Document:

Exhibit
10.2     

EXHIBIT
D

SECURITY
AGREEMENT

SECURITY
AGREEMENT, dated as of March 15, 2005 (this “Agreement”), among
Grant
Life Sciences, Inc., a Nevada corporation (the
“Company” or the “Debtor”) and the
holder or holders of the Company’s 8% Senior Secured Notes due June 15, 2005 in
the aggregate principal amount of up to $200,000 (the “Notes”),
signatory hereto, their endorsees, transferees and assigns (collectively
referred to as, the “Secured
Parties”).

W
I T N E S S E T H:

WHEREAS,
pursuant to the Notes, the Secured Parties have severally agreed to extend the
loans to the Company evidenced by the Notes; and

 

WHEREAS,
in order to induce the Secured Parties to extend the loans evidenced by the
Notes, the Debtor has agreed to execute and deliver to the Secured Parties this
Agreement and to grant the Secured Parties, pari
passu with
each other Secured Party, a first priority perfected security interest in all
property of such Debtor to secure the prompt payment, performance and discharge
in full of all of the Company’s obligations under the Notes.

NOW,
THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

1.
 Certain
Definitions. As used
in this Agreement, the following terms shall have the meanings set forth in this
Section 1. Terms used but not otherwise defined in this Agreement that are
defined in Article 9 of the UCC (such as “account”, “chattel paper”, “commercial
tort claim”, “deposit account”, “document”, “equipment”, “fixtures”, “general
intangibles”, “goods”, “instruments”, “inventory”, “investment property”,
“letter-of-credit rights”, “proceeds” and “supporting obligations”) shall have
the respective meanings given such terms in Article 9 of the UCC.

(a)
 “Collateral” means
the collateral in which the Secured Parties are granted a security interest by
this Agreement and which shall include the following personal property of the
Debtors, whether presently owned or existing or hereafter acquired or coming
into existence, wherever situated, and all additions and accessions thereto and
all substitutions and replacements thereof, and all proceeds, products and
accounts thereof, including, without limitation, all proceeds from the sale or
transfer of the Collateral and of insurance covering the same and of any tort
claims in connection therewith, and all
dividends, interest, cash, notes, securities, equity interest or other property
at any time and from time to time acquired, receivable or otherwise distributed
in respect of, or in exchange for, any or all of the Pledged Securities (as
defined below):

(i) All
goods, including, without limitations, (A) all machinery, equipment, computers,
motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and
general tools, fixtures, test and quality control devices and other equipment of
every kind and nature and wherever situated, together with all documents of
title and documents representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for any of the
foregoing and all other items used and useful in connection with any Debtor’s
businesses and all improvements thereto; and (B) all inventory;

(ii)
 All
contract rights and other general intangibles, including, without limitation,
all partnership interests, membership interests, stock or other securities,
rights
under any of the Organizational Documents, agreements related to the Pledged
Securities, licenses,
distribution and other agreements, computer software (whether “off-the-shelf”,
licensed from any third party or developed by any Debtor), computer software
development rights, leases, franchises, customer lists, quality control
procedures, grants and rights, goodwill, trademarks, service marks, trade
styles, trade names, patents, patent applications, copyrights, Intellectual
Property, and income tax refunds; 

 

(iii)
 All
accounts, together with all instruments, all documents of title representing any
of the foregoing, all rights in any merchandising, goods, equipment, motor
vehicles and trucks which any of the same may represent, and all right, title,
security and guaranties with respect to each account, including any right of
stoppage in transit; 

(iv)
 All
documents, letter-of-credit rights, instruments and chattel paper;

(v) All
commercial tort claims;

(vi) All
deposit accounts and all cash (whether or not deposited in such deposit
accounts);

(vii) All
investment property;

 (viii) All
supporting obligations; and

(ix) All
files, records, books of account, business papers, and computer programs;
and

(x) the
products and proceeds of all of the foregoing Collateral set forth in clauses
(i)-(ix) above.

Without
limiting the generality of the foregoing, the “Collateral” shall
include all investment property and general intangibles respecting ownership
and/or other equity interests in each Subsidiary, including, without limitation,
the shares of capital stock and the other equity interests listed on
Schedule
H hereto
(as the same may be modified from time to time pursuant to the terms hereof),
and any other shares of capital stock and/or other equity interests of any other
direct or indirect subsidiary of any Debtor obtained in the future, and, in each
case, all certificates representing such shares and/or equity interests and, in
each case, all rights, options, warrants, stock, other securities and/or equity
interests that may hereafter be received, receivable or distributed in respect
of, or exchanged for, any of the foregoing (all of the foregoing being referred
to herein as the “Pledged
Securities”) and
all rights arising under or in connection with the Pledged Securities,
including, but not limited to, all dividends, interest and cash.

 

Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any
asset which, in the event of an assignment, becomes void by operation of
applicable law or the assignment of which is otherwise prohibited by applicable
law (in each case to the extent that such applicable law is not overridden by
Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law);
provided, however, that to the extent permitted by applicable law, this
Agreement shall create a valid security interest in such asset and, to the
extent permitted by applicable law, this Agreement shall create a valid security
interest in the proceeds of such asset.

(b)
 “Intellectual
Property” means
the collective reference to all rights, priorities and privileges relating to
intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, (i) all copyrights
arising under the laws of the United States, any other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, (ii) all
letters patent of the United States, any other country or any political
subdivision thereof, all reissues and extensions thereof, and all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, (iii) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade dress, service marks, logos, domain names and other source or
business identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common law rights related thereto, (iv) all trade secrets
arising under the laws of the United States, any other country or any political
subdivision thereof, (v) all rights to obtain any reissues, renewals or
extensions of the foregoing, (vi) all licenses for any of the foregoing, and
(vii) all causes of action for infringement of the foregoing.

(c) “Majority
in Interest” shall
mean, at any time of determination, the majority in interest (based on
then-outstanding principal amounts of Notes at the time of such determination)
of the Secured Parties.

(d) “Necessary
Endorsement” shall
mean undated stock powers endorsed in blank or other proper instruments of
assignment duly executed and such other instruments or documents as the Secured
Parties may reasonably request.

(e)
 “Obligations” means
all of the Debtors’ obligations under this Agreement, the Notes
and any
other instruments, agreements or other documents executed and/or delivered in
connection herewith or therewith, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from any of the Secured Parties as a preference,
fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time. Without
limiting the generality of the foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the Notes
and the
loans extended pursuant thereto; (ii) any and all other fees, indemnities,
costs, obligations and liabilities of the Debtors from time to time under or in
connection with this Agreement, the Notes and any other instruments, agreements
or other documents executed and/or delivered in connection herewith or
therewith; and (iii) all amounts (including but not limited to post-petition
interest) in respect of the foregoing that would be payable but for the fact
that the obligations to pay such amounts are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
any Debtor.

(f)
 “Organizational
Documents” means
with respect to any Debtor, the documents by which such Debtor was organized
(such as a certificate of incorporation, certificate of limited partnership or
articles of organization, and including, without limitation, any certificates of
designation for preferred stock or other forms of preferred equity) and which
relate to the internal governance of such Debtor (such as bylaws, a partnership
agreement or an operating, limited liability or members agreement).

(g)
 “UCC” means
the Uniform Commercial Code of the State of New York and or any other applicable
law of any state or states which has jurisdiction with respect to all, or any
portion of, the Collateral or this Agreement, from time to time. It is the
intent of the parties that defined terms in the UCC should be construed in their
broadest sense so that the term “Collateral” will be construed in its broadest
sense. Accordingly if there are, from time to time, changes to defined terms in
the UCC that broaden the definitions, they are incorporated herein and if
existing definitions in the UCC are broader than the amended definitions, the
existing ones shall be controlling. 

2.
 Grant
of Perfected Security Interest. As an
inducement for the Secured Parties to extend the loans as evidenced by the Notes
and to secure the complete and timely payment, performance and discharge in
full, as the case may be, of all of the Obligations, the Debtor hereby
unconditionally and irrevocably pledges, grants and hypothecates to the Secured
Parties a continuing and perfected security interest in and to, a lien upon and
a right of set-off against all of their respective right, title and interest of
whatsoever kind and nature in and to, the Collateral (the “Security
Interest”).

3. Delivery
of Certain Collateral.
Contemporaneously or prior to the execution of this Agreement, the Debtor shall
deliver or cause to be delivered to the Secured Parties (a) any and all
certificates and other instruments representing or evidencing the Pledged
Securities, and (b) any and all certificates and other instruments or documents
representing any of the other Collateral, in each case, together with all
Necessary Endorsements. The Debtors are, contemporaneously with the execution
hereof, delivering to the Secured Parties, or have previously delivered to the
Secured Parties, a true and correct copy of each Organizational Document
governing any of the Pledged Securities.

 4.  Representations,
Warranties, Covenants and Agreements of the Debtors. The
Debtor represents and warrants to, and covenants and agrees with, the Secured
Parties as follows:

(a) The
Debtor has the requisite corporate, partnership, limited liability company or
other power and authority to enter into this Agreement and otherwise to carry
out its obligations hereunder. The execution, delivery and performance by the
Debtor of this Agreement and the filings contemplated therein have been duly
authorized by all necessary action on the part of such Debtor and no further
action is required by such Debtor. This Agreement has been duly executed by the
Debtor. This Agreement constitutes the legal, valid and binding obligation of
the Debtor, enforceable against the Debtor in accordance with its terms except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws of general application relating to or affecting
the rights and remedies of creditors and by general principles of
equity.

(b)
 The
Debtors have no place of business or offices where their respective books of
account and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or located,
except as set forth on Schedule
A attached
hereto. Except as specifically set forth on Schedule
A, the
Debtor is the record owner of the real property where such Collateral is
located, and there exist no mortgages or other liens on any such real property.
Except as disclosed on Schedule
A, none of
such Collateral is in the possession of any consignee, bailee, warehouseman,
agent or processor.

(c)
 Except as
set forth on Schedule
B attached
hereto, the Debtors are the sole owner of the Collateral (except for
non-exclusive licenses granted by any Debtor in the ordinary course of
business), free and clear of any liens, security interests, encumbrances, rights
or claims, and are fully authorized to grant the Security Interest. Other than
those filings made in connection with the 8% Senior Secured Notes, there is not
on file in any governmental or regulatory authority, agency or recording office
an effective financing statement, security agreement, license or transfer or any
notice of any of the foregoing (other than those that will be filed in favor of
the Secured Parties pursuant to this Agreement) covering or affecting any of the
Collateral. So long as this Agreement shall be in effect, the Debtors shall not
execute and shall not knowingly permit to be on file (other than those on file
to evidence the liens granted in connection the 8% Senior Secured Notes) in any
such office or agency any such financing statement or other document or
instrument (except to the extent filed or recorded in favor of the Secured
Parties pursuant to the terms of this Agreement).

(d)
 No
written claim has been received that any Collateral or Debtor's use of any
Collateral violates the rights of any third party. There has been no adverse
decision to any Debtor's claim of ownership rights in or exclusive rights to use
the Collateral in any jurisdiction or to any Debtor's right to keep and maintain
such Collateral in full force and effect, and there is no proceeding involving
said rights pending or, to the best knowledge of any Debtor, threatened before
any court, judicial body, administrative or regulatory agency, arbitrator or
other governmental authority.

(e)
 The
Debtor shall at all times maintain its books of account and records relating to
the Collateral at its principal place of business and its Collateral at the
locations set forth on Schedule
A attached
hereto and may not relocate such books of account and records or tangible
Collateral unless it delivers to the Secured Parties at least 30 days prior to
such relocation (i) written notice of such relocation and the new location
thereof (which must be within the United States) and (ii) evidence that
appropriate financing statements under the UCC and other necessary documents
have been filed and recorded and other steps have been taken to perfect the
Security Interest to create in favor of the Secured Parties a valid, perfected
and continuing perfected second priority lien in the Collateral.

(f)
 This
Agreement creates in favor of the Secured Parties a valid, security interest in
the Collateral, securing the payment and performance of the Obligations. Upon
making the filings described in the immediately following paragraph, all
security interests created hereunder in any Collateral which may be perfected by
filing Uniform Commercial Code financing statements shall have been duly
perfected. Except for the filing of the Uniform Commercial Code financing
statements referred to in the immediately following paragraph, the recordation
of the Intellectual Property Security Agreement (as defined below) with respect
to copyrights and copyright applications in the United States Copyright Office
referred to in paragraph (p), the
execution and delivery of deposit account control agreements satisfying the
requirements of Section 9-104(a)(2) of the UCC with respect to each deposit
account of the Debtors, and the
delivery of the certificates and other instruments provided in Section
3, no
action is necessary to create, perfect or protect the security interests created
hereunder. Without limiting the generality of the foregoing, except for the
filing of said financing statements, the recordation of said Intellectual
Property Security Agreement, and the execution and delivery of said deposit
account control agreements, no consent of any third parties and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for (i) the execution,
delivery and performance of this Agreement, (ii) the creation or perfection of
the Security Interests created hereunder in the Collateral or (iii) the
enforcement of the rights of the Secured Parties hereunder.

(g)
 The
Debtor hereby authorizes the Secured Parties, or any of them, to file one or
more financing statements under the UCC, with respect to the Security Interest
with the proper filing and recording agencies in any jurisdiction deemed proper
by them.

 (h)
 The
execution, delivery and performance of this Agreement by the Debtors does not
(i) violate any of the provisions of any Organizational Documents of any Debtor
or any judgment, decree, order or award of any court, governmental body or
arbitrator or any applicable law, rule or regulation applicable to any Debtor or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing any Debtor's debt or otherwise) or other understanding to
which any Debtor is a party or by which any property or asset of any Debtor is
bound or affected. No consent (including, without limitation, from stockholders
or creditors of any Debtor) is required for any Debtor to enter into and perform
its obligations hereunder, other than consents that have already been
received.

 (i)
 The
capital stock and other equity interests listed on Schedule
H hereto
represent all capital stock and other equity interests owned, directly or
indirectly, by the Company. All of the Pledged Securities are validly issued,
fully paid and nonassessable, and the Company is the legal and beneficial owner
of the Pledged Securities, free and clear of any lien, security interest or
other encumbrance.

(j)
 The
ownership and other equity interests in partnerships and limited liability
companies (if any) included
in the Collateral (the
“Pledged
Interests”) by
their express terms do not provide that they are securities governed by Article
8 of the UCC and are not held in a securities account or by any financial
intermediary.

(k)
 The
Debtor shall at all times maintain the liens and Security Interest provided for
hereunder as valid and perfected second priority liens and security interests in
the Collateral in favor of the Secured Parties until this Agreement and the
Security Interest hereunder shall be terminated pursuant to Section 11 hereof.
The Debtor hereby agrees to defend the same against the claims of any and all
persons and entities. The Debtor shall safeguard and protect all Collateral for
the account of the Secured Parties. At the request of the Secured Parties, the
Debtor will sign and deliver to the Secured Parties at any time or from time to
time one or more financing statements pursuant to the UCC in form reasonably
satisfactory to the Secured Parties and will pay the cost of filing the same in
all public offices wherever filing is, or is deemed by the Secured Parties to
be, necessary or desirable to effect the rights and obligations provided for
herein. Without limiting the generality of the foregoing, the Debtor shall pay
all fees, taxes and other amounts necessary to maintain the Collateral and the
Security Interest hereunder, and the Debtor shall obtain and furnish to the
Secured Parties from time to time, upon demand, such releases and/or
subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.

(l)
 No Debtor
will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose
of any of the Collateral (except for non-exclusive licenses granted by a Debtor
in its ordinary course of business and sales of inventory by a Debtor in its
ordinary course of business) without the prior written consent of a Majority
in Interest.

(m) The
Debtor shall keep and preserve its equipment, inventory and other tangible
Collateral in good condition, repair and order and shall not operate or locate
any such Collateral (or cause to be operated or located) in any area excluded
from insurance coverage.

(n) The
Debtor shall maintain with financially sound and reputable insurers, insurance
with respect to the Collateral against loss or damage of the kinds and in the
amounts customarily insured against by entities of established reputation having
similar properties similarly situated and in such amounts as are customarily
carried under similar circumstances by other such entities and otherwise as is
prudent for entities engaged in similar businesses but in any event sufficient
to cover the full replacement cost thereof. The Debtor shall cause each
insurance policy issued in connection herewith to provide, and the insurer
issuing such policy to certify to the Secured Parties that (a) the Secured
Parties will be named as lender loss payees and additional insured under each
such insurance policy; (b) if such insurance be proposed to be cancelled or
materially changed for any reason whatsoever, such insurer will promptly notify
the Secured Parties and such cancellation or change shall not be effective as to
the Secured Parties for at least thirty (30) days after receipt by the Secured
Parties of such notice, unless the effect of such change is to extend or
increase coverage under the policy; and (c) the Secured Parties will have the
right (but no obligation) at its election to remedy any default in the payment
of premiums within thirty (30) days of notice from the insurer of such default.
If no Event of Default (as defined in the Debenture) exists and if the proceeds
arising out of any claim or series of related claims do not exceed $50,000, loss
payments in each instance will be applied by the applicable Debtor to the repair
and/or replacement of property with respect to which the loss was incurred to
the extent reasonably feasible, and any loss payments or the balance thereof
remaining, to the extent not so applied, shall be payable to the applicable
Debtor, provided, however, that payments received by any Debtor after an Event
of Default occurs and is continuing or in excess of $50,000 for any occurrence
or series of related occurrences shall be paid to the Secured Parties and, if
received by such Debtor, shall be held in trust for and immediately paid over to
the Secured Parties unless otherwise directed in writing by the Secured Parties.
Copies of such policies or the related certificates, in each case, naming the
Secured Parties as lender loss payee and additional insured shall be delivered
to the Secured Parties at least annually and at the time any new policy of
insurance is issued.

(o)
 The
Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the
Secured Parties promptly, in sufficient detail, of any substantial change in the
Collateral, and of the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the Secured Parties’
security interest therein.

(p)
 The
Debtor shall promptly execute and deliver to the Secured Parties such further
deeds, mortgages, assignments, security agreements, financing statements or
other instruments, documents, certificates and assurances and take such further
action as the Secured Parties may from time to time request and may in its sole
discretion deem necessary to perfect, protect or enforce its security interest
in the Collateral including, without limitation, if applicable, the execution
and delivery of a separate security agreement with respect to the Debtor’s
Intellectual Property (“Intellectual
Property Security Agreement”) in
which the Secured Parties have been granted a security interest hereunder,
substantially in a form acceptable to the Secured Parties, which Intellectual
Property Security Agreement, other than as stated therein, shall be subject to
all of the terms and conditions hereof.

(q)
 The
Debtor shall permit the Secured Parties and their representatives and agents to
inspect the Collateral at any time, and to make copies of records pertaining to
the Collateral as may be requested by a Secured Party from time to
time.

(r)
 The
Debtor shall take all steps reasonably necessary to diligently pursue and seek
to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Collateral.

(s)
 The
Debtor shall promptly notify the Secured Parties in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other legal process
levied against any Collateral and of any other information received by such
Debtor that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Parties
hereunder.

(t)
 All
information heretofore, herein or hereafter supplied to the Secured Parties by
or on behalf of any Debtor with respect to the Collateral is accurate and
complete in all material respects as of the date furnished.

(u)
 The
Debtor shall at all times preserve and keep in full force and effect their
respective valid existence and good standing and any rights and franchises
material to its business.

(v)
 No Debtor
will change its name, type of organization, jurisdiction of organization,
organizational identification number (if it has one), legal or corporate
structure, or identity, or add any new fictitious name unless it provides at
least 30 days prior written notice to the Secured Parties of such change and, at
the time of such written notification, such Debtor provides any financing
statements or fixture filings necessary to perfect and continue perfected the
perfected Security Interest granted and evidenced by this
Agreement.

(w) No Debtor
may consign any of its Inventory or sell any of its Inventory on bill and hold,
sale or return, sale on approval, or other conditional terms of sale without the
consent of a Majority
in Interest which
shall not be unreasonably withheld, except to the extent such consignment or
sale does not exceed 15% of the total value of all of the Company’s finished
goods in Inventory.

(x)
 No Debtor
may relocate its chief executive office to a new location without providing 30
days prior written notification thereof to the Secured Parties and so long as,
at the time of such written notification, such Debtor provides any financing
statements or fixture filings necessary to perfect and continue perfected the
perfected security Interest granted and evidenced by this
Agreement.

(y) The
Debtor was organized and remains organized solely under the laws of the state
set forth next to such Debtor’s name in the first paragraph of this Agreement.
Schedule
D attached
hereto sets forth the Debtor’s organizational identification number or, if any
Debtor does not have one, states that one does not exist.

(z)  (i) The
actual name of the Debtor is the name set forth in the preamble above; (ii) no
Debtor has any trade names except as set forth on Schedule
E attached
hereto; (iii) no Debtor has used any name other than that stated in the preamble
hereto or as set forth on Schedule
E for the
preceding five years; and (iv) no entity has merged into any Debtor or been
acquired by any Debtor within the past five years except as set forth on
Schedule
E.

(aa) At any
time and from time to time that any Collateral consists of instruments,
certificated securities or other items that require or permit possession by the
secured party to perfect the security interest created hereby, the applicable
Debtor shall deliver such Collateral to the Secured Parties.

(bb)
 The
Debtor, in its capacity as issuer, hereby agrees to comply with any and all
orders and instructions of the Secured Parties regarding the Pledged Interests
consistent with the terms of this Agreement without the further consent of any
Debtor as contemplated by Section 8-106 (or any successor section) of the UCC.
Further, the Debtor agrees that it shall not enter into a similar agreement (or
one that would confer “control” within the meaning of Article 8 of the UCC) with
any other person or entity.

 

(cc) The Debtor
shall cause all tangible chattel paper constituting Collateral to be delivered
to the Secured Parties, or, if such delivery is not possible, then to cause such
tangible chattel paper to contain a legend noting that it is subject to the
security interest created by this Agreement. To the extent that any Collateral
consists of electronic chattel paper, the applicable Debtor shall cause the
underlying chattel paper to be “marked” within the meaning of Section 9-105 of
the UCC (or successor section thereto).

(dd) If there
is any investment property or deposit account included as Collateral that can be
perfected by “control” through an account control agreement, the applicable
Debtor shall cause such an account control agreement, in form and substance in
each case satisfactory to the Secured Parties, to be entered into and delivered
to the Secured Parties.

(ee)
 To the
extent that any Collateral consists of letter-of-credit rights, the applicable
Debtor shall cause the issuer of each underlying letter of credit to consent to
an assignment of the proceeds thereof to the Secured Parties.

(ff)
 To the
extent that any Collateral is in the possession of any third party, the
applicable Debtor shall join with the Secured Parties in notifying such third
party of the Secured Parties’ security interest in such Collateral and shall use
its best efforts to obtain an acknowledgement and agreement from such third
party with respect to the Collateral, in form and substance satisfactory to the
Secured Parties.

(gg) If any
Debtor shall at any time hold or acquire a commercial tort claim, such Debtor
shall promptly notify the Secured Parties in a writing signed by such Debtor of
the particulars thereof and grant to the Secured Parties in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
the Secured Parties.

(hh) The
Debtor shall immediately provide written notice to the Secured Parties of any
and all accounts which arise out of contracts with any governmental authority
and, to the extent necessary to perfect or continue the perfected status of the
Security Interest in such accounts and proceeds thereof, shall execute and
deliver to the Secured Parties an assignment of claims for such accounts and
cooperate with the Secured Parties in taking any other steps required, in their
judgment, under the Federal Assignment of Claims Act or any similar federal,
state or local statute or rule to perfect or continue the perfected status of
the Security Interest in such accounts and proceeds thereof.

(ii) Intentionally
Omitted.

(jj)
 The
Debtor shall vote the Pledged Securities to comply with the covenants and
agreements set forth herein and in the Notes.

(kk) The
Debtor shall register the pledge of the applicable Pledged Securities on the
books of such Debtor. The Debtor shall notify each issuer of Pledged Securities
to register the pledge of the applicable Pledged Securities in the name of the
Secured Parties on the books of such issuer. Further, except with respect to
certificated securities delivered to the Secured Parties, if any, the applicable
Debtor shall deliver to Secured Parties an acknowledgement of pledge (which,
where appropriate, shall comply with the requirements of the relevant UCC with
respect to perfection by registration) signed by the issuer of the applicable
Pledged Securities, which acknowledgement shall confirm that: (a) it has
registered the pledge on its books and records; and (b) at any time directed by
Secured Parties during the continuation of an Event of Default, such issuer will
transfer the record ownership of such Pledged Securities into the name of any
designee of Secured Parties, will take such steps as may be necessary to effect
the transfer, and will comply with all other instructions of Secured Parties
regarding such Pledged Securities without the further consent of the applicable
Debtor.

(ll)
In the
event that, upon an occurrence of an Event of Default, the Secured Parties shall
sell all or any of the Pledged Securities to another party or parties (herein
called the “Transferee”) or
shall purchase or retain all or any of the Pledged Securities, the Debtor shall,
to the extent applicable: (i) deliver to the Secured Parties or the Transferee,
as the case may be, the articles of incorporation, bylaws, minute books, stock
certificate books, corporate seals, deeds, leases, indentures, agreements,
evidences of indebtedness, books of account, financial records and all other
Organizational Documents and records of the Debtor and their direct and indirect
subsidiaries; (ii) use its best efforts to obtain resignations of the persons
then serving as officers and directors of the Debtor and their direct and
indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain
any approvals that are required by any governmental or regulatory body in order
to permit the sale of the Pledged Securities to the Transferee or the purchase
or retention of the Pledged Securities by the Secured Parties and allow the
Transferee or the Secured Parties to continue the business of the Debtor and
their direct and indirect subsidiaries.

 

(mm) Without
limiting the generality of the other obligations of the Debtor hereunder, the
Debtor shall promptly (i) cause to be registered at the United States Copyright
Office all of its material copyrights, (ii) cause the security interest
contemplated hereby with respect to all Intellectual Property registered at the
United States Copyright Office or United States Patent and Trademark Office to
be duly recorded at the applicable office, and (iii) give the Secured Parties
notice whenever it acquires (whether absolutely or by license) or creates any
additional material Intellectual Property.

(nn) The
Debtor will from time to time, at the joint and several expense of the Debtor,
promptly execute and deliver all such further instruments and documents, and
take all such further action as may be necessary or desirable, or as the Secured
Parties may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Secured
Parties to exercise and enforce their rights and remedies hereunder and with
respect to any Collateral or to otherwise carry out the purposes of this
Agreement.

(oo) Schedule
F attached
hereto lists all of the patents, patent applications, trademarks, trademark
applications, registered copyrights, and domain names owned by the Debtor as of
the date hereof. Schedule
F lists
all material licenses in favor of any Debtor for the use of any patents,
trademarks, copyrights and domain names as of the date hereof. All material
patents and trademarks of the Debtor have been duly recorded at the United
States Patent and Trademark Office and all material copyrights of the Debtor
have been duly recorded at the United States Copyright Office.

(pp) Except as
set forth on Schedule
G attached
hereto, none of the account debtors or other persons or entities obligated on
any of the Collateral is a governmental authority covered by the Federal
Assignment of Claims Act or any similar federal, state or local statute or rule
in respect of such Collateral.

5. Effect
of Pledge on Certain Rights. If any of
the Collateral subject to this Agreement consists of nonvoting equity or
ownership interests (regardless of class, designation, preference or rights)
that may be converted into voting equity or ownership interests upon the
occurrence of certain events (including, without limitation, upon the transfer
of all or any of the other stock or assets of the issuer), it is agreed that the
pledge of such equity or ownership interests pursuant to this Agreement or the
enforcement of any of the Secured Parties’ rights hereunder shall not be deemed
to be the type of event which would trigger such conversion rights
notwithstanding any provisions in the Organizational Documents or agreements to
which any Debtor is subject or to which any Debtor is party.

6.
 Defaults. The
following events shall be “Events
of Default”:

(a) The
occurrence of an Event of Default (as defined in the Notes) under the
Notes;

(b) Any
representation or warranty of any Debtor in this Agreement shall prove to have
been incorrect in any material respect when made;

(c) The
failure by any Debtor to observe or perform any of its obligations hereunder for
five (5) days after delivery to such Debtor of notice of such failure by or on
behalf of a Secured Party unless such default is capable of cure but cannot be
cured within such time frame and such Debtor is using best efforts to cure same
in a timely fashion; or

(d) If
any provision of this Agreement shall at any time for any reason be declared to
be null and void, or the validity or enforceability thereof shall be contested
by any Debtor, or a proceeding shall be commenced by any Debtor, or by any
governmental authority having jurisdiction over any Debtor, seeking to establish
the invalidity or unenforceability thereof, or any Debtor shall deny that any
Debtor has any liability or obligation purported to be created under this
Agreement.

 7.  Duty
To Hold In Trust.

(a) Upon the
occurrence of any Event of Default and at any time thereafter, the Debtor shall,
upon receipt of any revenue, income,
dividend, interest or other
sums subject to the Security Interest, whether payable pursuant to the Notes or
otherwise, or of any check, draft, note, trade acceptance or other instrument
evidencing an obligation to pay any such sum, hold the same in trust for the
Secured Parties and shall forthwith endorse and transfer any such sums or
instruments, or both, to the Secured Parties, pro-rata in proportion to their
initial purchases of Notes for application to the satisfaction of the
Obligations (and if any Debenture is not outstanding, pro-rata in proportion to
the initial purchases of the remaining Notes). 

(b) If any
Debtor shall become entitled to receive or shall receive any securities or other
property (including, without limitation, shares of Pledged Securities or
instruments representing Pledged Securities acquired after the date hereof, or
any options, warrants, rights or other similar property or certificates
representing a dividend, or any distribution in connection with any
recapitalization, reclassification or increase or reduction of capital, or
issued in connection with any reorganization of such Debtor or any of its direct
or indirect subsidiaries) in respect of the Pledged Securities (whether as an
addition to, in substitution of, or in exchange for, such Pledged Securities or
otherwise), such Debtor agrees to (i) accept the same as the agent of the
Secured Parties; (ii) hold the same in trust on behalf of and for the benefit of
the Secured Parties; and (iii) to deliver any and all certificates or
instruments evidencing the same to the Secured Parties on or before the close of
business on the fifth business day following the receipt thereof by such Debtor,
in the exact form received together with the Necessary Endorsements, to be held
by the Secured Parties subject to the terms of this Agreement as
Collateral.

 8.  Rights
and Remedies Upon Default.

(a) Upon the
occurrence of any Event of Default and at any time thereafter, the Secured
Parties, acting through any agent appointed by them for such purpose, shall have
the right to exercise all of the remedies conferred hereunder and under the
Notes, and the Secured Parties shall have all the rights and remedies of a
secured party under the UCC. Without limitation, the Secured Parties shall have
the following rights and powers:

(i) The
Secured Parties shall have the right to take possession of the Collateral and,
for that purpose, enter, with the aid and assistance of any person, any premises
where the Collateral, or any part thereof, is or may be placed and remove the
same, and the Debtor shall assemble the Collateral and make it available to the
Secured Parties at places which the Secured Parties shall reasonably select,
whether at such Debtor's premises or elsewhere, and make available to the
Secured Parties, without rent, all of such Debtor’s respective premises and
facilities for the purpose of the Secured Parties taking possession of, removing
or putting the Collateral in saleable or disposable form.

(ii) Upon
notice to the Debtor by the Secured Parties, all rights of the Debtor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise and all rights of the Debtor to receive the dividends and
interest which it would otherwise be authorized to receive and retain, shall
cease. Upon such notice, the Secured Parties shall have the right to receive any
interest, cash dividends or other payments on the Collateral and, at the option
of the Secured Parties, to exercise in the Secured Parties’ discretion all
voting rights pertaining thereto. Without limiting the generality of the
foregoing, the Secured Parties shall have the right (but not the obligation) to
exercise all rights with respect to the Collateral as it were the sole and
absolute owners thereof, including, without limitation, to vote and/or to
exchange, at its sole discretion, any or all of the Collateral in connection
with a merger, reorganization, consolidation, recapitalization or other
readjustment concerning or involving the Collateral or any Debtor or any of its
direct or indirect subsidiaries.

(iii) The
Secured Parties shall have the right to operate the business of the Debtor using
the Collateral and shall have the right to assign, sell, lease or otherwise
dispose of and deliver all or any part of the Collateral, at public or private
sale or otherwise, either with or without special conditions or stipulations,
for cash or on credit or for future delivery, in such parcel or parcels and at
such time or times and at such place or places, and upon such terms and
conditions as the Secured Parties may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to any Debtor or right of redemption of a
Debtor, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Parties may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of any Debtor, which are hereby waived and
released.

(iv) The
Secured Parties shall have the right (but not the obligation) to notify any
account debtors and any obligors under instruments or accounts to make payments
directly to the Secured Parties and to enforce the Debtor’s rights against such
account debtors and obligors.

(v) The
Secured Parties may (but are not obligated to) direct any financial intermediary
or any other person or entity holding any investment property to transfer the
same to the Secured Parties or their designee.

(vi) The
Secured Parties may (but are not obligated to) transfer any or all Intellectual
Property registered in the name of any Debtor at the United States Patent and
Trademark Office and/or Copyright Office into the name of the Secured Parties or
any designee or any purchaser of any Collateral.

(b) The
Secured Parties may comply with any applicable law in connection with a
disposition of Collateral and such compliance will not be considered adversely
to affect the commercial reasonableness of any sale of the Collateral. The
Secured Parties may sell the Collateral without giving any warranties and may
specifically disclaim such warranties. If the Secured Parties sell any of the
Collateral on credit, the Debtor will only be credited with payments actually
made by the purchaser. In addition, the Debtor waives any and all rights that it
may have to a judicial hearing in advance of the enforcement of any of the
Secured Parties’ rights and remedies hereunder, including, without limitation,
its right following an Event of Default to take immediate possession of the
Collateral and to exercise its rights and remedies with respect
thereto.

 

(c) For the
purpose of enabling the Secured Parties to further exercise rights and remedies
under this Section 8 or elsewhere provided by agreement or applicable law, the
Debtor hereby grants to the Secured Parties an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to such Debtor) to
use, license or sublicense following an Event of Default, any Intellectual
Property now owned or hereafter acquired by such Debtor, 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.

 9.  Applications
of Proceeds. The
proceeds of any such sale, lease or other disposition of the Collateral
hereunder shall be applied first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including, without
limitation, any taxes, fees and other costs incurred in connection therewith) of
the Collateral, to the reasonable attorneys’ fees and expenses incurred by the
Secured Parties in enforcing their rights hereunder and in connection with
collecting, storing and disposing of the Collateral, and then to satisfaction of
the Obligations pro rata among the Secured Parties (based on then-outstanding
principal amounts of Notes at the time of any such determination), and to the
payment of any other amounts required by applicable law, after which the Secured
Parties shall pay to the applicable Debtor any surplus proceeds. If, upon the
sale, license or other disposition of the Collateral, the proceeds thereof are
insufficient to pay all amounts to which the Secured Parties are legally
entitled, the Debtor will be liable for the deficiency, together with interest
thereon, at the rate of 20% per annum or the lesser amount permitted by
applicable law (the “Default Rate”), and the reasonable fees of any attorneys
employed by the Secured Parties to collect such deficiency. To the extent
permitted by applicable law, the Debtor waives all claims, damages and demands
against the Secured Parties arising out of the repossession, removal, retention
or sale of the Collateral, unless due solely to the gross negligence or willful
misconduct of the Secured Parties as determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction.

10. Securities
Law Provision. The
Debtor recognizes that Secured Parties may be limited in their ability to effect
a sale to the public of all or part of the Pledged Securities by reason of
certain prohibitions in the Securities Act of 1933, as amended, or other federal
or state securities laws (collectively, the “Securities
Laws”), and
may be compelled to resort to one or more sales to a restricted group of
purchasers who may be required to agree to acquire the Pledged Securities for
their own account, for investment and not with a view to the distribution or
resale thereof. The Debtor agrees that sales so made may be at prices and on
terms less favorable than if the Pledged Securities were sold to the public, and
that the Secured Parties have no obligation to delay the sale of any Pledged
Securities for the period of time necessary to register the Pledged Securities
for sale to the public under the Securities Laws. The Debtor shall cooperate
with the Secured Parties in their attempt to satisfy any requirements under the
Securities Laws (including, without limitation, registration thereunder if
requested by the Secured Parties) applicable to the sale of the Pledged
Securities by the Secured Parties.

 

 11.  Costs
and Expenses. The
Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses
incurred in connection with any filing required hereunder, including without
limitation, any financing statements pursuant to the UCC, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Secured Parties. The
Debtor shall also pay all other claims and charges which in the reasonable
opinion of the Secured Parties might prejudice, imperil or otherwise affect the
Collateral or the Security Interest therein. The Debtor will also, upon demand,
pay to the Secured Parties the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Parties may incur in connection with (i) the
enforcement of this Agreement, (ii) the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Collateral, or (iii)
the exercise or enforcement of any of the rights of the Secured Parties under
the Notes. Until so paid, any fees payable hereunder shall be added to the
principal amount of the Notes and shall bear interest at the Default
Rate.

 12.  Responsibility
for Collateral. The
Debtor assumes all liabilities and responsibility in connection with all
Collateral, and the Obligations shall in no way be affected or diminished by
reason of the loss, destruction, damage or theft of any of the Collateral or its
unavailability for any reason. Without limiting the generality of the foregoing,
(a) no Secured Party (i) has any duty (either before or after an Event of
Default) to collect any amounts in respect of the Collateral or to preserve any
rights relating to the Collateral, or (ii) has any obligation to clean-up or
otherwise prepare the Collateral for sale, and (b) the Debtor shall remain
obligated and liable under each contract or agreement included in the Collateral
to be observed or performed by such Debtor thereunder. No Secured Party shall
have any obligation or liability under any such contract or agreement by reason
of or arising out of this Agreement or the receipt by any Secured Party of any
payment relating to any of the Collateral, nor any Secured Party be obligated in
any manner to perform any of the obligations of any Debtor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by any Secured Party in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to any Secured Party or to which any Secured Party may be entitled at
any time or times.

13.  Security
Interest Absolute. All
rights of the Secured Parties and all obligations of the Debtor hereunder, shall
be absolute and unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Notes or any agreement entered into in
connection with the foregoing, or any portion hereof or thereof; (b) any change
in the time, manner or place of payment or performance of, or in any other term
of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Notes or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the Obligations; (d) any action by the Secured Parties to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters made or arising in connection with the Collateral; or (e) any other
circumstance which might otherwise constitute any legal or equitable defense
available to a Debtor, or a discharge of all or any part of the Security
Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Parties shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Debtor expressly waives
presentment, protest, notice of protest, demand, notice of nonpayment and demand
for performance. In the event that at any time any transfer of any Collateral or
any payment received by the Secured Parties hereunder shall be deemed by final
order of a court of competent jurisdiction to have been a voidable preference or
fraudulent conveyance under the bankruptcy or insolvency laws of the United
States, or shall be deemed to be otherwise due to any party other than the
Secured Parties, then, in any such event, the Debtor’s obligations hereunder
shall survive cancellation of this Agreement, and shall not be discharged or
satisfied by any prior payment thereof and/or cancellation of this Agreement,
but shall remain a valid and binding obligation enforceable in accordance with
the terms and provisions hereof. The Debtor waives all right to require the
Secured Parties to proceed against any other person or entity or
to apply
any Collateral which the Secured Parties may hold at any time, or to marshal
assets, or to pursue any other remedy. The Debtor waives any defense arising by
reason of the application of the statute of limitations to any obligation
secured hereby.

 14.
 Term
of Agreement. This
Agreement and the Security Interest shall terminate on the date on which all
payments under the Notes have been indefeasibly paid in full and all other
Obligations have been paid or discharged; provided, however, that all
indemnities of the Debtor contained in this Agreement shall survive and remain
operative and in full force and effect regardless of the termination of this
Agreement.

15.
 Power
of Attorney; Further Assurances.

(a)
 The
Debtor authorizes the Secured Parties, and does hereby make, constitute and
appoint the Secured Parties and their respective officers, agents, successors or
assigns with full power of substitution, as such Debtor’s true and lawful
attorney-in-fact, with power, in the name of the various Secured Parties or such
Debtor, to, after the occurrence and during the continuance of an Event of
Default, (i) endorse any note, checks, drafts, money orders or other instruments
of payment (including payments payable under or in respect of any policy of
insurance) in respect of the Collateral that may come into possession of the
Secured Parties; (ii) to sign and endorse any financing statement pursuant to
the UCC or any invoice, freight or express bill, bill of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
notices in connection with accounts, and other documents relating to the
Collateral; (iii) to pay or discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on or threatened against the
Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue for
monies due in respect of the Collateral; (v) to transfer any Intellectual
Property or provide licenses respecting any Intellectual Property; and (vi)
generally, at the option of the Secured Parties, and at the expense of the
Debtor, at any time, or from time to time, to execute and deliver any and all
documents and instruments and to do all acts and things which the Secured
Parties deem necessary to protect, preserve and realize upon the Collateral and
the Security Interest granted therein in order to effect the intent of this
Agreement and the Notes all as fully and effectually as the Debtor might or
could do; and the Debtor hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof. This power of attorney is coupled with
an interest and shall be irrevocable for the term of this Agreement and
thereafter as long as any of the Obligations shall be outstanding. The
designation set forth herein shall be deemed to amend and supersede any
inconsistent provision in the Organizational Documents or other documents or
agreements to which any Debtor is subject or to which any Debtor is a party.
Without
limiting the generality of the foregoing, after the occurrence and during the
continuance of an Event of Default, each Secured Party is specifically
authorized to execute and file any applications for or instruments of transfer
and assignment of any patents, trademarks, copyrights or other Intellectual
Property with the United States Patent and Trademark Office and the United
States Copyright Office.

(b)
 On a
continuing basis, the Debtor will make, execute, acknowledge, deliver, file and
record, as the case may be, with the proper filing and recording agencies in any
jurisdiction, including, without limitation, the jurisdictions indicated on
Schedule
C attached
hereto, all such instruments, and take all such action as may reasonably be
deemed necessary or advisable, or as reasonably requested by the Secured
Parties, to perfect the Security Interest granted hereunder and otherwise to
carry out the intent and purposes of this Agreement, or for assuring and
confirming to the Secured Parties the grant or perfection of a perfected
security interest in all the Collateral under the UCC.

(c)
 The
Debtor hereby irrevocably appoints the Secured Parties as such Debtor’s
attorney-in-fact, with full authority in the place and instead of such Debtor
and in the name of such Debtor, from time to time in the Secured Parties’
discretion, to take any action and to execute any instrument which the Secured
Parties may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of such Debtor where permitted by law,
which financing statements may (but need not) describe the Collateral as “all
assets” or “all personal property” or words of like import, and ratifies all
such actions taken by the Secured Parties. This power of attorney is coupled
with an interest and shall be irrevocable for the term of this Agreement and
thereafter as long as any of the Obligations shall be outstanding.

 16.  Notices. All
notices, requests, demands and other communications hereunder shall be subject
to the notice provision of the Purchase Agreement (as such term is defined in
the Notes).

 17.  Other
Security. To the
extent that the Obligations are now or hereafter secured by property other than
the Collateral or by the guarantee, endorsement or property of any other person,
firm, corporation or other entity, then the Secured Parties shall have the
right, in its sole discretion, to pursue, relinquish, subordinate, modify or
take any other action with respect thereto, without in any way modifying or
affecting any of the Secured Parties’ rights and remedies
hereunder.

18.  Intentionally
Omitted

 

 19.  Miscellaneous.

(a)
 No course
of dealing between the Debtor and the Secured Parties, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Parties, any
right, power or privilege hereunder or under the Notes shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.

(b)
 All of
the rights and remedies of the Secured Parties with respect to the Collateral,
whether established hereby or by the Notes or by any other agreements,
instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.

(c)
 This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and is intended to supersede all prior negotiations,
understandings and agreements with respect thereto. Except as specifically set
forth in this Agreement, no provision of this Agreement may be modified or
amended except by a written agreement specifically referring to this Agreement
and signed by the parties hereto.

(d)
 In the
event any provision of this Agreement is held to be invalid, prohibited or
unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.

(e)
 No waiver
of any breach or default or any right under this Agreement shall be considered
valid unless in writing and signed by the party giving such waiver, and no such
waiver shall be deemed a waiver of any subsequent breach or default or right,
whether of the same or similar nature or otherwise.

(f)
 This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.

(g)
 Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.

(h) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. The Debtor agrees that all proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and the Notes (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York, Borough of Manhattan.
The Debtor hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such proceeding
is improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If any party shall commence a proceeding to enforce any
provisions of this Agreement, then the prevailing party in such proceeding shall
be reimbursed by the other party for its reasonable attorney’s fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such proceeding.

(i)
 This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.

(j) Intentionally
Omitted.

(k) The
Debtor shall indemnify, reimburse and hold harmless the Secured Parties and
their respective partners, members, shareholders, officers, directors, employees
and agents (collectively, “Indemnitees”) from
and against any and all losses, claims, liabilities, damages, penalties, suits,
costs and expenses, of any kind or nature, (including fees relating to the cost
of investigating and defending any of the foregoing) imposed on, incurred by or
asserted against such Indemnitee in any way related to or arising from or
alleged to arise from this Agreement or the Collateral, except any such losses,
claims, liabilities, damages, penalties, suits, costs and expenses which result
from the gross negligence or willful misconduct of the Indemnitee as determined
by a final, nonappealable decision of a court of competent jurisdiction. This
indemnification provision is in addition to, and not in limitation of, any other
indemnification provision in the Notes, the Purchase Agreement (as such term is
defined in the Notes) or any other agreement, instrument or other document
executed or delivered in connection herewith or therewith.

(l) Nothing
in this Agreement shall be construed to subject any Secured Party to liability
as a partner in any Debtor or any if its direct or indirect subsidiaries that is
a partnership or as a member in any Debtor or any of its direct or indirect
subsidiaries that is a limited liability company, nor shall any Secured Party be
deemed to have assumed any obligations under any partnership agreement or
limited liability company agreement, as applicable, of any such Debtor or any if
its direct or indirect subsidiaries or otherwise, unless and until any such
Secured Party exercises its right to be substituted for such Debtor as a partner
or member, as applicable, pursuant hereto.

(m)
 To the
extent that the grant of the security interest in the Collateral and the
enforcement of the terms hereof require the consent, approval or action of any
partner or member, as applicable, of any Debtor or any direct or indirect
subsidiary of any Debtor or compliance with any provisions of any of the
Organizational Documents, the Debtor hereby grants such consent and approval and
waives any such noncompliance with the terms of said documents.

[SIGNATURE
PAGES FOLLOW]

IN
WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above
written.

 

	 	GRANT LIFE SCIENCES,
      INC.	 
	 	 	 
	 	/s/
      Stan Yakatan	 
	 	Name: Stan Yakatan	 
	 	
      Title:
      Chief Executive Officer
	 
	 	 	 

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

 

[SIGNATURE
PAGE OF HOLDERS TO GRANT LIFE SCIENCES SA]

 

 

	 	 Name of Investing Entity: DCOFI
      Master LDC
	 	 Signature of Authorized Signatory
      of Investing entity:
      /s/Richard
      Smithline
	 	 Name of Authorized Signatory: Richard
      Smithline
	 	 Title of Authorized Signatory: Director
	 	 
	 	 

                                                    [SIGNATURE PAGE OF
HOLDERS FOLLOWS]Exhibit
10.3

  EXHIBIT
B 

REGISTRATION
RIGHTS AGREEMENT

This
Registration Rights Agreement (this “Agreement”) is
made and entered into as of March 15, 2005, among Grant Life Sciences, Inc., a
Nevada corporation (the “Company”), and
the purchasers signatory hereto (each such purchaser is a “Purchaser” and all
such purchasers are, collectively, the “Purchasers”).

This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof among the Company and the Purchasers (the “Purchase
Agreement”).

The
Company and the Purchasers hereby agree as follows:

1.
Definitions

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

“Advice” shall
have the meaning set forth in Section 6(d).

“Effectiveness
Date” means,
with respect to the initial Registration Statement required to be filed
hereunder, the 240th calendar
day following the date hereof and, with respect to any additional Registration
Statements which may be required pursuant to Section 3(c), the 240th calendar
day following the date on which the Company first knows, or reasonably should
have known, that such additional Registration Statement is required hereunder;
provided,
however, in the
event the Company is notified by the Commission that one of the above
Registration Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration Statement
shall be the fifth Trading Day following the date on which the Company is so
notified if such date precedes the dates required above.

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

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

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

“Filing
Date” means,
with respect to the initial Registration Statement required hereunder, the 180th
calendar day following the date hereof and, with respect to any additional
Registration Statements which may be required pursuant to Section 3(c), the
180th day
following the date on which the Company first knows, or reasonably should have
known that such additional Registration Statement is required
hereunder.

1

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

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

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

“Losses” shall
have the meaning set forth in Section 5(a).

“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
(i) all Warrant Shares, (ii) all Penalty Warrant Shares, (iii) any securities
issued or issuable upon any stock split, dividend or other distribution
recapitalization or similar event with respect to the foregoing and (iv) any
additional shares issuable in connection with any anti-dilution provisions in
the Warrants or Penalty Warrants.

 

“Registration
Statement” means
the registration statements required to be filed hereunder and any additional
registration statements contemplated by Section 3(c), including (in each case)
the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.

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

“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.

2

2.
 Shelf
Registration

	               
    	
      (a)
      
	
      On
      or prior to each Filing Date, the Company shall prepare and file with the
      Commission a “Shelf” Registration Statement covering the resale of 125% of
      the Registrable Securities on such Filing Date for an offering to be made
      on a continuous basis pursuant to Rule 415. The Registration Statement
      shall be on Form SB-2 (except if the Company is not then eligible to
      register for resale the Registrable Securities on Form SB-2, in which case
      such registration shall be on another appropriate form in accordance
      herewith) and shall contain (unless otherwise directed by the Holders)
      substantially the “Plan of Distribution” attached hereto as Annex
      A.
      Subject to the terms of this Agreement, the Company shall use its best
      efforts to cause the Registration Statement to be declared effective under
      the Securities Act as promptly as possible after the filing thereof, but
      in any event prior to the applicable Effectiveness Date, and shall use its
      best efforts to keep such Registration Statement continuously effective
      under the Securities Act until all Registrable Securities covered by such
      Registration Statement have been sold or may be sold without volume
      restrictions pursuant to Rule 144(k) as determined by the counsel to the
      Company pursuant to a written opinion letter to such effect, addressed and
      acceptable to the Company’s transfer agent and the affected Holders (the
      “Effectiveness
      Period”).
      The Company shall immediately notify the Holders via facsimile of the
      effectiveness of the Registration Statement on the same day that the
      Company receives notification of the effectiveness from the Commission.
      Failure to so notify the Holder within 1 Trading Day of such notification
      shall be deemed an Event under Section
2(b).

	 	
      (b)          
      
	
      If:
      (i) a Registration Statement is not filed on or prior to its Filing Date
      (if the Company files a Registration Statement without affording the
      Holders the opportunity to review and comment on the same as required by
      Section 3(a), the Company shall not be deemed to have satisfied this
      clause (i)), or (ii) the Company fails to file with the Commission a
      request for acceleration in accordance with Rule 461 promulgated under the
      Securities Act, within five Trading Days of the date that the Company is
      notified (orally or in writing, whichever is earlier) by the Commission
      that a Registration Statement will not be “reviewed,” or not subject to
      further review, or (iii) prior to its Effectiveness Date, the Company
      fails to file a pre-effective amendment and otherwise respond in writing
      to comments made by the Commission in respect of such Registration
      Statement within 10 calendar days after the receipt of comments by or
      notice from the Commission that such amendment is required in order for a
      Registration Statement to be declared effective, or (iv) a Registration
      Statement filed or required to be filed hereunder is not declared
      effective by the Commission by its Effectiveness Date, or (v) after the
      Effectiveness Date, a Registration Statement ceases for any reason to
      remain continuously effective as to all Registrable Securities for which
      it is required to be effective, or the Holders are not permitted to
      utilize the Prospectus therein to resell such Registrable Securities for
      10 consecutive calendar days but no more than an aggregate of 15 calendar
      days during any 12-month period (which need not be consecutive Trading
      Days) (any such failure or breach being referred to as an “Event”,
      and for purposes of clause (i) or (iv) the date on which such Event
      occurs, or for purposes of clause (ii) the date on which such five Trading
      Day period is exceeded, or for purposes of clause (iii) the date which
      such 10 calendar day period is exceeded, or for purposes of clause (v) the
      date on which such 10 or 15 calendar day period, as applicable, is
      exceeded being referred to as “Event
      Date”),
      then in addition to any other rights the Holders may have hereunder or
      under applicable law, on each such Event Date and on each monthly
      anniversary of each such Event Date (if the applicable Event shall not
      have been cured by such date) until the applicable Event is cured, the
      Company shall pay to each Holder an amount in cash, as partial liquidated
      damages and not as a penalty, equal to 1.0% of the aggregate purchase
      price paid by such Holder pursuant to the Purchase Agreement for any
      Registrable Securities then held by such Holder. If the Company fails to
      pay any partial liquidated damages pursuant to this Section in full within
      seven days after the date payable, the Company will pay interest thereon
      at a rate of 18% per annum (or such lesser maximum amount that is
      permitted to be paid by applicable law) to the Holder, accruing daily from
      the date such partial liquidated damages are due until such amounts, plus
      all such interest thereon, are paid in full. The partial liquidated
      damages pursuant to the terms hereof shall apply on a daily pro-rata basis
      for any portion of a month prior to the cure of an
  Event.

3

3.
 Registration
Procedures

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

	 	
      (a)
	
      Not
      less than five Trading Days prior to the filing of each Registration
      Statement or any related Prospectus or any amendment or supplement thereto
      (including any document that would be incorporated or deemed to be
      incorporated therein by reference), the Company shall, (i) furnish to each
      Holder copies of all such documents proposed to be filed, which documents
      (other than those incorporated or deemed to be incorporated by reference)
      will be subject to the review of such Holders, and (ii) cause its officers
      and directors, counsel and independent certified public accountants to
      respond to such inquiries as shall be necessary, in the reasonable opinion
      of respective counsel to conduct a reasonable investigation within the
      meaning of the Securities Act. The Company shall not file the 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 5 Trading Days after the Holders
      have been so furnished copies of such documents. Each Holder agrees to
      furnish to the Company a completed Questionnaire in the form attached to
      this Agreement as Annex B (a “Selling
      Holder Questionnaire”)
      not less than two Trading Days prior to the Filing Date or by the end of
      the fourth Trading Day following the date on which such Holder receives
      draft materials in accordance with this Section.

	 	
      (b)
	
      (i)
      Prepare and file with the Commission such amendments, including
      post-effective amendments, to a Registration Statement and the Prospectus
      used in connection therewith as may be necessary to keep a Registration
      Statement continuously effective as to the applicable Registrable
      Securities for the Effectiveness Period and prepare and file with the
      Commission such additional Registration Statements in order to register
      for resale under the Securities Act all of the Registrable Securities;
      (ii) cause the related Prospectus to be amended or supplemented by any
      required Prospectus supplement (subject to the terms of this Agreement),
      and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
      respond as promptly as reasonably possible to any comments received from
      the Commission with respect to a Registration Statement or any amendment
      thereto and 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; and (iv) comply in all material
      respects with the provisions of the Securities Act and the Exchange Act
      with respect to the disposition of all Registrable Securities covered by a
      Registration Statement during the applicable period in accordance (subject
      to the terms of this Agreement) with the intended methods of disposition
      by the Holders thereof set forth in such Registration Statement as so
      amended or in such Prospectus as so
supplemented.

 

4

 

	 	
      (c)
	
      If
      during the Effectiveness Period, the number of Registrable Securities at
      any time exceeds 90% of the number of shares of Common Stock then
      registered in a Registration Statement, then the Company shall file as
      soon as reasonably practicable but in any case prior to the applicable
      Filing Date, an additional Registration Statement covering the resale by
      the Holders of not less than 125% of the number of such Registrable
      Securities.

	 	 	 

	 	(d)	
      Notify
      the Holders of Registrable Securities to be sold (which notice shall,
      pursuant to clauses (ii) through (vi) hereof, be accompanied by an
      instruction to suspend the use of the Prospectus until the requisite
      changes have been made) as promptly as reasonably possible (and, in the
      case of (i)(A) below, not less than five Trading Days prior to such
      filing) and (if requested by any such Person) confirm such notice in
      writing no later than one Trading Day following the day (i)(A) when a
      Prospectus or any Prospectus supplement or post-effective amendment to a
      Registration Statement is proposed to be filed; (B) when the Commission
      notifies the Company whether there will be a “review” of such Registration
      Statement and whenever the Commission comments in writing on such
      Registration Statement (the Company shall provide true and complete copies
      thereof and all written responses thereto to each of the Holders); and (C)
      with respect to a Registration Statement or any post-effective amendment,
      when the same has become effective; (ii) of any request by the Commission
      or any other Federal or state governmental authority for amendments or
      supplements to a Registration Statement or Prospectus or for additional
      information; (iii) of the issuance by the Commission or any other federal
      or state governmental authority of any stop order suspending the
      effectiveness of a Registration Statement covering any or all of the
      Registrable Securities or the initiation of any Proceedings for that
      purpose; (iv) of the receipt by the Company of any notification with
      respect to the suspension of the qualification or exemption from
      qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; (v) of the occurrence of any event or passage of time that makes
      the financial statements included in a Registration Statement ineligible
      for inclusion therein or any statement made in a Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated
      therein by reference untrue in any material respect or that requires any
      revisions to a Registration Statement, Prospectus or other documents so
      that, in the case of a Registration Statement or the Prospectus, as the
      case may be, it will not contain any untrue statement of a material fact
      or omit to state any material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances
      under which they were made, not misleading; and (vi) the occurrence or
      existence of any pending corporate development with respect to the Company
      that the Company believes may be material and that, in the determination
      of the Company, makes it not in the best interest of the Company to allow
      continued availability of the Registration Statement or Prospectus;
      provided that any and all of such information shall remain confidential to
      each Holder until such information otherwise becomes public, unless
      disclosure by a Holder is required by law; provided,
      further,
      notwithstanding each Holder’s agreement to keep such information
      confidential, the Holders make no acknowledgement that any such
      information is material, non-public
information.

 

 

5

 

 

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

	 	 	 

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

	 	 	 

	 	(g)	
      Promptly
      deliver to each Holder, without charge, as many copies of the Prospectus
      or Prospectuses (including each form of prospectus) and each amendment or
      supplement thereto as such Persons may reasonably request in connection
      with resales by the Holder of Registrable Securities. 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 on any notice pursuant to Section
      3(d).

 

 

6

 

 

	 	(h) 	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.

	 	 	 

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

	 	 	 

	 	(j)	
      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 (ii) through
      (v) of Section 3(d) above to suspend the use of any Prospectus until the
      requisite changes to such Prospectus have been made, then the Holders
      shall suspend use of such Prospectus. The Company will use its best
      efforts to ensure that the use of the Prospectus may be resumed as
      promptly as is practicable. The Company shall be entitled to exercise its
      right under this Section 3(j) to suspend the availability of a
      Registration Statement and Prospectus, subject to the payment of partial
      liquidated damages pursuant to Section 2(b), for a period not to exceed 60
      days (which need not be consecutive days) in any 12 month
      period.

 

 

7

 

	 	 	 

	 	(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
      person thereof that has voting and dispositive control over the Shares.
      During any periods that the Company is unable to meet its obligations
      hereunder with respect to the registration of the Registrable Securities
      solely because any Holder fails to furnish such information within three
      Trading Days of the Company’s request, any liquidated damages that are
      accruing at such time as to such Holder only shall be tolled and any Event
      that may otherwise occur solely because of such delay shall be suspended
      as to such Holder only, until such information is delivered to the
      Company.

	 	 	 

 

	 	
      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 the 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 the 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 and determination of the eligibility of the
      Registrable Securities for investment under the laws of such jurisdictions
      as requested by the Holders), (ii) printing expenses (including, without
      limitation, expenses of printing certificates for Registrable Securities
      and of printing prospectuses if the printing of prospectuses is reasonably
      requested by the holders of a majority of the Registrable Securities
      included in a Registration Statement), (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 or, except to the extent provided for in the
      Transaction Documents, any legal fees or other costs of the
      Holders.

8

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, agents,
      brokers (including brokers who offer and sell Registrable Securities as
      principal as a result of a pledge or any failure to perform under a margin
      call of Common Stock), investment advisors and employees 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, agents and employees 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 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, except to the
      extent, but only to the extent, that (i) such untrue statements or
      omissions are based solely upon information regarding such Holder
      furnished in writing to the Company by such Holder expressly for use
      therein, or to the extent that such information relates to such Holder or
      such Holder’s proposed method of distribution of Registrable Securities
      and was reviewed and expressly approved in writing by such Holder
      expressly for use in a Registration Statement, such Prospectus or such
      form of Prospectus or in any amendment or supplement thereto (it being
      understood that the Holder has approved Annex A hereto for this purpose)
      or (ii) in the case of an occurrence of an event of the type specified in
      Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective
      Prospectus after the Company has notified such Holder in writing that the
      Prospectus is outdated or defective and prior to the receipt by such
      Holder of the Advice contemplated in Section 6(d). The Company shall
      notify the Holders promptly of the institution, threat or assertion of any
      Proceeding arising from or in connection with the transactions
      contemplated by this Agreement of which the Company is
aware.

	 	 	 

	 	
      (b)
      
	
      Indemnification
      by Holders.
      Each Holder shall, severally and not jointly, indemnify and hold harmless
      the Company, its directors, officers, agents and employees, each Person
      who controls the Company (within the meaning of Section 15 of the
      Securities Act and Section 20 of the Exchange Act), and the directors,
      officers, agents or employees of such controlling Persons, to the fullest
      extent permitted by applicable law, from and against all Losses, as
      incurred, to the extent arising out of or based solely upon: (x) such
      Holder’s failure to comply with the prospectus delivery requirements of
      the Securities Act or (y) any untrue or alleged untrue statement of a
      material fact contained in any Registration Statement, any Prospectus, or
      any form of prospectus, or in any amendment or supplement thereto or in
      any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein not misleading (i) to the extent,
      but only to the extent, that such untrue statement or omission is
      contained in any information so furnished in writing by such Holder to the
      Company specifically for inclusion in such Registration Statement or such
      Prospectus or (ii) to the extent that (1) such untrue statements or
      omissions are based solely upon information regarding such Holder
      furnished in writing to the Company by such Holder expressly for use
      therein, or to the extent that such information relates to such Holder or
      such Holder’s proposed method of distribution of Registrable Securities
      and was reviewed and expressly approved in writing by such Holder
      expressly for use in the Registration Statement (it being understood that
      the Holder has approved Annex A hereto for this purpose), such Prospectus
      or such form of Prospectus or in any amendment or supplement thereto or
      (2) in the case of an occurrence of an event of the type specified in
      Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective
      Prospectus after the Company has notified such Holder in writing that the
      Prospectus is outdated or defective and prior to the receipt by such
      Holder of the Advice contemplated in Section 6(d). In no event shall the
      liability of any selling Holder hereunder be greater in amount than the
      dollar amount of the net proceeds received by such Holder upon the sale of
      the Registrable Securities giving rise to such indemnification
      obligation.

 

9

 

	 	
      (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 such 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 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. 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.

10

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

	
      
	
      (d)
      
	
      Contribution.
      If a claim for indemnification under Section 5(a) or 5(b) is unavailable
      to an Indemnified Party (by reason of public policy or otherwise), then
      each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
      shall contribute to the amount paid or payable by such Indemnified Party
      as a result of such Losses, 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 reasonable 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.

11

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
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.

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

6.
Miscellaneous

	(a)  	
      Remedies.
      In the event of a breach by the Company or by a Holder, of any of their
      obligations under this Agreement, each Holder or the Company, as the case
      may be, in addition to being entitled to exercise all rights granted by
      law and under this Agreement, including recovery of damages, will be
      entitled to specific performance of its rights under this Agreement. The
      Company and each Holder agree that monetary damages would not provide
      adequate compensation for any losses incurred by reason of a breach by it
      of any of the provisions of this Agreement and hereby further agrees that,
      in the event of any action for specific performance in respect of such
      breach, it shall waive the defense that a remedy at law would be
      adequate.

(b)  Reserved.

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

	(d)  	
      Discontinued
      Disposition.
      Each Holder agrees by its acquisition of such Registrable Securities that,
      upon receipt of a notice from the Company of the occurrence of any event
      of the kind described in Section 3(d), such Holder will forthwith
      discontinue disposition of such Registrable Securities under a
      Registration Statement until such Holder’s receipt of the copies of the
      supplemented Prospectus and/or amended Registration Statement, or until it
      is advised in writing (the “Advice”)
      by the Company that the use of the applicable Prospectus may be resumed,
      and, in either case, has received copies of any additional or supplemental
      filings that are incorporated or deemed to be incorporated by reference in
      such Prospectus or Registration Statement. The Company will use its best
      efforts to ensure that the use of the Prospectus may be resumed as
      promptly as it practicable. The Company agrees and acknowledges that any
      periods during which the Holder is required to discontinue the disposition
      of the Registrable Securities hereunder shall be subject to the provisions
      of Section 2(b).

12

 

	(e)  	
      Piggy-Back
      Registrations.
      If at any time during the Effectiveness Period there is not an effective
      Registration Statement covering all of the Registrable Securities and the
      Company shall determine to prepare and file with the Commission a
      registration statement relating to an offering for its own account or the
      account of others under the Securities Act of any of its equity
      securities, other than on Form S-4 or Form S-8 (each as promulgated under
      the Securities Act) or their then equivalents relating to equity
      securities to be issued solely in connection with any acquisition of any
      entity or business or equity securities issuable in connection with the
      stock option or other employee benefit plans, then the Company shall send
      to each Holder a written notice of such determination and, if within
      fifteen days after the date of such notice, any such Holder shall so
      request in writing, the Company shall include in such registration
      statement all or any part of such Registrable Securities such holder
      requests to be registered; provided, that, the Company shall not be
      required to register any Registrable Securities pursuant to this Section
      6(e) that are eligible for resale pursuant to Rule 144(k) promulgated
      under the Securities Act or that are the subject of a then effective
      Registration Statement.

	(f)  	
      Amendments
      and Waivers.
      The provisions of this Agreement, including the provisions of this
      sentence, may not be amended, modified or supplemented, and waivers or
      consents to departures from the provisions hereof may not be given, unless
      the same shall be in writing and signed by the Company and each Holder 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. 

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

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

 

13

 

	(i)  	
      No
      Inconsistent Agreements.
      Neither the Company nor any of its subsidiaries has entered, as of the
      date hereof, nor shall the Company or any of its subsidiaries, on or after
      the date of this Agreement, enter into any agreement with respect to its
      securities, that would have the effect of impairing the rights granted to
      the Holders in this Agreement or otherwise conflicts with the provisions
      hereof. Except as set forth on Schedule
      6(i),
      neither the Company nor any of its subsidiaries has previously entered
      into any agreement granting any registration rights with respect to any of
      its securities to any Person that have not been satisfied in
      full.

	(j)  	
      Execution
      and Counterparts.
      This Agreement may be executed in any number of counterparts, each of
      which when so executed shall be deemed to be an original and, all of which
      taken together shall constitute one and the same Agreement. In the event
      that any signature is delivered by facsimile transmission, such signature
      shall create a valid binding obligation of the party executing (or on
      whose behalf such signature is executed) the same with the same force and
      effect as if such facsimile signature were the original
      thereof.

	(k)  	
      Governing
      Law.
      All questions concerning the construction, validity, enforcement and
      interpretation of this Agreement shall be determined with the provisions
      of the Purchase Agreement.

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

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

	(n)  	
      Headings.
      The headings in this Agreement are for convenience of reference only and
      shall not limit or otherwise affect the meaning
hereof.

 

14

	(o)  	
      Independent
      Nature of Holders’ Obligations and Rights.
      The obligations of each Holder hereunder are several and not joint with
      the obligations of any other Holder hereunder, and no Holder shall be
      responsible in any way for the performance of the obligations of any other
      Holder hereunder. Nothing contained herein or in any other agreement or
      document delivered at any closing, and no action taken by any Holder
      pursuant hereto or thereto, shall be deemed to constitute the Holders as a
      partnership, an association, a joint venture or any other kind of entity,
      or create a presumption that the Holders are in any way acting in concert
      with respect to such obligations or the transactions contemplated by this
      Agreement. Each Holder shall be entitled to protect and enforce its
      rights, including without limitation the rights arising out of this
      Agreement, and it shall not be necessary for any other Holder to be joined
      as an additional party in any proceeding for such
  purpose.

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

 

15

 

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

	 	
      GRANT
      LIFE SCIENCES, INC.

       
	 
	 	
      /s/
      Stan Yakatan

      Name:
      Stan Yakatan

      Title:
      Chief Executive Officer
	 

     

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

 

16

[SIGNATURE
PAGE OF HOLDERS TO GRANT LIFE SCIENCES RRA]

 

Name of
Investing Entity: DCOFI
master LDC

Signature
of Authorized Signatory of Investing Entity:
/s/
Richard Smithline

Name of
Authorized Signatory: Richard
Smithline

Title of
Authorized Signatory: Director

[SIGNATURE
PAGES CONTINUE]

 

17

Plan
of Distribution

Each
Selling Stockholder (the “Selling
Stockholders”) of the
common stock (“Common
Stock”) of
Grant Life Sciences, Inc., a Nevada corporation (the “Company”) and
any of their pledgees, assignees and successors-in-interest may, from time to
time, sell any or all of their shares of Common Stock on the Trading Market or
any other stock exchange, market or trading facility on which the shares are
traded or in private transactions. These sales may be at fixed or negotiated
prices. A Selling Stockholder may use any one or more of the following methods
when selling shares:

 

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

 

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

 

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

 

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

 

	·  	
      privately
      negotiated transactions;

 

	·  	
      settlement
      of short sales entered into after the date of this prospectus;
      

 

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

 

	·  	
      a
      combination of any such methods of sale;

 

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

 

	·  	
      any
      other method permitted pursuant to applicable
law.

 

The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities
Act”), if
available, rather than under this prospectus.

 

Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. Each
Selling Stockholder does not expect these commissions and discounts relating to
its sales of shares to exceed what is customary in the types of transactions
involved.

 

18

In
connection with the sale of our common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).

 

The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.

 

The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act. 

 

Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold
under Rule 144 rather than under this prospectus. Each Selling Stockholder has
advised us that they have not entered into any agreements, understandings or
arrangements with any underwriter or broker-dealer regarding the sale of the
resale shares. There is no underwriter or coordinating broker acting in
connection with the proposed sale of the resale shares by the Selling
Stockholders.

 

We agreed
to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Stockholders without registration and
without regard to any volume limitations by reason of Rule 144(e) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to the prospectus or Rule 144 under the Securities Act
or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.

 

19

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

 

20

Annex
B

 

Grant
Life Sciences, Inc.

 

Selling
Securityholder Notice and Questionnaire

 

The
undersigned beneficial owner of common stock, no par value (the “Common
Stock”), of
Grant Life Sciences, Inc., a Nevada corporation (the “Company”), (the
“Registrable
Securities”)
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a
registration statement on Form SB-2 (the “Registration
Statement”) for
the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities
Act”), of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of March 15, 2005 (the “Registration
Rights Agreement”), among
the Company and the Purchasers named therein. A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.

 

Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.

 

NOTICE

 

The
undersigned beneficial owner (the “Selling
Securityholder”) of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise specified under such Item 3)
in the Registration Statement.

 

 

21

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

 

QUESTIONNAIRE

 

1. Name.

 

	
      
	
      (a)
	
      Full
      Legal Name of Selling Securityholder

 

	 
	 

	
      
	
      (b)
	
      Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities Listed in Item 3 below are
    held:

 

	 
	 

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

 

	 
	 

 

2.
Address for Notices to Selling Securityholder:

 

	 
	 
	 
	
      Telephone: 

	
      Fax: 

	
      Contact
      Person: 

3.
Beneficial Ownership of Registrable Securities:

 

	
      
	
      (a)
	
      Type
      and Principal Amount of Registrable Securities beneficially
      owned:

 

	 
	 
	 
	 

 

22

4.
Broker-Dealer Status:

 

	
      
	
      (a)
	
      Are
      you a broker-dealer?

 

Yes o     No o

 

	
      
	
      Note:
	
      If
      yes, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

 

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

 

Yes o     No o

 

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

 

Yes o     No o

 

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

 

5.
Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

 

Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

 

	
      
	
      (a)
	
      Type
      and Amount of Other Securities beneficially owned by the Selling
      Securityholder:

 

	 
	 
	 

23

 

 

6.
Relationships with the Company:

 

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

 

State any
exceptions here:

 

	 
	 
	 

 

The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.

 

By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

 

IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

 

	Dated:    	 	 
	 	Beneficial
      Owner: 
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
      

      Name:
	 	Title 

 

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

24

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