Document:

NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL,
      IN A
      GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
      NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
      WITH
      A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
      THE
      SECURITIES.

     

    RxElite,
      Inc.

     

    Warrant
      To Purchase Common Stock

     

    Warrant
      No.: 1

    Number
      of
      Shares of Common Stock: 4,661,694

    Date
      of
      Issuance: December 31, 2007 ("Issuance
      Date")

     

    RxElite,
      Inc., a Delaware corporation, (the "Company"),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, CASTLERIGG MASTER INVESTMENTS
      LTD., the registered holder hereof or its permitted assigns (the "Holder"),
      is
      entitled, subject to the terms set forth below, to purchase from the Company,
      at
      the Exercise Price (as defined below) then in effect, upon surrender of this
      Warrant to Purchase Common Stock (including any Warrants to purchase Common
      Stock issued in exchange, transfer or replacement hereof, the "Warrant"),
      at
      any time or times on or after the date hereof, but not after 11:59 p.m., New
      York Time, on the Expiration Date (as defined below), Four Million Six Hundred
      Sixty One Thousand Six Hundred Ninety Four (4,661,694) fully paid nonassessable
      shares of Common Stock (as defined below) (the
      "Warrant
      Shares").
      Except as otherwise defined herein, capitalized terms in this Warrant shall
      have
      the meanings set forth in Section 16. This Warrant is one of the Warrants to
      purchase Common Stock (the "SPA
      Warrants")
      issued
      pursuant to Section 1 of that certain Securities Purchase Agreement, dated
      as of
      December 31, 2007 (the "Subscription
      Date"),
      by
      and among the Company and the investors (the "Buyers")
      referred to therein (the "Securities
      Purchase Agreement").

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1. EXERCISE
      OF WARRANT.

     

    (a) Mechanics
      of Exercise.
      Subject
      to the terms and conditions hereof (including, without limitation, the
      limitations set forth in Section 1(f)), this Warrant may be exercised by the
      Holder on any day on or after the date hereof in whole or in part, by
      (i) delivery of a written notice, in the form attached hereto as
Exhibit
      A
      (the
      "Exercise
      Notice"),
      of
      the Holder's election to exercise this Warrant and (ii) (A) payment to the
      Company of an amount equal to the applicable Exercise Price multiplied by the
      number of Warrant Shares as to which this Warrant is being exercised (the
      "Aggregate
      Exercise Price")
      in
      cash or by wire transfer of immediately available funds or (B) by notifying
      the
      Company that this Warrant is being exercised pursuant to a Cashless Exercise
      (as
      defined in Section 1(d)). The Holder shall not be required to deliver the
      original Warrant in order to effect an exercise hereunder. Execution and
      delivery of the Exercise Notice with respect to less than all of the Warrant
      Shares shall have the same effect as cancellation of the original Warrant and
      issuance of a new Warrant evidencing the right to purchase the remaining number
      of Warrant Shares. On or before the first Business Day following the date on
      which the Company has received each of the Exercise Notice and the Aggregate
      Exercise Price (or notice of a Cashless Exercise) (the "Exercise
      Delivery Documents"),
      the
      Company shall transmit by facsimile an acknowledgment of confirmation of receipt
      of the Exercise Delivery Documents to the Holder and the Company's transfer
      agent (the "Transfer
      Agent").
      On or
      before the third Trading Day following the date on which the Company has
      received all of the Exercise Delivery Documents (the "Share
      Delivery Date"),
      the
      Company shall (X) provided that the Transfer Agent is participating in The
      Depository Trust Company ("DTC")
      Fast
      Automated Securities Transfer Program, upon the request of the Holder, credit
      such aggregate number of shares of Common Stock to which the Holder is entitled
      pursuant to such exercise to the Holder's or its designee's balance account
      with
      DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
      Transfer Agent is not participating in the DTC Fast Automated Securities
      Transfer Program, issue
      and
      dispatch by overnight courier
      to the
      address as specified in the Exercise Notice, a certificate, registered in the
      Company's share register in the name of the Holder or its designee, for the
      number of shares of Common Stock to which the Holder is entitled pursuant to
      such exercise. Upon delivery of the Exercise Delivery Documents, the Holder
      shall be deemed for all corporate purposes to have become the holder of record
      of the Warrant Shares with respect to which this Warrant has been exercised,
      irrespective of the date such Warrant Shares are credited to the Holder's DTC
      account or the date of delivery of the certificates evidencing such Warrant
      Shares, as the case may be. If this Warrant is submitted in connection with
      any
      exercise pursuant to this Section 1(a) and the number of Warrant Shares
      represented by this Warrant submitted for exercise is greater than the number
      of
      Warrant Shares being acquired upon an exercise, then the Company shall as soon
      as practicable and in no event later than three Business Days after any exercise
      and at its own expense, issue a new Warrant (in accordance with Section 7(d))
      representing the right to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant, less the number of
      Warrant Shares with respect to which this Warrant is exercised. No fractional
      shares of Common Stock are to be issued upon the exercise of this Warrant,
      but
      rather the number of shares of Common Stock to be issued shall be rounded up
      to
      the nearest whole number. The Company shall pay any and all taxes which may
      be
      payable with respect to the issuance and delivery of Warrant Shares upon
      exercise of this Warrant. NOTWITHSTANDING
      ANY PROVISION OF THIS WARRANT TO THE CONTRARY, NO MORE THAN THE MAXIMUM
      ELIGIBILITY NUMBER OF WARRANT SHARES SHALL BE EXERCISABLE
      HEREUNDER.

     

    (b) Exercise
      Price.
      For
      purposes of this Warrant, "Exercise
      Price"
      means
      $1.1262, subject to adjustment as provided herein.

     

    
      
        
        

      

      
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    (c) Company's
      Failure to Timely Deliver Securities.
      If
      the
      Company shall fail for any reason or for no reason to issue to the Holder within
      three (3) Trading Days of receipt of the Exercise Delivery Documents, a
      certificate for the number of shares of Common Stock to which the Holder is
      entitled and register such shares of Common Stock on the Company's share
      register or to credit the Holder's balance account with DTC for such number
      of
      shares of Common Stock to which the Holder is entitled upon the Holder's
      exercise of this Warrant, then, in addition to all other remedies available
      to
      the Holder, the Company shall pay in cash to the Holder on each day after such
      third Trading
      Day that the issuance of such shares of Common Stock is not timely effected
      an
      amount equal to 1.5% of the product of (A) the sum of the number of shares
      of
      Common Stock not issued to the Holder on a timely basis and to which the Holder
      is entitled and (B) the Closing Sale Price of the shares of Common Stock on
      the
      Trading Day immediately preceding the last possible date which the Company
      could
      have issued such shares of Common Stock to the Holder without violating Section
      1(a). In addition to the foregoing, if
      within
      three (3) Trading Days after the Company's receipt of the facsimile copy of
      a
      Exercise Notice the Company shall fail to issue and deliver a certificate to
      the
      Holder and register such shares of Common Stock on the Company's share register
      or credit the Holder's balance account with DTC for the number of shares of
      Common Stock to which the Holder is entitled upon the Holder's exercise
      hereunder, and if on or after such Trading Day the Holder purchases (in an
      open
      market transaction or otherwise) shares of Common Stock to deliver in
      satisfaction of a sale by the Holder of shares of Common Stock issuable upon
      such exercise that the Holder anticipated receiving from the Company (a
      "Buy-In"),
      then
      the Company shall, within three Business Days after the Holder's request and
      in
      the Holder's discretion, either (i) pay cash to the Holder in an amount equal
      to
      the Holder's total purchase price (including brokerage commissions, if any)
      for
      the shares of Common Stock so purchased (the "Buy-In
      Price"),
      at
      which point the Company's obligation to deliver such certificate (and to issue
      such shares of Common Stock) or credit such Holder's balance account with DTC
      shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
      a certificate or certificates representing such shares of Common Stock or credit
      such Holder's balance account with DTC and pay cash to the Holder in an amount
      equal to the excess (if any) of the Buy-In Price over the product of (A) such
      number of shares of Common Stock, times (B) the Closing Bid Price on the date
      of
      exercise.

     

    (d) Cashless
      Exercise.
       Notwithstanding
      anything contained herein to the contrary, if a Registration Statement (as
      defined in the Registration Rights Agreement) covering the resale of the Warrant
      Shares that are the subject of the Exercise Notice (the "Unavailable
      Warrant Shares")
      is not
      available for the resale of such Unavailable Warrant Shares, the Holder may,
      in
      its sole discretion, exercise this Warrant in whole or in part and, in lieu
      of
      making the cash payment otherwise contemplated to be made to the Company upon
      such exercise in payment of the Aggregate Exercise Price, elect instead to
      receive upon such exercise the "Net Number" of shares of Common Stock determined
      according to the following formula (a "Cashless
      Exercise"):

     

    Net
      Number = (A
      x
      B) - (A x C)

         B

     

    For
      purposes of the foregoing formula:

     

    A=
      the
      total number of shares with respect to which this Warrant is then being
      exercised.

     

    B=
      the
      Closing Sale Price of the shares of Common Stock (as reported by Bloomberg)
      on
      the date immediately preceding the date of the Exercise Notice.

     

    
      
        
        

      

      
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    C=
      the
      Exercise Price then in effect for the applicable Warrant Shares at the time
      of
      such exercise.

     

    (e) Disputes.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the Warrant Shares, the Company shall promptly issue
      to the Holder the number of Warrant Shares that are not disputed and resolve
      such dispute in accordance with Section 12.

     

    (f) Limitation
      on Exercises.
      The
      Company shall not effect the exercise of this Warrant, and the Holder shall
      not
      have the right to exercise this Warrant, to the extent that after giving effect
      to such exercise, such Person (together with such Person's affiliates) would
      beneficially own in excess of 4.99% (the "Maximum
      Percentage")
      of the
      shares of Common Stock outstanding immediately after giving effect to such
      exercise. For purposes of the foregoing sentence, the aggregate number of shares
      of Common Stock beneficially owned by such Person and its affiliates shall
      include the number of shares of Common Stock issuable upon exercise of this
      Warrant with respect to which the determination of such sentence is being made,
      but shall exclude shares of Common Stock which would be issuable upon (A)
      exercise of the remaining, unexercised portion of this Warrant beneficially
      owned by such Person and its affiliates and (B) exercise or conversion of the
      unexercised or unconverted portion of any other securities of the Company
      beneficially owned by such Person and its affiliates (including, without
      limitation, any convertible notes or convertible preferred stock or warrants)
      subject to a limitation on conversion or exercise analogous to the limitation
      contained herein. Except as set forth in the preceding sentence, for purposes
      of
      this paragraph, beneficial ownership shall be calculated in accordance with
      Section 13(d) of the Securities Exchange Act of 1934, as amended (the
      "Exchange
      Act").
      For
      purposes of this Warrant, in determining the number of outstanding shares of
      Common Stock, the Holder may rely on the number of outstanding shares of Common
      Stock as reflected in (1) the Company's most recent Form 10-K, Form 10-KSB,
      Form
      10-Q, Form 10-QSB, Current Report on Form 8-K or other public filing with the
      Securities and Exchange Commission, as the case may be, (2) a more recent public
      announcement by the Company or (3) any other notice by the Company or the
      Transfer Agent setting forth the number of shares of Common Stock outstanding.
      For any reason at any time, upon the written or oral request of the Holder,
      the
      Company shall within one (1) Business Day confirm orally and in writing to
      the
      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
      the
      SPA Securities and the SPA Warrants, by the Holder and its affiliates since
      the
      date as of which such number of outstanding shares of Common Stock was reported.
      By written notice to the Company, the Holder may from time to time increase
      or
      decrease the Maximum Percentage to any other percentage not in excess of 9.99%
      specified in such notice; provided that (i) any such increase will not be
      effective until the sixty-first (61st)
      day
      after such notice is delivered to the Company, and (ii) any such increase or
      decrease will apply only to the Holder and not to any other holder of SPA
      Warrants. The
      provisions of this paragraph shall be construed and implemented in a manner
      otherwise than in strict conformity with the terms of this Section 1(f) 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.

     

    
      
        
        

      

      
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    (g) Insufficient
      Authorized Shares.
      If at
      any time while this Warrant remain outstanding the Company does not have a
      sufficient number of authorized and unreserved shares of Common Stock to satisfy
      its obligation to reserve for issuance upon exercise of this Warrant at least
      a
      number of shares of Common Stock equal to 130% (the "Required
      Reserve Amount")
      of the
      number of shares of Common Stock as shall from time to time be necessary to
      effect the exercise of all of this Warrant then outstanding (an "Authorized
      Share Failure"),
      then
      the Company shall immediately take all action necessary to increase the
      Company's authorized shares of Common Stock to an amount sufficient to allow
      the
      Company to reserve the Required Reserve Amount for this Warrant then
      outstanding. Without limiting the generality of the foregoing sentence, as
      soon
      as practicable after the date of the occurrence of an Authorized Share Failure,
      but in no event later than seventy-five (75) days after the occurrence of such
      Authorized Share Failure, the Company shall hold a meeting of its stockholders
      for the approval of an increase in the number of authorized shares of Common
      Stock. In connection with such meeting, the Company shall provide each
      stockholder with a proxy statement and shall use its best efforts to solicit
      its
      stockholders' approval of such increase in authorized shares of Common Stock
      and
      to cause its board of directors to recommend to the stockholders that they
      approve such proposal.

     

    2. ADJUSTMENT
      OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
      The
      Exercise Price and the number of Warrant Shares shall be adjusted from time
      to
      time as follows:

     

    (a) Adjustment
      upon Issuance of shares of Common Stock.
      If and
      whenever on or after the Subscription Date the Company issues or sells, or
      in
      accordance with this Section 2 is deemed to have issued or sold, any shares
      of
      Common Stock (including the issuance or sale of shares of Common Stock owned
      or
      held by or for the account of the Company, but excluding shares of Common Stock
      deemed to have been issued by the Company in connection with any Excluded
      Securities) for a consideration per share (the "New
      Issuance Price")
      less
      than the Exercise Price (the "Applicable
      Price")
      in
      effect immediately prior to such issue or sale or deemed issuance or sale (the
      foregoing a "Dilutive
      Issuance"),
      then
      immediately after such Dilutive Issuance, the Exercise Price then in effect
      shall be reduced to an amount equal to the New Issuance Price. Upon each such
      adjustment of the Exercise Price hereunder, the number of Warrant Shares shall
      be adjusted to the number of shares of Common Stock determined by multiplying
      the Exercise Price in effect immediately prior to such adjustment by the number
      of Warrant Shares acquirable upon exercise of this Warrant immediately prior
      to
      such adjustment and dividing the product thereof by the Exercise Price resulting
      from such adjustment. For purposes of determining the adjusted Exercise Price
      under this Section 2(a), the following shall be applicable:

     

    (i) Issuance
      of Options.
      If the
      Company in any manner grants any Options and the lowest price per share for
      which one share of Common Stock is issuable upon the exercise of any such Option
      or upon conversion, exercise or exchange of any Convertible Securities issuable
      upon exercise of any such Option is less than the Applicable Price, then such
      share of Common Stock shall be deemed to be outstanding and to have been issued
      and sold by the Company at the time of the granting or sale of such Option
      for
      such price per share. For purposes of this Section 2(a)(i), the "lowest price
      per share for which one share of Common Stock is issuable upon exercise of
      such
      Options or upon conversion, exercise or exchange of such Convertible Securities
      issuable upon exercise of any such Option" shall be equal to the sum of the
      lowest amounts of consideration (if any) received or receivable by the Company
      with respect to any one share of Common Stock upon the granting or sale of
      the
      Option, upon exercise of the Option and upon conversion, exercise or exchange
      of
      any Convertible Security issuable upon exercise of such Option. No further
      adjustment of the Exercise Price or number of Warrant Shares shall be made
      upon
      the actual issuance of such shares of Common Stock or of such Convertible
      Securities upon the exercise of such Options or upon the actual issuance of
      such
      shares of Common Stock upon conversion, exercise or exchange of such Convertible
      Securities.

     

    
      
        
        

      

      
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    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities and the lowest
      price per share for which one share of Common Stock is issuable upon the
      conversion, exercise or exchange thereof is less than the Applicable Price,
      then
      such share of Common Stock shall be deemed to be outstanding and to have been
      issued and sold by the Company at the time of the issuance or sale of such
      Convertible Securities for such price per share. For the purposes of this
      Section 2(a)(ii), the "lowest price per share for which one share of Common
      Stock is issuable upon the conversion, exercise or exchange thereof" shall
      be
      equal to the sum of the lowest amounts of consideration (if any) received or
      receivable by the Company with respect to one share of Common Stock upon the
      issuance or sale of the Convertible Security and upon conversion, exercise
      or
      exchange of such Convertible Security. No further adjustment of the Exercise
      Price or number of Warrant Shares shall be made upon the actual issuance of
      such
      shares of Common Stock upon conversion, exercise or exchange of such Convertible
      Securities, and if any such issue or sale of such Convertible Securities is
      made
      upon exercise of any Options for which adjustment of this Warrant has been
      or is
      to be made pursuant to other provisions of this Section 2(a), no further
      adjustment of the Exercise Price or number of Warrant Shares shall be made
      by
      reason of such issue or sale.

     

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion, exercise or exchange of any Convertible
      Securities, or the rate at which any Convertible Securities are convertible
      into
      or exercisable or exchangeable for shares of Common Stock increases or decreases
      at any time, the Exercise Price and the number of Warrant Shares in effect
      at
      the time of such increase or decrease shall be adjusted to the Exercise Price
      and the number of Warrant Shares which would have been in effect at such time
      had such Options or Convertible Securities provided for such increased or
      decreased purchase price, additional consideration or increased or decreased
      conversion rate, as the case may be, at the time initially granted, issued
      or
      sold. For purposes of this Section 2(a)(iii), if the terms of any Option or
      Convertible Security that was outstanding as of the date of issuance of this
      Warrant are increased or decreased in the manner described in the immediately
      preceding sentence, then such Option or Convertible Security and the shares
      of
      Common Stock deemed issuable upon exercise, conversion or exchange thereof
      shall
      be deemed to have been issued as of the date of such increase or decrease.
      No
      adjustment pursuant to this Section 2(a)(iii) shall be made if such adjustment
      would result in an increase of the Exercise Price then in effect or a decrease
      in the number of Warrant Shares.

     

    
      
        
        

      

      
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    (iv) Calculation
      of Consideration Received.
      In case
      any Option or Convertible Security is issued in connection with the issue or
      sale of other securities of the Company, together comprising one integrated
      transaction in which no specific consideration is allocated to such Option
      or
      Convertible Security by the parties thereto, the Option or Convertible Security
      will be deemed to have been issued for a consideration of $0.01. If any shares
      of Common Stock, Options or Convertible Securities are issued or sold or deemed
      to have been issued or sold for cash, the consideration received therefor will
      be deemed to be the net amount received by the Company therefor. If any shares
      of Common Stock, Options or Convertible Securities are issued or sold for a
      consideration other than cash, the amount of such consideration received by
      the
      Company will be the fair value of such consideration, except where such
      consideration consists of publicly traded securities, in which case the amount
      of consideration received by the Company will be the Closing Sale Price of
      such
      security on the date of receipt. If any shares of Common Stock, Options or
      Convertible Securities are issued to the owners of the non-surviving entity
      in
      connection with any merger in which the Company is the surviving entity, the
      amount of consideration therefor will be deemed to be the fair value of such
      portion of the net assets and business of the non-surviving entity as is
      attributable to such shares of Common Stock, Options or Convertible Securities,
      as the case may be. The fair value of any consideration other than cash or
      publicly traded securities will be determined jointly by the Company and the
      Required Holders. If such parties are unable to reach agreement within ten
      (10)
      days after the occurrence of an event requiring valuation (the "Valuation
      Event"),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth day following the Valuation Event by an independent,
      reputable appraiser jointly selected by the Company and the Required Holders.
      The determination of such appraiser shall be final and binding upon all parties
      absent manifest error and the fees and expenses of such appraiser shall be
      borne
      by the Company.

     

    (v) Record
      Date.
      If the
      Company takes a record of the holders of shares of Common Stock for the purpose
      of entitling them (A) to receive a dividend or other distribution payable
      in shares of Common Stock, Options or in Convertible Securities or (B) to
      subscribe for or purchase shares of Common Stock, Options or Convertible
      Securities, then such record date will be deemed to be the date of the issue
      or
      sale of the shares of Common Stock deemed to have been issued or sold upon
      the
      declaration of such dividend or the making of such other distribution or the
      date of the granting of such right of subscription or purchase, as the case
      may
      be.

     

    
      
        
        

      

      
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    (b) Adjustment
      upon Subdivision or Combination of shares of Common Stock.
      If the
      Company at any time on or after the Subscription Date subdivides (by any stock
      split, stock dividend, recapitalization or otherwise) one or more classes of
      its
      outstanding shares of Common Stock into a greater number of shares, the Exercise
      Price in effect immediately prior to such subdivision will be proportionately
      reduced and the number of Warrant Shares will be proportionately increased.
      If
      the Company at any time on or after the Subscription Date combines (by
      combination, reverse stock split or otherwise) one or more classes of its
      outstanding shares of Common Stock into a smaller number of shares, the Exercise
      Price in effect immediately prior to such combination will be proportionately
      increased and the number of Warrant Shares will be proportionately decreased.
      Any adjustment under this Section 2(b) shall become effective at the close
      of
      business on the date the subdivision or combination becomes
      effective.

     

    (c) Other
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 2 but
      not expressly provided for by such provisions (including, without limitation,
      the granting of stock appreciation rights, phantom stock rights or other rights
      with equity features), then the Company's Board of Directors will make an
      appropriate adjustment in the Exercise Price and the number of Warrant Shares
      so
      as to protect the rights of the Holder; provided that no such adjustment
      pursuant to this Section 2(c) will increase the Exercise Price or decrease
      the
      number of Warrant Shares as otherwise determined pursuant to this Section
      2.

     

    3. RIGHTS
      UPON DISTRIBUTION OF ASSETS.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of shares of Common Stock, by
      way
      of return of capital or otherwise (including, without limitation, any
      distribution of cash, stock or other securities, property or options by way
      of a
      dividend, spin off, reclassification, corporate rearrangement, scheme of
      arrangement or other similar transaction) (a "Distribution"),
      at
      any time after the issuance of this Warrant, then, in each such
      case:

     

    (a) any
      Exercise Price in effect immediately prior to the close of business on the
      record date fixed for the determination of holders of shares of Common Stock
      entitled to receive the Distribution shall be reduced, effective as of the
      close
      of business on such record date, to a price determined by multiplying such
      Exercise Price by a fraction of which (i) the numerator shall be the Closing
      Bid
      Price of the shares of Common Stock on the Trading Day immediately preceding
      such record date minus the value of the Distribution (as determined in good
      faith by the Company's Board of Directors) applicable to one share of Common
      Stock, and (ii) the denominator shall be the Closing Bid Price of the shares
      of
      Common Stock on the Trading Day immediately preceding such record date;
      and

     

    
      
        
        

      

      
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    (b) the
      number of Warrant Shares shall be increased to a number of shares equal to
      the
      number of shares of Common Stock obtainable immediately prior to the close
      of
      business on the record date fixed for the determination of holders of shares
      of
      Common Stock entitled to receive the Distribution multiplied by the reciprocal
      of the fraction set forth in the immediately preceding paragraph (a); provided
      that in the event that the Distribution is of shares of common stock
      ("Other
      Shares of Common Stock")
      of a
      company whose common shares are traded on a national securities exchange or
      a
      national automated quotation system, then the Holder may elect to receive a
      warrant to purchase Other Shares of Common Stock in lieu of an increase in
      the
      number of Warrant Shares, the terms of which shall be identical to those of
      this
      Warrant, except that such warrant shall be exercisable into the number of shares
      of Other Shares of Common Stock that would have been payable to the Holder
      pursuant to the Distribution had the Holder exercised this Warrant immediately
      prior to such record date and with an aggregate exercise price equal to the
      product of the amount by which the exercise price of this Warrant was decreased
      with respect to the Distribution pursuant to the terms of the immediately
      preceding paragraph (a) and the number of Warrant Shares calculated in
      accordance with the first part of this paragraph (b).

     

    4. PURCHASE
      RIGHTS; FUNDAMENTAL TRANSACTIONS.

     

    (a) Purchase
      Rights.
      In
      addition to any adjustments pursuant to Section 2 above, if at any time the
      Company grants, issues or sells any Options, Convertible Securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of shares of Common Stock (the "Purchase
      Rights"),
      then
      the Holder will be entitled to acquire, upon the terms applicable to such
      Purchase Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the number of shares of Common Stock acquirable
      upon complete exercise of this Warrant (without regard to any limitations on
      the
      exercise of this Warrant) immediately before the date on which a record is
      taken
      for the grant, issuance or sale of such Purchase Rights, or, if no such record
      is taken, the date as of which the record holders of shares of Common Stock
      are
      to be determined for the grant, issue or sale of such Purchase
      Rights.

     

    
      
        
        

      

      
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    (b) Fundamental
      Transactions.
      The
      Company shall not enter into or be party to a Fundamental Transaction unless
      (i)  the Successor Entity assumes in writing all of the obligations of the
      Company under this Warrant and the other Transaction Documents in accordance
      with the provisions of this Section (4)(b) pursuant to written agreements in
      form and substance satisfactory to the Required Holders and approved by the
      Required Holders prior to such Fundamental Transaction, including agreements
      to
      deliver to each holder of Warrants in exchange for such Warrants a security
      of
      the Successor Entity evidenced by a written instrument substantially similar
      in
      form and substance to this Warrant, including, without limitation, an adjusted
      exercise price equal to the value for the shares of Common Stock reflected
      by
      the terms of such Fundamental Transaction, and exercisable for a corresponding
      number of shares of capital stock equivalent to the shares of Common Stock
      acquirable and receivable upon exercise of this Warrant (without regard to
      any
      limitations on the exercise of this Warrant) prior to such Fundamental
      Transaction, and satisfactory to the Required Holders and (ii) the
      Successor Entity (including its Parent Entity) is a publicly traded corporation
      whose common stock is quoted on or listed for trading on an Eligible Market.
      Upon the occurrence of any Fundamental Transaction, the Successor Entity shall
      succeed to, and be substituted for (so that from and after the date of such
      Fundamental Transaction, the provisions of this Warrant referring to the
      "Company" shall refer instead to the Successor Entity), and may exercise every
      right and power of the Company and shall assume all of the obligations of the
      Company under this Warrant with the same effect as if such Successor Entity
      had
      been named as the Company herein. Upon consummation of the Fundamental
      Transaction, the Successor Entity shall deliver to the Holder confirmation
      that
      there shall be issued upon exercise of this Warrant at any time after the
      consummation of the Fundamental Transaction, in lieu of the shares of the Common
      Stock (or other securities, cash, assets or other property) purchasable upon
      the
      exercise of the Warrant prior to such Fundamental Transaction, such shares
      of
      the publicly traded Common Stock (or its equivalent) of the Successor Entity
      (including its Parent Entity)
      which
      the Holder would have been entitled to receive upon the happening of such
      Fundamental Transaction had this Warrant been converted immediately prior to
      such Fundamental Transaction,
      as
      adjusted in accordance with the provisions of this Warrant. In addition to
      and
      not in substitution for any other rights hereunder, prior to the consummation
      of
      any Fundamental Transaction pursuant to which holders of shares of Common Stock
      are entitled to receive securities or other assets with respect to or in
      exchange for shares of Common Stock (a "Corporate
      Event"),
      the
      Company shall make appropriate provision to insure that the Holder will
      thereafter have the right to receive upon an exercise of this Warrant at any
      time after the consummation of
      the
      Fundamental Transaction but prior to the Expiration Date,
      in lieu
      of the shares of the Common Stock (or
      other
      securities, cash, assets or other property) purchasable
      upon the exercise of the Warrant prior to such Fundamental
      Transaction,
      such
      shares of stock, securities, cash, assets or any other property whatsoever
      (including warrants or other purchase or subscription rights) which the Holder
      would have been entitled to receive upon the happening of such Fundamental
      Transaction had the Warrant been exercised immediately prior to such Fundamental
      Transaction. Provision made pursuant to the preceding sentence shall be in
      a
      form and substance reasonably satisfactory to the Required Holders. The
      provisions of this Section shall apply similarly and equally to successive
      Fundamental Transactions and Corporate Events and shall be applied without
      regard to any limitations on the exercise of this Warrant.

     

    (c) Notwithstanding
      the foregoing and the provisions of Section 4(b) above, in the event of a
      Fundamental Transaction, at the request of the Holder delivered before the
      ninetieth (90th) day after the consummation of such Fundamental Transaction,
      the
      Company (or the Successor Entity) shall
      purchase
      this Warrant from the Holder by paying to the Holder, within five (5) Business
      Days of such request (or, if later, on the effective date of the Fundamental
      Transaction,
      cash in
      an amount equal to the Black-Scholes Value of the remaining unexercised portion
      of this Warrant on the date of such Fundamental Transaction.

     

    
      
        
        

      

      
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    5. WARRANT
      HOLDER NOT DEEMED A STOCKHOLDER.
      Except
      as otherwise specifically provided herein, the Holder, solely in such Person's
      capacity as a holder of this Warrant, shall not be entitled to vote or receive
      dividends or be deemed the holder of share capital of the Company for any
      purpose, nor shall anything contained in this Warrant be construed to confer
      upon the Holder, solely in such Person's capacity as the Holder of this Warrant,
      any of the rights of a shareholder of the Company or any right to vote, give
      or
      withhold consent to any corporate action (whether any reorganization, issue
      of
      stock, reclassification of stock, consolidation, merger, conveyance or
      otherwise), receive notice of meetings, receive dividends or subscription
      rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
      which such Person is then entitled to receive upon the due exercise of this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on the Holder to purchase any securities (upon exercise
      of this Warrant or otherwise) or as a shareholder of the Company, whether such
      liabilities are asserted by the Company or by creditors of the Company.
      Notwithstanding this Section 5, the Company shall provide the Holder with copies
      of the same notices and other information given to the shareholders of the
      Company generally, contemporaneously with the giving thereof to the
      shareholders.

     

    6. NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Certificate of Incorporation, Bylaws or through any reorganization, transfer
      of assets, consolidation, merger, scheme of arrangement, 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, and will at
      all
      times in good faith carry out all the provisions of this Warrant and take all
      action as may be required to protect the rights of the Holder. Without limiting
      the generality of the foregoing, the Company (i) shall not increase the par
      value of any shares of Common Stock receivable upon the exercise of this Warrant
      above the Exercise Price then in effect, (ii) shall take all such actions
      as may be necessary or appropriate in order that the Company may validly and
      legally issue fully paid and nonassessable shares of Common Stock upon the
      exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants
      are outstanding, take all action necessary to reserve and keep available out
      of
      its authorized and unissued shares of Common Stock, solely for the purpose
      of
      effecting the exercise of the SPA Warrants, 130% of the number of shares of
      Common Stock as shall from time to time be necessary to effect the exercise
      of
      the SPA Warrants then outstanding (without regard to any limitations on
      exercise).

     

    7. REISSUANCE
      OF WARRANTS.

     

    (a) Transfer
      of Warrant.
      If this
      Warrant is to be transferred, the Holder shall surrender this Warrant to the
      Company, whereupon the Company will forthwith issue and deliver upon the order
      of the Holder a new Warrant (in accordance with Section 7(d)), registered as
      the
      Holder may request, representing the right to purchase the number of Warrant
      Shares being transferred by the Holder and, if less than the total number of
      Warrant Shares then underlying this Warrant is being transferred, a new Warrant
      (in accordance with Section 7(d)) to the Holder representing the right to
      purchase the number of Warrant Shares not being transferred.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (b) Lost,
      Stolen or Mutilated Warrant.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Warrant, and, in the case of
      loss, theft or destruction, of any indemnification undertaking by the Holder
      to
      the Company in customary form and, in the case of mutilation, upon surrender
      and
      cancellation of this Warrant, the Company shall execute and deliver to the
      Holder a new Warrant (in accordance with Section 7(d)) representing the right
      to
      purchase the Warrant Shares then underlying this Warrant.

     

    (c) Exchangeable
      for Multiple Warrants.
      This
      Warrant is exchangeable, upon the surrender hereof by the Holder at the
      principal office of the Company, for a new Warrant or Warrants (in accordance
      with Section 7(d)) representing in the aggregate the right to purchase the
      number of Warrant Shares then underlying this Warrant, and each such new Warrant
      will represent the right to purchase such portion of such Warrant Shares as
      is
      designated by the Holder at the time of such surrender; provided, however,
      that
      no Warrants for fractional shares of Common Stock shall be given.

     

    (d) Issuance
      of New Warrants.
      Whenever the Company is required to issue a new Warrant pursuant to the terms
      of
      this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
      (ii) shall represent, as indicated on the face of such new Warrant, the right
      to
      purchase the Warrant Shares then underlying this Warrant (or in the case of
      a
      new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant
      Shares designated by the Holder which, when added to the number of shares of
      Common Stock underlying the other new Warrants issued in connection with such
      issuance, does not exceed the number of Warrant Shares then underlying this
      Warrant), (iii) shall have an issuance date, as indicated on the face of such
      new Warrant which is the same as the Issuance Date, and (iv) shall have the
      same
      rights and conditions as this Warrant.

     

    
      
        
        

      

      
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    8. NOTICES.
      Whenever notice is required to be given under this Warrant, unless otherwise
      provided herein, such notice shall be given in accordance with Section 9(f)
      of
      the Securities Purchase Agreement. The Company shall provide the Holder with
      prompt written notice of all actions taken pursuant to this Warrant, including
      in reasonable detail a description of such action and the reason therefore.
      Without limiting the generality of the foregoing, the Company will give written
      notice to the Holder (i) immediately upon any adjustment of the Exercise Price,
      setting forth in reasonable detail, and certifying, the calculation of such
      adjustment and (ii) at least fifteen days prior to the date on which the Company
      closes its books or takes a record (A) with respect to any dividend or
      distribution upon the shares of Common Stock, (B) with respect to any grants,
      issuances or sales of any Options, Convertible Securities or rights to purchase
      stock, warrants, securities or other property to holders of shares of Common
      Stock or (C) for determining rights to vote with respect to any Fundamental
      Transaction, dissolution or liquidation, provided in each case that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to the Holder.

     

    9. AMENDMENT
      AND WAIVER.
      Except
      as otherwise provided herein, the provisions of this Warrant may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the Required Holders; provided that no such action may
      increase the exercise price of any SPA Warrant or decrease the number of shares
      or class of stock obtainable upon exercise of any SPA Warrant without the
      written consent of the Holder. No such amendment shall be effective to the
      extent that it applies to less than all of the holders of the SPA Warrants
      then
      outstanding.

     

    10. GOVERNING
      LAW.
      This
      Warrant shall be governed by and construed and enforced in accordance with,
      and
      all questions concerning the construction, validity, interpretation and
      performance of this Warrant shall be governed by, the internal laws of the
      State
      of New York, without giving effect to any choice of law or conflict of law
      provision or rule (whether of the State of New York or any other jurisdictions)
      that would cause the application of the laws of any jurisdictions other than
      the
      State of New York.

     

    11. CONSTRUCTION;
      HEADINGS.
      This
      Warrant shall be deemed to be jointly drafted by the Company and all the Buyers
      and shall not be construed against any person as the drafter hereof. The
      headings of this Warrant are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Warrant.

     

    12. DISPUTE
      RESOLUTION.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the Warrant Shares, the Company shall submit the
      disputed determinations or arithmetic calculations via facsimile within two
      Business Days of receipt of the Exercise Notice giving rise to such dispute,
      as
      the case may be, to the Holder. If the Holder and the Company are unable to
      agree upon such determination or calculation of the Exercise Price or the
      Warrant Shares within three Business Days of such disputed determination or
      arithmetic calculation being submitted to the Holder, then the Company shall,
      within two Business Days submit via facsimile (a) the disputed determination
      of
      the Exercise Price to an independent, reputable investment bank selected by
      the
      Company and approved by the Holder or (b) the disputed arithmetic calculation
      of
      the Warrant Shares to the Company's independent, outside accountant. The Company
      shall cause at its expense the investment bank or the accountant, as the case
      may be, to perform the determinations or calculations and notify the Company
      and
      the Holder of the results no later than ten Business Days from the time it
      receives the disputed determinations or calculations. Such investment bank's
      or
      accountant's determination or calculation, as the case may be, shall be binding
      upon all parties absent demonstrable error.

     

    
      
        
        

      

      
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    13. REMEDIES,
      OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
      The
      remedies provided in this Warrant shall be cumulative and in addition to all
      other remedies available under this Warrant and the other Transaction Documents,
      at law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the right of the Holder
      right
      to pursue actual damages for any failure by the Company to comply with the
      terms
      of this Warrant. The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Holder and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the holder of this Warrant shall
      be entitled, in addition to all other available remedies, to an injunction
      restraining any breach, without the necessity of showing economic loss and
      without any bond or other security being required.

     

    14. TRANSFER.
      This
      Warrant may be offered for sale, sold, transferred or assigned without the
      consent of the Company, except as may otherwise be required by Section 2(g)
      of
      the Securities Purchase Agreement.

     

    15. SEVERABILITY.
      If any
      provision of this Agreement is prohibited by law or otherwise determined to
      be
      invalid or unenforceable by a court of competent jurisdiction, the provision
      that would otherwise be prohibited, invalid or unenforceable shall be deemed
      amended to apply to the broadest extent that it would be valid and enforceable,
      and the invalidity or unenforceability of such provision shall not affect the
      validity of the remaining provisions of this Agreement so long as this Agreement
      as so modified continues to express, without material change, the original
      intentions of the parties as to the subject matter hereof and the prohibited
      nature, invalidity or unenforceability of the provision(s) in question does
      not
      substantially impair the respective expectations or reciprocal obligations
      of
      the parties or the practical realization of the benefits that would otherwise
      be
      conferred upon the parties. The parties will endeavor in good faith negotiations
      to replace the prohibited, invalid or unenforceable provision(s) with a valid
      provision(s), the effect of which comes as close as possible to that of the
      prohibited, invalid or unenforceable provision(s).

     

    16. CERTAIN
      DEFINITIONS.
      For
      purposes of this Warrant, the following terms shall have the following
      meanings:

     

    (a) "Approved
      Stock Plan"
      means
      any employee benefit plan which has been approved by the Board of Directors
      of
      the Company, pursuant to which the Company's securities may be issued to any
      employee, consultant, officer or director for services provided to the
      Company.

     

    (b) "Black
      Scholes Value"
      means
      the value of this Warrant based on the Black and Scholes Option Pricing Model
      obtained from the "OV" function on Bloomberg determined as of the day of closing
      of the applicable Fundamental Transaction for pricing purposes and reflecting
      (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a
      period equal to the remaining term of this Warrant as of such date of request,
      (ii) an expected volatility equal to the greater of 100% and the 100 day
      volatility obtained from the HVT function on Bloomberg as of the day immediately
      following the public announcement of the applicable Fundamental Transaction
      and
      (iii) the underlying price per share used in such calculation shall be the
      sum
      of the price per share being offered in cash, if any, plus the value of any
      non
      cash consideration, if any, being offered in the Fundamental
      Transaction.

     

    
      
        
        

      

      
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    (c) "Bloomberg"
      means
      Bloomberg Financial Markets.

     

    (d) "Business
      Day"
      means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    (e) "Closing
      Bid Price"
      and
      "Closing
      Sale Price"
      means,
      for any security as of any date, the last closing bid price and last closing
      trade price, respectively, for such security on the Principal Market, as
      reported by Bloomberg, or, if the Principal Market begins to operate on an
      extended hours basis and does not designate the closing bid price or the closing
      trade price, as the case may be, then the last bid price or last trade price,
      respectively, of such security prior to 4:00:00 p.m., New York Time, as reported
      by Bloomberg, or, if the Principal Market is not the principal securities
      exchange or trading market for such security, the last closing bid price or
      last
      trade price, respectively, of such security on the principal securities exchange
      or trading market where such security is listed or traded as reported by
      Bloomberg, or if the foregoing do not apply, the last closing bid price or
      last
      trade price, respectively, of such security in the over-the-counter market
      on
      the electronic bulletin board for such security as reported by Bloomberg, or,
      if
      no closing bid price or last trade price, respectively, is reported for such
      security by Bloomberg, the average of the bid prices, or the ask prices,
      respectively, of any market makers for such security as reported in the "pink
      sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).
      If
      the Closing Bid Price or the Closing Sale Price cannot be calculated for a
      security on a particular date on any of the foregoing bases, the Closing Bid
      Price or the Closing Sale Price, as the case may be, of such security on such
      date shall be the fair market value as mutually determined by the Company and
      the Holder. If the Company and the Holder are unable to agree upon the fair
      market value of such security, then such dispute shall be resolved pursuant
      to
      Section 12. All such determinations to be appropriately adjusted for any stock
      dividend, stock split, stock combination or other similar transaction during
      the
      applicable calculation period.

     

    (f) "Common
      Stock"
      means
      (i) the Company's shares of Common Stock, par value $0.001 per share, and
      (ii) any share capital into which such Common Stock shall have been changed
      or any share capital resulting from a reclassification of such Common
      Stock.

     

    (g) "Convertible
      Securities"
      means
      any stock or securities (other than Options) directly or indirectly convertible
      into or exercisable or exchangeable for shares of Common Stock.

     

    (h) "Eligible
      Market"
      means
      the Principal Market, the American Stock Exchange, The New York Stock Exchange,
      Inc., The NASDAQ Global Market, The NASDAQ Capital Market or The NASDAQ Global
      Select Market.

     

    
      
        
        

      

      
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    (i) "Excluded
      Securities"
      means
      any Common Stock issued or issuable: (i) in connection with any Approved Stock
      Plan; (ii) upon conversion of the SPA Securities or the exercise of the SPA
      Warrants; (iii) in connection with any stock split, stock dividend,
      recapitalization or similar transaction by the Company for which adjustment
      is
      made pursuant to Section 2(b);
      and (iv)
      upon exercise of any Options or Convertible Securities which are outstanding
      on
      the day immediately preceding the Subscription Date, provided that the terms
      of
      such Options or Convertible Securities are not amended, modified or changed
      on
      or after the Subscription Date.

     

    (j) "Expiration
      Date"
      means
      sixty (60) months after the earlier of (A) such time as all of the Conversion
      Shares (as defined in the Securities Purchase Agreement) are available for
      resale pursuant to an effective Registration Statement (as defined in the
      Registration Rights Agreement) and (B) two (2) years after the Issuance Date
      or,
      if any such date falls on a day other than a Business Day or on which trading
      does not take place on the Principal market (a "Holiday"),
      the
      next day that is not a Holiday.

     

    (k) "Fundamental
      Transaction"
      means
      that the Company shall directly or indirectly, in one or more related
      transactions, (i) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person, or (ii) sell, assign, transfer,
      convey or otherwise dispose of all or substantially all of the properties or
      assets of the Company to another Person, or (iii) allow another Person to make
      a
      purchase, tender or exchange offer that is accepted by the holders of more
      than
      the 50% of either the outstanding shares of Common Stock (not including any
      shares of Common Stock held by the Person or Persons making or party to, or
      associated or affiliated with the Persons making or party to, such purchase,
      tender or exchange offer), or (iv) consummate a stock purchase agreement or
      other business combination (including, without limitation, a reorganization,
      recapitalization, spin-off or scheme of arrangement) with another Person whereby
      such other Person acquires more than the 50% of the outstanding shares of Common
      Stock (not including any shares of Common Stock held by the other Person or
      other Persons making or party to, or associated or affiliated with the other
      Persons making or party to, such stock purchase agreement or other business
      combination), or (v) reorganize, recapitalize or reclassify its Common Stock,
      or
      (vi) any "person" or "group" (as these terms are used for purposes of Sections
      13(d) and 14(d) of the Exchange Act), become the "beneficial owner" (as defined
      in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the
      aggregate ordinary voting power represented by issued and outstanding Common
      Stock.

     

    (l) "Maximum
      Eligibility Number"
      means
      initially zero and shall be increased on each Company Optional Redemption Date
      when the Company elects a Company Optional Redemption with respect to any
      portion of the SPA Securities representing the Available Additional Company
      Optional Redemption Amount pursuant to the Holders' SPA Securities by an amount
      equal to one-hundred percent (100%) of the Conversion Amount representing the
      portion of the Available Additional Company Optional Redemption Amount divided
      by the then applicable Conversion Price (as such terms are defined in the SPA
      Securities).

     

    (m) "Options"
      means
      any rights, warrants or options to subscribe for or purchase shares of Common
      Stock or Convertible Securities.

     

    
      
        
        

      

      
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    (n) "Parent
      Entity"
      of a
      Person means an entity that, directly or indirectly, controls the applicable
      Person and whose common stock or equivalent equity security is quoted or listed
      on an Eligible Market, or, if there is more than one such Person or Parent
      Entity, the Person or Parent Entity with the largest public market
      capitalization as of the date of consummation of the Fundamental
      Transaction.

     

    (o) "Person"
      means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization, any other entity and
      a
      government or any department or agency thereof.

     

    (p) "Principal
      Market"
      means
      the OTC Bulletin Board.

     

    (q) "Registration
      Rights Agreement"
      means
      that certain Registration Rights Agreement dated as of the Issuance Date by
      and
      among the Company and the Buyers.

     

    (r) "Required
      Holders"
      means
      the holders of the SPA Warrants representing at least a majority of shares
      of
      Common Stock underlying the SPA Warrants then outstanding.

     

    (s) "SPA
      Securities"
      means
      the Notes issued pursuant to the Securities Purchase Agreement.

     

    (t) "Successor
      Entity"
      means
      the Person (or, if so elected by the Required Holders, the Parent Entity) formed
      by, resulting from or surviving any Fundamental Transaction or the Person (or,
      if so elected by the Required Holders, the Parent Entity) with which such
      Fundamental Transaction shall have been entered into.

     

    (u) "Trading
      Day"
      means
      any day on which the Common Stock is traded on the Principal Market, or, if
      the
      Principal Market is not the principal trading market for the Common Stock,
      then
      on the principal securities exchange or securities market on which the Common
      Stock is then traded; provided that "Trading Day" shall not include any day
      on
      which the Common Stock is scheduled to trade on such exchange or market for
      less
      than 4.5 hours or any day that the Common Stock is suspended from trading during
      the final hour of trading on such exchange or market (or if such exchange or
      market does not designate in advance the closing time of trading on such
      exchange or market, then during the hour ending at 4:00:00 p.m., New York
      Time).

     

    
      
        
        

      

      
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    (v) "Weighted
      Average Price"
      means,
      for any security as of any date, the dollar volume-weighted average price for
      such security on the Principal Market during the period beginning at 9:30:01
      a.m., New York Time (or such other time as the Principal Market publicly
      announces is the official open of trading), and ending at 4:00:00 p.m., New
      York
      Time (or such other time as the Principal Market publicly announces is the
      official close of trading) as reported by Bloomberg through its "Volume at
      Price" functions, or, if the foregoing does not apply, the dollar
      volume-weighted average price of such security in the over-the-counter market
      on
      the electronic bulletin board for such security during the period beginning
      at
      9:30:01 a.m., New York Time (or such other time as such market publicly
      announces is the official open of trading), and ending at 4:00:00 p.m., New
      York
      Time (or such other time as such market publicly announces is the official
      close
      of trading) as reported by Bloomberg, or, if no dollar volume-weighted average
      price is reported for such security by Bloomberg for such hours, the average
      of
      the highest closing bid price and the lowest closing ask price of any of the
      market makers for such security as reported in the "pink sheets" by Pink Sheets
      LLC (formerly the National Quotation Bureau, Inc.). If the Weighted Average
      Price cannot be calculated for a security on a particular date on any of the
      foregoing bases, the Weighted Average Price of such security on such date shall
      be the fair market value as mutually determined by the Company and the Holder.
      If the Company and the Holder are unable to agree upon the fair market value
      of
      such security, then such dispute shall be resolved pursuant to Section 12.
      All
      such determinations are to be appropriately adjusted for any stock dividend,
      stock split, stock combination or other similar transaction during the
      applicable calculation period.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to Purchase Common Stock to be duly executed
      as
      of the Issuance Date set out above.

     

    
      	 	
              RxELITE,
                INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	/s/
              Jonathan
              Houssian                              
              
	 	
              Name:
                Jonathan Houssian

            
	 	
              Title:
                President and Chief Executive
                OfficerSECURITY
      AGREEMENT

     

    SECURITY
      AGREEMENT,
      dated
      as of December 31, 2007 (this "Agreement")
      made
      by RxElite,
      Inc.,
      a
      Delaware corporation (the "Company"),
      and
      the undersigned subsidiaries of the Company (each a "Grantor"
      and
      collectively and together with the Company, the "Grantors"),
      in
      favor of Castlerigg
      Master Investments
      Ltd.,
      a
      company organized under the laws of the British Virgin Islands, in its capacity
      as collateral agent (in such capacity, the "Collateral
      Agent")
      for
      the Buyers (as defined below) party to the Securities Purchase Agreement, dated
      as of even date herewith (as amended, restated or otherwise modified from time
      to time, the "Securities
      Purchase Agreement").

     

    WITNESSETH:

     

    WHEREAS,
      the Company and each party listed as a "Buyer" on the Schedule of Buyers
      attached to the Securities Purchase Agreement (collectively, the "Buyers")
      are
      parties to the Securities Purchase Agreement, pursuant to which the Company
      has
      agreed to sell, and the Buyers agreed to purchase, the "Notes" (as defined
      in
      the Securities Purchase Agreement) to be issued pursuant thereto (as such Notes
      may be amended, restated, replaced or otherwise modified from time to time
      in
      accordance with the terms thereof, collectively, the "Notes");

     

    WHEREAS,
      each of the Grantors (other than the Company) (each a "Guarantor"
      and
      collectively, the "Guarantors")
      has
      executed and delivered a Guaranty dated the date hereof (the "Guaranty")
      in
      favor of the Collateral Agent for the benefit of itself and the Buyers, with
      respect to the Company's obligations under the Securities Purchase Agreement,
      the Notes and the Transaction Documents (as defined below); 

     

    WHEREAS,
      it is a condition precedent to the Buyers purchasing the Notes pursuant to
      the
      Securities Purchase Agreement that the Grantors execute and deliver to the
      Collateral Agent this Agreement providing for the grant to the Collateral Agent
      for the benefit of the Buyers of a first priority perfected security interest
      in
      the personal property of each Grantor to secure all of the Company's obligations
      under the Securities Purchase Agreement, the Notes and the "Transaction
      Documents" (as defined in the Securities Purchase Agreement, collectively,
      the
      "Transaction
      Documents")
      and
      the Guarantors' obligations under the Guaranty; and

     

    WHEREAS,
      the Grantors have determined that the execution, delivery and performance of
      this Agreement directly benefits, and is in the best interest of, the
      Grantors.

     

    NOW,
      THEREFORE, in consideration of the premises and the agreements herein and in
      order to induce the Buyers to enter into the Securities Purchase Agreement,
      each
      Grantor agrees with the Collateral Agent, for the benefit of the Buyers, as
      follows:

     

    SECTION
      1. Definitions.

     

    (a) Reference
      is hereby made to the Securities Purchase Agreement and the Notes for a
      statement of the terms thereof. All terms used in this Agreement and the
      recitals hereto which are defined in the Securities Purchase Agreement, the
      Notes or in Articles 8 or 9 of the Uniform Commercial Code as in effect from
      time to time in the State of New York (the "Code"),
      and
      which are not otherwise defined herein shall have the same meanings herein
      as
      set forth therein, as applicable; provided
      that
      terms used herein which are defined in the Code as in effect
      in
      the State of New York on the date hereof shall continue to have the same meaning
      notwithstanding any replacement or amendment of such statute except as the
      Collateral Agent may otherwise determine. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) The
      following terms shall have the respective meanings provided for in the Code:
      "Accounts", "Cash Proceeds", "Chattel Paper", "Commercial Tort Claim",
      "Commodity Account", "Commodity Contracts", "Deposit Account", "Documents",
      "Equipment", "Fixtures", "General Intangibles", "Goods", "Instruments",
      "Inventory", "Investment Property", "Letter-of-Credit Rights", "Noncash
      Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes", "Security",
      "Record", "Security Account", "Software", and "Supporting
      Obligations".

     

    (c) As
      used
      in this Agreement, the following terms shall have the respective meanings
      indicated below, such meanings to be applicable equally to both the singular
      and
      plural forms of such terms:

     

    "Capital
      Stock"
      means
      (i) with respect to any Person that is a corporation, any and all shares,
      interests, participations or other equivalents (however designated and whether
      or not voting) of corporate stock, and (ii) with respect to any Person that
      is
      not a corporation, any and all partnership, membership or other equity interests
      of such Person.

     

    "Copyright
      Licenses"
      means
      all licenses, contracts or other agreements, whether written or oral, naming
      any
      Grantor as licensee or licensor and providing for the grant of any right to
      use
      or sell any works covered by any copyright (including, without limitation,
      all
      Copyright Licenses set forth in Schedule
      II
      hereto).

     

    "Copyrights"
      means
      all domestic and foreign copyrights, whether registered or not, including,
      without limitation, all copyright rights throughout the universe (whether now
      or
      hereafter arising) in any and all media (whether now or hereafter developed),
      in
      and to all original works of authorship fixed in any tangible medium of
      expression, acquired or used by any Grantor (including, without limitation,
      all
      copyrights described in Schedule
      II
      hereto),
      all applications, registrations and recordings thereof (including, without
      limitation, applications, registrations and recordings in the United States
      Copyright Office or in any similar office or agency of the United States or
      any
      other country or any political subdivision thereof), and all reissues,
      divisions, continuations, continuations in part and extensions or renewals
      thereof.

     

    "Event
      of Default"
      shall
      have the meaning set forth in the Notes.

     

    "Governmental
      Authority"
      means
      any nation or government, any Federal, state, city, town, municipality, county,
      local or other political subdivision thereof or thereto and any department,
      commission, board, bureau, instrumentality, agency or other entity exercising
      executive, legislative, judicial, taxing, regulatory or administrative powers
      or
      functions of or pertaining to government.

     

    "Insolvency
      Proceeding"
      means
      any proceeding commenced by or against any Person under any provision of the
      Bankruptcy Code (Chapter 11 of Title 11 of the United States Code) or under
      any other bankruptcy or insolvency law, assignments for the benefit of
      creditors, formal or informal moratoria, compositions, or extensions generally
      with creditors, or proceedings seeking reorganization, arrangement, or other
      similar relief.

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    "Intellectual
      Property"
      means
      the Copyrights, Trademarks and Patents.

     

    "Licenses"
      means
      the Copyright Licenses, the Trademark Licenses and the Patent
      Licenses.

     

    "Lien"
      means
      any mortgage, lien, pledge, charge, security interest or other encumbrance
      upon
      or in any Collateral (including accounts and contract rights). 

     

    "Patent
      Licenses"
      means
      all licenses, contracts or other agreements, whether written or oral, naming
      any
      Grantor as licensee or licensor and providing for the grant of any right to
      manufacture, use or sell any invention covered by any Patent (including, without
      limitation, all Patent Licenses set forth in Schedule
      II
      hereto).

     

    "Patents"
      means
      all domestic and foreign letters patent, design patents, utility patents,
      industrial designs, inventions, trade secrets, ideas, concepts, methods,
      techniques, processes, proprietary information, technology, know-how, formulae,
      rights of publicity and other general intangibles of like nature, now existing
      or hereafter acquired (including, without limitation, all domestic and foreign
      letters patent, design patents, utility patents, industrial designs, inventions,
      trade secrets, ideas, concepts, methods, techniques, processes, proprietary
      information, technology, know-how and formulae described in Schedule
      II
      hereto),
      all applications, registrations and recordings thereof (including, without
      limitation, applications, registrations and recordings in the United States
      Patent and Trademark Office, or in any similar office or agency of the United
      States or any other country or any political subdivision thereof), and all
      reissues, divisions, continuations, continuations in part and extensions or
      renewals thereof.

     

    "Person"
      means an
      individual, corporation, limited liability company, partnership, association,
      joint-stock company, trust, unincorporated organization, joint venture or other
      enterprise or entity or Governmental Authority.

     

    "Trademark
      Licenses"
      means
      all licenses, contracts or other agreements, whether written or oral, naming
      any
      Grantor as licensor or licensee and providing for the grant of any right
      concerning any Trademark, together with any goodwill connected with and
      symbolized by any such trademark licenses, contracts or agreements and the
      right
      to prepare for sale or lease and sell or lease any and all Inventory now or
      hereafter owned by any Grantor and now or hereafter covered by such licenses
      (including, without limitation, all Trademark Licenses described in Schedule
      II
      hereto).

     

    "Trademarks"
      means
      all domestic and foreign trademarks, service marks, collective marks,
      certification marks, trade names, business names, d/b/a's, internet domain
      names, trade styles, designs, logos and other source or business identifiers
      and
      all general intangibles of like nature, now or hereafter owned, adopted,
      acquired or used by any Grantor (including, without limitation, all domestic
      and
      foreign trademarks, service marks, collective marks, certification marks, trade
      names, business names, d/b/a's, internet domain names, trade styles, designs,
      logos and other source or business identifiers described in Schedule
      II
      hereto),
      all applications, registrations and recordings thereof (including, without
      limitation, applications, registrations and recordings in the United States
      Patent and Trademark Office or in any similar office or agency of the United
      States, any state thereof or any other country or any political subdivision
      thereof), and all reissues, extensions or renewals thereof, together with all
      goodwill of the business symbolized by such marks and all customer lists,
      formulae and other Records of any Grantor relating to the distribution of
      products and services in connection with which any of such marks are
      used.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    "Vaporizers"
      means
      any medical device used to deliver Sevoflurane or other anesthetic
      agents.

     

    SECTION
      2. Grant
      of Security Interest.
      As
      collateral security for all of the "Obligations" (as defined in Section
      3
      hereof),
      each Grantor hereby pledges and assigns to the Collateral Agent for the benefit
      of the Buyers, and grants to the Collateral Agent for the benefit of the Buyers
      a continuing security interest in, all personal property of each Grantor,
      wherever located and whether now or hereafter existing and whether now owned
      or
      hereafter acquired, of every kind and description, tangible or intangible
      (collectively, the "Collateral"),
      including, without limitation, the following:

     

    (a) all
      Accounts;

     

    (b) all
      Chattel Paper (whether tangible or electronic);

     

    (c) the
      Commercial Tort Claims specified on Schedule VI hereto;

     

    (d) all
      Deposit Accounts, all cash and other property from time to time deposited
      therein and the monies and property in the possession or under the control
      of
      the Collateral Agent or Buyer or any affiliate, representative, agent or
      correspondent of the Collateral Agent or Buyer; 

     

    (e) all
      Documents;

     

    (f) all
      Equipment;

     

    (g) all
      Fixtures;

     

    (h) all
      General Intangibles (including, without limitation, all Payment
      Intangibles);

     

    (i) all
      Goods;

     

    (j) all
      Instruments (including, without limitation, Promissory Notes and each
      certificated Security);

     

    (k) all
      Inventory;

     

    (l) all
      Investment Property;

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (m) all
      Copyrights, Patents and Trademarks, and all Licenses;

     

    (n) all
      Letter-of-Credit Rights;

     

    (o) all
      Supporting Obligations;

     

    (p) all
      other
      tangible and intangible personal property of each Grantor (whether or not
      subject to the Code), including, without limitation, all bank and other accounts
      and all cash and all investments therein, all proceeds, products, offspring,
      accessions, rents, profits, income, benefits, substitutions and replacements
      of
      and to any of the property of any Grantor described in the preceding clauses
      of
      this Section 2 (including, without limitation, any proceeds of insurance thereon
      and all causes of action, claims and warranties now or hereafter held by each
      Grantor in respect of any of the items listed above), and all books,
      correspondence, files and other Records, including, without limitation, all
      tapes, desks, cards, Software, data and computer programs in the possession
      or
      under the control of any Grantor or any other Person from time to time acting
      for any Grantor, in each case, to the extent of such Grantors rights therein,
      that at any time evidence or contain information relating to any of the property
      described in the preceding clauses of this Section 2 or are otherwise necessary
      or helpful in the collection or realization thereof;
      and

     

    (q) all
      Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of
      any
      and all of the foregoing Collateral; 

     

    in
      each
      case howsoever any Grantor's interest therein may arise or appear (whether
      by
      ownership, security interest, claim or otherwise).

     

    Notwithstanding
      anything herein to the contrary, the term "Collateral"
      shall
      not include, in the case of a Subsidiary organized under the laws of a
      jurisdiction other than the United States, any of the states thereof or the
      District of Columbia (a "Foreign
      Subsidiary"),
      more
      than 65% (or
      such
      greater percentage that,
      due
      to a change in applicable law after the date hereof, (i) would not reasonably
      be
      expected to cause the undistributed earnings of such Foreign Subsidiary as
      determined for United States federal income tax purposes to be treated as a
      deemed dividend to such Foreign Subsidiary's United States parent and (ii)
      would
      not reasonably be expected to cause any
      material
      adverse tax consequences) of the issued and outstanding shares of Capital
      Stock of such Foreign Subsidiary entitled to vote (within the meaning of Treas.
      Reg. Section 1.956-2(c)(2)) (it being understood and agreed that the Collateral
      shall include 100% of
      the
      issued and outstanding shares of Capital
      Stock of such Foreign Subsidiary not entitled to vote (within the meaning of
      Treas. Reg. Section 1.956-2(c)(2)) or other equity interest of such Foreign
      Subsidiary).

     

    The
      Grantors agree that the pledge of the shares of Capital Stock acquired by a
      Grantor of any and all Persons now or hereafter existing who is a Foreign
      Subsidiary may be supplemented by one or more separate pledge agreements, deeds
      of pledge, share charges, or other similar agreements or instruments, executed
      and delivered by the relevant Grantors in favor of the Collateral Agent, which
      pledge agreements will provide for the pledge of such shares of Capital Stock
      in
      accordance with the laws of the applicable foreign jurisdiction. With respect
      to
      such shares of Capital Stock, the Collateral Agent may, at any time and from
      time to time, in its sole discretion, take actions in such foreign jurisdictions
      that will result in the perfection of the Lien created in such shares of Capital
      Stock.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    SECTION
      3. Security
      for Obligations.
      The
      security interest created hereby in the Collateral constitutes continuing
      collateral security for all of the following obligations, whether now existing
      or hereafter incurred (collectively, the "Obligations"):

     

    (a) for
      so
      long as the Notes are outstanding, (i) the payment by the Company, as and when
      due and payable (by scheduled maturity, required prepayment, acceleration,
      demand or otherwise), of all amounts from time to time owing by it in respect
      of
      the Securities Purchase Agreement, the Notes and the other Transaction
      Documents, and (ii) in the case of any Guarantors, the payment by such Grantors,
      as and when due and payable of all "Guaranteed Obligations" under (and as
      defined in) the Guaranty, including, without limitation, in both cases, (A)
      all
      principal of and interest on the Notes (including, without limitation, all
      interest that accrues after the commencement of any Insolvency Proceeding of
      any
      Grantor, whether or not the payment of such interest is unenforceable or is
      not
      allowable due to the existence of such Insolvency Proceeding), and (B) all
      fees,
      commissions, expense reimbursements, indemnifications and all other amounts
      due
      or to become due under any of the Transaction Documents; and

     

    (b) for
      so
      long as the Notes are outstanding, the due performance and observance by each
      Grantor of all of its other obligations from time to time existing in respect
      of
      any of the Transaction Documents, including without limitation, with respect
      to
      any conversion or redemption rights of the Buyers under the Notes.

     

    SECTION
      4. Representations
      and Warranties.
      Each
      Grantor represents and warrants as of the date of this Agreement as
      follows:

     

    (a) Schedule
      I
      hereto
      sets forth (i) the exact legal name of each Grantor, and (ii) the state of
      incorporation, organization or formation and the organizational identification
      number of each Grantor in such state.

     

    (b) There
      is
      no pending or, to its knowledge, written notice threatening any action, suit,
      proceeding or claim affecting any Grantor before any Governmental Authority
      or
      any arbitrator, or any order, judgment or award issued by any Governmental
      Authority or arbitrator, in each case, that may adversely affect the grant
      by
      any Grantor, or the perfection, of the security interest purported to be created
      hereby in the Collateral, or the exercise by the Collateral Agent of any of
      its
      rights or remedies hereunder.

     

    (c) All
      Federal, state and local tax returns and other reports required by applicable
      law to be filed by any Grantor have been filed, or extensions have been
      obtained, and all taxes, assessments and other governmental charges imposed
      upon
      any Grantor or any property of any Grantor (including, without limitation,
      all
      federal income and social security taxes on employees' wages) and which have
      become due and payable on or prior to the date hereof have been paid, except
      to
      the extent contested in good faith by proper proceedings which stay the
      imposition of any penalty, fine or Lien resulting from the non-payment thereof
      and with respect to which adequate reserves have been set aside for the payment
      thereof in accordance with generally accepted accounting principles consistently
      applied ("GAAP").

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (d) All
      Equipment, Fixtures, Goods and Inventory (other than the Vaporizers) of each
      Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory
      (other than the Vaporizers) of each Grantor hereafter existing will be, located
      and/or based at the addresses specified therefor in Schedule III hereto, except
      that each Grantor will give the Collateral Agent written notice of any change
      in
      the location of any such Collateral within 20 days following such change, other
      than to locations set forth on Schedule III hereto (or a new Schedule III
      delivered by the Grantors to the Collateral Agent from time to time) and with
      respect to which the Collateral Agent has filed financing statements and
      otherwise fully perfected its Liens thereon or will take such actions pursuant
      to Section 5(n). Each Grantor's chief place of business and chief executive
      office, the place where each Grantor keeps its Records concerning Accounts
      and
      all originals of all Chattel Paper are located at the addresses specified
      therefor in Schedule III hereto. None of the Accounts is evidenced by Promissory
      Notes or other Instruments. Set forth in Schedule IV hereto is a complete and
      accurate list, as of the date of this Agreement, of (i) each Promissory Note,
      Security and other Instrument owned by each Grantor and (ii) each Deposit
      Account, Securities Account and Commodities Account of each Grantor, together
      with the name and address of each institution at which each such account is
      maintained, the account number for each such account and a description of the
      purpose of each such account. Set forth in Schedule II hereto is a complete
      and
      correct list of each trade name used by each Grantor. 

     

    (e) Each
      Grantor has delivered to the Collateral Agent complete and correct copies of
      each License described in Schedule II hereto, including all schedules and
      exhibits thereto, which represents all of the Licenses existing on the date
      of
      this Agreement. Each such License sets forth the entire agreement and
      understanding of the parties thereto relating to the subject matter thereof,
      and
      there are no other agreements, arrangements or understandings, written or oral,
      relating to the matters covered thereby or the rights of such Grantor or any
      of
      its affiliates in respect thereof. Each material License now existing is, and
      any material License entered into in the future will be, the legal, valid and
      binding obligation of the parties thereto, enforceable against such parties
      in
      accordance with its terms. No default under any material License by any such
      party has occurred, nor does any defense, offset, deduction or counterclaim
      exist thereunder in favor of any such party.

     

    (f) Each
      Grantor owns and controls, or otherwise possesses adequate rights to use, all
      Trademarks, Patents and Copyrights, which are the only trademarks, patents,
      copyrights, inventions, trade secrets, proprietary information and technology,
      know-how, formulae, rights of publicity necessary to conduct its business in
      substantially the same manner as conducted as of the date hereof. Schedule
      II
      hereto sets forth a true and complete list of all registered copyrights, issued
      Patents, Trademarks, and Licenses annually owned or used by each Grantor as
      of
      the date hereof. To the best knowledge of each Grantor, all such Intellectual
      Property of each Grantor is subsisting and in full force and effect, has not
      been adjudged invalid or unenforceable, is valid and enforceable and has not
      been abandoned in whole or in part. Except as set forth in Schedule II, no
      such
      Intellectual Property is the subject of any licensing or franchising agreement.
      Each Grantor has no knowledge of any conflict with the rights of others to
      any
      such Intellectual Property and, to the best knowledge of each Grantor, each
      Grantor is not now infringing or in conflict with any such rights of others
      in
      any material respect, and to the best knowledge of each Grantor, no other Person
      is now infringing or in conflict in any material respect with any such
      properties, assets and rights owned or used by each Grantor. No Grantor has
      received any notice that it is violating or has violated the trademarks,
      patents, copyrights, inventions, trade secrets, proprietary information and
      technology, know-how, formulae, rights of publicity or other intellectual
      property rights of any third party.

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (g) Each
      Grantor is and will be at all times the sole and exclusive owner of, or
      otherwise has and will have adequate rights in, the Collateral free and clear
      of
      any Liens, except for Permitted Liens. No effective financing statement or
      other
      instrument similar in effect covering all or any part of the Collateral is
      on
      file in any recording or filing office except such as (i) may have been filed
      in
      favor of the Collateral Agent and/or the Buyers relating to this Agreement
      or
      the other Security Documents and (ii) are described on Schedule
      4(g)
      hereto.

     

    (h) The
      exercise by the Collateral Agent of any of its rights and remedies hereunder
      will not contravene any law or any material contractual restriction binding
      on
      or otherwise affecting each Grantor or any of its properties and will not result
      in or require the creation of any Lien, upon or with respect to any of its
      properties.

     

    (i) No
      authorization or approval or other action by, and no notice to or filing with,
      any Governmental Authority or other regulatory body, is required for
      (i) the grant by each Grantor, or the perfection, of the security interest
      purported to be created hereby in the Collateral, or (ii) the exercise by
      the Collateral Agent of any of its rights and remedies hereunder, except
      (A) for the filing under the Uniform Commercial Code as in effect in the
      applicable jurisdiction of the financing statements described in Schedule
      V
      hereto
      (or a new Schedule
      V
      delivered by the Grantors to the Collateral Agent from time to time), all of
      which financing statements have been duly filed and are in full force and effect
      or will be duly filed and in full force and effect, (B) with respect to Deposit
      Accounts, and all cash and other property from time to time deposited therein,
      for the execution of a control agreement with the depository institution with
      which such account is maintained, as provided in Section
      5(i),
      (C) with respect to Commodity Contracts, for the execution of a control
      agreement with the commodity intermediary with which such commodity contract
      is
      carried, as provided in Section
      5(i),
      (D) with respect to the perfection of the security interest created hereby
      in the United States Intellectual Property and Licenses, for the recording
      of
      the appropriate Assignment for Security, substantially in the form of
Exhibit
      A
      hereto
      in the United States Patent and Trademark Office or the United States Copyright
      Office, as applicable, (E) with respect to the perfection of the security
      interest created hereby in foreign Intellectual Property and Licenses, for
      registrations and filings in jurisdictions located outside of the United States
      and covering rights in such jurisdictions relating to such foreign Intellectual
      Property and Licenses, (F) with respect to the perfection of the security
      interest created hereby in Titled Collateral, for the submission of an
      appropriate application requesting that the Lien of the Collateral Agent be
      noted on the Certificate of Title or certificate of ownership, completed and
      authenticated by the applicable Grantor, together with the Certificate of Title
      or certificate of ownership, with respect to such Titled Collateral, to the
      appropriate governmental authority, (G) with respect to the perfection of the
      security interest created hereby in any Letter-of-Credit Rights, for the consent
      of the issuer of the applicable letter of credit to the assignment of proceeds
      as provided in the Uniform Commercial Code as in effect in the applicable
      jurisdiction, (H) with respect to any action that may be necessary to obtain
      control of Collateral constituting Deposit Accounts, Commodity Contracts,
      Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights, the
      taking of such actions, and (I) the Collateral Agent having possession of all
      Documents, Chattel Paper, Instruments and cash constituting
      Collateral
      (subclauses (A), (B), (C), (D), (E), (F), G), (H) and (I), each a "Perfection
      Requirement"
      and
      collectively, the "Perfection
      Requirements").

    
      
        
        

      

      
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    (j) This
      Agreement creates in favor of the Collateral Agent a legal, valid and
      enforceable security interest in the Collateral, as security for the
      Obligations. The Perfection Requirements result in the perfection of such
      security interests. Such security interests are, or in the case of Collateral
      in
      which each Grantor obtains rights after the date hereof, will be, perfected,
      first priority security interests, subject only to Permitted Liens and the
      Perfection Requirements and the financing statements described in Schedule
      4(g).
      Such
      recordings and filings and all other action necessary to perfect and protect
      such security interest have been duly taken or will be taken pursuant to Section
      5(n), and, in the case of Collateral in which each Grantor obtains rights after
      the date hereof, will be duly taken, except for the Collateral Agent's having
      possession of all Documents, Chattel Paper, Instruments and cash constituting
      Collateral after the date hereof and the other actions, filings and recordations
      described above, including the Perfection Requirements.

     

    (k) As
      of the
      date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of
      any
      pending Commercial Tort Claims, except for such Commercial Tort Claims described
      in Schedule
      VI.

     

    SECTION
      5. Covenants
      as to the Collateral.
      So long
      as any of the Obligations shall remain outstanding, unless the Collateral Agent
      shall otherwise consent in writing:

     

    (a) Further
      Assurances.
      Each
      Grantor will at its expense, at any time and from time to time, promptly execute
      and deliver all further instruments and documents and take all further action
      that the Collateral Agent may reasonably request in order to: (i) perfect and
      protect the security interest purported to be created hereby; (ii) enable the
      Collateral Agent to exercise and enforce its rights and remedies hereunder
      in
      respect of the Collateral; or (iii) otherwise effect the purposes of this
      Agreement, including, without limitation: (A) marking conspicuously all Chattel
      Paper and each License and, at the request of the Collateral Agent, each of
      its
      Records pertaining to the Collateral with a legend, in form and substance
      satisfactory to the Collateral Agent, indicating that such Chattel Paper,
      License or Collateral is subject to the security interest created hereby, (B)
      delivering and pledging to the Collateral Agent pursuant to the Pledge each
      Promissory Note, Security, Chattel Paper or other Instrument, now or hereafter
      owned by any Grantor, duly endorsed and accompanied by executed instruments
      of
      transfer or assignment, all in form and substance satisfactory to the Collateral
      Agent, (C) executing and filing (to the extent, if any, that any Grantor's
      signature is required thereon) or authenticating the filing of, such financing
      or continuation statements, or amendments thereto, as may be necessary or that
      the Collateral Agent may reasonably request in order to perfect and preserve
      the
      security interest purported to be created hereby, (D) furnishing to the
      Collateral Agent from time to time statements and schedules further identifying
      and describing the Collateral and such other reports in connection with the
      Collateral in each case as the Collateral Agent may reasonably request, all
      in
      reasonable detail, (E) if any Collateral shall be in the possession of a third
      party, notifying such Person of the Collateral Agent's security interest created
      hereby and obtaining a written acknowledgment from such Person that such Person
      holds possession of the Collateral for the benefit of the Collateral Agent,
      which such written acknowledgement shall be in form and substance reasonably
      satisfactory to the Collateral Agent, (F) if at any time after the date hereof,
      any Grantor acquires or holds any Commercial Tort Claim, promptly notifying
      the
      Collateral Agent in a writing signed by such Grantor setting forth a brief
      description of such Commercial Tort Claim and granting to the Collateral Agent
      a
      security interest therein and in the proceeds thereof, which writing shall
      incorporate the provisions hereof and shall be in form and substance
      satisfactory to the Collateral Agent, (G) upon the acquisition after the date
      hereof by any Grantor of any motor vehicle or other Equipment subject to a
      certificate of title or ownership (other than a Motor Vehicle or Equipment
      that
      is subject to a purchase money security interest), causing the Collateral Agent
      to be listed as the lienholder on such certificate of title or ownership and
      delivering evidence of the same to the Collateral Agent in accordance with
      Section 5(j) hereof; and (H) taking all actions required by any earlier versions
      of the Uniform Commercial Code or by other law, as applicable, in any relevant
      Uniform Commercial Code jurisdiction, or by other law as applicable in any
      foreign jurisdiction.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (b) Location
      of Equipment and Inventory.
      Each
      Grantor will keep the Equipment and Inventory (i) at the locations specified
      therefor on Schedule III hereto, or (ii) at such other locations set forth
      on
      Schedule III (or a new Schedule III delivered by the Grantors to Collateral
      Agent from time to time) and with respect to which the Collateral Agent has
      filed financing statements and otherwise fully perfected its Liens thereon,
      or
      (iii) at such other locations in the United States, provided that within 20
      days
      following the relocation of Equipment or Inventory to such other location or
      the
      acquisition of Equipment or Inventory, such Grantor shall deliver to the
      Collateral Agent a new Schedule III indicating such new locations.

     

    (c) Condition
      of Equipment.
      Each
      Grantor will maintain or cause the Equipment (necessary or useful to its
      business) to be maintained and preserved in good condition, repair and working
      order, ordinary wear and tear excepted, and will forthwith, or in the case
      of
      any loss or damage to any Equipment of any Grantor within a commercially
      reasonable time after the occurrence thereof, make or cause to be made all
      repairs, replacements and other improvements in connection therewith which
      are
      necessary or desirable, consistent with past practice, or which the Collateral
      Agent may request to such end. Any Grantor will promptly furnish to the
      Collateral Agent a statement describing in reasonable detail any such loss
      or
      damage in excess of $250,000 per occurrence to any Equipment.

     

    (d) Taxes,
      Etc.
      Each
      Grantor agrees to pay promptly when due all property and other taxes,
      assessments and governmental charges or levies imposed upon, and all claims
      (including claims for labor, materials and supplies) against, the Equipment
      and
      Inventory, except to the extent the validity thereof is being contested in
      good
      faith by proper proceedings which stay the imposition of any penalty, fine
      or
      Lien resulting from the non-payment thereof and with respect to which adequate
      reserves in accordance with GAAP have been set aside for the payment
      thereof.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (e) Insurance.

     

    (i) Each
      Grantor will, at its own expense, maintain insurance (including, without
      limitation, commercial general liability and property insurance) with respect
      to
      the Equipment and Inventory in such amounts, against such risks, in such form
      and with responsible and reputable insurance companies or associations as is
      required by any governmental authority having jurisdiction with respect thereto
      or as is carried generally in accordance with sound business practice by
      companies in similar businesses similarly situated and in any event, in amount,
      adequacy and scope reasonably satisfactory to the Collateral Agent. To the
      extent requested by the Collateral Agent at any time and from time to time,
      each
      such policy for liability insurance shall provide for all losses to be paid
      on
      behalf of the Collateral Agent and any Grantor as their respective interests
      may
      appear, and each policy for property damage insurance shall provide for all
      losses to be adjusted with, and paid directly to, the Collateral Agent. To
      the
      extent requested by the Collateral Agent at any time and from time to time,
      each
      such policy shall in addition (A) name the Collateral Agent as an additional
      insured party thereunder (without any representation or warranty by or
      obligation upon the Collateral Agent) as their interests may appear, (B) contain
      an agreement by the insurer that any loss thereunder shall be payable to the
      Collateral Agent on its own account notwithstanding any action, inaction or
      breach of representation or warranty by any Grantor, (C) provide that there
      shall be no recourse against the Collateral Agent for payment of premiums or
      other amounts with respect thereto, and (D) provide that at least 30 days'
      prior
      written notice of cancellation, lapse, expiration or other adverse change shall
      be given to the Collateral Agent by the insurer. Any Grantor will, if so
      requested by the Collateral Agent, deliver to the Collateral Agent original
      or
      duplicate policies of such insurance and, as often as the Collateral Agent
      may
      reasonably request, a report of a reputable insurance broker with respect to
      such insurance. Any Grantor will also, at the request of the Collateral Agent,
      execute and deliver instruments of assignment of such insurance policies and
      cause the respective insurers to acknowledge notice of such
      assignment.

     

    (ii) Reimbursement
      under any liability insurance maintained by any Grantor pursuant to this Section
      5(e) may be paid directly to the Person who shall have incurred liability
      covered by such insurance. Following an Event of Default, in the case of any
      loss involving damage to Equipment or Inventory, any proceeds of insurance
      maintained by any Grantor pursuant to this Section 5(e) shall be paid to the
      Collateral Agent (except as to which paragraph (iii) of this Section 5(e) is
      not
      applicable), any Grantor will make or cause to be made the necessary repairs
      to
      or replacements of such Equipment or Inventory, and any proceeds of insurance
      maintained by any Grantor pursuant to this Section 5(e) shall be paid by the
      Collateral Agent to any Grantor as reimbursement for the costs of such repairs
      or replacements.

     

    (iii) Following
      and during the continuance of an Event of Default, all insurance payments in
      respect of such Equipment or Inventory shall be paid to the Collateral Agent
      and
      applied as specified in Section
      7(b)
      hereof.

     

    (f) Provisions
      Concerning the Accounts and the Licenses.

     

    (i) Each
      Grantor will (A) give the Collateral Agent at least 10 Business Days' prior
      written notice of any change in such Grantor's name, identity, organizational
      structure or jurisdiction of incorporation, organization or formation, (B)
      immediately notify the Collateral Agent upon obtaining an organizational
      identification number, if on the date hereof such Grantor did not have such
      identification number, and (C) keep adequate records concerning the Accounts,
      in
      accordance with Section 4 (i) of the Securities Purchase Agreement and Chattel
      Paper.

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (ii) Each
      Grantor will, except as otherwise provided in this subsection (f), continue
      to
      collect, at its own expense, all amounts due or to become due under the
      Accounts. In connection with such collections, any Grantor may (and, at the
      Collateral Agent's direction, will) take such action as any Grantor or the
      Collateral Agent may deem necessary or advisable to enforce collection or
      performance of the Accounts; provided, however, that the Collateral Agent shall
      have the right at any time, upon the occurrence and during the continuance
      of an
      Event of Default, to notify the account debtors or obligors under any Accounts
      of the assignment of such Accounts to the Collateral Agent and to direct such
      account debtors or obligors to make payment of all amounts due or to become
      due
      to any Grantor thereunder directly to the Collateral Agent or its designated
      agent and, upon such notification and at the expense of any Grantor and to
      the
      extent permitted by law, to enforce collection of any such Accounts and to
      adjust, settle or compromise the amount or payment thereof, in the same manner
      and to the same extent as any Grantor might have done. After receipt by any
      Grantor of a notice from the Collateral Agent that the Collateral Agent has
      notified, intends to notify, or has enforced or intends to enforce any Grantor's
      rights against the account debtors or obligors under any Accounts as referred
      to
      in the proviso to the immediately preceding sentence, (A) all amounts and
      proceeds (including Instruments) received by any Grantor in respect of the
      Accounts shall be received in trust for the benefit of the Collateral Agent
      hereunder, shall be segregated from other funds of any Grantor and shall be
      forthwith paid over to the Collateral Agent in the same form as so received
      (with any necessary endorsement) to be applied as specified in Section 7(b)
      hereof, and (B) no Grantor will adjust, settle or compromise the amount or
      payment of any Account or release wholly or partly any account debtor or obligor
      thereof or allow any credit or discount thereon. In addition, upon the
      occurrence and during the continuance of an Event of Default, the Collateral
      Agent may (in its sole and absolute discretion) direct any or all of the banks
      and financial institutions with which any Grantor either maintains a Deposit
      Account or a lockbox or deposits the proceeds of any Accounts to send
      immediately to the Collateral Agent by wire transfer (to such account as the
      Collateral Agent shall specify, or in such other manner as the Collateral Agent
      shall direct) all or a portion of such securities, cash, investments and other
      items held by such institution. Any such securities, cash, investments and
      other
      items so received by the Collateral Agent shall be applied as specified in
      accordance with Section 7(b) hereof.

     

    (iii) Upon
      the
      occurrence and during the continuance of any breach or default under any
      material License referred to in Schedule II hereto by any party thereto other
      than any Grantor, each Grantor party thereto will, promptly after obtaining
      knowledge thereof, give the Collateral Agent written notice of the nature and
      duration thereof, specifying what action, if any, it has taken and proposes
      to
      take with respect thereto and thereafter will take reasonable steps to protect
      and preserve its rights and remedies in respect of such breach or default,
      or
      will obtain or acquire an appropriate substitute License.

     

    (iv) Each
      Grantor will, at its expense, promptly deliver to the Collateral Agent a copy
      of
      each notice or other communication received by it by which any other party
      to
      any material License referred to in Schedule II hereto purports to exercise
      any
      of its rights or affect any of its obligations thereunder, together with a
      copy
      of any reply by such Grantor thereto.

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (v) Each
      Grantor will exercise promptly and diligently each and every right which it
      may
      have under each material License (other than any right of termination) and
      will
      duly perform and observe in all respects all of its obligations under each
      material License and will take all action reasonably necessary to maintain
      such
      Licenses in full force and effect. No Grantor will, without the prior written
      consent of the Collateral Agent, cancel, terminate, amend or otherwise modify
      in
      any respect, or waive any provision of, any material License referred to in
      Schedule II hereto.

     

    (g) Transfers
      and Other Liens.

     

    (i) No
      Grantor will sell, assign (by operation of law or otherwise), lease, license,
      exchange or otherwise transfer or dispose of any of the Collateral, except
      (A)
      Inventory in the ordinary course of business, and (B) worn out or obsolete
      assets, not necessary to such Grantor's business.

     

    (ii) No
      Grantor will create, suffer to exist or grant any Lien upon or with respect
      to
      any Collateral, other than a Permitted Lien.

     

    (h) Intellectual
      Property.

     

    (i) If
      applicable, any Grantor shall, upon the Collateral Agent's written request,
      duly
      execute and deliver the applicable Assignment for Security in the form attached
      hereto as Exhibit A. Each Grantor (either itself or through licensees) will,
      and
      will cause each licensee thereof to, take all action necessary to maintain
      all
      of the Intellectual Property in full force and effect, including, without
      limitation, using the proper statutory notices and markings and using the
      Trademarks on each applicable trademark class of goods in order to so maintain
      the Trademarks in full force and free from any claim of abandonment for non-use,
      and each Grantor will not (nor permit any licensee thereof to) do any act or
      knowingly omit to do any act whereby any Intellectual Property may become
      invalidated; provided, however, that so long as no Event of Default has occurred
      and is continuing, no Grantor shall have an obligation to use or to maintain
      any
      Intellectual Property (A) that relates solely to any product or work, that
      has
      been, or is in the process of being, discontinued, abandoned or terminated,
      (B)
      that is being replaced with Intellectual Property substantially similar to
      the
      Intellectual Property that may be abandoned or otherwise become invalid, so
      long
      as the failure to use or maintain such Intellectual Property does not materially
      adversely affect the validity of such replacement Intellectual Property and
      so
      long as such replacement Intellectual Property is subject to the Lien created
      by
      this Agreement or (C) that is substantially the same as another Intellectual
      Property that is in full force, so long the failure to use or maintain such
      Intellectual Property does not materially adversely affect the validity of
      such
      replacement Intellectual Property and so long as such other Intellectual
      Property is subject to the Lien and security interest created by this Agreement.
      Each Grantor will cause to be taken all reasonably necessary steps in any
      proceeding before the United States Patent and Trademark Office and the United
      States Copyright Office or any similar office or agency in any other country
      or
      political subdivision thereof to maintain each registration of the Intellectual
      Property (other than the Intellectual Property described in the proviso to
      the
      immediately preceding sentence), including, without limitation, filing of
      renewals, affidavits of use, affidavits of incontestability and opposition,
      interference and cancellation proceedings and payment of maintenance fees,
      filing fees, taxes or other governmental fees. If any Intellectual Property
      (other than Intellectual Property described in the proviso to the first sentence
      of subsection (i) of this clause (h)) is infringed, misappropriated, diluted
      or
      otherwise violated in any material respect by a third party, each Grantor shall
      (x) upon learning of such infringement, misappropriation, dilution or other
      violation, promptly notify the Collateral Agent and (y) to the extent any
      Grantor shall deem appropriate under the circumstances, promptly sue for
      infringement, misappropriation, dilution or other violation, seek injunctive
      relief where appropriate and recover any and all damages for such infringement,
      misappropriation, dilution or other violation, or take such other actions as
      such Grantor shall deem appropriate under the circumstances to protect such
      Intellectual Property. Each Grantor shall furnish to the Collateral Agent from
      time to time upon its request statements and schedules further identifying
      and
      describing the Intellectual Property and Licenses and such other reports in
      connection with the Intellectual Property and Licenses as the Collateral Agent
      may reasonably request, all in reasonable detail and promptly upon request
      of
      the Collateral Agent, following receipt by the Collateral Agent of any such
      statements, schedules or reports, each Grantor shall modify this Agreement
      by
      amending Schedule II hereto, as the case may be, to include any Intellectual
      Property and License, as the case may be, which becomes part of the Collateral
      under this Agreement and shall execute and authenticate such documents and
      do
      such acts as shall be necessary or, in the reasonable judgment of the Collateral
      Agent, desirable to subject such Intellectual Property and Licenses to the
      Lien
      and security interest created by this Agreement. Notwithstanding anything herein
      to the contrary, upon the occurrence and during the continuance of an Event
      of
      Default, no Grantor may abandon or otherwise permit any Intellectual Property
      to
      become invalid without the prior written consent of the Collateral Agent, and
      if
      any Intellectual Property is infringed, misappropriated, diluted or otherwise
      violated in any material respect by a third party, each Grantor will take such
      action as the Collateral Agent shall deem appropriate under the circumstances
      to
      protect such Intellectual Property.

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (ii) In
      no
      event shall any Grantor, either itself or through any agent, employee, licensee
      or designee, file an application for the registration of any Trademark or
      Copyright or the issuance of any Patent with the United States Patent and
      Trademark Office or the United States Copyright Office, as applicable, or in
      any
      similar office or agency of the United States or any country or any political
      subdivision thereof unless it gives the Collateral Agent prior written notice
      thereof. Upon request of the Collateral Agent, any Grantor shall execute,
      authenticate and deliver any and all assignments, agreements, instruments,
      documents and papers as the Collateral Agent may reasonably request to evidence
      the Collateral Agent's security interest hereunder in such Intellectual Property
      and the General Intangibles of any Grantor relating thereto or represented
      thereby, and each Grantor hereby appoints the Collateral Agent its
      attorney-in-fact to execute and/or authenticate and file all such writings
      for
      the foregoing purposes, all acts of such attorney being hereby ratified and
      confirmed, and such power (being coupled with an interest) shall be irrevocable
      until the indefeasible payment in full in cash of all of the Obligations in
      full.

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    (i) Deposit,
      Commodities and Securities Accounts.
      Upon
      the Collateral Agent's written request, each Grantor shall deliver to the
      Collateral Agent a control agreement, in form and substance reasonably
      satisfactory to the Collateral Agent, duly executed by each Grantor and such
      bank or financial institution with an account referred to in Schedule IV hereto,
      or enter into other arrangements in form and substance reasonably satisfactory
      to the Collateral Agent, pursuant to which such institution shall irrevocably
      agree, inter alia,
      that
      (i) upon the continuance of an Event of Default, it will comply at any time
      with the instructions originated by the Collateral Agent to such bank or
      financial institution directing the disposition of cash, Commodity Contracts,
      securities, Investment Property and other items from time to time credited
      to
      such account, without further consent of each Grantor, which
      instructions the Collateral Agent will not give to such bank or other financial
      institution in the absence of a continuing Event of Default, (ii)
      all
      Commodity Contracts, securities, Investment Property and other items of each
      Grantor deposited with such institution shall be subject to a perfected, first
      priority security interest in favor of the Collateral Agent, (iii) any
      right of set off (other than recoupment of standard fees), banker's Lien or
      other similar Lien, security interest or encumbrance shall be fully waived
      as
      against the Collateral Agent, and (iv) upon receipt of written notice from
      the Collateral Agent during the continuance of an Event of Default, such bank
      or
      financial institution shall immediately or within a timeframe acceptable to
      Collateral Agent set forth in the Control Agreement send to the Collateral
      Agent
      by wire transfer (to such account as the Collateral Agent shall specify, or
      in
      such other manner as the Collateral Agent shall direct) all such cash, the
      value
      of any Commodity Contracts, securities, Investment Property and other items
      held
      by it. Without the prior written consent of the Collateral Agent, such consent
      not to be unreasonably withheld, each Grantor shall not make or maintain any
      Deposit Account, Commodity Account or Securities Account except for the accounts
      set forth in Schedule IV hereto. The provisions of this paragraph 5(i) shall
      not
      apply to (i) Deposit Accounts for which the Collateral Agent is the depositary
      and (ii) Deposit Accounts specially and exclusively used for payroll, payroll
      taxes and other employee wage and benefit payments to or for the benefit of
      each
      Grantor's salaried or hourly employees.

     

    (j) Motor
      Vehicles.

     

    (i) Upon
      the
      Collateral Agent's written request, each Grantor shall deliver to the Collateral
      Agent originals of the certificates of title or ownership for all motor vehicles
      with a value in excess of $50,000, owned by it with the Collateral Agent listed
      as lienholder, for the benefit of the Buyers.

     

    (ii) Each
      Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective
      the date hereof and terminating upon the termination of this Agreement, for
      the
      purpose of (A) executing on behalf of such Grantor title or ownership
      applications for filing with appropriate state agencies to enable motor vehicles
      now owned or hereafter acquired by such Grantor to be retitled and the
      Collateral Agent listed as lienholder thereof, (B) filing such applications
      with
      such state agencies, and (C) executing such other documents and instruments
      on
      behalf of, and taking such other action in the name of, such Grantor as the
      Collateral Agent may deem necessary or advisable to accomplish the purposes
      hereof (including, without limitation, for the purpose of creating in favor
      of
      the Collateral Agent a perfected Lien on the motor vehicles and exercising
      the
      rights and remedies of the Collateral Agent hereunder). This appointment as
      attorney-in-fact is coupled with an interest and is irrevocable until all of
      the
      Obligations are indefeasibly paid in full in cash.

     

    (iii) Any
      certificates of title or ownership delivered pursuant to the terms hereof shall
      be accompanied by odometer statements for each motor vehicle covered
      thereby.

    
      
        
        

      

      
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    (iv) So
      long
      as no Event of Default shall have occurred and be continuing, upon the request
      of any Grantor, the Collateral Agent shall execute and deliver to any Grantor
      such instruments as any Grantor shall reasonably request to remove the notation
      of the Collateral Agent as lienholder on any certificate of title for any motor
      vehicle; provided,
      however,
      that
      any such instruments shall be delivered, and the release effective, only upon
      receipt by the Collateral Agent of a certificate from any Grantor stating that
      such motor vehicle is to be sold or has suffered a casualty loss (with title
      thereto in such case passing to the casualty insurance company therefor in
      settlement of the claim for such loss) and the amount that any Grantor will
      receive as sale proceeds or insurance proceeds. 

     

    (k) Control.
      Each
      Grantor hereby agrees to take any or all action that may be necessary or that
      the Collateral Agent may reasonably request in order for the Collateral Agent
      to
      obtain control in accordance with Sections 9-105 through 9-107 of the Code
      with
      respect to the following Collateral: (i) Electronic Chattel Paper, (ii)
      Investment Property, and (iii) Letter-of-Credit Rights.

     

    (l) Inspection
      and Reporting.
      Each
      Grantor shall permit in accordance with Section 4(i) of the Securities Purchase
      Agreement, the Collateral Agent, or any agent or representatives thereof or
      such
      professionals or other Persons as the Collateral Agent may designate, during
      normal business hours, after reasonable prior notice, in the absence of an
      Event
      of Default and not more than once a year in the absence of an Event of Default,
      (i) to examine and make copies of and abstracts from any Grantor's records
      and
      books of account, (ii) to visit and inspect its properties, (iii) to verify
      materials, leases, Instruments, Accounts, Inventory and other assets of any
      Grantor from time to time, (iii) to conduct audits, physical counts, appraisals
      and/or valuations, examinations at the locations of any Grantor. Each Grantor
      shall also permit, in accordance with Section 4(i) of the Securities Purchase
      Agreement, the Collateral Agent, or any agent or representatives thereof or
      such
      professionals or other Persons as the Collateral Agent may designate to discuss
      such Grantor's affairs, finances and accounts with any of its directors,
      officers, managerial employees, independent accountants or any of its other
      representatives.

     

    (m) Future
      Subsidiaries.
      If any
      Grantor shall hereafter create or acquire any Subsidiary, simultaneously with
      the creation or acquisition of such Subsidiary, such Grantor shall (i) cause
      such Subsidiary to become a party to this Agreement as an additional "Grantor"
      hereunder, (ii) such Grantor shall deliver to Collateral Agent revised Schedules
      to this Agreement, as appropriate, (iii) shall duly execute and deliver a
      guaranty of the Obligations in favor of the Collateral Agent in form and
      substance reasonably acceptable to the Collateral Agent, and (iv) shall duly
      execute and/or deliver such opinions of counsel and other documents, in form
      and
      substance reasonably acceptable to the Collateral Agent, as the Collateral
      Agent
      shall reasonably request with respect thereto, provided that any Grantor that
      acquires a subsidiary on or within two days after the Closing Date shall have
      10
      Business Days in which to satisfy the requirements of this Section
      5(m).

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    SECTION
      6. Additional
      Provisions Concerning the Collateral.

     

    (a) To
      the
      maximum extent permitted by applicable law, and for the purpose of taking any
      action that the Collateral Agent may deem necessary or advisable to accomplish
      the purposes of this Agreement, each Grantor hereby (i) authorizes the
      Collateral Agent to execute any such agreements, instruments or other documents
      in such Grantor's name and to file such agreements, instruments or other
      documents in such Grantor's name and in any appropriate filing office, (ii)
      authorizes the Collateral Agent at any time and from time to time to file,
      one
      or more financing or continuation statements, and amendments thereto, relating
      to the Collateral (including, without limitation, any such financing statements
      that (A) describe the Collateral as "all assets" or "all personal property"
      (or
      words of similar effect) or that describe or identify the Collateral by type
      or
      in any other manner as the Collateral Agent may determine regardless of whether
      any particular asset of such Grantor falls within the scope of Article 9 of
      the
      Uniform Commercial Code or whether any particular asset of such Grantor
      constitutes part of the Collateral, and (B) contain any other information
      required by Part 5 of Article 9 of the Code for the sufficiency or filing office
      acceptance of any financing statement, continuation statement or amendment,
      including, without limitation, whether such Grantor is an organization, the
      type
      of organization and any organizational identification number issued to such
      Grantor) and (iii) ratifies such authorization to the extent that the Collateral
      Agent has filed any such financing or continuation statements, or amendments
      thereto, prior to the date hereof. A photocopy or other reproduction of this
      Agreement or any financing statement covering the Collateral or any part thereof
      shall be sufficient as a financing statement where permitted by
      law.

     

    (b) Each
      Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact
      and proxy, with full authority in the place and stead of such Grantor and in
      the
      name of such Grantor or otherwise, from time to time in the Collateral Agent's
      discretion, so long as an Event of Default shall have occurred and is
      continuing, to take any action and to execute any instrument which the
      Collateral Agent may reasonably deem necessary or advisable to accomplish the
      purposes of this Agreement (subject to the rights of each Grantor under Section
      5 hereof), including, without limitation, (i) to obtain and adjust insurance
      required to be paid to the Collateral Agent pursuant to Section 5(e) hereof,
      (ii) to ask, demand, collect, sue for, recover, compound, receive and give
      acquittance and receipts for moneys due and to become due under or in respect
      of
      any Collateral, (iii) to receive, endorse, and collect any drafts or other
      instruments, documents and chattel paper in connection with clause (i) or (ii)
      above, (iv) to file any claims or take any action or institute any proceedings
      which the Collateral Agent may deem necessary or desirable for the collection
      of
      any Collateral or otherwise to enforce the rights of the Collateral Agent and
      the Buyers with respect to any Collateral, and (v) to execute assignments,
      licenses and other documents to enforce the rights of the Collateral Agent
      and
      the Buyers with respect to any Collateral. This power is coupled with an
      interest and is irrevocable until all of the Obligations are indefeasibly paid
      in full in cash. 

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (c) For
      the
      purpose of enabling the Collateral Agent to exercise rights and remedies
      hereunder, at such time as the Collateral Agent shall be lawfully entitled
      to
      exercise such rights and remedies, and for no other purpose, each Grantor hereby
      grants to the Collateral Agent, to the extent assignable, an irrevocable,
      non-exclusive license (exercisable without payment of royalty or other
      compensation to any Grantor) to use, assign, license or sublicense any
      Intellectual Property now owned or hereafter acquired by such Grantor, wherever
      the same may be located, including in such license reasonable access to all
      media in which any of the licensed items may be recorded or stored and to all
      computer programs used for the compilation or printout thereof. Notwithstanding
      anything contained herein to the contrary, but subject to the provisions of
      the
      Securities Purchase Agreement that limit the right of any Grantor to dispose
      of
      its property, and Section 5(g) and Section 5(h) hereof, so long as no Event
      of
      Default shall have occurred and be continuing, any Grantor may exploit, use,
      enjoy, protect, license, sublicense, assign, sell, dispose of or take other
      actions with respect to the Intellectual Property in the ordinary course of
      its
      business. In furtherance of the foregoing, unless an Event of Default shall
      have
      occurred and be continuing, the Collateral Agent shall from time to time, upon
      the request of any Grantor, execute and deliver any instruments, certificates
      or
      other documents, in the form so requested, which such Grantor shall have
      certified are appropriate (in such Grantor's judgment) to allow it to take
      any
      action permitted above (including relinquishment of the license provided
      pursuant to this clause (c) as to any Intellectual Property. Further, upon
      the
      indefeasible payment in full in cash of all of the Obligations, the Collateral
      Agent (subject to Section 10(e) hereof) shall release and reassign to any
      Grantor all of the Collateral Agent's right, title and interest in and to the
      Intellectual Property, and the Licenses, all without recourse, representation
      or
      warranty whatsoever. The exercise of rights and remedies hereunder by the
      Collateral Agent shall not terminate the rights of the holders of any licenses
      or sublicenses theretofore granted by each Grantor in accordance with the second
      sentence of this clause (c). Each Grantor hereby releases the Collateral Agent
      from any claims, causes of action and demands at any time arising out of or
      with
      respect to any actions taken or omitted to be taken by the Collateral Agent
      under the powers of attorney granted herein other than actions taken or omitted
      to be taken through the Collateral Agent's gross negligence or willful
      misconduct, as determined by a final determination of a court of competent
      jurisdiction. 

     

    (d) If
      any
      Grantor fails to perform any agreement or obligation contained herein, the
      Collateral Agent may itself perform, or cause performance of, such agreement
      or
      obligation, in the name of such Grantor or the Collateral Agent, and the
      expenses of the Collateral Agent incurred in connection therewith shall be
      payable by such Grantor pursuant to Section 8 hereof and shall be secured by
      the
      Collateral.

     

    (e) The
      powers conferred on the Collateral Agent hereunder are solely to protect its
      interest in the Collateral and shall not impose any duty upon it to exercise
      any
      such powers. Except for the safe custody of any Collateral in its possession
      and
      the accounting for moneys actually received by it hereunder, the Collateral
      Agent shall have no duty as to any Collateral or as to the taking of any
      necessary steps to preserve rights against prior parties or any other rights
      pertaining to any Collateral.

     

    (f) Anything
      herein to the contrary notwithstanding (i) each Grantor shall remain liable
      under the Licenses and otherwise with respect to any of the Collateral to the
      extent set forth therein to perform all of its obligations thereunder to the
      same extent as if this Agreement had not been executed, (ii) the exercise by
      the
      Collateral Agent of any of its rights hereunder shall not release any Grantor
      from any of its obligations under the Licenses or otherwise in respect of the
      Collateral, and (iii) the Collateral Agent shall not have any obligation or
      liability by reason of this Agreement under the Licenses or with respect to
      any
      of the other Collateral, nor shall the Collateral Agent be obligated to perform
      any of the obligations or duties of any Grantor thereunder or to take any action
      to collect or enforce any claim for payment assigned hereunder.

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    SECTION
      7. Remedies
      Upon Event of Default.
      If any
      Event of Default shall have occurred and be continuing:

     

    (a) The
      Collateral Agent may exercise in respect of the Collateral, in addition to
      any
      other rights and remedies provided for herein or otherwise available to it,
      all
      of the rights and remedies of a secured party upon default under the Code
      (whether or not the Code applies to the affected Collateral), and also may
      (i)
      take absolute control of the Collateral, including, without limitation, transfer
      into the Collateral Agent's name or into the name of its nominee or nominees
      (to
      the extent the Collateral Agent has not theretofore done so) and thereafter
      receive, for the benefit of the Collateral Agent, all payments made thereon,
      give all consents, waivers and ratifications in respect thereof and otherwise
      act with respect thereto as though it were the outright owner thereof, (ii)
      require each Grantor to, and each Grantor hereby agrees that it will at its
      expense and upon request of the Collateral Agent forthwith, assemble all or
      part
      of its respective Collateral as directed by the Collateral Agent and make it
      available to the Collateral Agent at a place or places to be designated by
      the
      Collateral Agent that is reasonably convenient to both parties, and the
      Collateral Agent may enter into and occupy any premises owned or leased by
      any
      Grantor where the Collateral or any part thereof is located or assembled for
      a
      reasonable period in order to effectuate the Collateral Agent's rights and
      remedies hereunder or under law, without obligation to any Grantor in respect
      of
      such occupation, and (iii) without notice except as specified below and without
      any obligation to prepare or process the Collateral for sale, (A) sell the
      Collateral or any part thereof in one or more parcels at public or private
      sale,
      at any of the Collateral Agent's offices or elsewhere, for cash, on credit
      or
      for future delivery, and at such price or prices and upon such other terms
      as
      the Collateral Agent may deem commercially reasonable and/or (B) lease, license
      or dispose of the Collateral or any part thereof upon such terms as the
      Collateral Agent may deem commercially reasonable. Each Grantor agrees that,
      to
      the extent notice of sale or any other disposition of its respective Collateral
      shall be required by law, at least ten (10) days' notice to any Grantor of
      the
      time and place of any public sale or the time after which any private sale
      or
      other disposition of its respective Collateral is to be made shall constitute
      reasonable notification. The Collateral Agent shall not be obligated to make
      any
      sale or other disposition of any Collateral regardless of notice of sale having
      been given. The Collateral Agent may adjourn any public or private sale from
      time to time by announcement at the time and place fixed therefor, and such
      sale
      may, without further notice, be made at the time and place to which it was
      so
      adjourned. Each Grantor hereby waives any claims against the Collateral Agent
      and the Buyers arising by reason of the fact that the price at which its
      respective Collateral may have been sold at a private sale was less than the
      price which might have been obtained at a public sale or was less than the
      aggregate amount of the Obligations, even if the Collateral Agent accepts the
      first offer received and does not offer such Collateral to more than one
      offeree, and waives all rights that any Grantor may have to require that all
      or
      any part of such Collateral be marshaled upon any sale (public or private)
      thereof. Each Grantor hereby acknowledges that (i) any such sale of its
      respective Collateral by the Collateral Agent shall be made without warranty,
      (ii) the Collateral Agent may specifically disclaim any warranties of title,
      possession, quiet enjoyment or the like, and (iii) such actions set forth in
      clauses (i) and (ii) above shall not adversely affect the commercial
      reasonableness of any such sale of Collateral. In addition to the foregoing,
      (1)
      upon written notice to any Grantor from the Collateral Agent after and during
      the continuance of an Event of Default, such Grantor shall cease any use of
      the
      Intellectual Property or any trademark, patent or copyright similar thereto
      for
      any purpose described in such notice; (2) the Collateral Agent may, at any
      time
      and from time to time after and during the continuance of an Event of Default,
      upon 10 days' prior notice to such Grantor, license, whether general, special
      or
      otherwise, and whether on an exclusive or non-exclusive basis, any of the
      Intellectual Property, throughout the universe for such term or terms, on such
      conditions, and in such manner, as the Collateral Agent shall in its sole
      discretion determine; and (3) the Collateral Agent may, at any time, pursuant
      to
      the authority granted in Section 6 hereof (such authority being effective upon
      the occurrence and during the continuance of an Event of Default), execute
      and
      deliver on behalf of such Grantor, one or more instruments of assignment of
      the
      Intellectual Property (or any application or registration thereof), in form
      suitable for filing, recording or registration in any country.

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    (b) Any
      cash
      held by the Collateral Agent as Collateral and all Cash Proceeds received by
      the
      Collateral Agent in respect of any sale of or collection from, or other
      realization upon, all or any part of the Collateral shall be applied (after
      payment of any amounts payable to the Collateral Agent pursuant to Section
      8
      hereof)
      by the Collateral Agent against, all or any part of the Obligations in such
      order as the Collateral Agent shall elect, consistent with the provisions of
      the
      Securities Purchase Agreement. Any surplus of such cash or Cash Proceeds held
      by
      the Collateral Agent and remaining after the indefeasible payment in full in
      cash of all of the Obligations shall be paid over to whomsoever shall be
      lawfully entitled to receive the same or as a court of competent jurisdiction
      shall direct.

     

    (c) In
      the
      event that the proceeds of any such sale, collection or realization are
      insufficient to pay all amounts to which the Collateral Agent and the Buyers
      are
      legally entitled, each Grantor shall be liable for the deficiency, together
      with
      interest thereon at the highest rate specified in the Notes for interest on
      overdue principal thereof or such other rate as shall be fixed by applicable
      law, together with the costs of collection and the reasonable fees, costs,
      expenses and other client charges of any attorneys employed by the Collateral
      Agent to collect such deficiency.

     

    (d) Each
      Grantor hereby acknowledges that if the Collateral Agent complies with any
      applicable state, provincial, or federal law requirements in connection with
      a
      disposition of the Collateral, such compliance will not adversely affect the
      commercial reasonableness of any sale or other disposition of the
      Collateral.

     

    (e) The
      Collateral Agent shall not be required to marshal any present or future
      collateral security (including, but not limited to, this Agreement and the
      Collateral) for, or other assurances of payment of, the Obligations or any
      of
      them or to resort to such collateral security or other assurances of payment
      in
      any particular order, and all of the Collateral Agent's rights hereunder and
      in
      respect of such collateral security and other assurances of payment shall be
      cumulative and in addition to all other rights, however existing or arising.
      To
      the extent that any Grantor lawfully may, each Grantor hereby agrees that it
      will not invoke any law relating to the marshaling of collateral which might
      cause delay in or impede the enforcement of the Collateral Agent's rights under
      this Agreement or under any other instrument creating or evidencing any of
      the
      Obligations or under which any of the Obligations is outstanding or by which
      any
      of the Obligations is secured or payment thereof is otherwise assured, and,
      to
      the extent that it lawfully may, each Grantor hereby irrevocably waives the
      benefits of all such laws.

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    SECTION
      8. Indemnity
      and Expenses.

     

    (a) Each
      Grantor agrees, jointly and severally, to defend, protect, indemnify and hold
      the Collateral Agent and each of the Buyers, jointly and severally, harmless
      from and against any and all claims, damages, losses, liabilities, obligations,
      penalties, fees, costs and expenses (including, without limitation, reasonable
      legal fees, costs, expenses, and disbursements of such Person's counsel) to
      the
      extent that they arise out of or otherwise result from this Agreement
      (including, without limitation, enforcement of this Agreement), except to the
      extent resulting from such Person's gross negligence or willful misconduct,
      as
      determined by a final judgment of a court of competent
      jurisdiction.

     

    (b) Each
      Grantor agrees, jointly and severally, to pay to the Collateral Agent upon
      demand the amount of any and all costs and expenses, including the reasonable
      fees, costs, expenses and disbursements of counsel for the Collateral Agent
      and
      of any experts and agents (including, without limitation, any collateral trustee
      which may act as agent of the Collateral Agent), which the Collateral Agent
      may
      incur in connection with (i) the preparation, negotiation, execution, delivery,
      recordation, administration, amendment, waiver or other modification or
      termination of this Agreement, (ii) the custody, preservation, use or operation
      of, or the sale of, collection from, or other realization upon, any Collateral,
      (iii) the exercise or enforcement of any of the rights of the Collateral Agent
      hereunder, or (iv) the failure by any Grantor to perform or observe any of
      the
      provisions hereof.

     

    SECTION
      9. Notices,
      Etc.
      All
      notices and other communications provided for hereunder shall be in writing
      and
      shall be mailed (by certified mail, postage prepaid and return receipt
      requested), telecopied, e-mailed or delivered, (a) if to any Grantor, to it
      at
      its address below, or (b) if to the Collateral Agent to it, at its address
      specified on the signature pages below, or (c) as to any such Person, at such
      other address as shall be designated by such Person in a written notice to
      all
      other parties hereto complying as to delivery with the terms of this Section
      9.
      All such notices and other communications shall be effective (a) if sent by
      certified mail, return receipt requested, when received or three days after
      deposited in the mails, whichever occurs first, (b) if telecopied or e-mailed,
      when transmitted (during normal business hours) and confirmation is received,
      and otherwise, the day after the notice or communication was transmitted and
      confirmation is received, or (c) if delivered in person, upon delivery. For
      the
      avoidance of doubt, the Foreign Subsidiaries, as Grantors, hereby appoint the
      Company as its agent for receipt of service of process and all notices and
      other
      communications in the United States at the address specified below. 

     

    SECTION
      10. Miscellaneous.

     

    (a) No
      amendment of any provision of this Agreement shall be effective unless it is
      in
      writing and signed by each Grantor and the Collateral Agent, and no waiver
      of
      any provision of this Agreement, and no consent to any departure by each Grantor
      therefrom, shall be effective unless it is in writing and signed by each Grantor
      and the Collateral Agent, and then such waiver or consent shall be effective
      only in the specific instance and for the specific purpose for which
      given.

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    (b) No
      failure on the part of the Collateral Agent to exercise, and no delay in
      exercising, any right hereunder or under any of the other Transaction Documents
      shall operate as a waiver thereof; nor shall any single or partial exercise
      of
      any such right preclude any other or further exercise thereof or the exercise
      of
      any other right. The rights and remedies of the Collateral Agent or any Buyer
      provided herein and in the other Transaction Documents are cumulative and are
      in
      addition to, and not exclusive of, any rights or remedies provided by law.
      The
      rights of the Collateral Agent or any Buyer under any of the other Transaction
      Documents against any party thereto are not conditional or contingent on any
      attempt by such Person to exercise any of its rights under any of the other
      Transaction Documents against such party or against any other Person, including
      but not limited to, any Grantor.

     

    (c) Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining portions
      hereof or thereof or affecting the validity or enforceability of such provision
      in any other jurisdiction.

     

    (d) This
      Agreement shall create a continuing security interest in the Collateral and
      shall (i) remain in full force and effect until the indefeasible payment in
      full
      of the Obligations, and (ii) be binding on each Grantor and all other Persons
      who become bound as debtor to this Agreement in accordance with Section 9-203(d)
      of the Code and shall inure, together with all rights and remedies of the
      Collateral Agent and the Buyers hereunder, to the benefit of the Collateral
      Agent and the Buyers and their respective permitted successors, transferees
      and
      assigns. Without limiting the generality of clause (ii) of the immediately
      preceding sentence, without notice to any Grantor, the Collateral Agent and
      the
      Buyers may assign or otherwise transfer their rights and obligations under
      this
      Agreement and any of the other Transaction Documents in accordance with the
      respective Transaction Documents, to any other Person and such other Person
      shall thereupon become vested with all of the benefits in respect thereof
      granted to the Collateral Agent and the Buyers herein or otherwise. Upon any
      such assignment or transfer, all references in this Agreement to the Collateral
      Agent or any such Buyer shall mean the assignee of the Collateral Agent or
      such
      Buyer. None of the rights or obligations of any Grantor hereunder may be
      assigned or otherwise transferred without the prior written consent of the
      Collateral Agent, and any such assignment or transfer without the consent of
      the
      Collateral Agent shall be null and void.

     

    (e) Upon
      the
      indefeasible payment in full of the Obligations, (i) this Agreement and the
      security interests created hereby shall terminate and all rights to the
      Collateral shall revert to the respective Grantor that granted such security
      interests hereunder, and (ii) the Collateral Agent will, upon any Grantor's
      request and at such Grantor's expense, (A) return to such Grantor such of the
      Collateral as shall not have been sold or otherwise disposed of or applied
      pursuant to the terms hereof, and (B) execute and deliver to such Grantor such
      documents as such Grantor shall reasonably request to evidence such termination,
      all without any representation, warranty or recourse whatsoever.

     

    (f) THIS
      AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF
      LAW
      AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION
      AND
      THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
      HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
      GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
      YORK.

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    (g) ANY
      LEGAL
      ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT
      RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE
      COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
      OF
      NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS
      AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
      PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
      COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
      EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
      OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
      CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
      ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO
      THE
      GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
      COURT.

     

    (h) EACH
      GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) THE COLLATERAL
      AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION
      BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
      OF
      THE OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
      ORAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

     

    (i) Each
      Grantor irrevocably consents to the service of process of any of the aforesaid
      courts in any such action, suit or proceeding by the mailing of copies thereof
      by registered or certified mail (or any substantially similar form of mail),
      postage prepaid, to any Grantor at its address provided herein, such service
      to
      become effective 10 days after such mailing.

     

    (j) Nothing
      contained herein shall affect the right of the Collateral Agent to serve process
      in any other manner permitted by law or commence legal proceedings or otherwise
      proceed against any Grantor or any property of any Grantor in any other
      jurisdiction.

     

    (k) Each
      Grantor irrevocably and unconditionally waives any right it may have to claim
      or
      recover in any legal action, suit or proceeding referred to in this Section
      any
      special, exemplary, punitive or consequential damages.

     

    (l) Section
      headings herein are included for convenience of reference only and shall not
      constitute a part of this Agreement for any other purpose.

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    (m) This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which shall be deemed to be an
      original, but all of which taken together constitute one in the same
      Agreement.

     

    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
      delivered by its officer thereunto duly authorized, as of the date first above
      written.

     

     

    
      	 	
              RxElite,
                Inc.

            
	 	 
	 	 
	 	
              By:

            	/s/
              Jonathan Houssian	 
	 	 	
              Name:
                Jonathan Houssian

            
	 	 	
              Title:  
                President and Chief Executive Officer

            
	 	 	 
	 	 	 
	 	
              RxElite
                Holdings Inc.

            
	 	 
	 	 
	 	
              By:

            	/s/
              Jonathan Houssian	 
	 	 	
              Name:
                Jonathan Houssian

            
	 	 	
              Title:  
                President and Chief Executive
                Officer

            

    

    
       

    

    
      
        Security
          Agreement

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ACCEPTED
      BY:

     

    

      
        	
                CASTLERIGG
                  MASTER INVESTMENTS LTD.

              	 
	 	 
	By: 	SANDELL
                ASST MANAGEMENT CORP.	 	 
	 	 	 	 
	
                By:

              	/s/
                Patrick Burke	 	 
	
                Name:    
                  Patrick Burke

              	 
	
                Title:      
                  Senior Managing Director

              	 

      

    

     

    
      
        
          Security
            Agreement

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