options, in the aggregate, in any 12 month period),
(b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of this Agreement to increase 

  

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the number of such securities or to decrease the exercise, exchange or conversion price of such securities, and (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business
synergistic with or complementary to the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing in securities. 
 “FWS” means
Feldman Weinstein & Smith LLP with offices located at 420 Lexington Avenue, Suite 2620, New York, New York 10170-0002. 
 “GAAP” shall have the meaning ascribed to such term in Section 3.1(h). 
 “Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa). 
 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o). 
 “Laurus” means Laurus Master Fund, Ltd. 
 “Laurus Financing Documents” means
(i) that certain Amended and Restated Security Agreement dated as of February 13, 2006 between the Company and Laurus, (ii) that certain Second Amended and Restated Convertible Minimum Borrowing Note, made by the Company and certain
of its Subsidiaries as of February 13, 2006, and issued to Laurus in the initial face amount of $2,500,000, (iii) that certain Amended and Restated Secured Non-Convertible Revolving Note, made by the Company and certain of its Subsidiaries
as of February 13, 2006, and issued to Laurus in the initial face amount of $5,000,000, (iv) that certain Second Amended and Restated Convertible Term Note made by the Company and certain of its Subsidiaries as of February 13, 2006,
and issued to Laurus in the initial face amount of $10,000,000, with a principal amount outstanding of $7,096,774.24, as of the date hereof, and (v) that certain Secured Promissory Note made by Biovest International, Inc., as of March 31,
2006, and issued to Laurus in the initial face amount of $7,799,000, with a principal amount outstanding of $7,195,613.28 as of the date hereof, in each case as amended, restated, modified and/or supplemented from time to time. 
 “Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c). 
 “Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other
restriction. 
 “Long Term Warrants” means collectively the Common Stock purchase warrants delivered to the
Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to 5 years, in the form of Exhibit C attached hereto. 
  

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 “Material Adverse Effect” shall have the meaning assigned to such term
in Section 3.1(b). 
 “Material Permits” shall have the meaning ascribed to such term in
Section 3.1(m). 
 “Maximum Rate” shall have the meaning ascribed to such term in Section 5.17.

 “Participation Maximum” shall have the meaning ascribed to such term in Section 4.13. 
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
 “Pre-Notice” shall have the meaning ascribed to such term in Section 4.13. 
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.11. 
 “Registration Rights Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the
Purchasers, in the form of Exhibit B attached hereto. 
 “Registration Statement” means a registration
statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale of the Underlying Shares by each Purchaser as provided for in the Registration Rights Agreement. 
 “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e). 
 “Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or
potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise or conversion in full of all Warrants and Debentures (including Underlying Shares issuable as payment of interest),
ignoring any conversion or exercise limits set forth therein, and assuming that the Conversion Price is at all times on and after the date of determination 75% of the then Conversion Price on the Trading Day immediately prior to the date of
determination. 
  

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 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h). 
 “Securities” means the Debentures, the Warrants, the Warrant Shares and the Underlying Shares. 
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated hereunder.

 “September Debenture Amendment and Conversion Agreement” means that certain amendment and conversion
agreement, in the form of Exhibit F attached hereto, among the Company and the September Debenture Holders signatory thereto. 
 “September Debentures” means the debentures issued pursuant to the September Debenture Transaction. 
 “September Debenture Transaction” means those certain transactions consummated by the Company pursuant to that certain securities purchase agreement dated September 29, 2006 among the Company and the investors
signatory thereto, whereby the Company issued and sold to such investors an aggregate of $25,000,000 of secured convertible debentures and warrants to purchase shares of Common Stock as described therein. 
 “September Debenture Holders” means the holders of the September Debentures. 
 “Shareholder Approval” means such approval as may be required by the applicable rules and regulations of the Nasdaq
Global Market from the shareholders of the Company with respect to the transactions contemplated by the Transaction Documents, including the issuance of all of the Underlying Shares in excess of 19.99% of the issued and outstanding Common Stock on
the Closing Date. 
 “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
 “Short Term Warrants” means collectively the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have
a term of exercise expiring the earlier of (i) two years following their issuance or (ii) 60 days following the later of (x) the Effective Date and (y) the date Shareholder Approval is received and effective, in the form of
Exhibit C attached hereto. 
  

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 “Subscription Amount” means, as to each Purchaser, the aggregate amount
to be paid for Debentures and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately
available funds. 
 “Subsequent Financing” shall have the meaning ascribed to such term in Section 4.13.

 “Subsequent Financing Notice” shall have the meaning ascribed to such term in Section 4.13.

 “Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a). 
 “Trading Day” means a day on which the New York Stock Exchange is open for trading. 
 “Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board. 
 “Transaction Documents” means this Agreement, the Debentures, the Warrants, the Registration Rights Agreement, all
exhibits and schedules hereto and thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
 “Transfer Agent” means American Stock Transfer, with a mailing address of 1050 Mallard Creek Road, Suite 307, Charlotte, NC 28262 and a facsimile number of 704.590.7599, and any successor transfer
agent of the Company. 
 “Underlying Shares” means the shares of Common Stock issued and issuable upon
conversion or redemption of the Debentures and upon exercise of the Warrants and issued and issuable in lieu of the cash payment of interest on the Debentures in accordance with the terms of the Debentures. 
 “Variable Rate Transaction” shall have the meaning ascribed to such term in Section 4.14(b). 
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported
by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. New York City time to 4:02 p.m. New York City time); (b) if Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink Sheets, LLC (or a similar organization or 

  

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agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. 
 “Warrants” means collectively the Long Term and Short Term Warrants. 
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 
 ARTICLE II. 
 PURCHASE AND SALE

 2.1 Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees to purchase up to an aggregate of $25,000,000 in principal amount of the Debentures. Each Purchaser
shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to its Subscription Amount and the Company shall deliver to each Purchaser its respective Debenture and a Warrant, as determined pursuant to
Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the
offices of FWS or such other location as the parties shall mutually agree. 
 2.2 Deliveries. 
 (a) On the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following: 
 (i) this Agreement duly executed by the Company; 
 (ii) a legal opinion of Company Counsel, in the form of Exhibit D attached hereto; 
 (iii) a Debenture with a principal amount equal to such Purchaser’s Subscription Amount, registered in the name of such Purchaser;
provided, however, as to September Debenture Holders that are signatories to the September Debenture Amendment and Conversion Agreement, the Company shall issue such Purchasers a Debenture with a principal amount equal to such Purchaser’s
Subscription Amount multiplied by 1.38; 
 (iv) a Long Term Warrant registered in the name of such Purchaser to purchase up to
a number of shares of Common Stock equal to 35% of the principal amount of the Debenture issuable to such Purchaser hereunder divided by the initial Conversion Price, with an exercise price equal to $4.25, subject to adjustment therein; 

 

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 (v) a Short Term Warrant registered in the name of such Purchaser to purchase up to a
number of shares of Common Stock equal to 50% of the principal amount of the Debenture issuable to such Purchaser hereunder divided by the initial Conversion Price, with an exercise price equal to $4.00, subject to adjustment therein; 
 (vi) the written agreement, in the form of Exhibit E attached hereto, of The Hopkins Capital Group, LLC, MOAB Investments, LP,
Francis E. O’Donnell, Jr., Dennis L. Ryll, Alan M. Pearce, Steven J. Stogel, Ronald E. Osman, PPDI Capital and all other officers, directors and shareholders holding more than 10% of the issued and outstanding shares of Common Stock on the date
hereof to vote all Common Stock over which such Persons have voting control as of the record date for the meeting of shareholders of the Company in favor of Shareholder Approval, amounting to, in the aggregate, at least 50% of the issued and
outstanding Common Stock; and 
 (vii) the Registration Rights Agreement duly executed by the Company. 
 (b) On the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following: 
 (i) this Agreement duly executed by such Purchaser; 
 (ii) such Purchaser’s Subscription Amount by wire transfer to the account as specified in writing by the Company; and 
 (iii) the Registration Rights Agreement duly executed by such Purchaser. 
 2.3 Closing Conditions. 
 (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met: 
 (i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Purchasers contained herein; 
 (ii) all obligations, covenants and agreements of the Purchasers required to be performed at or prior to the Closing Date shall have been
performed; and 
 (iii) the delivery by the Purchasers of the items set forth in Section 2.2(b) of this Agreement.

 (b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following
conditions being met: 
 (i) the accuracy in all material respects when made and on the Closing Date of the representations
and warranties of the Company contained herein; 
  

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 (ii) all obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed; 
 (iii) the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement; 
 (iv) there shall have been no Material Adverse Effect with respect to the Company
since the date hereof; and 
 (v) from the date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal Trading Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the
Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading
Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Purchaser, makes it impracticable or inadvisable to purchase the Debentures at the Closing. 
 ARTICLE III. 
 REPRESENTATIONS AND
WARRANTIES 
 3.1 Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure
Schedules shall be deemed a part hereof and shall qualify any representation or warranty otherwise made herein, the Company hereby makes the following representations and warranties to each Purchaser: 
 (a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

  

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 (b) Organization and Qualification. The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a
material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. 
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith other than
in connection with the Required Approvals. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and 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) insofar as indemnification and contribution
provisions may be limited by applicable law. 
 (d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of 

  

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the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses
(ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. 
 (e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) filings required pursuant to Section 4.6, (ii) the filing with the Commission of the
Registration Statement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Underlying Shares for trading thereon in the time and manner required thereby,
(iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws and (v) Shareholder Approval (collectively, the “Required Approvals”). 
 (f) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares, when
issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock a number of
shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum on the date hereof. 
 (g)
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company
as of the date hereof. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the
issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan and pursuant to the conversion or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report
under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as 

  

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a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of
the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Securities. There are
no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

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

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 (i) Material Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company
has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance
of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one Trading Day prior to the date that
this representation is made. 
 (j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or
(ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act. 
 (k) Labor Relations. No material labor dispute exists or,
to the knowledge of the Company, is imminent with respect to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of
a union that relates to such employee’s relationship with the Company, and neither the Company or any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. No executive 

  

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officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 
 (l) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation
of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws
applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect. 
 (m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not have or reasonably be expected to result
in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. 
 (n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by
them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the
Company and the Subsidiaries are in material compliance. 
 (o) Patents and Trademarks. The Company and the
Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service 

  

 14 








 
marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use
in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any
Subsidiary has received a notice (written or otherwise) that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of
all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 
 (p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription
Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost. 
 (q) Transactions with Affiliates and Employees. Except
as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess
of $60,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any
stock option plan of the Company. 
 (r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or specific 

  

 15 








 
authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that
information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The
Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial reporting. 
 (s) Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction Documents. 
 (t) Private Placement. Assuming the
accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The
issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market. 
 (u)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act of 1940, as amended. 
 (v) Registration Rights. Other than each of the Purchasers, no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company. 
 (w) Listing and Maintenance Requirements. The
Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act nor has the 

  

 16 








 
Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the
date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is,
and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 
 (x) Application of Takeover Protections. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s articles of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could
become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the
Securities and the Purchasers’ ownership of the Securities. 
 (y) Disclosure. Except with respect to the
material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any
information that it believes constitutes or might constitute material, nonpublic information. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the
Company. All disclosure furnished by or on behalf of the Company in writing to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, with respect to
the representations and warranties contained herein is true and correct with respect to such representations and warranties and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements, in light of the circumstances under which they were made and when made, not misleading. The Company
acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof. Without limiting the
foregoing, the Company hereby expressly represents to each Purchaser that all discussions and negotiations with Biodelivery Sciences International, Inc., its subsidiaries, their respective Affiliates and shareholders (collectively, “BDSI”)
with respect to the proposed merger transaction between the Company and BDSI have been abandoned and terminated. Further, the Company hereby represents that neither it, nor any of its subsidiaries, nor any of their respective Affiliates has any
present intention to pursue a merger, consolidation, acquisition, tender offer, exchange offer or other business combination transaction 

  

 17 








 
of any nature whatsoever with BDSI, nor are there any ongoing discussions between the Company and BDSI with respect to any such transaction. In
addition the Company hereby represents and agrees that neither it, nor its subsidiaries nor any of their respective Affiliates has any present intention to directly or indirectly initiate, participate in, entertain or agree to any negotiations or
discussions with BDSI with respect to any merger, acquisition, tender offer, exchange offer, consolidation or other business combination transaction involving the Company or any of its subsidiaries and BDSI. The Company understands and confirms that
the Purchasers will rely on the foregoing representations in effecting transactions in securities of the Company. 
 (z)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the
Securities Act or any applicable shareholder approval provision of any Trading Market on which any of the securities of the Company are listed or designated. 
 (aa) Solvency. Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be
paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(aa) sets forth as of the dates
thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (a) any
liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of
others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in 

  

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the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness. 
 (bb) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary. 
 (cc) No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the
Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 (dd) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person
acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 
 (ee) Accountants. The Company’s accounting firm is set forth on Schedule 3.1(ee) of the Disclosure Schedule. To the
knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the
Company’s Annual Report on Form 10-K for the year ending September 30, 2007. 
 (ff) Seniority. Except as set
forth in Schedule 3.1(ff), as of the Closing Date, no Indebtedness or other claim against the Company is senior to the Debentures in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than
indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby). 
 (gg) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers. 
  

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 (hh) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the
Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. 
 (ii) Acknowledgment Regarding Purchasers’ Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 3.2(f) and 4.16 hereof), it is understood and acknowledged by the Company (i) that none of the Purchasers have been asked to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that past or future open market or other transactions by any
Purchaser, including Short Sales, and specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market
price of the Company’s publicly-traded securities; (iii) that any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iv) that each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and
acknowledges that (a) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Underlying Shares
deliverable with respect to Securities are being determined and (b) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are
being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents. 
 (jj) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the securities of
the Company or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s
placement agent in connection with the placement of the Securities. 
  

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 (kk) FDA. Except as set forth on Schedule 3.1(kk), as to each product
subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold
and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good
manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect.
Except as set forth on Schedule 3.1(kk), there is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or
investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests
the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its
approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or
any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The
properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA
will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being
developed or proposed to be developed by the Company. 
 (ll) Form S-3 Eligibility. The Company is eligible to register
the resale of the Underlying Shares for resale by the Purchaser on Form S-3 promulgated under the Securities Act. 
 3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser hereby, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows: 
  

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 (a) Organization; Authority. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on
the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and 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) insofar as indemnification and contribution provisions
may be limited by applicable law. 
 (b) Own Account. Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling
such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law
and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities
pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law. Such Purchaser is acquiring the Securities hereunder in
the ordinary course of its business. Such Purchaser is a resident of either a foreign jurisdiction or the state set forth in the “Address for Notice” included on such Purchaser’s signature page hereto. 
 (c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date hereof it is, and on each date
on which it exercises any Warrants or converts any Debentures it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 
 (d) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is
able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 

  

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Each Purchaser hereby acknowledges that the Debentures being issued hereunder are general obligations of the Company, and neither the obligations of the
Company owing in respect thereof or in connection with the transactions contemplated hereby are, or shall be (unless the Company’s obligations to Laurus under the Laurus Financing Documents have been satisfied) secured by a Lien on the assets
of the Company or its Subsidiaries. 
 (e) General Solicitation. Such Purchaser is not purchasing the Securities as a
result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or
general advertisement. 
 (f) Short Sales and Confidentiality Prior To The Date Hereof. Other than the transaction
contemplated hereunder, such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any transaction, including Short Sales, in the securities of the
Company during the period commencing from the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person setting forth the material terms of the transactions contemplated hereunder until the date
hereof (“Discussion Time”). Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction). 
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
 4.1
Transfer Restrictions. 
 (a) The Securities may only be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the
Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have
the rights of a Purchaser under this Agreement and the Registration Rights Agreement. 
  

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 (b) The Purchasers agree to the imprinting, so long as is required by this
Section 4.1, of a legend on any of the Securities in the following form: 
 [NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS
SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
 The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the
provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would
not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate
Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities
are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of Selling Stockholders thereunder. 
 (c) Certificates evidencing the Underlying Shares shall
not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, or
(ii) following any sale of such Underlying Shares pursuant to Rule 144, or (iii) if such Underlying Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the 

  

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Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer
Agent to effect the removal of the legend hereunder. If all or any portion of a Debenture or Warrant is converted or exercised (as applicable) at a time when there is an effective registration statement to cover the resale of the Underlying Shares,
or if such Underlying Shares may be sold under Rule 144(k) or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission)
then such Underlying Shares shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days
following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver
or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the
restrictions on transfer set forth in this Section. Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchasers by crediting the account of the Purchaser’s prime broker
with the Depository Trust Company System. 
 (d) In addition to such Purchaser’s other available remedies, the Company
shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal
of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day 5 Trading Days after such damages have begun to accrue) for each Trading Day after the second Trading Day following the Legend
Removal Date until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the
Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. 
 (e) Each Purchaser, severally and not jointly with the other Purchasers, agrees that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including
any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein. 
 4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including without limitation its obligation to issue 

  

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the Underlying Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company. 

4.3 Furnishing of Information. As long as any Purchaser owns Securities, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as any Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144. The Company further
covenants that it will take such further action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the
requirements of the exemption provided by Rule 144. 
 4.4 Integration. The Company shall not sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act
of the sale of the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market. 
 4.5 Conversion and Exercise Procedures. The form of Notice of Exercise included in the Warrants and the form of Notice of Conversion included in
the Debentures set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants or convert the Debentures. No additional legal opinion or other information or instructions shall be required of the Purchasers to
exercise their Warrants or convert their Debentures. The Company shall honor exercises of the Warrants and conversions of the Debentures and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the
Transaction Documents. 
 4.6 Securities Laws Disclosure; Publicity. The Company shall, by 8:30 a.m. (New York City time) on the
Trading Day following the date hereof, issue a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby and attaching the Transaction Documents as exhibits thereto. The Company and each Purchaser shall consult
with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release or otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such
disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the 

  

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name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents
(including signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure
permitted under this clause (ii). 
 4.7 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the
consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover
plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other
agreement between the Company and the Purchasers. 
 4.8 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the
Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each
Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the Company. 
 4.9 Use of
Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds for the satisfaction of any
portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), the redemption of any Common Stock or Common Stock Equivalents or the settlement of any outstanding
litigation. 
 4.10 Reimbursement. If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is
a stockholder of the Company (except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any other stockholder), solely as a result of such Purchaser’s acquisition of the Securities under this
Agreement, the Company will reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection therewith) incurred in connection therewith, as such expenses are
incurred. The reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchasers who are
actually named in such action, proceeding or investigation, and partners, directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and shall be binding upon and inure to the benefit
of any successors, assigns, heirs and personal representatives of the Company, the Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor 

  

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any such Affiliates, partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting claims on
behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement. 
 4.11 Indemnification of
Purchasers. Subject to the provisions of this Section 4.11, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling
person (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of
the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such
Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense
and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. 
  

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 4.12 Reservation and Listing of Securities. 
 (a) The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full under the Transaction Documents. 
 (b) If, on
any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then the Board of Directors of the Company shall use commercially reasonable efforts to amend the
Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after
such date. 
 (c) The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market,
prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application, (ii) take all steps necessary to cause such
shares of Common Stock to be approved for listing on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing, and (iv) maintain the listing of such Common Stock on any date at least
equal to the Required Minimum on such date on such Trading Market or another Trading Market. In addition, the Company shall hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) at the earliest practical
date after the date the number of shares of Common Stock issuable pursuant to this Agreement on a fully converted or exercised basis (ignoring for such purposes any conversion or exercise limitations therein) exceeds 15% of the issued and
outstanding shares of Common Stock on the Closing Date, and in any event on or before May 14, 2007 for the purpose of obtaining Shareholder Approval, with the recommendation of the Company’s Board of Directors that such proposal be
approved, and the Company shall solicit proxies from its shareholders in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of
such proposal. If the Company does not obtain Shareholder Approval at the first meeting, the Company shall call a meeting every four months thereafter to seek Shareholder Approval until the earlier of the date Shareholder Approval is obtained or the
Debentures are no longer outstanding. 
 4.13 Participation in Future Financing. 
 (a) From the date hereof until the date that the Debentures are no longer outstanding, upon any issuance by the Company or any of its
Subsidiaries of Common Stock or Common Stock Equivalents (a “Subsequent Financing”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to lesser of (a) 100% of the aggregate
amount of the Subsequent Financing minus the amount of the Subsequent Financing as to which the September Debenture Holders have exercised their rights set forth in Section 4.13 of the Securities Purchase Agreement entered into in connection
with the September Debenture Transaction and (b) the aggregate principal amount then outstanding of all Debentures issued pursuant to this Agreement at the Closing (the “Participation Maximum”) on the same terms, conditions and
price provided for in the Subsequent Financing. 
  

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 (b) At least 5 Trading Days prior to the closing of the Subsequent Financing, the Company
shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such additional
notice, a “Subsequent Financing Notice”). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than 1 Trading Day after such request,
deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or
Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment. 
 (c) Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to
the Company by not later than 5:30 p.m. (New York City time) on the 5th Trading Day after all of the Purchasers have
received the Pre-Notice that the Purchaser is willing to participate in the Subsequent Financing, the amount of the Purchaser’s participation, and that the Purchaser has such funds ready, willing, and available for investment on the terms set
forth in the Subsequent Financing Notice. If the Company receives no notice from a Purchaser as of such 5th Trading
Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate. 
 (d) If by 5:30 p.m. (New York City time) on the 5th Trading Day after all of the
Purchasers have received the Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent
Financing, then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice. 
 (e) If by 5:30 p.m. (New York City time) on the 5th Trading Day after all of the Purchasers have received the Pre-Notice, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking
to purchase more than the aggregate amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” means the
ratio of (x) the Subscription Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 4.13 and (y) the sum of the aggregate Subscription Amounts of Securities purchased on the Closing Date by
all Purchasers participating under this Section 4.13. 
 (f) The Company must provide the Purchasers with a second
Subsequent Financing Notice, and the Purchasers will again have the right of participation set forth above in this Section 4.13, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on
the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice. 
  

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 (g) Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of
(i) an Exempt Issuance or (ii) an underwritten public offering of Common Stock. 
 4.14 Subsequent Equity Sales. 

(a) From the date hereof until 90 days after the Effective Date, neither the Company nor any Subsidiary shall issue shares of Common
Stock or Common Stock Equivalents; provided, however, the 90 day period set forth in this Section 4.14 shall be extended for the number of Trading Days during such period in which (i) trading in the Common Stock is suspended
by any Trading Market, or (ii) following the Effective Date, the Registration Statement is not effective or the prospectus included in the Registration Statement may not be used by the Purchasers for the resale of the Underlying Shares.

 (b) From the date hereof until such time as no Purchaser holds any of the Securities, the Company shall be prohibited from
effecting or entering into an agreement to effect any Subsequent Financing involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with
the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date
after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any
agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price. 
 (c) Unless Shareholder Approval has been obtained and deemed effective, neither the Company nor any Subsidiary shall make any issuance whatsoever of Common Stock or Common Stock Equivalents which would cause any
adjustment of the Conversion Price or Exercise Price to the extent the holders of Debentures and Warrants would not be permitted, pursuant to Section 4(c)(i) of the Debentures and Section 2(d) of the Warrants, to convert their respective
outstanding Debentures and exercise their respective Warrants in full, ignoring for such purposes the conversion or exercise limitations therein. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect damages. 
 (d) Notwithstanding the foregoing, this
Section 4.14 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance. 
  

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 4.15 Equal Treatment of Purchasers. No consideration shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. Further, the Company shall not make any payment of
principal or interest on the Debentures in amounts which are disproportionate to the respective principal amounts outstanding on the Debentures at any applicable time. For clarification purposes, this provision constitutes a separate right granted
to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to
the purchase, disposition or voting of Securities or otherwise. 
 4.16 Short Sales and Confidentiality After The Date Hereof. Each
Purchaser severally and not jointly with the other Purchasers covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period commencing at the Discussion Time
and ending at the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section 4.6, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction). Each Purchaser understands and acknowledges, severally and not jointly with any other Purchaser, that the Commission currently takes the position that coverage of short sales of shares of the Common Stock
“against the box” prior to the Effective Date of the Registration Statement with the Securities is a violation of Section 5 of the Securities Act, as set forth in Item 65, Section A, of the Manual of Publicly Available Telephone
Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporation Finance. Notwithstanding the foregoing, no Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short Sales in
the securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.6; provided, however, each Purchaser agrees, severally and not jointly with any other
Purchasers, that they or any Person acting at the request or direction of such Purchaser, will not enter into any Net Short Sales (as hereinafter defined) from the period commencing on the Closing Date and ending on the date that such Purchaser no
longer holds any Debentures or Warrants. For purposes of this Section 4.16, a “Net Short Sale” by any Purchaser shall mean a sale of Common Stock by such Purchaser that is marked as a short sale and that is made at a time
when there is no equivalent offsetting long position in Common Stock held by such Purchaser. For purposes of determining whether there is an equivalent offsetting long position in Common Stock held by the Purchaser, Underlying Shares that have
not yet been converted pursuant to the shares of Debentures and Warrant Shares that have not yet been exercised pursuant to the Warrants shall be deemed to be held long by the Purchaser, and the amount of shares of Common Stock held in a long
position shall be all unconverted Underlying Shares and unexercised Warrant Shares (ignoring any exercise limitations included therein) issuable to such Purchaser on such date, plus any shares of Common Stock or Common Stock Equivalents otherwise
then held by such Purchaser. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment 

  

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decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. 
 4.17 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take
such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of
the United States, and shall provide evidence of such actions promptly upon request of any Purchaser. 
 4.18 Capital Changes. Until
the one year anniversary of the Effective Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in principal amount
outstanding of the Debentures. 
 4.19 Transactions with Biovest International, Inc. So long as the Debentures are outstanding,
without the prior written consent of the holders of at least 66% of the principal amount of the Debentures then outstanding, the Company and its Subsidiaries (including any subsidiaries hereafter formed or acquired) (other than Biovest
International, Inc.) shall be prohibited from (i) lending or advancing funds to Biovest International, Inc. or its direct and indirect subsidiaries (collectively, the “BVI Entities”), (ii) guaranteeing any obligations
(monetary or otherwise) of any BVI Entity or (iii) investing in any BVI Entity in any transaction of any nature whatsoever. 
 ARTICLE
V. 
 MISCELLANEOUS 
 5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by
written notice to the other parties, if the Closing has not been consummated on or before March 1, 2007; provided, however, that such termination will not affect the right of any party to sue for any breach by the other party (or
parties). 
 5.2 Fees and Expenses. At the Closing, the Company has agreed to reimburse Midsummer Capital, LLC
(“Midsummer”) the non-accountable sum of $25,000, for its legal fees and expenses, none of which has been paid prior to the Closing. The Company shall deliver to each Purchaser, prior to the Closing, a completed and executed copy of
the Closing Statement attached hereto as Annex A. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchasers. 
  

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 5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. 
 5.4 Notices. Any and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature
pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. 
 5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and the Purchasers holding 66% or more in interest of the Securities then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of
any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. So long as any obligations of the Company owed to Laurus under the Laurus Financing Documents remain outstanding and
the principal amount of such obligations does not exceed $20,000,000, in the aggregate, the Company and each Purchaser, severally and not jointly with any other Purchasers, hereby agree that they shall not modify or amend the terms of any
Transaction Document (including, without limitation, Sections 7(d) and 7(e) of the Debentures) if such modification or amendment prohibits, or requires the Company to delay the making of, any required payments to be made by the Company to Laurus
under the Laurus Financing Documents. The parties acknowledge that Laurus shall be a third party beneficiary with respect to the restrictions set forth in the immediately preceding sentence. 
 5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. 
 5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each 

  

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Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.” 
 5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.11. 
 5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this
Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the
City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The parties hereby
waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 
 5.10 Survival. The representations and warranties shall survive the Closing and the delivery of the Securities for the applicable statue of limitations. 
 5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as
if such facsimile or “.pdf” signature page were an original thereof. 
  

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 5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable. 
 5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting
any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and
rights; provided, however, in the case of a rescission of a conversion of a Debenture or exercise of a Warrant, the Purchaser shall be required to return any shares of Common Stock delivered in connection with any such rescinded
conversion or exercise notice. 
 5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument,
but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement Securities. 
 5.15 Remedies. In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agrees to waive and not to assert in any action for specific performance of any such obligation the defense that a
remedy at law would be adequate. 
 5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to any
Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, 

  

 36 








 
repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state
or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred. 
 5.17 Usury. To the extent it may lawfully do so, the Company hereby
agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any
claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and
provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without
limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such
Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new
maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date forward, unless such application is precluded by applicable law. If under any circumstances whatsoever,
interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such
indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election. 
 5.18
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be
deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the
Transaction Documents. For reasons of administrative convenience only, Purchasers and their respective counsel have chosen to communicate with the Company through FWS. FWS does not represent all of the Purchasers but only Midsummer. The Company has
elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Purchasers. 
  

 37 








 5.19 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or
other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or
security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled. 
 5.20
Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. 
 (Signature Pages Follow) 
  

 38 








 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. 
  

					
	ACCENTIA BIOPHARMACEUTICALS, INC.	 	Address for Notice:
			
	By:	 	 /s/ Francis E. O’Donnell
	 	
	Name:	 	Francis E. O’Donnell	 	
	Title:	 	President and CEO	 	
		
	With a copy to (which shall not constitute notice):	 	

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGE FOR PURCHASER FOLLOWS] 
  

 39 








 [PURCHASER SIGNATURE PAGES TO ABPI SECURITIES PURCHASE AGREEMENT] 
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above. 
 Name of Purchaser:
                                        
                                        
                                        
                     
 Signature of Authorized
Signatory of Purchaser:
                                        
                                        
             
 Name of Authorized Signatory:
                                        
                                        
                                        

 Title of Authorized Signatory:
                                        
                                        
                                        

 Email Address of Purchaser:
                                        
                                        
                                        
     
 Facsimile Number of Purchaser:
                                        
                                        
                                        

  
 Address for Notice of Purchaser: 
  
 Address for Delivery of Securities for Purchaser (if not same as above): 
  
 Subscription Amount:
                     
 Warrant Shares:
                                 
  
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 
 [SIGNATURE PAGES CONTINUE] 
  

 40 








 Annex A 
 CLOSING STATEMENT 
 Pursuant to the attached Securities Purchase Agreement, dated as of the date hereto, the
purchasers shall purchase up to $25,000,000 of Debentures and Warrants from Accentia Biopharmaceuticals, Inc. (the “Company”). All funds will be wired into a trust account maintained by Foley & Lardner, LLP, counsel to the
Company. All funds will be disbursed in accordance with this Closing Statement. 
 Disbursement Date: February     , 2007

  

				
	I. PURCHASE PRICE	 		
		
	 Gross Proceeds to be Received in Trust
	 	$	 
		
	II. DISBURSEMENTS	 		
		 	$	 
	 Midsummer Capital, LLC
	 	$	25,000
		 	$	 
		 	$	 
		 	$	 
	Total Amount Disbursed:	 	$	 

 WIRE INSTRUCTIONS: 
  


									
	To:	 	  
	 		 		 	
					
	To:	 	  
	 		 		 	

  

 41 








 EXHIBIT A 
 NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL
BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
 Original Issue Date: February     , 2007 
 Original Conversion Price (subject to adjustment herein): $4.00 
 $                     
 8% CONVERTIBLE DEBENTURE 
 DUE FEBRUARY     , 2011 
 THIS DEBENTURE is one of a series of duly authorized and validly issued 8% Convertible Debentures of Accentia Biopharmaceuticals, Inc., a Florida
corporation, (the “Company”), having its principal place of business at
                                        ,
designated as its 8% Convertible Debenture due February     , 2011 (this debenture, the “Debenture” and, collectively with the other such series of debentures, the “Debentures”).

 FOR VALUE RECEIVED, the Company promises to pay to
                                        
or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of
$                     on February     , 2011 (the “Maturity Date”) or such earlier date as this
Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture is
subject to the following additional provisions: 
 Section 1. Definitions. For the purposes hereof, in addition to the
terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings: 
  

 1 








 “Alternate Consideration” shall have the meaning set forth in
Section 5(e). 
 “Bankruptcy Event” means any of the following events: (a) the Company or any
Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed
within 60 days after commencement; (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any
Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment; (e) the Company or any
Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts; or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose
of effecting any of the foregoing. 
 “Base Conversion Price” shall have the meaning set forth in
Section 5(b). 
 “Business Day” means any day except Saturday, Sunday, any day which shall be a federal
legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. 
 “Buy-In” shall have the meaning set forth in Section 4(d)(v). 
 “Capital Raising Transaction” means any issuance of debt or equity securities (including, without limitation, any shares
of capital stock, securities convertible in to or exchangeable for shares of capital stock, or warrants, options or other rights for the purchase or acquisition of such shares, and other ownership or profit interests (including, without limitation,
partnership, member or trust interest therein), whether voting or nonvoting) of the Company and/or any of its Subsidiaries for cash occurring after the Original Issue Date. 
 “Change in Control Optional Redemption” shall have the meaning set forth in Section 6(c). 
 “Change in Control Optional Redemption Amount” means the sum of (i) 120% of all or a part of 65% of the principal
amount of the Debenture then outstanding as is set forth in the Change in Control Optional Redemption Notice, (ii) accrued but unpaid interest and (iii) all liquidated damages and other amounts due in respect of the Debenture. 

 

 2 








 “Change in Control Optional Redemption Date” shall have the meaning set
forth in Section 6(c). 
 “Change in Control Optional Redemption Notice” shall have the meaning set
forth in Section 6(c). 
 “Change in Control Optional Redemption Notice Date” shall have the meaning set
forth in Section 6(c). 
 “Change of Control Transaction” means the occurrence after the date hereof of
any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of
capital stock of the Company, by contract or otherwise) of in excess of 40% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and the Securities issued together with the Debentures), or
(ii) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction
own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction, or (iii) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, or (iv) a replacement at one time or within a three year period of more than one-half of the
members of the Company’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on
any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), or (v) the execution by the Company of an agreement to which the Company is a party or
by which it is bound, providing for any of the events set forth in clauses (i) through (iv) above. 
 “Common Stock” means the common stock, par value $.001 per share, of the Company and stock of any other class of securities into which such securities may hereafter be reclassified or changed into. 
 “Conversion Date” shall have the meaning set forth in Section 4(a). 
 “Conversion Price” shall have the meaning set forth in Section 4(b). 
 “Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in
accordance with the terms hereof. 
  

 3 








 “Debenture Register” shall have the meaning set forth in
Section 2(c). 
 “Dilutive Issuance” shall have the meaning set forth in Section 5(b). 

“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b). 
 “Effectiveness Period” shall have the meaning set forth in the Registration Rights Agreement. 
 “Equity Conditions” shall mean, during the period in question, (i) the Company shall have duly honored all
conversions and redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (ii) the Company shall have paid all liquidated damages and other amounts owing and then due to the Holder in
respect of this Debenture, (iii) there is an effective Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares issuable pursuant to the Transaction Documents (and the
Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future), (iv) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are
listed for trading on such Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (v) there is a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares issuable pursuant to the Transaction Documents, (vi) there is no existing Event of Default or no existing event which, with the passage of time or
the giving of notice, would constitute an Event of Default, (vii) the issuance of the shares in question (or, in the case of an Optional or Monthly Redemption, the shares issuable upon conversion in full of the Optional or Monthly Redemption
Amount) to the Holder would not violate the limitations set forth in Section 4(c)(i) and Section 4(c)(ii) herein, (viii) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control
Transaction that has not been consummated, (ix) the Holder is not in possession of any information provided by the Company that constitutes, or may constitute, material non-public information and (x) for a period of 20 consecutive Trading
Days prior to the applicable date in question, the daily trading volume for the Common Stock on the principal Trading Market exceeds 75,000 shares per Trading Day (subject to adjustment for forward and reverse stock splits and the like). 

“Event of Default” shall have the meaning set forth in Section 8. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder. 
 “Forced Conversion” shall have the meaning set forth in Section 6(e). 
 “Forced Conversion Date” shall have the meaning set forth in Section 6(e). 
  

 4 








 “Forced Conversion Notice” shall have the meaning set forth in
Section 6(e). 
 “Forced Conversion Notice Date” shall have the meaning set forth in Section 6(e).

 “Fundamental Transaction” shall have the meaning set forth in Section 5(e). 
 “Interest Conversion Rate” means 90% of the lesser of (i) the average of the VWAPs for the 20 consecutive Trading
Days ending on the Trading Day that is immediately prior to the applicable Interest Payment Date or (ii) the average of the VWAPs for the 20 consecutive Trading Days ending on the Trading Day that is immediately prior to the date the applicable
Interest Conversion Shares are issued and delivered if after the Interest Payment Date. 
 “Interest Conversion
Shares” shall have the meaning set forth in Section 2(a). 
 “Interest Notice Period” shall
have the meaning set forth in Section 2(a). 
 “Interest Payment Date” shall have the meaning set forth
in Section 2(a). 
 “Interest Share Amount” shall have the meaning set forth in Section 2(a).

 “Late Fees” shall have the meaning set forth in Section 2(d). 
 “Mandatory Default Amount” means the sum of (i) the greater of (A) 130% of the outstanding principal amount of
this Debenture, plus all accrued and unpaid interest hereon, or (B) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is
either (a) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (b) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either
(x) demanded or otherwise due or (y) paid in full, whichever has a higher VWAP, and (ii) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture. 
 “Monthly Conversion Period” shall have the meaning set forth in Section 6(b) hereof. 
 “Monthly Conversion Price” shall have the meaning set forth in Section 6(b) hereof. 
 “Monthly Redemption” means the redemption of this Debenture pursuant to Section 6(b) hereof. 
  

 5 








 “Monthly Redemption
Amount” means, as to a Monthly Redemption, $                    1, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to such Holder in respect of this Debenture. 
 “Monthly Redemption Date” means the 1st of each month, commencing immediately upon March 1, 2008, and terminating
upon the full redemption of this Debenture. 
 “Monthly Redemption Notice” shall have the meaning set forth
in Section 6(b) hereof. 
 “Monthly Redemption Period” shall have the meaning set forth in
Section 6(b) hereof. 
 “Monthly Redemption Share Amount” shall have the meaning set forth in
Section 6(b) hereof. 
 “New York Courts” shall have the meaning set forth in Section 9(d).

 “Notice of Conversion” shall have the meaning set forth in Section 4(a). 
 “Optional Redemption” shall have the meaning set forth in Section 6(a). 
 “Optional Redemption Amount” means the sum of (i) 120% of the portion of the principal amount of the Debenture then
outstanding being redeemed as is set forth in the Optional Redemption Notice, (ii) accrued but unpaid interest and (iii) all liquidated damages and other amounts due in respect of the Debenture. 
 “Optional Redemption Date” shall have the meaning set forth in Section 6(a). 
 “Optional Redemption Notice” shall have the meaning set forth in Section 6(a). 
 “Optional Redemption Notice Date” shall have the meaning set forth in Section 6(a). 
 “Original Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any
Debenture and regardless of the number of instruments which may be issued to evidence such Debentures. 
 “Permitted
Indebtedness” means (a) the Indebtedness existing on the Original Issue Date and set forth on Schedule 3.1(aa) attached to the Purchase Agreement, (b) capital lease obligations and purchase money indebtedness of up to
$500,000, in the aggregate, incurred in connection with the acquisition of capital assets and capital lease obligations with respect to newly acquired or leased assets and (c) up to [$16,000,000] of additional non-equity linked Indebtedness
incurred directly by the Company with a 


	 1
	  1/37th of the original principal amount of this Debenture.



  

 6 








 
nationally recognized commercial lending institution whose primary business is not investing in securities to be incurred in connection with the replacement
of the Company’s existing direct Indebtedness set forth on Schedule 3.1(aa) to the Purchase Agreement, provided that the terms of such additional Indebtedness are no less favorable to the Company than the terms of the existing Indebtedness of
the Company set forth on Schedule 3.1(aa) to the Purchase Agreement. 
 “Permitted Lien” means the individual
and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP; (b) Liens imposed by law which were incurred in the ordinary course of the
Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not
individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in
good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien; (c) Liens incurred in connection with Permitted Indebtedness
under clause (c) thereunder, to the extent such Permitted Indebtedness replaces Permitted Indebtedness described in clause (a) that is secured; (d) Liens incurred in connection with Permitted Indebtedness under clause
(a) thereunder (to the extent such Indebtedness is secured as indicated on Schedule 3.1(aa)); and (e) Liens incurred in connection with Permitted Indebtedness under clause (b) thereunder, provided that such Liens are not secured by
assets of the Company or its Subsidiaries other than the assets so acquired or leased. 
 “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
 “Pre-Redemption Conversion Shares” shall have the meaning set forth in Section 6(b) hereof. 
 “Purchase Agreement” means the Securities Purchase Agreement, dated as of February 27, 2007, among the Company and
the original Holders, as amended, modified or supplemented from time to time in accordance with its terms. 
 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the Company and the original Holders, as amended, modified or supplemented from time to time in
accordance with its terms. 
 “Registration Statement” means a registration statement that registers the
resale of all Conversion Shares and Interest Conversion Shares of the Holder, names such Holder as a “selling stockholder” therein, and meets the requirements of the Registration Rights Agreement. 
  

 7 








 “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder. 
 “Share Delivery Date” shall have the meaning set forth in
Section 4(d). 
 “Shareholder Approval” shall have the meaning set forth in the Purchase Agreement.

 “Subsidiary” shall have the meaning set forth in the Purchase Agreement. 
 “Threshold Period” shall have the meaning set forth in Section 6(d). 
 “Trading Day” shall have the meaning set forth in the Purchase Agreement. 
 “Trading Market” shall have the meaning set forth in the Purchase Agreement. 
 “Transaction Documents” shall have the meaning set forth in the Purchase Agreement. 
 “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted for trading
as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by
Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company. 
 Section 2. Interest. 
 a) Payment of Interest in Cash or Kind. The Company shall pay
interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 8% per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on
the first such date after the Original Issue Date, on each Monthly Redemption Date (as to that principal amount then being redeemed), on each Conversion Date (as to that principal amount then being converted), on each Optional 

  

 8 








 
Redemption Date (as to that principal amount then being redeemed) and on the Maturity Date (each such date, an “Interest Payment Date”) (if
any Interest Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash or duly authorized, validly issued, fully paid and non-assessable shares of Common Stock at the Interest
Conversion Rate (the dollar amount to be paid in shares, the “Interest Share Amount”) or a combination thereof; provided, however, that payment in shares of Common Stock may only occur if (i) all of the Equity
Conditions have been met (unless waived by the Holder in writing) during the 20 Trading Days immediately prior to the applicable Interest Payment Date (the “Interest Notice Period”) and through and including the date such shares of
Common Stock are issued to the Holder, (ii) the Company shall have given the Holder notice in accordance with the notice requirements set forth below and (iii) as to such Interest Payment Date, prior to such Interest Notice Period (but not
more than 5 Trading Days prior to the commencement of such Interest Notice Period), the Company shall have delivered to the Holder’s account with The Depository Trust Company a number of shares of Common Stock to be applied against such
Interest Share Amount equal to the quotient of (x) the applicable Interest Share Amount divided by (y) the then Conversion Price (the “Interest Conversion Shares”). 
 b) Company’s Election to Pay Interest in Kind. Subject to the terms and conditions herein, the decision whether to pay
interest hereunder in cash, shares of Common Stock or a combination thereof shall be at the discretion of the Company. Prior to the commencement of any Interest Notice Period, the Company shall deliver to the Holder a written notice of its election
to pay interest hereunder on the applicable Interest Payment Date either in cash, shares of Common Stock or a combination thereof and the Interest Share Amount as to the applicable Interest Payment Date, provided that the Company may indicate in
such notice that the election contained in such notice shall apply to future Interest Payment Dates until revised by a subsequent notice. During any Interest Notice Period, the Company’s election (whether specific to an Interest Payment Date or
continuous) shall be irrevocable as to such Interest Payment Date. Subject to the aforementioned conditions, failure to timely deliver such written notice to the Holder shall be deemed an election by the Company to pay the interest on such Interest
Payment Date in cash. At any time the Company delivers a notice to the Holder of its election to pay the interest in shares of Common Stock, the Company shall timely file a prospectus supplement pursuant to Rule 424 disclosing such election. The
aggregate number of shares of Common Stock otherwise issuable to the Holder on an Interest Payment Date shall be reduced by the number of Interest Conversion Shares previously issued to the Holder in connection with such Interest Payment Date.

 c) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30
calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has
been made. Payment of interest in shares of Common Stock (other than the Interest Conversion Shares issued prior to an Interest Notice Period) shall otherwise occur pursuant to Section 4(d)(ii) herein and, solely for purposes of the payment of
interest in shares, the Interest Payment Date shall be deemed the Conversion 

  

 9 








 
Date. Interest shall cease to accrue with respect to any principal amount converted, provided that the Company actually delivers the Conversion Shares within
the time period required by Section 4(d)(ii) herein. Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the
“Debenture Register”). Except as otherwise provided herein, if at any time the Company pays interest partially in cash and partially in shares of Common Stock to the holders of the Debentures, then such payment of cash shall be
distributed ratably among the holders of the then-outstanding Debentures based on their (or their predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement. 
 d) Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 18% per annum or the maximum rate permitted by applicable law (“Late Fees”) which shall accrue daily from the date such interest is due hereunder through and including the date of payment in full. Notwithstanding
anything to the contrary contained herein, if on any Interest Payment Date the Company has elected to pay accrued interest in the form of Common Stock but the Company is not permitted to pay accrued interest in Common Stock because it fails to
satisfy the conditions for payment in Common Stock set forth in Section 2(a) herein, then, at the option of the Holder, the Company, in lieu of delivering either shares of Common Stock pursuant to this Section 2 or paying the regularly
scheduled interest payment in cash, shall deliver, within three Trading Days of each applicable Interest Payment Date, an amount in cash equal to the product of (x) the number of shares of Common Stock otherwise deliverable to the Holder in
connection with the payment of interest due on such Interest Payment Date multiplied by (y) the highest VWAP during the period commencing on the Interest Payment Date and ending on the Trading Day prior to the date such payment is made. If any
Interest Conversion Shares are issued to the Holder in connection with an Interest Payment Date and are not applied against an Interest Share Amount, then the Holder shall promptly return such excess shares to the Company. 
 e) Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount of
this Debenture without the prior written consent of the Holder. 
 Section 3. Registration of Transfers and Exchanges.

 a) Different Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of
different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange. 
 b) Investment Representations. This Debenture has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations. 
  

 10 








 c) Reliance on Debenture Register. Prior to due presentment for transfer to the
Company of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving payment as herein provided and for
all other purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. 
 Section 4. Conversion. 
 a) Voluntary Conversion. At any time after
the Original Issue Date until this Debenture is no longer outstanding, this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion
limitations set forth in Section 4(c) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (a “Notice of Conversion”),
specifying therein the principal amount of this Debenture to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the
Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal
amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable
conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within 1 Business Day of delivery of such
Notice of Conversion. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted
principal amount of this Debenture may be less than the amount stated on the face hereof. 
 b) Conversion Price.
The conversion price in effect on any Conversion Date shall be equal to $4.00, subject to adjustment herein (the “Conversion Price”). 
 c) Conversion Limitations. 
 i. Issuance Limitations. Notwithstanding anything herein to the contrary, if the Company has not obtained Shareholder Approval, then the Company may not issue, upon conversion of this Debenture, a number of
shares of Common Stock which, when aggregated with any shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date (A) in connection with any Debentures issued pursuant to the Purchase Agreement,
(B) in connection with any Warrants issued pursuant to the Purchase Agreement and (C) in connection with any warrants issued to any registered broker-dealer as 

  

 11 








 
a fee in connection with the issuance of the Securities pursuant to the Purchase Agreement, would exceed
                    2 shares of Common Stock (subject to adjustment for forward and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable Maximum”). Each Holder shall be entitled to a portion of the
Issuable Maximum equal to the product of (I) and (II) where (I) is equal to the Issuable Maximum and (II) is the quotient obtained by dividing (x) the original principal amount of such Holder’s Debenture by (y) the aggregate
original principal amount of all Debentures issued on the Original Issue Date to all Holders. In addition, each Holder may allocate its pro-rata portion of the Issuable Maximum among Debentures and Warrants held by it in its sole discretion. Such
portion shall be adjusted upward ratably in the event a Holder no longer holds any Debentures or Warrants and the amount of shares issued to such Holder pursuant to such Holder’s Debentures and Warrants was less than such Holder’s pro-rata
share of the Issuable Maximum. For avoidance of doubt, unless and until any required Shareholder Approval is obtained and effective, warrants issued to any registered broker-dealer as a fee in connection with the Securities issued pursuant to the
Purchase Agreement as described in (C) above shall provide that such warrants shall not be allocated any portion of the Issuable Maximum and shall be unexercisable unless and until such Shareholder Approval is obtained and effective.

 ii. Holder’s Restriction on Conversion. The Company shall not effect any conversion of this Debenture, and a
Holder shall not have the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any
other person or entity acting as a group together with such Holder or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Debenture with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted principal amount of this Debenture beneficially owned by such Holder or any of its Affiliates and (B) exercise or conversion
of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Debentures or the Warrants)
beneficially owned by such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(c)(ii), beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(c)(ii) applies, the 


	 2
	 19.99% of the number of shares of Common Stock outstanding on the Trading Day immediately preceding the
date of the Purchase Agreement. 



  

 12 








 
determination of whether this Debenture is convertible (in relation to other securities owned by such Holder together with any Affiliates) and of which
principal amount of this Debenture is convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination of whether this Debenture may be converted (in
relation to other securities owned by such Holder together with any Affiliates) and which principal amount of this Debenture is convertible, in each case subject to such aggregate percentage limitations. To ensure compliance with this restriction,
each Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or
confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 4(c)(ii), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent notice by the Company or the Company’s transfer agent setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Debenture, by such Holder or its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable upon conversion of this Debenture held by the Holder. The Beneficial Ownership Limitation provisions of this Section 4(c)(ii) may be waived by such Holder, at the election of such Holder, upon not less than 61 days’ prior notice
to the Company, to change the Beneficial Ownership Limitation to 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture held by the
Holder and the provisions of this Section 4(c)(ii) shall continue to apply. Upon such a change by a Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not
be further waived by such Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(c)(ii) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this Debenture. 
  

 13 








 d) Mechanics of Conversion. 
 i. Conversion Shares Issuable Upon Conversion of Principal Amount. The number of shares of Common Stock issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y) the Conversion Price. 
 ii. Delivery of Certificate Upon Conversion. Not later than three Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares which, on or after the Effective Date, shall be free of restrictive legends and
trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Debenture (including, if the Company has given continuous
notice pursuant to Section 2(b) for payment of interest in shares of Common Stock at least 20 Trading Days prior to the date on which the Conversion Notice is delivered to the Company, shares of Common Stock representing the payment of accrued
interest otherwise determined pursuant to Section 2(a) but assuming that the Interest Payment Period is the 20 Trading Days period immediately prior to the date on which the Conversion Notice is delivered to the Company and excluding for such
issuance the condition that the Company deliver Interest Conversion Shares as to such interest payment) and (B) a bank check in the amount of accrued and unpaid interest (if the Company has elected or is required to pay accrued interest in
cash). On or after the Effective Date, the Company shall use its best efforts to deliver any certificate or certificates required to be delivered by the Company under this Section 4 electronically through the Depository Trust Company or another
established clearing corporation performing similar functions. 
 iii. Failure to Deliver Certificates. If in the case
of any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after the Conversion Date, the Holder shall be entitled to elect by written notice to the Company at
any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return
the Common Stock certificates representing the principal amount of this Debenture tendered for conversion to the Company. 
 iv. Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any 

  

 14 








 
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the
event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been
engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and the Company
posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of
the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed
conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the third Trading Day after the Conversion Date, the Company shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, for each $1000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after
such third Trading Day until such certificates are delivered. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof for the Company’s failure to deliver
Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. 
 v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such
certificate or certificates by the Share Delivery Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the
Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies 

  

 15 








 
available to or elected by the Holder) the amount by which (x) the Holder’s total purchase price (including any brokerage commissions) for the
Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell
order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount of the
attempted conversion or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(d)(ii). For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such
purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Debenture as required pursuant to the terms
hereof. 
 vi. Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve
and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided, free from preemptive rights or any
other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Debentures), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the
Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the outstanding principal amount of this Debenture and payment of interest hereunder. The Company covenants that all
shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be registered for public sale
in accordance with such Registration Statement. 
 vii. Fractional Shares. Upon a conversion hereunder the Company
shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the VWAP at such time. If the Company elects
not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the final fraction of a share, 1 whole share of Common Stock. 
  

 16 








 viii. Transfer Taxes. The issuance of certificates for shares of the Common Stock
on conversion of this Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Debenture so converted and the Company shall not be
required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has
been paid. 
 Section 5. Certain Adjustments. 
 a) Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (A) pays a stock
dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon conversion of, or payment of interest on, the Debentures); (B) subdivides outstanding shares of Common Stock into a larger number of shares; (C) combines (including by way of a reverse stock split) outstanding shares of Common
Stock into a smaller number of shares; or (D) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after
such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or re-classification. 
 b) Subsequent Equity Sales. If,
at any time while this Debenture is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues, any Common Stock or Common Stock
Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a
“Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower 

  

 17 








 
than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the
Conversion Price shall be reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this
Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than 1 Business Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating
therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company
provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such
Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion. 
 c) Subsequent Rights Offerings. If the Company, at any time while the Debenture is outstanding, shall issue rights, options or warrants to all holders of Common Stock (and not to Holders) entitling them to subscribe for or purchase
shares of Common Stock at a price per share that is lower than the VWAP on the record date referenced below, then the Conversion Price shall be multiplied by a fraction of which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock outstanding on the
date of issuance of such rights or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered (assuming delivery to the Company in full of all consideration payable upon exercise of such rights,
options or warrants) would purchase at such VWAP. Such adjustment shall be made whenever such rights or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such
rights, options or warrants. 
 d) Pro Rata Distributions. If the Company, at any time while this Debenture is
outstanding, distributes to all holders of Common Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security (other than the Common
Stock, which shall be subject to Section 5(b)), then in each such case the Conversion Price shall be adjusted by multiplying such Conversion Price in effect immediately prior to the record date fixed for determination of stockholders entitled
to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then fair market value at such record
date of the portion of such assets or evidence of indebtedness so distributed applicable to 1 outstanding share of the Common Stock as determined by the Board of Directors of the Company in good faith. In either case the adjustments shall be
described in a statement delivered to the Holder describing the portion of assets or evidences of indebtedness so distributed or such subscription 

  

 18 








 
rights applicable to 1 share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately
after the record date mentioned above. 
 e) Fundamental Transaction. If, at any time while this Debenture is
outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one transaction or a series of related transactions,
(C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the
Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such
Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the
holder of 1 share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of 1 share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder’s right to convert such debenture into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 5(e) and insuring that this Debenture (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
 f) Calculations. All calculations
under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding. 
  

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 g) Notice to the Holder. 
 i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the
Company shall promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. If the Company enters into a Variable Rate Transaction, despite
the prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised. 
 ii. Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger
to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this
Debenture, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Debenture Register, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as
of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this
Debenture during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice. 
 h) Other Adjustments. In the event that the average of each of the VWAPs for the 10 Trading Days immediately prior to the earlier of (i) May 14, 2007 and (ii) the date the Company’s obtains
Shareholder Approval (such earlier date, the “Reset Date” and such average of the 10 VWAPs immediately prior to the Reset Date, the “Reset Price”) is less than the then effective Conversion Price as of such Reset
Date, then the 

  

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Conversion Price shall be reduced to such Reset Price effective as of such Reset Date, subject to further adjustment as provided herein. For clarity, the
Conversion Price can only be adjusted downward pursuant to this Section 5(h). The Reset Date (and corresponding Reset Price) set forth in this Section 5(h) shall be extended for the number of calendar days during the period beginning on
the Original Issue Date and ending on the date that is the earlier of (x) May 14, 2007 and (y) the date the Company’s obtains Shareholder Approval in which (a) trading in the Common Stock is suspended by any Trading Market,
or (b) the Company’s registration statement on Form S-3, no. 333-138366 registering the resale of the shares of Common Stock underlying debentures and warrants of the Company issued on September 29, 2006 (the “September
Registration Statement”) is not effective or the prospectus included in such registration statement may not be used by the selling security holders named therein for the resale of the shares of Common Stock underlying such debentures and
warrants. By way of an example, if the prospectus included in the September Registration Statement is unavailable for 20 days prior to the date the Company obtains Shareholder Approval, and the Company obtains Shareholder Approval on April 30,
2007, the Reset Date would be extended to May 20, 2007, and the Reset Price would be 100% of such average of the 10 VWAPs immediately prior to May 20, 2007. 
 Section 6. Redemption and Forced Conversion. 
 a) Optional Redemption at Election of Company. Subject to the provisions of this Section 6, at any time after the 12-month anniversary of the Effective Date, the Company may deliver a notice to the Holder (an “Optional
Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem some or all of the then outstanding principal amount of this Debenture
for (i) cash in an amount equal to the Optional Redemption Amount and (ii) warrants to purchase shares of Common Stock in an amount equal to the principal amount of this Debenture being redeemed pursuant to such Optional Redemption divided
by the then applicable Conversion Price, which warrants shall be immediately exercisable and shall have a term of exercise equal to the earlier of (x) 5 years following their issuance or (y) a period of time following the effective date of
the registration statement covering the resale of such warrants equal to the amount of time between the Optional Redemption Notice Date and the Maturity Date (by way of an example, if the Maturity Date is on the three year anniversary of the
Original Issue Date and an Optional Redemption Notice Date is on the two year anniversary of the Original Issue Date, the exercise term for purposes of this clause (y) would be one year following the effective date of the registration statement
covering the resale of the shares of Common Stock underlying such warrants), an exercise price equal to the average of the VWAPs for the 20 Trading Days immediately prior to the Optional Redemption Date (subject to adjustment for forward and reverse
stock splits, stock dividends, recapitalizations and the like) and otherwise be in the form of warrant attached to the Purchase Agreement as Exhibit C (such warrants, the “Optional Redemption Warrants”), on the 20th Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date” and such
redemption, the “Optional Redemption”). The Optional Redemption 

  

 21 








 
Amount is payable in full on the Optional Redemption Date. The Company may only effect an Optional Redemption if (i) each of the Equity Conditions shall
have been met on each Trading Day during the period commencing on the Optional Redemption Notice Date through to the Optional Redemption Date and through and including the date payment of the Optional Redemption Amount is actually made and
(ii) the aggregate principal amount of Debentures subject to such Optional Redemption held by the Holder and the other holders of Debentures is $5,000,000 or more (or such lesser aggregate principal amount of Debentures as is then outstanding).
If any of the Equity Conditions shall cease to be satisfied at any time during the 20 Trading Day period, then the Holder may elect to nullify the Optional Redemption Notice by notice to the Company within 3 Trading Days after the first day on which
any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents, the Company is obligated to notify the Holder of the non-existence of an Equity Condition, such notice period shall be extended to the third
Trading Day after proper notice from the Company) in which case the Optional Redemption Notice shall be null and void, ab initio. The Holder may convert, pursuant to Section 4(a), any principal amount of this Debenture subject to an
Optional Redemption at any time prior to the date that the Optional Redemption Amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder are due and paid in full. Unless otherwise indicated by the
Holder in the applicable Notice of Conversion, any principal amount of this Debenture converted during the period from the Optional Redemption Notice Date until the date the Optional Redemption Amount is paid in full shall be first applied to the
principal amount subject to such Optional Redemption. The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the Optional Redemption Notice through the date all amounts (including Optional
Redemption Warrants) owing thereon are due and paid in full. 
 b) Monthly Redemption. On each Monthly Redemption Date,
the Company shall redeem the Monthly Redemption Amount (the “Monthly Redemption”). The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid in cash; provided, however, as to any Monthly
Redemption and upon 20 Trading Days’ prior written irrevocable notice (the “Monthly Redemption Notice”), in lieu of a cash redemption payment the Company may elect to pay all or part of a Monthly Redemption Amount in Conversion
Shares (such dollar amount to be paid on a Monthly Redemption Date in Conversion Shares, the “Monthly Redemption Share Amount”) based on a conversion price equal to the lesser of (i) the then Conversion Price and (ii) 90%
of the average of the VWAPs for the 20 consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable Monthly Redemption Date (subject to adjustment for any stock dividend, stock split, stock combination or other
similar event affecting the Common Stock during such 20 Trading Day period) (the price calculated during the 20 Trading Day period immediately prior to the Monthly Redemption Date, the “Monthly Conversion Price” and such 20 Trading
Day period, the “Monthly Conversion Period”); provided, further, that the Company may not pay the Monthly Redemption Amount in Conversion Shares unless (x) aggregate Monthly Redemption Amount under all Debentures
as to such Monthly Redemption is less than 15% of the total dollar trading volume of the Common Stock for the 20 Trading Days prior to the 

  

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applicable Monthly Redemption Date, (y) from the date the Holder receives the duly delivered Monthly Redemption Notice through and until the date such
Monthly Redemption is paid in full, the Equity Conditions have been satisfied, unless waived in writing by the Holder, and (z) as to such Monthly Redemption, prior to such Monthly Conversion Period (but not more than 5 Trading Days prior to the
commencement of the Monthly Conversion Period), the Company shall have delivered to the Holder’s account with The Depository Trust Company a number of shares of Common Stock to be applied against such Monthly Redemption Share Amount equal to
the quotient of (x) the applicable Monthly Redemption Share Amount divided by (y) the then Conversion Price (the “Pre-Redemption Conversion Shares”). The Holder may convert, pursuant to Section 4(a), any principal
amount of this Debenture subject to a Monthly Redemption at any time prior to the date that the Monthly Redemption Amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder are due and paid in full.
Unless otherwise indicated by the Holder in the applicable Notice of Conversion, any principal amount of this Debenture converted during the applicable Monthly Conversion Period until the date the Monthly Redemption Amount is paid in full shall be
first applied to the principal amount subject to the Monthly Redemption Amount payable in cash and then to the Monthly Redemption Share Amount. Any principal amount of this Debenture converted during the applicable Monthly Conversion Period in
excess of the Monthly Redemption Amount shall be applied against the last principal amount of this Debenture scheduled to be redeemed hereunder, in reverse time order from the Maturity Date; provided, however, if any such conversion is
applied against such Monthly Redemption Amount, the Pre-Redemption Conversion Shares, if any were issued in connection with such Monthly Redemption or were not already applied to such conversions, shall be first applied against such conversion. The
Company covenants and agrees that it will honor all Notice of Conversions tendered up until such amounts are paid in full. The Company’s determination to pay a Monthly Redemption in cash, shares of Common Stock or a combination thereof shall be
applied ratably to all of the holders of the then outstanding Debentures based on their (or their predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement. At any time the Company delivers a notice to the Holder of its
election to pay the Monthly Redemption Amount in shares of Common Stock, the Company shall file a prospectus supplement pursuant to Rule 424 disclosing such election. Each Monthly Redemption Notice shall specifically set forth the manner in which
the Company intends to pay the applicable Monthly Redemption Amount (i.e., the amount to be paid in cash and/or the amount to be paid in Common Stock). 
 c) Redemption upon a Change in Control. Subject to the provisions of this Section 6(c), at any time after the date hereof, in the event of a Change of Control Transaction, in addition to any other rights
hereunder, the Company shall have the right, within three Trading Days of the date it announces it has entered into a Change of Control Transaction, to deliver the Holder a written notice (a “Change in Control Optional Redemption
Notice” and the date such notice is deemed delivered hereunder, the “Change in Control Optional Redemption Notice Date”) of its irrevocable election to redeem for an amount (i) in cash equal to the Change in Control
Optional Redemption Amount plus (ii) warrants to purchase shares of Common Stock in an amount equal to the 

  

 23 








 
principal amount of this Debenture being redeemed pursuant to such Change in Control Optional Redemption divided by the then applicable Conversion Price,
which warrants shall be immediately exercisable and shall have a term of exercise equal to the earlier of (x) 5 years following their issuance or (y) a period of time following the effective date of the registration statement covering the
resale of such warrants equal to the amount of time between the Change in Control Optional Redemption Notice Date and the Maturity Date (by way of an example, if the Maturity Date is on the three year anniversary of the Original Issue Date and a
Change in Control Optional Redemption Notice Date is on the two year anniversary of the Original Issue Date, the exercise term for purposes of this clause (y) would be one year following the effective date of the registration statement covering
the resale of the shares of Common Stock underlying such warrants), an exercise price equal to the average of the VWAPs for the 20 Trading Days immediately prior to the Change in Control Optional Redemption Date (subject to adjustment for forward
and reverse stock splits, stock dividends, recapitalizations and the like) and otherwise be in the form of warrant attached to the Purchase Agreement as Exhibit C (such warrants, the “Change in Control Optional Redemption
Warrants”), on the 20th Trading Day following the Change in Control Optional Redemption Notice Date (such
date, the “Change in Control Optional Redemption Date” and such redemption, the “Change in Control Optional Redemption”). The Change in Control Optional Redemption Amount and Change in Control Optional Redemption
Warrants are due in full on the Change in Control Optional Redemption Date. The Company may only effect a Change in Control Optional Redemption if during the period commencing on the Change in Control Optional Redemption Notice Date through to the
Change in Control Optional Redemption Date and through and including the date such Change in Control Optional Redemption Amount is paid to the Holder, each of the Equity Conditions shall have been met, unless waived by the Holder. If any of the
Equity Conditions shall cease to be satisfied at any time during the required period, then the Holder may elect to nullify the Change in Control Optional Redemption Notice by notice to the Company within 3 Trading Days after the first day on which
any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents, the Company is obligated to notify the Holder of the non-existence of an Equity Condition, such notice period shall be extended to the third
Trading Day after proper notice from the Company) in which case the Change in Control Optional Redemption Notice shall be null and void, ab initio. The Holder may convert, pursuant to Section 4(a), any principal amount of this Debenture subject
to a Change in Control Optional Redemption at any time prior to the date that the Change in Control Optional Redemption Amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder are due and paid in
full. Unless otherwise indicated by the Holder in the applicable Notice of Conversion, any principal amount of this Debenture converted during the period from the Change in Control Optional Redemption Notice Date until the date the Change in Control
Optional Redemption Amount is paid in full shall be first applied to the principal amount subject to such Change in Control Optional Redemption. The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of
delivery of the Change in Control Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. 
  

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 d) Redemption Procedure. The payment of cash or issuance of Common Stock, as
applicable, pursuant to an Optional, Monthly or Change in Control Optional Redemption shall be payable on the Optional, Monthly or Change in Control Optional Redemption Date, as applicable. If any portion of the payment or warrants issuable pursuant
to an Optional, Monthly or Change in Control Optional Redemption shall not be paid by the Company by the applicable due date, interest shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted
by applicable law until such amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of the Optional, Monthly or Change in Control Optional Redemption Amount remains unpaid after such date, the Holder may
elect, by written notice to the Company given at any time thereafter, to invalidate such Optional, Monthly or Change in Control Optional Redemption, ab initio, and, with respect to the Company’s failure to honor the Optional or
Change in Control Optional Redemption, the Company shall have no further right to exercise such Optional or Change in Control Optional Redemption. Notwithstanding anything to the contrary in this Section 6, the Company’s determination to
redeem in cash or its elections under Section 6 shall be applied ratably among the Holders of Debentures. The Holder may elect to convert or exchange the outstanding principal amount of the Debenture pursuant to Section 4 prior to actual
payment for any redemption under this Section 6 by the delivery of a Notice of Conversion or Notice of Exchange. 
 e)
Forced Conversion. Notwithstanding anything herein to the contrary, if after the Effective Date, the VWAP for each of any 20 consecutive Trading Days, which period shall have commenced only after the Effective Date (such period the
“Threshold Period”), exceeds $10.00 (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the Original Issue
Date), the Company may, within 1 Trading Day after the end of any such Threshold Period, deliver a written notice to the Holder (a “Forced Conversion Notice” and the date such notice is delivered to the Holder, the “Forced
Conversion Notice Date”) to cause the Holder to convert all or part of up to 50% of the then outstanding principal amount of this Debenture (100% of the outstanding principal amount of this Debentures if the VWAP for each Trading Day during
a Threshold Period exceeds 300% of the then effective Conversion Price (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the Original
Issue Date)) plus, if so specified in the Forced Conversion Notice, accrued but unpaid interest, liquidated damages and other amounts owing to the Holder under this Debenture, it being agreed that the “Conversion Date” for purposes of
Section 4 shall be deemed to occur on the twentieth Trading Day following the Forced Conversion Notice Date (such twentieth Trading Day, the “Forced Conversion Date”). The Company may not deliver a Forced Conversion Notice, and
any Forced Conversion Notice delivered by the Company shall not be effective, unless all of the Equity Conditions are met on each Trading Day occurring during the applicable Threshold Period through and including the later of the Forced Conversion
Date and the Trading Day after the date such Conversion Shares pursuant to such conversion are delivered to the Holder. Any Forced Conversion shall be applied ratably to all Holders based on their initial purchases of Debentures pursuant to 

  

 25 








 
the Purchase Agreement, provided that any voluntary conversions by a Holder shall be applied against such Holder’s pro-rata allocation, thereby
decreasing the aggregate amount forcibly converted hereunder if only a portion of this Debenture is forcibly converted. For purposes of clarification, a Forced Conversion shall be subject to all of the provisions of Section 4, including,
without limitation, the provision requiring payment of liquidated damages and limitations on conversions. 
 Section 7.
Negative Covenants. As long as any portion of this Debenture remains outstanding, unless the holders of at least 66% of the aggregate principal amount of the then outstanding Debentures shall have otherwise given prior written consent, the
Company shall not, and shall not permit any of its subsidiaries (whether or not a Subsidiary on the Original Issue Date) to, directly or indirectly: 
 a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including but not limited to, a guarantee, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; 
 b) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
therefrom; 
 c) amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in
any manner that materially and adversely affects any rights of the Holder; 
 d) repay, repurchase or offer to repay,
repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common Stock Equivalents other than as to (a) the Conversion Shares or Warrant Shares as permitted or required under the Transaction
Documents, (b) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term
of this Debenture, (c) regularly scheduled monthly redemption, interest and maturity date payments under the Debentures and the September Debentures, (d) any payment made to the holder of a Debenture or September Debenture pursuant to the
terms of any Transaction Document (as defined in the Purchase Agreement and the September 2006 Purchase Agreement) that has accrued and vested as to such holder, but not other holders of Debentures or September Debentures (such as liquidated damages
under the Registration Rights Agreement which may be payable to the holders of the Debentures, but not the September Debenture Holders), (e) any other distributions or payments made to the holders of the Debentures and the September Debentures,
provided such payments are made on a pro-rata basis based on the then aggregate outstanding principal amounts owed under such debentures, (f) regularly scheduled principal, interest and other required payments under any other Permitted
Indebtedness (other than the September Debentures) and (g) the payment of Permitted Indebtedness (other than the September Debentures) owing to Laurus Master Fund, Ltd. with and to the extent of proceeds from any Capital Raising Transaction by
the Company following the Original Issue Date; 
  

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 e) pay cash dividends or distributions on any equity or debt securities of the Company or
otherwise redeem or make a payment under any equity or debt securities of the Company other than: (a) regularly scheduled monthly redemption, interest and maturity date payments under the Debentures and the September Debentures, (b) any
payment made to the holder of a Debenture or September Debenture pursuant to the terms of any Transaction Document (as defined in the Purchase Agreement and the September 2006 Purchase Agreement) that has accrued and vested as to such holder, but
not other holders of Debentures or September Debentures (such as liquidated damages under the Registration Rights Agreement which may be payable to the holders of the Debentures, but not the September Debenture Holders), (c) any other
distributions or payments made to the holders of the Debentures and the September Debentures, provided such payments are made on a pro-rata basis based on the then aggregate outstanding principal amounts owed under such debentures,
(d) regularly scheduled principal, interest and other required payments under any other Permitted Indebtedness (other than the September Debentures) or (e) the payment of Permitted Indebtedness (other than the September Debentures) owing
to Laurus Master Fund, Ltd. with and to the extent of proceeds from any Capital Raising Transaction by the Company following the Original Issue Date; 
 f) enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission, unless such transaction is made on an arm’s-length basis and
expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or 
 g) enter into any agreement with respect to any of the foregoing. 
 Section 8. Events of Default.

 a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for
such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body): 

i. any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other
amounts owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other
default under clause (B) above, is not cured within 3 Trading Days; 
  

 27 








 ii. the Company shall fail to observe or perform any other covenant or agreement
contained in the Debentures (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below) which failure is not cured, if possible to cure,
within the earlier to occur of (A) 10 Trading Days after notice of such failure sent by the Holder or by any other Holder and (B) 15 Trading Days after the Company has become or should have become aware of such failure; 
 iii. a default or event of default by the Company (subject to any grace or cure period provided in the applicable agreement, document or
instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi) below);

 iv. any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant
hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made; 
 v. the Company or any Significant Subsidiary shall be subject to a Bankruptcy Event; 
 vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that
(a) involves an obligation greater than $150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable; 
 vii. the Common Stock shall not be eligible for listing or quotation for trading on a
Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five Trading Days; 
 viii.
the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or in excess of 40% of its assets in one transaction or a series of related transactions (whether or not such sale
would constitute a Change of Control Transaction); 
 ix. a Registration Statement shall
not have been declared effective by the Commission on or prior to the 180th calendar day after the Closing Date;

  

 28 








 x. if, during the Effectiveness Period (as defined in the Registration Rights Agreement),
either (a) the effectiveness of the Registration Statement lapses for any reason or (b) the Holder shall not be permitted to resell Registrable Securities (as defined in the Registration Rights Agreement) under the Registration Statement
for a period of more than 20 consecutive Trading Days or 30 non-consecutive Trading Days during any 12 month period; provided, however, that if the Company is negotiating a merger, consolidation, acquisition or sale of all or
substantially all of its assets or a similar transaction and, in the written opinion of counsel to the Company, the Registration Statement would be required to be amended to include information concerning such pending transaction(s) or the parties
thereto which information is not available or may not be publicly disclosed at the time, the Company shall be permitted an additional 10 consecutive Trading Days during any 12 month period pursuant to this Section 8(a)(x); 
 xi. the Company shall fail for any reason to deliver certificates to a Holder prior to the fifth Trading Day after a Conversion Date or
any Forced Conversion Date pursuant to Section 4(d) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Debentures
in accordance with the terms hereof; 
 xii. any Person shall breach any voting agreement delivered to the initial Holders
pursuant to Section 2.2(a) of the Purchase Agreement; or 
 xiii. any monetary judgment, writ or similar final process
shall be entered or filed against the Company, any Subsidiary or any of their respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 45
calendar days. 
 b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount
of this Debenture, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory
Default Amount. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 18% per
annum or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the Company. In connection with such acceleration described
herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and
remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder 

  

 29 








 
shall have all rights as a holder of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such
rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. 
 Section 9.
Miscellaneous. 
 a) Notices. Any and all notices or other communications or deliveries to be provided by the
Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth
above, facsimile number             , Attention:                      or
such other facsimile number or address as the Company may specify for such purpose by notice to the Holder delivered in accordance with this Section 9. Any and all notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Company, or
if no such facsimile number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number specified in this Section 9 prior to 5:30 p.m. (New York City time), (ii) the date immediately following the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in this Section 9 between 5:30 p.m. (New York City time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. 
 b) Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a
direct debt obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein. 
 c) Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and
deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost,
stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company. 
 d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be
governed by and construed and 

  

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enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that
all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Debenture or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Debenture, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding. 
 e) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture. Any waiver by the Company or the Holder must be in writing. 
 f) Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall
remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due
hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or
any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, 

  

 31 








 
now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully
do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the
execution of every such as though no such law has been enacted. 
 g) Next Business Day. Whenever any payment or other
obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day. 
 h) Headings. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be deemed to limit or affect any of the provisions hereof. 
 i) Assumption. Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior
to such Fundamental Transaction, all of the obligations of the Company under this Debenture and the other Transaction Documents pursuant to written agreements in form and substance satisfactory to the Holder (such approval not to be unreasonably
withheld or delayed) and (ii) issue to the Holder a new debenture of such successor entity evidenced by a written instrument substantially similar in form and substance to this Debenture, including, without limitation, having a principal amount
and interest rate equal to the principal amount and the interest rate of this Debenture and having similar ranking to this Debenture, which shall be satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed). The
provisions of this Section 9(i) shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations of this Debenture. 
 ********************* 
  

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 IN WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized
officer as of the date first above indicated. 
  

			
	ACCENTIA BIOPHARMACEUTICALS, INC.
		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	


  

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 ANNEX A 
 NOTICE OF CONVERSION 
 The undersigned hereby elects to convert principal under the 8% Convertible
Debenture due February     , 2011 of Accentia Biopharmaceuticals, Inc., a Florida corporation (the “Company”), into shares of common stock, par value $.001 per share (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto
and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. 
 By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not
exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d) of the Exchange Act. 
 The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock. 
 Conversion calculations: 
  

	
	 Date to Effect Conversion:

	
	 Principal Amount of Debenture to be Converted:

	
	 Payment of Interest in Common Stock      yes      no

	             If yes,
$             of Interest Accrued on Account of
             Conversion at Issue.

	
	 Number of shares of Common Stock to be issued:

	
	 Signature:

	
	 Name:

	
	 Address:



  

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 Schedule 1 
 CONVERSION SCHEDULE 
 The 8% Convertible Debentures due on February     , 2011 in the
aggregate principal amount of $             are issued by Accentia Biopharmaceuticals, Inc. This Conversion Schedule reflects conversions made under Section 4 of the above
referenced Debenture. 
 Dated: 
  

							
	 Date of Conversion
(or for first
entry,
Original Issue Date)
	 	 Amount of
Conversion
	 	 Aggregate
Principal
Amount
Remaining
Subsequent
to
Conversion
(or original
Principal
Amount)
	 	 Company Attest


  

 35 








 EXHIBIT B 
 REGISTRATION RIGHTS AGREEMENT 
 This Registration Rights Agreement (this
“Agreement”) is made and entered into as of February 27, 2007, among Accentia Biopharmaceuticals, Inc., a Florida corporation (the “Company”) and the several purchasers signatory hereto (each such purchaser, a
“Purchaser” and, collectively, the “Purchasers”). 
 This Agreement is made pursuant to the Securities
Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the “Purchase Agreement”). 
 The
Company and each Purchaser hereby agrees as follows: 
 1. Definitions 
 Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
 “Advice” shall have the meaning set forth in Section 6(d). 
 “Effectiveness Date” means, with respect to the initial Registration Statement required to be filed hereunder, the 90th calendar day following the date hereof (or, in the event of a “review” by the Commission, the 135th calendar day following the date hereof) and with respect to any additional Registration Statements which may be required pursuant to Section 3(c), the 90th calendar day following the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement is
required hereunder (the 120th calendar day in the case of a review by the Commission of such additional Registration
Statement); provided, however, that in the event the Company is notified by the Commission that one of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness
Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates required above. 
 “Effectiveness Period” shall have the meaning set forth in Section 2(a). 
 “Event” shall have the meaning set forth in Section 2(b). 
 “Event Date” shall have the meaning set forth in Section 2(b). 
 “Filing Date” means, with respect to the initial Registration Statement required
hereunder, the 30th calendar day following the date hereof and, with respect to any additional Registration
Statements which may be required pursuant to Section 3(c), the 30th calendar day following the date on which
the Company first knows, or reasonably should have known, that such additional Registration Statement is required hereunder. 
  

 1 








 “Holder” or “Holders” means the holder or holders, as
the case may be, from time to time of Registrable Securities. 
 “Indemnified Party” shall have the meaning
set forth in Section 5(c). 
 “Indemnifying Party” shall have the meaning set forth in
Section 5(c). 
 “Losses” shall have the meaning set forth in Section 5(a). 
 “Plan of Distribution” shall have the meaning set forth in Section 2(a). 
 “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that
includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus. 
 “Registrable Securities” means
(i) all of the shares of Common Stock issuable upon conversion in full of the Debentures, (ii) all shares of Common Stock issuable as interest or principal on the Debentures assuming all permissible interest and principal payments are made
in shares of Common Stock and the Debentures are held until maturity, (iii) all Warrant Shares, (iv) shares of Common Stock underlying warrants issuable pursuant to Section 6 of the Debentures, (v) any additional shares of Common
Stock issuable in connection with any anti-dilution provisions in the Debentures or the Warrants (including any such warrants issuable pursuant to Section 6 of the Debentures) (in each case, without giving effect to any limitations on
conversion set forth in the Debenture or limitations on exercise set forth in the Warrant) and (vi) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the
foregoing. 
 “Registration Statement” means the registration statements required to be filed hereunder and
any additional registration statements contemplated by Section 3(c), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. 
 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule. 
  

 2 








 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
 “Selling Shareholder Questionnaire” shall have the meaning set forth in Section 3(a). 
 2. Shelf Registration 
 (a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities on such Filing Date for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith) and shall contain (unless otherwise directed by at least an 75% majority in interest of the Holders) substantially the “Plan of Distribution” attached hereto as Annex A provided such Plan of
Distribution section of the Registration Statement shall be amended to the extent required to respond to comments received by the Company from the Commission, provided further that any such amendments shall be reasonably acceptable to the Holders.
Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement have been sold, or may be sold
without volume restrictions pursuant to Rule 144(k), as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness Period”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. New York City time on a Trading Day. The Company shall immediately notify the Holders via facsimile of the
effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of a Registration Statement. The Company shall, by 9:30
a.m. New York City time on the Trading Day after the Effective Date (as defined in the Purchase Agreement), file a final Prospectus with the Commission as required by Rule 424. Failure to so notify the Holder within 1 Trading Day of such
notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(b). 
 (b) If: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement without affording the Holders the opportunity 

  

 3 








 
to review and comment on the same as required by Section 3(a) herein, the Company shall be deemed to have not satisfied this clause (i)), or
(ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever
is earlier) by the Commission that a Registration Statement will not be “reviewed,” or not subject to further review unless the Company is required to include its next quarterly or annual financial statements prior to the expiration of
such five Trading Days in which case such date (if later) shall be the earlier of the 10th day following the earlier
of (y) the date such financial statements are filed and (z) the date the applicable quarterly or annual financial statements are required to be filed with the Commission (without regard to any extensions), or (iii) prior to its
Effectiveness Date, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within 15 calendar days after the receipt of comments by or notice
from the Commission that such amendment is required in order for a Registration Statement to be declared effective, or (iv) a Registration Statement filed or required to be filed hereunder is not declared effective by the Commission by its
Effectiveness Date, or (v) after the Effectiveness Date, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or the Holders are otherwise not
permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than 15 consecutive calendar days or more than an aggregate of 30 calendar days during any 12-month period (which need not be consecutive calendar days) (any
such failure or breach being referred to as an “Event”, and for purposes of clause (i) or (iv) the date on which such Event occurs, or for purposes of clause (ii) the date on which such five Trading Day period is
exceeded, or for purposes of clause (iii) the date which such 15 calendar day period is exceeded, or for purposes of clause (v) the date on which such 15 or 30 calendar day period, as applicable, is exceeded being referred to as
“Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have
been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 2% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any Registrable Securities then held by such Holder (calculated as if all convertible securities had been fully converted). The parties agree that (1) the Company shall not be liable for liquidated damages under this
Agreement with respect to any Warrants or Warrant Shares, (2) in no event shall the Company be liable for liquidated damages under this Agreement in excess of 2% of the aggregate Subscription Amount of the Holders in any 30-day period,
(3) the maximum aggregate liquidated damages payable to a Holder under this Agreement shall be 24% of the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement and (4) in the case of an Event Date described
in clause (iv) above, in no event shall the Company be liable for liquidated damages under this Agreement with respect to Registrable Securities that are subject to an effective Registration Statement on such Event Date. If the Company fails to
pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such 
  

 4 








 
lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due
until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event. 
 3. Registration Procedures. 
 In
connection with the Company’s registration obligations hereunder, the Company shall: 
 (a) Not less than three Trading
Days prior to the filing of each Registration Statement and not less than one Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than (A) those incorporated or deemed to be incorporated by reference and
(B) prospectus supplements that contain nothing other than information that the Company has included or will include in its prior or simultaneous current or periodic report filings with the Commission) will be subject to the review of such
Holders and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall
reasonably object in good faith, provided that the Company is notified of such objection in writing no later than 3 Trading Days after the Holders have been so furnished copies of a Registration Statement or 1 Trading Day after the Holders have been
so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Shareholder
Questionnaire”) not less than three Trading Days prior to the Filing Date or by the end of the third Trading Day following the date on which such Holder receives draft materials in accordance with this Section. 
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of
this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment
thereto and provide as promptly as reasonably possible to 

  

 5 








 
the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that the Company may
excise any information contained therein which would constitute material non-public information as to any Holder which has not executed a confidentiality agreement with the Company); and (iv) comply in all material respects with the provisions
of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended
methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented. 
 (c) If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as
soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities. 
 (d) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one Trading Day prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement; and (C) with respect to a Registration
Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or
for additional information; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities
for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration
Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (vi) the occurrence or existence of any pending corporate development with respect to the Company that the
Company believes 

  

 6 








 
may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a
Registration Statement or Prospectus, provided that any and all of such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure by a Holder is required by law; provided,
further, that notwithstanding each Holder’s agreement to keep such information confidential, the Holders make no acknowledgement that any such information is material, non-public information. 
 (e) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. 
 (f) Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
 (g) Subject to the
terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d). 
 (h) The Company shall effect a filing with respect to the public offering contemplated by the Registration Statement (an “Issuer Filing”) with the National Association of Securities Dealers, Inc. (“NASD”)
Corporate Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) within one Trading Day of the date that the Registration Statement is first filed with the Commission and pay the filing fee required by such Issuer Filing. The Company shall use
commercially reasonable efforts to pursue the Issuer Filing until the NASD issues a letter confirming that it does not object to the terms of the offering contemplated by the Registration Statement. A copy of the Issuer Filing and all related
correspondence with respect thereto shall be provided to FWS. 
 (i) Prior to any resale of Registrable Securities by a
Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction 

  

 7 








 
where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent
to service of process in any such jurisdiction. 
 (j) If requested by the Holders, cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request. 
 (k) Upon the occurrence of any event contemplated by this Section 3, as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse
consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will 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, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(k) to suspend the availability of a Registration Statement and Prospectus, subject
to the payment of partial liquidated damages pursuant to Section 2(b), for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12 month period. 
 (l) Comply with all applicable rules and regulations of the Commission. 
 (m) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the Common Stock. During any periods that the Company is unable to meet its obligations hereunder with
respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request or a completed Selling Shareholder Questionnaire as described in
Section 3(a) above, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such
information is delivered to the Company, and the Company shall be permitted to exclude such Holder from the Registration Statement, provided that as soon as such information and/or questionnaire is furnished, the Company shall use its best efforts
to include such Holder on the Registration Statement after filing. 
  

 8 








 4. Registration Expenses. All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation,
(i) all registration and filing fees (including, without limitation, fees and expenses) (A) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (B) in compliance
with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities) and (C) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable
Securities with NASD Regulation, Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of
any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders. 
 5.
Indemnification. 
 (a) Indemnification by the Company. The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a
margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, shareholders, partners, agents and employees (and any other Persons with a
functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, 

  

 9 








 
arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any
form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or
omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being
understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus after
the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. 
 (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all
Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to
the Company specifically for inclusion in such Registration Statement or such Prospectus or (ii) to the extent that such information relates to such Holder’s proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or 

  

 10 








 
defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
 (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to
assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party. 
 An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably
believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the
expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding. 
 Subject to the terms of this Agreement, all
reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially determined to be not entitled to indemnification hereunder. 
  

 11 








 (d) Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 
 The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
 6. Miscellaneous. 
 (a)
Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law
and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a
remedy at law would be adequate. 
  

 12 








 (b) No Piggyback on Registrations. Except as set forth on Schedule 6(b) attached hereto,
neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statements other than the Registrable Securities. The Company shall not file any
other registration statements until the initial Registration Statement is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from filing amendments to registration statements filed prior to the
date of this Agreement. 
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement. 
 (d) Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through
(vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may
have been supplemented or amended) may be resumed. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as it practicable. The Company agrees and acknowledges that any periods during which the
Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(b). 
 (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company
shall send to each Holder a written notice of such determination and, if within fifteen days after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 6(e) that are eligible for resale pursuant to
Rule 144(k) promulgated under the Securities Act or that are the subject of a then effective Registration Statement. 
 (f) Amendments and
Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and the Holders of 66% or more of the then outstanding 

  

 13 








 
Registrable Securities. If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance
with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted
from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence. 
 (g) Notices. Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement. 
 (h) Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or
obligations hereunder without the prior written consent of all of the Holders of the then-outstanding Registrable Securities. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase
Agreement. 
 (i) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor
shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to
any Person that have not been satisfied in full. 
 (j) Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. 
 (k) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

 (l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

  

 14 








 (m) Severability. If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable. 
 (n) Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and
shall not be deemed to limit or affect any of the provisions hereof. 
 (o) Independent Nature of Holders’ Obligations and
Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. 
 ******************** 
  

 15 








 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	ACCENTIA BIOPHARMACEUTICALS, INC.
		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	


 [SIGNATURE PAGE OF HOLDERS FOLLOWS] 
  

 16 








 [SIGNATURE PAGE OF HOLDERS TO ABPI RRA] 
 Name of Holder:
                                        
                                        
                 
 Signature of Authorized Signatory of Holder:
                                        
                                        
             
 Name of Authorized Signatory:
                                        
                                        
             
 Title of Authorized Signatory:
                                        
                                        
               
 [SIGNATURE PAGES CONTINUE] 
  

 17 








 Annex A 
 Plan of Distribution 
 Each Selling Stockholder (the “Selling Stockholders”) of the
common stock and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on the Nasdaq Global Market or any other stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling shares: 
  

	 	•	 	 ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 


  

	 	•	 	 block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the
transaction; 


  

	 	•	 	 purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 


  

	 	•	 	 an exchange distribution in accordance with the rules of the applicable exchange; 


  

	 	•	 	 privately negotiated transactions; 


  

	 	•	 	 settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; 


  

	 	•	 	 broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 


  

	 	•	 	 through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; 


  

	 	•	 	 a combination of any such methods of sale; or 


  

	 	•	 	 any other method permitted pursuant to applicable law. 


 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus. 
 Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with NASDR IM-2440. 
  

 18 








 In connection with the sale of the common stock or interests therein, the Selling Stockholders may enter
into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The Selling Stockholders may also sell shares of the
common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
 The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company
that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the Common Stock. In no event shall any broker-dealer receive fees, commissions and markups which, in the aggregate, would
exceed eight percent (8%). 
 The Company is required to pay certain fees and expenses incurred by the Company incident to the registration
of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. 
 Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than
under this prospectus. There is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the Selling Stockholders. 
 We agreed to keep this prospectus effective until the earlier of (i) the date on which the shares may be resold by the Selling Stockholders without registration and without regard to any volume limitations by
reason of Rule 144(k) under the Securities Act or any other rule of similar effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale shares
will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification requirement is available and is complied with. 
  

 19 








 Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of
the resale shares may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the Selling Stockholders
or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance
with Rule 172 under the Securities Act). 
  

 20 








 Annex B 
 ACCENTIA BIOPHARMACEUTICALS, INC. 
 Selling Securityholder Notice and Questionnaire 

The undersigned beneficial owner of common stock (the “Registrable Securities”) of Accentia Biopharmaceuticals, Inc., a Florida
corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement
(the “Registration Rights Agreement”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement. 
 Certain legal consequences arise from being
named as a selling securityholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of
being named or not being named as a selling securityholder in the Registration Statement and the related prospectus. 
 NOTICE

 The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities hereby elects to include
the Registrable Securities owned by it in the Registration Statement. 
  

 21 








 The undersigned hereby provides the following information to the Company and represents and warrants that such
information is accurate: 
 QUESTIONNAIRE 
 1. Name. 
  

	 	(a)	Full Legal Name of Selling Securityholder 


	
	  
 


	 	(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held: 


	
	  
 


	 	(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the
questionnaire): 


	
	  
 

 2. Address for Notices to Selling Securityholder: 
  

			
	  

	  

	  

	Telephone:	  	  

	Fax:	  	  

	Contact Person:	  	  


 3. Broker-Dealer Status: 
  

	 	(a)	Are you a broker-dealer? 

 Yes   ̈    No   ̈ 

 

	 	(b)	If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company. 

 Yes   ̈    No   ̈ 
  

	 	Note:	If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  

 22 









	 	(c)	Are you an affiliate of a broker-dealer? 

 Yes   ̈    No   ̈ 
  

	 	(d)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? 

 Yes   ̈    No   ̈ 
 Note: If no, the Commission’s staff has indicated that
you should be identified as an underwriter in the Registration Statement. 
 4. Beneficial Ownership of Securities of the Company Owned by the Selling
Securityholder. 
 Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any
securities of the Company other than the securities issuable pursuant to the Purchase Agreement. 
  

	 	(a)	Type and Amount of other securities beneficially owned by the Selling Securityholder: 

  


			
	  
	    	
	  
	    	

  

 23 








 5. Relationships with the Company: 
 Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position
or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. 
 State any exceptions here: 
  

			
	  
	  	
	  
	  	

 The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective. 
 By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus. 
 IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by
its duly authorized agent. 
  

							
	 Dated:
	 	  
	    	Beneficial Owner:	 	  


  

			
	By:	 	  

	Name:	 	
	Title:	 	


 PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY
OVERNIGHT MAIL, TO: 
  

 24 








 EXHIBIT C 
 NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL
BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
 [LONG TERM/SHORT TERM] COMMON STOCK PURCHASE WARRANT 
 ACCENTIA BIOPHARMACEUTICALS, INC. 
  

			
	Warrant Shares: [            	 	Initial Exercise Date: February     , 2007

 THIS COMMON STOCK PURCHASE WARRANT (the
“Warrant”) certifies that, for value received,                      (the “Holder”) is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on
                    1 (the “Termination Date”) but not thereafter, to subscribe for and purchase from Accentia Biopharmaceuticals, Inc., a Florida corporation (the “Company”), up to
             shares (the “Warrant Shares”) of common stock, par value $.001 per share, of the Company (the “Common Stock”). The purchase price of
one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). 
 Section 1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated February 27, 2007, among the Company
and the purchasers signatory thereto. 


	 1
	 the five year anniversary of the Initial Exercise Date as to the Long Term Warrants and the earlier of
(i) the 60th day following the later of (x) the Effective Date or (y) the date Shareholder Approval
is received and effective or (ii) two year anniversary of the Initial Exercise Date as to the Short Term Warrants. 


  

 1 








 Section 2. Exercise. 
 a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company); and, within 3 Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received
payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within 3
Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of Exercise Form within 1 Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of
this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. 
 b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be
$            2, subject to adjustment
hereunder (the “Exercise Price”). 
 c) Cashless Exercise. If at any time after one year from the date
of issuance of this Warrant there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised at such time by means of a
“cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: 
  

					
	(A)	 	=	  	the VWAP on the Trading Day immediately preceding the date of such election;
			
	(B)	 	=	  	the Exercise Price of this Warrant, as adjusted; and
			
	(X)	 	=	  	the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of
a cash exercise rather than a cashless
exercise.



	 2
	 $4.25 as to Long Term Warrants, $4.00 as to Short Term Warrants. 


  

 2 








 Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant
shall be automatically exercised via cashless exercise pursuant to this Section 2(c). 
  

	 	d)	Exercise Limitations. 

  

	 	i.	 Holder’s Restrictions. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2(c) or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, such Holder (together with such Holder’s Affiliates, and any other
person or entity acting as a group together with such Holder or any of such Holder’s Affiliates), as set forth on the applicable Notice of Exercise, would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to
which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by such Holder or any of its
Affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Debentures or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by a Holder that the Company is not representing to such Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(d) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of which a portion of this Warrant is exercisable shall be in the sole discretion of a Holder, and the submission of a Notice of
Exercise shall be deemed to be each Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(d), in determining 



  

 3 









	 	 
the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by such Holder or its Affiliates since the date as of which such number of outstanding
shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable
upon exercise of this Warrant. The Beneficial Ownership Limitation provisions of this Section 2(d)(i) may be waived by such Holder, at the election of such Holder, upon not less than 61 days’ prior notice to the Company to change the
Beneficial Ownership Limitation to 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant, and the provisions of this Section 2(d)
shall continue to apply. Upon such a change by a Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not be further waived by such Holder. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d)(i) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.



  

	 	 ii.
	 Issuance Restrictions. If the Company has not obtained Shareholder Approval, then the Company may not issue upon
exercise of this Warrant a number of shares of Common Stock, which, when aggregated with any shares of Common Stock issued (A) upon conversion of or as payment of interest on the Debentures issued pursuant to the Purchase Agreement,
(B) upon prior exercise of this or any other Warrant issued pursuant to the Purchase Agreement and (C) pursuant to any warrants issued to any registered broker-dealer as a fee in connection with the Securities pursuant to the Purchase
Agreement, would exceed            3, subject to
adjustment for reverse and forward stock splits, stock dividends, stock 




	 3
	 19.999% of the number of shares of Common Stock outstanding on the Trading Day immediately preceding the
Closing Date. 


  

 4 









	 	 
combinations and other similar transactions of the Common Stock that occur after the date of the Purchase Agreement (such number of shares, the
“Issuable Maximum”). The Holder and the holders of the other Warrants issued pursuant to the Purchase Agreement shall be entitled to a portion of the Issuable Maximum equal to the product of (I) and (II) where (I) is equal
to the Issuable Maximum and (II) is the quotient obtained by dividing (x) such Holder’s original Subscription Amount by (y) the aggregate original Subscription Amount of all holders pursuant to the Purchase Agreement. In addition, the
Holder may allocate its pro-rata portion of the Issuable Maximum among Debentures and Warrants held by it in its sole discretion. Such portion shall be adjusted upward ratably in the event a Purchaser no longer holds any Debentures or Warrants and
the amount of shares issued to such Purchaser pursuant to its Debentures and Warrants was less than such Purchaser’s pro-rata share of the Issuable Maximum. For avoidance of doubt, unless and until any required Shareholder Approval is obtained
and effective, warrants issued to any registered broker-dealer as a fee in connection with the Securities issued pursuant to the Purchase Agreement as described in (C) above shall provide that such warrants shall not be allocated any portion of
the Issuable Maximum and shall be unexercisable unless and until such Shareholder Approval is obtained and effective. 


  

	 	e)	Mechanics of Exercise. 

 i.
Authorization of Warrant Shares. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be
duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue). 
 ii. Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be
transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within 3 Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this
Warrant (if required) and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company. The
Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such 

  

 5 








 
shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price (or by cashless exercise, if
permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of such shares, have been paid. If the Company fails for any reason to deliver to the Holder certificates evidencing the
Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the
VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share
Delivery Date until such certificates are delivered. 
 iii. Delivery of New Warrants Upon Exercise. If this Warrant
shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 
 iv. Rescission Rights. If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise. 
 v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times
(B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored or deliver to the Holder the number of shares of Common 

  

 6 








 
Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 
 vi. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price or round up to the next whole share. 
 vii. Charges, Taxes and Expenses.
Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto. 
 viii. Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
 Section 3. Certain Adjustments. 
 a) Stock Dividends and Splits. If the Company, at any
time while this Warrant is outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not 

  

 7 








 
include any shares of Common Stock issued by the Company upon exercise of this Warrant), (B) subdivides outstanding shares of Common Stock into a larger
number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the Common Stock any shares of capital stock of the
Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted. Any adjustment made pursuant to this
Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a
subdivision, combination or re classification. 
 b) Subsequent Equity Sales. If the Company or any Subsidiary thereof,
as applicable, at any time while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice its securities, or otherwise dispose of or issue any Common Stock or Common Stock Equivalents entitling
any Person to acquire shares of Common Stock, at an effective price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if
the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options
or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise Price, such issuance shall be deemed to have occurred for less than
the Exercise Price on such date of the Dilutive Issuance), then the Exercise Price shall be reduced and only reduced to equal the Base Share Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate
Exercise Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise Price prior to such adjustment. Such adjustment shall be made whenever such Common Stock or Common Stock
Equivalents are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than the Trading Day
following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such
notice the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance, after the date
of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. 
 c) Subsequent Rights Offerings. If the Company, at any time while the Warrant is outstanding, shall issue rights, options or
warrants to all holders of Common 

  

 8 








 
Stock (and not to Holders) entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the VWAP at the record date
mentioned below, then the Exercise Price shall be multiplied by a fraction, of which the denominator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number of shares which the aggregate
offering price of the total number of shares so offered (assuming receipt by the Company in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such VWAP. Such adjustment shall be made whenever such
rights or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants. 
 d) Pro Rata Distributions. If the Company, at any time prior to the Termination Date, shall distribute to all holders of Common
Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock (which shall be subject to
Section 3(b)), then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of
such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the
Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above. 
 e) Fundamental Transaction. If, at any time while this Warrant is
outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,
(C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the
Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental
Transaction, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a
result of such merger, consolidation or 

  

 9 








 
disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing
provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this Section 3(e) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Securities Exchange Act of 1934, as amended, or (3) a
Fundamental Transaction involving a person or entity not traded on a national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the Company or any successor entity shall pay at the
Holder’s option, exercisable at any time concurrently with or within 30 days after the consummation of the Fundamental Transaction, an amount of cash equal to the value of this Warrant as determined in accordance with the Black-Scholes option
pricing formula using an expected volatility equal to the 100 day historical price volatility obtained from the HVT function on Bloomberg L.P. as of the trading day immediately prior to the public announcement of the Fundamental
Transaction.
 f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding. 
 g) Voluntary Adjustment By Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company. 
 h) Other Adjustments. In the event that [110% as to Long Term Warrants and 100% as to Short Term Warrants] of the average of
each of the VWAPs for the 10 Trading Days immediately prior to the earlier of (i) May 14, 2007 and (ii) the date the Company’s obtains Shareholder Approval (such earlier date, the “Reset Date” and [110% as to
Long Term Warrants and 100% as to Short Term Warrants] of such average of 

  

 10 








 
the 10 VWAPs immediately prior to the Reset Date, the “Reset Price”) is less than the then effective Exercise Price as of such Reset Date,
then the Exercise Price shall be reduced to such Reset Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price payable hereunder, after taking into account the decrease in the Exercise
Price, shall be equal to the aggregate Exercise Price prior to such adjustment, effective as of such Reset Date, subject to further adjustment as provided herein. For clarity, the Conversion Price can only be adjusted downward pursuant to this
Section 3(h). The Reset Date (and corresponding Reset Price) set forth in this Section 3(h) shall be extended for the number of calendar days during the period beginning on the Initial Exercise Period and ending on the date that is the
earlier of (x) May 14, 2007 and (y) the date the Company’s obtains Shareholder Approval in which (a) trading in the Common Stock is suspended by any Trading Market, or (b) the Company’s registration statement on
Form S-3, no. 333-138366 registering the resale of the shares of Common Stock underlying debentures and warrants of the Company issued on September 29, 2006 (the “September Registration Statement”) is not effective or the
prospectus included in such registration statement may not be used by the selling security holders named therein for the resale of the shares of Common Stock underlying such debentures and warrants. By way of an example, if the prospectus included
in the September Registration Statement is unavailable for 20 days prior to the date the Company obtains Shareholder Approval, and the Company obtains Shareholder Approval on April 30, 2007, the Reset Date would be extended to May 20,
2007, and the Reset Price would be [110% as to Long Term Warrants and 100% as to Short Term Warrants] of such average of the 10 VWAPs immediately prior to May 20, 2007. 
  

	 	i)	Notice to Holder. 

 i.
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. If the Company enters into a Variable Rate Transaction (as defined in the Purchase Agreement) despite the prohibition thereon in the Purchase Agreement, the Company shall be deemed to
have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised. 
 ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger
to which the Company is a party, any sale or transfer of all or substantially all of the assets of the 

  

 11 








 
Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize
the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the
Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the
Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall
not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this Warrant during the 20-day period commencing on the date of such notice to the effective date of the event triggering
such notice. 
 Section 4. Transfer of Warrant. 
 a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d)
hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified
in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant issued. 
 b) New Warrants. This Warrant may be divided
or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. 
  

 12 








 c) Warrant Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for
the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 
 d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective
registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer, that (i) the Holder or transferee of this Warrant, as the case may be,
furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the
Securities Act and under applicable state securities or blue sky laws, and (ii) the Holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company, and (iii) the transferee be
an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a “qualified institutional buyer” as defined in Rule 144A(a) promulgated under the Securities Act.

 Section 5. Miscellaneous. 
 a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof as set forth in
Section 2(e)(ii). 
 b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or
stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 
 c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day. 
  

 13 








 d) Authorized Shares. 
 The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. 
 Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in
the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. 
 e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be
determined in accordance with the provisions of the Purchase Agreement. 
 f) Restrictions. The Holder acknowledges
that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws. 
 g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right 

  

 14 








 
or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. 
 h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Purchase Agreement. 
 i) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 
 j) Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that
a remedy at law would be adequate. 
 k) Successors and Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of
all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares. 
 l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder. 
 m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. 
 n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant. 
 ******************** 
  

 15 








 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly
authorized as of the date first above indicated. 
  

			
	ACCENTIA BIOPHARMACEUTICALS, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	


  

 16 








 NOTICE OF EXERCISE 
 TO: ACCENTIA BIOPHARMACEUTICALS, INC. 
 (1) The undersigned hereby elects to purchase
             Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any. 
 (2) Payment shall take the form of (check applicable box): 
  ̈ in lawful money of the United States; or

  ̈ [if permitted] the cancellation
of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set
forth in subsection 2(c). 
 (3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or
in such other name as is specified below: 
  

			
	  
	 	

 The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a
certificate to: 

			
	  
	 	
	  
	 	
	  
	 	

 (4) Accredited Investor. The undersigned is an “accredited investor” as defined
in Regulation D promulgated under the Securities Act of 1933, as amended. 
 [SIGNATURE OF HOLDER] 
  

	
	Name of Investing
Entity:                                       
                                        
                                        
                                        
                                        
        
	 Signature of Authorized Signatory of Investing
Entity:                                      
                                       
                                        
                                     

	 Name of Authorized
Signatory:                                      
                                        
                                        
                                        
                                      
 

	 Title of Authorized
Signatory:                                      
                                        
                                        
                                        
                                        
 

	 Date:                                     
                                        
                                        
                                        
                                        
                                        
          









 ASSIGNMENT FORM 
 (To assign the foregoing warrant, execute 
 this form and supply required information. 
 Do not use this form to exercise the warrant.) 
 FOR VALUE RECEIVED, [            ] all of or [            ] shares of the foregoing Warrant and all rights
evidenced thereby are hereby assigned to 
  

			
	  
	 	whose address is
	  

	
	  


  

	
	Dated:                     ,
            


  

			
	 Holder’s Signature:
	 	  

	 Holder’s Address:
	 	  

		 	  



  

			
	Signature Guaranteed:	 	  


 NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the
Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant. 







 EXHIBIT D 
  

	1.	The Company is a corporation incorporated and having an active status under the laws of the State of Florida. The Company has all requisite corporate power and authority required to
own and operate its properties and assets and to carry on its business as now conducted (as described in the Company’s SEC Reports filed in the past 12 months). 

  

	2.	Each of the following subsidiaries of the Company (the “Subsidiaries”) is a corporation incorporated (or, in the case of Biolender, LLC, a limited liability company
organized) and in good standing (or with respect to Subsidiaries incorporated under Florida law, with an active status) under its respective jurisdiction indicated below: 

 Accent RX, Inc., a Florida corporation 
 Biovest International, Inc., a Delaware corporation 
 TEAMM Pharmaceuticals, Inc., a Florida
corporation 
 Analytica International, Inc., a Florida corporation 
 Biolender, LLC, a Delaware limited liability company 
 Biovax, Inc., a Florida corporation 
  

	3.	The Company has all requisite corporate power and authority to execute, deliver and perform the Transaction Documents, to issue, sell and deliver the Debentures, the Warrants and
the Underlying Shares pursuant to the Transaction Documents and to carry out and perform its obligations under, and to consummate the transactions contemplated by, the Transaction Documents. 

  

	4.	All corporate action on the part of the Company, its directors and its stockholders necessary for the authorization, execution and delivery by the Company of the Transaction
Documents, the authorization, issuance, sale and delivery of the Debentures and the Warrants pursuant to the Purchase Agreement, the issuance and delivery of the Underlying Shares and the consummation by the Company of the transactions contemplated
by the Transaction Documents has been duly taken. The Transaction Documents have been duly and validly executed and delivered by the Company and constitute the legal, valid and binding obligation of the Company, enforceable against the Company in
accordance with their terms, except (a) that such enforceability may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights in general and (b) that the remedies of specific
performance and injunctive and other forms of injunctive relief may be subject to equitable defenses. 

  

	5.	 After giving effect to the transactions contemplated by the Purchase Agreement, and immediately after the Closing, the authorized capital stock of the Company will
consist of: an aggregate of 300,000,000 shares of Common Stock and 150,000,000 shares of preferred stock, par value $1.00 per share. To our knowledge based on records provided to us by the Company, after giving effect to the transactions
contemplated by the Purchase Agreement,                      shares of Common Stock will be issued and outstanding. All presently issued and
outstanding shares of Common Stock identified in the preceding sentence have been duly authorized and validly issued and are fully paid and nonassessable and free of any statutory preemptive rights. An aggregate of
                     Underlying Shares have been duly and validly authorized and reserved for issuance, and when issued in accordance with the
conversion of the Debentures or the 











	 	 
exercise of the Warrants in accordance with their respective terms, will be validly issued, fully paid and nonassessable and free of any statutory preemptive
rights. To our knowledge, except for rights described in Schedule 3.1(g) of the Purchase Agreement and except for the rights granted pursuant to the Transaction Documents, there are no other options, warrants, conversion privileges or other rights
presently outstanding to purchase or otherwise acquire from the Company any capital stock or other securities of the Company, or any agreements to issue any such securities or rights. 


  

	6.	To our knowledge, the Company has filed all reports (the “SEC Reports”) required to be filed by it under Sections 13(a) and 15(d) of the Exchange Act of 1934, as
amended (the “Exchange Act”), since November 1, 2005. 

  

	7.	Based upon, and assuming the truthfulness of, the representations and warranties of the Purchasers contained in the Purchase Agreement and the representation and warranty of the
Company in Section 3.1(cc) of the Purchase Agreement, the Debentures, the Warrants and the Underlying Shares may be issued to the Purchasers without registration under the Securities Act of 1933, as amended. 

  

	8.	The execution, delivery and performance by the Company of, and the compliance by the Company with the terms of, the Transaction Documents and the issuance, sale and delivery of the
Debentures, the Warrants and the Underlying Shares pursuant to the Purchase Agreement do not (a) conflict with or result in a violation of any provision of the articles of incorporation or bylaws of the Company or the Subsidiaries,
(b) conflict with or result in a violation of any provision of law, rule, or regulation known to us to be applicable to the Company or any Subsidiary, (c) to our knowledge, conflict with, result in a breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default) under, or result in or permit the termination or modification of, any agreement, instrument, order, writ, judgment or decree known to us to which the Company or any
Subsidiary is a party or is subject or (c) to our knowledge, result in the creation or imposition of any lien, claim or encumbrance on any of the Company’s or its Subsidiaries’ assets or properties. 

  

	9.	To our knowledge and except as set forth in the Disclosure Schedules, there is no claim, action, suit, proceeding, arbitration, investigation or inquiry, pending or threatened,
before any court or governmental or administrative body or agency, or any private arbitration tribunal, against the Company or its Subsidiaries, or any of its officers, directors or employees (in connection with the discharge of their duties as
officers, directors and employees), or affecting any of its properties or assets. 

  

	10.	To our knowledge, no consent, license, permit, waiver, approval or authorization of, or designation, declaration, registration or filing with, any court, governmental or regulatory
authority, or self-regulatory organization, is required in connection with the valid execution, delivery and performance by the Company of the Transaction Documents, or the offer, sale, issuance or delivery of the Debentures, the Warrants and the
Underlying Shares or the consummation of the transactions contemplated thereby. 









	11.	The Company is not an Investment Company within the meaning of the Investment Company Act of 1940, as amended. 








 EXHIBIT E 
  

	TO:	The Purchasers of Accentia Biopharmaceuticals, Inc. 8% Convertible Debentures and Warrants 

 To Whom It May Concern: 
 This letter will confirm my agreement to vote all shares of Accentia
Biopharmaceuticals, Inc. (the “Company”) voting stock over which I have voting control in favor of any resolution presented to the shareholders of the Company to approve the issuance, in the aggregate, of more than 19.999% of the
number of shares of common stock of the Company outstanding on the date of closing pursuant to that certain Securities Purchase Agreement, dated February     , 2007 among the Company and the purchasers signatory thereto
(the “Purchase Agreement”) and the other agreements entered into in connection therewith or as otherwise may be required by the applicable rules and regulations of the Nasdaq Global Market (or any successor entity). This agreement
is given in consideration of, and as a condition to enter into such Purchase Agreement and is not revocable by me. 
  

			
	By:	 	  

		 	Name of Shareholder:
		 	Percentage Beneficial Ownership:









 EXHIBIT F 
 This Agreement (the “Agreement”), dated as of February 27, 2007, is by and among Accentia Biopharmaceuticals, Inc., a Florida corporation (the “Company”) and the investors
signatory hereto (each, a “Purchaser” and collectively, the “Purchasers”). 
 WHEREAS, pursuant to
securities purchase agreement dated September 29, 2006 (the “September 2006 Purchase Agreement”) among the Company, the Purchasers and the other investors signatory thereto, the Company issued and sold secured convertible
debentures (the “September Debentures”) with an aggregate principal amount of $25,000,000, in the individual amounts set forth on Schedule A hereto; 
 WHEREAS, pursuant to a securities purchase agreement to be entered into on or about the date hereof (the “February 2007 Purchase
Agreement”), the Company desires to issue and sell up to $25,000,000 in principal amount of debentures and warrants to purchase shares of Common Stock to the purchasers signatory thereto; 
 WHEREAS, the Purchasers signatory hereto desire to convert a portion of their September Debentures in accordance with the terms hereof; 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the Purchasers and the Company agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Section 1.1
Definitions. Capitalized terms not defined in this Agreement shall have the meanings ascribed to such terms in the September 2006 Purchase Agreement. 
 ARTICLE II 
 CONVERSION OF DEBENTURES 
 AND OTHER AGREEMENTS 
 Section 2.1 Conversion of Debentures Each
Purchaser hereby agrees, severally and not jointly with the other Purchasers, to convert a portion of the original principal amount of such Purchaser’s September Debenture, in the individual amounts set forth on Schedule 2.1 attached hereto,
over a six month period, commencing on the date hereof and ending on August 31, 2007 (the “Conversion Period”), otherwise in accordance with the terms of the September Debentures. The Conversion Period set forth in this
Section 2.1 shall be extended for the number of calendar days during such period in which (i) trading in the Common Stock is suspended by any Trading Market, or (ii) the Company’s registration statement on Form S-3, no.
333-138366 registering the resale of the shares of Common Stock underlying the September Debentures and Warrants (the 

  

 1 








 
“September Registration Statement”) is not effective or the prospectus included in such registration statement may not be used by the
selling security holders named therein for the resale of the shares of Common Stock underlying the September Debentures and Warrants. By way of an example, if the prospectus included in the September Registration Statement is unavailable for 20 days
prior to August 31, 2007, the Conversion Period would be extended to September 20, 2007. Notwithstanding the foregoing, a Purchaser shall not be required to convert such certain portion of its September Debenture to the extent that
Section 4(c)(ii) of such debenture is violated by the resulting Common Stock issuance of such certain portion. 
 Section 2.2 February 2007 Purchase Agreement. Each Purchaser party hereto that is a party to the February 2007 Purchase Agreement shall be issued a debenture under such agreement with a principal amount equal to such
Purchaser’s Subscription Amount (as defined in the February 2007 Purchase Agreement) multiplied by 1.38, and otherwise in the form of the debenture attached to the February 2007 Purchase Agreement as Exhibit A, notwithstanding any
contrary provision contained in the February 2007 Purchase Agreement. 
 Section 2.3 Effect on September 2006 Purchase Agreement and
February 2007 Purchase Agreement. Except as expressly set forth herein, all of the terms and conditions of the Transaction Documents shall continue in full force and effect after the execution of this Agreement, and shall not be in any
way changed, modified or superseded by the terms set forth herein. This Agreement shall not constitute a novation or satisfaction and accord of any Transaction Document. 
 Section 2.4 Filing of Form 8-K. Within 1 Trading Day of the date hereof, the Company shall issue a Current Report on Form 8-K, reasonably acceptable to each Purchaser disclosing the material terms of the
transactions contemplated hereby, which shall include this Agreement as an attachment thereto. 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
 Section 3.1 Representations and Warranties of the Company. The Company hereby make the representations and warranties set forth below to the Purchasers that as of the date of its execution of this Agreement: 
 (a) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of such Company and no further action is required by such Company, its board of directors or its stockholders in connection therewith. This Agreement has been duly executed by the Company and, when
delivered in accordance with the terms hereof will constitute the valid and binding obligation of the Company enforceable against the 

  

 2 








 
Company in accordance with its terms except (i) as limited by general equitable principles and 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) insofar as indemnification and contribution provisions may be limited by applicable law. 
 (b) No
Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the
Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under,
result in the creation of any lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement,
credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or affected. 
 Section 3.2 Representations and Warranties of
the Purchasers. The Purchaser hereby makes the representations and warranties set forth below to the Company that as of the date of its execution of this Agreement: 
 (a) Due Authorization. Such Purchaser represents and warrants that (i) the execution and delivery of this Agreement by it and
the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on its behalf and (ii) this Agreement has been duly executed and delivered by such Purchaser and constitutes the valid and binding
obligation of such Purchaser, enforceable against it in accordance with its terms except (i) as limited by general equitable principles and 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) insofar as indemnification and contribution
provisions may be limited by applicable law. 
  

 3 








 ARTICLE IV 
 MISCELLANEOUS 
 Section 4.1 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be made in accordance with the provisions of the September 2006 Purchase Agreement. 
 Section 4.2 Survival. All warranties and representations (as of the date such warranties and representations were made) made herein or in any certificate or other instrument delivered by it or on its behalf under this Agreement
shall be considered to have been relied upon by the parties hereto. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties; provided however that no party may assign this
Agreement or the obligations and rights of such party hereunder without the prior written consent of the other parties hereto. 
 Section 4.3 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof. 
 Section 4.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement
shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this
Agreement. 
 Section 4.5 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be determined pursuant to the Governing Law provision of the September 2006 Purchase Agreement. 
 Section 4.6
Entire Agreement. The Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 
 Section 4.7 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. 
 Section 4.8 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser hereunder are several and not joint with the obligations of any other Purchasers hereunder, and
no Purchaser shall be responsible in any way for the 

  

 4 








 
performance of the obligations of any other Purchaser hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and
no action taken by any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in
concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not
be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. 
 Section 4.9
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder, by written notice to the other parties, if the closing of the transactions contemplated by the February 2007 Purchase
Agreement have not been consummated on or before March 1, 2007. 
 *********************** 
  

 5 








 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above. 
  

			
	ACCENTIA BIOPHARMACEUTICALS, INC.
		
	 By:
	 	 
	 Name:
	 	
	 Title:
	 	


  

 6 








 [PURCHASER SIGNATURE PAGES TO ABPI 
 DEBENTURE CONVERSION AGREEMENT] 
 IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  

	
	 Name of Purchaser:
                                       
 

	 Signature of Authorized Signatory of Purchaser:
                                       
 

	 Name of Authorized Signatory:
                                       
 

	 Title of Authorized Signatory:
                                       
 

	 Email Address of
Purchaser:                                      
  


  

 7 








 SCHEDULE A 
 LIST OF SEPTEMBER 2006 INVESTORS 
  

			
	 NAME
	 	 ORIGINAL PRINCIPAL AMOUNT OF DEBENTURES


  

 8 








 SCHEDULE 2.1 
 DEBENTURE CONVERSION AMOUNTS 
  

					
	 NAME OF PURCHASER
	 	 ORIGINAL
 PRINCIPAL AMOUNT
	 	 AMOUNT TO BE
 CONVERTED PURSUANT
 TO THIS AGREEMENT


  

 9 








 DISCLOSURE SCHEDULES 
 OF 
 ACCENTIA BIOPHARMACEUTICALS, INC. 
 These are the Disclosure Schedules referred to in the Securities Purchase Agreement (the “Agreement”), dated as of February 27,
2007, among Accentia Biopharmaceuticals, Inc., a Florida corporation (the “Company”), Biovest International, Inc., a Delaware corporation (i.e., to specify release from escrow if failure to pay principal or interest), and the
persons identified as “Purchasers” in the Agreement. These Disclosure Schedules are subject to the following terms and conditions:: 
 The inclusion of any fact, item, matter, circumstance, transaction or event in a section of these Disclosure Schedules is not deemed to be an admission or representation that the fact, item, matter, circumstance, transaction or event is or
is not “material,” and such inclusion shall not be deemed an acknowledgment that such fact, item, matter, circumstance, transaction or event is required to be disclosed pursuant to the Agreement. 
 If any section of these Disclosure Schedules lists an item or information in such a way as to make its relevance to the disclosure required in another
section or schedule readily apparent, the matter shall be deemed to have been disclosed in such other section or schedule, notwithstanding the omission of an appropriate cross-reference to such other section. 
 The introductory language and the heading to each section or schedule of these Disclosure Schedules are inserted for convenience only and shall not create
a different standard for disclosure than the language set forth in the Agreement. Nothing in these Disclosure Schedules shall be deemed to expand the scope of the representation and warranties of the Company made in Article III of the Agreement.

 Unless the context otherwise requires, all capitalized terms used herein shall have the meanings given to such terms in the Agreement.








 Schedule 3.1(a) 
 List of the Subsidiaries of Accentia Biopharmaceuticals, Inc. 
 Wholly-owned Subsidiaries 

Analytica International, Inc., a Florida corporation 
 Teamm
Pharmaceuticals, Inc., a Florida corporation d/b/a Accentia Pharmaceuticals 
 Accentia Specialty Pharmacy, Inc., a Florida corporation 
 Accent RX, Inc., a Florida corporation (inactive) 
 ABPI Acquisition,
Inc, a Delaware corporation 
 Other 
 The Company
owns approximately 77% of Biovest International, Inc., a Delaware corporation (BVTI) subject to outstanding warrants and debenture exchange rights granted by the Company as described in Schedule 3.1(a)(2). 
 Analytical owns 100% of Analytica International GmbH f/k/a Imor International GmbH a corporation organized in Germany 
 BVTI Wholly-owned Subsidiaries 
 Biovax, Inc., a Florida
corporation 
 AutovaxID, Inc., a Florida corporation 
 Biolender
LLC, a Delaware limited liability company 
 Biolender II, LLC, a Delaware limited liability company 







 SCHEDULE 3.1 (a)(2) 
 Subsidiaries 
 All stock in TEAMM Pharmaceuticals, Analytica International and Biovest International,
Inc. (“BVTI”) (except 18 million shares of BVTI owned of record by the Company that are pledged as a senior security position to holders of debentures issued in the September 2006 Debenture transaction) is pledged as security for the
Company’s obligations to Laurus Master Fund, Ltd. (“Laurus”) pursuant to Amended and Restated Security Agreement and a Stock Pledge Agreement dated as of April, 2005, and is covered under subordinate security interests held by
McKesson Corporation* (“McKesson”) and Southwest Bank of St. Louis f/k/a Missouri State Bank (“MSB”). The Company has granted warrants to Laurus Master Funds to purchase up to 10 million shares of BVTI common stock
owned of record by the Company at an exercise price of $0.01 per share. Additionally, the Company granted warrants and rights to exchange debentures into an aggregate 18 million shares of BVTI common stock under the September 2006 debenture
transaction. 


	*	Notwithstanding that the McKesson credit facility has been paid in full, the McKesson security interest continues to secure McKesson’s right to the return of a deposit under a
separate Biologics Distribution Agreement. 








 Schedule 3.1(e) 
 Required Consents 
 Consent from Laurus Master Fund, Ltd. 
 Consent from Southwest Bank of St. Louis f/k/a Missouri State Bank 
 Consent under registration rights agreements granted to
certain stockholders 
 Consents and Waivers from Holders of Secured Convertible Notes issued in September 2006 
 Consents and Waivers from certain investors in the Company’s May 2006 PIPE transaction 
 All listed consents will be satisfied at Closing 







 Schedule 3.1 (g) - Capitalization 
  

													
	 	  	 	  	Date Issued	  	Exercise
Price	  	Vested	 	 	 Note

	 Shares outstanding
	  	32,744,723	  		  			  			 	
						
	 Shares issuable upon conversion of Laurus Term Note
	  	1,043,643	  		  			  			 	
	 Shares issuable upon conversion of Minimum Laurus Borrowing Note
	  	367,647	  		  			  			 	
	 Shares issuable upon conversion of Convertible Debenture
	  	9,491,923	  		  			  			 	
		  	 	  		  			  			 	
	 Total convertible debt
	  	10,903,213	  		  			  			 	
		  	 	  		  			  			 	
	 MAYO Warrants - July 2006
	  	25,000	  	7/20/2006	  	$	3.50	  	100	%	 	
	 MAYO Warrants - August 2006
	  	450,000	  	8/22/2006	  	$	3.50	  	33	%	 	150,000 vest upon issue, 1st anniv., 2nd anniv.
	 Laurus Warrants
	  	1,000,000	  	8/2/2005	  	$	8.00	  	100	%	 	
	 Warrants offered with 5-15-06 Private Equity Transaction
	  	823,500	  	5/15/2006	  	$	6.59	  	100	%	 	Issued with Equity Offering
						
	 Telesis CDE Corporation (NMTC - 70,000 vested)
	  	100,000	  	4/25/2006	  	$	9.00	  	70	%	 	100% vested upon completion of 2nd Suballocation Event
	 Holman warrants (@ $8.00)
	  	35,000	  	11/2/2005	  	$	8.00	  	100	%	 	
	 September 2006 Investor warrants
	  	3,136,201	  	09/29/2006	  	$	2.75	  	100	%	 	
	 Rodman & Renshaw warrants
	  	545,455	  	09/29/2006	  	$	2.75	  	100	%	 	
	 Outstanding Stock Options
	  	2,699,144	  		  			  			 	
		  	 	  		  			  			 	
	 Total options and warrants
	  	8,814,300	  		  			  			 	
		  	 	  		  			  			 	
	 Fully diluted common shares
	  	52,462,236	  		  			  			 	
		  	 	  		  			  			 	








 SCHEDULE 3.1 (j)
 Litigation 
 The Company’s Analytica subsidiary is a party to a litigation brought against a former employee,
alleging breach of covenants not to compete, breach of confidentiality agreements and misappropriation of proprietary information. This matter is pending in the Supreme Court of New York, New York County. The defendant has filed an Answer containing
counterclaims against Analytica, the Company and an officer of the Company. The Company has filed a motion seeking to dismiss all claims naming the Company and the Company’s officer personally, and to dismiss certain claims against all
defendants. 







 Schedule 3.1 (l) 
 Compliance 
 The Company may be in non-compliance with minimum purchase and payment obligations under its
distribution agreement with Respirics, Inc. regarding its MDTurbo product. The Company anticipates that due to market value changes in collateral, at the next valuation date under the Laurus Master Funds revolving credit facility the Company may be
required to make a pay up to $2.5 million to satisfy the applicable borrowing availability formula. 







 Schedule 3.1(o) 
 Patents and Trademark 
 ACCENTIA BIOPHARMACEUTICALS (CTM TM Application No. 004805214) (Europe) Opposition filed
by Accentia Multimedia SL in view of AACCENTIA mark in Spain. Status: Opposition just recently filed. CTM Office is confirming that opposition complies with formalities. Our European associate has contacted Opponent to begin negotiation. 

BIOVEST (US TM Application Nos. 78/449968, 78/449930 and 78/449977) Oppositions filed by BIOTEST AG. Status: in discovery period. Interrogatories are outstanding for
both parties. 
 SINUTEST (CTM Application No. 004805248) (Europe) Opposition filed by Bionorica in view of SINUPRET mark in various European countries.
Status: Cooling off period for negotiation has been extended to November 22, 2008. Our European associate has contacted Opponent to begin negotiation. 
 MUCINASE (US TM Application No. 78/830101) Extension of Time filed by Adams Respiratory (in view of “MUCINEX” and “MUCINEX IN... MUCUS OUT” marks) to file Opposition. Status: No opposition has been filed. Period for
filing opposition is being extended in view of Frank O’Donnell’s indication that he is in discussion with Adams to develop MUCINASE product. 
 SINUTEST (US TM Application No. 78/664,701) Extension of Time filed by Johnson and Johnson (in view of SINUTAB mark) to file Opposition. Status: No opposition has been filed. Period for filing opposition is being extended as Johnson
and Johnson considers whether they wish to file an opposition. 







 Schedule 3.1(s) 
 Fees 
 The Company is obligated to pay fees to Rodman & Renshaw, LLC in connection with the
transaction described in this Agreement. The fees are: (i) 6% of the cash consideration received by the Company from the sale of Debentures to be paid in cash to Rodman & Renshaw and (ii) warrants with the same terms including
exercise price as the warrants issued to Purchasers for that number of shares of the Company’s Common Stock equal to 6% of the cash purchase price for Debentures divided by the warrant exercise price. In the event an investor is introduced by
another broker, the fee and warrant to be paid to Rodman & Renshaw is reduced by 50% and the maximum cash fee is capped at 8%. 
 Additionally, the Company may be obligated to pay fees including placement agent warrants to Ascendiant Securities, LLC in the event Ascendiant introduces investors that participate in the transaction. The fees are (i) a cash fee equal
to 6% of the cash consideration received on the sale of the Debentures and (ii) warrant coverage of 10% (to be calculated in the same manner as the Rodman & Renshaw warrants and to contain the same terms). 







 Schedule 3.1(v) 
 Registration Rights 
 Accentia Biopharmaceuticals, Inc. (the “Company”) has granted the following
registration rights: 
 The Company has granted registration rights under the following Agreements: 
  

	(a)	Registration Rights Agreement, dated September 29, 2006, among the Company and the parties identified as “Initial Investors” therein. 


This agreement was entered into by the Company in connection with the debenture financing transaction that the Company closed on September 29,
2006. Pursuant to this agreement, the Company has filed, and the Commission declared effective on November 17, 2006, an S-3 registration statement registering the resale of the shares sold to the investors in the Midsummer transaction
(Registration No. 333-138366). All of the registrable securities under this agreement have been included in such registration statement and the Company has a continuing obligation to maintain the effectiveness of this registration statement
until all of the registrable securities have been sold or are eligible for sale under Rule 144(k). 
  

	(b)	Registration Rights Agreement, dated May 15, 2006, among the Company and the parties identified as “Initial Investors” therein. 

 This agreement was entered into by the Company in connection with the “PIPE” transaction that the Company closed on May 15, 2006. Pursuant
to this agreement, the Company has filed, and the Commission declared effective on June 22, 2006, an S-1 registration statement registering the resale of the shares sold to the investors in the PIPE transaction (Registration
No. 333-135018). All of the registrable securities under this agreement have been included in such registration statement and the Company has a continuing obligation to maintain the effectiveness of this registration statement until all of the
registrable securities have been sold or are eligible for sale under Rule 144(k). 
  

	(c)	Amended and Restated Registration Rights Agreement, dated February 13, 2006, between the Company and Laurus Master Fund, Ltd. (“Laurus”).


 This agreement was entered into by the Company in connection with the Company’s credit facility with Laurus, and it
required the Company to file and have declared effective a registration statement covering the resale of all shares of Company common stock issuable pursuant to the term note and minimum borrowing note issued by the Company to Laurus or issuable
pursuant to all warrants issued to Laurus through the date of the Agreement. The Company has filed, and the Commission declared effective on June 23, 2006, an S-1 registration statement (Registration No. 333-132237) registering all such
shares (the “Laurus Registration Statement”), and the Company has a continuing obligation to maintain the effectiveness of this registration statement until all of the registrable securities have been sold or are eligible for sale under
Rule 144 without volume restrictions. This registration statement registers all currently existing registrable securities under this Agreement, although if there is an increase in the number of shares underlying the term note and minimum borrowing
note issued to Laurus, the Company may be required to file additional registration statements to register the resale of such securities. Laurus has waived its right to include any of its registrable securities in the initial Registration Statement
and has waived any right to require the Company to file any registration statement prior to the date on which the Registration Statement is filed. 








	(d)	Overadvance Letter Agreement, dated July 13, 2006, between the Company and Laurus. 

 Under this agreement, the Company issued to Laurus 100,000 shares of Company common stock as a non-refundable servicing payment. Under this agreement,
Laurus was granted piggyback registration rights as to future-filed resale registration statements. Laurus has waived its right to include these shares in the initial Registration Statement. 
  

	(e)	Amended and Restated Investors’ Rights Agreement, dated January 7, 2005, between the Company and Pharmaceutical Product Development, Inc., as amended July 8, 2005
and August 11, 2005 (including Assignment and Assumption Agreement, dated June 28, 2005, among the Company, Pharmaceutical Product Development, Inc. and PPD International Holdings, Inc. (“PPD”)). 

 Under this Agreement, PPD has demand registration rights as to all of the shares of Common Stock held by it that were issued upon the automatic conversion
of the Company’s Series E Preferred Stock at the time of the Company’s IPO. 1,423,441 of such shares (out of a total of 4,270,323 registrable securities under such agreement) were included in the Laurus Registration Statement, and as to
the registrable shares not included in the Laurus Registration Statement, PPD has waived its right to include such remaining registrable securities in the initial Registration Statement and has waived any right to require the Company to file any
registration statement prior to the date on which the initial Registration Statement is filed. 
  

	(f)	Investors’ Rights Agreements of various dates between the Company and the former holders of Series E Preferred Stock of the Company (excluding PPD).


 In addition to the registration rights held by PPD, the other former holders of the Company’s Series E Preferred
Stock have demand and piggyback registration rights as to the common shares that they received upon the auto may demand that we register for public resale under the Securities Act all shares of common stock held by them as a result of conversion
their Series E shares upon the Company’s IPO. However, through a waiver executed by the holders of more than 50% of such registrable securities, these holders have waived their right to include such registrable securities in the initial
Registration Statement and have waived any right to require the Company to file any registration statement prior to the date on which the initial Registration Statement is filed. 
  

	(g)	Registration Rights Agreement, dated April 3, 2002, between the Company and Steven Arikian, M.D., John Doyle, Julian Casciano, and Roman Casciano, as amended by Amendment
No. 1, dated March 30, 2005, and Amendment No. 2, dated April 29, 2005. 

 The four former stockholders
of the Company’s Analytica subsidiary have piggyback registration rights under this agreement, but through a waiver executed by the holders of more than 50% of such registrable securities, these holders have waived their right to include such
registrable securities in the initial Registration Statement and have waived any right to require the Company to file any registration statement prior to the date on which the initial Registration Statement is filed. 







 Accentia Biopharmaceuticals, Inc. 
 Schedule 3.1 (aa) 
 List of Indebtedness as of February 12, 2007 
  

							
	 Company
	  	 Description
	  	 Maturity Date
	  	 Debt Payable

	 Direct obligations of the Company:
	  		  	
		  	LT Note Payable - Laurus (a), (e), (f)	  	4/29/2008	  	$  7,096,774
		  	LOC - Laurus (a), (e), (f)	  	4/29/2008	  	$  4,826,930
		  	LOC - Missouri State Bank (b), (g), (h)	  	1/15/2008	  	$  4,000,000
		  	Hopkins Capital Group II	  	8/15/2007	  	$  1,060,497
		  	September 2006 Convertible Debentures(j)	  	9/29/2010	  	$24,679,000
			
	 Guarantees of the Company:
	  		  	
	 Analytica
	  	Analytica Lease Guaranty (1)	  		  	$       98,151
			
	 Obligations of Subsidiaries:
	  		  	
	 Biovest
	  	Laurus Term Loan with Accentia Guaranty (c), (d)	  	4/2009	  	$ 7,195, 613
	 Biovest
	  	Pulaski Bank & Trust Promissory Note	  	7/5/2007	  	$  1,000,000
	 Biovest
	  	Various Bridge Loans (I)	  	Various-all less than 12 months	  	$       46,817
	 Biovest
	  	Accentia Demand Note	  	within 30 days of written demand	  	$  8,900,000



	(1)	The company’s guaranty is contractually capped at $98,151. 


	(2)	To be paid at closing 

 Security interest
granted by Accentia: 
 (a) Laurus Master Fund – First security interest in all of the assets of Accentia, including all
subsidiary stock owned by Accentia (other than the 18 million BVTI shares subject to the September 2006 debenture transaction) 
 (b)
Southwest Bank f/k/a Missouri State Bank – Third security interest in all of the assets of Accentia, including all subsidiary stock owned by Accentia (other than the 18 million BVTI shares subject to the September 2006 debenture
transaction) 
 (c) Laurus Master Fund – First security interest in all of the assets of Biovest and all of its assets in its
subsidiaries including BiovaxID, Inc. 
 (d) Laurus Master Fund – First security interest in all of the assets of Biolender, LLC

 (e) Laurus Master Fund – First security interest in all of the assets of TEAMM 
 (f) Laurus Master Fund – First security interest in all of the assets of Analytica (U.S. only) 
 (g) Southwest Bank f/k/a Missouri State Bank – Third security interest in all of the assets of TEAMM 
 (h) Southwest Bank f/k/a Missouri State Bank – Third security interest in all of the assets of Analytica (U.S. only) 
 (i) Accentia Biopharmaceuticals – Second security interest in all of the assets of Biovest 
 (j) The Debenture Holders – Security interest in 18 million shares in Biovest shares owned by Accentia 








	
	 Schedule 3.1 (ee)

	 Company’s Accountants

	
	 Aidman, Piser & Company

	 401 East Jackson Street

	 Tampa, Florida 33602









 Schedule 3.1(ff) 
 Seniority 
 Except as set forth in the Transaction Documents and except with respect to security
interests granted to third parties as set forth below, the Debentures are not subordinated in right of payment to any other Indebtedness: 
 Security
interests granted by Accentia: 
 Laurus Master Fund – First security interest in all of the
assets of Accentia, including all subsidiary stock owned by Accentia (other than the 18 million BVTI shares subject to the September 2006 debenture transaction) 
 McKesson Corporation – Second security interest in all of the assets of Accentia, including all subsidiary stock
owned by Accentia to secure the deposit under the Biologics distribution Agreement (other than the 18 million BVTI shares subject to the September 2006 debenture transaction)  
 Southwest Bank f/k/a Missouri State Bank –
Third security interest in all of the assets of Accentia, including all subsidiary stock owned by Accentia (other than the 18 million BVTI shares subject to the September 2006 debenture transaction) 
 September 29, 2006, Debenture Transaction-Security interest in 18 million shares of Biovest International, Inc. owned of record by the Company

 Security interests granted by subsidiaries: 
 Laurus Master Fund – First security interest in all of the assets of Biovest and all of its assets in its subsidiaries 
 Laurus Master Fund – First security interest in all of the assets of Biolender, LLC 
 Laurus Master Fund
– First security interest in all of the assets of TEAMM 
 Laurus Master Fund – First security interest in all of the assets of
Analytica (U.S. only) 
 McKesson – Second security interest in all of the assets of Analytica (U.S. only) 
 McKesson – Second security interest in all of the assets of TEAMM 
 Southwest Bank f/k/a Missouri State Bank – Third security interest in all of the assets of TEAMM 
 Southwest Bank f/k/a Missouri State Bank – Third security interest in all of the assets of Analytica (U.S. only) 
 Accentia
Biopharmaceuticals – Second security interest in all of the assets of Biovest 
 Principal amounts due to creditors listed above:

  

				
	 Accentia
	  	 
	 Laurus Term Note
	  	$	7,096,774
	 Laurus Revolver
	  	$	4,826,930
	 Southwest Bank
	  	$	4,000,000
	 September 2006 Convertible Debentures
	  	$	24,679,000
		
	 Biovest
	  	 
	 Laurus Term Note
	  	$	7,915,613
	 Accentia Demand Note
	  	$	8,900,000








 SCHEDULE 3.1 (kk) 
 FDA 
 The FDA has issued a guidance related to unapproved (“DESI”) products including
DESI products containing carbinoxamine. DESI products, including Respi-TANN, are promoted by Teamm Pharmaceuticals, Inc. and three of the DESI products contain carbinoxamine which products are marketed under the Histex label. 
 Additionally, the Histex I/E product promoted by TEAMM Pharmaceuticals was the subject of a manufacturer’s recall during the first calendar quarter
of 2006. TEAMM no longer promotes this item as a result of the product recall. 
 The Company has become aware of issues regarding samples of its Respi-TANN
G product manufactured by ANI under contract with Kiel Laboratories. Although ANI/Kiel have indicated that the issue does not affect the safety or efficacy of the product, an observed “clumping” which affects the appearance of the product
has resulted in the Company pulling back sample product from doctors. Since the market for Respi-TANN G is highly sample-driven, there is reason to believe that the unavailability of sufficient quantities of sample product may result in higher than
anticipated levels of returns of unsold trade product at the conclusion of flu season. Although the Company is not aware of any instance in which similar issues of clumping have been observed in trade product, there is no assurance that this problem
will not occur, and negotiations remain ongoing with ANI/Kiel as to financial responsibility for the costs associated with the pullback of sample product and the anticipated higher than normal Respi-TANN G returns that will likely need to be
absorbed as a result of this issue. 







 Schedule 4.9 
 Use of Proceeds 
 Additional Permitted Debt Payments: All regularly scheduled or required debt payments
including payments on the Company’s revolving credit facilities. The following is a list of all regularly scheduled and revolving debt payments: 
  

					
	 Direct Obligation of the Company
	  	Maturity Date	  	Balance Due
	 Laurus Term Note (1)
	  	04/29/08	  	$7,096,774
	 Laurus minimum borrowing note
	  	04/29/08	  	$2,500,000
	 Laurus revolving line of credit (2)
	  	04/29/08	  	$2,228,481
	 Southwest Bank of St. Louis
	  	01/15/08	  	$4,000,000



	(1)	monthly principal payments of $322,580.64 


	(2)	pay down of principal required based on fluctuations of borrowing base