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    PLEDGE
      AND SECURITY AGREEMENT

     

    THIS
      PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to
      time, the “Security
      Agreement”)
      is
      entered into as of November 2, 2007 by and among Lev Pharmaceuticals, Inc.,
      a
      Delaware corporation (“Lev”),
      and
      Lev Development Corp., a Delaware corporation (“Development”),
      (each
      a “Grantor”,
      and
      collectively, the “Grantors”),
      and
      Mast Capital Management, LLC, in its capacity as collateral agent (the
“Collateral
      Agent”)
      for
      the lenders party to the Credit Agreement referred to below.

     

    PRELIMINARY
      STATEMENT

     

    Reference
      is hereby made to the Term Loan Agreement, dated as of November 2, 2007 (as
      it
      may be amended or modified from time to time the “Credit
      Agreement”),
      by
      and among Lev and Development as joint and several borrowers (together, the
      “Borrowers”),
      the
      lenders from time to time party thereto (the “Lenders”)
      and
      Mast Capital Management, LLC, in its capacities as administrative agent and
      collateral agent for the Lenders (the “Agent”).
      The
      Grantors are entering into this Security Agreement in order to induce the
      Lenders to enter into and extend credit to the Borrowers under the Credit
      Agreement and to secure the Obligations (as such term is defined in the Credit
      Agreement).

     

    NOW,
      THEREFORE, in consideration of the premises and the agreements, provisions
      and
      covenants set forth herein, each of the Grantors and the Collateral Agent,
      on
      behalf of the Lenders, hereby agreed as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1. Terms
      Defined in Credit Agreement.
      All
      capitalized terms used herein and not otherwise defined shall have the meanings
      assigned to such terms in the Credit Agreement.

     

    1.2. Terms
      Defined in UCC.
      Terms
      defined in the UCC which are not otherwise defined in this Security Agreement
      are used herein as defined in the UCC.

     

    1.3. Definitions
      of Certain Terms Used Herein.
      As used
      in this Security Agreement, in addition to the terms defined in the Preliminary
      Statement, the following terms shall have the following meanings:

     

    “Article”
means
      a
      numbered article of this Security Agreement, unless another document is
      specifically referenced.

     

    “Assigned
      Contracts”
means,
      collectively, all of the Grantors’ rights and remedies under, and all moneys and
      claims for money due or to become due to the Grantor under all material
      contracts and agreements to which any Grantor is a party or by which its assets
      are bound, and any and all amendments, supplements, extensions, and renewals
      thereof, including all rights and claims of the Grantors now or hereafter
      existing: (a) under any insurance, indemnities, warranties, and guarantees
      provided for or arising out of or in connection with any of the foregoing
      agreements; (b) for any damages arising out of or for breach or default under
      or
      in connection with any of the foregoing contracts; (c) to all other amounts
      from
      time to time paid or payable under or in connection with any of the foregoing
      agreements; or (d) to exercise or enforce any and all covenants, remedies,
      powers and privileges thereunder.

     

    “Chattel
      Paper”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Closing
      Date”
means
      the date of the Credit Agreement.

     

    “Collateral”
shall
      have the meaning set forth in Article II.

     

    “Collateral
      Access Agreement”
means
      any landlord waiver and consent or other agreement, in form and substance
      satisfactory to the Collateral Agent, between the Collateral Agent and any
      third
      party (including any bailee, consignee, customs broker, or other similar Person)
      in possession of any Collateral or any landlord of any Credit Party for any
      real
      property where any Collateral is located, as such landlord waiver and consent
      or
      other agreement may be amended, restated, or otherwise modified from time to
      time.

     

    “Collateral
      Report”
means
      any certificate (including any Borrowing Base Certificate), report or other
      document delivered by any Grantor to the Collateral Agent or any Lender with
      respect to the Collateral pursuant to any Loan Document.

     

    “Commercial
      Tort Claims”
means
      “commercial tort claims” as set forth in Article 9 of the UCC and shall include,
      without limitation, the existing commercial tort claims of the Grantor set
      forth
      in Exhibit
      C-2
      attached
      hereto.

     

    “Control”
shall
      have the meaning set forth in Article 8 or, if applicable, in Section 9-104,
      9-105, 9-106 or 9-107 of Article 9 of the UCC.

     

    “Deposit
      Account Control Agreement”
means
      an agreement, in form and substance satisfactory to the Collateral Agent, among
      any Credit Party, a banking institution holding such Credit Party’s funds, and
      the Collateral Agent with respect to collection and control of all deposits
      and
      balances held in a deposit account maintained by any Credit Party with such
      banking institution.

     

    “Deposit
      Accounts”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “Documents”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “Equipment”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “Equity
      Interests”
means
      shares of capital stock, partnership interests, membership interests in a
      limited liability company, beneficial interests in a trust or other equity
      ownership interests in a Person, and any warrants, options or other rights
      entitling the holder thereof to purchase or acquire any such equity
      interest.

     

    “Event
      of Default”
means
      an event described in Section 5.1.

     

    “Exhibit”
refers
      to a specific exhibit to this Security Agreement, unless another document is
      specifically referenced.

     

    “Fixtures”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “General
      Intangibles”
shall
      have the meaning set forth in Article 9 of the UCC,

     

    “Goods”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “Instruments”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “Inventory”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Investment
      Property”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “Lenders”
means
      the lenders party to the Credit Agreement and their successors and
      assigns.

     

    “Letter-of-Credit
      Rights”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “Licenses”
means,
      with respect to any Person, all of such Person’s right, title, and interest in
      and to (a) any and all licensing agreements or similar arrangements in and
      to
      its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages,
      claims, and payments now or hereafter due or payable under and with respect
      thereto, including, without limitation, damages and payments for past and future
      breaches thereof, and (c) all rights to sue for past, present, and future
      breaches thereof.

     

    “Permit(s)”
shall
      have the meaning set forth in Section
      8.19.

     

    “Pledged
      Collateral”
means
      all Instruments, Securities and other Investment Property of the Grantors,
      whether or not physically delivered to the Collateral Agent pursuant to this
      Security Agreement.

     

    “Receivables”
means,
      with respect to the Grantor, all rights to payment, whether or not earned by
      performance, for goods or other property sold, leased, licensed, assigned or
      otherwise disposed of, or services rendered, including, without limitation,
      all
      such rights constituting or evidenced by an Account, Chattel Paper, Document,
      Investment Property, Instrument, or any other right or claim to receive money
      which is a General Intangible or which is otherwise included as
      Collateral.

     

    “Section”
means
      a
      numbered section of this Security Agreement, unless another document is
      specifically referenced.

     

    “Security”
has
      the
      meaning set forth in Article 8 of the UCC.

     

    “Stock
      Rights”
means
      all dividends, instruments or other distributions and any other right or
      property which the Grantors shall receive or shall become entitled to receive
      for any reason whatsoever with respect to, in substitution for or in exchange
      for any Equity Interest constituting Collateral, any right to receive an Equity
      Interest and any right to receive earnings, in which the Grantors now have
      or
      hereafter acquire any right, issued by an issuer of such Equity
      Interest.

     

    “Supporting
      Obligations”
shall
      have the meaning set forth in Article 9 of the UCC.

     

    “UCC”
means
      the Uniform Commercial Code, as in effect from time to time, of the State of
      New
      York or
      of any
      other state the laws of which are required as a result thereof to be applied
      in
      connection with the attachment, perfection or priority of, or remedies with
      respect to, Collateral Agent’s or any Lender’s Lien on any
      Collateral.

     

    The
      foregoing definitions shall be equally applicable to both the singular and
      plural forms of the defined terms.

     

    ARTICLE
      II

    GRANT
      OF SECURITY INTEREST

     

    2.1. Grant
      of Security Interest.
      Each
      Grantor hereby pledges, assigns and grants to the Collateral Agent, on behalf
      of
      and for the ratable benefit of the Lenders, a security interest in all of its
      right, title and interest in, to and under all personal property and other
      assets, whether now owned by or owing to, or hereafter acquired by or arising
      in
      favor of such Grantor (including under any trade name or derivations thereof),
      and whether owned or consigned by or to, or leased from or to, such Grantor,
      and
      wherever located (all of which will be collectively referred to as the
“Collateral”),
      including, without limitation:

     

    
      
         

      

      
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    (i) all
      Accounts;

     

    (ii) all
      Chattel Paper;

     

    (iii) all
      Copyrights, Patents and Trademarks;

     

    (iv) all
      Documents;

     

    (v) all
      Equipment;

     

    (vi) all
      Fixtures;

     

    (vii) all
      General Intangibles;

     

    (viii) all
      Goods;

     

    (ix) all
      Instruments;

     

    (x) all
      Inventory;

     

    (xi) all
      Investment Property;

     

    (xii) all
      cash
      or cash equivalents;

     

    (xiii) all
      letters of credit, Letter-of-Credit Rights and Supporting
      Obligations;

     

    (xiv) all
      Deposit Accounts with any bank or other financial institution;

     

    (xv) all
      Commercial Tort Claims;

     

    (xvi) all
      Assigned Contracts; and

     

    (xvii) all
      accessions to, substitutions for and replacements, proceeds (including Stock
      Rights), insurance proceeds and products of the foregoing, together with all
      books and records, customer lists, credit files, computer files, programs,
      printouts and other computer materials and records related thereto and any
      General Intangibles at any time evidencing or relating to any of the
      foregoing.

     

    2.2. Security
      for Obligations.
      This
      Security Agreement secures, and the Collateral is collateral security for,
      the
      prompt and complete payment and performance in full when due, whether at stated
      maturity, by required prepayment, declaration, acceleration, demand or
      otherwise, of all Obligations of the Grantors.

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES

     

    Each
      Grantor represents and warrants to the Collateral Agent and the Lenders
      that:

     

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

     

    3.1. Title,
      Perfection and Priority.
      Such
      Grantor has good and valid rights in or the power to transfer the Collateral
      and
      title to the Collateral with respect to which it has purported to grant a
      security interest hereunder, free and clear of all Liens except for Permitted
      Liens, and has full power and authority to grant to the Collateral Agent the
      security interest in such Collateral pursuant hereto. When financing statements
      have been filed in the appropriate offices against such Grantor in the locations
      listed on Exhibit
      H,
      the
      Collateral Agent will have a fully perfected first priority security interest
      in
      that Collateral of such Grantor in which a security interest may be perfected
      by
      filing, subject only to Permitted Liens.

     

    3.2. Type
      and Jurisdiction of Organization, Organizational and Identification
      Numbers.
      The
      type of entity of such Grantor, its state of organization, the organizational
      number issued to it by its state of organization and its federal employer
      identification number are set forth on Exhibit
      A.
      

     

    3.3. Principal
      Location.
      Such
      Grantor’s mailing address and the location of its place of business (if it has
      only one) or its chief executive office (if it has more than one place of
      business), is disclosed in Exhibit
      A;
      such
      Grantor has no other places of business except those set forth in Exhibit
      A.

     

    3.4. Collateral
      Locations.
      All of
      such Grantor’s locations where Collateral is located are listed on Exhibit
      A.
      All of
      said locations are owned by such Grantor except for locations (i) which are
      leased by the Grantor as lessee and designated in Part
      VII(b)
      of
Exhibit
      A
      and (ii)
      at which Inventory is held in a public warehouse or is otherwise held by a
      bailee or on consignment as designated in Part
      VII(c)
      of
Exhibit
      A.

     

    3.5. Accounts.

     

    (a) All
      of
      such Grantor’s Deposit Accounts are listed on Exhibit
      B.
      No
      Grantor has consented to, nor is otherwise aware of, any other Person (other
      than the Collateral Agent pursuant hereto) having Control over any Deposit
      Account. The Collateral Agent agrees with each Grantor that the Collateral
      Agent
      shall not give any instructions directing the disposition of funds from time
      to
      time credited to any Deposit Account or withhold any withdrawal rights from
      such
      Grantor with respect to funds from time to time credited to any Deposit Account
      unless an Event of Default has occurred and is continuing. No Grantor shall
      grant (or permit the granting of) Control of any Deposit Account to any person
      other than the Collateral Agent.

     

    (b) All
      of
      such Grantor’s Securities Accounts or Commodities Accounts are listed on
Exhibit
      B.
      No
      Grantor has consented to, nor is otherwise aware of, any other Person (other
      than the Collateral Agent pursuant hereto) having Control over any Securities
      Account or Commodities Account. The Collateral Agent agrees with each Grantor
      that the Collateral Agent shall not give any Entitlement Orders or instructions
      or directions to any issuer of uncertificated securities, Securities
      Intermediary or Commodity Intermediary, and shall not withhold its consent
      to
      the exercise of any withdrawal or dealing rights by such Grantor, unless an
      Event of Default has occurred and is continuing or, after giving effect to
      any
      such investment and withdrawal rights, would occur. No Grantor shall grant
      Control over any Investment Property to any person other than the Collateral
      Agent.

     

    3.6. Exact
      Names.
      Such
      Grantor’s name in which it has executed this Security Agreement is the exact
      name as it appears in such Grantor’s organizational documents, as amended, as
      filed with such Grantor’s jurisdiction of organization. Such Grantor has not,
      during the past five years, been known by or used any other corporate or
      fictitious name, or been a party to any merger or consolidation, or been a
      party
      to any acquisition other than as described in the SEC Reports.

     

    3.7. Letter-of-Credit
      Rights and Chattel Paper.
      Exhibit
      C-1
      lists
      all Letter-of-Credit Rights and Chattel Paper of such Grantor. All action by
      such Grantor necessary or desirable to protect and perfect the Collateral
      Agent’s Lien on each item listed on Exhibit
      C
      (including the delivery of all originals and the placement of a legend on all
      Chattel Paper as required hereunder) has been duly taken. The Collateral Agent
      will have a fully perfected first priority security interest in the Collateral
      listed on Exhibit
      C-1,
      subject
      only to Permitted Liens.

     

    
      
         

      

      
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    3.8. Accounts
      and Chattel Paper.

     

    (a) The
      names
      of the obligors, amounts owing, due dates and other information with respect
      to
      its Accounts and Chattel Paper are and will be correctly stated in all records
      of such Grantor relating thereto and in all invoices and Collateral Reports
      with
      respect thereto furnished to the Collateral Agent by such Grantor from time
      to
      time. As of the time when each Account or each item of Chattel Paper arises,
      such Grantor shall be deemed to have represented and warranted that such Account
      or Chattel Paper, as the case may be, and all records relating thereto, are
      genuine and in all respects what they purport to be.

     

    (b) With
      respect to its Accounts, except as specifically disclosed on the most recent
      Collateral Report, (i) all Accounts of the Borrowers are Eligible Accounts;
      (ii)
      all Accounts represent bona fide sales of Inventory or rendering of services
      to
      Account Debtors in the ordinary course of such Grantor’s business and are not
      evidenced by a judgment, Instrument or Chattel Paper; (iii) there are no
      setoffs, claims or disputes existing or asserted with respect thereto and such
      Grantor has not made any agreement with any Account Debtor for any extension
      of
      time for the payment thereof, any compromise or settlement for less than the
      full amount thereof, any release of any Account Debtor from liability therefor,
      or any deduction therefrom except a discount or allowance allowed by such
      Grantor in the ordinary course of its business for prompt payment and disclosed
      to the Collateral Agent; (iv) to such Grantor’s knowledge, there are no facts,
      events or occurrences which in any way impair the validity or enforceability
      thereof or could reasonably be expected to reduce the amount payable thereunder
      as shown on such Grantor’s books and records and any invoices, statements and
      Collateral Reports with respect thereto; (v) such Grantor has not received
      any
      notice of proceedings or actions which are threatened or pending against any
      Account Debtor which might result in any adverse change in such Account Debtor’s
      financial condition; and (vi) such Grantor has no knowledge that any Account
      Debtor is unable generally to pay its debts as they become due.

     

    (c) In
      addition, with respect to all of its Accounts, (i) the amounts shown on all
      invoices, statements and Collateral Reports with respect thereto are actually
      and absolutely owing to such Grantor as indicated thereon and are not in any
      way
      contingent, other than (A) as arise pursuant to the Grantors’ agreements with
      Sanquin and any amendments, extensions or modifications thereto and (B) rights
      granted to a counterparty to inspect or approve delivery of products pursuant
      to
      an arm’s-length agreement with such counterparty; (ii) no payments have been or
      shall be made thereon except payments immediately delivered to a Collateral
      Deposit Account as required by Section
      7.1;
      and
      (iii) to such Grantor’s knowledge, all Account Debtors have the capacity to
      contract.

     

    3.9. Inventory.
      With
      respect to any of its Inventory scheduled or listed on the most recent
      Collateral Report, (a) such Inventory (other than Inventory in transit) is
      located at one of such Grantor’s locations set forth on Exhibit
      A,
      (b) no
      Inventory (other than Inventory in transit) is now, or shall at any time or
      times hereafter be stored at any other location except as permitted by
Section
      4.1(f),
      (c)
      such Grantor has good, indefeasible and merchantable title to such Inventory
      and
      such Inventory is not subject to any Lien or security interest or document
      whatsoever except for the Lien granted to the Collateral Agent, for the benefit
      of the Collateral Agent and Lenders, and except for Permitted Liens, (d) except
      as specifically disclosed in the most recent Collateral Report, such Inventory
      of the Borrowers is Inventory of good and merchantable quality, free from any
      material defects, (e) other than the license granted by Sanquin to Lev pursuant
      to that certain Exclusive License Agreement effective as of January 27, 2004,
      such Inventory is not subject to any licensing, patent, royalty, trademark,
      trade name or copyright agreements with any third parties which would require
      any consent of any third party upon sale or disposition of that Inventory or
      the
      payment of any monies to any third party upon such sale or other disposition,
      (f) to the extent that it has been produced in the United States, such Inventory
      has been produced by third parties and to the Grantors’ knowledge in accordance
      with the Federal Fair Labor Standards Act of 1938, as amended, and all rules,
      regulations and orders thereunder and (g) subject to Section
      8.19,
      the
      completion of manufacture, sale or other disposition of such Inventory by the
      Collateral Agent following an Event of Default shall not require the consent
      of
      any Person and shall not constitute a breach or default under any contract
      or
      agreement to which such Grantor is a party or to which such property is
      subject.

     

    
      
         

      

      
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    3.10. Intellectual
      Property.
      Such
      Grantor does not have any interest in, or title to, any Patent, registered
      or
      applied for Trademark registered or applied for or Copyright except as set
      forth
      in Exhibit
      D.
      This
      Security Agreement is effective to create a valid and continuing Lien and,
      upon
      filing of appropriate financing statements in the offices listed on Exhibit
      H
      and this
      Security Agreement with the United States Copyright Office and the United States
      Patent and Trademark Office, fully perfected first priority security interests
      in favor of the Collateral Agent on such Grantor’s Patents, registered
      Trademarks and registered Copyrights, such perfected security interests are
      enforceable as such as against any and all creditors of and purchasers from
      such
      Grantor; and all action necessary or desirable to protect and perfect the
      Collateral Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights
      shall have been duly taken.

     

    3.11. Filing
      Requirements.
      None of
      its Equipment is covered by any certificate of title, except for the vehicles
      described in Part I of Exhibit
      E.
      None of
      the Collateral owned by it is of a type for which security interests or liens
      may be perfected by filing under any federal statute except for (a) the vehicles
      described in Part II of Exhibit
      E
      and (b)
      Patents, Trademarks and Copyrights held by such Grantor and described in
Exhibit
      D.
      The
      legal description, county and street address of each property on which any
      Fixtures are located is set forth in Exhibit
      F
      together
      with the name and address of the record owner of each such
      property.

     

    3.12. No
      Financing Statements, Security Agreements.
      No
      financing statement or security agreement describing all or any portion of
      the
      Collateral which has not lapsed or been terminated naming such Grantor as debtor
      has been filed or is of record in any jurisdiction except (a) for financing
      statements or security agreements naming the Collateral Agent on behalf of
      the
      Lenders as the secured party and (b) as permitted by the Credit
      Agreement.

     

    3.13. Pledged
      Collateral.

     

    (a) Exhibit
      G
      sets
      forth a complete and accurate list of the Pledged Collateral. Each Grantor
      is
      the record and beneficial owner of the Pledged Collateral listed on Exhibit
      G
      as being
      owned by such Grantor, free and clear of any Liens, except for the security
      interest granted to the Collateral Agent for the benefit of the Lenders
      hereunder. Each Grantor further represents and warrants that (i) with respect
      to
      any certificates delivered to the Collateral Agent representing Equity
      Interests, either such certificates are Securities as defined in Article 8
      of
      the UCC as a result of actions by the issuer or otherwise or, if such
      certificates are not Securities, such Grantor has so informed the Collateral
      Agent so that the Collateral Agent may take steps to perfect its security
      interest therein as a General Intangible, (ii) all Pledged Collateral held
      by a
      securities intermediary is covered by a control agreement among such Grantor,
      the securities intermediary and the Collateral Agent pursuant to which the
      Collateral Agent has Control, (iii) none of the Pledged Collateral owned by
      such
      Grantor has been issued or transferred in violation of the securities
      registration, securities disclosure or similar laws of any jurisdiction to
      which
      such issuance or transfer may be subject, (iv) there are existing no options,
      warrants, calls or commitments of any character whatsoever relating to such
      Pledged Collateral or which obligate the issuer of any Equity Interest included
      in the Pledged Collateral to issue additional Equity Interests except as
      disclosed in the SEC Reports, and (v) no consent, approval, authorization,
      or
      other action by, and no giving of notice, filing with, any governmental
      authority or any other Person is required for the pledge by such Grantor of
      such
      Pledged Collateral pursuant to this Security Agreement or for the execution,
      delivery and performance of this Security Agreement by such Grantor, or for
      the
      exercise by the Collateral Agent of the voting or other rights provided for
      in
      this Security Agreement or for the remedies in respect of the Pledged Collateral
      pursuant to this Security Agreement, except as may be required in connection
      with such disposition by laws affecting the offering and sale of securities
      generally.

     

    
      
         

      

      
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    (b) Except
      as
      set forth in Exhibit
      G,
      such
      Grantor owns 100% of the issued and outstanding Equity Interests which
      constitute Pledged Collateral owned by it and none of the Pledged Collateral
      which represents Indebtedness owed to such Grantor is subordinated in right
      of
      payment to other Indebtedness or subject to the terms of an
      indenture.

     

    ARTICLE
      IV

    COVENANTS

     

    From
      the
      date of this Security Agreement, and thereafter until this Security Agreement
      is
      terminated, each Grantor agrees that:

     

    4.1. General.

     

    (a) Collateral
      Records.
      Such
      Grantor will maintain complete and accurate books and records with respect
      to
      the Collateral owned by it, and furnish to the Collateral Agent, with sufficient
      copies for each of the Lenders, updates with respect to Exhibits
      A, B, C-1, C-2, D, E, F and G
      hereto
      in accordance with Section
      4.1(c)
      and such
      other such reports relating to such Collateral as the Collateral Agent shall
      from time to time reasonably request.

     

    (b) Authorization
      to File Financing Statements; Ratification.
      Such
      Grantor hereby authorizes the Collateral Agent to file, and if requested will
      deliver to the Collateral Agent, all financing statements and other documents
      and take such other actions as may from time to time be requested by the
      Collateral Agent in order to maintain a first perfected security interest in
      and, if applicable, Control of, the Collateral owned by such Grantor. Any
      financing statement filed by the Collateral Agent may be filed in any filing
      office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral
      (1) as all assets of the Grantor or words of similar effect, regardless of
      whether any particular asset comprised in the Collateral falls within the scope
      of Article 9 of the UCC or such jurisdiction, or (2) by any other description
      which reasonably approximates the description contained in this Security
      Agreement, and (ii) contain any other information required by part 5 of Article
      9 of the UCC for the sufficiency or filing office acceptance of any financing
      statement or amendment, including (A) whether such Grantor is an organization,
      the type of organization and any organization identification number issued
      to
      such Grantor and (B) in the case of a financing statement filed as a fixture
      filing or indicating such Grantor’s Collateral as as-extracted collateral or
      timber to be cut, a sufficient description of real property to which the
      Collateral relates. Such Grantor also agrees to furnish any such information
      to
      the Collateral Agent promptly upon request. Such Grantor also ratifies its
      authorization for the Collateral Agent to have filed in any UCC jurisdiction
      any
      initial financing statements or amendments thereto if filed prior to the date
      hereof.

     

    (c) Further
      Assurances.
      Such
      Grantor will, if so requested by the Collateral Agent, furnish to the Collateral
      Agent, as often as the Collateral Agent requests, statements and schedules
      further identifying and describing the Collateral owned by it and such other
      reports and information in connection with its Collateral as the Collateral
      Agent may reasonably request, all in such detail as the Collateral Agent may
      specify. Such Grantor also agrees to take any and all actions necessary to
      defend title to the Collateral against all persons and to defend the security
      interest of the Collateral Agent in its Collateral and the priority thereof
      against any Lien not expressly permitted hereunder. Each Grantor agrees to
      deliver to the Collateral Agent supplements with respect to the information
      set
      forth in Exhibits
      A, B, C-1, C-2, D, E, F and G
      promptly
      after obtaining information which would require a material correction of or
      addition to any such Exhibit.

     

    
      
         

      

      
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    (d) Disposition
      of Collateral.
      Such
      Grantor will not sell, lease or otherwise dispose of the Collateral owned by
      it
      except for dispositions specifically permitted pursuant to Section 7. 4 of
      the
      Credit Agreement. 

     

    (e) Other
      Financing Statements.
      Such
      Grantor will not authorize the filing of any financing statement naming it
      as
      debtor covering all or any portion of the Collateral owned by it, except as
      permitted by the Credit Agreement. Such Grantor acknowledges that it is not
      authorized to file any financing statement or amendment or termination statement
      with respect to any financing statement without the prior written consent of
      the
      Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of
      the UCC.

     

    (f) Locations.
      Such
      Grantor will not (i) except as set forth in this Section
      4.1(f)
      maintain
      any Collateral owned by it at any location other than those locations listed
      on
Exhibit
      A,
      (ii)
      otherwise change, or add to, such locations without providing the Collateral
      Agent with prior written notice of such change or addition (and if requested
      by
      the Collateral Agent, such Grantor will concurrently therewith obtain a
      Collateral Access Agreement for each such location to the extent required by
      the
      Credit Agreement), or (iii) change its principal place of business or chief
      executive office from the location identified on Exhibit
      A,
      without
      providing the Collateral Agent with prior written notice of such relocation
      (and
      if requested by the Collateral Agent, such Grantor will concurrently therewith
      obtain a Collateral Access Agreement for such new location).

     

    (g) Compliance
      with Terms.
      Such
      Grantor will perform and comply with all obligations in respect of the
      Collateral owned by it and all agreements to which it is a party or by which
      it
      is bound relating to such Collateral.

     

    4.2. Receivables.

     

    (a) Certain
      Agreements on Receivables.
      Such
      Grantor will not make or agree to make any discount, credit, rebate or other
      reduction in the original amount owing on a Receivable or accept in satisfaction
      of a Receivable less than the original amount thereof, except that, prior to
      the
      occurrence of an Event of Default, such Grantor may reduce the amount of
      Accounts arising from the sale of Inventory in accordance with its present
      policies and in the ordinary course of business.

     

    (b) Collection
      of Receivables.
      Except
      as otherwise provided in this Security Agreement, such Grantor will collect
      and
      enforce, at such Grantor’s sole expense, all amounts due or hereafter due to
      such Grantor under the Receivables owned by it.

     

    (c) Delivery
      of Invoices.
      Such
      Grantor will deliver to the Collateral Agent promptly upon its request duplicate
      invoices with respect to each Account owned by it bearing such language of
      assignment as the Collateral Agent shall reasonably specify.

     

    (d) Disclosure
      of Counterclaims on Receivables.
      If (i)
      any discount, credit or agreement to make a rebate or to otherwise reduce the
      amount owing on any Receivable owned by such Grantor exists or (ii) if, to
      the
      knowledge of such Grantor, any dispute, setoff, claim, counterclaim or defense
      exists or has been asserted or threatened with respect to any such Receivable,
      such Grantor will promptly disclose such fact to the Collateral Agent in
      writing. Such Grantor shall send the Collateral Agent a copy of each credit
      memo
      in excess of $250,000 as soon as issued, and such Grantor shall promptly report
      each credit memo and each of the facts required to be disclosed to the
      Collateral Agent in accordance with this Section
      4.2(d)
      on the
      Borrowing Base Certificates submitted by it.

     

    
      
         

      

      
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    (e) Electronic
      Chattel Paper.
      Such
      Grantor shall take all steps necessary to grant the Collateral Agent Control
      of
      all electronic chattel paper in accordance with the UCC and all “transferable
      records” as defined in each of the Uniform Electronic Transactions Act and the
      Electronic Signatures in Global and National Commerce Act.

     

    4.3. Inventory
      and Equipment.

     

    (a) Maintenance
      of Goods.
      Such
      Grantor will do all things necessary to maintain, preserve, protect and keep
      its
      Inventory and the Equipment in good repair and working and saleable condition,
      except for damaged or defective goods arising in the ordinary course of such
      Grantor’s business and except for ordinary wear and tear in respect of the
      Equipment.

     

    (b) Returned
      Inventory.
      If an
      Account Debtor returns any Inventory to such Grantor when no Event of Default
      exists, then such Grantor shall promptly determine the reason for such return
      and shall issue a credit memorandum to the Account Debtor in the appropriate
      amount. Such Grantor shall immediately report to the Collateral Agent any return
      involving Inventory in an amount in excess of $250,000. Each such report shall
      indicate the reasons for the returns and the locations and condition of the
      returned Inventory. In the event any Account Debtor returns Inventory to such
      Grantor when an Event of Default exists, such Grantor, upon the request of
      the
      Collateral Agent, shall: (i) hold the returned Inventory in trust for the
      Collateral Agent; (ii) segregate all returned Inventory from all of its other
      property; (iii) dispose of the returned Inventory solely according to the
      Collateral Agent’s written instructions; and (iv) not issue any credits or
      allowances with respect thereto without the Collateral Agent’s prior written
      consent. All returned Inventory shall be subject to the Collateral Agent’s Liens
      thereon. Whenever any Inventory is returned, the related Account shall be deemed
      ineligible to the extent of the amount owing by the Account Debtor with respect
      to such returned Inventory and such returned Inventory shall be excluded from
      the Borrowing Base.

     

    (c) Inventory
      Count.
      Such
      Grantor will, to the extent required by the Grantor’s accountants, conduct a
      physical count of its Inventory at least once per Fiscal Year (or at such
      intervals as required by the Grantor’s accountants), and after and during the
      continuation of an Event of Default, at such other times as the Collateral
      Agent
      requests. Such
      Grantor, at its own expense, shall deliver to the Collateral Agent the results
      of each physical verification, which such Grantor has made, or has caused any
      other Person to make on its behalf, of all or any portion of its Inventory.
      

     

    (d) Equipment.
      Such
      Grantor shall promptly inform the Collateral Agent of any additions to or
      deletions from its Equipment which individually exceed $100,000. Such Grantor
      shall not permit any Equipment to become a fixture with respect to real property
      or to become an accession with respect to other personal property with respect
      to which real or personal property the Collateral Agent does not have a Lien.
      Such Grantor will not, without the Collateral Agent’s prior written consent, not
      to be unreasonably withheld or conditioned, alter or remove any identifying
      symbol or number on any of such Grantor’s Equipment constituting
      Collateral.

     

    (e) Titled
      Vehicles.
      Such
      Grantor will give the Collateral Agent notice of its acquisition of any vehicle
      covered by a certificate of title and deliver to the Collateral Agent, upon
      request, the original of any vehicle title certificate and provide and/or file
      all other documents or instruments necessary to have the Lien of the Collateral
      Agent noted on any such certificate or with the appropriate state
      office.

     

    
      
         

      

      
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    4.4. Delivery
      of Instruments, Securities, Chattel Paper and Documents.
      Such
      Grantor will (a) deliver to the Collateral Agent immediately upon execution
      of
      this Security Agreement the originals of all Chattel Paper (except for the
      Distribution and Manufacturing Services Agreement between Grantors and Sanquin,
      dated as of January 16, 2004 as amended), Securities (to the extent
      certificated) and Instruments constituting Collateral owned by it (if any then
      exist), (b) hold in trust for the Collateral Agent upon receipt and immediately
      thereafter deliver to the Collateral Agent any such Chattel Paper, Securities
      and Instruments constituting Collateral, (c) upon the Collateral Agent’s
      request, deliver to the Collateral Agent (and thereafter hold in trust for
      the
      Collateral Agent upon receipt and immediately deliver to the Collateral Agent)
      any Document evidencing or constituting Collateral and (d) upon the Collateral
      Agent’s request, deliver to the Collateral Agent a duly executed amendment to
      this Security Agreement, in the form of Exhibit
      I
      hereto
      (the “Amendment”),
      pursuant to which such Grantor will pledge such additional Collateral. Such
      Grantor hereby authorizes the Collateral Agent to attach each Amendment to
      this
      Security Agreement and agrees that all additional Collateral owned by it set
      forth in such Amendments shall be considered to be part of the
      Collateral.

     

    4.5. Uncertificated
      Pledged Collateral.
      Such
      Grantor will permit the Collateral Agent from time to time to cause the
      appropriate issuers (and, if held with a securities intermediary, such
      securities intermediary) of uncertificated securities or other types of Pledged
      Collateral owned by it not represented by certificates to mark their books
      and
      records with the numbers and face amounts of all such uncertificated securities
      or other types of Pledged Collateral not represented by certificates and all
      rollovers and replacements therefor to reflect the Lien of the Collateral Agent
      granted pursuant to this Security Agreement. With respect to any Pledged
      Collateral owned by it, such Grantor will take any actions necessary to cause
      (a) the issuers of uncertificated securities which are Pledged Collateral and
      (b) any securities intermediary which is the holder of any such Pledged
      Collateral, to cause the Collateral Agent to have and retain Control over such
      Pledged Collateral. Without limiting the foregoing, such Grantor will, with
      respect to any such Pledged Collateral held with a securities intermediary,
      cause such securities intermediary to enter into a control agreement with the
      Collateral Agent, in form and substance satisfactory to the Collateral Agent,
      giving the Collateral Agent Control.

     

    4.6. Pledged
      Collateral.

     

    (a) Issuance
      of Additional Securities.
      If any
      issuer of Equity Interests constituting Pledged Collateral issues additional
      Equity Interests to any Grantor, such Grantor shall promptly notify the
      Collateral Agent of such issuance of Equity Interests and to the extent such
      Equity Interests are represented by physical certificates shall promptly be
      deposited with and pledged to the Collateral Agent for itself and for the
      benefit of the Lenders in accordance with Section
      4.4
      and
4.5
      hereof.

     

    (b) Registration
      of Pledged Collateral.
      After
      the occurrence of an Event of Default, such Grantor will permit any registerable
      Pledged Collateral owned by it to be registered in the name of the Collateral
      Agent or its nominee at any time at the option Collateral Agent.

     

    (c) Exercise
      of Rights in Pledged Collateral.

     

    (i) Without
      in any way limiting the foregoing and subject to clause (ii) below, such Grantor
      shall have the right to exercise all voting rights or other rights relating
      to
      the Pledged Collateral owned by it for all purposes not inconsistent with this
      Security Agreement, the Credit Agreement or any other Loan Document;
provided
      however,
      that
      no vote
      or other right shall be exercised or action taken which would have the effect
      of
      impairing the rights of the Collateral Agent in respect of such Pledged
      Collateral.

     

    
      
         

      

      
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    (ii) Such
      Grantor will permit the Collateral Agent or its nominee at any time after the
      occurrence of an Event of Default, without notice, to exercise all voting rights
      or other rights relating to the Pledged Collateral owned by it, including,
      without limitation, exchange, subscription or any other rights, privileges,
      or
      options pertaining to any Equity Interests or Investment Property constituting
      such Pledged Collateral as if it were the absolute owner thereof.

     

    (iii) Such
      Grantor shall be entitled to collect and receive for its own use all cash
      dividends and interest paid in respect of the Pledged Collateral owned by it
      to
      the extent not in violation of the Credit Agreement other
      than
      any of
      the following distributions and payments (collectively referred to as the
“Excluded
      Payments”):
      (A)
      dividends and interest paid or payable other than in cash in respect of such
      Pledged Collateral, and instruments and other property received, receivable
      or
      otherwise distributed in respect of, or in exchange for, any Pledged Collateral;
      (B) dividends and other distributions paid or payable in cash in respect of
      such
      Pledged Collateral in connection with a partial or total liquidation or
      dissolution or in connection with a reduction of capital, capital surplus or
      paid-in capital of an issuer; and (C) cash paid, payable or otherwise
      distributed, in respect of principal of, or in redemption of, or in exchange
      for, such Pledged Collateral; provided
      however, that
      until
      actually paid, all rights to such distributions shall remain subject to the
      Lien
      created by this Security Agreement; and

     

    (iv) All
      Excluded Payments and all other distributions in respect of any of the Pledged
      Collateral owned by such Grantor, whenever paid or made, shall be delivered
      to
      the Collateral Agent to hold as Pledged Collateral and shall, if received by
      such Grantor, be received in trust for the benefit of the Collateral Agent,
      be
      segregated from the other property or funds of such Grantor, and be forthwith
      delivered to the Collateral Agent as Pledged Collateral in the same form as
      so
      received (with any necessary endorsement).

     

    4.7. Intellectual
      Property.

     

    (a) Such
      Grantor will use its best efforts to secure all consents and approvals necessary
      or appropriate for the assignment to or benefit of the Collateral Agent of
      any
      License held by such Grantor and to enforce the security interests granted
      hereunder.

     

    (b) Such
      Grantor shall notify the Collateral Agent immediately if it knows or has reason
      to know that any application or registration relating to any Patent, Trademark
      or Copyright (now or hereafter existing) may become abandoned or dedicated,
      or
      of any adverse determination or material development (including the institution
      of, or any such determination or development in, any proceeding in the United
      States Patent and Trademark Office, the United States Copyright Office or any
      court) regarding such Grantor’s ownership of any Patent, Trademark or Copyright,
      its right to register the same, or to keep and maintain the same.

     

    (c) In
      no
      event shall such Grantor, either directly or through any agent, employee,
      licensee or designee, file an application for the registration of any Patent,
      Trademark or Copyright with the United States Patent and Trademark Office,
      the
      United States Copyright Office or any similar office or agency without
      giving the Collateral Agent written notice thereof contemporaneously or promptly
      thereafter (but in any event no more than 3 Business Days
      thereafter),
      and,
      upon request of the Collateral Agent, such Grantor shall execute and deliver
      any
      and all security agreements as the Collateral Agent may request to evidence
      the
      Collateral Agent’s first priority security interest on such Patent, Trademark or
      Copyright, and the General Intangibles of such Grantor relating thereto or
      represented thereby.

     

    
      
         

      

      
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    (d) Such
      Grantor shall take all actions necessary or reasonably requested by the
      Collateral Agent to maintain and pursue each application, to obtain the relevant
      registration and to maintain the registration of each of its Patents, registered
      Trademarks and registered Copyrights (now or hereafter existing), including
      the
      filing of applications for renewal, affidavits of use, affidavits of
      noncontestability and opposition and interference and cancellation proceedings,
      unless the Collateral Agent and Grantor shall agree that such Patent, Trademark
      or Copyright is not material to the conduct of such Grantor’s business. The
      Collateral Agent shall provide the Grantors with all assistance required or
      reasonably requested by the Grantors to assist the Grantors in complying with
      Grantors’ obligations herein.

     

    (e) Such
      Grantor shall, unless it shall reasonably determine that such Patent, Trademark
      or Copyright is in no way material to the conduct of its business or operations,
      promptly sue for, or take other commercially reasonable steps to protect the
      Patents, Trademarks and Copyrights against, infringement, misappropriation
      or
      dilution and to recover any and all damages for such infringement,
      misappropriation or dilution, and shall take such other actions as the
      Collateral Agent shall deem appropriate under the circumstances to protect
      such
      Patent, Trademark or Copyright. In the event that such Grantor institutes suit
      because any of its Patents, Trademarks or Copyrights constituting Collateral
      is
      infringed upon, or misappropriated or diluted by a third party, such Grantor
      shall comply with Section 4.8.

     

    4.8. Commercial
      Tort Claims.
      Such
      Grantor shall promptly, and in any event within five Business Days after the
      same is acquired by it, notify the Collateral Agent of any Commercial Tort
      Claim
      acquired by it and, unless the Collateral Agent otherwise consents, such Grantor
      shall enter into an amendment to this Security Agreement, in the form of
Exhibit
      I
      hereto,
      granting to Collateral Agent a first priority security interest in such
      commercial tort claim.

     

    4.9. Letter-of-Credit
      Rights.
      If such
      Grantor is or becomes the beneficiary of a letter of credit, it shall promptly,
      and in any event within five Business Days after becoming a beneficiary, notify
      the Collateral Agent thereof and cause the issuer and/or confirmation bank
      to
      (i) consent to the assignment of any Letter-of-Credit Rights to the Collateral
      Agent and (ii) agree to direct all payments thereunder to the Agent for
      application to the Obligations, all in form and substance reasonably
      satisfactory to the Collateral Agent.

     

    4.10. Federal,
      State or Municipal Claims.
      Such
      Grantor will promptly notify the Collateral Agent of any Collateral which
      constitutes a claim against the United States government or any state or local
      government or any instrumentality or agency thereof, the assignment of which
      claim is restricted by federal, state or municipal law.

     

    4.11. No
      Interference.
      Such
      Grantor agrees that it will not interfere with any right, power and remedy
      of
      the Collateral Agent provided for in this Security Agreement or now or hereafter
      existing at law or in equity or by statute or otherwise, or the exercise or
      beginning of the exercise by the Collateral Agent of any one or more of such
      rights, powers or remedies.

     

    4.12. Insurance.

     

    (a) All
      insurance policies required hereunder and under Section 6.5 of the Credit
      Agreement shall name the Collateral Agent (for the benefit of the Collateral
      Agent and the Lenders) as an additional insured or as loss payee, as applicable,
      and shall contain loss payable clauses or mortgagee clauses, through
      endorsements in form and substance satisfactory to the Collateral Agent, which
      provide that: (i) subject to the limitations set forth in the Credit Agreement,
      all proceeds thereunder with respect to any Collateral shall be payable to
      the
      Collateral Agent; (ii) no such insurance shall be affected by any act or neglect
      of the insured or owner of the property described in such policy; and (iii)
      such
      policy and loss payable or mortgagee clauses may be canceled, amended, or
      terminated only upon at least thirty days prior written notice given to the
      Collateral Agent.

     

    
      
         

      

      
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    (b) All
      premiums on any such insurance shall be paid when due by such Grantor, and
      copies of the policies delivered to the Collateral Agent. If such Grantor fails
      to obtain any insurance as required by this Section, the Collateral Agent may
      obtain such insurance at the Borrowers’ expense.

     

    4.13. Collateral
      Access Agreements.
      Such
      Grantor shall use its best efforts to obtain a Collateral Access Agreement,
      from
      the lessor of each leased property, mortgagee of owned property or bailee or
      consignee with respect to any warehouse, processor or converter facility or
      other location where Collateral is stored or located, which agreement or letter
      shall provide access rights, contain a waiver or subordination of all Liens
      or
      claims that the landlord, mortgagee, bailee or consignee may assert against
      the
      Collateral at that location, and shall otherwise be reasonably satisfactory
      in
      form and substance to the Collateral Agent. With respect to such locations
      or
      warehouse space leased as of the Closing Date and thereafter, if the Collateral
      Agent has not received a Collateral Access Agreement as of the Effective Time
      (or, if later, as of the date such location is acquired or leased), the
      Borrowers’ Inventory at that location shall be deemed to be ineligible and shall
      be excluded from the Borrowing Base until such time that a Collateral Access
      Agreement is obtained. After the Closing Date, no real property or warehouse
      space shall be leased by such Grantor and no Inventory shall be shipped to
      a
      processor or converter under arrangements established after the Closing Date,
      unless and until a satisfactory Collateral Access Agreement shall first have
      been obtained with respect to such location and if it has not been obtained,
      the
      Borrowers’ Inventory at that location shall be deemed to be ineligible and shall
      be excluded from the Borrowing Base until such time that a Collateral Access
      Agreement is obtained. Such Grantor shall timely and fully pay and perform
      its
      obligations under all leases and other agreements with respect to each leased
      location or third party warehouse where any Collateral is or may be
      located.

     

    4.14. Control
      Agreements.

     

    (a) Such
      Grantor will provide to the Collateral Agent a Control Agreement duly executed
      on behalf of each financial institution holding a Deposit Account of such
      Grantor. No Grantor shall establish or maintain any Deposit Account unless
      (1)
      it shall have given the Collateral Agent fifteen (15) days’ prior written notice
      of its intention to establish such new Deposit Account with a bank and (2)
      such
      bank and such Grantor shall have duly executed and delivered to the Collateral
      Agent a Control Agreement with respect to such Deposit Account, in form and
      substance reasonable satisfactory to the Collateral Agent.

     

    (b) Such
      Grantor will provide to the Collateral Agent a Control Agreement duly executed
      on behalf of each financial institution holding a Securities Account or
      Commodity Account of such Grantor. No Grantor shall hereafter establish and
      maintain any Securities Account or Commodity Account with any Securities
      Intermediary or Commodity Intermediary unless (1) it shall have given the
      Collateral Agent fifteen (15) days’ prior written notice of its intention to
      establish such new Securities Account or Commodity Account with such Securities
      Intermediary or Commodity Intermediary and (2) such Securities Intermediary
      or
      Commodity Intermediary, as the case may be, and such Grantor shall have duly
      executed and delivered a Control Agreement with respect to such Securities
      Account or Commodity Account, as the case may be, in form and substance
      reasonable satisfactory to the Collateral Agent.

     

    4.15. Change
      of Name or Location; Change of Fiscal Year.
      Such
      Grantor shall not (a) change its name as it appears in official filings in
      the
      state of its incorporation or organization, (b) change its chief executive
      office, principal place of business, mailing address, corporate offices or
      warehouses or locations at which Collateral is held or stored, or the location
      of its records concerning the Collateral as set forth in the Security Agreement,
      (c) change the type of entity that it is, (d) change its organization
      identification number, if any, issued by its state of incorporation or other
      organization, or (e) change its state of incorporation or organization, in
      each
      case, unless the Collateral Agent shall have received at least fifteen (15)
      days’ prior written notice of such change and the Collateral Agent shall have
      acknowledged in writing that either (1) such change will not adversely affect
      the validity, perfection or priority of the Collateral Agent’s security interest
      in the Collateral, or (2) any reasonable action requested by the Collateral
      Agent in connection therewith has been completed or taken (including any action
      to continue the perfection of any Liens in favor of the Collateral Agent, on
      behalf of Lenders, in any Collateral), provided
      that,
      any new
      location shall be in the continental U.S.; provided that Inventory may be stored
      in locations outside of the U.S. in the ordinary course of the Company’s
      business. 

     

    
      
         

      

      
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    ARTICLE
      V

    EVENTS
      OF DEFAULT AND REMEDIES

     

    5.1. Events
      of Default.
      The
      occurrence of any one or more of the following events shall constitute an Event
      of Default hereunder:

     

    (a) Any
      representation or warranty made by or on behalf of any Grantor under or in
      connection with this Security Agreement shall be materially false as of the
      date
      on which made.

     

    (b) The
      failure by any Grantor (other than a breach which constitutes an Event of
      Default under any other Section of this Article
      V)
      to
      perform or observe any other terms or provisions of this Security Agreement
      and
      such failure continues for thirty days after the earlier of (i) a Designated
      Financial Officer of any Grantor becoming aware of such failure or (ii) notice
      thereof to any Grantor by the Collateral Agent.

     

    (c) The
      occurrence of any “Event of Default” under, and as defined in, the Credit
      Agreement.

     

    5.2. Remedies.

     

    (a) If
      an
      Event of Default has occurred and for so long as such Event of Default is
      continuing, the Collateral Agent may exercise any or all of the following rights
      and remedies:

     

    (i) those
      rights and remedies provided in this Security Agreement, the Credit Agreement,
      or any other Loan Document; provided
      that,
      this
Section
      5.2(a)
      shall
      not be understood to limit any rights or remedies available to the Collateral
      Agent and the Lenders prior to an Event of Default;

     

    (ii) those
      rights and remedies available to a secured party under the UCC (whether or
      not
      the UCC applies to the affected Collateral) or under any other applicable law
      (including, without limitation, any law governing the exercise of a bank’s right
      of setoff or bankers’ lien) when a debtor is in default under a security
      agreement;

     

    (iii) give
      notice of sole control or any other instruction under any Deposit Account
      Control Agreement or and other control agreement with any securities
      intermediary and take any action therein with respect to such
      Collateral;

     

    (iv) without
      notice (except as specifically provided in Section
      8.1
      or
      elsewhere herein), demand or advertisement of any kind to any Grantor or any
      other Person, enter the premises of any Grantor where any Collateral is located
      (through self-help and without judicial process) to collect, receive, assemble,
      process, appropriate, sell, lease, assign, grant an option or options to
      purchase or otherwise dispose of, deliver, or realize upon, the Collateral
      or
      any part thereof in one or more parcels at public or private sale or sales
      (which sales may be adjourned or continued from time to time with or without
      notice and may take place at any Grantor’s premises or elsewhere), for cash, on
      credit or for future delivery without assumption of any credit risk, and upon
      such other terms as the Collateral Agent may deem commercially reasonable;
      and

     

    
      
         

      

      
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    (v) concurrently
      with written notice to the applicable Grantor, transfer and register in its
      name
      or in the name of its nominee the whole or any part of the Pledged Collateral,
      to exchange certificates or instruments representing or evidencing Pledged
      Collateral for certificates or instruments of smaller or larger denominations,
      to exercise the voting and all other rights as a holder with respect thereto,
      to
      collect and receive all cash dividends, interest, principal and other
      distributions made thereon and to otherwise act with respect to the Pledged
      Collateral as though the Collateral Agent was the outright owner
      thereof.

     

    (b) The
      Collateral Agent, on behalf of the Lenders, may comply with any applicable
      state
      or federal law requirements in connection with a disposition of the Collateral
      and compliance will not be considered to adversely affect the commercial
      reasonableness of any sale of the Collateral.

     

    (c) The
      Collateral Agent shall have the right upon any such public sale or sales and,
      to
      the extent permitted by law, upon any such private sale or sales, to purchase
      for the benefit of the Collateral Agent and the Lenders, the whole or any part
      of the Collateral so sold, free of any right of equity redemption, which equity
      redemption the Grantor hereby expressly releases.

     

    (d) Until
      the
      Collateral Agent is able to effect a sale, lease, or other disposition of
      Collateral, the Collateral Agent shall have the right to hold or use Collateral,
      or any part thereof, to the extent that it deems appropriate for the purpose
      of
      preserving Collateral or its value or for any other purpose deemed appropriate
      by the Collateral Agent. The Collateral Agent may, if it so elects, designate
      an
      agent or designee to take possession of Collateral and to enforce any of the
      Collateral Agent’s remedies (for the benefit of the Collateral Agent and
      Lenders), with respect to such appointment without prior notice or hearing
      as to
      such appointment.

     

    (e) Notwithstanding
      the foregoing, neither the Collateral Agent nor the Lenders shall be required
      to
      (i) make any demand upon, or pursue or exhaust any of their rights or remedies
      against, any Grantor, any other obligor, guarantor, pledgor or any other Person
      with respect to the payment of the Obligations or to pursue or exhaust any
      of
      their rights or remedies with respect to any Collateral therefor or any direct
      or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee
      of
      the Obligations or to resort to the Collateral or any such guarantee in any
      particular order, or (iii) effect a public sale of any Collateral.

     

    (f) Each
      Grantor recognizes that the Collateral Agent may be unable to effect a public
      sale of any or all the Pledged Collateral and may be compelled to resort to
      one
      or more private sales thereof in accordance with clause
      (a)
      above.
      Each Grantor also acknowledges that any private sale may result in prices and
      other terms less favorable to the seller than if such sale were a public sale
      and, notwithstanding such circumstances, agrees that any such private sale
      shall
      not be deemed to have been made in a commercially unreasonable manner solely
      by
      virtue of such sale being private. The Collateral Agent shall be under no
      obligation to delay a sale of any of the Pledged Collateral for the period
      of
      time necessary to permit any Grantor or the issuer of the Pledged Collateral
      to
      register such securities for public sale under the Securities Act of 1933,
      as
      amended, or under applicable state securities laws, even if the applicable
      Grantor and the issuer would agree to do so.

     

    
      
         

      

      
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    5.3. Grantor’s
      Obligations Upon Default.
      Upon
      the request of the Collateral Agent after the occurrence of an Event of Default,
      each Grantor will:

     

    (a) assemble
      and make available to the Collateral Agent the Collateral and all books and
      records relating thereto at any place or places specified by the Collateral
      Agent, whether at a Grantor’s premises or elsewhere;

     

    (b) permit
      the Collateral Agent, by the Collateral Agent’s representatives and Collateral
      Agents, to enter, occupy and use any premises where all or any part of the
      Collateral, or the books and records relating thereto, or both, are located,
      to
      take possession of all or any part of the Collateral or the books and records
      relating thereto, or both, to remove all or any part of the Collateral or the
      books and records relating thereto, or both, and to conduct sales of the
      Collateral, without any obligation to pay the Grantor for such use and
      occupancy;

     

    (c) prepare
      and file, or cause the issuer of any Pledged Collateral to prepare and file,
      with the Securities and Exchange Commission or any other applicable government
      agency, registration statements, a prospectus and such other documentation
      in
      connection with the Pledged Collateral as the Collateral Agent may request,
      all
      in form and substance satisfactory to the Collateral Agent, and furnish to
      the
      Collateral Agent, or cause the issuer of any Pledged Collateral to furnish
      to
      the Collateral Agent, any information regarding the Pledged Collateral in such
      detail as the Collateral Agent may specify;

     

    (d) take,
      or
      cause an issuer of Pledged Collateral to take, any and all actions necessary
      to
      register or qualify the Pledged Collateral to enable the Collateral Agent to
      consummate a public sale or other disposition of the Pledged Collateral;
      and

     

    (e) at
      its
      own expense, request that the independent certified public accountants then
      engaged by each Grantor to prepare and deliver to the Collateral Agent and
      each
      Lender, at any time, and from time to time, promptly upon the Collateral Agent’s
      request, the following reports with respect to the applicable Grantor: (i)
      a
      reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial
      balances; and (iv) a test verification of such Accounts.

     

    5.4. Grant
      of Intellectual Property License.
      For the
      purpose of enabling the Collateral Agent to exercise the rights and remedies
      under this Article
      V
      at such
      time as the Collateral Agent shall be lawfully entitled to exercise such rights
      and remedies, each Grantor hereby (a) grants to the Collateral Agent, for the
      benefit of the Collateral Agent and the Lenders, an irrevocable, nonexclusive
      license (exercisable without payment of royalty or other compensation to any
      Grantor) to use, license or sublicense any Registered Proprietary Rights now
      owned or hereafter acquired by such Grantor, and wherever the same may be
      located, and including in such license 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 (b) irrevocably agrees
      that the Collateral Agent may sell any of such Grantor’s Inventory directly to
      any person, including without limitation persons who have previously purchased
      the Grantor’s Inventory from such Grantor and in connection with any such sale
      or other enforcement of the Collateral Agent’s rights under this Security
      Agreement, may sell Inventory which bears any Trademark owned by or licensed
      to
      such Grantor and any Inventory that is covered by any Copyright owned by or
      licensed to such Grantor and the Collateral Agent may finish any work in process
      and affix any Trademark owned by or licensed to such Grantor and sell such
      Inventory as provided herein. The Collateral Agent and the Grantors agree that
      any irrevocable, nonexclusive license granted hereunder may be used by the
      Collateral Agent only during the continuance of an Event of Default and in
      connection with the exercise the rights and remedies under this Article
      V.

     

    
      
         

      

      
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    ARTICLE
      VI

    ACCOUNT
      VERIFICATION; ATTORNEY IN FACT; PROXY

     

    6.1. Account
      Verification.
      The
      Collateral Agent may at any time, in the Collateral Agent’s own name, in the
      name of a nominee of the Collateral Agent, or in the name of any Grantor
      communicate (by mail, telephone, facsimile or otherwise) with the Account
      Debtors of any such Grantor, parties to contracts with any such Grantor and
      obligors in respect of Instruments of any such Grantor to verify with such
      Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms
      of, and any other matter relating to, Accounts, Instruments, Chattel Paper,
      payment intangibles and/or other Receivables.

     

    6.2. Authorization
      for Secured Party to Take Certain Action.

     

    (a) Each
      Grantor irrevocably authorizes the Collateral Agent at any time and from time
      to
      time in the sole discretion of the Collateral Agent and appoints the Collateral
      Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor
      and to file financing statements necessary or desirable in the Collateral
      Agent’s sole discretion to perfect and to maintain the perfection and priority
      of the Collateral Agent’s security interest in the Collateral, (ii) to endorse
      and collect any cash proceeds of the Collateral, (iii) to file a carbon,
      photographic or other reproduction of this Security Agreement or any financing
      statement with respect to the Collateral as a financing statement and to file
      any other financing statement or amendment of a financing statement (which
      does
      not add new collateral or add a debtor) in such offices as the Collateral Agent
      in its sole discretion deems necessary or desirable to perfect and to maintain
      the perfection and priority of the Collateral Agent’s security interest in the
      Collateral, (iv) upon reasonable prior written notice to the Grantors, to
      contact and enter into one or more agreements with the issuers of uncertificated
      securities which are Pledged Collateral or with securities intermediaries
      holding Pledged Collateral as may be necessary or advisable to give the
      Collateral Agent Control over such Pledged Collateral, (v) to apply the proceeds
      of any Collateral received by the Collateral Agent to the Obligations as
      provided in Section 2.3 of the Credit Agreement, (vi) to discharge past due
      taxes, assessments, charges, fees or Liens on the Collateral (except for
      Permitted Liens), (vii) to contact Account Debtors for any reason, (viii) to
      demand payment or enforce payment of the Receivables in the name of the
      Collateral Agent or such Grantor and to endorse any and all checks, drafts,
      and
      other instruments for the payment of money relating to the Receivables, (ix)
      to
      sign such Grantor’s name on any invoice or bill of lading relating to the
      Receivables, drafts against any Account Debtor of the Grantor, assignments
      and
      verifications of Receivables, (x) to exercise all of such Grantor’s rights and
      remedies with respect to the collection of the Receivables and any other
      Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables,
      (xii) to settle, adjust or compromise any legal proceedings brought to collect
      Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of
      claim in bankruptcy or similar document against any Account Debtor of such
      Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of
      Lien, assignment or satisfaction of Lien or similar document in connection
      with
      the Receivables, (xv) to change the address for delivery of mail addressed
      to
      such Grantor to such address as the Collateral Agent may designate and to
      receive, open and dispose of all mail addressed to such Grantor and (xvi) to
      do
      all other acts and things reasonably necessary to carry out this Security
      Agreement; and such Grantor agrees to reimburse the Collateral Agent on demand
      for any payment made or any expense incurred by the Collateral Agent (including
      the reasonable fees, charges and disbursements of counsel) in connection with
      any of the foregoing; provided
      that,
      this
      authorization shall not relieve such Grantor of any of its obligations under
      this Security Agreement or under the Credit Agreement.

     

    
      
         

      

      
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    (b) All
      acts
      of said attorney or designee are hereby ratified and approved. The powers
      conferred on the Collateral Agent, for the benefit of the Collateral Agent
      and
      Lenders, under this Section
      6.2
      are
      solely to protect the Collateral Agent’s interests in the Collateral and shall
      not impose any duty upon the Collateral Agent or any Lender to exercise any
      such
      powers. The Collateral Agent agrees that, except for the powers granted in
      Section
      6.2(a)(i)-(vi),
      it
      shall not exercise any power or authority granted to it unless an Event of
      Default has occurred and is continuing. The rights granted to the Collateral
      Agent pursuant to this Section 6.2 shall be irrevocable until the date on which
      this Security Agreement is terminated in accordance with Section
      8.14.

     

    6.3. Proxy.
      EACH
      GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS
      ITS
      PROXY AND ATTORNEY-IN-FACT (TO THE EXTENT SET FORTH IN SECTION 6.2 ABOVE) WITH
      RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED
      COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT
      TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE COLLATERAL AGENT
      AS
      PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS,
      POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL
      WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF
      SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH
      MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE
      NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL
      ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER
      OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR COLLATERAL AGENT THEREOF), UPON
      THE
      OCCURRENCE OF AN EVENT OF DEFAULT.

     

    6.4. Nature
      of Appointment; Limitation of Duty.
      THE
      APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS
      ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE
      ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14.
      NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR
      ANY
      LENDER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
      ADMINISTRATIVE AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY
      RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL
      NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT
      IN
      RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL
      MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED
      THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT
      OR
      CONSEQUENTIAL DAMAGES.

     

    ARTICLE
      VII

    COLLECTION
      AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS

     

    7.1. Application
      of Proceeds; Deficiency.
      All
      proceeds of the Collateral received by the Collateral Agent (i) after an Event
      of Default has occurred and is continuing and the Collateral Agent so elects
      and
      (ii) the exercise of remedies provided for in Article 8 of the Credit Agreement
      (or after the Term Loans have automatically become immediately due and payable),
      shall be applied to the Obligations in the order set forth in Section 2.3 of
      the
      Credit Agreement unless a court of competent jurisdiction shall otherwise
      direct. The Grantors shall remain liable for any deficiency if the proceeds
      of
      any sale or disposition of the Collateral are insufficient to pay all of the
      Obligations, including any attorneys’ fees and other expenses incurred by
      Collateral Agent or any Lender to collect such deficiency.

     

    
      
         

      

      
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    ARTICLE
      VIII

    GENERAL
      PROVISIONS

     

    8.1. Waivers.
      Each
      Grantor hereby waives notice of the time and place of any public sale or the
      time after which any private sale or other disposition of all or any part of
      the
      Collateral may be made. To the extent such notice may not be waived under
      applicable law, any notice made shall be deemed reasonable if sent to the
      Grantors, addressed as set forth in Article
      IX,
      at
      least ten (10) days prior to (i) the date of any such public sale or (ii) the
      time after which any such private sale or other disposition may be made. To
      the
      maximum extent permitted by applicable law, each Grantor waives all claims,
      damages, and demands against the Collateral Agent or any Lender arising out
      of
      the repossession, retention or sale of the Collateral, except such as arise
      solely out of the gross negligence or willful misconduct of the Collateral
      Agent
      or such Lender as finally determined by a court of competent jurisdiction.
      To
      the extent it may lawfully do so, each Grantor absolutely and irrevocably waives
      and relinquishes the benefit and advantage of, and covenants not to assert
      against the Collateral Agent or any Lender, any valuation, stay, appraisal,
      extension, moratorium, redemption or similar laws and any and all rights or
      defenses it may have as a surety now or hereafter existing which, but for this
      provision, might be applicable to the sale of any Collateral made under the
      judgment, order or decree of any court, or privately under the power of sale
      conferred by this Security Agreement, or otherwise. Except as otherwise
      specifically provided herein, each Grantor hereby waives presentment, demand,
      protest or any notice (to the maximum extent permitted by applicable law) of
      any
      kind in connection with this Security Agreement or any Collateral.

     

    8.2. Limitation
      on Collateral Agent’s and Lenders’ Duty with Respect to the
      Collateral.
      The
      Collateral Agent shall have no obligation to clean-up or otherwise prepare
      the
      Collateral for sale. The Collateral Agent and each Lender shall use reasonable
      care with respect to the Collateral in its possession or under its control.
      Neither the Collateral Agent nor any Lender shall have any other duty as to
      any
      Collateral in its possession or control or in the possession or control of
      any
      Collateral Agent or nominee of the Collateral Agent or such Lender, or any
      income thereon or as to the preservation of rights against prior parties or
      any
      other rights pertaining thereto. To the extent that applicable law imposes
      duties on the Collateral Agent to exercise remedies in a commercially reasonable
      manner, each Grantor acknowledges and agrees that it is commercially reasonable
      for the Collateral Agent (i) to fail to incur expenses deemed significant by
      the
      Collateral Agent to prepare Collateral for disposition or otherwise to transform
      raw material or work in process into finished goods or other finished products
      for disposition, (ii) to fail to obtain third party consents for access to
      Collateral to be disposed of, or to obtain or, if not required by other law,
      to
      fail to obtain governmental or third party consents for the collection or
      disposition of Collateral to be collected or disposed of, (iii) to fail to
      exercise collection remedies against Account Debtors or other Persons obligated
      on Collateral or to remove Liens on or any adverse claims against Collateral,
      (iv) to exercise collection remedies against Account Debtors and other Persons
      obligated on Collateral directly or through the use of collection agencies
      and
      other collection specialists, (v) to advertise dispositions of Collateral
      through publications or media of general circulation, whether or not the
      Collateral is of a specialized nature, (vi) to contact other Persons, whether
      or
      not in the same business as such Grantor, for expressions of interest in
      acquiring all or any portion of such Collateral, (vii) to hire one or more
      professional auctioneers to assist in the disposition of Collateral, whether
      or
      not the Collateral is of a specialized nature, (viii) to dispose of Collateral
      by utilizing internet sites that provide for the auction of assets of the types
      included in the Collateral or that have the reasonable capacity of doing so,
      or
      that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
      rather than retail markets, (x) to disclaim disposition warranties, such as
      title, possession or quiet enjoyment, (xi) to purchase insurance or credit
      enhancements to insure the Collateral Agent against risks of loss, collection
      or
      disposition of Collateral or to provide to the Collateral Agent a guaranteed
      return from the collection or disposition of Collateral, or (xii) to the extent
      deemed appropriate by the Collateral Agent, to obtain the services of other
      brokers, investment bankers, consultants and other professionals to assist
      the
      Collateral Agent in the collection or disposition of any of the Collateral.
      Each
      Grantor acknowledges that the purpose of this Section 8.2 is to provide
      non-exhaustive indications of what actions or omissions by the Collateral Agent
      would be commercially reasonable in the Collateral Agent’s exercise of remedies
      against the Collateral and that other actions or omissions by the Collateral
      Agent shall not be deemed commercially unreasonable solely on account of not
      being indicated in this Section 8.2. Without limitation upon the foregoing,
      nothing contained in this Section 8.2 shall be construed to grant any rights
      to
      any Grantor or to impose any duties on the Collateral Agent that would not
      have
      been granted or imposed by this Security Agreement or by applicable law in
      the
      absence of this Section 8.2.

    
      
         

      

      
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    8.3. Compromises
      and Collection of Collateral.
      The
      Grantors and the Collateral Agent recognize that setoffs, counterclaims,
      defenses and other claims may be asserted by obligors with respect to certain
      of
      the Receivables, that certain of the Receivables may be or become uncollectible
      in whole or in part and that the expense and probability of success in
      litigating a disputed Receivable may exceed the amount that reasonably may
      be
      expected to be recovered with respect to a Receivable. In view of the foregoing,
      each Grantor agrees that the Collateral Agent may at any time and from time
      to
      time, if an Event of Default has occurred and is continuing, compromise with
      the
      obligor on any Receivable, accept in full payment of any Receivable such amount
      as the Collateral Agent in its sole discretion shall determine or abandon any
      Receivable, and any such action by the Collateral Agent shall be commercially
      reasonable so long as the Collateral Agent acts in good faith based on
      information known to it at the time it takes any such action.

     

    8.4. Secured
      Party Performance of Debtor Obligations.
      Without
      having any obligation to do so, the Collateral Agent may perform or pay any
      obligation which any Grantor has agreed to perform or pay in this Security
      Agreement and the Grantors shall reimburse the Collateral Agent for any amounts
      paid by the Collateral Agent pursuant to this Section
      8.4.
      The
      Grantors’ obligation to reimburse the Collateral Agent pursuant to the preceding
      sentence shall be a Obligation payable on demand.

     

    8.5. Specific
      Performance of Certain Covenants.
      Each
      Grantor acknowledges and agrees that a breach of any of the covenants contained
      in Sections
      4.1(d),
      Sections
      4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10,
      4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7
      or in
Article
      VII
      will
      cause irreparable injury to the Collateral Agent and the Lenders, that the
      Collateral Agent and Lenders have no adequate remedy at law in respect of such
      breaches and therefore agrees, without limiting the right of the Collateral
      Agent or the Lenders to seek and obtain specific performance of other
      obligations of the Grantors contained in this Security Agreement, that the
      covenants of the Grantors contained in the Sections referred to in this Section
      8.5 shall be specifically enforceable against the Grantors.

     

    8.6. Dispositions
      Not Authorized.
      No
      Grantor is authorized to sell or otherwise dispose of the Collateral except
      as
      set forth in Section
      4.1(d)
      and
      notwithstanding any course of dealing between any Grantor and the Collateral
      Agent or other conduct of the Collateral Agent, no authorization to sell or
      otherwise dispose of the Collateral (except as set forth in Section
      4.1(d))
      shall
      be binding upon the Collateral Agent or the Lenders unless such authorization
      is
      in writing signed by the Collateral Agent.

     

    8.7. No
      Waiver; Amendments; Cumulative Remedies.
      No
      delay or omission of the Collateral Agent or any Lender to exercise any right
      or
      remedy granted under this Security Agreement shall impair such right or remedy
      or be construed to be a waiver of any Event of Default or an acquiescence
      therein, and any single or partial exercise of any such right or remedy shall
      not preclude any other or further exercise thereof or the exercise of any other
      right or remedy. No waiver, amendment or other variation of the terms,
      conditions or provisions of this Security Agreement whatsoever shall be valid
      unless in writing signed by the Collateral Agent with the concurrence or at
      the
      direction of the Lenders required under Section 10.2 of the Credit Agreement
      and
      then only to the extent in such writing specifically set forth. All rights
      and
      remedies contained in this Security Agreement or by law afforded shall be
      cumulative and all shall be available to the Collateral Agent and the Lenders
      until the Obligations have been paid in full.

     

    
      
         

      

      
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    8.8. Limitation
      by Law; Severability of Provisions.
      All
      rights, remedies and powers provided in this Security Agreement may be exercised
      only to the extent that the exercise thereof does not violate any applicable
      provision of law, and all the provisions of this Security Agreement are intended
      to be subject to all applicable mandatory provisions of law that may be
      controlling and to be limited to the extent necessary so that they shall not
      render this Security Agreement invalid, unenforceable or not entitled to be
      recorded or registered, in whole or in part. Any provision in any this Security
      Agreement that is held to be inoperative, unenforceable, or invalid in any
      jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
      or
      invalid without affecting the remaining provisions in that jurisdiction or
      the
      operation, enforceability, or validity of that provision in any other
      jurisdiction, and to this end the provisions of this Security Agreement are
      declared to be severable.

     

    8.9. Reinstatement.
      This
      Security Agreement shall remain in full force and effect and continue to be
      effective should any petition be filed by or against any Grantor for liquidation
      or reorganization, should any Grantor become insolvent or make an assignment
      for
      the benefit of any creditor or creditors or should a receiver or trustee be
      appointed for all or any significant part of any Grantor’s assets, and shall
      continue to be effective or be reinstated, as the case may be, if at any time
      payment and performance of the Obligations, or any part thereof, is, pursuant
      to
      applicable law, rescinded or reduced in amount, or must otherwise be restored
      or
      returned by any obligee of the Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance
      had not been made. In the event that any payment, or any part thereof, is
      rescinded, reduced, restored or returned, the Obligations shall be reinstated
      and deemed reduced only by such amount paid and not so rescinded, reduced,
      restored or returned.

     

    8.10. Benefit
      of Agreement.
      The
      terms and provisions of this Security Agreement shall be binding upon and inure
      to the benefit of the Grantors, the Collateral Agent and the Lenders and their
      respective successors and assigns (including all persons who become bound as
      a
      debtor to this Security Agreement), except that no Grantor shall have the right
      to assign its rights or delegate its obligations under this Security Agreement
      or any interest herein, without the prior written consent of the Collateral
      Agent. No sales of participations, assignments, transfers, or other dispositions
      of any agreement governing the Obligations or any portion thereof or interest
      therein shall in any manner impair the Lien granted to the Collateral Agent,
      for
      the benefit of the Collateral Agent and the Lenders, hereunder.

     

    8.11. Survival
      of Representations.
      All
      representations and warranties of the Grantors contained in this Security
      Agreement shall survive the execution and delivery of this Security
      Agreement.

     

    8.12. Taxes
      and Expenses.
      Any
      taxes (including income taxes) payable or ruled payable by Federal or State
      authority in respect of this Security Agreement shall be paid by the Grantors,
      together with interest and penalties, if any. The Grantors shall reimburse
      the
      Collateral Agent for any and all out-of-pocket expenses and internal charges
      (including reasonable attorneys’, auditors’ and accountants’ fees and reasonable
      time charges of attorneys, paralegals, auditors and accountants who may be
      employees of the Collateral Agent) paid or incurred by the Collateral Agent
      in
      connection with the preparation, execution, delivery, administration, collection
      and enforcement of this Security Agreement and in the audit, analysis,
      administration, collection, preservation or sale of the Collateral (including
      the expenses and charges associated with any periodic or special audit of the
      Collateral). Any and all costs and expenses incurred by the Grantors in the
      performance of actions required pursuant to the terms hereof shall be borne
      solely by the Grantors.

     

    
      
         

      

      
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    8.13. Headings.
      The
      title of and section headings in this Security Agreement are for convenience
      of
      reference only, and shall not govern the interpretation of any of the terms
      and
      provisions of this Security Agreement.

     

    8.14. Termination.
      This
      Security Agreement shall continue in effect (notwithstanding the fact that
      from
      time to time there may be no Obligations outstanding) until (i) the Credit
      Agreement has terminated pursuant to its express terms and (ii) all of the
      Obligations have been indefeasibly paid and performed in full and no Commitments
      of the Lenders which would give rise to any Obligations are outstanding. Upon
      any termination or expiration of this Security Agreement, the Collateral Agent
      shall promptly following the date of such termination at the sole cost and
      expense of the Grantors (A) make such filings in all jurisdictions in which
      it
      filed or caused to be filed a financing statement or other evidence of the
      security agreements granted hereunder a termination statement regarding such
      liens and (B) terminate its rights under any Collateral Access Agreement,
      Deposit Account Control Agreement and any other similar agreement.

     

    8.15. Entire
      Agreement.
      This
      Security Agreement embodies the entire agreement and understanding between
      the
      Grantors and the Collateral Agent relating to the Collateral and supersedes
      all
      prior agreements and understandings between the Grantors and the Collateral
      Agent relating to the Collateral.

     

    8.16. CHOICE
      OF LAW.
      THIS
      SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
      INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK
      STATE CONSOLIDATED LAWS, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS
      PROVISIONS) OF THE STATE OF NEW YORK.

     

    8.17. CONSENT
      TO JURISDICTION.
      EACH
      PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
      ANY
      U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION
      OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT ANY EACH PARTY
      HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
      OR
      PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
      ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
      ACTION, OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
      INCONVENIENT FORUM. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT
      IN
      ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
      JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
      NOTHING IN THIS SECURITY AGREEMENT SHALL AFFECT ANY RIGHT THAT THE AGENT OR
      ANY
      LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
      SECURITY AGREEMENT AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS
      OF
      ANY JURISDICTION.

     

    EACH
      PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
      EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW
      OR
      HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
      OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE OTHER LOAN DOCUMENTS IN
      ANY
      COURT REFERRED TO IN PARAGRAPH ABOVE. EACH OF THE PARTIES HERETO HEREBY
      IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF
      AN
      INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
      COURT.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    EACH
      PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
      PROVIDED FOR NOTICES IN THE CREDIT AGREEMENT. NOTHING IN THIS SECURITY AGREEMENT
      WILL AFFECT THE RIGHT OF ANY PARTY TO THIS SECURITY AGREEMENT TO SERVE PROCESS
      IN ANY OTHER MANNER PERMITTED BY LAW.

     

    8.18. WAIVER
      OF JURY TRIAL.
      EACH
      PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
      ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
      INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE
      TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
      THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
      ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
      OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
      WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
      INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
      AND CERTIFICATIONS IN THIS SECTION 8.18.

     

    8.19. Certain
      Regulatory Restrictions.
      Notwithstanding anything to the contrary set forth herein, certain rights,
      remedies and powers provided the Agent in this Security Agreement, such as
      actions that involve taking possession or controlling the use of human blood
      products or facilities for which a Permit is required, are subject to regulatory
      restrictions that may require the Agent to obtain the prior written consent
      or
      approval of certain state and/or federal agencies, and all provisions of this
      Security Agreement shall be limited to conform with such restrictions. For
      purposes hereof, “Permits”
means
      permits, licenses, certificates, approvals and other authorizations issued
      by a
      state and/or federal agency exercising authority over human blood products.
      Grantors shall not be held liable for any damages resulting from the exercise
      by
      the Collateral Agent of any rights under this Security Agreement in
      contravention of any Permits.

     

    8.20. Indemnity.
      Each
      Grantor hereby agrees to indemnify the Collateral Agent and the Lenders, and
      their respective successors, assigns, Collateral Agents and employees, from
      and
      against any and all liabilities, damages, penalties, suits, costs, and expenses
      of any kind and nature (including, without limitation, all expenses of
      litigation or preparation therefor whether or not the Collateral Agent or any
      Lender is a party thereto) imposed on, incurred by or asserted against the
      Collateral Agent or the Lenders, or their respective successors, assigns,
      Collateral Agents and employees, in any way relating to or arising out of this
      Security Agreement, or the manufacture, purchase, acceptance, rejection,
      ownership, delivery, lease, possession, use, operation, condition, sale, return
      or other disposition of any Collateral (including, without limitation, latent
      and other defects, whether or not discoverable by the Collateral Agent or the
      Lenders or any Grantor, and any claim for Patent, Trademark or Copyright
      infringement). The parties will adhere to the provisions of Section 10.3 of
      the
      Credit Agreement with respect to any claim for indemnification pursuant to
      this
      Security Agreement.

     

    8.21. Counterparts.
      This
      Security Agreement may be executed in any number of counterparts, all of which
      taken together shall constitute one agreement, and any of the parties hereto
      may
      execute this Security Agreement by signing any such counterpart.

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    ARTICLE
      IX

    NOTICES

     

    9.1. Sending
      Notices.
      Any
      notice required or permitted to be given under this Security Agreement shall
      be
      sent by United States mail, telecopier, personal delivery or nationally
      established overnight courier service, and shall be deemed received (a) when
      received, if sent by hand or overnight courier service, or mailed by certified
      or registered mail notices or (b) when sent, if sent by telecopier (except
      that,
      if not given during normal business hours for the recipient, shall be deemed
      to
      have been given at the opening of business on the next Business Day for the
      recipient), in each case addressed to the Grantors at the notice address set
      forth on Exhibit
      A,
      and to
      the Collateral Agent and the Lenders at the addresses set forth in accordance
      with Section 10.1 of the Credit Agreement.

     

    9.2. Change
      in Address for Notices.
      Each of
      the Grantors, the Collateral Agent and the Lenders may change the address for
      service of notice upon it by a notice in writing to the other
      parties.

     

    ARTICLE
      X

    THE
      COLLATERAL AGENT

     

    Mast
      Capital Management, LLC has been appointed as the exclusive Collateral Agent
      for
      the Lenders hereunder pursuant to Article 9 of the Credit Agreement. It is
      expressly understood and agreed by the parties to this Security Agreement that
      any authority conferred upon the Collateral Agent hereunder is subject to the
      terms of the delegation of authority made by the Lenders to the Collateral
      Agent
      pursuant to the Credit Agreement, and that the Collateral Agent has agreed
      to
      act (and any successor Collateral Agent shall act) as such hereunder only on
      the
      express conditions contained in such Article 9 of the Credit Agreement. Any
      successor Collateral Agent appointed pursuant to Article 9 of the Credit
      Agreement shall be entitled to all the rights, interests and benefits of the
      Collateral Agent hereunder.

     

    [Signature
      Page Follows]

     

    
      
         

      

      
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    [Signature
      Page to Pledge and Security Agreement]

     

    IN
      WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this
      Security Agreement as of the date first above written.

     

    
      	 	 	 
	 	GRANTORS:
	 	 
	 	LEV
              PHARMACEUTICALS, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Joshua
              D.
              Schein
	 	
              
Name:
              Joshua D. Schein
	 	Title:
              Chief Executive Officer

    

     

    
      	 	 	 
	 	LEV
              DEVELOPMENT CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Joshua
              D.
              Schein
	 	
              
Name:
              Joshua D. Schein
	 	Title:
              Chief Executive Officer

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    [Signature
      Page to Pledge and Security Agreement]

    

    
      	 	 	 
	 	COLLATERAL AGENT:
	 	 
	 	MAST
              CAPITAL MANAGEMENT, LLC
	 
 	 
 	 
 
	 	By:  	/s/ John
              S. Ehlinger
	 	
              
Name:
              John S. Ehlinger
	 	Title:
              PartnerUnassociated Document

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of November 2, 2007, among Lev Pharmaceuticals, Inc.,
      a
      Delaware corporation (the “Company”),
      and
      the several lenders signatory hereto (each such lender is a “Lender”
and
      collectively, the “Lenders”).

    

    This
      Agreement is made pursuant to the Term Loan Agreement, dated as of the date
      hereof among the Company, Mast Capital Management LLC, and each Lender (the
      “Term
      Loan Agreement”).

    

    The
      Company and each Lender hereby agrees as follows:

    

    1. Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Term Loan Agreement shall have the meanings given such terms in the Term Loan
      Agreement. As used in this Agreement, the following terms shall have the
      following meanings:

    

    “Business
      Day”
means
      any day except Saturday, Sunday, any day which shall be a federal legal holiday
      in the United States or any day on which banking institutions in the State
      of
      New York are authorized or required by law or other governmental action to
      close.

     

    “Commission”
shall
      mean the U.S. Securities and Exchange Commission.

     

    “Effectiveness
      Period”
shall
      have the meaning set forth in Section 2(a).

     

    “Event”
shall
      have the meaning set forth in Section 2(b).

     

    “Event
      Date”
shall
      have the meaning set forth in Section 2(b).

     

    “Holder”
or
      “Holders”
means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.

     

    “Indemnified
      Party”
shall
      have the meaning set forth in Section 5(c).

     

    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 5(c). 

     

    “Proceeding”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened.

     

    “Prospectus”
means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by a Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.

     

    “Registrable
      Securities”
means
      all of (i) shares of Common Stock issuable upon exercise of the Warrants issued
      by the Company to the Lenders pursuant to the Term Loan Agreement, and (ii)
      any
      shares of Common Stock issued or issuable upon any stock split, dividend or
      other distribution, recapitalization or similar event with respect to the
      foregoing. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Registration
      Statement”
means
      the registration statements required to be filed hereunder, including the
      Prospectus, amendments and supplements to such registration statement or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

     

    “Rule
      415”
means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule.

     

    “Rule
      424”
means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule.

     

    “Selling
      Shareholder Questionnaire”
shall
      have the meaning set forth in Section 3(a).

     

    “Warrants”
means
      the common stock purchase warrants to be issued by the Company to the Lenders
      pursuant to the Term Loan Agreement.

     

    2. Registration Rights.

     

    (a) Demand
      Right.
      For a period of twelve (12) months following the Closing, one or more Lenders
      holding, in the aggregate, at least fifty percent (50%) of the Registrable
      Securities then held by all Lenders, may request, on one occasion, registration
      for sale under the Securities Act of 1933, as amended (the “Securities
      Act”)
      of all or part of the Registrable Securities then held by them, and upon such
      request the Company will promptly take the actions specified in Section 2(a)
      of
      this Agreement.

     

    (i) Demand
      Procedures.
      Within
      ten (10) Business Days after receipt by the Company of a written registration
      request under Section 2(a) (which
      request shall specify the number of shares proposed to be registered and sold
      and the manner in which such sale is proposed to be effected), the Company
      shall
      promptly give written notice to all other Holders of the proposed demand
      registration, and such other Holders shall have the right to join in the
      proposed registration and sale, upon written request to the Company (which
      request shall specify the number of shares proposed to be registered and sold)
      within ten (10) Business Days after receipt of such notice from the
      Company. The Company shall thereafter, as promptly as practicable, use
      commercially reasonable efforts to (i) file with the Commission under the
      Securities Act a Registration Statement on the appropriate form concerning
      all
      Registrable Securities specified in the demand request and all Registrable
      Securities with respect to which the Company has received the written request
      from the other Holders, (ii) cause the Registration Statement to be
      declared effective, and (iii) keep such Registration Statement continuously
      effective under the Securities Act until the first to occur of (A) all
      Registrable Securities covered by such Registration Statement have been sold,
      or
      (B) the date that is two years from the date the Registration Statement was
      declared effective by the Commission (the “Effectiveness
      Period”).
      The
      Company shall promptly notify the Holders via facsimile or e-mail of the
      effectiveness of a Registration Statement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (ii)
      Delay
      by Company.
      The
      Company shall not be required to effect a demand registration under the
      Securities Act pursuant to Section
      2(a) above
      if (i) the Company receives a request for registration under Section
      2(a) less
      than 90 days preceding the anticipated effective date of a proposed underwritten
      public offering of securities of the Company approved by the Company’s Board of
      Directors prior to the Company’s receipt of the request and in such event the
      Company shall not be required to effect any such requested registration until
      120 days after the effective date of such proposed underwritten public offering;
      (ii) within 120 days prior to any such request for registration, a
      registration of securities of the Company has been effected in which the Holders
      had the right to participate pursuant to this Agreement; or (iii) the Board
      of Directors of the Company reasonably determines in good faith that effecting
      such a demand registration at such time would have a material adverse effect
      upon a proposed sale of all (or substantially all) of the assets of the Company,
      or a merger, reorganization, recapitalization, or business combination
      materially affecting the capital structure or equity ownership of the Company,
      or would otherwise be detrimental to the Company because the Company was then
      in
      the process of raising capital in the public or private markets; provided,
      however, that the Company may only delay a demand registration pursuant to
      this
      provision for a period not exceeding 120 days (or until such earlier time as
      such transaction is consummated or no longer proposed). The Company shall
      promptly notify in writing the Holders requesting registration of any decision
      not to effect any such request for registration pursuant to this Section, which
      notice shall set forth in reasonable detail the reason for such decision and
      shall include an undertaking by the Company promptly to notify such Holders
      as
      soon as a demand registration may be effected, and such Holders will hold the
      information in confidence.

    

    (iii) Reduction.
      If a
      demand registration initiated by any Holders pursuant to Section
      2(a) is
      an
      underwritten registration and the managing underwriters advise the Company
      and
      the Holders participating in the demand registration in writing that in their
      opinion the number of shares of Common Stock requested to be included in such
      registration exceeds the number which can be sold in such offering, then the
      amount of such shares that may be included in such registration shall be
      allocated pro rata among the Holders participating in the demand registration
      based on the number of shares of Registrable Securities held on a fully diluted
      basis with all other Holders of Registrable Securities.

     

    (iv) Withdrawal.
      Holders
      participating in any demand registration pursuant to this Section
      2(a) may
      withdraw at any time before a registration statement is declared effective,
      and
      the Company may withdraw such registration statement if no Registrable
      Securities are then proposed to be included (and if withdrawn by the Company
      the
      Holders shall not be deemed to have requested a demand registration for purposes
      of Section 2(a) hereof).
      If the Company withdraws a registration statement hereunder in respect of a
      registration for which the Company would otherwise be required to pay expenses
      under this Agreement, the Holders that shall have withdrawn shall reimburse
      the
      Company for all expenses of such registration in proportion to the number of
      shares each such withdrawing Holder shall have requested to be
      registered.

    

    (b) Piggyback Registration Rights.
      If
      at any
      time during the Effectiveness Period there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the Commission a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than a registration
      statement (i) filed pursuant to Section 2(a) of this Agreement or (b) on Form
      S-4 or Form S-8 (each as promulgated under the Securities Act) or their then
      equivalents relating to equity securities to be issued solely in connection
      with
      any acquisition of any entity or business or equity securities issuable in
      connection with the stock option or other employee benefit plans, then the
      Company shall send to each Holder a written notice of such determination and,
      if
      within fifteen days after the date of such notice, any such Holder shall so
      request in writing, the Company shall include in such registration statement
      all
      or any part of such Registrable Securities such Holder requests to be
      registered, subject to customary underwriter cutbacks applicable to all holders
      of registration rights on a pro rata basis, provided
      that if
      at any time after giving written notice of its intention to register any
      securities and prior to the effective date of the registration statement filed
      in connection with such registration, the Company shall determine for any reason
      not to register or to delay registration of such securities, the Company may,
      at
      its election, give written notice of such determination to such Holder and,
      thereupon, (i) in the case of a determination not to register, shall be relieved
      of its obligation to register any Registrable Securities in connection with
      such
      registration (but not from its obligation to pay expenses in accordance with
      Section 4 hereof), and (ii) in the case of a determination to delay registering,
      shall be permitted to delay registering any Registrable Securities being
      registered pursuant to this Section 2(b) for the same period as the delay in
      registering such other securities Notwithstanding the foregoing, the Company
      shall not be required to register any Registrable Securities pursuant to this
      Section 2(b) that are eligible for resale pursuant to Rule 144(k) promulgated
      under the Securities Act or that are the subject of a then effective
      Registration Statement. Notwithstanding the foregoing, nothing herein shall
      be
      construed of relieving the Company of its obligations under this
      Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Exceptions.
      The Company shall have no obligation to include shares of Common Stock owned
      by
      any Holder in a registration statement pursuant to this Section 1.2, unless
      and until such Holder (a) in connection with any underwritten offering,
      agrees to enter into an underwriting agreement, a custody agreement and power
      of
      attorney and any other customary documents required in an underwritten offering
      all in customary form and containing customary provisions and (b) shall
      have furnished the Company with all information and statements about or
      pertaining to such Holder in such reasonable detail and on such timely basis
      as
      is reasonably deemed by the Company to be legally required with respect to
      the
      preparation of the registration statement. 

    3. Registration
      Procedures

     

    In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

     

    (a) Not
      less
      than five Business Days prior to the filing of each Registration Statement
      and
      not less than 1 Business Day prior to the filing of any related Prospectus
      or
      any amendment or supplement thereto, (i) furnish to each Holder copies of all
      such documents proposed to be filed, which documents will be subject to the
      review of such Holders (it being acknowledged and agreed that if a Holder does
      not object to or comment on the aforementioned documents within such five
      Business Day period, then the Holder shall be deemed to have consented to and
      approved the use of such documents), and (ii) cause its officers and directors,
      counsel and independent certified public accountants to respond to such
      inquiries as shall be necessary, in the reasonable opinion of respective counsel
      to each Holder to conduct a reasonable investigation within the meaning of
      the
      Securities Act. The Company shall not file a Registration Statement or any
      such
      Prospectus or any amendments or supplements thereto to which the Holders of
      a
      majority of the Registrable Securities shall reasonably object in good faith,
      provided that, the Company is notified of such objection in writing no later
      than 4 Business Days after the Holders have been so furnished copies of a
      Registration Statement or 1 Business Day after the Holders have been so
      furnished copies of any related Prospectus or amendment or supplement thereto.
      Each Holder agrees to furnish to the Company a completed Questionnaire in the
      form attached to this Agreement as Annex A (a “Selling
      Shareholder Questionnaire”)
      not
      less than two Business Days prior to date on which the Company files the
      Registration Statement (the “Filing
      Date”)
      or by
      the end of the fourth Business Day following the date on which such Holder
      receives draft materials in accordance with this Section. The Company shall
      not
      be required to include the Registrable Securities of a Holder in a Registration
      Statement to any Holder who fails to furnish to the Company a fully completed
      Selling Holder Questionnaire at least two Business Days prior to the Filing
      Date
      (subject to the requirements set forth in Section 3(a)).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to a Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements in order to register for resale under the Securities Act all of
      the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement (subject to the terms of
      this
      Agreement), and as so supplemented or amended to be filed pursuant to Rule
      424;
      (iii) respond as promptly as reasonably possible to any comments received from
      the Commission with respect to a Registration Statement or any amendment thereto
      and as promptly as reasonably possible provide the Holders true and complete
      copies of all correspondence from and to the Commission relating to a
      Registration Statement that pertain to the Holders as Selling Shareholders
      (provided that the Company may excise any information contained therein which
      would constitute material non-public information as to any Holder which has
      not
      executed a confidentiality agreement with the Company); and (iv) comply in
      all
      material respects with the provisions of the Securities Act and the Securities
      Exchange Act of 1934, as amended (the “Exchange
      Act”)
      with
      respect to the disposition of all Registrable Securities covered by a
      Registration Statement during the applicable period in accordance (subject
      to
      the terms of this Agreement) with the intended methods of disposition by the
      Holders thereof set forth in such Registration Statement as so amended or in
      such Prospectus as so supplemented.

     

    (c) Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (iii) through (v) hereof, be accompanied by an instruction to suspend
      the use of the Prospectus until the requisite changes have been made) as
      promptly as reasonably possible (and, in the case of (i)(A) below, not less
      than
      1 Business Day prior to such filing) and (if requested by any such Person)
      confirm such notice in writing no later than one Business Day following the
      day
      (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to a Registration Statement is proposed to be filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement; and (C) with respect to a Registration Statement or
      any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the Commission or any other Federal or state governmental authority
      (or the NASD) for amendments or supplements to a Registration Statement or
      Prospectus or for additional information; (iii) of the issuance by the
      Commission or any other federal or state governmental authority of any stop
      order suspending the effectiveness of a Registration Statement covering any
      or
      all of the Registrable Securities or the initiation of any Proceedings for
      that
      purpose; (iv) of the receipt by the Company of any notification with respect
      to
      the suspension of the qualification or exemption from qualification of any
      of
      the Registrable Securities for sale in any jurisdiction, or the initiation
      or
      threatening of any Proceeding for such purpose; and (v) of the occurrence of
      any
      event or passage of time that makes the financial statements included in a
      Registration Statement ineligible for inclusion therein or any statement made
      in
      a Registration Statement or Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference untrue in any material respect or that
      requires any revisions to a Registration Statement, Prospectus or other
      documents so that, in the case of a Registration Statement or the Prospectus,
      as
      the case may be, it will not contain any untrue statement of a material fact
      or
      omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading.

     

    (d) Use
      its
      commercially reasonable efforts to avoid the issuance of, or, if issued, obtain
      the withdrawal of (i) any order suspending the effectiveness of a Registration
      Statement, or (ii) any suspension of the qualification (or exemption from
      qualification) of any of the Registrable Securities for sale in any
      jurisdiction, at the earliest practicable moment.

     

    (e) If
      requested by a Holder, furnish to such Holder, without charge, at least one
      conformed copy of each such Registration Statement and each amendment thereto,
      including financial statements and schedules, all documents incorporated or
      deemed to be incorporated therein by reference to the extent requested by such
      Person, and all exhibits to the extent requested by such Person (including
      those
      previously furnished or incorporated by reference) promptly after the filing
      of
      such documents with the Commission.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (f) Subject
      to the terms of this Agreement, the Company hereby consents to the use of such
      Prospectus and each amendment or supplement thereto by each of the selling
      Holders in connection with the offering and sale of the Registrable Securities
      covered by such Prospectus and any amendment or supplement thereto, except
      after
      the giving of any notice pursuant to Section 3(c), and undertakes to furnish
      to
      such Holders such number of copies of such Prospectus and any amendment or
      supplement thereto as the Holders may reasonably request.

     

    (g) Prior
      to
      any resale of Registrable Securities by a Holder, use its commercially
      reasonable efforts to register or qualify or cooperate with the selling Holders
      in connection with the registration or qualification (or exemption from the
      registration or qualification) of such Registrable Securities for the resale
      by
      the Holder under the securities or Blue Sky laws of such jurisdictions within
      the United States as any Holder reasonably requests in writing, to keep each
      registration or qualification (or exemption therefrom) effective during the
      Effectiveness Period and to do any and all other acts or things reasonably
      necessary to enable the disposition in such jurisdictions of the Registrable
      Securities covered by each Registration Statement; provided, that the Company
      shall not be required to qualify generally to do business in any jurisdiction
      where it is not then so qualified, subject the Company to any material tax
      in
      any such jurisdiction where it is not then so subject or file a general consent
      to service of process in any such jurisdiction.

     

    (h) Cooperate
      with the Holders to facilitate the timely preparation and delivery of
      certificates representing Registrable Securities to be delivered to a transferee
      pursuant to a Registration Statement, which certificates shall be free, to
      the
      extent permitted by the Warrant, of all restrictive legends, and to enable
      such
      Registrable Securities to be in such denominations and registered in such names
      as any such Holders may request.

     

    (i) Upon
      the
      occurrence of any event contemplated by this Section 3, as promptly as
      reasonably possible under the circumstances taking into account the Company’s
      good faith assessment of any adverse consequences to the Company and its
      stockholders of the premature disclosure of such event, prepare a supplement
      or
      amendment, including a post-effective amendment, to a Registration Statement
      or
      a supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither a Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading. If
      the
      Company notifies the Holders in accordance with clauses (iii) through (v) of
      Section 3(c) above to suspend the use of any Prospectus until the requisite
      changes to such Prospectus have been made, then the Holders shall suspend use
      of
      such Prospectus. The Company will use, in good faith, its commercially
      reasonable best efforts to ensure that the use of the Prospectus may be resumed
      as promptly as is practicable. 

     

    (j) Cooperate
      with any reasonable due diligence investigation undertaken by the Holders in
      connection with the sale of Registrable Securities, including, without
      limitation, by making available any documents and information; provided
      that the
      Company will not deliver or make available to any Holder material, nonpublic
      information unless such Holder specifically requests in advance to receive
      material, nonpublic information in writing and, if requested by the Company,
      such Holder agrees in writing to treat such information
      confidentially.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (k) Comply
      with all applicable rules and regulations of the Commission.

     

    (l) The
      Company may require each selling Holder to furnish to the Company a certified
      statement as to the number of shares of Common Stock beneficially owned by
      such
      Holder and, if required by the Commission, the natural persons thereof that
      have
      voting and dispositive control over the Shares.

     

    4. Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to a Registration Statement. The fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings required to be made with any
      regulatory authority or trading market on which the Common Stock is then listed
      for trading and (B) in compliance with applicable state securities or Blue
      Sky
      laws reasonably agreed to by the Company in writing (including, without
      limitation, fees and disbursements of counsel for the Company in connection
      with
      Blue Sky qualifications or exemptions of the Registrable Securities), (ii)
      printing expenses (including, without limitation, expenses of printing
      certificates for Registrable Securities, (iii) messenger, telephone and delivery
      expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities
      Act liability insurance, if the Company so desires such insurance, and (vi)
      fees
      and expenses of all other persons retained by the Company in connection with
      the
      consummation of the transactions contemplated by this Agreement. In addition,
      the Company shall be responsible for all of its internal expenses incurred
      in
      connection with the consummation of the transactions contemplated by this
      Agreement (including, without limitation, all salaries and expenses of its
      officers and employees performing legal or accounting duties), the expense
      of
      any annual audit and the fees and expenses incurred in connection with the
      listing of the Registrable Securities on any securities exchange as required
      hereunder. In no event shall the Company be responsible for any broker or
      similar commissions of any Holder or any legal fees or other costs of the
      Holders.

     

    5. Indemnification

     

    (a) Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, members, partners, agents,
      investment advisors and employees (and any other persons with a functionally
      equivalent role of a person holding such titles, notwithstanding a lack of
      such
      title or any other title) of each of them, each person who controls any such
      Holder (within the meaning of Section 15 of the Securities Act or Section 20
      of
      the Exchange Act) and the officers, directors, members, shareholders, partners,
      agents and employees (and any other persons with a functionally equivalent role
      of a person holding such titles, notwithstanding a lack of such title or any
      other title) of each such controlling person, to the fullest extent permitted
      by
      applicable law, from and against any and all losses, claims, damages,
      liabilities, costs (including, without limitation, reasonable attorneys’ fees)
      and expenses (collectively, “Losses”),
      as
      incurred, arising out of or relating to (1) any untrue or alleged untrue
      statement of a material fact contained in a Registration Statement, any
      Prospectus or any form of prospectus or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any Prospectus or
      form
      of prospectus or supplement thereto, in light of the circumstances under which
      they were made) not misleading, or (2) any violation or alleged violation by
      the
      Company of the Securities Act, Exchange Act or any state securities law, or
      any
      rule or regulation thereunder, in connection with the performance of its
      obligations under this Agreement, except to the extent, but only to the extent,
      that (i) such untrue statements or omissions are based upon information
      regarding such Holder furnished to the Company in writing by such Holder
      specifically for use therein; or (ii) in the case of an occurrence of an event
      of the type specified in Section 3(c)(iii)-(v), the use by such Holder of an
      outdated or defective Prospectus after the Company has notified such Holder
      in
      writing that the Prospectus is outdated or defective. The Company shall notify
      the Holders promptly of the institution, threat or assertion of any Proceeding
      arising from or in connection with the transactions contemplated by this
      Agreement of which the Company is aware. The Holders agree that the indemnity
      agreement contained in this Section 5(a) shall not apply to amounts paid in
      settlement of any Losses if such settlement is effected without the prior
      written consent of the Company, which consent shall not be unreasonably
      withheld.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Indemnification
      by Holders.
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, to the extent arising out of or based
      upon: (x) such Holder’s failure to comply with the prospectus delivery
      requirements of the Securities Act or (y) any untrue or alleged untrue statement
      of a material fact contained in any Registration Statement, any Prospectus,
      or
      any form of prospectus, or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein not misleading (i) to the extent that such untrue
      statement or omission is contained in any information so furnished by such
      Holder to the Company in writing specifically for use therein or (ii) in the
      case of an occurrence of an event of the type specified in Section
      3(c)(iii)-(v), the use by such Holder of an outdated or defective Prospectus
      after the Company has notified such Holder in writing that the Prospectus is
      outdated or defective. The Company agrees that the indemnity agreement contained
      in this Section 5(b) shall not apply to amounts paid in settlement of any Losses
      if such settlement is effected without the prior written consent of the Holder,
      which consent shall not be unreasonably withheld.

     

    (c) Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the person from whom indemnity is sought
      (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall have the right to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, that the failure of any Indemnified
      Party to give such notice shall not relieve the Indemnifying Party of its
      obligations or liabilities pursuant to this Agreement, except (and only) to
      the
      extent that it shall be finally determined by a court of competent jurisdiction
      (which determination is not subject to appeal or further review) that such
      failure shall have prejudiced the Indemnifying Party.

     

    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) the Indemnifying Party shall have failed promptly to assume the
      defense of such Proceeding and to employ counsel reasonably satisfactory to
      such
      Indemnified Party in any such Proceeding; or (3) the named parties to any such
      Proceeding (including any impleaded parties) include both such Indemnified
      Party
      and the Indemnifying Party, and counsel to the Indemnified Party shall
      reasonably believe that a material conflict of interest is likely to exist
      if
      the same counsel were to represent such Indemnified Party and the Indemnifying
      Party (in which case, if such Indemnified Party notifies the Indemnifying Party
      in writing that it elects to employ separate counsel at the expense of the
      Indemnifying Party, the Indemnifying Party shall not have the right to assume
      the defense thereof and the reasonable fees and expenses of no more than one
      separate counsel shall be at the expense of the Indemnifying Party). The
      Indemnifying Party shall not be liable for any settlement of any such Proceeding
      effected without its written consent, which consent shall not be unreasonably
      withheld or delayed. No Indemnifying Party shall, without the prior written
      consent of the Indemnified Party, effect any settlement of any pending
      Proceeding in respect of which any Indemnified Party is a party, unless such
      settlement includes an unconditional release of such Indemnified Party from
      all
      liability on claims that are the subject matter of such Proceeding.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection with investigating or preparing to defend such Proceeding in
      a
      manner not inconsistent with this Section) shall be paid to the Indemnified
      Party, as incurred, within twenty Business Days of written notice thereof to
      the
      Indemnifying Party; provided,
      that
      the Indemnified Party shall promptly reimburse the Indemnifying Party for that
      portion of such fees and expenses applicable to such actions for which such
      Indemnified Party is judicially determined to be not entitled to indemnification
      hereunder.

     

    (d) Contribution.
      If the
      indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
      Party or insufficient to hold an Indemnified Party harmless for any Losses,
      then
      each Indemnifying Party shall contribute to the amount paid or payable by such
      Indemnified Party, in such proportion as is appropriate to reflect the relative
      fault of the Indemnifying Party and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as any
      other relevant equitable considerations. The relative fault of such Indemnifying
      Party and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission of a material
      fact,
      has been taken or made by, or relates to information supplied by, such
      Indemnifying Party or Indemnified Party, and the parties’ relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in this Agreement, any reasonable attorneys’ or other fees or expenses incurred
      by such party in connection with any Proceeding to the extent such party would
      have been indemnified for such fees or expenses if the indemnification provided
      for in this Section was available to such party in accordance with its
      terms.

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      net proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission, except in the case of fraud
      by
      such Holder. No person guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any Person who was not guilty of such fraudulent
      misrepresentation.

     

    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

     

    6. Miscellaneous

     

    (a) Compliance.
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to a Registration Statement.

     

    (b) Discontinued
      Disposition.
      Each
      Holder agrees by its acquisition of Registrable Securities that, upon receipt
      of
      a notice from the Company of the occurrence of any event of the kind described
      in Section 3(c)(iii)-(v), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under a Registration Statement until it is advised
      in writing by the Company that the use of the applicable Prospectus (as it
      may
      have been supplemented or amended) may be resumed. The Company will use its
      commercially reasonable efforts to ensure that the use of the Prospectus may
      be
      resumed as promptly as it practicable. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the Holders of at least 50% of the then outstanding
      Registrable Securities. Notwithstanding the foregoing, a waiver or consent
      to
      depart from the provisions hereof with respect to a matter that relates
      exclusively to the rights of Holders and that does not directly or indirectly
      affect the rights of other Holders may be given by Holders of all of the
      Registrable Securities to which such waiver or consent relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding
      sentence.

     

    (d) Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Purchase
      Agreement.

     

    (e) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign its rights (except by merger) or obligations
      hereunder without the prior written consent of all of the Holders of the
      then-outstanding Registrable Securities. Each Holder may assign their respective
      rights hereunder in the manner and to the Persons as permitted under the
      Warrant.

     

    (f) Execution
      and Counterparts.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission or by e-mail delivery of a “.pdf” format data file, such signature
      shall create a valid and binding obligation of the party executing (or on whose
      behalf such signature is executed) with the same force and effect as if such
      facsimile or “.pdf” signature page were an original thereof.

     

    (g) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined in accordance with the provisions of
      the
      New York law.

     

    (h) Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full force and effect and shall in no way be affected, impaired
      or invalidated, and the parties hereto shall use their commercially reasonable
      best efforts to find and employ an alternative means to achieve the same or
      substantially the same result as that contemplated by such term, provision,
      covenant or restriction. It is hereby stipulated and declared to be the
      intention of the parties that they would have executed the remaining terms,
      provisions, covenants and restrictions without including any of such that may
      be
      hereafter declared invalid, illegal, void or unenforceable.

     

    (i) Headings.
      The
      headings in this Agreement are for convenience only, do not constitute a part
      of
      this Agreement, and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    *************************

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    
      	 	 	 
	 	
              Lev
                Pharmaceuticals, Inc.

            
	 
 	 
 	 
 
	 	By:  	/s/ Joshua
              D.
              Schein
	 	
              
Name:
              Joshua D. Schein 
	 	
              Title:
                Chief Executive Officer 

            

    

    

    

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    [SIGNATURE
      PAGE OF HOLDERS RRA]

    

    Name
      of
      Holder: Mast Credit Opportunities I Master Fund Limited

    

    

    Signature
      of Authorized Signatory of Holder:
      /s/
      Christopher B. Madison____________

    Name
      of
      Authorized Signatory: Christopher B. Madison

    Title
      of
      Authorized Signatory: Director

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex
      A

     

    Lev
      Pharmaceuticals, Inc.

     

    Selling
      Securityholder Notice and Questionnaire

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