Exhibit
10.42






SECURITY
AGREEMENT




SOLX,
INC.





This
SECURITY AGREEMENT dated as of December
19, 2007 is made by Solx, Inc. (“Solx”), a Delaware
corporation, in favor of OccuLogix, Inc. (“OccuLogix”), a
Delaware corporation.




WHEREAS:




A.
            On
      the date hereof, Solx Acquisition, Inc. (“Solx
      Acquisition”) acquired all of the issued and outstanding shares of
      the capital stock of Solx pursuant to the Stock Purchase Agreement, of
      even date herewith, between Solx Acquistion and OccuLogix (the “Stock Purchase
      Agreement”);




B.
            Solx
      Acquisition owes certain enumerated obligations to OccuLogix under the
      Stock Purchase Agreement, including the obligation to pay the Royalty
      Payments (as such term is defined in the Stock Purchase Agreement);
      and




C.
            Pursuant
      to the Stock Purchase Agreement, and as an inducement to OccuLogix to
      enter into the same, Solx Acquisition agreed to cause Solx to execute and
      deliver this Security Agreement.




NOW THEREFORE THIS AGREEMENT
WITNESSESthat, in consideration of payment of the sum of $1.00 by
OccuLogix to Solx and of the premises and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged by Solx), Solx
hereby covenants and agrees in favor of OccuLogix as follows:




1.           INTERPRETATION




1.1          Definitions




In this
Agreement, unless the context shall otherwise require, all capitalized terms
used but not expressly defined herein shall have the meanings ascribed thereto
in the Stock Purchase Agreement, as it may be amended, supplemented, replaced
and/or amended and restated from time to time, and the following words and terms
shall have the following meanings:




“Event of Default” has
the meaning given to it in Section 4.1;




“Intellectual
Property” means the IP Collateral, other than any proceeds or
payments;




“License” means any
license, sub-license, lease, right of use or control, agreement to license or
sub-license, or to lease or to grant a right of use or control, in respect of or
in connection with the acquisition, ownership, use, control or exploitation, of
the Intellectual Property, together with any amendments, supplements,
modifications, extensions, renewals or replacements thereof;




“Lien” means any
mortgage, pledge, deed of trust, pledge, hypothecation, assignment, security
interest, lien (whether statutory or otherwise), charge, claim or encumbrance,
or preference, priority or other security agreement or preferential arrangement
held or asserted in respect of any asset of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, or any lease having substantially the same economic effect as any of
the foregoing, or the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code (as adopted in the State of Delaware from time
to time) or a comparable law of any jurisdiction;









“Merger Agreement”
means the Agreement and Plan of Merger, dated as of August 1, 2006, by and among
OccuLogix, Inc., OccuLogix Mergeco, Inc., Solx, Inc. and Doug P. Adams, John
Sullivan and Peter M. Adams, acting, in each case, in his capacity as a member
of the Stockholder Representative Committee referred to therein, as
amended;




“Obligations”has the meaning given to
it in Section 2.2(a);




“PRH Security
Agreement” has the meaning given to it in Section 2.5; and




“Security Interest”
has the meaning given to it in Section 2.2(a).




1.2
            Governing
      Law




This
Security Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to any
conflicts of laws principles that would require application of the laws of
another jurisdiction.




1.3
            Incorporation
      of Schedules




The
schedules attached hereto are incorporated into, and form part of, this Security
Agreement.




1.4           Captions




The
section and paragraph headings used herein are for convenience only and shall
not affect the interpretation hereof.




2.
            SECURITY




2.1
            Grant
      of Security Interestin
      IP Collateral




As
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations, Solx hereby grants, transfers, collaterally assigns and sets over
to OccuLogix a fully perfected, priority security interest in, assignment of,
general lien on and right of set-off of, all of the collateral set forth on
Schedule “A” hereto, solely as the same is directly related to the Royalty
Products (collectively, the “IP Collateral”), in
each case, whether now existing or hereafter arising and whether now owned or
hereafter acquired.




2




2.2
            Obligations
      Secured




(a)
            The
      security interests granted hereby (collectively, the “Security
      Interest”) are granted as continuing collateral security for the
      due payment and performance of Solx Acquisition’s obligations to pay the
      Royalty Payments, at any time due or accruing due, to OccuLogix under the
      Stock Purchase Agreement, or any of such obligations (collectively, and
      together with the expenses, costs and charges set out in Section 2.2(b)
      (collectively, the “Obligations”).




(b)
            All
      reasonable expenses, costs and charges incurred by or on behalf of
      OccuLogix in connection with the enforcement of OccuLogix’s rights and
      remedies hereunder, including the realization of the IP Collateral, and
      including all reasonable legal fees and disbursements, court costs,
      receiver’s or agent’s remuneration and other expenses of taking possession
      of, repairing, protecting, insuring, preparing for disposition, realizing,
      collecting, selling, licensing, transferring, delivering or obtaining
      payment of the IP Collateral, will be added to and form a part of the
      Obligations.




2.3
            Attachment




Solx and
OccuLogix hereby acknowledge that:  (i) value has been given; (ii)
Solx has rights in the IP Collateral (other than hereafter acquired IP
Collateral); and (iii) Solx and OccuLogix have not agreed to postpone the time
of attachment of the Security Interest.




2.4
            Scope
      of Security Interest




(a)
            Until
      the Security Interest will have become enforceable, the grant of the
      Security Interest in the Intellectual Property will not affect, in any
      way, Solx’s rights to exploit commercially the Intellectual Property, to
      defend the Intellectual Property, to enforce Solx’s rights in or with
      respect to the Intellectual Property against third parties in any court or
      to claim and be entitled to receive any damages with respect to any
      infringement or violation thereof.




(b)
            OccuLogix
      will not be deemed in any manner to have assumed any obligation of Solx
      under any License or otherwise relating to or arising in connection with
      any of the IP Collateral, nor will OccuLogix be liable to any official
      body or party to a license or any other third party by reason of any
      default by any person under any
contract.




2.5
            Subordination
      of Security Interest




OccuLogix
hereby acknowledges and agrees that the first priority security interest granted
by Solx in the IP Collateral pursuant to the Security Agreement (the “PRH Security
Agreement”), dated as of September 1, 2006, by Solx in favor of Doug P.
Adams, John Sullivan and Peter M. Adams, acting, in each case, in his capacity
as a member of the Stockholder Representative Committee under the Merger
Agreement, is, and shall remain, superior in priority and rank to the Security
Interest.  For avoidance of doubt, under the PRH Security Agreement,
Solx granted rights to the Secured Party (as defined therein) in all of the
intellectual property of Solx.  OccuLogix agrees to do, from time to
time, whether before or after the Security Interest will have become
enforceable, all such acts and things and execute and deliver all such deeds,
transfers, assignments and instruments as Solx may reasonably require for
assuring the superior rank of the first priority security interest granted by
Solx pursuant to the PRH Security Agreement.  Solx hereby agrees to
give OccuLogix prompt notice of any change or amendment to the collateral
described in, or covered by, the PRH Security Agreement.  In the event
that any such change or amendment affects the description of all or any part of
the collateral described in, or covered by, the PRH Security Agreement that
coincides or overlaps with all or any part of the IP Collateral, if requested by
OccuLogix, Solx shall amend the definition of “IP Collateral” in this Agreement
to conform it to the collateral description or coverage provided in and by the
PRH Security Agreement, provided, however, that IP Collateral shall always
remain directly related to the Royalty Products.




3




OccuLogix
hereby furthermore acknowledges and agrees that the Security Interest will be
subordinate to any and all Liens that Solx proposes to grant in the IP
Collateral to persons or entities proposing to provide financing to Solx
Acquisition or Solx, upon terms and conditions to be mutually agreed among the
parties interested in such subordination.  Solx hereby agrees to give
OccuLogix prompt notice of any such future Liens, and OccuLogix hereby agrees
that it will take all actions reasonably requested by Solx Acquisition or Solx
to evidence the subordination of the Security Interest to such
Liens.





3.
            COVENANTS




3.1
            Borrower’s
      Dealing with IP Collateral




Solx will
not, without the prior written consent of OccuLogix, sell, exchange, license,
release or abandon or otherwise dispose of the IP Collateral or create, assume
or permit any Lien in, on or of the IP Collateral, except as provided in Section
2.5.




3.2
            Maintenance
      of Registrations




Solx will
keep all registrations and applications of the Intellectual Property in good
standing and will renew all registrations and file new applications, where
commercially reasonable.  Solx will not allow any material registered
or pending patent or trademark forming part of the IP Collateral to lapse,
expire, become abandoned, expunged or cancelled.




3.3
            Reporting




Solx
agrees to provide to OccuLogix, within 60 days after the acquisition by Solx of
any rights in or to any registrable or unregistrable Intellectual Property,
including the entitlement to the benefit of any application or registration for
a patent or trademark, written notice of such acquisition containing a detailed
description of the Intellectual Property so acquired, and Solx agrees to execute
and deliver, from time to time, amendments to this Security Agreement or the
schedules hereto or additional security agreements or schedules as may be
reasonably required by OccuLogix.  Solx will advise OccuLogix of the
occurrence of any event which adversely affects the status of the Intellectual
Property, including, without limitation, any changes to the status of the
Intellectual Property resulting from expungement, cancellation, expiration,
non-renewal, abandonment of, or opposition to, or claim, action or suit against,
any of the Intellectual Property.




4




3.4
            Litigation
      and Proceedings




Solx
will:




(a)
            commence
      and diligently prosecute such suits, administrative proceedings or other
      actions for infringement or other causes of action as are, in its
      reasonable business judgment, necessary to protect the IP Collateral;
      and




(b)
            diligently
      defend all suits, administrative proceedings, oppositions or other actions
      brought by third parties in respect of the IP Collateral or use
      thereof.




Solx
hereby agrees to provide to OccuLogix, on reasonable request, any information
with respect to any such suits, administrative proceedings or other
action.  Following Solx becoming aware thereof, Solx will promptly
notify OccuLogix of the institution of, or any adverse determination in, any
proceeding in any patent or trade-mark office or by another regulatory authority
or a court or other adjudicative body, whether in the United States or
elsewhere.




3.5
            Protective
      Disbursements




If Solx
fails to perform any covenant on its part contained in this Security Agreement,
then OccuLogix, in its absolute discretion, may perform (but has no obligation
to perform) any such covenant capable of being performed by it.  If
any such covenant requires the payment or expenditure of money, OccuLogix may
make, but will be under no obligation to make, such payment or expenditure, and
all sums so paid or expended by OccuLogix will be immediately payable by Solx,
will bear interest at the per annum rate equal to the “Prime Rate” as announced
from time to time by Bank of America, N.A., or its successor, plus 2%, until
paid and will be secured hereby, having the benefit of the Security Interest
hereby created in priority to the other indebtedness secured by this Security
Agreement.  No such performance or payment will relieve Solx from any
default under this Security Agreement or any consequences of such
default.




4.
            ENFORCEMENT




4.1
            Default




The
Security Interest will be and become enforceable against Solx (i) upon the
failure to pay, when due and payable, any of the Royalty Payments; or (ii) if
any petition should be filed by or against Solx or Solx Acquisition for
liquidation or reorganization, if Solx or Solx Acquisition becomes insolvent or
makes an assignment for the benefit of any creditor or creditors, if a receiver
or trustee is appoited for all or any signficant part of the assets of either
Solx or Solx Acquisition or if either of Solx or Solx Acquisition consents to
the winding up, liquidation or dissolution of its affairs (each, an “Event of
Default”).




4.2
            Remedies




5




Whenever
the Security Interest has become enforceable, OccuLogix may realize upon the IP
Collateral and enforce its rights by:




(a)
            sale,
      assignment, license, sub-license, grant of rights or options to purchase
      or any other disposal of the IP Collateral and, if applicable, any
      goodwill associated therewith;




(b)
            collection
      of any proceeds arising in respect of the IP
  Collateral;




(c)
            the
      exercise of any of Solx’s contractual, legal or other rights or interests
      under or in respect of the IP
Collateral;




(d)
            the
      institution of proceedings in a court of competent jurisdiction for the
      appointment of a receiver of the IP
Collateral;




(e)
            the
      appointment by instrument in writing of a receiver or agent of the IP
      Collateral and the removal or replacement of such receiver or agent from
      time to time;




(f)
            the
      institution of proceedings in any court of competent jurisdiction for sale
      or foreclosure of the IP
Collateral;




(g)
            filing
      proof of claim and other documents to establish claims and any proceeding
      relating to Solx; and




(h)
            any
      other remedy or proceeding authorized or
      permitted by any applicable laws.




In
addition, upon the occurrence of an Event of Default, Solx will grant to
OccuLogix a royalty-free non-exclusive license to use the Intellectual
Property.




Such
remedies may be exercised from time to time separately or in combination and are
in addition to and not in substitution for any other rights of OccuLogix,
however created.  OccuLogix may proceed by way of any action, suit or
other proceeding available at law, and no right, remedy or power OccuLogix will
be exclusive of, or dependent on, any other.  OccuLogix may exercise
any of its rights, remedies or powers separately or in combination and at any
time.  OccuLogix will not be bound to exercise any such rights or
remedies, and the exercise of such rights and remedies will be without prejudice
to the rights of OccuLogix in respect of the Obligations, including the right to
any claim for any deficiency.




4.3
            Additional
      Rights




In
addition to the remedies of OccuLogix set forth in Section 4.2, whenever the
Security Interest has become enforceable, OccuLogix may demand, commence,
continue or defend any judicial or administrative proceedings for the purpose of
protecting, seizing, collecting, realizing or obtaining possession or payment of
the IP Collateral, and give valid and effectual receipts and discharges
therefor, and compromise or give time for the payment or performance of all or
any part of the accounts or any contact or any other obligation of any third
party to Solx relating to the IP Collateral.




6




5.
            GENERAL




5.1
            No
      Merger




No
judgment recovered by OccuLogix will operate by way of merger of or in any way
affect the Security Interest, which is in addition to and not in substitution
for any other security now or hereafter held by OccuLogix in respect of the
Obligations.




5.2
            Waivers




No
amendment, consent or waiver by OccuLogix will be effective unless made in
writing and signed by an authorized officer of OccuLogix, and then such
amendment, waiver or consent will be effective only in the specific instance and
for the specific purpose for which it is given.




5.3
            Further
      Assurances




Solx,
from time to time, whether before or after the Security Interest will have
become enforceable, will do all such acts and things and execute and deliver all
such deeds, transfers, assignments and instruments as OccuLogix may reasonably
require for the protection of the IP Collateral or perfecting the Security
Interest and for exercising all rights, remedies, powers, authorities and
discretions hereby conferred upon OccuLogix, and Solx, from time to time after
the Security Interest has become enforceable, will do all such acts and things
and execute and deliver all such deeds, transfers, assignments and instruments
as OccuLogix may require for facilitating the sale or other dealing with the IP
Collateral in connection with any realization thereof, including, without
limitation, the execution and delivery of assignments of the Intellectual
Property in form acceptable to OccuLogix for filing with the United States
Patent and Trademark Office.




5.5
            Successors
      and Assigns




This
Security Agreement will be binding upon Solx, its successors and permitted
assigns and will enure to the benefit of OccuLogix and its successors and
assigns.  Solx may not assign or novate any of its rights or
obligations under this Security Agreement without the prior written consent of
OccuLogix.




IN WITNESS WHEREOF Solx hereto
has caused this Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the day and year first above
written.




SOLX,
      INC.“Doug P.
      Adams”Name:
      Doug P. AdamsTitle:
      President


7




Schedule
“A”




IP
Collateral




“IP
Collateral” means, solely as the same is directly related to the Royalty
Products, intellectual property or proprietary rights of any description,
including (i) rights in any patent, patent application (including any
provisionals, continuations, divisions, continuations-in-part, extensions,
renewals, reissues, revivals and reexaminations, any national phase PCT
applications, any PCT international applications and all foreign counterparts),
copyright, industrial design, URL, website, domain name, trademark, service
mark, logo, trade dress or trade name, (ii) related registrations and
applications for registration, (iii) trade secrets, moral rights or publicity
rights, (iv) inventions, discoveries, improvements, modification, know-how,
technique, methodology, writing, work of authorship, design or data, whether or
not patented, patentable, copyrightable or reduced to practice, including any
inventions, discoveries, improvements, modification, know-how, technique,
methodology, writing, work of authorship, design or data embodied or disclosed
in any (1) computer source codes (human readable format) and object codes
(machine readable format), (2) specifications, (3) manufacturing, assembly,
test, installation, service and inspection instructions and procedures, (4)
engineering, programming, service and maintenance notes and logs, (5) technical,
operating and service and maintenance manuals and data, (6) hardware reference
manuals and (7) user documentation, help files or training materials and (v)
goodwill related to any of the foregoing.