Document:

Loan Agreement

  
 Exhibit 10.38

  
 LOAN AGREEMENT

  
 THIS LOAN AGREEMENT (“Agreement”), dated as
of the 9th day of August, 2002, is made and entered into on the terms and conditions hereinafter set forth, by and
between TEAMM PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), and HARBINGER MEZZANINE PARTNERS, L.P., a Delaware limited partnership (“Lender”). 
  
 RECITALS: 
  
 WHEREAS, Borrower has requested that Lender make available to Borrower a term loan in the original principal amount of
55,000,000 (the “Loan”) on the terms and conditions hereinafter set forth, and for the purpose(s) hereinafter set forth; and 
  
 WHEREAS, in order to induce Lender to make the Loan to Borrower, Borrower has made certain representations to Lender; and 
  
 WHEREAS, Lender, in reliance upon the representations and inducements of
Borrower, has agreed to make the Loan upon the terms and conditions hereinafter set forth. 
  
 AGREEMENT: 
  
 NOW, THEREFORE, in consideration of the agreement of Lender to make the Loan, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Borrower and Lender hereby agree as follows: 
  
 ARTICLE 1 
 THE LOAN 
  
 1.1 Evidence of Loan Indebtedness and Repayment. Subject to the terms and conditions contained herein, the Lender shall make the Loan to
Borrower by wire transfer in immediately available funds. The Loan shall he evidenced by a Secured Promissory Note in the original principal amount of $5,000,000 dated as of the date hereof, executed by Borrower in favor of Lender, in a form
acceptable to Lender (the “Note”). The Loan shall be payable in accordance with the terms of the Note. The Note, this Agreement and any other instruments and documents executed by Borrower, any guarantor of Borrower, or any shareholder,
member, partner, subsidiary or affiliate of Borrower (“Affiliates”), now or hereafter evidencing, securing or in any way related to the indebtedness evidenced by the Note are herein individually referred to as a “Loan Document”
and collectively referred to as the “Loan Documents.” The term “Obligations” as used herein shall refer to (a) the Loan to be made concurrently or in connection with this Agreement, as evidenced by the Note, and any renewals or
extensions thereof, (b) the full and prompt payment and performance of any and all other indebtednesses and other obligations of Borrower to Lender, direct or contingent (including but not limited to obligations incurred as indorser, guarantor or
surety), however evidenced or denominated, and however and 

  

 
whenever incurred, including but not limits to indebtednesses incurred pursuant to any present or future commitment of Lender to Borrower and (c) all future
advances made by Lender for taxes, levies, insurance and preservation of the collateral securing the Loan (“Collateral”) and all attorneys’ fees, court costs and expenses of whatever kind incident to the collection of any of said
indebtedness or other obligations and the enforcement and protection of the security interest created hereby or by the other Loan Documents. 
  
 1.2 Processing Fee. Borrower shall pay Lender a processing fee of $100,000, $25,000 of which has previously been paid to Lender and
$75,000 of which shall be paid on the date the Loan is funded. 
  
 1.3 Prepayment. Borrower may prepay the indebtedness evidenced by the Note in whole or in part at any time and from time to time, without penalty or premium. 
  
 1.4 Purposes of Loan and Use of Proceeds. The purpose of the Loan shall be to provide additional working
capital to Borrower. 
  
 ARTICLE 2 
 REPRESENTATIONS AND WARRANTIES 
  
 2.1 Borrower’s Representations. Borrower hereby represents and warrants to Lender as follows: 
  
 (a) Corporate Status. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware; and has the corporate power to own and operate its properties, to carry on its business as now conducted and to enter into and to perform its obligations under
this Agreement and the other Loan Documents to which it is a party. Borrower is duly qualified to do business and in good standing in each state in which a failure to be so qualified would have a material adverse effect on Borrower’s financial
condition or its ability to conduct its business in the manner now conducted. 
  
 (b) Subsidiaries. Borrower neither owns nor has an interest in, directly or indirectly, any other corporation, partnership, joint venture or other business organization (“Subsidiaries”). 

 
 (c) Authorization. Borrower has full legal right,
power and authority to conduct its business and affairs. Borrower has full legal right, power and authority to enter into and perform its obligations under the Loan Documents, without the consent or approval of any other person, firm, governmental
agency or other legal entity. The execution and delivery of this Agreement, the borrowing hereunder, the execution and delivery of each Loan Document to which Borrower is a party, and the performance by Borrower of its obligations thereunder are
within the corporate powers of Borrower and have been duly authorized by all necessary corporate action properly taken and Borrower has received all necessary governmental approvals, if any, that are required. The officer(s) executing this
Agreement, the Note and all of the other Loan Documents to which Borrower is a party are duly authorized to act on behalf of Borrower. 
  

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 (d) Validity and Binding Effect. This Agreement and the other Loan Documents are
the legal, valid and binding obligations of Borrower, enforceable in accordance with their respective terms, subject to limitations imposed by bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally or
the application of general equitable principles. 
  
 (e) Capitalization. As of the date hereof, the authorized capital stock of Borrower consists solely of: (i) 9,000,000 shares of Class A Voting Common Stock, par value $0,001 per share, of which 1,995,669 shares are issued and
outstanding (the “Voting Common Stock”); (ii) 1,000,000 shares of Class B Nonvoting Common Stock, par value $0,001 per share, of which 100,000 shares are issued and outstanding; and (iii) 10,000,000 shares of Preferred Stock, par value
$0,001 per share, of which 1,073,418 shares have been designated as Series A Convertible Preferred Stock and of which 871,106 shares are issued and outstanding (the “Series A Preferred Stock”). The Company has reserved 762,571 shares of
Voting Common Stock for issuance pursuant to the exercise of stock options under its Stock Option Plan (the “Option Plan”). As of the date hereof, there are options that are issued and outstanding under the Option Plan that are exercisable
for 510,455 shares of Voting Common Stock. As of the date hereof, there are warrants that are issued and outstanding that are exercisable for 30,000 shares of Voting Common Stock; provided that, the number of shares reserved for issuance upon the
exercise of such warrants may be increased from time to time in accordance with the terms of such warrants. 1,105,891 Shares of Voting Common Stock are reserved for issuance upon the exercise of the Stock Purchase Warrant, dated as of the date
hereof and issued to the Lender pursuant to this Agreement (the “Warrant”); provided that, the number of shares reserved for issuance upon the exercise of the Warrant may be increased from time to time in accordance with the terms of the
Warrant. Attached hereto as Schedule 2.1(e) is a table showing the capitalization of Borrower, as of the date hereof, on a fully diluted basis. As of the date hereof, Borrower does not have outstanding any stock or securities convertible or
exchangeable for any shares of its Voting Common Stock or containing any profit participation features, and does not have outstanding any rights or options to subscribe for or to purchase its Voting Common Stock or any stock appreciation rights or
phantom stock plans, except as set forth on Schedule 2.1(e) and the Warrant. Schedule 2.1(e) accurately sets forth the following with respect to all outstanding options and rights to acquire Borrower’s Voting Common Stock: (i) the total number
of shares issuable upon exercise of all outstanding options; (ii) the range of exercise prices for all such outstanding options; (iii) the number of shares issuable, the exercise price and the expiration date for each such outstanding option; and
(iv) with respect to all outstanding options, warrants and rights to acquire Borrower’s capital stock other than the Warrant, the holder, the number of shares covered, the exercise price and the expiration date. As of the date hereof, Borrower
is not subject to any obligation (contingent or otherwise) to repurchase, redeem, retire or otherwise acquire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, except as set forth in the Warrant
or on Schedule 2.1(e). As of the date hereof, all of the outstanding shares of Borrower’s capital stock are validly issued, fully paid and nonassessable. Except as set forth on Schedule 2.1(e), there are no statutory or contractual preemptive
rights, rights of first refusal, anti-dilution rights or any similar rights, held by stockholders or option holders of Borrower, with respect to the issuance of the Warrant or the issuance of the Voting Common Stock upon exercise of the Warrant and
all such rights have been effectively waived with regard to the issuance of the Warrant, the exercise of the Warrant 

  

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and the issuance of the Voting Common Stock upon exercise of the Warrant. Borrower has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital stock, and the offer, sale and issuance of the Warrant hereunder do not require registration under the Securities Act of 1933, as amended, or any applicable state securities laws. To
the best of Borrower’s knowledge, there are no agreements among Borrower’s shareholders with respect to any other aspect of Borrower’s affairs, except as set forth on Schedule 2.l(e). 
  
 (f) Trademarks, Patents, Etc. Schedule 2.l(f) is an
accurate and complete list of all patents, trademarks, tradenames, trademark registrations, service names, service marks, copyrights, licenses, formulas and applications therefor owned by Borrower or used or required by Borrower in the operation of
its business, title to each of which is, except as set forth in Schedule 2. l(f) hereto, held by Borrower free and clear of all adverse claims, liens, security agreements, restrictions or other encumbrances. Except as set forth in Schedule 2.1(f),
Borrower owns or possesses adequate (and will use its best efforts to obtain as expediently as possible any additional) licenses or other rights to use all patents, trademarks, trade names, service marks, trade secrets or other intangible property
rights and know-how necessary to entitle Borrower to conduct its business as presently being conducted. There is no infringement action, lawsuit, claim or complaint which asserts that Borrower’s operations violate or infringe the rights or the
trade names, trademarks, trademark registrations, service names, service marks or copyrights of others with respect to any apparatus or method of Borrower or any adversely held trademarks, trade names, trademark registrations, service names, service
marks or copyrights, and Borrower is not in any way making use of any confidential information or trade secrets of any person, except with the consent of such person. Except as set forth in Schedule 2.1(f), Borrower has taken reasonable steps to
protect its proprietary information (except disclosure of source codes pursuant to licensing agreements) and is the lawful owner of the proprietary information free and clear of any claim of any third party. As used herein, “proprietary
information” includes without limitation, (i) any computer programming language, software, hardware, firmware or related documentation, inventions, technical and nontechnical data related thereto, and (ii) other documentation, inventions and
data related to patterns, plans, methods, techniques, drawings, finances, customer lists, suppliers, products, special pricing and cost information, designs, processes, procedures, formulas, research data owned or used by Borrower or marketing
studies conducted by Borrower, all of which Borrower considers to be commercially important and competitively sensitive and which generally has not been disclosed to third parties. 
  
 (g) No Conflicts. Consummation of the transactions contemplated hereby and the performance of the
obligations of Borrower under and by virtue of the Loan Documents do not conflict with, and will not result in any breach of, or constitute a default or trigger a lien under, any mortgage, security deed or agreement, deed of trust, lease, bank loan
or credit agreement, corporate charter or bylaws, agreement or certificate of limited partnership, partnership agreement, license, franchise or any other instrument or agreement to which Borrower is a party or by which Borrower or its respective
properties may be bound or affected or to which Borrower has not obtained an effective waiver. 
  
 (h) Litigation. There are no actions, suits, arbitrations, administrative hearings or other proceedings pending, or, to the
knowledge of Borrower threatened, against or affecting Borrower or any of Borrower’s property or involving the validity or enforceability of 

  

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any of the Loan Documents at law or in equity, or before any governmental or administrative agency. To Borrower’s knowledge, Borrower is not subject to
any order, writ, injunction, decree or demand of any court or any governmental authority. 
  
 (i) Financial Statements. The financial statements of Borrower dated June 30, 2002, which are attached hereto as Schedule
2.1(i)(A), are true and correct in all material respects, have been prepared on the basis of generally accepted accounting principles consistently applied, and fairly present the financial condition of Borrower as of the date(s) thereof and the
statements of income and retained earnings and statements of cash flows present fairly the results of operations and cash flows of Borrower for the periods set forth therein. No material adverse change has occurred in the financial condition of
Borrower since the date(s) thereof, and no additional borrowings have been made by Borrower since the date(s) thereof other than as set forth on Schedule 2.1(i)(B). 
  
 (j) Other Agreements: No Defaults. Borrower is not a party to any indenture, loan or credit
agreement, lease or other agreement or instrument, or subject to any charter or corporate restriction, that a default or event of default thereunder could have a material adverse effect on the business, properties, assets, operations or conditions,
financial or otherwise, of Borrower, or the ability of Borrower to carry out its obligations under the Loan Documents to which it is a party. Borrower is not in default in any respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument material to its business to which it is a party, including but not limited to this Agreement and the other Loan Documents, and no other default or event has occurred and
is continuing that with notice or the passage of time or both would constitute a default or event of default under any of same. 
  
 (k) Compliance With Law. Borrower has obtained all necessary licenses, permits and approvals and authorizations necessary or
required in order to conduct its business and affairs as heretofore conducted and as hereafter intended to be conducted. Borrower is in compliance with all laws, regulations, decrees and orders applicable to it (including but not limited to laws,
regulations, decrees and orders relating to environmental, occupational and health standards and controls, antitrust, monopoly, restraint of trade or unfair competition), except to the extent that any noncompliance, in the aggregate, cannot
reasonably be expected to have a material adverse effect on its business, operations, property or financial condition and will not materially adversely affect Borrower’s ability to perform its obligations under the Loan Documents. 

 
 (l) Debt. Schedule 2.1(1) is a complete and correct
list of all credit agreements, indentures, purchase agreements, promissory notes and other evidences of indebtedness, guaranties, capital leases and other instruments, agreements and arrangements presently in effect providing for or relating to
extensions of credit (including agreements and arrangements for the issuance of letters of credit or for acceptance financing) in respect of which Borrower or any of its properties is in any manner directly or contingently obligated and the maximum
principal or face amounts of the credit in question that are outstanding and that can be outstanding are correctly stated, and all liens of any nature given or agreed to be given as security therefor are correctly described or indicated in Schedule
2.1(1). 
  

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 (m) Taxes. Borrower has filed or caused to be filed all tax returns that are
required to be filed (except for returns that have been appropriately extended), and has paid, or will pay when due, all taxes shown to be due and payable on said returns and all other taxes, impositions, assessments, fees or other charges imposed
on it by any governmental authority, agency or instrumentality, prior to any delinquency with respect thereto (other than taxes, impositions, assessments, fees and charges currently being contested in good faith by appropriate proceedings, for which
appropriate amounts have been reserved in accordance with generally accepted accounting principles). No tax liens have been filed against Borrower or any of its property. 
  
 (n) Certain Transactions. Except as set forth on Schedule 2.1 (n) hereto, Borrower is not indebted,
directly or indirectly, to any of its shareholders, officers or directors or to their respective spouses or children, in any amount whatsoever, and none of said shareholders, officers or directors or any members of their immediate families, are
indebted to Borrower or have any direct or indirect ownership interest in any firm or corporation with which Borrower has a business relationship, or any firm or corporation which competes with Borrower, except that shareholders, officers and/or
directors of Borrower may own no more than 4.9% of outstanding stock of publicly traded companies which may compete with Borrower. No shareholder, officer or director or any member of their immediate families, is, directly or indirectly, interested
in any material contract with Borrower. Borrower is not a guarantor or indemnitor of any indebtedness of any other person, firm, corporation or other legal entity. 
  
 (o) Small Business Concern. Borrower, together with its “affiliates” (as that term is
defined in Title 13, Code of Federal Regulations, §121.103), is a “small business concern” within the meaning of the Small Business Investment Act of 1958, as amended, and the regulations promulgated thereunder. The information set
forth in the Small Business Administration Forms 480, 652 and Parts A and B of Form 1031 regarding Borrower upon delivery, pursuant to Section 4.1 hereof, will be accurate and complete. Borrower does not presently engage in, and it will not
hereafter engage in, any activities, and Borrower will not use directly or indirectly, the proceeds from the Loan, for any purpose for which a Small Business Investment Company is prohibited from providing funds by the Small Business Investment Act
and the regulations thereunder, including Title 13, Code of Federal Regulations §107.720. 
  
 (p) Statements Not False or Misleading. No representation or warranty given as of the date hereof by Borrower contained in this
Agreement or any schedule attached hereto or any statement in any document, certificate or other instrument furnished or to be furnished by Borrower to Lender pursuant hereto, taken as a whole, contains or will (as of the time so furnished) contain
any untrue statement of a material fact, or omits or will (as of the time so furnished) omit to state any material fact which is necessary in order to make the statements contained therein not misleading. 
  
 (q) Margin Regulations. Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying margin stock. No proceeds received pursuant to this Agreement will be used to purchase or carry any equity security of a class which is registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended. 
  

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 (r) Significant Contracts. Schedule 2.1(r) is a complete and correct list of all
contracts, agreements and other documents pursuant to which (i) Borrower receives revenues in excess of $25,000 per fiscal year or has committed to make expenditures in excess of $25,000 per fiscal year, (if) Borrower engages any pharmaceutical
manufacturer to manufacture products to be sold by Borrower and (iii) Borrower engages any third-party to fulfill or supply products for sale by Borrower. Each such contract, agreement and other document is in full force and effect as of the date
hereof and Borrower knows of no reason why such contracts, agreements and other documents would not remain in full force and effect pursuant to the terms thereof. 
  
 (s) Environment. Borrower has duly complied with, and its business, operations, assets, equipment,
property, leaseholds or other facilities are in compliance with, the provisions of all federal, state and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations promulgated thereunder. Borrower has been
issued and will maintain all required federal, state and local permits, licenses, certificates and approvals relating to (i) air emissions; (if) discharges to surface water or groundwater; (iii) noise emissions; (iv) solid or liquid waste disposal;
(v) the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes (which shall include any and all such materials listed in any federal, state or local law, code or ordinance and all rules and regulations
promulgated thereunder as hazardous or potentially hazardous); or (vi) other environmental, health or safety matters. Borrower has not received notice of, or knows of, or suspects facts which might constitute any violations of any federal, state or
local environmental, health or safety laws, codes or ordinances, and any rules or regulations promulgated thereunder with respect to its businesses, operations, assets, equipment, property, leaseholds, or other facilities. Except in accordance with
a valid governmental permit, license, certificate or approval, there has been no emission, spill, release or discharge into or upon (A) the air; (B) soils, or any improvements located thereon; (C) surface water or groundwater; or (D) the sewer,
septic system or waste treatment, storage or disposal system servicing the premises, of any toxic or hazardous substances or wastes at or from the premises; and accordingly the premises of Borrower are free of all such toxic or hazardous substances
or wastes. There has been no complaint, order, directive, claim, citation or notice by any governmental authority or any person or entity with respect to (1) air emissions; (2) spills, releases or discharges to soils or improvements located thereon,
surface water, groundwater or the sewer, septic system or waste treatment, storage or disposal systems servicing the premises; (3) noise emissions; (4) solid or liquid waste disposal; (5) the use, generation, storage, transportation or disposal of
toxic or hazardous substances or waste; or (6) other environmental, health or safety matters affecting Borrower or its business, operations, assets, equipment, property, leaseholds or other facilities. Borrower does not have any indebtedness,
obligation or liability (absolute or contingent, matured or not matured), with respect to the storage, treatment, cleanup or disposal of any solid wastes, hazardous wastes or other toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability with respect to any current regulation, law or statute regarding such storage, treatment, cleanup or disposal). 
  
 (t) Fees/Commissions. Except as set forth on Schedule 2.1(t), Borrower has not agreed to pay any finder’s fee, commission,
origination fee (except for the processing and commitment fees due pursuant to Section 1.2 hereof) or other fee or charge to any person or entity with respect to the Loan and investment transactions contemplated hereunder. 
  

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 (u) ERISA. Borrower has operated and administered each Plan (as defined below) in
compliance in all material respects with all applicable laws, including the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the Internal Revenue Code of 1986, as amended (“Code”). Neither a prohibited
transaction nor a breach of fiduciary duty has occurred with respect to any Plan. Each Plan that is intended to be a tax-qualified plan within the meaning of Section 401(a) of the Code satisfies the applicable requirements of the Code. With respect
to any Title IV Plan (as defined below), neither Borrower nor any ERISA Affiliate (as defined below) has incurred a reportable event with respect to any Title IV Plan; no notice of intent to terminate a Title IV Plan has been filed nor has any Title
IV Plan been terminated; no circumstances exist which constitute grounds for the Pension Benefit Guaranty Corporation (“PBGC”) to institute proceedings to terminate a Title IV Plan nor has the PBGC instituted any such proceedings; Borrower
and each ERISA Affiliate have met all minimum funding requirements for the Title IV Plan and the assets of such plan are not less than the present value of all benefits accrued under such plan as of the most recent valuation date determined on a
termination basis under Title IV of ERISA. Neither Borrower nor any ERISA Affiliate has completely or partially withdrawn from a multiemployer plan (as defined in ERISA) nor do they have, any withdrawal liability with respect to such multiemployer
plans. Borrower does not have any liability for post-employment healthcare or life insurance benefits, except for the continuation coverage mandated by Section 4980B of the Code. 
  
 For purposes of this Agreement (iv) “Plan” means any employee benefit plan as defined in Section 3(3) of ERISA;
(v) “Title IV Plan” means any employee pension benefit plan subject . to the provisions of Title IV of ERISA; and (vi) “ERISA Affiliate” means any person or entity that was or is required to be treated as a single employer with
Borrower under Section 414 of the Code. 
  
 (v)
Title to Properties. Borrower has good, indefeasible and insurable title to, or valid leasehold interests in, all its real properties and good title to its other assets, free and clear of all hens other than Permitted Liens (as defined in.
Section 3.15 hereof). 
  
 (w) Limited Offering
of Note and Warrant. Neither Borrower nor anyone acting on its behalf has offered the Note, the Warrant or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect
thereof, with, any person other than Lender and not more than 35 other institutional investors. Neither Borrower nor anyone acting on its behalf has taken, or will take, any action which would subject the issuance or sale of the Note and Warrant to
Section 5 of the Securities Act of 1933, as amended, or the registration or qualification provisions of the blue sky laws of any state. 
  
 (x) Registration Rights. Except as described in the Warrant and the Investor Rights Agreement dated July 31, 2002 between Borrower
and the holders of the Series A Preferred Stock of Borrower, Borrower is not under any obligation to register under the Securities Act of 1933, as amended, or the Trust Indenture Act of 1939, as amended, any of its presently outstanding securities
or any of its securities that may subsequently be issued. 
  
 (y) Employees. Borrower has no current labor problems or disputes that have resulted in or Borrower reasonably believes could be expected to have, a material adverse effect. Borrower is in compliance in all
material respects with all applicable laws respecting 

  

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employment, employment practices, wages and hours, payment for vacation and overtime, and immigration matters. 
  
 (z) Issuance Taxes. All taxes imposed on Borrower in
connection with the issuance, sale and delivery of the Note, the Warrant and the capital stock issuable upon exercise of the Warrant have been or “will be fully paid, and all laws imposing such taxes have been or will be fully satisfied by
Borrower. 
  
 (aa) Solvency. As of the
date hereof and giving effect to the making of the Loan, Borrower (i) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage and is able to pay its debts as they mature, (ii)
owns property having a value, both at fair valuation and at present fair saleable value, greater than the amount required to pay its probable liabilities (including contingencies), and (iii) does not believe that it will incur debts or liabilities
beyond its ability to pay such debts or liabilities as they mature. 
  
 (ab) Location of Properties. Names. Places of Business. The only jurisdictions in which Borrower maintains any tangible personal property or carries on business are as listed in Schedule 2.l(ab) hereto. All
billings for the supply of goods and services by Borrower are made from, and require payment to be made to, the chief executive office of Borrower. The exact legal name of Borrower on its certificate of incorporation as filed with the Delaware
Secretary of State is “TEAMM Pharmaceuticals, Inc.” Borrower has not, during the five years preceding the date of this Agreement, been known as or used any other corporate, trade or fictitious name, nor acquired all or substantially all of
the assets, capital stock or operating units of any person. Borrower has not, during the five years preceding the date of this Agreement, had a business location at any address other than addresses set forth on Schedule 2.l(ab). 
  
 ARTICLE 3 
 COVENANTS AND AGREEMENTS 
  
 Borrower covenants and agrees that during the term of this Agreement: 
  
 3.1 Payment of Obligations. Borrower shall pay the indebtedness evidenced by the Note according to the terms thereof, and shall timely pay
or perform, as the case may be, all of the other obligations of Borrower to Lender, direct or contingent, however evidenced or denominated, and however and whenever incurred, including but not limited to indebtedness incurred pursuant to any present
or future commitment of Lender to Borrower, together with interest thereon, and any extensions, modifications; consolidations and/or renewals thereof and any notes given in payment thereof. 
  
 3.2 Financial Statements and Reports. Borrower shall furnish to
Lender (a) as soon as practicable and in any event within 120 days after the end of each fiscal year of Borrower, an audited balance sheet of Borrower as of the close of such fiscal year, an audited statement of operations of Borrower as of the
close of such fiscal year and an audited statement of cash flows for Borrower for such fiscal year, prepared in accordance with generally accepted accounting principles consistently applied and accompanied by an unqualified audit report prepared by
an 

  

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independent certified public accountant acceptable to Lender showing the financial condition of Borrower at the close of such fiscal year and the results of
its operations during such fiscal year and accompanied by a certificate of the President of Borrower and a certificate by Borrower’s independent certified public accountants, stating that to the best of the knowledge of such officer and such
accountants, as applicable, Borrower has kept, observed, performed and fulfilled each covenant, term and condition of this Agreement and the other Loan Documents during the preceding fiscal year and that no Event of Default has occurred and is
continuing (or if an Event of Default has occurred and is continuing, specifying the nature of same, the period of existence of same and the action Borrower proposes to take in connection therewith), (b) within 30 days of the end of each month, a
balance sheet of Borrower as of the close of such month, a statement of operations of Borrower as of the close of such month and a statement of cash flows of Borrower as of the close of such month, all in reasonable detail, and prepared
substantially in accordance with generally accepted accounting principles consistently applied (except for the absence of footnotes and subject to year-end adjustments), (c) as soon as available and in any event within 30 days after the end of each
quarter (other than at year end) (i) an accounts receivable aging of Borrower as of the close of such quarter and (ii) a compliance certificate of the President of Borrower, stating that to the best of the knowledge of such officer, Borrower has
kept, observed, performed and fulfilled each covenant, term and condition of this Agreement and the other Loan Documents during the preceding quarter and that no Event of Default has occurred and is continuing (or if an Event of Default has occurred
and is continuing, specifying the nature of same, the period of existence of same and the action Borrower proposes to take in connection therewith), (d) within 15 days, copies of any other financial reports delivered to any third parties, and (e)
with reasonable promptness, such other financial data, including without limitation, inventory reports, as Lender may reasonably request. Without Lender’s prior written consent which shall not be unreasonably withheld, Borrower shall not modify
or change any accounting policies or procedures, including Borrower’s fiscal year, in effect on the date hereof. 
  
 3.3 Maintenance of Books and Records; Inspection. Borrower shall maintain its books, accounts and records in accordance with generally
accepted accounting principles consistently applied, and after reasonable notice from Lender permit Lender, its officers and employees and any professionals designated by Lender in writing, at Borrower’s expense, to visit and inspect any of its
properties, corporate books and financial records, and to discuss its accounts, affairs and finances with Borrower or the principal officers of Borrower during reasonable business hours, all at such times as Lender may reasonably request; provided
that no such inspection shall materially interfere with the conduct of Borrower’s business. 
  
 3.4 Insurance. Borrower shall maintain and deliver evidence to Lender of such insurance as is required by Lender, written by insurers, in
amounts and with lender’s loss payable, mortgagee, additional insured and other endorsements reasonably satisfactory to Lender. All premiums with respect to such insurance shall be paid by Borrower as and when due. Upon the written request of
Lender, accurate and complete copies of such policies shall be delivered by Borrower to Lender. If Borrower fails to comply with this Section 3.4, Lender may (but shall not be required to) procure such insurance and endorsements insuring the
Collateral. Any money received by Lender under said policies, after deducting all costs and expenses (including attorney’s fees) of collection, shall be applied, at Lender’s option, toward either (a) replacing or restoring the subject
Collateral, in a manner and on terms satisfactory to Lender, or (b) payment of the Obligations. Any proceeds applied to the payment of the Obligations shall be 

  

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applied in such manner as Lender may elect in its sole discretion. In no event shall such application relieve Borrower from payment in full of all
installments of principal and interest under the Note. Until the Obligations have been fully satisfied and any obligations of Lender to make further advances hereunder has terminated, Lender’s security interest in the Collateral shall continue
in full force and effect. 
  
 3.5 Taxes and
Assessments. Borrower shall (a) file all tax returns and appropriate schedules thereto that are required to be filed under applicable law, prior to the date of delinquency, (b) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon Borrower upon its income and profits or upon any properties belonging to it, prior to the date on which penalties attach thereto, and (c) pay all taxes, assessments and governmental charges or levies that, if unpaid,
might become a lien or charge upon any of its properties; provided, however, that Borrower in good faith may contest any such tax, assessment, governmental charge or levy described in the foregoing clauses (b) and (c) so long as appropriate reserves
in accordance with generally accepted accounting principles are maintained with respect thereto. 
  
 3.6 Corporate Existence. Borrower shall maintain its corporate existence and good standing in the state of its incorporation, and its
qualification and good standing as a foreign corporation in each jurisdiction in which such qualification is necessary pursuant to applicable law. Borrower shall not change its state of incorporation. 
  
 3.7 Compliance with Law and Other Agreements. Except where the
failure to do so would not materially adversely affect Borrower’s operations, properties, financial condition or its ability to fulfill its obligations under the Loan Documents, Borrower shall maintain its business operations and property owned
or used in connection therewith in compliance with (a) all applicable federal, state and local laws, regulations and ordinances governing such business operations and the use and ownership of such property, and (b) all agreements, licenses,
franchises, indentures and mortgages to which Borrower is a party or by which Borrower or any of its properties is bound. Without limiting the foregoing, Borrower shall pay all of its indebtedness promptly in accordance with the terms thereof.

  
 3.8 Notice of Default; Perceived Breach; Correspondence
with Other Lenders. Borrower shall give written notice to Lender of the occurrence of any default, event of default or Event of Default under this Agreement or any other Loan Document promptly upon the occurrence thereof. Borrower agrees to
give Lender prompt written notice of any action or inaction by or on behalf of Lender in connection with this Agreement or the Obligations that Borrower believes may be actionable against Lender or a defense to payment of any or all Obligations for
any reason, including, but not limited to, commission of a tort or violation of any contractual duty or duty implied by law. Borrower agrees to give Lender a copy of all written correspondence concerning an actual or potential default or event of
default under any agreements between Borrower and any other lender within 10 days of Borrower’s receipt thereof. 
  
 3.9 Notice of Litigation. Borrower shall give notice, in writing, to Lender of (a) any actions, suits or proceedings, instituted by any
persons whomsoever against Borrower or affecting any of the assets of Borrower wherein the amount at issue is in excess of $25,000.00 and (b) any dispute, not resolved within 6O days of the commencement thereof, between 

  

 11 

 
Borrower on the one hand and any governmental regulatory body on the other hand, which dispute might materially interfere with the normal operations of
Borrower. 
  
 3.10 Conduct of Business; Name.
Borrower will continue to engage in a business of the same general type and manner as conducted by it on the date of this Agreement. Without 10 days’ prior written notice to Lender, Borrower shall not change its name or location of doing
business. In the event Borrower makes a change of its name or location of doing business, Borrower shall promptly execute any and all financing statements and amendments or continuations thereof and any other documents that Lender may reasonably
request to evidence, continue, and/or perfect any security interest in or pledge of collateral securing the Loan. 
  
 3.11 Title IV Plan. If Borrower has in effect, or hereafter institutes, a Title IV Plan, then the following warranties and covenants shall
be applicable during such period as to any such Title IV Plan that shall be in effect: (a) Borrower hereby warrants that no fact that might constitute grounds for the involuntary termination of the Title IV Plan, or for the appointment by the
appropriate United States District Court of a trustee to administer the Title IV Plan, exists at the time of execution of this Agreement; (b) Borrower hereby covenants that throughout the existence of the Title TV Plan, Borrower’s contributions
under the Title IV Plan will meet the minimum funding standards required by ERISA and Borrower will not institute a distress termination of the Title TV Plan; and (c) Borrower covenants that it will send to Lender a copy of any notice of a
reportable event (as defined in ERISA) required by ERISA to be filed with respect to the Title IV Plan with the Labor Department or the Pension Benefit Guaranty Corporation, at the time that such notice is so filed. 
  
 3.12 Dividends, Distributions, Stock Rights, etc. Without the
prior written consent of Lender which shall not be unreasonably withheld, Borrower shall not declare or pay any dividend of any kind (other than stock dividends payable to all holders of any class of capital stock), in cash or in property, on any
class of the capital stock of Borrower, or purchase, redeem, retire or otherwise acquire for value any shares of such stock, nor make any distribution of any kind in cash or property in respect thereof, nor make any return of capital of
shareholders, nor make any payments in cash or property in respect of any stock options, stock bonus or similar plan nor grant any preemptive rights with respect to the capital stock of Borrower. 
  
 3.13 Guaranties; Loans; Payment of Debt. Without the prior
written consent of Lender, Borrower shall not guarantee nor be liable in any manner, whether directly or indirectly, or become contingently liable after the date of this Agreement in connection with the obligations or indebtedness of any person or
entity whatsoever, except for the endorsement of negotiable instruments payable to Borrower for deposit or collection in the ordinary course of business. Without the prior written consent of Lender, Borrower shall not (a) make any loan, advance or
extension of credit to any person other than in the normal course of its business, or (b) make any payment on any indebtedness that is expressly subordinate to the Loan. 
  
 3.14 Debt. Without the prior written consent of Lender which shall not be unreasonably withheld, Borrower
shall not create, incur, assume or suffer to exist indebtedness of any description whatsoever, excluding: 
  
 (a) the indebtedness evidenced by the Note; 
  

 12 

 (b) the endorsement of negotiable instruments payable to Borrower for deposit or
collection in the ordinary course of business; 
  
 (c) trade payables incurred in the ordinary course of business; and 
  
 (d) the indebtedness listed on Schedule 2.1(1) hereto. 
  
 3.15 No Liens. Without the prior written consent of Lender which shall not be unreasonably withheld, Borrower shall not create, incur, assume or suffer to exist any lien, security interest, security
title, mortgage, deed of trust or other encumbrance upon or with respect to any of its assets, now owned or hereafter acquired, except the following permitted liens (the “Permitted Liens”): 
  
 (a) liens in favor of Lender; 
  
 (b) liens for taxes or assessments or other governmental
charges or levies if not yet due and payable; 
  
 (c) liens on leased equipment granted in connection with the leasing of such equipment in favor of the lessor of such equipment; 
  
 (d) liens described on Schedule 2.1(1) hereto. 
  
 3.16 Mergers, Consolidations, Acquisitions and Sales. Without the prior written consent of Lender which shall not be unreasonably withheld,
Borrower shall not (a) be a party to any merger, consolidation or corporate reorganization, nor (b) purchase or otherwise acquire all or substantially all of the assets or stock of, or any partnership or joint venture, limited liability company or
other equity interest in, any other person, firm or entity, nor (c) sell, transfer, convey, or lease all or any substantial part of its assets, nor (d) create any Subsidiaries nor convey any of its assets to any Subsidiary. 
  
 3.17 Transactions with Affiliates. Borrower shall not enter
into any transaction, including, without limitation, the purchase, sale or exchange of property or the rendering of any service, with any affiliate, except in the ordinary course of and pursuant to the reasonable requirements of Borrower’s
business and upon fair and reasonable terms no less favorable to Borrower than Borrower would obtain in a comparable arm’s length transaction with a person not an affiliate. For the purposes of this Section 3.17, “affiliate” shall
mean a person, corporation, partnership or other entity controlling, controlled by or under common control with Borrower. 
  
 3.18 Employment Contracts. Without the prior written consent of Lender, Borrower shall not (a) enter into any employment agreement or other
written compensation agreement that has a term of greater than one year with any of Borrower’s executive officers or (b) increase total compensation paid to the executive officers of Borrower by more than ten percent (10%) per year. 

 
 3.19 Environment. Borrower shall be and remain in compliance
with the provisions of all federal, state and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations issued thereunder; notify Lender immediately of any notice of a 

  

 13 

 
hazardous discharge or environmental complaint received from any governmental agency or any other party; notify Lender immediately of any hazardous discharge
from or affecting its premises; immediately contain and remove the same, in compliance with all applicable laws; promptly pay any fine or penalty assessed in connection therewith; permit Lender to inspect the premises, to conduct tests thereon, and
to inspect all books, correspondence, and records pertaining thereto; and at Lender’s request, and at Borrower’s expense, provide a report of a qualified environmental engineer, satisfactory in scope, form, and content to Lender, and such
other and further assurances reasonably satisfactory to Lender that the condition has been corrected. 
  
 3.20 Financial Definitions and Covenants. 
  
 (a) Definitions. For purposes of this Section 3.20, the following terms shall have the meaning set forth with respect thereto: .

  
 (i) “Corporate EBITDA”–
means with respect to any calendar quarter of Borrower, the sum, without duplication, of (A) Corporate Net Income for such period plus (B) to the extent deducted in determining such Corporate Net Income: (1) all income taxes, including but not
limited to, federal, foreign and state income taxes (including any deferred taxes); (2) Corporate Interest Expense; and (3) depreciation, amortization and similar non-cash charges, provided, that there shall be excluded therefrom
non-operating gains and non-operating losses. 
  
 (ii) “Corporate Fixed Charges”– means for any fiscal period of Borrower, the sum of (A) the aggregate principal amount of Indebtedness required to be paid during such period, plus (B) Corporate Interest Expense
required to be paid during such period. 
  
 (iii)
“Corporate Interest Expense”– means for any fiscal period of Borrower, the amount which, in conformity with GAAP, would be set forth opposite the caption “interest expense” or any like caption (excluding amortization
of deferred finance charges) on the income statement of Borrower for such period, provided, however, that in no event shall interest income be deducted therefrom in computing such amount. 
  
 (iv) “Corporate Net Income”– means for
any fiscal period of Borrower, the amount which, in conformity with GAAP, would be set forth opposite the caption “net income or loss” or any nice caption on the income statement of the Borrower for such period. 
  
 (v) “Fixed Charges Coverage Ratio”–
means for any fiscal period of Borrower the ratio of (A) the sum of Corporate EBITDA to (B) the sum of Corporate Fixed Charges 
  
 (vi) “GAAP” – means generally accepted accounting principles applied on a consistent basis. 
  
 (vii) “Indebtedness”– means any
obligation of Borrower (whether or not classified as a current liability or secured or unsecured, but excluding trade payables 

  

 14 

 
and accrued salaries, wages and other similar current liabilities for operating accruals incurred in the ordinary course of business) which, pursuant to
GAAP, should be included on Borrower’s balance sheet as a liability, including without limitation, capitalized lease obligations. 
  
 (b) Covenants. 
  
 (i) Fixed Charges Coverage Ratio. With respect to each rolling 12 month period and as measured as of the end of each calendar
quarter beginning September 30,2002, Borrower shall maintain a Fixed Charges Coverage Ratio of not less than 2 to 1. However, with regard to the calendar quarters ending September 30, 2002, December 31, 2002, and March 21, 2003, the Fixed Charges
Coverage Ratio shall be computed for a period commencing July 1, 2002 and running through the end of the relevant calendar quarter. 
  
 (ii) Corporate EBITDA. With respect to each calendar year (beginning with the calendar year ending December 31, 2003),
Borrower’s Corporate EBITDA shall be at least $1,750,000. 
  
 (iii) Cash. Borrower shall at all times maintain an aggregate cash balance of at least $1,000,000 in deposit accounts with federally insured banks or similar institutions. 
  
 ARTICLE 4 
 CONDITIONS TO CLOSING 
  
 4.1 Closing of The Loan. The obligation of Lender to fund the Loan on the date hereof (the “Closing Date”) is subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions: 
  
 (a) Borrower shall have
performed and complied in all material respects with all of the covenants, agreements, obligations and conditions required by this Agreement. 
  
 (b) Lender shall have received an opinion of Borrower’s counsel, Hutchison & Mason PLLC, dated the Closing Date, in form
and substance satisfactory to Lender’s counsel, Chambliss, Bahner & Stophel, P.C. 
  
 (c) Borrower shall have delivered to Lender a Note executed by Borrower, in form and substance satisfactory to Lender. 
  
 (d) Borrower shall have delivered to Lender a Stock Purchase
Warrant executed by Borrower, in form and substance satisfactory to Lender, and the related Warrant Valuation Letter executed by Borrower. 
  
 (e) Borrower shall have delivered to Lender a Security Agreement and related UCC-1 Financing Statement(s), executed by Borrower, each of
which is in form and substance satisfactory to Lender. 
  

 15 

 (f) Borrower shall have delivered to Lender a Landlord’s Consent and Subordination
of Lien, executed by each of Borrower’s landlords, in form and substance satisfactory to Lender. 
  
 (g) Borrower shall have delivered to Lender an Intellectual Property Security Agreement executed by Borrower, in form and substance
satisfactory to Lender. 
  
 (h) Borrower shall
have delivered to Lender an Authorization Agreement for Pre-Authorized Payments (Debit) executed by Borrower, in form and substance satisfactory to Lender. 
  
 (i) Borrower shall have delivered to Lender the Small Business Administration Forms 480, 652 and 1031 (Parts A and B) completed by
Borrower. 
  
 (j) Borrower shall have delivered
to Lender the Small Business Administration Economic Impact Assessment completed by Borrower, in form and substance satisfactory to Lender. 
  
 (k) Borrower shall have delivered to Lender copies of the corporate charter and other publicly filed organizational documents of Borrower,
certified by the Secretary of State or other appropriate public official in the jurisdiction in which Borrower is incorporated. 
  
 (l) Borrower shall have delivered to Lender certified (as of the date of this Agreement) copies of all corporate action taken by Borrower,
including resolutions of its Board of Directors, authorizing the execution, delivery and performance of the Loan Documents. 
  
 (m) Borrower shall have delivered to Lender a certificate as to the legal existence and good standing of Borrower, issued by the Secretary
of State or other appropriate public official in the jurisdiction in which Borrower is incorporated. 
  
 (n) Borrower shall have delivered to Lender certificates of the Secretaries of State or other appropriate public officials as to
Borrower’s qualification to do business and good standing in each jurisdiction in which a failure to be so qualified would have a material adverse effect on its financial condition or its ability to conduct its business in the manner now
conducted and as hereafter intended to be conducted. 
  
 (o) Borrower shall have delivered to Lender a Consent and Acknowledgment of Lien and Security Interest executed by each manufacturer of products sold by Borrower, in form and substance satisfactory to Lender. 
  
 (p) Borrower shall have delivered to Lender a Consent and
Acknowledgment of Lien and Security Interest executed by each person or entity that fulfills sales by Borrower, in form and substance satisfactory to Lender. 
  

(q) Borrower shall have converted all of the indebtedness listed on Schedule 4.1 (q)(1) to Series A Preferred Stock in accordance with
the terms set forth on the term sheet attached hereto as Schedule 4.1(q)(2). 
  

 16 

  
 ARTICLE 5 

DEFAULT AND REMEDIES 
  
 5.1 Events of Default. The occurrence of any of the following shall constitute an Event of Default hereunder: 
  
 (a) Default in the payment of the principal of or interest
on the indebtedness evidenced by the Note in accordance with the terms of the Note, which default is not cured within five days; 
  
 (b) Any misrepresentation by Borrower, any guarantor of the Loan, or any Affiliate as to any material matter hereunder or under any of the
other Loan Documents, or delivery by Borrower of any schedule, statement, resolution, report, certificate, notice or writing to Lender that is untrue in any material respect on the date as of which the facts set forth therein are stated or
certified; 
  
 (c) Failure of Borrower, any
guarantor of the Loan, or any Affiliate to perform any of its obligations, covenants or agreements under this Agreement, the Note or any of the other Loan Documents; 
  
 (d) Borrower (i) shall generally not pay or shall be unable to pay its debts as such debts become due, or
(ii) shall make an assignment for the benefit of creditors or petition or apply to any tribunal for the appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or (iii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, or (iv) shall have had any such petition or application filed or any such proceeding
commenced against it that is not dismissed within 30 days, or (v) shall indicate, by any act or intentional and purposeful omission, its consent to, approval of or acquiescence in any such petition, application, proceeding or order for relief or the
appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or (vi) shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of 60 days or more; 
  
 (e) Borrower shall be liquidated, dissolved, partitioned or
terminated, or the charter thereof shall expire or be revoked; 
  
 (f) A default or event of default shall occur under any of the other Loan Documents and, if subject to a cure right, such default or event of default shall not be cured within the applicable cure period; 

 
 (g) Borrower shall default in the timely payment or
performance of any obligation now or hereafter owed to Lender in connection with any other indebtedness of Borrower now or hereafter owed to Lender; 
  
 (h) Borrower shall have defaulted and continue to be in default in the timely payment of or performance of any covenant relating to any
other indebtedness or obligation, which in the aggregate exceeds $25,000.00 or materially adversely affects Borrower’s operations, properties or financial condition; 
  

 17 

 (i) Martin G. Baum, Gary V. Cantrell and Nicholas J. Leb shall no longer be significantly
involved in the executive staff or management of Borrower (“Management Change”); provided, however, if the Management Change is caused by the death or total disability of any of the foregoing individuals, such Management Change shall not
constitute an Event of Default if the relevant individual is replaced by a person agreed to be Lender in writing within 60 days after the occurrence of such death or total disability; or 
  
 (j) If any materially adverse change in the business, operations, property, condition (financial or
otherwise) or prospects for Borrower or any Guarantor shall occur or the occurrence of any other condition which, in Lender’s reasonable determination, constitutes an impairment of Borrower’s or any Guarantor’s ability to perform its
obligations under the Loan Documents. 
  
 With respect to any
Event of Default described above that is capable of being cured and that does not already provide its own cure procedure (a “Curable Default”), the occurrence of such Curable Default shall not constitute an Event of Default hereunder if
such Curable Default is fully cured and/or corrected within 30 days (10 days, if such Curable Default may be cured by payment of a sum of money) of notice thereof to Borrower given in accordance with the provisions hereof; provided, however, that
this provision shall not require notice to Borrower and an opportunity to cure any Curable Default of which Borrower has had knowledge for the requisite number of days set forth. A violation of any of the covenants set forth in Section 3.20 hereof
shall not be a Curable Default. 
  
 5.2 Acceleration of
Maturity; Remedies. Upon the occurrence of any Event of Default described in subsection 5.1(d), the indebtedness evidenced by the Note as well as any and all other indebtedness of Borrower to Lender shall be immediately due and payable in
full; and upon the occurrence of any other Event of Default described above, Lender at any time thereafter may at its option accelerate the maturity of the indebtedness evidenced by the Note as well as any and all other indebtedness of Borrower to
Lender; all without notice of any kind. Upon the occurrence of any such Event of Default and the acceleration of the maturity of the indebtedness evidenced by the Note: 
  
 (a) Lender shall be immediately entitled to exercise any and all rights and remedies possessed by Lender
pursuant to the terms of the Note and all of the other Loan Documents; and 
  
 (b) Lender shall have any and all other rights and remedies that Lender may now or hereafter possess at law, in equity or by statute 
  
 5.3 Remedies Cumulative; No Waiver. No right, power or remedy conferred upon or reserved to Lender by this
Agreement or any of the other Loan Documents is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and
remedy given hereunder, under any of the other Loan Documents or now or hereafter existing at law, in equity or by statute. No delay or omission by Lender to exercise any right, power or remedy accruing upon the occurrence of any Event of Default
shall exhaust or impair any such right, power or remedy or shall be construed to be a waiver of any such Event of Default or an 

  

 18 

 
acquiescence therein, and every right, power and remedy given by this Agreement and the other Loan Documents to Lender may be exercised from time to time and
as often as may be deemed expedient by Lender. 
  
 5.4
Proceeds of Remedies. Any or all proceeds resulting from the exercise of any or all of the foregoing remedies shall be applied as set forth in the Loan Document(s) providing the remedy or remedies exercised, if none is specified, or if
the remedy is provided by this Agreement, then as follows: 
  
 First, to the costs and expenses, including without limitation reasonable attorneys’ fees and disbursements, incurred by Lender in connection with the exercise of its remedies; 
  
 Second, to the expenses of curing the default that
has occurred, in the event that Lender elects, in its sole discretion, to cure the default that has occurred; 
  
 Third, to the payment of the Obligations of Borrower, including but not limited to the payment of the principal of and interest on
the indebtedness evidenced by the Note, in such order of priority as Lender shall determine in its sole discretion; and 
  
 Fourth, the remainder, if any, to Borrower or to any other person lawfully thereunto entitled. 
  
 ARTICLE 6 
 TERMINATION 
  
 6.1 Termination of This Agreement. This Agreement shall remain in full force and effect until the payment in full by Borrower of the Obligations, at which time Lender shall cancel the Note and deliver it to Borrower; provided,
however, that the indemnities provided in Section 7.16 shall survive the termination of this Agreement 
  
 ARTICLE 7 
 MISCELLANEOUS 
  
 7.1 Performance by Lender.
If Borrower shall default in the payment, performance or observance of any covenant, term or condition of this Agreement, which, default is not cured within the applicable cure period, then Lender may, at its option, pay, perform or observe the
same, and all payments made or costs or expenses incurred by Lender in connection therewith (including but not limited to reasonable attorneys’ fees), with interest thereon at the highest default rate provided in the Note, shall be immediately
repaid to Lender by Borrower and shall constitute a part of the Obligations. Lender shall be the sole judge of the necessity for any such actions and of the amounts to be paid. 
  

 19 

 7.2 Successors and Assigns Included in Parties. Whenever in this Agreement one of the
parties hereto is named or referred to, the heirs, legal representatives, successors, successors-in-title and assigns of such parties shall be included in such name or reference, and all covenants and agreements contained in this Agreement by or on
behalf of Borrower or by or on behalf of Lender shall bind and inure to the benefit of their respective heirs, legal representatives, successors-in-title and assigns, whether so expressed or not. 
  
 7.3 Costs and Expenses. Borrower agrees to pay all reasonable
costs and expenses incurred by Lender in connection with the making of the Loan, including but not limited to filing fees, recording taxes and reasonable attorneys’ fees, promptly upon demand of Lender. Borrower further agrees to pay all
premiums for insurance required to be maintained by Borrower pursuant to the terms of the Loan Documents and all of the out-of-pocket costs and expenses incurred by Lender in connection with the collection of the Loan, amendment to the Loan
Documents, or prepayment of the Loan, including but not limited to reasonable attorneys’ fees, promptly upon demand of Lender. 
  
 7.4 Assignment. The Note, this Agreement and the other Loan Documents may be endorsed, assigned and/or transferred in whole or in part by
Lender, and any such holder and/or assignee of the same shall succeed to and be possessed of the rights and powers of Lender under all of the same to the extent transferred and assigned. Lender may grant participations in all or any portion of its
interest in the indebtedness evidenced by the Note, and in such event Borrower shall continue to make payments due under the Loan Documents to Lender and Lender shall have the sole responsibility of allocating and forwarding such payments in the
appropriate manner and amounts. Borrower shall not assign any of its rights nor delegate any of its duties hereunder or under any of the other Loan Documents without the prior written consent of Lender. 
  
 7.5 Time of The Essence. Time is of the essence with respect to
each and every covenant, agreement and obligation of Borrower hereunder and under all of the other Loan Documents. 
  
 7.6 Severability. If any provision(s) of this Agreement or the application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 
  
 7.7 Interest and Loan Charges Not to Exceed Maximum Allowed by
Law. Anything in this Agreement, the Note or any of the other Loan Documents to the contrary notwithstanding, in no event whatsoever, whether by reason of advancement of proceeds of the Loan, acceleration of the maturity of the unpaid
balance of the Loan or otherwise, shall the interest and other charges agreed to be paid to Lender for the use of the money advanced or to be advanced hereunder exceed the maximum amounts collectible under applicable laws in effect from time to
time. It is understood and agreed by the parties that, if for any reason whatsoever the interest or loan charges paid or contracted to be paid by Borrower in respect of the indebtedness evidenced by the Note shall exceed the maximum amounts
collectible under applicable laws in effect from time to time, then ipso facto, the obligation to pay such interest and/or loan charges shall be reduced to the maximum amounts collectible under applicable laws 

  

 20 

 
in effect from time to time, and any amounts collected by Lender that exceed such maximum amounts shall be applied to the reduction of the principal balance
of the indebtedness evidenced by the Note and/or refunded to Borrower so that at no time shall the interest or loan charges paid or payable in respect of the indebtedness evidenced by the Note exceed the maximum amounts permitted from time to time
by applicable law. 
  
 7.8 Article and Section
Headings: Defined Terms. Numbered and titled article and section headings and defined terms are for convenience only and shall not be construed as amplifying or limiting any of the provisions of this Agreement. “When used herein,
the singular shall include the plural, and vice versa, and the use of any gender shall include all other genders, as appropriate. 
  
 7.9 Notices. Any and all notices, elections or demands permitted or required to be made under this Agreement shall be in writing, signed by
the party giving such notice, election or demand and shall be delivered personally, telecopied, or sent by certified mail or overnight via nationally recognized courier service (such as Federal Express), to the other party at the address set forth
below, or at such other address as may be supplied in writing and of which receipt has been acknowledged in writing. The date of personal delivery or telecopy or two business days after the date of mailing (or the next business day after delivery to
such courier service), as the case may be, shall be the date of such notice, election or demand. For the purposes of this Agreement: 
  

			
	 The address of Lender is:
	  	 Harbinger Mezzanine Partners, L.P.
 One Riverchase Parkway South
 Birmingham, Alabama 35244
 Attention: Mr. David A. Boutwell
 Telecopy No.: 205/987-5599

		
	 with a copy to:
	  	 Harbinger Mezzanine Partners, L.P.
 618 Church Street, Suite 500
 Nashville, Tennessee 37219
 Attention: Mr. John C. Harrison
 Telecopy No.: 615/301-6401

		
	 	  	 and

		
	 	  	 Chambliss, Bahner & Stophel, P.C.
 1000 Tallan
Building, Two Union Square
 Chattanooga, Tennessee 37402-2500
 Attention: Mr. J. Patrick Murphy
 Telecopy No.: 423/265-9574

		
	 The Address of Borrower is:
	  	 TEAMM Pharmaceuticals, Inc.
 3000 Aerial Center Parkway, Suite 110
 Morrisville, North Carolina 27560
 Attention: Mr. Martin G. Baum
 Telecopy No.: 919/481-9311

  

 21 

			
	 with a copy to:
	  	Hutchison & Mason, PLLC
	 	  	            3110 Edwards Mill Road, Suite 100
	 	  	    Raleigh, North Carolina 27612
	 	  	  Attention: J. Robert Tyler, III
	 	  	Telecopy No.: 919/829-9696

  
 7.10 Public
Disclosure. The parties hereto may make a public statement or release concerning this Agreement and the transaction contemplated hereby after the Closing Date. 
  
 7.11 Entire Agreement. This Agreement and the other written agreements between Borrower and Lender represent
the entire agreement between the parties concerning the subject matter hereof, and all oral discussions and prior agreements are merged herein; provided, if there is a conflict between this Agreement and any other document executed contemporaneously
herewith with respect to the Obligations, the provision of this Agreement shall control. The execution and delivery of this Agreement and the other Loan Documents by Borrower were not based upon any fact or material provided by Lender, nor was
Borrower induced or influenced to enter into this Agreement or the other Loan Documents by any representation, statement, analysis or promise by Lender. 
  
 7.12 Governing Law and Amendments. This Agreement shall be construed and enforced under the laws of the State of Tennessee applicable to
contracts to be wholly performed in such State. No amendment or modification hereof shall be effective except in a writing executed by each of the parties hereto. 
  
 7.13 Survival of Representations and Warranties. All representations and warranties contained herein or in any
of the Loan Documents or made by or furnished on behalf of Borrower in connection herewith or in any Loan Documents shall survive the execution and delivery of this Agreement and the other Loan Documents. 
  
 7.14 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties to this Agreement in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. 
  
 7.15 Construction and Interpretation. Should any provision of
this Agreement require judicial interpretation, the parties hereto agree that the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule
of construction that a document is to be more strictly construed against the party that itself or through its agent prepared the same, it being agreed that Borrower, Lender and their respective agents have participated in the preparation hereof.

  
 7.16 General Indemnification. Borrower agrees to
indemnify Lender, its officers, directors, employees, partners and agents (individually, an “Indemnified Party” and collectively, the “Indemnified Parties”) and each of them and agrees to hold each of them harmless from and
against any and all losses, liabilities, damages, costs, expenses and claims of any and every kind whatsoever (except those arising solely by reason of the gross negligence or willful misconduct of an Indemnified Party) which may be imposed on,
incurred by, or asserted against the 

  

 22 

 
Indemnified Parties or any of them arising by reason of any action or inaction or omission to any act legally required of Borrower (including as required
pursuant hereto or pursuant to any other Loan Document). 
  
 7.17 Standard of Care; Limitation of Damages. Lender shall be liable to Borrower only for matters arising from this Agreement or otherwise related to the Obligations resulting from Lender’s gross negligence or willful
misconduct, and liability for all other matters is hereby waived. Lender shall not in any event be liable to Borrower for special or consequential damages arising from this Agreement or otherwise related to the Obligations. 
  
 7.18 Consent to Jurisdiction; Exclusive Venue. Borrower hereby
irrevocably consents to the jurisdiction of the United States District Court for the Middle District of Tennessee and of all Tennessee state courts sitting in Davidson County, Tennessee, for the purpose of any litigation to which Lender may be a
party and which concerns this Agreement or the Obligations. It is further agreed that venue for any such action shall lie exclusively with courts sitting in Davidson County, Tennessee, unless Lender agrees to the contrary in writing. 
  
 7.19 Waiver of Trial by Jury. LENDER AND
BORROWER HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY
WAY RELATING TO THIS AGREEMENT OR THE LOAN DOCUMENTS. 
  

 23 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above written. 
  

			
	LENDER:
	
	HARBINGER MEZZANINE PARTNERS,
L.P., a Delaware limited partnership

					
		
	By:	 	 Harbinger Mezzanine GP, LLC, its
 General
Partner

			
	 	 	 By:
	 	 Harbinger Mezzanine Manager, Inc.,
 its
Manager

					
			
	 	 	 By:
	 	 /s/ John C. Harrison

	 	 	 Title:
	 	 Director

  

			
	BORROWER:
	
	TEAMM PHARMACEUTICALS, INC.,
a Delaware corporation
		
	By:	 	 /s/ Martin G. Baum

	 	 	 Martin G. Baum

	 	 	 President and Chief Executive Officer

  

 24 

  
 INDEX
OF SCHEDULES 
  
 Schedule 2.1(e) -
Capitalization Table 
 Schedule 2.1(f) - Intellectual Property 
 Schedule 2.1(i)(A) and (B) - Financial Statements 
 Schedule 2.1(1) - Debt and Liens 
 Schedule 2.1(n) - Shareholder Loans 
 Schedule 2.1(r) - Significant Contracts 
 Schedule 2.l(t) - Commissions 
 Schedule 2.l(ab) - Location of Properties,
Names, Places of Business 
 Schedule 4.1(q)(l) - List of Indebtedness 
 Schedule 4.1 (q)(2) - Term sheet for Converting Indebtedness to Series A Preferred Stock 
  

  
 Schedule of Exceptions to

 Loan Agreement 
 by
and between 
 TEAMM Pharmaceuticals, Inc. and Harbinger Mezzanine Partners, L.P. 
 Dated August 9, 2002 
  
 In connection with that certain Loan Agreement, dated as of August 9, 2002 (the “Agreement”), by and between TEAMM Pharmaceuticals, Inc.,
a Delaware corporation (the “Borrower”), and Harbinger Mezzanine Partners, L.P., a Delaware limited partnership (the “Lender”), the Borrower hereby delivers this Schedule of Exceptions to the Borrower’s
representatives and warranties given in the Agreement. This Schedule of Exceptions is qualified entirely by reference to the provisions of the Agreement and does not constitute a representation or warranty of Buyer except as expressly provided in
the Agreement. 
  
 This Schedule of Exceptions may include items
that do not meet materiality thresholds set forth in the Agreement and any such inclusion shall not be deemed an admission that the item is material, nor shall any item so included be used to construe materiality thresholds set forth in the
Agreement. 
  
 Headings have been inserted in the Schedule of
Exceptions for reference only and do not amend the descriptions of the disclosed items set forth in the Agreement. 
  
 Capitalized terms not otherwise defined herein have the meanings assigned to such terms in the Agreement. 
  

  
 Schedule of Exceptions to

 Loan Agreement 
 by
and between 
 TEAMM Pharmaceuticals, Inc. and Harbinger Mezzanine Partners, L.P. 
 Dated August 9,2002 
  
 Section 2.1(e) Capitalization 
  
 See the attached Stock Option Ledger. 
  
 See the attached Warrant Ledger. 
  
 Stock Restriction Agreement, dated December 22, 2000, between the Company and Martin G. Baum (“Baum”). 
  
 Executive Employment Agreement, dated August 1, 2002, between the Company and
Baum. 
  
 Stock Restriction Agreement, dated December 22, 2000
between the Company and Nicholas J. Leb (“Leb”). 
  
 Executive Employment Agreement, dated August 1, 2001, between the Company and Leb. 
  
 Stock Restriction Agreement, dated December 22, 2000 between the Company and Jon T. Stone (“Stone”). 
  
 Executive Employment Agreement, dated August 1, 2001, between the Company and Stone. 
  
 Stock Restriction Agreement, dated December 22, 2000 between the Company and William J. Thomas II
(“Thomas”). 
  
 Executive Employment Agreement,
dated August 1, 2001, between the Company and Thomas. 
  
 Stock
Restriction Agreement, dated October 5,2001, between the Company and Gary V. Cantrell (“Cantrell”), 
  
 Executive Employment Agreement, dated August 1, 2001, between the Company and Cantrell. 
  
 The Bylaws of the Company, as amended, contain restrictions on the transfer of shares of the Company’s capital stock
and a right of first refusal in favor of the Company to purchase shares of the Company’s capital stock. 
  
 Pursuant to the Company’s Stock Option Plan, shares of the Company’s Class A Voting Stock that are issued upon the exercise of stock options are
subject to the restrictions on transfer and right of first refusal contained in the Company’s Bylaws. 
  

  
 Schedule of Exceptions to

 Loan Agreement 
 by
and between 
 TEAMM Pharmaceuticals, Inc. and Harbinger Mezzanine Partners, L.P. 
 Dated August 9, 2002 
  
 Section 2.1(f) Trademarks, Patents, etc. 
  
 Service Mark application serial number 76/190942, for a Class 35 Goods and Services Use Mark “TEAMM Pharmaceuticals. 
  
 The Borrower entered into a Trademark Assignment Agreement, dated June 28,
2002, with Andrx Laboratories, Inc. transferring certain common law trademarks to the Borrower. 
  
 Section 2.1(i)(A) Financial Statements 
  
 See the attached Financial Statements. 
  
 Section 2.1(i)(B) Financial Statements 
  

						
	 Lender

	  	Date of
Investment

	  	Amount Invested

	 Ernest Mario
	  	6/27/02	  	$	100,000.00
	 Clifford H. Disbrow
	  	6/28/02	  	$	25,000.00
	 M. Ross Johnson
	  	6/28/02	  	$	50,000.00
	 Gary V. Cantrell
	  	7/2/02	  	$	25,000.00
	 Martin G. Baum
	  	7/18/02	  	$	15,775.00
	 Carroll M. McLeod, M.D.
	  	7/18/02	  	$	50,000.00
	 The Hopkins Capital Group, LLC
	  	5/8/02	  	$	100,000.00
	 The Hopkins Capital Group, LLC
	  	6/14/02	  	$	50,000.00
	 The Hopkins Capital Group, LLC
	  	6/21/02	  	$	50,000.00
	 The Hopkins Capital Group, LLC
	  	7/18/02	  	$	100,000.00
	 	  	 	  	
	

	 Total:
	  	 	  	$	565,775.00

  

  
 Schedule of Exceptions to

 Loan Agreement 
 by
and between 
 TEAMM Pharmaceuticals, Inc. and Harbinger Mezzanine Partners, L.P. 
 Dated August 9, 2002 
  
 Section 2.1(1) Debt 
  

						
	 Lender Name

	  	Date of Investment

	  	Amount of
Indebtedness

	 Clifford Disbrow
	  	6/22/01	  	$	25,000
	 Jack H. Hughes, Jr.
	  	6/22/01	  	$	50,000
	 Chris T. Koenemann
	  	6/27/01	  	$	25,000
	 M. Ross Johnson
	  	7/3/01	  	$	100,000
	 James M. Indermill
	  	7/2/01	  	$	5,000
	 B. L. “Chip” Radford
	  	7/2/01	  	$	25,000
	 Jay H. Ferguson
	  	7/2/01	  	$	50,000
	 Samuel W. Dawson
	  	7/2/01	  	$	35,000
	 Kenneth R. Tyma and Patrice D. Tyma, JT TEN
	  	7/2/01	  	$	25,000
	 Peter J. Wise
	  	7/2/01	  	$	30,000
	 C. Stephen Doan
	  	7/2/01	  	$	10,000
	 Charles Darsie & Sandra Cook, JT TUN
	  	7/6/01	  	$	25,000
	 S. Wayne Smith
	  	7/6/01	  	$	25,000
	 Jeremy K. Mario
	  	7/10/01	  	$	100,000
	 Christopher B. Mario
	  	7/10/01	  	$	25,000
	 Delmar A. & Dianne L. Nordstrom
	  	7/17/01	  	$	50,000
	 Gregory G. Mario
	  	7/20/01	  	$	25,000
	 James & Donna Deppe
	  	7/20/01	  	$	25,000
	 Mentor Capital Angel Fund I, LP
	  	7/31/01	  	$	50,000
	 Mentor Capital Angel Fund I, LP
	  	9/25/01	  	$	50,000
	 Andrew J. Butler
	  	10/02/01	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	1/8/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	1/9/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	1/18/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	2/7/02	  	$	100,000
	 The Hopkins Capital Group, LLC
	  	2/15/02	  	$	100,000
	 The Hopkins Capital Group, LLC
	  	2/28/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	3/1/02	  	$	150,000
	 The Hopkins Capital Group, LLC
	  	3/28/02	  	$	80,000
	 The Hopkins Capital Group, LLC
	  	4/2/02	  	$	120,000
	 The Hopkins Capital Group, LLC
	  	4/24/02	  	$	80,000
	 The Hopkins Capital Group, LLC
	  	5/8/02	  	$	20,000
	 The Hopkins Capital Group, LLC
	  	5/8/02	  	$	100,000
	 The Hopkins Capital Group, LLC
	  	6/14/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	6/21/02	  	$	50,000

  

  
 Schedule of Exceptions to

 Loan Agreement 
 by
and between 
 TEAMM Pharmaceuticals, Inc. and Harbinger Mezzanine Partners, L.P. 
 Dated August 9, 2002 
  
 The provisions of Section 2.1(i)(B) of this Schedule of Exceptions are incorporated herein by reference. 
  
 Section 2.1(n) Certain Transactions 
  
 The provisions of Section 2.1(1) of this Schedule of Exceptions are
incorporated herein by reference. 
  
 Section 2.1(r) Significant Contracts

  
 The provisions of Section 2.1(e) of this Schedule of
Exceptions are incorporated herein by reference. 
  
 The
provisions of Section 2.1(t) of this Schedule of Exceptions are incorporated herein by reference. 
  
 The Company entered into a Distribution Services Agreement, dated July 24, 2002, with DDN/Obergfel, LLC. 
  
 The Company entered into an Asset Purchase Agreement, Escrow Agreement,
Warehouse, Management, and Distribution Agreement, Assignment and Assumption Agreement, Trademark Assignment Agreement, and Bill of Sale, dated June 28, 2002, with Andrx Laboratories, Inc. 
  
 The Company entered into an agreement, dated July 18, 2001, with Hi-Tech
Pharmacal Co., Inc., as amended on September 1, 2001. 
  
 The
Company entered into a Co-promotion Agreement, dated April 1, 2001, with Amarin Pharmaceutials, Inc. 
  
 Section 2.1(t) Fees/Commissions 
  
 The Company entered into a non-exclusive financial advisory services agreement, dated May 24, 2001, with Dragonfly Capital, LLC, as amended on October 8, 2001, November 19, 2001 and July 18, 2002. 
  

  
 Schedule of Exceptions to

 Loan Agreement 
 by
and between 
 TEAMM Pharmaceuticals, Inc. and Harbinger Mezzanine Partners, L.P. 
 Dated August 9, 2002 
  
 Section 2.1(ab) Location of Properties, Names, Places of Business 
  
 TEAMM Pharmaceuticals, Inc. 
 3000 Aerial Center Parkway, Suite 110 
 Morrisville, NC 27560 
  
 DDN/Obergfel LLC 
 4880 Mendenhall Road 
 Memphis, TN 38141 
  

  
 TEAMM Pharmaceuticals,
Inc. 
 Balance Sheet 
 As of June 30, 2002 
  

			
	 	  	Jun 30, ’02

	 ASSETS
	  	 
	 Current Assets
	  	 
	 Checking/Savings
	  	 
	 1000 - Cash and cash equivalents
	  	 
	 1010 - First Citizens Bank-checking
	  	64,573.52
	 1050 - Petty Cash
	  	6.00
	 	  	

	 Total 1000 - Cash and cash equivalents
	  	64,579.52
	 	  	

	 Total Checking/Savings
	  	64,579.52
	 Accounts Receivable
	  	 
	 1100 - Accounts Receivable
	  	 
	 1110 - Trade Receivables
	  	319,940.97
	 	  	

	 Total 1100 - Accounts Receivable
	  	319,940.97
	 	  	

	 Total Accounts Receivable
	  	319,940.97
	 Other Currant Assets
	  	 
	 1300 - Inventory
	  	 
	 1310 - Inventory Asset
	  	1,512,278.61
	 1320 - Collateral Materials
	  	81,284.89
	 	  	

	 Total 1300 - Inventory
	  	1,593,563.50
	 1400 - Prepaids & Other Currant Assets
	  	 
	 1420 - Deposits
	  	6,200.00
	 1430 - Prepaid Misc. Expenses
	  	46,645.56
	 	  	

	 Total 1400 - Prepaids & Other Current Assets
	  	54,845.56
	 	  	

	 Total Other Current Assets
	  	1,648,408.16
	 	  	

	 Total Current Assets
	  	2,032,929.65
	 Fixed Assets
	  	 
	 1500 - Fixed Assets
	  	 
	 1510 - Furniture &. Fixtures
	  	5,000.00
	 1520 - Computer Equipment
	  	69,956.50
	 1610 - Accum. Deprec.-Furniture & Fix.
	  	-1,583.31
	 1620 - Accum. Deprec.-Computer Equip.
	  	-21,195.95
	 	  	

	 Total 1500 - Fixed Assets
	  	52,177.24
	 	  	

	 Total Fixed Assets
	  	52,177.24
	 Other Assets
	  	 
	 1700 - Other Assets
	  	 
	 1720 - Trademarks
	  	2,483.75
	 1730 - Acquired Product Rights
	  	800,000.00
	 1740 - Restricted Cash
	  	2,000,000.00
	 	  	

	 Total 1700 - Other Assets
	  	2,802,483.75
	 1900 - Deferred Tax Asset
	  	2,800.00
	 	  	

	 Total Other Assets
	  	2,805,283.75
	 	  	

	 TOTAL ASSETS
	  	4,890,380.64
	 	  	

	 LIABILITIES & EQUITY
	  	 
	 Liabilities
	  	 
	 Current Liabilities
	  	 
	 Accounts Payable
	  	 
	 2110 - Trade Payables
	  	550,857.83
	 2120 - Accured Accounts Payable
	  	2,895.30
	 	  	

	 Total Accounts Payable
	  	553,753.13

  

  
 TEAMM Pharmaceuticals,
Inc. 
 Balance Sheet 
 As of June 30, 2002 
  

			
	 	  	Jun 30, ’02

	 Other Current Liabilities
	  	 
	 2200 - Other Current Liabilities
	  	 
	 2205 - Customer Advances
	  	3,400,000.00
	 2210 - Accrued Salary & Compensation
	  	98,885.92
	 2211 - Federal W/H
	  	466.78
	 2219 - 401 (k) W/H
	  	13,598.48
	 2220 - 401 (k) Match
	  	3,857.20
	 2225 - Provision for Returned Goods
	  	20,290.00
	 2235 - Note Payable - Andrx Labs
	  	375,000.00
	 	  	

	 Total 2200 - Other Current Liabilities
	  	3,912,096.38
	 2240 - Convertible Promissory Notes
	  	1,612,755.28
	 	  	

	 Total Other Current Liabilities
	  	5,524,851.66
	 	  	

	 Total Current Liabilities
	  	8,078,604.79
	 Long Term Liabilities
	  	 
	 2241- Promissory Notes
	  	300,000.00
	 2245 - Discount of Convertible Notes
	  	-60,832.00
	 3600 - Deferred Tax Liability
	  	2,800.00
	 3610 - Deferred Revenue
	  	501,843.09
	 	  	

	 Total Long Term Liabilities
	  	743,811.08
	 	  	

	 Total Liabilities
	  	6,822,415.88
	 Equity
	  	 
	 Opening Bal Equity
	  	107.74
	 3000 - Shareholders’ Equity
	  	 
	 3110 - Common Stock
	  	2,124.57
	 3130 - Additional Paid-in Capital
	  	629,829.61
	 	  	

	 Total 3000 - Shareholders’ Equity
	  	631,954.18
	 3150 - Deferred Compensation
	  	-78,910.00
	 3900 - Retained Earnings
	  	-1,310,411.74
	 Net Income
	  	-1,174,765,42
	 	  	

	 Total Equity
	  	-1,932,025.24
	 	  	

	 TOTAL LIABILITIES & EQUITY
	  	4,890,390.64
	 	  	

  

  
 TEAMM Pharmaceuticals,
Inc. 
 Profit & Loss 
 January through June 2002 
  

			
	 	  	Jan -Jun ’02

	 Ordinary Income/Expense
	  	 
	 Income
	  	 
	 4000 - Revenue
	  	 
	 4020 - Co-Promotion Revenues
	  	303,526.95
	 4060 - Rebates/Chargebacks
	  	-405.60
	 	  	

	 Total 4000 - Revenue
	  	303,121.35
	 	  	

	 Total Income
	  	303,121.35
	 	  	

	 Gross Profit
	  	303,121.35
	 Expense
	  	 
	 6000 - Personnel Costs
	  	 
	 6001 - Salaries and wages
	  	931,327.23
	 6002 - F.I.C.A.
	  	55,109.55
	 6003 - Medicare
	  	12,887.34
	 6004 - F.U.T.A.
	  	1,498.28
	 6005 - S.U.T.A.
	  	5633.12
	 6006 - Medical Insurance
	  	60,052.99
	 6009 - Life & LTD Insurance
	  	4,749.93
	 6020 - Temporary Services
	  	150.00
	 	  	

	 Total 6000 - Personnel Costs
	  	1,071,418.44
	 7000 - Travel & Entertainment
	  	 
	 7001 - Airfare
	  	25,533.49
	 7002 - Lodging
	  	8,083.48
	 7003 - Meals & Entertainment
	  	25,739.33
	 7004 - Auto Rental
	  	1,932.24
	 7005 - Taxi, train, shuttle, etc.
	  	372.85
	 7006 - Parking & Tolls
	  	2,625.35
	 7007 - Auto Reimbursement
	  	27,212.92
	 	  	

	 Total 7000 - Travel & Entertainment
	  	91,499.66
	 8000 - General & Administrative
	  	 
	 8001 - Bank Service Charges
	  	1,207.02
	 8002 - Rent - Building
	  	38,677.02
	 8003 - Rent - Equipment
	  	13,453.57
	 8004 - Security
	  	209.70
	 8005 - Water
	  	153.39
	 8006 - Insurance - Liability
	  	2,228.77
	 8008 - Dues and Subscriptions
	  	1,035.80
	 8009 - Legal Fees
	  	19,584.56
	 8010 - Accounting
	  	24,661.14
	 8011 - Postage and Delivery
	  	4,864.70
	 8012 - Licenses, and Permits
	  	-500.00
	 8013 - Printing and Reproduction
	  	2,658.22
	 8016 - Telephone
	  	21,439.70
	 8018 - Supplies - Office
	  	4,133.80
	 8019 - Depreciation Expense
	  	12,159.42
	 8022 - Consulting Services
	  	1,067.29
	 8023 - Meetings & Seminars
	  	400.00
	 8025 - Promotional Materials
	  	25,882.07
	 8026 - Sales Training
	  	-5,000.00
	 8027 - Marketing Data
	  	31,688.61
	 8039 - Miscellaneous
	  	2,032.41
	 8042 - Franchise Tax
	  	1,468.75
	 8045 - Training
	  	1,797.00
	 8046 - Sample Expense
	  	13,929.76
	 8047 - Recruiting
	  	10,278.00
	 8050 - Uncategorized Expenses
	  	0.00
	 	  	

	 Total 8000 - General & Administrative
	  	229,510.70
	 	  	

	 Total Expense
	  	1,392,428.80
	 	  	

	 Net Ordinary Income
	  	-1,089,307.45

  
  

 TEAMM Pharmaceuticals, Inc. 
 Profit & Loss 
 January through June 2002 
  

			
	 	  	Jan - Jun ’02

	 Other Income/Expense
	  	 
	 Other Income
	  	 
	 9001 Interest Income
	  	385.03
	 	  	

	 Total Other Income
	  	385.03
	 Other Expense
	  	 
	 9002 Interest Expense
	  	85,843.00
	 	  	

	 Total Other Expense
	  	85,843.00
	 	  	

	 Net Other Income
	  	-85,457.97
	 	  	

		
	 Net Income
	  	-1,174,755.42
	 	  	

  

 TEAMM Pharmaceuticals, Inc. 
 Statement of Cash Flows 
 For the Six Months Ending June 30, 2002 
  

					
	 Cash flows from operating activities
	  	 	 	 
		
	 Net loss
	  	$	(1,174,765	)
	 Adjustments to reconcile net loss to net cash provided (used) by operating activities:
	  	 	 	 
	 Depreciation and amortization
	  	 	12,159	 
	 Accrued interest expense
	  	 	85,843	 
	 Changes in operating assets and liabilities:
	  	 	 	 
	 Accounts receivable
	  	 	(78,957	)
	 Inventories
	  	 	(1,508,913	)
	 Prepaid expenses and other current liabilities
	  	 	(47,346	)
	 Accounts payable and other accrued expenses
	  	 	57,629	 
	 Accrued compensation and employee benefits
	  	 	5,366	 
	 	  	
	
	

		
	 Net cash provided (used) by operating activities
	  	 	(2,648,984	)
	 	  	
	
	

		
	 Cash flows from investing activities
	  	 	 	 
		
	 Purchase of product rights
	  	 	(800,000	)
	 Write-up of purchased inventory
	  	 	501,843	 
	 Increase in note to Andrx Laboratories
	  	 	375,000	 
	 Customer advance
	  	 	3,400,000	 
	 Establishment of escrow account
	  	 	(2,000,000	)
	 	  	
	
	

		
	 Net cash provided by (used in) investing activities
	  	 	1,476,843	 
	 	  	
	
	

		
	 Cash flows from financing activities
	  	 	 	 
		
	 Net proceeds from issuance of convertible promissory notes
	  	 	1,138,951	 
	 	  	
	
	

		
	 Net cash provided by financing activities
	  	 	1,138,951	 
	 	  	
	
	

		
	 Net increase in cash and cash equivalents
	  	 	(33,190	)
		
	 Cash and cash equivalents as of beginning of period
	  	 	97,770	 
	 	  	
	
	

		
	 Cash and cash equivalents as of end of period
	  	$	 64,580	 
	 	  	
	
	

  

 Section 4.1 (q)(1) Debt 
 Debt to be Converted 
  

						
	 Lender Name

	  	Date of Investment

	  	Amount of
Indebtedness

	 Clifford Disbrow
	  	6/22/01	  	$	25,000
	 Jack H. Hughes, Jr.
	  	6/22/01	  	$	50,000
	 Chris T. Koenemann
	  	6/27/01	  	$	25,000
	 M. Ross Johnson
	  	7/3/01	  	$	100,000
	 James M. Indermill
	  	7/2/01	  	$	5,000
	 B.L. “Chip” Radford
	  	7/2/01	  	$	25,000
	 Jay H. Ferguson
	  	7/2/01	  	$	50,000
	 Samuel W. Dawson
	  	7/2/01	  	$	35,000
	 Kenneth R. Tyma and Patrice D. Tyma, JT TEN
	  	7/2/01	  	$	25,000
	 Peter J. Wise
	  	7/2/01	  	$	30,000
	 C. Stephen Doan
	  	7/2/01	  	$	10,000
	 Charles Darsie & Sandra Cook, JT TEN
	  	7/6/01	  	$	25,000
	 S. Wayne Smith
	  	7/6/01	  	$	25,000
	 Jeremy K. Mario
	  	7/10/01	  	$	100,000
	 Christopher B. Mario
	  	7/10/01	  	$	25,000
	 Delmar A. & Dianne L. Nordstrom
	  	7/17/01	  	$	50,000
	 Gregory G. Mario
	  	7/20/01	  	$	25,000
	 James & Donna Deppe
	  	7/20/01	  	$	25,000
	 Mentor Capital Angel Fund I, LP
	  	7/31/01	  	$	50,000
	 Mentor Capital Angel Fund I, LP
	  	9/25/01	  	$	50,000
	 Andrew J. Butler
	  	10/02/01	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	1/8/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	1/9/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	1/18/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	2/7/02	  	$	100,000
	 The Hopkins Capital Group, LLC
	  	2/15/02	  	$	100,000
	 The Hopkins Capital Group, LLC
	  	2/28/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	3/1/02	  	$	150,000
	 The Hopkins Capital Group, LLC
	  	3/28/02	  	$	80,000
	 The Hopkins Capital Group, LLC
	  	4/2/02	  	$	120,000
	 The Hopkins Capital Group, LLC
	  	4/24/02	  	$	80,000
	 The Hopkins Capital Group, LLC
	  	5/8/02	  	$	20,000
	 The Hopkins Capital Group, LLC
	  	5/8/02	  	$	100,000
	 The Hopkins Capital Group, LLC
	  	6/14/02	  	$	50,000
	 The Hopkins Capital Group, LLC
	  	6/21/02	  	$	50,000

  

  
 SCHEDULE 4.1(q) (2)

  
 Term Sheet 
  
 This Term Sheet describes the terms of the newly created equity security of TEAMM
Pharmaceuticals, Inc., a Delaware corporation (“TEAMM”). These securities will be issued to the current holders of the Company’s Convertible Promissory Notes and certain other creditors of the Company. 
  

			
	Form of Security:	  	Series A Convertible Preferred Stock (the “Preferred Stock”).
		
	Conversion Date of Convertible Promissory Notes and Certain Other Indebtedness:	  	Anticipated to occur on or before July 31, 2002 in conjunction with the closing of the Company’s line of credit from Harbinger Mezzanine Partners, L.P.
		
	Dividend Rate:	  	6% of the Liquidation Preference (as described below) per annum, to be paid upon conversion of the Preferred Stock or upon any liquidation of the Company. Each quarter, accrued dividends on
the Preferred Stock will, at the election of the Company, be paid in cash or be added to the Liquidation Preference.
		
	Rights, Preferences, Privileges and Restrictions of Preferred:	  	(1) Ranking; Liquidation Preference: The Preferred Stock will rank senior to all classes of common stock, of the Company. In the event of liquidation, sale, merger,
consolidation or winding up of the Company, the holders of the Preferred Stock will be entitled to receive in preference to holders of all other preferred stock and common stock an amount equal to $2.01064 per share, plus all accrued and unpaid
dividends (the “Liquidation Preference”).
		
	 	  	(2) Conversion Price: The initial conversion price will provide for a one-for-one conversion ratio, subject to adjustment as provided in paragraphs (4) and (5) below.
		
	 	  	(3) Mandatory Conversion: Upon the election of the holders of a majority of the Preferred Stock or the closing of an Initial Public Offering of shares of the common stock of the
Company at a public offering price that is not less than three times the conversion price per share, with net proceeds to the Company of at least $30 million, the Preferred Stock holders will automatically convert into shares of common stock at the
then applicable conversion price.
		
	 	  	(4) Price Protection: Subject to customary exceptions, if the Company issues additional shares at a purchase price less than the applicable conversion price of the Preferred Stock the
conversion price will be reduced on a customary weighted average basis.

  

 Page 1 of 2 

			
	 	  	(5) Anti-Dilution: The conversion price of the shares of Preferred Stock will be proportionally adjusted in the event of a stock split or stock dividend with respect to the shares of
common stock. The conversion rights will likewise be subject to adjustment in the event of a reclassification or other recapitalization of the common stock, or any merger or disposition of all or substantially all of the Company’s assets, so
that the holders of the shares of Preferred Stock will be entitled to receive upon conversion what they would have received if the shares of Preferred Stock had been converted to common stock prior to such an event.
		
	 	  	(6) Voting Rights: The Preferred Stock will vote together with the common stock on an as converted basis.
		
	Information Rights:	  	So long as any of the Preferred Stock is outstanding and until the closing of an Initial Public Offering, the Company will deliver to each holder audited annual and unaudited quarterly and
monthly financial statements, annual budgets and other information reasonably requested by any holder of Preferred Stock.
		
	Registration Rights:	  	(1) Piggy-Back Registration: The Investors will be entitled to unlimited “piggy-back” registration rights on registrations of the Company, subject to customary
underwriter’s cutback.
		
	 	  	(2) Registration Expenses: The Registration expenses (exclusive of underwriting discounts and commissions but including the fees of one counsel of the selling shareholders) of each of
the registrations under paragraph (1) above will be paid by the Company.

  

 Page 2 of 2 

  
 SECURED
PROMISSORY NOTE 
  

			
	$5,000,000	 	August 9, 2002

  
 FOR VALUE RECEIVED,
the undersigned, TEAMM PHARMACEUTICALS, INC., a Delaware corporation (“Maker”), promises to pay to the order of HARBINGER MEZZANINE PARTNERS, L.P., a Delaware limited partnership (“Payee”; Payee and any subsequent holder[s]
hereof are hereinafter referred to collectively as “Holder”), at the office of Payee at Harbinger Mezzanine Partners, L.P., One Riverchase Parkway South, Birmingham, Alabama 35244, or at such other place as Holder may designate to Maker in
writing from time to time, the principal sum of FIVE MILLION AND NO/100THS DOLLARS ($5,000,000.00), together with interest on the outstanding principal balance hereof from the date hereof at the rate of thirteen and one-half percent (13.5%) per
annum (computed on the basis of a 360-day year). 
  
 Interest only
on the outstanding principal balance hereof shall be due and payable monthly, in arrears, with the first installment being payable on the first (1st) day of September, 2002, and subsequent installments being payable on the first (1st) day of each
succeeding month thereafter until August 8 , 2007 (the “Maturity Date”), at which time the entire outstanding principal balance, together with all accrued and unpaid interest, shall be immediately due and payable in full. 
  
 The indebtedness evidenced hereby may be prepaid in whole or in part, at any
time and from time to time, without premium or penalty. Any such prepayments shall be credited first to any accrued and unpaid interest and then to the outstanding principal balance hereof. 
  
 Time is of the essence of this Note. It is hereby expressly agreed that in
the event that any Event of Default shall occur under and as defined in that certain Loan Agreement of even date herewith, between Maker and Payee (together with any amendments thereto, the “Loan Agreement”), which Event of Default is not
cured following the giving of any applicable notice and within any applicable cure period set forth in the Loan Agreement, then, and in such event, the entire outstanding principal balance of the indebtedness evidenced hereby, together with any
other sums advanced hereunder, under the Loan Agreement and/or under any other instrument or document now or hereafter evidencing, securing or in any way relating to the indebtedness evidenced hereby, together with all unpaid interest accrued
thereon, shall, at the option of Holder and without notice to Maker, at once become due and payable and may be collected forthwith, regardless of the stipulated date of maturity. Upon the occurrence of any Event of Default as set forth herein, at
the option of Holder and without notice to Maker, all accrued and unpaid interest, if any, shall be added to the outstanding principal balance hereof, and the entire outstanding principal balance, as so adjusted, shall bear interest thereafter until
paid at an annual rate (the “Default Rate”) equal to the lesser of (i) the rate that is seven percentage points (7.0%) in excess of the above-specified interest rate, or (ii) the maximum rate of interest allowed to be charged under
applicable law (the “Maximum Rate”), regardless of whether or not there has been an acceleration of the payment of principal as set forth herein. All such interest shall be paid at the time of and as a condition precedent to the curing of
any such Event of Default. 
  

 In the event this Note is placed in the hands of an attorney for collection, or if Holder incurs any
costs incident to the collection of the indebtedness evidenced hereby, Maker and any endorsers hereof agree to pay to Holder an amount equal to all such costs, including without limitation all reasonable attorneys’ fees and all court costs.

  
 Presentment for payment, demand, protest and notice of demand,
protest and nonpayment are hereby waived by Maker and all other parties hereto. No failure to accelerate the indebtedness evidenced hereby by reason of an Event of Default hereunder, acceptance of a past-due installment or other indulgences granted
from time to time, shall be construed as a novation of this Note or as a waiver of such right of acceleration or of the right of Holder thereafter to insist upon strict compliance with the terms of this Note or to prevent the exercise of such right
of acceleration or any other right granted hereunder or by applicable law. No extension of the time for payment of the indebtedness evidenced hereby or any installment due hereunder, made by agreement with any person now or hereafter liable for
payment of the indebtedness evidenced hereby, shall operate to release, discharge, modify, change or affect the original liability of Maker hereunder or that of any other person now or hereafter liable for payment of the indebtedness evidenced
hereby, either in whole or in part, unless Holder agrees otherwise in writing. This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is
sought. 
  
 The indebtedness and other obligations evidenced by
this Note are further evidenced by (i) the Loan Agreement and (ii) certain other instruments and documents, as may be required to protect and preserve the rights of Maker and Payee, as more specifically described in the Loan Agreement. 

 
 All agreements herein made are expressly limited so that in no event
whatsoever, whether by reason of advancement of proceeds hereof, acceleration of maturity of the unpaid balance hereof or otherwise, shall the amount paid or agreed to be paid to Holder for the use of the money advanced or to be advanced hereunder
exceed the Maximum Rate. If, from any circumstances whatsoever, the fulfillment of any provision of this Note or any other agreement or instrument now or hereafter evidencing, securing or in any way relating to the indebtedness evidenced hereby
shall involve the payment of interest in excess of the Maximum Rate, then, ipso facto, the obligation to pay interest hereunder shall be reduced to the Maximum Rate; and if from any circumstance whatsoever, Holder shall ever receive
interest, the amount of which would exceed the amount collectible at the Maximum Rate, such amount as would be excessive interest shall be applied to the reduction of the principal balance remaining unpaid hereunder and not to the payment of
interest. This provision shall control every other provision in any and all other agreements and instruments existing or hereafter arising between Maker and Holder with respect to the indebtedness evidenced hereby. 
  
 This Note is intended as a contract under and shall be construed and
enforceable in accordance with the laws of the State of Tennessee, except to the extent that federal law may be applicable to the determination of the Maximum Rate. 
  
 Maker hereby irrevocably consents to the jurisdiction of the United States District Court for the Middle District of
Tennessee and of all Tennessee state courts sitting in Davidson County, Tennessee, for the purpose of any litigation to which Lender may be a party and which 

  

 2 

 
concerns this Note or the indebtedness evidenced hereby. It is further agreed that venue for any such action shall he exclusively with courts sitting in
Davidson County, Tennessee, unless Holder agrees to the contrary in writing. 
  
 HOLDER AND MAKER HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY,
ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE LOAN DOCUMENTS. 
  
 As used herein, the terms “Maker” and “Holder” shall be deemed to include their respective successors, legal representatives and assigns, whether by voluntary action of the parties or by operation
of law. 
  

			
	MAKER:
	
	 TEAMM PHARMACEUTICALS, INC., a

	 Delaware corporation

		
	 By:
	 	 /s/ Martin G. Baum

	 	 	 Martin G. Baum

	 	 	 President and Chief Executive Officer

  

 3 

  
 STOCK
PURCHASE WARRANT 
  
 This
STOCK PURCHASE WARRANT (“Warrant”) is issued this 9th day of August, 2002, by TEAMM PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), to HARBINGER MEZZANINE PARTNERS, L.P., a Delaware limited partnership (Harbinger
Mezzanine Partners, L.P. and any subsequent assignee or transferee hereof are hereinafter referred to collectively as “Holder” or “Holders”). 
  
 AGREEMENT: 
  
 1. Issuance of Warrant; Term. 
  
 (a) For and in consideration of Harbinger Mezzanine Partners, L.P. making a loan to the Company in an amount
of $5,000,000 (the “Loan”) pursuant to the terms of a secured promissory note of even date herewith (the “Note”) and related loan agreement of even date herewith (the “Loan Agreement”), and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company hereby grants to Holder the right to purchase 663,414 shares (“Base Amount”) of the Company’s Class A common stock (the “Common
Stock”), which the Company represents to equal 15% of the shares of capital stock outstanding on the date hereof, calculated on a fully diluted basis and assuming exercise of this Warrant, provided that in the event that any portion of the
indebtedness evidenced by the Note is outstanding on the following dates, the Base Amount shall be increased to the corresponding number set forth below: 
  

			
	 DATE

	 	 BASE AMOUNT

	 August 9, 2003
	 	 825,222 shares, which the Company represents to equal 18% of the shares of the Company’s capital stock outstanding on the date hereof calculated on a fully
diluted basis after exercise of this Warrant

		
	 August 9, 2004
	 	 999,320 shares, which the Company represents to equal 21% of the shares of the Company’s capital stock outstanding on the date hereof calculated on a fully
diluted basis after exercise of this Warrant

  

			
	 August 9, 2005
	  	 1,187,162 shares, which the Company represents to equal 24% of the shares of the Company’s capital stock outstanding on the date hereof calculated on a
fully diluted basis after exercise of this Warrant

		
	 August 9, 2006
	  	 1,253,115 shares, which the Company represents to equal 25% of the shares of the Company’s capital stock outstanding on the date hereof calculated on a
fully diluted basis after exercise of this Warrant

  
 (b) As
used in this Warrant, “fully diluted basis” means the shares of Common Stock outstanding on the effective date of this Warrant, together with all shares of Common Stock that would be outstanding on such date assuming the issuance of all
shares of Common Stock issuable upon the exercise, exchange or conversion of (i) this Warrant, (ii) any securities outstanding as of such date and convertible into or exchangeable for Common Stock (whether or not the rights to exchange or convert
thereunder are immediately exercisable) (such convertible or exchangeable securities being herein called “Convertible Securities”), (iii) any rights outstanding as of such date to subscribe for or to purchase, or any warrants or options
outstanding as of such date for the purchase of, Common Stock or Convertible Securities (whether or not immediately exercisable) (such rights, warrants or options being herein called “Option Securities”), and (iv) any such Convertible
Securities issuable upon the exercise of such Option Securities. 
  
 (c) The shares of Common Stock issuable upon exercise of this Warrant are hereinafter referred to as the “Shares.” This Warrant shall be exercisable at any time and from time to time from the date hereof
until August 9, 2012 (the “Expiration Date”). 
  
 2.
Exercise Price. The exercise price (the “Exercise Price”) per share for which all or any of the Shares may be purchased pursuant to the terms of this Warrant shall be One Cent ($.01). 
  
 3. Exercise. This Warrant may be exercised by the Holder hereof
(but only on the conditions hereinafter set forth) in whole or in part, upon delivery of written notice of intent to exercise to the Company in the manner at the address of the Company set forth in Section 16 hereof, together with this Warrant and
payment to the Company of the aggregate Exercise Price of the Shares so purchased. The Exercise Price shall be payable, at the option of the Holder, (a) by certified or bank check, (b) by the surrender of the Note or portion thereof having an
outstanding principal balance equal to the aggregate Exercise Price or (c) by the surrender of a portion of this Warrant where the Shares subject to the portion of this Warrant that is surrendered have a fair market value equal to the aggregate
Exercise Price. In the absence of an established public market for the Common Stock, fair market value shall be established by the Company’s board of directors in a commercially reasonable manner. Upon exercise of this Warrant as aforesaid, the
Company shall as promptly as practicable, and in any event within 15 days 

  

 2 

 
thereafter, execute and deliver to the Holder of this Warrant a certificate or certificates for the total number of whole Shares for which this Warrant is
being exercised in such names and denominations as are requested by such Holder. If this Warrant shall be exercised with respect to less than all of the Shares, the Holder shall be entitled to receive a new Warrant covering the number of Shares in
respect of which this Warrant shall not have been exercised, which new Warrant shall in all other respects be identical to this Warrant. The Company covenants and agrees that it will pay when due any and all state and federal issue taxes which may
be payable in respect of the issuance of this Warrant or the issuance of any Shares upon exercise of this Warrant. 
  
 4. Covenants and Conditions. The above provisions are subject to the following: 
  
 (a) Neither this Warrant nor the Shares have been registered
under the Securities Act of 1933, as amended (“Securities Act”), or any state securities laws (“Blue Sky Laws”). This Warrant has been acquired for investment purposes and not with a view to distribution or resale and may not be
sold or otherwise transferred without (i) an effective registration statement for such Warrant under the Securities Act and such applicable Blue Sky Laws, or (ii) an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to
the Company and its counsel, that registration is not required under the Securities Act or under any applicable Blue Sky Laws (the Company hereby acknowledges that Chambliss, Banner & Stophel, P.C. is acceptable counsel). Transfer of the Shares
shall be restricted in the same manner and to the same extent as the Warrant and the certificates representing such Shares shall bear substantially the following legend: 
  
 THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE ACT AND SUCH
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER SUCH SECURITIES ACTS AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER. 
  
 The
Holder hereof and the Company agree to execute such other documents and instruments as counsel for the Company reasonably deems necessary to effect the compliance of the issuance of this Warrant and any shares of Common Stock issued upon exercise
hereof with applicable federal and state securities laws. 
  
 (b) The Company covenants and agrees that all Shares which may be issued upon exercise of this Warrant will, upon issuance and payment therefor, be legally and validly issued and outstanding, fully paid and
nonassessable, free from all taxes, liens, charges and preemptive rights, if any, with respect thereto or to the issuance thereof. The Company shall at all times reserve and keep available for issuance upon the exercise of this Warrant such number

  

 3 

 
of authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of this Warrant. 
  
 (c) The Company covenants and agrees that it shall not sell
any shares of the Company’s capital stock at a price per share below the fair market value of such shares, without the prior written consent of the Holder hereof. In the event that the Company sells shares of Common Stock at a price per share
below the fair market value of such shares (a “Below Market Transaction”), without the prior written consent of the Holder hereof, the Company covenants and agrees that the number of shares issuable upon exercise of this Warrant shall be
equal to the product obtained by multiplying the number of shares issuable pursuant to this Warrant prior to the Below Market Transaction by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately
prior to consummation of the Below Market Transaction plus the number of shares of Common Stock issued in the Below Market Transaction, and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the
Below Market Transaction plus the number of shares of Common Stock that the aggregate consideration received by the Company in the Below Market Transaction would purchase at fair market value. For purposes of this subsection, Common Stock shall be
deemed to include that number of shares of Common Stock that would be obtained assuming (i) the conversion of any securities of the Company which, by their terms, are convertible into or exchangeable for Common Stock, and (ii) the exercise of all
options to purchase or rights to subscribe for Common Stock or securities which, by their terms, are convertible into or exchangeable for Common Stock. In the absence of an established public market for the securities sold by the Company hi a Below
Market Transaction, fair market value shall be established by the Company’s board of directors in a commercially reasonable manner. Notwithstanding the foregoing to the contrary, the Company may issue shares of Common Stock or options for
shares of Common Stock for up to 762,571 shares out of the shares available for issuance under the Company’s stock option plan as reflected on the capitalization table attached to the Loan Agreement as Schedule 2.1 (e). 
  
 (d) The Company covenants and agrees that if the computation
of the Shares is understated because any capital stock of the Company, Convertible Securities and/or Option Securities outstanding on the date hereof were excluded from said computation, then the Shares shall be correspondingly increased to take
such shares, securities and/or options into account on a proportionate basis. 
  
 5. Transfer of Warrant. Prior to an Event of Default (as defined in the Loan Agreement), this Warrant may not be transferred without the prior written consent of the Company, except that subject to the
provisions of Section 4 hereof, this Warrant may be transferred, in whole or in part, to any affiliate of Holder or affiliate of the general partner of Holder, by presentation of the Warrant to the Company with written instructions for such
transfer. Upon such presentation for transfer, the Company shall promptly execute and deliver a new Warrant or Warrants in the form hereof in the name of the assignee or assignees and in the denominations specified in such instructions. The Company
shall pay all expenses incurred by it in connection with the preparation, issuance and delivery of Warrants under this Section. 
  
 6. Warrant Holder Not Shareholder: Rights Offering; Preemptive Rights; Preference Rights. Except as otherwise provided herein, this
Warrant does not confer upon the 

  

 4 

 
Holder, as such, any right whatsoever as a shareholder of the Company. Notwithstanding the foregoing, if the Company should offer to all of the
Company’s shareholders the right to purchase any securities of the Company, then all shares of Common Stock that are subject to this Warrant shall be deemed to be outstanding and owned by the Holder and the Holder shall be entitled to
participate in such rights offering. The Holder shall have preemptive rights. The Company shall not issue any securities which entitle the holder thereof to obtain any preference over holders of Common Stock upon the dissolution, liquidation,
winding-up, sale, merger, or reorganization of the Company without the prior written consent of the Holder. 
  
 7. Observation Rights. The Holder of this Warrant shall receive notice of and be entitled to attend or may send a
representative to attend all meetings of the Company’s Board of Directors in a non-voting observation capacity and shall receive a copy of all correspondence and information delivered to the Company’s Board of Directors, from the date
hereof until such time as the indebtedness evidenced by the Note has been paid in full; provided that such representative shall execute such confidentiality agreement in favor of the Company as the Company may reasonably request. 
  
 8. Financial Statements and
Reports. Unless the Company is otherwise furnishing such information to the Holder hereof, from the date hereof, the Company shall deliver to the Holder the following financial information: 
  
 (a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Company, (i) a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, shareholders’ equity and cash flows of
the Company and its subsidiaries for such fiscal year, audited and reported upon, without qualification, by an independent public accounting firm acceptable to Holder and the Company, accompanied by an unaudited consolidating balance sheet of the
Company and its subsidiaries as of the end of such fiscal year and an unaudited consolidating statement of income of the Company and its subsidiaries for such fiscal year, certified by the Company’s president, chief executive officer or chief
financial officer and (ii) a written discussion and analysis by the management of the Company of the financial statements furnished in respect of such fiscal year; 
  
 (b) as soon as available and in any event within 30 days after the end of each month, (i) an unaudited
consolidated and consolidating balance sheet of the Company and its subsidiaries as of the end of such month, the related consolidated and consolidating statement of income of the Company and its subsidiaries for the period commencing at the
beginning of the current fiscal year and ending with the end of such month and the related consolidated statements of shareholders’ equity and cash flows of the Company and its subsidiaries for such period, certified by the Company’s
president, chief executive officer or chief financial officer and (ii) a written discussion and analysis by the management of the Company of the financial statements furnished in respect of such period, in a form consistent with the discussion and
analysis currently prepared internally by the Company for use by its management; 
  
 (c) within 30 days prior to the beginning of each fiscal year of the Company, a budget of the Company and its subsidiaries for such fiscal
year setting forth, in reasonable 

  

 5 

 
detail, a balance sheet and statements of income, shareholders’ equity and cash flows for such fiscal year; and 
  
 (d) with reasonable promptness, such other financial data as
the Holder may reasonably request. 
  
 9. Adjustment
Upon Changes in Stock. 
  
 (a) If all or
any portion of this Warrant shall be exercised subsequent to any stock split, stock dividend, recapitalization, combination of shares of the Company, or other similar event, occurring after the date hereof, then the Holder exercising this Warrant
shall receive, for the aggregate Exercise Price, the aggregate number and class of shares which such Holder would have received if this Warrant had been exercised immediately prior to such stock split, stock dividend, recapitalization, combination
of shares, or other similar event. If any adjustment under this Section 9(a), would create a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall be disregarded and the number of
shares subject to this Warrant shall be the next higher number of shares, rounding all fractions upward. Whenever there shall be an adjustment pursuant to this Section 9(a), the Company shall forthwith notify the Holder or Holders of this Warrant of
such adjustment, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated. 
  
 (b) If all or any portion of this Warrant shall be exercised subsequent to any merger, consolidation, exchange of shares, separation,
reorganization or liquidation of the Company, or other similar event, occurring after the date hereof, as a result of which shares of Common Stock shall be changed into the same or a different number of shares of the same or another class or classes
of securities of the Company or another entity, or the holders of Common Stock are entitled to receive cash or other property, then the Holder exercising this Warrant shall receive, for the aggregate Exercise Price, the aggregate number and class of
shares, cash or other property which such Holder would have received if this Warrant had been exercised immediately prior to such merger, consolidation, exchange of shares, separation, reorganization or liquidation, or other similar event. If any
adjustment under this Section 9(b) would create a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall be disregarded and the number of shares subject to this Warrant shall be the
next higher number of shares, rounding all fractions upward. Whenever there shall be an adjustment pursuant to this Section 9(b), the Company shall forthwith notify the Holder or Holders of this Warrant of such adjustment, setting forth in
reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated. 
  
 10. Put Agreement. 
  
 (a) The Company hereby irrevocably grants and issues to Holder the right and option to sell to the Company (the “Put”) during
the Put Period (as hereinafter defined), at a purchase price (the “Put Price”) equal to the Fair Market Value (as determined under subsection (c) below) of the shares of Common Stock issuable to Holder upon exercise of this Warrant less
the Exercise Price. Capitalized terms not otherwise defined in this Section shall have the meaning ascribed to them in the Loan Agreement. 
  

 6 

 “Put Period” means the period commencing on the earliest of (i) the Maturity
Date (as defined in the Note), or (ii) the occurrence of a Significant Event (as hereinafter defined), and terminating on the Expiration Date. 
  
 “Significant Event” means any of the following events: (i) any change of management or control of the Company whether by merger,
sale, consolidation or otherwise, (ii) any public offering by the, Company of capital stock, (iii) any filing by the Company for protection under the Bankruptcy Code, or (iv) any material breach under the Loan Agreement. For purposes of the
definition of Significant Event, “change of control of the Company” shall mean (A) with regard to a merger or consolidation, the Company or a wholly-owned subsidiary of the Company is not the party into whom the Company is merged or
consolidated, (B) with respect to a sale of substantially all of the assets of the Company, substantially all of the assets of the Company have been sold to a third party that is not a wholly-owned subsidiary of the Company and (C) with respect to
the sale or disposition of the capital stock of the Company, more than 50% of the . outstanding stock of the Company is sold. 
  
 (b) Holder may exercise the Put by delivery of written notice (the “Put Notice”) of such exercise to the Company in the manner
and at the address of the Company set forth in Section 16 hereof. The Company shall pay to Holder, in cash or by wire transfer of immediately available funds, the Put Price within 30 days of the receipt of the Put Notice. 
  
 (c) For purposes of this Section 10, the Fair Market Value
of the shares of Common Stock of the Company issuable pursuant to this Warrant shall be determined by mutual agreement between the Company and Holder or, if no agreement is reached, as follows: 
  
 (i) The Company and the Holder shall each appoint an
independent, experienced appraiser who is a member of a recognized professional association of business appraisers. The two appraisers shall determine the value of the shares of Common Stock which would be issued upon the exercise of the Warrant,
assuming that the sale would be between a willing buyer and a willing seller, both of whom have full knowledge of the financial and other affairs of the Company, and neither of whom is under any compulsion to sell or to buy, and without taking into
consideration that (A) such shares would constitute a minority interest and (B) would lack liquidity. 
  
 (ii) If the higher of the two appraisals is not 10% greater than the lower of the appraisals, the Fair Market Value shall be the average
of the two appraisals. If the higher of the two appraisals is equal to or greater than 10% more than the lower of the two appraisals, then a third appraiser shall be appointed by the two appraisers, and if they cannot agree on a third appraiser, the
American Arbitration Association shall appoint the third appraiser. The third appraiser, regardless of who appoints him or her, shall have the same qualifications as the first two appraisers. 
  

 7 

 (iii) The Fair Market Value after the appointment of the third appraiser shall be the
mean of the three appraisals. 
  
 (iv) The fees
and expenses of the appraisers shall be paid one-half by the Company and one-half by the Holder. 
  
 11. Registration. 
  
 (a) The Company and the Holder of the Warrant and the Shares agree that if at any time after the date hereof the Company shall propose to
file a registration statement with respect to any of its Common Stock on a form suitable for a secondary offering (including its initial public offering), it will give notice in writing to such effect to the Holder(s) at least 30 days prior to such
filing, and, at the written request of any such registered holder, made within 10 days after the receipt of such notice, will include therein at the Company’s cost and expense (including the fees and expenses of counsel to such Holder(s), but
excluding underwriting discounts, commissions and firing fees attributable to the Shares included therein) such of the Shares as such Holder(s) shall request; provided, however, that if the offering being registered by the Company is underwritten
and if the representative of the underwriters certifies in writing that the inclusion therein of the Shares would materially and adversely affect the sale of the securities to be sold by the Company thereunder, then the Company shall be required to
include in the offering only that number of securities, including the Shares, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among all
selling shareholders according to the total amount of securities entitled to be included therein owned by each selling shareholder, but in no event shall the total amount of Shares included in the offering be less than the number of securities
included in the offering by any other single selling shareholder unless all of the Shares are included in the offering). 
  
 (b) Whenever the Company undertakes to effect the registration of any of the Shares, the Company shall, as expeditiously as reasonably
possible: 
  
 (i) Prepare and file with the
Securities and Exchange Commission (the “Commission”) a registration statement covering such Shares and use its best efforts to cause such registration statement to be declared effective by the Commission as expeditiously as possible and
to keep such registration effective until the earlier of (A) the date when all Shares covered by the registration statement have been sold or (B) 180 days from the effective date of the registration statement; provided, that before filing a
registration statement or prospectus or any amendment or supplements thereto, the Company will furnish to each Holder of Shares covered by such registration statement and the underwriters, if any, copies of all such documents proposed to be filed
(excluding exhibits, unless any such person shall specifically request exhibits), which documents will be subject to the review of such Holders and underwriters, and the Company will not file such registration statement or any amendment thereto or
any prospectus or any supplement thereto (including any documents incorporated by reference therein) with the Commission if (1) the underwriters, if any, shall reasonably object to such filing or (2) if information in such registration statement

  

 8 

 
or prospectus concerning a particular selling Holder has changed and such Holder or the underwriters, if any, shall reasonably object. 
  
 (ii) Prepare and file with the Commission such amendments
and post-effective amendments to such registration statement as may be necessary to keep such registration statement effective during the period referred to in Section 11(b)(i) and to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement, and cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed with the Commission pursuant to Rule 424 under the
Securities Act. 
  
 (iii) Furnish to the selling
Holder(s) such numbers of copies of such registration statement, each amendment thereto, the prospectus included in such registration statement (including each preliminary prospectus), each supplement thereto and such other documents as they may
reasonably request in order to facilitate the disposition of the Shares owned by them. 
  
 (iv) Use its best efforts to register and qualify under such other securities laws of such jurisdictions as shall be reasonably requested
by any selling Holder and do any and all other acts and things which may be reasonably necessary or advisable to enable such selling Holder to consummate the disposition of the Shares owned by such Holder, in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a condition thereto to qualify to transact business or to file a general consent to service of process in any such states or jurisdictions. 
  
 (v) Promptly notify each selling Holder of the happening of
any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading and, at the request of any such Holder,
the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading. 
  
 (vi) Provide a transfer agent and registrar for all such Shares not later than the effective date of such registration statement. 
  
 (vii) Enter into such customary agreements (including underwriting agreements in customary form for a primary offering) and take all such
other actions as the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Shares (including, without limitation, effecting a stock split or a combination of shares). 
  
 (viii) Make available for inspection by any selling Holder
or any underwriter participating in any disposition pursuant to such registration 

  

 9 

 
statement and any attorney, accountant or other agent retained by any such selling Holder or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers, directors, employees and independent accountants of the Company to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent
in connection with such registration statement. 
  
 (ix) Promptly notify the selling Holder(s) and the underwriters, if any, of the following events and (if requested by any such person) confirm such notification in writing: (A) the filing of the prospectus or any prospectus supplement and
the registration statement and any amendment or post-effective amendment thereto and, with respect to the registration statement or any post-effective amendment thereto, the declaration of the effectiveness of such, documents, (B) any requests by
the Commission for amendments or supplements to the registration statement or the prospectus or for additional information, (C) the issuance or threat of issuance by the Commission of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose and (D) the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the initiation or threat of
initiation of any proceeding for such purposes. 
  
 (x) Make every reasonable effort to prevent the entry of any order suspending the effectiveness of the registration statement and obtain at the earliest possible moment the withdrawal of any such order, if entered. 
  
 (xi) Cooperate with the selling Holder(s) and the
underwriters, if any, to facilitate the timely preparation and delivery of certificates representing the Shares to be sold and not bearing any restrictive legends, and enable such Shares to be in such lots and registered in such names as the
underwriters may request at least two business days prior to any delivery of the Shares to the underwriters. 
  
 (xii) Provide a CUSIP number for all the Shares not later than the effective date of the registration statement. 
  
 (xiii) Prior to the effectiveness of the registration
statement and any post-effective amendment thereto and at each closing of an underwritten offering, (A) make such representations and warranties to the selling Holder(s) and the underwriters, if any, with respect to the Shares and the registration
statement as are customarily made by issuers in primary underwritten offerings; (B) use its best efforts to obtain “cold comfort” letters and updates thereof from the Company’s independent certified public accountants addressed to the
selling Holders and the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters by underwriters in connection with primary underwritten offerings; (C)
deliver such documents and certificates as may be reasonably requested (1) by the holders of a 

  

 10 

 
majority of the Shares being sold, and (2) by the underwriters, if any, to evidence compliance with clause (A) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the Company; and (D) obtain opinions of counsel to the Company and updates thereof (which counsel and which opinions shall be reasonably satisfactory to the underwriters, if
any), covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by the selling Holders and underwriters or their counsel. Such counsel shall also state that no
facts have come to the attention of such counsel which cause them to believe that such registration statement, the prospectus contained therein, or any amendment or supplement thereto, as of their respective effective or issue dates, contains any
untrue statement of any material fact or omits to state any material fact necessary to make the statements therein not misleading (except that no statement need be made with respect to any financial statements, notes thereto or other financial
‘data or other expertized material contained therein). If for any reason the Company’s counsel is unable to give such opinion, the Company shall so notify the Holders of the Shares and shall use its best efforts to remove expeditiously all
impediments to the rendering of such opinion. 
  
 (xiv) Otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders earnings statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of any 12-month period (or 90 days, if such period is a fiscal year) (A) commencing at the end of any fiscal quarter in which the Shares are sold to underwriters in a firm or best efforts
underwritten offering, or (B) if not sold to underwriters in such an offering, beginning with the first month of the first fiscal quarter of the Company commencing after the effective date of the registration statement, which statements shall cover
such 12-month periods. 
  
 (c) After the date
hereof, the Company shall not grant to any holder of securities of the Company any registration rights which have a priority greater than or equal to those granted to Holders pursuant to this Warrant without the prior written consent of the
Holder(s). 
  
 (d) The Company’s obligations
under Section 11(a) above with respect to each Holder of Shares are expressly conditioned upon such Holder’s furnishing to the Company in writing such information concerning such holder and the terms of such holder’s proposed offering as
the Company shall reasonably request for inclusion in the registration statement. If any registration statement including any of the Shares is filed, then the Company shall indemnify each Holder thereof (and each underwriter for such holder and each
person, if any, who controls such underwriter within the meaning of the Securities Act) from any loss, claim, damage or liability arising out of, based upon or in any way relating to any untrue statement of a material fact contained in such
registration statement or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except for any such statement or omission based on information furnished in writing by
such Holder of the Shares expressly for use in connection with such registration statement; and such Holder 

  

 11 

 
shall indemnify the Company (and each of its officers and directors who has signed such registration statement, each director, each person, if any, who
controls the Company within the meaning of the Securities Act, each underwriter for the Company and each person, if any, who controls, such underwriter within the meaning of the Securities Act) and each other such holder against any loss, claim,
damage or liability arising from any such statement or omission which was made in reliance upon information furnished in writing to the Company by such holder of the Shares expressly for use in connection with such registration statement.

  
 (e) For purposes of this Section 11, all of
the Shares shall be deemed to be issued and outstanding. 
  
 12. Certain Notices. In case at any time the Company shall propose to: 
  
 (a) declare any cash dividend upon its Common Stock, except as expressly . permitted under the Loan Agreement; 
  
 (b) declare any dividend upon its Common Stock payable in
stock or make any special dividend or other distribution to the holders of its Common Stock; 
  
 (c) offer for subscription to the holders of any of its Common Stock any additional shares of stock in any class or other rights;

  
 (d) reorganize, or reclassify the capital
stock of the Company, or consolidate, merge or otherwise combine with, or sell of all or substantially all of its assets to, another corporation; 
  
 (e) voluntarily or involuntarily dissolve, liquidate or wind up of the affairs of the Company; or 
  
 (f) redeem or purchase any shares of its capital stock or
securities convertible into its capital stock; 
  
 then, in any one or more of
said cases, the Company shall give to the Holder of the Warrant, by certified or registered mail, (i) at least 20 days’ prior written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend,
distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, and (ii) in the case of such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, at least 20 days’ prior written notice of the date when the same shall take place. Any notice required by clause (i) shall also specify, in the case of any
such dividend, distribution or subscription rights, the date on which the holders of Common Stock shall be entitled thereto, and any notice required by clause (ii) shall specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be. 
  

 12 

 13. Rights of Co-Sale. 
  
 (a) None of the shareholders of the Company listed on the signature page hereof (the
“Shareholders”) shall enter into any transaction that would result in the sale by it of any capital common stock of the Company now or hereafter owned by it, unless prior to such sale such Shareholder shall give written notice (the
“Co-Sale Notice”) to Holder addressed and delivered as set forth in Section 16 hereof, of its intention to effect such sale in order that Holder may exercise its rights under this Section 13 as hereinafter described. Such notice shall set
forth (i) the number of shares to be sold by such Shareholder, (ii) the principal terms of the sale, including the price at which the shares are intended to be sold, and (iii) an offer by such Shareholder to cause to be included with the shares to
be sold by it in the sale, on a share-by- share basis and on the same terms and conditions, the Shares issuable or issued to Holder pursuant this Warrant. 
  
 (b) If Holder has not accepted such offer in writing within a period of 10 days from the date of receipt of the Co-Sale Notice, then such
Shareholder shall thereafter be free for a period of 90 days to sell the number of shares specified in the Co-Sale Notice, at a price no greater than the price set forth in the Co-Sale Notice and on otherwise no more favorable terms to such
Shareholder than as set forth in the Co-Sale Notice, without any further obligation to Holder in connection with such sale. In the event that such Shareholder fails to consummate such sale within such 90-day period, the shares specified in the
Co-Sale Notice shall continue to be subject to this Section 13. 
  
 (c) If Holder accepts such offer in writing within the 10-day period, then such acceptance shall be irrevocable unless such Shareholder shall be unable to cause to be included in the sale the number of Shares of stock
held by Holder and set forth in the written acceptance. In that event, such Shareholder and Holder shall participate in the sale equally, with such Shareholder and Holder each selling half the total number of such shares to be sold in the sale.

  
 14. Remedies. If the Company or any Shareholder
violates, breaches or defaults under this Warrant, the Holder may proceed to protect and enforce its rights by any action at law, suit in equity or other appropriate proceeding, whether for specific performance of any agreement contained in
this Warrant, or for an injunction against a violation of any of the terms hereof, or in and of the exercise of any power granted hereby or by law. In case of any violation, breach or default under this Warrant, the Company or any Shareholder, as
applicable, shall pay. to the Holder on demand all costs and expenses of enforcing the Holder’s rights under this Warrant, including, without limitation, reasonably attorneys’ fees and legal expenses. 
  
 15. Article and Section Headings; Defined Terms. Numbered and
titled article and section headings are for convenience only and shall not be construed as amplifying or limiting any of the provisions of this Warrant. When used herein, the singular shall include the plural, and vice versa, and the use of any
gender shall include all other genders, as appropriate. 
  
 16.
Notice. Any and all notices, elections or demands permitted or required to be made under this Warrant shall be in writing, signed by the party giving such notice, election or demand and shall be delivered personally, telecopied, or sent
by certified mail or overnight via nationally recognized courier service (such as Federal Express), to the other party at the address 

  

 13 

 
set forth below, or at such other address as may be supplied in writing and of which receipt has been acknowledged in writing. The date of personal delivery
or telecopy or two business days after the date of mailing (or the next business day after delivery to such courier service), as the case may be, shall be the date of such notice, election or demand. For the purposes of this Warrant: 
  

			
	The address of Lender is:	  	Harbinger Mezzanine Partners, L.P.
	 	  	One Riverchase Parkway South
	 	  	Birmingham, Alabama 35244
	 	  	Attention: Mr. David A. Boutwell
	 	  	Telecopy No.: 205/987-5599
		
	with a copy to:	  	Harbinger Mezzanine Partners, L.P.
	 	  	618 Church Street, Suite 500
	 	  	Nashville, Tennessee 37219
	 	  	Attention: Mr. John C. Harrison
	 	  	Telecopy No.: 615/301-6401
		
	 	  	and
		
	 	  	Chambliss, Banner & Stophel, P.C.
	 	  	1000 Tallan Building
	 	  	Two Union Square
	 	  	Chattanooga, Tennessee 37402
	 	  	Attention: Mr. J. Patrick Murphy
	 	  	Telecopy No.: 423/265-9574
		
	The Address of Borrower is:	  	TEAMM Pharmaceuticals, Inc.
	 	  	3000 Aerial Center Parkway, Suite 110
	 	  	Morrisville, North Carolina 27560
	 	  	Attention: Mr. Martin G. Baum
	 	  	Telecopy No.: 919/481-9311
		
	with a copy to:	  	Hutchison & Mason, PLLC
	 	  	3110 Edwards Mill Road, Suite 100
	 	  	Raleigh, North Carolina 27612
	 	  	Attention: J. Robert Tyler, III
	 	  	Telecopy No.: 919/829-9696

  
 17.
Severability. If any provisions(s) of this Warrant or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Warrant and the application of such provisions to other
persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 
  
 18. Entire Agreement. This Warrant between the Company and Holder represents the entire agreement between the parties concerning the subject
matter hereof, and all oral discussions and prior agreement are merged herein. 
  

 14 

 19. Governing Law and Amendments. This Warrant shall be construed and enforced under the
laws of the State of Tennessee applicable to contracts to be wholly performed in such State. No amendment or modification hereof shall be effective except in a writing executed by each of the parties hereto. 
  
 20. Counterparts. This Warrant may be executed in any number of
counterparts and be different parties to this Warrant in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Warrant. 
  
 21. Consent to Jurisdiction: Exclusive Venue. The Company
hereby irrevocably consents to the jurisdiction of the United States District Court for the Middle District of Tennessee and of all Tennessee state courts sitting in Davidson County, Tennessee, for the purpose of any litigation to which Holder may
be a party and which concerns this Warrant. It is further agreed that venue for any such action shall lie exclusively with courts sitting in Davidson County, Tennessee, unless Holder agrees to the contrary in writing. 
  
 22. Waiver of Trial by Jury. HOLDER AND THE
COMPANY HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY
WAY RELATING TO THIS WARRANT. 
  

 15 

 IN “WITNESS WHEREOF, the parties hereto have set their hands as of the date first above written.

  

					
	COMPANY:
	
	TEAMM Pharmaceuticals, Inc., a Delaware corporation
		
	By:	 	 /s/ Martin G. Baum

	 	 	 Martin G. Baum

	 	 	 President and Chief Executive Officer

	
	HOLDER:
	
	HARBINGER MEZZANINE PARTNERS, L.P., a Delaware limited partnership
		
	By:	 	 Harbinger Mezzanine GP, LLC, its General Partner

	 	 	 	 	 
			
	 	 	By:	 	 Harbinger Mezzanine Manager, Inc., its Manager

			
	 	 	By:	 	/s/ John C. Harrison
	 	 	 Title:
	 	Director

  

 16 

 For and in consideration of the Holder making the Loan to the Company pursuant to the Loan Agreement, the
undersigned have executed or caused this Warrant to be executed as of the date first above written for the purposes of agreeing to the terms and conditions of Sections 13 and 14 hereof and agreeing to refrain from taking any action inconsistent with
the terms hereof. 
  

	
	 SHAREHOLDERS:

	
	 /s/ Martin G. Baum

	 Martin G. Baum

  

	
	
	 /s/ Gary V. Cantrell

	 Gary V. Cantrell

  

	
	
	 /s/ Nicholas J. Leb

	 Nicholas J. Leb

  

 17 

  
 SECURITY
AGREEMENT 
  
 THIS SECURITY AGREEMENT
(“Agreement”) is made as of the 9th day of August, 2002, by and between TEAMM PHARMACEUTICALS, INC., a
Delaware corporation (“Borrower”), and HARBINGER MEZZANINE PARTNERS, L.P., a Delaware limited partnership (“Lender”). 
  
 RECITALS: 
  
 WHEREAS, Lender is making a loan (the “Loan”) in the amount of $5,000,000 to Borrower, pursuant to that certain Loan Agreement of even date
herewith by and between Borrower and Lender, as it may be amended, modified or extended from time to time (the “Loan Agreement”); and 
  
 WHEREAS, in connection with the making of the Loan, Lender desires to obtain from Borrower and Borrower desires to grant to Lender a security interest in
certain collateral more particularly described below. 
  
 AGREEMENT: 
  
 NOW,
THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Grant of Security Interest. Borrower hereby grants to Lender
a security interest in the following described property (collectively, the “Collateral”): 
  
 (a) presently existing and hereafter arising accounts, contract rights, and all other forms of obligations owing to Borrower arising out
of the sale or lease of goods or the rendition of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower
and Borrower’s Books relating to any of the foregoing (collectively, “Accounts”); 
  
 (b) present and future general intangibles and other personal property (including choses or things in action, goodwill, patents, trade
names, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, monies due under any royalty or licensing agreements, infringement claims, computer
programs, computer discs, computer tapes, literature, reports, catalogs deposit accounts, insurance premium rebates, tax refunds, and tax refund claims) other than goods and Accounts, and Borrower’s Books relating to any of the foregoing
(collectively, “General Intangibles”); 
  

 (c) present and future letters of credit, notes, drafts, instruments, certificated and
uncertificated securities, documents, leases, and chattel paper, and Borrower’s Books relating to any of the foregoing (collectively, “Negotiable Collateral”); 
  
 (d) present and future inventory in which Borrower has any interest, including goods held for sale or lease
or to be furnished under a contract of service and all of Borrower’s present and future raw materials, work in process, finished goods, and packing and shipping materials, wherever located, and any documents of title representing any of the
above, and Borrower’s Books relating to any of the foregoing (collectively, “Inventory”); 
  
 (e) present and hereafter acquired machinery, machine tools, motors, equipment, furniture, furnishings, fixtures, vehicles (including
motor vehicles and trailers), tools, parts, dies, jigs, goods (other than consumer goods or farm products), and any interest in any of the foregoing, and all attachments, accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located (collectively, “Equipment”); 
  
 (f) present and hereafter acquired books and records including: ledgers; records indicating, summarizing, or evidencing Borrower’s
assets or liabilities, or the collateral; all information relating to Borrower’s business operations or financial condition; and all computer programs, disc or tape files, printouts, funds or other computer prepared information, and the
equipment containing such information (collectively, “Borrower’s Books”); 
  
 (g) present and hereafter acquired securities (whether certificated or uncertificated), securities accounts, commodity contracts and
accounts, securities entitlements and other investment property (collectively “Investment Property”); 
  
 (h) substitutions, replacements, additions, accessions, proceeds, products to or of any of the foregoing, including, but not limited to,
proceeds of insurance covering any of the foregoing, or any portion thereof, and any and all Accounts, General Intangibles, Negotiable Collateral, Inventory, Equipment, money, deposits, accounts, or other tangible or intangible property resulting
from the sale or other disposition of the accounts, general Intangibles, Negotiable Collateral, Inventory, Equipment, or any portion thereof or interest therein and the proceeds thereof. 
  
 2. Revised Article 9. Borrower acknowledges and agrees to the following provisions with respect to the
application of revised Article 9 of the Uniform Commercial Code, in the form or substantially in the form approved by the American Law Institute and the National Conference of Commissioners on Uniform State Laws, as contained in Appendix XVI of the
1999 edition of the Uniform Commercial Code Official Text (as adopted in the applicable jurisdiction, “Revised Article 9”): 
  
 (a) Attachment. In applying the law of any jurisdiction in which Revised Article 9 is in effect, the Collateral is all assets of
Borrower secured by this Agreement, whether or not within the scope of Revised Article 9. The Collateral shall include, without limitation, the following categories of assets as defined in Revised Article 9: instruments (including promissory notes),
accounts, chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit 

  

 2 

 
rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities and all other investment property, general
intangibles (including payment intangibles and software), supporting obligations and any and all proceeds thereof, wherever located, whether now owned or hereafter acquired. 
  
 (b) Perfection by Filing. Borrower hereby specifically authorizes Lender at any time and from time to
time to file financing statements, continuation statements and amendments thereto that describe the Collateral and contain any other information required by Part 5 of Revised Article 9 for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether Borrower is an organization, the type of organization and any organization identification number issued to Borrower. Borrower agrees to furnish any such information to the Lender
promptly upon request. Any such financing statements, continuation statements or amendments may be signed by Lender on behalf of Borrower and may be filed at any time in any jurisdiction whether or not Revised Article 9 is then in effect in such
jurisdiction. Borrower hereby irrevocably constitutes and appoints Lender and any officer or agent thereof, with full power of substitution, as its true and lawful attomey-in-fact with full irrevocable power and authority in the place and stead of
Borrower and in the name of Borrower or in its own name, from time to time in Lender’s discretion, for the limited purpose of carrying out the terms of this subsection regarding perfection by filing. Borrower hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this subsection are coupled with an interest and are irrevocable until all of the Obligations (as defined in the Loan Documents)
have been paid and satisfied in full. 
  
 (c)
Other Perfection, etc. At any time and from time to time, Borrower shall, whether or not Revised Article 9 is in effect in any applicable jurisdiction, take such steps as the Lender may reasonably request for Borrower (i) to obtain an
acknowledgment, in form and substance reasonably satisfactory to Lender, of any bailee having possession of any of the Collateral, that such bailee holds such Collateral for the Lender, (ii) to obtain control of any investment property, deposit
accounts, letter-of-credit rights or electronic chattel paper (as such terms are defined in Revised Article 9) as set forth in Revised Article 9, and, where control is established by written agreement, such agreement shall be in form and substance
reasonably satisfactory to Lender, and (iii) otherwise to insure the continued perfection and priority of Lender’s security interest in any of the Collateral and of the preservation of its rights therein, whether in anticipation of or following
the effectiveness of Revised Article 9 in any applicable jurisdiction. 
  
 (d) Savings Clause. Nothing contained in this Section 2 shall be construed to narrow the scope of Lender’s security interest in any of the Collateral or the perfection or priority thereof or to impair or
otherwise limit any of the rights, powers, privileges or remedies of Lender, except (and then only to the extent) as mandated by Revised Article 9, if applicable in a particular jurisdiction. 
  
 3. Secured Indebtedness. The security interest granted hereby
shall secure the prompt payment of the Obligations (as defined in the Loan Agreement) and the prompt performance of each of the covenants and duties under the Loan Documents (as defined in the Loan Agreement). 
  

 3 

 4. Representations and Warranties of Borrower. Borrower represents, warrants and agrees as
follows: 
  
 (a) Except as set forth on Schedule
4(a) hereto (the “Permitted Encumbrances”), Borrower is the owner of the Collateral free and clear of any liens and security interests. Borrower will defend the Collateral against the claims and demands of all persons other than the
holders of the Permitted Encumbrances. 
  
 (b)
The address set forth on Schedule 4(b) hereto is Borrower’s principal place(s) of business and the location of all tangible Collateral and the place where the records concerning all intangible Collateral are kept and/or maintained. 

 
 (c) Borrower will pay all costs of filing of financing,
continuation and termination statements with respect to the security interests created hereby, and Lender is authorized to do all things that it deems necessary to perfect and continue perfection of the security interests created hereby and to
protect the Collateral. 
  
 5. Agreements With Respect to
the Collateral. Borrower covenants and agrees with Lender as follows: 
  
 (a) Borrower will not permit any of the Collateral to be removed from the location specified herein, except for temporary periods in the normal and customary use thereof, without the prior written consent of Lender.
Notwithstanding the foregoing, so long as an Event of Default has not occurred, Borrower shall have the right to process and sell Borrower’s Inventory in the regular course of business. 
  
 (b) Borrower shall notify Lender in writing of any change in
the location of Borrower’s principal place of business or the location of any tangible Collateral or the place(s) where the records concerning all intangible Collateral are kept or maintained. 
  
 (c) Borrower will keep the Collateral in good condition and
repair and will pay and discharge all taxes, levies and other impositions levied thereon as well as the cost of repairs to or maintenance of same, and will not permit anything to be done that may impair the value of any of the Collateral. If
Borrower fails to pay such sums, Lender may do so for Borrower’s account and add the amount thereof to the Obligations. 
  
 (d) Until the occurrence of an Event of Default, Borrower shall be entitled to possession of the Collateral and to use the same in any
lawful manner, provided that such use does not cause excessive wear and tear to the Collateral, cause it to decline in value at an excessive rate, or violate the terms of any policy of insurance thereon. 
  
 (e) Borrower will not sell, exchange, lease or otherwise
dispose of any of the Collateral or any interest therein without the prior written consent of Lender. Notwithstanding the foregoing, so long as an Event of Default has not occurred, Borrower shall have the right to process and sell Borrower’s
Inventory in the regular course of business. Lender’s security interest hereunder shall attach to all proceeds of all sales or other dispositions of the Collateral. If at any time any such proceeds shall be represented by any instruments,
chattel paper or documents of title, then such instruments, chattel paper or documents of title shall be promptly 

  

 4 

 
delivered to Lender and subject to the security interest granted hereby. If at any time any of Borrower’s inventory is represented by any document of
title, such document of title will be delivered promptly to Lender and subject to the security interest granted hereby. 
  
 (f) Borrower will not allow the Collateral to be attached to real estate in such manner as to become a fixture or a part of any real
estate. 
  
 (g) Borrower will at all times keep
the Collateral insured against all insurable hazards in amounts equal to the full cash value of the Collateral. Such insurance shall be in such companies as may be acceptable to Lender, with provisions satisfactory to Lender for payment of all
losses thereunder to Lender as its interests may appear. If required by Lender, Borrower shall deposit the policies with Lender. Any money received by Lender under said policies may be applied to the payment of the Obligations, whether or not due
and payable, or at Lender’s option may be delivered by Lender to Borrower for the purpose of repairing or restoring the Collateral. Borrower assigns to Lender all right to receive proceeds of insurance not exceeding the amounts secured hereby,
directs any insurer to pay .all proceeds directly to Lender, and appoints Lender Borrower’s attomey-in-fact to endorse any draft or check made payable to Borrower in order to collect the benefits of such insurance. If Borrower fails to keep the
Collateral insured as required by Lender, Lender shall have the right to obtain such insurance at Borrower’s expense and add the cost thereof to the Obligations. 
  
 (h) Borrower will not permit any liens or security interests other than those created by this Agreement and
the Permitted Encumbrances to attach to any of the Collateral, nor permit any of the Collateral to be levied upon under any legal process, nor permit anything to be done that may impair the security intended to be afforded by this Agreement, nor
permit any tangible Collateral to become attached to or commingled with other goods without the prior written consent of Lender. 
  
 6. Remedies Upon Default. Upon an Event of Default under and as defined in the Loan Agreement, Lender may pursue any or all of the following
remedies, without any notice to Borrower except as required below: 
  
 (a) Lender may give written notice of default to Borrower, following which Borrower shall not dispose of, conceal, transfer, sell or encumber any of the Collateral (including, but not limited to, cash proceeds)
without Lender’s prior written consent, even if such disposition is otherwise permitted hereunder in the ordinary course of business. Any such disposition, concealment, transfer or sale after the giving of such notice shall constitute a
wrongful conversion of the Collateral. Lender may obtain a temporary restraining order or other equitable relief to enforce Borrower’s obligation to refrain from so impairing Lender’s Collateral. 
  
 (b) Lender may take possession of any or all of the
Collateral. Borrower hereby consents to Lender’s entry into any of Borrower’s premises to repossess Collateral, and specifically consents to Lender’s forcible entry thereto as long as Lender causes no significant damage to the
premises in the process of entry (drilling of locks, cutting of chains and the like do not in themselves cause “significant” damage for the purposes hereof) and provided that Lender accomplishes such entry without a breach of the peace.

  

 5 

 (c) Lender may dispose of the Collateral at private or public sale. Any required notice
of sale shall be deemed commercially reasonable if given at least five days prior to sale. Lender may adjourn any public or private sale to a different time or place without notice or publication of such adjournment, and may adjourn any sale either
before or after offers are received. The Collateral may be sold in such lots as Lender may elect, in its sole discretion. Lender may take such action as it may deem necessary to repair, protect, or maintain the Collateral pending its disposition.

  
 (d) Lender may recover any or all proceeds of
accounts from any bank or other custodian who may have possession thereof. Borrower hereby authorizes and directs all custodians of Borrower’s assets to comply with any demand for payment made by Lender pursuant to this Agreement, without the
need of confirmation from Borrower and without . making any inquiry as to the existence of an Event of Default or any other matter. Lender may engage a collection agent to collect accounts for a reasonable percentage commission or for any other
reasonable compensation arrangement. 
  
 (e)
Lender may notify any or all account debtors that subsequent payments must be made directly to Lender or its designated agent. Such notice may be made over Lender’s signature or over Borrower’s name with no signature or both, in
Lender’s discretion. Borrower hereby authorizes and directs all existing or future account debtors to comply with any such notice given by Lender, without the need of confirmation from Borrower and without making any inquiry as to the existence
of an Event of Default or as to any other matter. 
  
 (f) Lender may, but shall not be obligated to, take such measures as Lender may deem necessary in order to collect any or all of the accounts. Without limiting the foregoing, Lender may institute any administrative or judicial action that
it may deem necessary in the course of collecting and enforcing any or all of the accounts. Any administrative or judicial action or other action taken by Lender in the course of collecting the accounts may be taken by Lender in its own name or in
Borrower’s name. Lender may compromise any disputed claims and may otherwise enter into settlements with account debtors or obligors under the accounts, which compromises or settlements shall be binding upon Borrower. Lender shall have no duty
to pursue collection of any account, and may abandon efforts to collect any account after such efforts are initiated. 
  
 (g) Lender may, with respect to any account involving uncompleted performance by Borrower, and with respect to any general intangible or
other Collateral whose value may be preserved by additional performance on Borrower’s part, take such action as Lender may deem appropriate including, but not limited, to performing or causing the performance of any obligation of Borrower
thereunder, the making of payments to prevent defaults thereunder, and the granting of adequate assurances to other parties thereto with respect to future performance. Lender’s action with respect to any such accounts or general intangibles
shall not render Lender liable for further performance thereunder unless Lender so agrees in writing. 
  
 (h) Lender may exercise its hen upon and right of setoff against any monies, items, credits, deposits or instruments that Lender may have
in its possession and that belong to Borrower or to any other person or entity liable for the payment of any or all of the Obligations. 
  

 6 

 (i) Lender may exercise any right that it may have under any other document evidencing or
securing the Obligations or otherwise available to Lender at law or equity. 
  
 7. Audits and Examinations. Lender shall have the right, at any time, by its own auditors, accountants or other agents, to examine or audit any of the books and records of Borrower, or the Collateral,
all of which will be made available upon request. Such accountants or other representatives of Lender will be permitted to make any verification of the existence of the Collateral or accuracy of the records that Lender deems necessary or proper. Any
reasonable expenses incurred by Lender in making such examination, inspection, verification or audit shall be paid by Borrower promptly on demand and shall constitute part of the Obligations. 
  
 8. Termination Statement. Following the payment in full of the
Obligations and termination of any commitment of Lender to make any future advances to Borrower, Lender shall send a termination statement with respect to any financing statement filed to perfect Lender’s security interests in any of the
Collateral to Borrower or cause such termination statement to be filed with the appropriate filing officer(s). 
  
 9. Power of Attorney. Borrower hereby constitutes Lender or its designee, as Borrower’s attomey-in-fact with power, upon the occurrence
and during the continuance of an Event of Default, to endorse Borrower’s name upon any notes, acceptances, checks, drafts, money orders, or other evidences of payment or Collateral that may come into either its or Lender’s possession; to
sign the name of Borrower on any invoice or bill of lading relating to any of the accounts receivable, drafts against customers, assignments and verifications of accounts receivable and notices to customers; to send verifications of accounts
receivable; to notify the Post Office authorities to change the address for delivery of mail addressed to Borrower to such address as Lender may designate; to execute any of the documents referred to in Section 4(c) hereof in order to perfect and/or
maintain the security interests and liens granted herein by Borrower to Lender; to do all other acts and things necessary to carry out the purposes of and remedies provided under this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designee shall not be liable for any acts of commission or omission (other than acts of gross negligence or willful misconduct), nor for any error of judgment or mistake of fact or law. This power, being
coupled with an interest is irrevocable until all of the Obligations are paid in full and any and all promissory notes executed in connection therewith are terminated and satisfied. 
  
 10. Binding Effect. This Agreement shall inure to the benefit of Lender’s successors and assigns and
shall bind Borrower’s heirs, representatives, successors and assigns. 
  
 11. Severability. If any provision of this Agreement is held invalid, such invalidity shall not affect the validity or enforceability of the remaining provisions of this Agreement. 
  
 12. Governing Law and Amendments. This Agreement shall be
construed and enforced under the laws of the State of Tennessee applicable to contracts to be wholly performed in such State. No amendment or modification hereof shall be effective except in a writing executed by each of the parties hereto.

  

 7 

 13. Survival of Representations and Warranties. All representations and warranties
contained herein or made by or furnished on behalf of Borrower in connection herewith shall survive the execution and delivery of this Agreement. 
  
 14. Counterparts. This Agreement may be executed in any number of counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. 
  
 15. Construction and Interpretation. Should any provision of this Agreement require judicial interpretation, the parties hereto agree that
the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be more strictly construed against the
party that itself or through its agent prepared the same, it being agreed that Borrower, Lender and their respective agents have participated in the preparation hereof. 
  
 16. Consent to Jurisdiction; Exclusive Venue. Borrower hereby irrevocably consents to the Jurisdiction of the
United States District Court for the Middle District of Tennessee and of all Tennessee state courts sitting in Davidson County, Tennessee, for the purpose of any litigation to which Lender may be a party and which concerns this Agreement or the
Obligations. It is further agreed that venue for any such action shall lie exclusively with courts sitting in Davidson County, Tennessee, unless Lender agrees to the contrary in writing. 
  
 17. Waiver of Trial by Jury. LENDER AND BORROWER
HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL
BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER
IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY, ARISING
OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE
LOAN DOCUMENTS. 
  
 18.
Notice. Any notice under this Agreement shall be made in accordance with the terms of the Loan Agreement. 
  

 8 

 IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement, or have caused this Agreement to be
executed as of the date first above written. 
  

			
	BORROWER:
	
	 TEAMM PHARMACEUTICALS, INC., a
 Delaware
corporation

		
	By:	 	 /s/ Martin G. Baum

	 	 	 Martin G. Baum

	 	 	 President and Chief Executive Officer

			
	
	LENDER:
	
	 HARBINGER MEZZANINE PARTNERS,
 L.P., a
Delaware limited partnership

			
		
	By:	 	Harbinger Mezzanine GP, LLC, its
General Partner

  

					
			
	 	 	 By:
	 	Harbinger Mezzanine Manager, Inc.,
its Manager

							
			
	 	 	 By:
	 	 /s/ John C. Harrison

	 	 	 Title:
	 	 Director

  

 9 

  
 SCHEDULE
3(a) 
  
 PERMITTED
ENCUMBRANCES 
  
 None. 
  

  
 SCHEDULE
3(b) 
  
 PRINCIPAL
PLACE(S) OF BUSINESS 
 AND
LOCATION(S) OF COLLATERAL 
  
 TEAMM Pharmaceuticals, Inc. 
 3000 Aerial Center Parkway, Suite 110 
 Morrisville, NC 27560 
  
 DDN/Obergfel LLC 
 4880 Mendenhall Road 
 Memphis, TN 38141Accentia Assumption of Debt and Security Agreement

 Exhibit 10.39 
  
 ACCENTIA ASSUMPTION OF DEBT AND SECURITY AGREEMENT 
  
 THIS ACCENTIA ASSUMPTION OF DEBT AND SECURITY AGREEMENT (this
“Agreement”), dated as of December 31, 2003, is made and executed by and between ACCENTIA, INC., a Florida corporation (“Accentia”) and McKESSON CORPORATION, a Delaware corporation (“Secured
Party” or “McKesson”) pursuant to that certain “Forbearance Agreement” dated as of December 9, 2003 by and among, McKesson, Accentia and Accent Rx and is based on the Recitals set forth in said Forbearance
Agreement (all of which are incorporated herein by this reference), and also upon following facts and understandings: 
  
 WHEREAS, Accentia currently owns 100% of the stock in Accent Rx, a Florida corporation (“Accent Rx”) which was the successor to American
Prescription Providers, Inc., a Delaware corporation (“APP”). formerly a customer of and borrower from McKesson. 
  
 WHEREAS, contemporaneously with the acquisition by Accent Rx, Inc. of the assets and liabilities of APP effective October 21, 2002, pursuant to a purchase
agreement dated as of October 11, 2002, Accent Rx, Inc. as “Debtor” executed and delivered to McKesson that certain “Assumption of Debt and Security Agreement” dated as of October 29, 2002 (the “Accent Rx Assumption
Agreement”). Among the liabilities of APP assumed by Accent Rx were all obligations owed by APP to McKesson pursuant to that certain “Credit Agreement” executed on or about November 30, 1998 by APP and McKesson (the
“Credit Agreement”), and each of the other “Loan Documents” (as defined in the Credit Agreement) executed pursuant thereto or concurrently therewith, including a “McKesson Health Systems Agreement to Serve
American. Prescription Providers, Inc. as Prime Vendor of Pharmaceuticals” dated as of November 30, 1998 (the “Supply Agreement”), which Supply Agreement is also sometimes referred to in certain of the Loan Documents as a
“Wholesale Supply Agreement” The Credit Agreement, Loan Documents and Supply Agreement were duly modified and amended from time to time since November 30, 1998, including by a “Third Amendment to Credit Agreement” dated as of May
2, 2000. A true and correct copy of the Credit Agreement (including all amendments) is attached hereto as Exhibit A. Ensuing references herein to the “Credit Agreement,” the “Loan Documents,” and the “Supply
Agreement” shall be deemed to refer to such documents as amended from time to time in writing and executed by McKesson. 
  
 WHEREAS, McKesson obtained a duly perfected security interest of first priority in all assets of APP (and in those of all of its subsidiaries) pursuant,
among other things, to a Security Agreement dated as of November 30, 1998 between APP and McKesson, and pursuant to a “Subsidiary Security Agreement” executed as of November 30, 1998 by American Prescription Providers of Georgia, Inc.,
American Prescription Providers of Florida, Inc., and American Prescription Providers of New York, Inc. and by McKesson as “Secured Party” to secure the payment and performance of a “Subsidiary Guaranty” likewise dated as of
November 30, 1998 and executed by American Prescription Providers of Georgia, Inc., American Prescription Providers of Florida, Inc., and American Prescription Providers of New York, Inc. The Subsidiary Security Agreement and Subsidiary Guaranty
were duly amended from time to time, including on October 6, 1999 when American Prescription Providers of Pennsylvania, Inc. was added as a guarantor to the Subsidiary Guaranty and as a “Debtor” to the Subsidiary Security Agreement.

  

 WHEREAS, on or about November 30, 1998, Francis E. O’Donnell, Jr., M.D. and Dennis L. Ryll, M.D.
executed a “Principal Guaranty” for the benefit of McKesson guarantying the payment and performance of all existing and thereafter arising obligations of APP to McKesson relating to the Credit Agreement, the Supply Agreement, the
“Notes” executed pursuant to the Credit Agreement, and all of the other Loan Documents, up to a maximum, in the aggregate of $ 10,000,000 for principal, plus all interest thereon, and all costs and expenses relating to the enforcement of
the Principal Guaranty or the collection of the obligations owed by APP to McKesson. The Principal Guaranty, as it may have been amended in writing from time to time, and the Subsidiary Guaranty (to the extent any signatories thereto have not
dissolved) remain in full force, and effect in accordance with their express written terms, excepting that references therein to APP (by any name or designation, whether “borrower” or “debtor”, etc.) currently refers to Accent Rx
as the successor of APP. Francis E. O’Donnell, Jr., M.D. is a manager of Hopkins Capital Group, LLC (“HCG”). Dennis Ryll, MD is an officer of the general partner of MOAB Investments, LP (“MOAB”). MOAB and HCG,
together, own a majority interest in the outstanding common stock of Accentia, Inc., the parent and 100% shareholder of Accent Rx. Francis E. O’Donnell, Jr., M.D. is a manager of Hopkins Capital Group II, LLC (“HCG II”).

  
 WHEREAS, on or about November 19, 1999, McKesson received a
third party pledge from Regent Court Technologies (a limited liability company of which Francis E. O’Donnell, Jr., M.D. is the managing member) of 1,000,000 shares of stock in Star Scientific, Inc. (or a larger number if the value dips at any
time below $2,250,000) for the purpose of securing all obligations of Regent Court Technologies (hereafter, “RCT”), Francis E. O’Donnell, Jr., M.D., and/or APP (or its successor, Accent Rx) to McKesson. The third party pledge
agreement signed by RCT is included in the definition of “Loan Documents” and remains in full force and effect, excepting that references therein to APP (by any name or designation, whether “borrower” or “debtor”, etc.)
currently refers to Accent Rx as the successor of APP. 
  
 WHEREAS, when APP transferred all of its assets to Accent Rx (and when Accent Rx assumed all liabilities of APP), the assets conveyed by APP remained subject to the duly perfected, security interests in favor of McKesson securing all
obligations owing by APP to McKesson (the “APP Obligations”, including, without limitation, the sums owing under the loans referred to in the previous Recital (all of which APP Obligations were assumed by Accent Rx). Such security
interests were of first priority. 
  
 WHEREAS, APP and Accent Rx
represented to McKesson that (i) each of American Prescription Providers of New York, Inc., American Prescription Providers of Florida, Inc., American Prescription Providers of Georgia, Inc., and American Prescription Providers of Pennsylvania, Inc.
transferred all of their respective assets (if any) to either Accent Rx or APP (which then transferred those assets to Accent Rx), (ii) American Prescription Providers of Florida, Inc. has been administratively dissolved and wound up its affairs,
(iii) American Prescription Providers of Georgia, Inc. has dissolved, (iv) American Prescription Providers of New York, Inc. has been dissolved, and (v) American Prescription Providers of Pennsylvania, Inc. has not yet dissolved, but has ceased
operations, and is likely to dissolve or be dissolved in the near term. 
  

 2 

 WHEREAS, to induce McKesson not to declare a default and resort to its creditor’s rights and
remedies with regard to the APP Obligations and the collateral therefor due to the sale by APP of its assets to Accent Rx, (1) Accent Rx confirmed its assumption of all obligations owing to McKesson without defense or offset and formally granted to
McKesson a security interest in all existing and thereafter acquired assets of Accent Rx as provided in the Accent Rx Assumption Agreement, and (2) each of RCT, the signatories of the Principal Guaranty, and the signatories of the Subsidiary
Guaranty reaffirmed their obligations to McKesson, albeit substituting Accent Rx for APP as the obligor of the obligations guaranteed by them as guarantors or third party obligors. 
  
 WHEREAS, as of November 30, 2003, the components of the APP Obligations excluding the trade debt owing under the Supply
Agreement equaled the following: 
  

													
	 DEBT

	  	PRINCIPAL

	  	INTEREST

	  	FEES1 &
LATE
CHARGES

	  	TOTAL

	 1. Revolver
	  	$	2,202,182.36	  	$	103,294.93	  	$	30,005.05	  	$	2,335,482.34
	 2. Term Loan
	  	$	3,900,000.00	  	$	222,587.63	  	$	385,217.29	  	$	4,507,804.92
	 TOTAL:
	  	$	6,102,182.36	  	$	325,882.56	  	$	415,222.79	  	$	6,843,287.26

  
 Interest has accrued since November
30, 2003 on the principal amounts of the foregoing obligations at a per diem rate of $791.49, and will continue to do so until paid in full, assuming LIBOR rate stays at 1.1694%. The trade debt owing to McKesson by Accent Rx pursuant to the Supply
Agreement totaled $4,610,073 as of November 30, 2003 and is currently all due and payable. 
  
 WHEREAS, in mid-2003, Accentia approached McKesson and requested that McKesson loan to Accentia the sum of $2,500,000 with which Accentia would purchase not less than 81% of the outstanding shares in BioVest
International, Inc. (“BioVest”). McKesson loaned to Accentia $2,500,000.00 (the “Bridge Loan”), which Bridge Loan is evidenced by a promissory note dated as of June 12, 2003 (the “Bridge Note”), in
order to fund Accentia’s purchase of an 81% stake in BioVest. Concurrently with the execution of the Bridge Note, Accentia and certain of its affiliates executed in favor of McKesson certain security documents (together with the Bridge Note,
called the “Bridge Loan Documents”), including a “Third Party Pledge Agreement” executed by Hopkins Capital Group II, LLC (i.e., “HCG II”) as of June 12, 2003 and a “Stock Pledge Agreement”
executed by Accentia as of June 12, 2003. 

	1	Exclusive of attorneys’ fees and costs for which Accent Rx must reimburse McKesson.

  

 3 

 WHEREAS, on or about October 10, 2003, the “Third Party Pledge Agreement” dated as of June 12,
2003 and executed by HCG II was amended by that certain “First Amendment to Third Party Stock Pledge Agreement” executed by McKesson and HCG II. References to the Third Party Pledge Agreement signed by HCG II shall be deemed to refer to
said Third Party Pledge Agreement as amended by said First Amendment to Third Party Stock Pledge Agreement dated as of October 10, 2003. The collateral described in the Bridge Loan Documents (as amended) is defined as the “Bridge Loan
Collateral.” 
  
 WHEREAS, Accentia has requested that
McKesson (a) forbear from exercising its creditors’ rights and remedies with regard to certain obligations of Accentia as more particularly addressed in the Forbearance Agreement referenced above, (b) permit the sale of the assets of Accent Rx
to a third party (“Buyer”) free and clear of the liens and claims of McKesson on such assets relating to the APP Obligations, notwithstanding that the sale proceeds will not pay the obligations owed by Accent Rx to McKesson in full, and
(c) allow Accentia to assume the indebtedness still owing by Accent Rx to McKesson, subject to the modification of the repayment terms thereof. McKesson has set forth the terms upon which it is willing to forbear vis-a-vis Accentia (and Accent Rx,
for a limited period) and the terms upon which it will consent to the sale of the assets of Accent Rx in the Forbearance Agreement. McKesson is willing to accommodate the other request made by Accentia subject to the terms and conditions of this
Agreement, including that Accentia shall assume all obligations owed by Accent Rx to McKesson, including the APP Obligations. 
  
 NOW THEREFORE, for fair and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Accentia and McKesson hereby agree as
follows: 
  
 SECTION 1 Definitions: Interpretation.

  
 (a) All capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. 
  
 (b) As used in this Agreement (including the Preamble hereof), the following terms shall have the following meanings: 
  
 “Accent Rx Debt Documents” means the Accent Rx Assumption Agreement, the Credit Agreement (as amended, including by the Third Amendment
to Credit Agreement), the other Loan Documents, the Supply Agreement, and any documents or agreements executed pursuant to any of them, as any may have been amended in writing from time to time. 
  
 “Assumed Indebtedness” means all indebtedness owing as of
the date hereof by Accent Rx to McKesson (or any affiliate of McKesson), whether liquidated or unliquidated, whether or not evidenced by a promissory note or other instrument, whether or not contingent, and whether or not specifically identified in
this Agreement or in the Accent Rx Debt Documents, including but no limited all of the APP Obligations previously assumed by Accent Rx., and all fees, costs and expenses for which Accent Rx was required to reimburse McKesson or any of
McKesson’s affiliates. 
  

 4 

 “BioVest” means Bio Vest International, Inc. (“BioVest”), the
corporation in which Accentia acquired 81% of the outstanding shares on a fully diluted basis using, in part, the proceeds of a “Bridge Note” payable to the order of McKesson by Accentia in the original principal amount of $2,500,000 and
dated as of June 12, 2003. 
  
 “Collateral” has
the meaning set forth in Section 4. 
  
 “Contract
Rate” means a rate of interest equal to ten percent (10%) per annum based on a 360-day year, for actual days elapsed. 
  
 “Credit Agreement” means that certain Credit Agreement referred to in the Recitals above as amended from time to time. 
  
 “Default Rate” means the rate interest accrues on the
Assumed Indebtedness after an Event of Default occurs equal to the Contract Rate plus 5%. 
  
 “Documents” means this Agreement, the Accent Rx Assumption Agreement, the Forbearance Agreement, the Bridge Loan Documents, the Loan Documents, the Supply Agreement, and all other certificates,
documents, agreements and instruments delivered at any time to Secured Party pursuant to or in connection with this Agreement, the Accent Rx Assumption Agreement, the Credit Agreement, the Supply Agreement (as any may have been or may be amended
from time to time in writing) or in connection with the Obligations, including any documents, agreements or certificates delivered to fulfill a Condition Subsequent defined in Section 26. 
  
 “Event of Default” has the meaning set forth in Section 12. 
  
 “Lien” means any mortgage, deed of trust, pledge, security
interest, assignment, deposit arrangement, charge or encumbrance, lien, or other type of preferential arrangement. 
  
 “Loans” means each of the “Revolving Loans,” the “Term Loan,” any sums financed under the Supply Agreement, the sums
still owing (if any) under the lease financing facility provided by McKesson to APP, and any other loan made by McKesson to APP, Accent Rx or Accentia, currently or (as to Accentia) in the future. 
  
 “Obligations” means: 
  
 (i) all presently existing indebtedness, liabilities and
other obligations of APP and/or Accent Rx to Secured Party (each and all of which have been and will be assumed by Accentia, subject to no defenses, counterclaims or offsets whatsoever), plus 
  
 (ii) all presently existing or hereafter arising
indebtedness, liabilities and other obligations of Accentia to Secured Party (including, but not limited to those formerly of APP and assumed first by Accent Rx and now by Accentia), 

  

 5 

 
in each case, whether created under, arising out of or in connection with this Agreement, the Accent Rx Assumption Agreement, the Credit Agreement, any of
the other Documents, the Forbearance Agreement, the Bridge Loan Documents (as that term is defined in the Forbearance Agreement), or otherwise, including, without limitation, all unpaid principal of any Loans, all interest accrued thereon, all fees
and all other amounts payable by Accent Rx or Accentia (or APP) to Secured Party thereunder or in connection therewith, or in connection with the Supply Agreement or any other contract in favor of Secured Party to which Accent Rx or Accentia (or
APP) is a party (including without limitation, the Bridge Loan Documents), and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and including interest that accrues after the commencement
by or against Accent Rx or Accentia (or APP) of any bankruptcy or insolvency proceeding naming the Accent Rx or Accentia (or APP) as debtor in such proceeding. 
  

“Permitted Lien” means (i) any Lien in favor of Secured Party; (ii) duly perfected Liens to secure purchase money indebtedness for the
purchase of equipment by Accentia in the ordinary course of its business so long as the Lien only encumbers the equipment that is purchased and only secures the purchase price thereof, and (iii) any existing duly perfected Lien on the assets of
Accentia (or Teamm Pharmaceuticals, Inc.) to secure the Senior Credit Facility. 
  
 “Person” means an individual, corporation, partnership, joint venture, trust, unincorporated organization, governmental agency or authority, or any other entity of whatever nature. 
  
 “Remaining Debt Due Date” shall be September 1,2004, provided
that if and only if (a) no default or Event of Default has occurred under this Agreement through September 1, 2004, and (b) Accentia pays to McKesson in cash in good, collected funds an “Extension Fee” of $39,000 on or before September
1, 2004, then “Remaining Debt Due Date” shall be extended until January 15, 2005. 
  
 “Senior Credit Facility” means that certain existing credit facility provided to Accentia by Harbinger Mezzanine Partners; LP which presently aggregates $5,000,000 in principal outstanding, but which
may be increased to equal as much as $13,000,000, for principal, in the future (but no more) and may be funded by a syndicate of lenders of which Harbinger Mezzanine Partners, LP is a member, and shall also include any replacement facility provided
by any lender or group of lenders, not affiliated with Accentia, which lender (or group of lenders) shall be satisfactory to McKesson and which replacement facility shall be made on terms and conditions satisfactory to McKesson. 
  
 “Subsidiary” means any of Teamm Pharmaceuticals, Inc., The
Analytica Group, Inc., BioVest and any other entity in which Accentia owns an equity interest in excess of 51% of all direct or indirect ownership interests. 
  
 “UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of California. 
  

 6 

 (c) Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the
meanings assigned to them in the UCC. 
  
 (d) In this Agreement,
(i) the meaning of defined terms shall be equally applicable to both the singular and plural forms of the terms defined; and (ii) the captions and headings are for convenience of reference only and shall not affect the construction of this
Agreement. 
  
 SECTION 2 Confirmation of Assumption of
Obligations of APP and Accent Rx. Accentia hereby acknowledges, agrees, represents and warrants to McKesson that each of the Recitals set forth at the outset of this Agreement is true and correct (and that there is no longer any opportunity to
contest the debt figures based on manifest error as was reserved in the Forbearance Agreement), and that Accentia has and hereby does assume each and every debt, obligation, and liability owed by APP and/or Accent Rx to McKesson of every kind or
nature, whether such debt, obligation, arid liability was known, unknown, liquidated, unliquidated, disclosed, or undisclosed, existing or contingent, and whether or not explicitly listed in the Recitals or evidenced by a promissory note.
Furthermore, Accentia has no known or unknown defenses, counterclaims, rights of offset or set off, recoupment, or any other causes of action against McKesson or any Person that would prevent or interfere with the full collection and enforcement by
McKesson of all such assumed debts, obligations, and liabilities, and/or the full enforcement of each of the Documents against Accentia as though it were “Borrower” or APP or Accent Rx in accordance with the express written terms of such
Documents as the same may be amended in writing from time to time. Accentia further acknowledges and agrees that there are no oral understandings between Accentia and McKesson and that any purported agreement with McKesson must be in writing and
signed by McKesson in order to be enforceable against McKesson. 
  
 SECTION 3 [Omitted]. 
  
 SECTION 4 Security
Interest 
  
 (a) As security for the payment and performance
of the Obligations, Accentia hereby grants to McKesson a security interest in all of Accentia’s right, title and interest in, to and under all of its personal property, wherever located and whether now existing or owned or hereafter acquired or
arising, including all accounts, chattel paper, commercial tort claims, deposit accounts, documents, equipment (including all fixtures), general intangibles, intellectual property, patents, trademarks, service marks, trade names, trade secrets,
customer lists, copyrights, payment intangibles, instruments, inventory, investment property (including all stock it holds in Teamm Pharmaceuticals, Inc., The Analytica Group, Inc. and Bio Vest Inc., hereafter called the “Subsidiary
Stock”), membership interests, letter-of-credit rights, money and all products, proceeds and supporting obligations of any and all of the foregoing (collectively, the “Collateral”). Notwithstanding the foregoing, except for
fixtures (to the extent covered by Article 9 of the UCC), such grant of a security interest shall not extend to, and the term “Collateral” shall not include, any asset which would be real property under the law of the jurisdiction in which
it is located. 
  

 7 

 (b) Anything herein to the contrary notwithstanding, (i) Accentia shall remain liable under any
contracts, agreements and other documents included in the Collateral, to the extent set forth therein, to perform, all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by
Secured Party of any of the rights hereunder shall not release Accentia or Accent Rx (or APP) from any of its duties or obligations under such contracts, agreements and other documents included in the Collateral, and (iii) Secured Party shall not
have any obligation or liability under any contracts, agreements and other documents included in the Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of Accentia (and/or those
of APP or Accent Rx) thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Collateral hereunder. 
  

(c) This Agreement shall create a continuing security interest in the Collateral which shall remain in effect until terminated in accordance with
Section 23 hereof. 
  
 (d) Accentia hereby authorizes Secured
Party to file (with or without Accentia’s signature), at any time and from time to time thereafter, all financing statements, assignments, continuation financing statements, termination statements, account control agreements, and other
documents and instruments, in form reasonably satisfactory to Secured Party, and take all other action, as Secured Party may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the security interest
of Secured Party in the Collateral and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, Accentia ratifies and authorizes the filing by Secured Party of any financing statements filed prior to the date
hereof. Accentia will cooperate with Secured Party in obtaining control (as defined in the UCC) of Collateral consisting of deposit accounts, investment property, letter of credit rights and electronic chatter paper. Accentia will join with Secured
Party in notifying any third party who has possession of any Collateral of Secured Party’s security interest therein and obtaining an acknowledgment from the third party that it is holding the Collateral for the benefit of Secured Party.
Accentia will not create any chattel paper without placing a legend on the chattel paper acceptable to Secured Party indicating that Secured Party has a security interest in the chattel paper. 
  
 (e) Accentia acknowledges and agrees that the security agreements granted in
this Section 4 shall be subject and junior to only those duly perfected security interests granted by Accentia to secure the Senior Credit Facility. 
  
 SECTION 5 Conditions Precedent to Bank Obligations. It shall be a condition precedent to the enforceability of each and every obligation of
McKesson hereunder, including the obligations set forth in Section 6 below, that each and all of the following shall be and remain satisfied on or before December 15, 2003: 
  
 (a) This Agreement. McKesson shall have received an original counterpart of this Agreement, duly executed by
Accentia. 
  
 (b) Forbearance Agreement. McKesson shall
have received an original counterpart of the Forbearance Agreement, duly executed by Accentia and Accent Rx, and all conditions precedent to the effectiveness of the Forbearance Agreement shall have been satisfied. 
  

 8 

 (c) New Security Agreements. 
  
 i) RCT and HCG II shall have duly executed and delivered to McKesson a security agreement (the “New HCG
II/RCT Security Agreement”) in substantially the form of Exhibit B attached hereto granting to McKesson (or confirming the grant to McKesson) of a lien of first priority in certain marketable securities more specifically described
therein, which in the aggregate shall have a value of at least $8 million as of the execution and delivery of this Assumption Agreement to McKesson, which stock shall include any such stock previously pledged to McKesson, including under the Bridge
Loan Documents, subject to the following: in the event that BioVest becomes a publicly traded company, Accentia shall have the right, so long as no Event of Default has occurred and is continuing, to substitute $10,000,000 million worth of
unrestricted BioVest common stock for said marketable securities pledged to McKesson as collateral for the remaining indebtedness owed by Accentia to McKesson. To effect such substitution (and as a further condition to such substitution), Accentia
shall have delivered to McKesson a duly executed pledge agreement in form and substance satisfactory to McKesson relating to such stock of BioVest, shall have paid all fees and costs (including attorneys’ fees) associated with documenting the
substitution and satisfying the conditions to effectuating the substitution, shall have paid to McKesson any sums payable by HCG II or RCT to McKesson under the terms of the New HCG II/RCT Security Agreement, and shall have taken all steps necessary
(including physical delivery of the stock and delivery of stock powers signed in blank) such that upon substitution, McKesson shall have a duly perfected security interest of no less than first priority in all such BioVest stock. Upon the
satisfaction of all such conditions, including (but not limited to) that McKesson has a duly perfected security interest of no less than first priority in the common stock of BioVest after BioVest has become a publicly traded company, and provided
no Event of Default has occurred, and that McKesson has been reimbursed for all fees and costs (including attorneys’ fees) incurred in connection with such substitution of collateral and the satisfaction of the conditions to substitution,
McKesson will release the Pledged Collateral described in this Agreement from the lien in favor of McKesson. 
  
 ii) McKesson shall have received a security agreement (the “New HCG/MOAB Security Agreement”) in substantially the form of
Exhibit K attached hereto duly executed by HCG, MOAB and any subsidiaries of either of them with any interest in the stock of Accentia, pursuant to which security agreement McKesson shall be granted of a lien of first priority in all stock in
Accentia that is (or becomes) directly or indirectly owned or controlled by HCG or MOAB. 
  
 (d) Reaffirmation by Guarantors and Third Party Pledgors. Each of Francis E. O’Donnell, Jr., M.D., Dennis L. Ryll, M.D., HCG II, RCT and the other signatories thereto shall have executed the “Consent,
Reaffirmation and Release Agreement” in the form of Exhibit C attached hereto (the “Reaffirmation Agreement”), reaffirming their respective obligations under the Principal Guaranty and/or their third party pledge
agreements and acknowledging that the same remain in full force and effect with respect to the Obligations arid notwithstanding the assumption by Accentia of the APP Obligations and the other obligations owed by Accent Rx to McKesson. 
  

 9 

 (e) Interest Payment. McKesson shall have received payment in full of all interest that has
accrued from and after December 31,2003 through January 31,2004 on the Assumed Indebtedness at the rate applicable as provided in this Agreement. 
  
 (f) Borrowing Resolution. Each of Accentia, Teamm Pharmaceuticals, Inc. and The Analytica Group, Inc. shall have delivered to McKesson duly
executed resolutions of their respective Boards of Directors evidencing the power and authority of the person signing this Agreement and/or any other document executed pursuant hereto by any of Accentia, Teamm Pharmaceuticals, Inc. and The Analytica
Group, Inc. on behalf of the relevant entity to bind the corporation. 
  
 (g) Capitalization Table. Accentia shall have delivered to McKesson a capitalization table which discloses fully and accurately all direct and indirect ownership of Teamm Pharmaceuticals, Inc., The Analytica Group, Inc., BioVest
International, Inc., Accentia, Inc., HCG and MOAB. Said table shall be attached hereto as Exhibit E. 
  
 (h) [Intentionally omitted]. 
  
 (i) New Subsidiary Guaranties. Each of Teamm Pharmaceuticals, Inc. and The Analytica Group, Inc. shall have duly executed and delivered to McKesson
a guaranty of all obligations of Accentia to McKesson (the “New Subsidiary Guaranty”) in substantially the form of Exhibit F attached hereto. 
  

(j) New Subsidiary Security Agreements. Each of Teamm Pharmaceuticals, Inc. and The Analytica Group, Inc. shall have duly executed and delivered
to McKesson a security agreement, encumbering all their respective assets and securing the timely payment and performance of their respective obligations under the New Subsidiary Guaranty (the “New Subsidiary Security Agreement”) in
substantially the form of Exhibit G attached hereto, and McKesson shall be, and hereby is authorized to file such UCC-1 financing statements as are necessary or appropriate to perfect McKesson’s security interest in the collateral
described in each of the New Subsidiary Security Agreements. In addition, the security interests in the assets of The Analytica Group, Inc. and/or Teamm Pharmaceuticals, Inc. shall be junior only to Permitted Liens as defined in the New Subsidiary
Security Agreement). 
  
 (k) [Intentionally omitted.] 

 
 (1) Perfection in Stock of Subsidiaries. McKesson shall have
received possession and/or control of the Subsidiary Stock. 
  
 (m) Receipt of $4,000,000 from Sale of Accent Rx. On the earlier to occur of December 15,2003, and the closing date of the sale of all assets of Accent Rx (as was permitted subject to the terms and conditions of the Forbearance
Agreement), McKesson shall have received a payment equal to the greater of: (x) the entire proceeds received as of that date by Accentia from the sale of the assets of Accent Rx, and (y) $4,000,000, 
  

 10 

 (n) [Intentionally omitted.] 
  
 (o) Fees and Costs. McKesson shall have received payment in full of all fees expenses, and costs (including
attorneys’ fees and costs) incurred in negotiating and documenting this Agreement, the Forbearance Agreement, the Bridge Loan Documents, all other agreements and documents executed pursuant to any of the foregoing or concurrently with any of
the foregoing, as well as the fees, costs and expenses incurred by McKesson in the preparation of any proposal letters or term sheets relating to Accent Rx, Accentia, or any indebtedness assumed or incurred by either of them. 
  
 SECTION 6 Modification of Repayment Terms for Assumed Indebtedness.
Subject to the satisfaction of the conditions precedent set forth in Section 5 above, McKesson agrees to substitute the following payment schedule for the payment schedule that otherwise was operative under the Accent Rx Debt Documents (as to which
former payment schedule, Accent Rx was in default), provided that interest shall be payable as set forth in Section 7 below: 
  
 (a) Remaining Term Debt. By no later than June 28,2004, all indebtedness relating to the Accent Rx Debt Documents (all of which obligations shall
have been assumed by Accentia), all other Assumed Indebtedness, and any other interest bearing indebtedness of Accentia of any kind owed to McKesson (or any affiliate of McKesson) shall have been paid down in full, with the exception of no more than
$3,900,000 which amount shall constitute the remaining principal of the term debt obligations assumed by Accentia and, which remaining debt shall be referred to herein as the “Remaining Term Debt”. 
  
 (b) Payment of Remaining Term Debt. The Remaining Term Debt, plus
accrued and unpaid interest on the principal portion thereof, together with any fees, costs and expenses incurred by McKesson in connection with the Assumed Indebtedness, this Agreement, or any other indebtedness of Accentia (or Accent Rx) to
McKesson (or to any affiliate of McKesson), or in connection with the collateral therefor (for all of which Accentia must reimburse McKesson), shall be paid in full (subject to Section 6(c) below) on or before the Remaining Debt Due Date (unless and
to the extent McKesson converts any portion thereof to equity, which McKesson may elect to do in its sole and absolute discretion on terms no less favorable than the proposed Series E financing that Accentia expects to obtain in 2003, all as more
particularly set forth in Section 25 below). 
  
 (c) Potential
Credit Against Remaining Term Debt. So long as no Event of Default has occurred and Accentia has paid all of the Remaining Debt, plus interest, fees and costs as and when due, then on the Remaining Debt Due Date (or on any earlier date) when
Accentia is prepared to pay all outstanding sums owing to McKesson by Accentia under this Agreement or otherwise, Accentia may hold back from such final payment in full the sum of $400,000 which shall be deemed attributable to the fees and late
charges that have accrued through November 30, 2003 as reflected in the Recitals set forth above. The $400,000 debt related to the $400,000 payment held back by Accentia shall remain outstanding, but shall not accrue interest. If after 91 days from
such date of final and complete payment, (i) Accentia has not become a debtor in a case under title 11 of the United States Code (the “Bankruptcy Code”), (ii) McKesson has been able to retain all payments received from Accentia or on
account of the indebtedness owed by Accentia, and (iii) none of the payments is the subject of any actions to 

  

 11 

 
avoid such payments or to recover them as a fraudulent transfer, preferential payment or otherwise regardless of whether in the context of a
bankruptcy, then such $400,000 remaining debt shall be forgiven. 
  
 SECTION 7 Interest on Assumed Obligations. 
  
 (a)
From and after the date hereof, but prior to the occurrence of an Event of Default, interest shall accrue on the principal portion of the Assumed Indebtedness at a rate per annum equal to the Contract Rate, based on a 360-day year for actual days
elapsed. After the occurrence of an Event of Default, interest shall accrue on the principal portion of all obligations. owing by Accentia to McKesson (or to any affiliate of McKesson) at a rate equal to the Default Rate, based on a 360-day year for
actual days elapsed. In the absence of acceleration after an Event of Default, accrued interest shall be payable to McKesson (or the applicable affiliate, if any) monthly in arrears on the first business day of each calendar month for the previous
month ending commencing with December 1, 2003. 
  
 (b) In no event
shall the interest rate or rates payable under this Agreement the Forbearance Agreement or in connection with the Assumed Indebtedness, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem applicable. Accentia and McKesson, in executing this Agreement, the Forbearance Agreement and the other Documents, intend legally to agree upon the rate or rates of interest and
manner of payment stated within it; provided, however, that, anything contained herein or in any Document to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law,
then, ipso facto as of the date of this Agreement and/or such other Document, Accentia is and shall be liable only for the payment of such maximum as allowed by law, and payment received from Accentia in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess. 
  
 SECTION 8 Representations and Warranties. Accentia represents and warrants to McKesson that: 
  
 (a) Accentia is a corporation duly organized, validly existing and in good
standing under the laws of the state of Florida and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. 
  

(b) The execution, delivery and performance by Accentia of this Agreement have been duly authorized by all necessary action of Accentia and its Board
of Directors, and this Agreement constitutes the legal, valid and binding obligation of Accentia, enforceable against Accentia in accordance with its terms. 
  
 (c) No authorization, consent, approval, license, exemption of, or filing or registration with, any governmental authority or agency, or approval or
consent of any other Person, is required for the due execution, delivery or performance by Accentia of this Agreement, except for any filings necessary to perfect any Liens on any Collateral. 
  

 12 

 (d) Accentia’s chief executive office and principal place of business (as of the date of this
Agreement) is located at the address set forth in Schedule 1; Accentia’s exact legal name is as set forth in the first paragraph of this Agreement; and all other locations where Accentia conducts business or Collateral is kept (as of the
date of this Agreement) are set forth in Schedule 1. 
  
 (e) Schedule 1 also accurately sets forth the proper names (as reflected in their official formation or registration documentation as filed with the appropriate office of their jurisdictions of organization), jurisdictions of
organization, and chief executive offices of each, of HCG, HCG II, RCT, Accent Rx, BioVest, Teamm Pharmaceuticals, Inc., and The Analytica Group, Inc. 
  
 (f) Accentia has rights in or the power to transfer the Collateral, and Accentia is the sole and complete owner of the Collateral, free from any Lien
other than Permitted Liens. 
  
 (g) All of the U.S. and foreign
patents and patent applications, copyrights (whether or not registered), applications for copyright, trademarks, service marks and trade names (whether registered or unregistered), and applications for registration of such trademarks, service marks
and trade names, which are owned by any of Accentia, Accent Rx, Teamm Pharmaceuticals, Inc., The Analytica Group, Inc., HCG and RCT are set forth in Schedule 2. 
  
 (h) Accentia is not and will not become a lessee under any real property lease or other agreement governing the location of
Collateral at the premises of another Person pursuant to which the lessor or such other Person may obtain any rights in any of the Collateral, and no such lease or other such agreement now prohibits, restrains, impairs or will prohibit, restrain or
impair such Accentia’s right to remove any Collateral from the premises at which such Collateral is situated, except for the usual and customary restrictions contained in such leases of real property. 
  
 (i) No control agreements exist with respect to any Collateral other than
control agreements in favor of Secured Party. 
  
 (j) Accentia
does not have or hold any chattel paper, letter-of-credit rights or commercial tort claims except as disclosed to Secured Party. 
  
 (k) The names and addresses of all financial institutions and other Persons at which Accentia, Accent Rx, Teamm Pharmaceuticals, Inc., and/or The
Analytica Group, Inc. maintains a deposit and securities accounts, and the account numbers and account names of such accounts, are set forth in Schedule 1. 
  
 SECTION 9 Covenants. So long as any of the Obligations remain unsatisfied, Accentia agrees that: 
  
 (a) Accentia shall deliver to McKesson not later than the 30th day after each fiscal quarter consolidated income statements, balance sheets and statements of cash flow, each prepared in
accordance with GAAP. 
  

 13 

 (b) Accentia shall, deliver to McKesson a copy of any and all reports, statements, business plans, and
other documentation, which it provides to any of its shareholders or to the members of its Board of Directors and such deliveries to McKesson shall be contemporaneous with the deliveries to such shareholders or Board members. 
  
 (c) Accentia shall appear in and defend any action, suit or proceeding which
may affect to a material extent its title to, or right or interest in, or McKesson’s right or interest in, the Collateral, and shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the
Collateral. 
  
 (d) Accentia shall comply in all material respects
with all laws, regulations and ordinances, and all policies of insurance, relating in a material way to the possession, operation, maintenance and control of the Collateral. 
  
 (e) Accentia shall give 15 days’ prior written notice to McKesson before making: 
  
 i) Any change in the location of Accentia’s chief
executive office or principal place of business and any change in the location of the chief executive office or principal place of business of any of its Subsidiaries; 
  
 ii) any change in the locations set forth in Schedule 1; 
  
 iii) any change in its name or that of any Subsidiary;

  
 iv) any changes in its identity or structure
or that of any Subsidiary in any manner which might make any financing statement filed hereunder (or under any of the documents executed pursuant hereto) incorrect or misleading; 
  
 v) any change in its registration as an organization (or any new such registration) or any change in the
registration of any Subsidiary as an organization (or any new such registration); or 
  
 vi) any change in its jurisdiction of organization or that of any Subsidiary; 
  
 provided that Accentia shall not locate any Collateral outside of the United States
nor shall Accentia (or any subsidiary) change its jurisdiction of organization to a jurisdiction outside of the United States. 
  
 (f) Accentia shall carry and maintain in full force and effect, at its own expense and with financially sound and reputable insurance companies, insurance
with respect to the Collateral in such amounts, with such deductibles and covering such risks as is customarily carried by companies engaged in the same or similar businesses and owning similar properties in the localities where Accentia operates.
Insurance on the Collateral shall name Secured Party as additional insured and as loss payee. Upon the request of Secured Party, Accentia shall furnish Secured Party from time to time with full information as to the insurance carried by it and, if
so requested, copies of all such insurance policies. Accentia shall also furnish to Secured Party at 

  

 14 

 
least once in each calendar year a certificate of Accentia’s insurance broker or other insurance specialist stating that all premiums then due on the
policies relating to insurance on the Collateral have been paid and that such policies are in full force and effect. All insurance policies required under this subsection (f) shall provide that they shall not be terminated or cancelled nor shall any
such policy be materially changed without at least 30 days’ prior written notice to Accentia and Secured Party. Receipt of notice of termination or cancellation of any such insurance policies or reduction of coverage’s or amounts
thereunder shall entitle Secured Party to renew any such policies, cause the coverage’s and amounts thereof to be maintained at levels required pursuant to the first sentence of this subsection (f) of otherwise to obtain similar insurance in
place of such policies, in each case at the expense of Accentia. 
  
 (g) All insurance policies shall provide that any losses payable thereunder be payable directly to Secured Party unless written authority to the contrary is obtained. In the event that Accentia shall receive any proceeds of any insurance
(other than in respect of third party liability insurance) it shall immediately cause such proceeds to be paid over to Secured Party. If the Collateral shall be materially damaged or destroyed, in whole or in part, by fire or other casualty,
Accentia shall give prompt notice thereof to Secured Party. Additionally, Accentia shall in any event promptly give Secured Party notice of all reports made to insurance companies in respect of any claim in excess of $10,000. No settlement on
account of any loss covered by insurance shall be made for less than insured value without the consent of Secured Party. In its sole and absolute discretion Secured Party may apply all or any portion of such insurance proceeds to the payment of
Obligations or may release all or any portion thereof to Accentia. 
  
 (h) Accentia shall keep separate, accurate and complete books and records with respect to the Collateral, disclosing Secured Party’s security interest hereunder. 
  
 (i) Accentia shall not surrender or lose possession of (other than to Secured Party), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein, except in the ordinary course of business or unless such Collateral is replaced by comparable Collateral of similar value; provided that no such disposition or
transfer of Collateral consisting of investment property or instruments shall be permitted while any Event of Default exists. 
  
 (j) Accentia shall keep the Collateral free of all Liens except Permitted Liens. 
  
 (k) Accentia shall pay and discharge all taxes, fees, assessments and governmental charges or levies imposed upon it with
respect to the Collateral prior to the date on which penalties attach thereto, except to the extent such taxes, fees, assessments or governmental charges or levies are being contested in good faith by appropriate proceedings. 
  
 (l) Accentia shall maintain and preserve its legal existence, its rights to
transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of the Collateral, except in connection with any transactions expressly permitted by the
Credit Agreement or any other Document. 
  

 15 

 (m) Upon the request of Secured Party, Accentia shall (i) immediately deliver to Secured Party, or an
agent designated by it, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment, all documents and instruments, all certificated securities with respect to any investment property, all letters of credit and all
accounts and other rights to payment at any time evidenced by promissory notes, trade acceptances or other instruments, (ii) cause any securities intermediaries to show on their books that Secured Party is the entitlement holder with respect to any
investment property, and/or obtain account control agreements in favor of Secured Party from such-securities intermediaries, in form and substance satisfactory to Secured Party, with respect to any investment property, as requested by Secured Party,
(iii) provide such notice, obtain such acknowledgments and take all such other action, with respect to any chattel paper, documents and letter-of credit rights, as Secured Party shall reasonably specify, and (iv) obtain consents from any letter of
credit issuers with respect to the assignment to Secured Party of any letter of credit proceeds. 
  
 (n) Accentia shall at any reasonable time and from time to time permit Secured Party or any of its agents or representatives to visit the premises of
Accentia and inspect the Collateral and to examine and make copies of and abstracts from the records and books of account of Accentia. 
  
 (o) Accentia shall: (i) with such frequency as Secured Party may require, furnish to Secured Patty such lists of customers and other information relating
to the accounts and other rights to payment as Secured Party shall reasonably request (which information Secured Party agrees to treat as confidential so long as doing so would not interfere with the rights of Secured Party as a secured creditor or
its ability to assign participations or interests in the Loans or the other Documents to third parties consistent with the provisions of the other Documents); (ii) give only normal discounts, allowances and credits as to accounts and other rights to
payment, in the ordinary course of business, according to normal trade practices utilized by Accentia, and enforce all accounts and other rights to payment strictly in accordance with their terms, except that Accentia may grant any extension of the
time for payment or enter into any agreement to make a rebate or otherwise to reduce the amount owing on or with respect to, or compromise or settle for less than the full amount thereof, any account or other right to payment, in the ordinary course
of business, according to normal and prudent trade practices utilized by Accentia; and (iii) upon the request of Secured Party (A) at any time, notify all or any designated portion of the account debtors and other obligors on the accounts and other
rights to payment of the security interest hereunder, and (B) upon the occurrence and during the continuance of an Event of Default, notify the account debtors and other obligors on the accounts and other rights to payment or any designated portion
thereof that payment shall be made directly to Secured Party or to such other Person or location as Secured Party shall specify. 
  
 (p) Accentia shall (i) notify Secured Party of any material claim made or asserted against the Collateral by any Person and of any change in the
composition of the Collateral or other event which could materially adversely affect the value of the Collateral or Secured Party’s Lien thereon; (ii) furnish to Secured Party such statements and schedules further identifying and describing the
Collateral and such other reports and other information in connection with the Collateral as Secured Party may reasonably request, all in reasonable detail; and (iii) upon reasonable request of Secured Party make such demands and requests for
information and reports as Accentia is entitled to make in respect of the Collateral, provided that none of the foregoing need be duplicative of other reports prepared and provided to Secured Party pursuant to the other 

  

 16 

 
Documents, provided that Accentia identifies for Secured Party where the requested information can be located in the existing reports. 
  
 (q) If and when Accentia shall obtain rights to any new patents, trademarks,
service marks, trade names or copyrights, or otherwise acquire or become entitled to the benefit of, or apply for registration of, any of the foregoing, Accentia (i) shall promptly notify Secured Party thereof and (ii) hereby authorizes Secured
Party to modify, amend, or supplement any schedules, exhibits, or certificates provided in connection with any of the Documents and relating to any Collateral and from time to time to include any of the foregoing and make all necessary or
appropriate filings with respect thereto. 
  
 (r) Accentia shall
not, without the prior written consent of McKesson, which consent shall not be unreasonably withheld, enter into any agreement (including any license or royalty agreement) pertaining to any of its patents, copyrights, trademarks, service marks and
trade names, except for non-exclusive licenses in the ordinary course of business. 
  
 (s) At Secured Party’s request, Accentia will obtain from each Person from whom Accentia leases any premises at which any Collateral is at any time present such collateral access, subordination, waiver, consent
and estoppel agreements as Secured Party may require, in form and substance satisfactory to Secured Party. 
  
 (t) Accentia shall give Secured Party immediate notice of the acquisition of any i instruments or securities, or the establishment of any new deposit
account or any new securities account with respect to any investment property. 
  
 (u) Accentia shall immediately notify Secured Party if Accentia holds or acquires (i) any commercial tort claims, (ii) any chattel paper, including any interest in any electronic chattel paper, or (iii) any
letter-of-credit rights. 
  
 SECTION 10 Collection of
Accounts. Until Secured Party exercises its rights hereunder to collect the accounts and other rights to payment, Accentia shall endeavor in the first instance diligently to collect all amounts due or to become due on or with respect to the
accounts and other rights to payment. At the request of Secured Party, upon the occurrence and during the continuance of any Event of Default, all remittances received by Accentia shall be held in trust for Secured Party and, in accordance with
Secured Party’s instructions, remitted to Secured Party or deposited to an account of Secured Party in the form received (with any necessary endorsements or instruments of assignment or transfer). At the request of Secured Party, upon and after
the occurrence of any Event of Default, Secured Party shall be entitled to receive all distributions and payments of any nature with respect to any investment property or instruments, and all such distributions or payments received by Accentia shall
be held in trust for Secured Party and, in accordance with Secured Party’s instructions, remitted to Secured Party or deposited to an account with Secured Party in the form received (with any necessary endorsements or instruments of assignment
or transfer). Following the occurrence of an Event of Default, any such distributions and payments with respect to any investment property held in any securities account shall be held and retained in such securities account, in each case as part of
the Collateral hereunder. Additionally, Secured Party shall have the right, upon the occurrence of an Event of Default, without prior notice to Accentia, to vote and to give consents, ratifications and 

  

 17 

 
waivers with respect to any investment property and instruments, and to exercise all rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining thereto, as if Secured Party were the absolute owner thereof; provided that Secured Party shall have no duty to exercise any of the foregoing rights afforded to it and shall not be responsible to Accentia or
any other Person for any failure to do so or delay in doing so. 
  
 SECTION 11 Authorization; Secured Party Appointed Attorney-in-Fact. 
  
 Secured Party shall have the right to, in the name of Accentia, or in the name of Secured Party or otherwise, upon notice to but without the requirement of assent by Accentia, and Accentia hereby constitutes and
appoints Secured Party (and any of Secured Party’s officers, employees or agents designated by Secured Party) as Accentia’s true and lawful attorney-in-fact, with full power and authority to: (i) sign and file any of the financing
statements and other documents and instruments which must be executed or filed to perfect or continue perfected, maintain the priority of or provide notice of Secured Party’s security interest in the Collateral (including any notices to or
agreements with any securities intermediary); (ii) assert, adjust, sue for, compromise or release any claims under any policies of insurance; (iii) give notices of control, default or exclusivity (or similar notices) under any account control
agreement or similar agreement with respect to exercising control over deposit accounts or securities accounts; and (iv) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of Accentia,
which Secured Party may deem reasonably necessary or advisable to maintain, protect, realize upon and preserve the Collateral and Secured Party’s security interest therein and to accomplish the purposes of this Agreement. Secured Party agrees
that, except upon and during the continuance of an Event of Default, it shall not exercise the power of attorney, or any rights granted to Secured Party, pursuant to clauses (ii), (iii) and (iv). The foregoing power of attorney is coupled with an
interest and irrevocable so long as the Obligations have not been paid and performed in full. Accentia hereby ratifies, to the extent permitted by law, all that Secured Party shall lawfully and in good faith do or cause to be done by virtue of and
in compliance with this Section 11. 
  
 SECTION 12 Events of
Default. Any of the following events which shall occur and be continuing shall constitute an “Event of Default”: 
  
 (a) Any Event of Default under the Credit Agreement or any of the Documents shall occur where the term “Borrower” (or “APP” or
“Accent Rx”) shall be deemed to refer to Accentia. 
  
 (b) Accentia shall fail to pay as and when due any payment required to be made pursuant to Section 7 of this Agreement or any other provision of this Agreement, or shall fail to pay when due any of the other Obligations, including but not
limited to the APP Obligations, all of which have been assumed by Accentia. 
  
 (c) Any breach of any material covenant or condition (or the failure of a Condition Subsequent defined in Section 26 to be timely satisfied) shall occur under this Agreement, any Document, the Forbearance Agreement or
any document or agreement executed pursuant to or concurrently with any of them. 
  

 18 

 (d) Any representation or warranty made by Accentia under or in connection with this Agreement or any
Document, shall prove to have been incorrect in any material respect when made or deemed made. 
  
 (e) Accentia or any Subsidiary shall admit in writing its inability to, or shall fail generally or be generally unable to, pay its debts (including its payroll) as such debts become due, or shall make a general
assignment for the benefit of creditors; or Accentia or any Subsidiary (or Accent Rx or APP) shall file a voluntary petition in bankruptcy or a petition or answer seeking reorganization, to effect a plan or other arrangement with creditors or any
other relief under the Bankruptcy Reform Act of 1978, as amended or recodified from time to time (the “Bankruptcy Code”) or under any other state or federal law relating to bankruptcy or reorganization granting relief to debtors, whether
now or hereafter in effect, or shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition filed against Accentia, any Subsidiary, Accent Rx, or APP, as the case may be or pursuant to the
Bankruptcy Code or any such other state or federal law; or Accentia or any Subsidiary (or Accent Rx or APP) shall be adjudicated a bankrupt, or shall make an assignment for the benefit of creditors, or shall apply for or consent to the appointment
of any custodian, receiver or trustee for all or any substantial part of Accentia’s property (or that of any Subsidiary, Accent Rx or APP), or shall take any action to authorize any of the actions set forth above in this paragraph; or an
involuntary petition seeking any of the relief specified in this paragraph shall be filed against Accentia or any Subsidiary (or Accent Rx or APP); or any order for relief shall be entered against Accentia or any Subsidiary (or Accent Rx or APP) in
any involuntary proceeding under the Bankruptcy Code or any such other state or federal law referred to in this subsection (e). 
  
 (f) Accentia or any Subsidiary shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or dissolution), except to the extent
expressly consented to by Secured Party in writing, (ii) suspend its operations other than in the ordinary course of business, or (iii) take any action to authorize any of the actions or events set forth above in subsections (e) or (f). 

 
 (g) Any material impairment in the value of the Collateral described in
this Agreement (or the “Collateral” described in any New Subsidiary Security Agreement or in any third party pledge agreement) or in the priority of McKesson’s lien or security interest therein. 
  
 (h) Any levy upon, seizure or attachment of any of the Collateral described
in this Agreement (or the “Collateral” described in any New Subsidiary Security Agreement or in any third party pledge agreement), which shall not have been rescinded or withdrawn. 
  
 (i) Any loss, theft or substantial damage to, or destruction of, any material
portion of the Collateral described in this Agreement (or the “Collateral” described in any New Subsidiary Security Agreement or in any third party pledge agreement) (unless within 10 days after the occurrence of any such event, Accentia
furnishes to McKesson evidence satisfactory to McKesson that the amount of any such loss, theft, damage to or destruction of the Collateral or other collateral is fully insured under policies naming McKesson as the sole additional named insured or
loss payee). 
  

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 (j) Any existing or future guarantor or third party pledgor of collateral to “ McKesson to secure or
guaranty the payment and performance of the Obligations (including, but not limited to, any Subsidiary, Francis E. O’Donnell, Jr., M.D., Dennis L. Ryll, M.D. [unless and until, in the case of Dr. Ryll, after the effectiveness of any release
from his liability under the Principal Guaranty], HCG, HCG II, or RCT) shall seek to revoke their guaranty or pledge, or shall repudiate their guaranty or pledge for any reason, including, without limitation, because their pledge or guaranty was of
the obligations owed by APP or Accent Rx rather than Accentia or Accent Rx, or any existing or future guarantor or third party pledgor shall die, cease to exist, become incompetent, or dissolve, or any existing or future guarantor or third party
pledgor shall become a debtor in a case under the Bankruptcy Code, or shall make a general assignment for the benefit of creditors or suffer any of the events to exist as to themselves that are described in subsections 9(e) or (f) with respect to
Accentia, provided that it shall hot constitute an Event of Default under this Agreement if APP and/or any of the subsidiaries of APP which guarantied the APP Obligations are dissolved, if and only if any liabilities of such entities
owed to McKesson have been assumed by Accentia. 
  
 SECTION 13
Remedies. 
  
 (a) Upon the occurrence and continuance of
any Event of Default, Secured Party may declare any or all of the Obligations to be immediately due and payable and shall have, in addition to all other rights and remedies granted to it in this Agreement, the Credit Agreement or any other Document
(where Accentia is treated as though it were the “Borrower” or APP), all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, (i) Secured Party may peaceably and
without notice enter any premises of Accentia, take possession of any the Collateral, remove or dispose of all or part of the Collateral on any premises of Accentia or elsewhere, or, in the case of equipment, render it nonfunctional, and otherwise
collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as Secured Party may determine; (ii)
Secured Party may require Accentia to assemble all or any part of the Collateral and make it available to Secured Party at any place and time designated by Secured Party; (iii) Secured Party may secure the appointment of a receiver of the Collateral
or any part thereof (to the extent and in the manner provided by applicable law); (iv) Secured Party may sell, resell, lease, use, assign, license, sublicense, transfer or otherwise dispose of any or all of the Collateral in its then condition or
following any commercially reasonable preparation or processing (utilizing in connection therewith any of Accentia’s assets, without charge or liability to Secured Party therefore) at public or private sale, by one or more contracts, in one or
more parcels, at the same or different times, for cash or credit, or for future delivery without assumption of any credit risk, all as Secured Party deems advisable; provided, however, that Accentia shall be credited with the net proceeds of
sale only when such proceeds are finally collected by Secured Party. Secured Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption, which right or equity of redemption Accentia hereby releases, to the extent permitted by law. McKesson shall give Accentia such notice of any private or public sales as may be required by the UCC
or other applicable law. 
  

 20 

 (b) For the purpose of enabling McKesson to exercise its rights and remedies under this Section 13 or
otherwise in connection with this Agreement, Accentia hereby, grants to Secured Party an irrevocable, non-exclusive and assignable license (exercisable without payment or royalty or other compensation to Accentia) to use, license or sublicense any
intellectual property Collateral, and 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 software and programs used for the compilation or printout thereof and
sufficient rights of quality control in favor of Accentia to avoid the invalidation of any trademarks, service marks or trade names subject to the license. 
  
 (c) Secured Party shall not have any obligation to clean up, repair or improve or otherwise prepare the Collateral for sale. Secured Party has no
obligation to attempt to satisfy the Obligations by collecting them from any other Person liable for them, and Secured Party may release, modify or waive any Collateral provided by any other Person to secure any of the Obligations, all without
affecting Secured Party’s rights against Accentia. Accentia waives any right it may have to require Secured Party to pursue any third Person for any of the Obligations. Secured Party may comply with any applicable state or federal law
requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. Secured Party may sell the Collateral without giving any
warranties as to the Collateral. Secured Party may specifically disclaim any warranties of title or the like. This procedure will riot be considered adversely to affect the commercial reasonableness of any sale of the Collateral; If Secured Party
sells any of the Collateral upon credit, Accentia will be credited only with payments actually made by the purchaser, received by Secured Party and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral; Secured Party may resell the Collateral and Accentia shall be credited with the proceeds of the sale. 
  
 (d) The cash proceeds actually received from the sale or other disposition or collection of Collateral (other than the proceeds of the sale of Accent Rx
or its assets), and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied first, to the payment of the reasonable costs and expenses of Secured Party in
exercising or enforcing its rights hereunder and hi collecting or attempting to collect any of the Collateral, and to the payment of all other amounts payable to Secured Party pursuant to Section 17 hereof; and second, to the payment of the
Obligations. Any surplus thereof which exists after payment and performance in full of the Obligations shall be promptly paid over to Accentia or otherwise disposed of in accordance with the UCC or other applicable law. Accentia shall remain liable
to Secured Party for any deficiency which exists after any sale or other disposition or collection of Collateral. 
  
 SECTION 14 Certain Waivers. Accentia waives, to the fullest extent permitted by law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Obligations; (ii) any right to require Secured Party (A) to proceed against any Person, (B) to exhaust any other
Collateral or security for any of the Obligations, (C) to pursue any remedy in Secured Party’s power, or (D) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of
dishonor in connection with any of the Collateral; and (iii) all claims, damages, and demands against Secured Party arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral. 
  

 21 

 SECTION 15 Notices. All notices or other communications hereunder shall be in writing (including
by facsimile transmission or by email) and mailed, sent or delivered to the respective parties hereto at or to their respective addresses, facsimile numbers or email addresses set forth below their names on the signature pages hereof, or at or to
such other address, facsimile number or email address as shall be designated by any party in a written notice to the other parties hereto. All such notices and other communications shall be deemed to be delivered when a record (within the meaning of
the UCC) has been (i) delivered by hand; (ii) sent by mail upon the earlier of the date of receipt or five business days after deposit in the mail, first class (or air mail as to communications sent to or from the United States); (iii) sent by
facsimile transmission; or (iv) sent by email. 
  
 SECTION 16
No Waiver: Cumulative Remedies. No failure on the part of Secured Party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights,
remedies, powers and privileges that may otherwise be available to Secured Party. 
  
 SECTION 17 Costs and Expenses. 
  
 (a) Accentia agrees to pay on demand: 
  
 (i) all title, appraisal, survey, audit, consulting, search, recording, filing and similar costs, fees and expenses incurred or sustained by Secured Party in connection with this Agreement, any Document or the Collateral; and 
  
 (ii) all costs and expenses of Secured Party and the fees
and disbursements of counsel for which either APP or Accent Rx (or both) was obliged to reimburse Secured Party under the Documents, and for which Accentia is now obligated to reimburse Secured Party, and all costs and expenses of Secured Party, and
the fees and disbursements of counsel, in connection with the preparation and negotiation of this Agreement (and any amendments thereof), and any documents executed concurrently herewith (or amendments thereof) or in the future relating in any way
to the matters described in this Agreement, including the Recitals hereof, and in connection with the enforcement or attempted enforcement of, and preservation of any rights or interests under, this Agreement, the Credit Agreement, each other
Document (as they may be amended from time to time), including in any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, and the protection, sale or collection of, of other realization upon, any of the Collateral,
including all expenses of taking, collecting, holding, sorting, handling, preparing for sale, selling, or the like, and all other expenses of sales and collections of Collateral. 
  
 (b) Any amounts payable to Secured Party under this Section 17 or otherwise under this Agreement if not paid upon demand
shall bear interest from the date of such demand until paid in full, at the Default Rate. 
  

 22 

 SECTION 18 Binding Effect This Agreement shall be binding upon, inure to the. benefit of and be
enforceable by Accentia, Secured Party and their respective successors and assigns and shall bind any Person who becomes bound as a debtor to this Agreement. Accentia may not assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder without the prior express written consent of Secured Party. Any such purported assignment, transfer, hypothecation or other conveyance by Accentia without the prior express written consent of Secured Party shall be
void. Accentia acknowledges and agrees that in connection with an assignment of, or grant of a participation in, the Obligations, Secured Party may assign, or grant participations in, all or a portion of its rights and obligations hereunder. Upon
any assignment of Secured Party’s’ rights hereunder, such assignee shall have, to the extent of such assignment, all rights of Secured Party hereunder. Accentia agrees that, upon any such assignment, such assignee may enforce directly,
without joinder of Secured Party, the rights of Secured Party set forth in this Agreement. Any such assignee shall be entitled to enforce Secured Party’s rights and remedies under this Agreement to the same extent as if it were the original
secured party named herein. 
  
 SECTION 19 Governing Law.
This Agreement shall be governed by, and construed in accordance with, the law of the State of California, except as required by mandatory provisions of law and to the extent the validity or perfection of the security interests hereunder, or the
remedies hereunder, in respect of any Collateral are governed by the law of a jurisdiction other than California. 
  
 SECTION 20 Entire Agreement: Amendment. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and
shall not be amended except by the written agreement of the parties. 
  
 SECTION 21 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Agreement
shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so
modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction.

  
 SECTION 22 Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. 
  
 SECTION 23 Termination. Upon payment and performance in full of all
Obligations, the security interest created under this Agreement shall terminate and Secured Party shall promptly execute and deliver to Accentia such documents and instruments reasonably requested by Accentia as shall be necessary to evidence
termination of all security interests given by Accentia to Secured Party hereunder; provided however that the obligations of Accentia under Section 17 hereof shall survive such termination. 
  

 23 

 SECTION 24 Conflicts. In the event of any conflict or inconsistency between this Agreement and the
Credit Agreement, the terms of this Agreement shall control. 
  
 SECTION 25 Right of McKesson to Convert Debt Into Equity. Until the first to occur of: (i) January 15, 2005, (ii) an IPO or establishment of public trading by Accentia or (iii) the sale of substantially all of Accentia’s assets
or the merger of Accentia with a publicly traded company (to which sale or merger McKesson has given its prior written consent which consent shall not be unreasonably withheld), McKesson may convert up to $3,900,000 in indebtedness owing by Accentia
to McKesson (or any affiliate of McKesson) into shares of Accentia Series E Convertible Preferred stock at the rate of $ 1.00 per share with Accentia’s consent. 
  
 SECTION 26 Conditions Subsequent. .It shall be an additional “Event of Default under this Agreement (and each of
the other documents executed concurrently herewith or pursuant hereto) should the following events (each a “Condition Subsequent”) fail to be and remain satisfied on or before January 31,2004: 
  
 (a) Account Control Agreements. McKesson shall have received an
Account Control Agreement in substantially the form of Exhibit D attached hereto for each and every deposit account of Accentia, Teamm Pharmaceuticals, Inc., and The Analytica Group, Inc. including those identified on Schedule 1.

  
 (b) Representation Certificate. McKesson shall have
received a fully and accurately completed Representation Certificate in the form of Exhibit H attached hereto, duly executed by each of Accentia, Teamm Pharmaceuticals, Inc., and The Analytica Group, Inc. 
  
 SECTION 27 Modification of Conditions to Release of Dr. Ryll From
Principal Guaranty. Section 2(d) of the Forbearance Agreement is hereby amended such that Dr. Ryll’s eligibility to be released from bis liability under the Principal Guaranty will be governed by the following: 
  
 Subject to the satisfaction of each of the conditions precedent set forth in
Section 3 of the Forbearance Agreement, McKesson agrees to undertake the following: . . . To release Dennis L. Ryll, M.D. from any further liability under that certain “Principal Guaranty” dated as of November 30, 1998 and executed by
Francis E. O’Donnell, Jr., M.D. and Dennis L. Ryll, M.D. in favor of McKesson effective on the date that is 91 days after June 28, 2004 provided that: 
  

	 	(i)	On or before December 31, 2003, McKesson has received all net proceeds from the sale of the assets of Accent Rx; 

  

	 	(ii)	On or before January 12, 2004, the Bridge Loan and all other sums payable to McKesson thereunder have been paid in full; 

  

	 	(iii)	all other payments to be made to McKesson on or before June 28, 2004, (including the reimbursement of fees, costs and expenses) that are referred to in the Forbearance Agreement or
which are referred to in the Assumption Agreement have been timely made; 

  

 24 

	 	(iv)	all conditions to the effectiveness of the Assumption Agreement have been and remain satisfied; and 

  

	 	(v)	no default or “Event of Default” has occurred under this Agreement or the Assumption Agreement through the date upon which the release of Dr. Ryll becomes effective,

  
 and provided further that at no time on
or before the date that is 91 days after June 28, 2004, none of Accent Rx, Accentia, HCG, HCG II, MOAB, RCT, BioVest, Francis E. O’Donnell, Jr., or Dennis L. Ryll, M.D. has become a debtor in a case under title 11 of the United States Code (the
“Bankruptcy Code”). 
  
 IN WITNESS WHEREOF, the parties
hereto have duly executed this Agreement, as of the date first above written. 
  

			
	 ACCENTIA, INC.

		
	 By
	 	 /s/ Francis E. O’Donnell

	 	 	 Title: Chairman & CEO

	
	 Accentia, Inc.

	 5310 Cypress Center Drive, Suite 101

	 Tampa, FL 33609

	 Attn: Francis E. O’Donnell, Jr., M.D.

	 Fax: 813-287-6642

	 email: FEOMDJR@aol.com

	
	 MCKESSON CORPORATION

		
	 By:
	 	 /s/ Ana Schrank

	 	 	 Ana Schrank

	 Title:
	 	 SVP Financial Services

	
	 McKesson Corporation

	 One Post Street

	 San Francisco, CA 94104

	 Attn: Ana Schrank

	 Fax; (415)983-9272

	 email: ana.schrank@mckesson.com

  

 25

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