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                                                                   Exhibit 10.10

                       VENTURE LOAN AND SECURITY AGREEMENT

                                                       Dated as of June 16, 2006

                                 by and between

                     HORIZON TECHNOLOGY FUNDING COMPANY LLC,
                      a Delaware limited liability company
                             76 Batterson Park Road
                              Farmington, CT 06032
                                    as Lender

                                       and

                               ACTIVBIOTICS, INC.,
                             a Delaware corporation
                               110 Hartwell Avenue
                               Lexington, MA 02421
                                  as a Borrower

Commitment Amount:             $5,000,000

Commitment Termination Date:   June 16, 2006

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This Venture Loan and Security Agreement (this "Agreement") is made by and
between ActivBiotics, Inc., a Delaware corporation ("Borrower") and Horizon
Technology Funding Company LLC, a Delaware limited liability company ("Lender").
Lender and Borrower hereby agree as follows:

                                    AGREEMENT

     1. Definitions and Construction.

          1.1 Definitions. As used in this Agreement, the following capitalized
terms shall have the following meanings:

     "ABI Canada" means ActivBiotics (Canada) Inc., a Canadian corporation.

     "Account Control Agreement" means an agreement acceptable to Lender which
perfects via control Lender's security interest in Borrower's deposit accounts
and/or accounts holding securities.

     "Affiliate" means any Person that owns or controls directly or indirectly
ten percent (10%) or more of the stock of another entity, any Person that
controls or is controlled by or is under common control with such Persons or any
Affiliate of such Persons and each of such Person's officers, directors, joint
venturers or partners.

     "Agreement" means this certain Venture Loan and Security Agreement by and
between Borrower and Lender dated as of the date on the cover page hereto (as it
may from time to time be amended or supplemented in writing signed by the
Borrower and Lender).

     "Borrower" means ActivBiotics, Inc., a Delaware corporation.

     "Borrower's Home State" means Massachusetts.

     "Business Day" means any day that is not a Saturday, Sunday, or other day
on which banking institutions are authorized or required to close in Connecticut
or Borrower's Home State.

     "Claim" has the meaning given such term in Section 10.3 of this Agreement.

     "Co-Development Licenses" means (i) the Co-Development, License and
Distribution Agreement, dated as of March 22, 2005 by and between Borrower and
ABI Canada, as amended from time to time and (ii) the Co-Development, License
and Distribution Agreement, dated as of May 17, 2006 by and between Borrower and
ABI Canada, as amended from time to time.

     "Code" means the Uniform Commercial Code as adopted and in effect in the
State of Connecticut, as amended from time to time; provided that if by reason
of mandatory provisions of law, the creation and/or perfection or the effect of
perfection or non-perfection of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a


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jurisdiction other than Connecticut, the term "Code" shall also mean the Uniform
Commercial Code as in effect from time to time in such jurisdiction for purposes
of the provisions hereof relating to such creation, perfection or effect of
perfection or non-perfection.

     "Collateral" has the meaning given such term in Section 4.1 of this
Agreement.

     "Commitment Amount" has the meaning as set forth on the cover page of this
Agreement.

     "Commitment Fee" has the meaning given such term in Section 2.6(c) of this
Agreement.

     "Commitment Termination Date" has the meaning as set forth on the cover
page of this Agreement.

     "Default" means any event which with the passing of time or the giving of
notice or both would become an Event of Default hereunder.

     "Default Rate" means the per annum rate of interest equal to five percent
(5%) over the Loan Rate, but such rate shall in no event be more than the
highest rate permitted by applicable law to be charged on commercial loans in a
default situation.

     "Disclosure Schedule" means Exhibit A attached hereto.

     "Environmental Laws" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act and the Emergency Planning and
Community Right-to-Know Act.

     "Equity Securities" of any Person means (a) all common stock, preferred
stock, participations, shares, partnership interests, membership interests or
other equity interests in and of such Person (regardless of how designated and
whether or not voting or non-voting) and (b) all warrants, options and other
rights to acquire any of the foregoing.

     "ERISA" has the meaning given to such term in Section 7.12 of this
Agreement.

     "Event of Default" has the meaning given to such term in Section 8 of this
Agreement.

     "Excluded Taxes" means, with respect to Lender, or any other recipient of
any payment to be made by or on account of any Obligation hereunder, income, net
worth or franchise taxes imposed on (or measured by) its net income or net worth
by the United States of America, or by the jurisdiction under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of Lender, in which its lending office is located or in which it is
taxable solely on account of some connection other than the execution, delivery
or performance of this Agreement or the receipt of income hereunder.


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     "Funding Certificate" means a certificate executed by a Responsible Officer
of Borrower substantially in the form of Exhibit B or such other form as Lender
may agree to accept.

     "Funding Date" means any date on which the Loan is made to or on account of
Borrower under this Agreement.

     "GAAP" means generally accepted accounting principles as in effect in the
United States of America from time to time, consistently applied.

     "Good Faith Deposit" has the meaning given such term in Section 2.6(a) of
this Agreement.

     "Governmental Authority" means (a) any federal, state, county, municipal or
foreign government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, (c) any court or administrative tribunal, or (d)
with respect to any Person, any arbitration tribunal or other non-governmental
authority to whose jurisdiction that Person has consented.

     "Guarantor" means any guarantor of the Obligations, including, without
limitation, ABI Canada and Metaphore Pharmaceuticals, Inc.

     "Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.

     "Indebtedness" means, with respect to Borrower or any Subsidiary, the
aggregate amount of, without duplication, (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person to pay the deferred purchase price of property or services (excluding
trade payables aged less than one hundred eighty (180) days), (d) all capital
lease obligations of such Person, (e) all obligations or liabilities of others
secured by a Lien on any asset of such Person, whether or not such obligation or
liability is assumed, (f) all obligations or liabilities of others guaranteed by
such Person, and (g) any other obligations or liabilities which are required by
GAAP to be shown as debt on the balance sheet of such Person. Unless otherwise
indicated, the term "Indebtedness" shall include all Indebtedness of Borrower
and the Subsidiaries.

     "Indemnified Person" has the meaning given such term in Section 10.3 of
this Agreement.

     "Indemnified Taxes" means all Taxes other than (a) Excluded Taxes and Other
Taxes and (b) amounts constituting penalties or interest imposed with respect to
Excluded Taxes or Other Taxes.

     "Intellectual Property" means all of Borrower's and its Subsidiaries'
right, title and interest in and to (i) patents, patent rights (and applications
and registrations therefor), trademarks and service marks (and applications and
registrations therefor), inventions,


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copyrights, mask works (and applications and registrations therefor), trade
names, trade styles, software and computer programs, source code, object code,
trade secrets, methods, processes, know how, drawings, specifications,
descriptions, and all memoranda, notes, and records with respect to any research
and development and (ii) any licenses or contracts for the development, use,
sharing or commercializing of any of the foregoing (including, but not limited
to, the Co-Development Licenses, the Kaneka License and the Pfizer License) all
whether now owned or subsequently acquired or developed by Borrower and whether
in tangible or intangible form or contained on magnetic media readable by
machine together with all such magnetic media (but not including embedded
computer programs and supporting information included within the definition of
"goods" under the Code).

     "Investment" means the purchase or acquisition of any capital stock, equity
interest, or any obligations or other securities of, or any interest in, any
Person, or the extension of any advance, loan, extension of credit or capital
contribution to, or any other investment in, or deposit with, any Person.

     "Kaneka License" means the License Agreement dated as of September 27, 2001
by and between ABI and Kaneka Corporation, as amended from time to time.

     "knowledge" when used in this Agreement has the following meaning:

     (i) an individual will be deemed to have knowledge of a particular fact or
other matter if the individual is actually aware of such fact or other matter;
and

     (ii) in the case of a Person that is not an individual, such Person will be
deemed to have knowledge of a particular fact or other matter (a) if any
principal, senior manager, officer or director of such person is actually aware
of such fact or other matter, or (b) if a principal, senior manager, officer or
director of such Person could be expected to have discovered or otherwise become
aware of such fact or other matter in the ordinary course of not performing his
or her duties.

     "Landlord Agreement" means an agreement substantially in the form provided
by Lender to Borrower or such other form as Lender may agree to accept.

     "Lender" means the Lender as defined in the preamble to this Agreement.

     "Lender's Expenses" means all reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, documentation, administration and funding of the Loan
Documents; and Lender's reasonable attorneys' fees, costs and expenses incurred
in amending, modifying, enforcing or defending the Loan Documents (including
fees and expenses of appeal or review), including the exercise of any rights or
remedies afforded hereunder or under applicable law, whether or not suit is
brought, whether before or after bankruptcy or insolvency, including without
limitation all fees and costs incurred by Lender in connection with Lender's
enforcement of its rights in a bankruptcy or insolvency proceeding filed by or
against Borrower or its Property.


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     "Lien" means any voluntary or involuntary security interest, pledge,
bailment, lease, mortgage, hypothecation, conditional sales and title retention
agreement, encumbrance or other lien with respect to any Property in favor of
any Person.

     "Loan" means the advance of credit by Lender to Borrower under this
Agreement.

     "Loan Documents" means, collectively, this Agreement, the Note, the
Warrant, any Landlord Agreement, any Account Control Agreement and all other
documents, instruments and agreements entered into in connection with this
Agreement, all as amended or extended from time to time.

     "Loan Rate" means the per annum rate of interest (based on a year of twelve
30-day months) equal to the greater of (a) 11.9% or (b) 11.9% plus the positive
difference, if any, between (i) the one month LIBOR Rate (rounded to the nearest
one hundredth percent), as reported in the Wall Street Journal, on the date
which is five (5) Business Days before the Funding Date for such Loan (or, if
the Wall Street Journal is not published on such date, the next earlier date on
which it is published) and (ii) 4.41%.

     "Maturity Date" means January 1, 2010, or if earlier, the date of
acceleration of the Loan following an Event of Default or the date of
prepayment, whichever is applicable.

     "Note" means the promissory note executed in connection with the Loan in
substantially the form of Exhibit C attached hereto.

     "Obligations" means all debt, principal, interest, fees, charges, expenses
and attorneys' fees and costs and other amounts, obligations, covenants, and
duties owing by Borrower to Lender of any kind and description (whether pursuant
to or evidenced by the Loan Documents (other than the Warrant), or by any other
agreement between Lender and Borrower, and whether or not for the payment of
money), other than with respect to the Warrant or shares issued thereunder or
rights relating thereto, whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, including all Lender's
Expenses.

     "Officer's Certificate" means a certificate executed by a Responsible
Officer substantially in the form of Exhibit E or such other form as Lender may
agree to accept.

     "Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement and the other Loan Documents,
provided that there shall be excluded from "Other Taxes" all Excluded Taxes.

     "Payment Date" has the meaning given such term in Section 2.2(a) of this
Agreement.

     "Permitted Indebtedness" means and includes:

               (a) Indebtedness of Borrower to Lender;


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               (b) Indebtedness of Borrower secured by Liens permitted under
clause (e) of the definition of Permitted Liens; provided that such Indebtedness
is limited to an aggregate amount outstanding at one time of Five Million
Dollars ($5,000,000);

               (c) Indebtedness arising from the endorsement of instruments in
the ordinary course of business;

               (d) Indebtedness existing on the date hereof and set forth on the
Disclosure Schedule;

               (e) any intercompany Indebtedness between Borrower and any of its
Subsidiaries, provided, that at Lender's request such Subsidiary has guaranteed
the Obligations and provided a security interest in its assets to secure such
guaranty;

               (f) any Indebtedness between Borrower and ABI Canada;

               (g) Other Indebtedness aggregating not in excess of One Hundred
Thousand Dollars ($100,000) at any time; and

               (h) Any obligations of Borrower for payments made or owed by
Borrower under licenses or contracts executed in connection with Intellectual
Property, to the extent such licenses or contracts are permitted under this
Agreement.

     "Permitted Investments" means and includes any of the following Investments
as to which Lender, in the cases of clauses (a) through (e), have a perfected
security interest:

               (a) Deposits and deposit accounts with commercial banks organized
under the laws of the United States or a state thereof to the extent: (i) the
deposit accounts of each such institution are insured by the Federal Deposit
Insurance Corporation up to the legal limit; and (ii) each such institution has
an aggregate capital and surplus of not less than One Hundred Million Dollars
($100,000,000).

               (b) Investments in marketable obligations issued or fully
guaranteed by the United States and maturing not more than one (1) year from the
date of issuance.

               (c) Investments in open market commercial paper rated at least
"Al" or "PI" or higher by a national credit rating agency and maturing not more
than one (1) year from the creation thereof.

               (d) Investments pursuant to or arising under currency agreements
or interest rate agreements entered into in the ordinary course of business.

               (e) Other Investments aggregating not in excess of Two Hundred
Fifty Thousand Dollars ($250,000) at any time.

               (f) Licenses of Intellectual Property entered into in a
transaction negotiated at arms-length in the ordinary course of business;
provided, that the granting of a security interest or other Lien in such
licenses shall not be permitted.


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               (g) Any Investment pursuant to the Put and Support Agreement.

     "Permitted Liens" means and includes:

               (a) the Lien created by this Agreement;

               (b) Liens for fees, taxes, levies, imposts, duties or other
governmental charges of any kind which are not yet delinquent or which are being
contested in good faith by appropriate proceedings which suspend the collection
thereof (provided that such appropriate proceedings do not involve any
substantial danger of the sale, forfeiture or loss of any material item of
Collateral which in the aggregate is material to Borrower and/or its
Subsidiaries and that Borrower and/or its Subsidiaries has adequately bonded
such Lien or reserves sufficient to discharge such Lien have been provided on
the books of Borrower and/or its Subsidiaries);

               (c) Liens identified on the Disclosure Schedule or any other Loan
Documents in favor of Lender;

               (d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
and which are not delinquent or remain payable without penalty or which are
being contested in good faith and by appropriate proceedings (provided that such
appropriate proceedings do not involve any substantial danger of the sale,
forfeiture or loss of any material item of Collateral or Collateral which in the
aggregate is material to Borrower and/or its Subsidiaries and that Borrower
and/or its Subsidiaries has adequately bonded such Lien or reserves sufficient
to discharge such Lien have been provided on the books of Borrower and/or its
Subsidiaries);

               (e) Liens upon any equipment or other personal property acquired
by Borrower and/or its Subsidiaries after the date hereof to secure (i) the
purchase price of such equipment or other personal property, or (ii) lease
obligations or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment or other personal property; provided that (A) such
Liens are confined solely to the equipment or other personal property so
acquired and the amount secured does not exceed the acquisition price thereof,
and (B) no such Lien shall be created, incurred, assumed or suffered to exist in
favor of any Borrower's and/or its Subsidiaries' officers, directors or
shareholders holding five percent (5%) or more of any Borrower's Equity
Securities;

               (f) in-licenses to Borrower or its Subsidiaries of Intellectual
Property;

               (g) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation;

               (h) deposits to secure bids, trade contracts, leases, statutory
obligations, surety bonds or performance bonds entered into in the ordinary
course of business;

               (i) easements, rights of way and other similar restrictions, if
any, which are not material and do not materially interfere with the business;


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               (j) Liens securing judgments for payment of money not
constituting an Event of Default or securing appeal or other surety bonds
related to such judgments; provided such Liens are bonded off within sixty (60)
days;

               (k) Liens securing the Indebtedness permitted under clauses (e)
and (f) of the definition of Permitted Indebtedness;

               (l) licenses of Intellectual Property entered into pursuant to a
transaction negotiated at arms-length in the ordinary course of business,
including but not limited to, the Kaneka License, the Pfizer License, the
Research Agreements and the Co-Development Licenses, provided that the granting
of a security interest or other Lien in such licenses shall not be permitted;
and

               (j) other Liens consented to in writing by the Lender.

     "Person" means and includes any individual, any partnership, any
corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any domestic or
foreign national, state or local government, any political subdivision thereof,
and any department, agency, authority or bureau of any of the foregoing.

     "Pfizer License" means that License Agreement, dated as of December 19,
2003, by and between Pfizer, Inc. and Metaphore Pharmaceuticals, Inc.

     "Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.

     "Put and Support Agreement" means that Put and Support Agreement, dated as
of March 22, 2005 by and among Borrower, ABI Canada and the Investors named
therein.

     "Requirements of Law" as to any Person, the certificate of incorporation
and by-laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

     "Research Agreements" means (i) that Research and Development Cost-Sharing
Agreement dated as of March 22, 2005 between Borrower and ABI Canada, as amended
from time to time and (ii) that Research and Development Cost-Sharing Agreement
dated as of May 17, 2006 between Borrower and ABI Canada, as amended from time
to time.

     "Responsible Officer" has the meaning given such term in Section 6.3 of
this Agreement.

     "Scheduled Payments" has the meaning given such term in Section 2.2(a) of
this Agreement.

     "Solvent" has the meaning given such term in Section 5.11 of this
Agreement.


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     "Subsidiary" means any corporation or other entity of which a majority of
the outstanding Equity Securities entitled to vote for the election of directors
or other governing body (otherwise than as the result of a default) is owned by
Borrower or ABI Canada directly or indirectly through Subsidiaries.

     "Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

     "Third Party Equipment" has the meaning given such term in Section 4.8 of
this Agreement.

     "Transfer" has the meaning given such term in Section 7.4 of this
Agreement.

     "Warrant" means the separate warrant or warrants dated on or about the date
hereof in favor of Horizon or its designees to purchase securities of Borrower,
and collectively, means all such "Warrants".

          1.2 Construction. References in this Agreement to "Articles,"
"Sections," "Exhibits," "Schedules" and "Annexes" are to recitals, articles,
sections, exhibits, schedules and annexes herein and hereto unless otherwise
indicated. References in this Agreement and each of the other Loan Documents to
any document, instrument or agreement shall include (a) all exhibits, schedules,
annexes and other attachments thereto, (b) all documents, instruments or
agreements issued or executed in replacement thereof, and (c) such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
modified and supplemented from time to time and in effect at any given time. The
words "hereof," "herein" and "hereunder" and words of similar import when used
in this Agreement or any other Loan Document shall refer to this Agreement or
such other Loan Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such other Loan Document, as the case
may be. The words "include" and "including" and words of similar import when
used in this Agreement or any other Loan Document shall not be construed to be
limiting or exclusive. Unless otherwise indicated in this Agreement or any other
Loan Document, all accounting terms used in this Agreement or any other Loan
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP, and all
terms describing Collateral shall be construed in accordance with the Code. The
terms and information set forth on the cover page of this Agreement are
incorporated into this Agreement.

     2. Loans; Repayment.

          2.1 Commitment.

               (a) The Commitment Amount. Subject to the terms and conditions of
this Agreement and relying upon the representations and warranties herein set
forth as and when made or deemed to be made, Lender agrees to lend to Borrower
prior to the Commitment Termination Date, the Loan in the Commitment Amount.

               (b) The Loan and the Note. The obligation of Borrower to repay
the unpaid principal amount of and interest on the Loan made under this
Agreement shall be


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evidenced by a single promissory note in favor of Lender in the form of Exhibit
C attached hereto, duly completed, executed and delivered to Lender dated on or
about the Funding Date for the Loan and made payable to Lender. Borrower hereby
authorizes Lender to record on the Note or on its internal computerized records,
the principal amount of the Loan and of each payment of principal received by
Lender on account of the Loan, which recordance, in the absence of manifest
error, shall be conclusive as to the outstanding principal balance of the Loan;
provided that, the failure to make such recordation with respect to the Loan or
payment shall not limit or otherwise affect the obligations of the Borrower
under this Agreement, the Note or the other Loan Documents.

               (c) Use of Proceeds. The proceeds of the Loan shall be used
solely for working capital or general corporate purposes of Borrower consistent
with this Agreement.

               (d) Termination of Commitment to Lend. Notwithstanding anything
in the Loan Documents, Lender's obligation to lend the undisbursed portion of
its Commitment Amount to Borrower hereunder shall terminate on the earlier of
(i) at such Lender's sole election, the occurrence of any Default or Event of
Default hereunder, and (ii) the Commitment Termination Date. Notwithstanding the
foregoing, Lender's obligation to lend the undisbursed portion of its Commitment
Amount to Borrower shall terminate if, in Lender's sole judgment, acting
reasonably, there has been a material adverse change in the general affairs,
management, results of operations, condition (financial or otherwise) or
prospects of Borrower, whether or not arising from transactions in the ordinary
course of business, or there has been any material adverse deviation by Borrower
from the business plan of Borrower presented to Lender on or before the date of
this Agreement.

          2.2 Payments.

               (a) Scheduled Payments. Borrower shall make payments of accrued
interest only on the outstanding principal amount of the Loan on the first
eighteen (18) Payment Dates specified in the Note applicable to the Loan and
twenty-four (24) level payments of principal plus accrued interest on the
outstanding principal amount of the Loan on each subsequent Payment Date as set
forth in the Note (collectively, the "Scheduled Payments"). Borrower shall make
such Scheduled Payments commencing on the date set forth in the Note and
continuing thereafter on the first Business Day of each calendar month (each a
"Payment Date") through the Maturity Date. In any event, all unpaid principal
and accrued interest shall be due and payable in full on the Maturity Date.

               (b) Interim Payment. Unless the Funding Date for the Loan is the
first day of a calendar month, Borrower shall pay the per diem interest
(accruing at the Loan Rate from the Funding Date through the last day of that
month) payable with respect to the Loan on the first Business Day of the next
calendar month.

               (c) Payment of Interest. Borrower shall pay interest on the Loan
at a per annum rate of interest equal to the Loan Rate, applicable to the
Lender. All computations of interest (including interest at the Default Rate, if
applicable) shall be based on a year of twelve 30-day months. Notwithstanding
any other provision hereof, the amount of interest payable


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hereunder shall not in any event exceed the maximum amount permitted by the law
applicable to interest charged on commercial loans.

               (d) Application of Payments. All payments received by Lender
prior to an Event of Default shall be applied as follows: (1) first, to Lender's
Expenses then due and owing; and (2) second to all Scheduled Payments then due
and owing (provided, however, if such payments are not sufficient to pay the
whole amount then due, such payments shall be applied first to unpaid interest
at the Loan Rate, then to the remaining amount then due). After an Event of
Default, all payments and application of proceeds shall be made as set forth in
Section 9.7.

               (e) Late Payment Fee. Borrower shall pay to Lender a late payment
fee equal to four percent (4%) of any Scheduled Payment not paid when due.

               (f) Default Rate. Borrower shall pay interest at a per annum rate
equal to the Default Rate on any amounts required to be paid by Borrower under
this Agreement or the other Loan Documents (including Scheduled Payments),
payable with respect to the Loan, accrued and unpaid interest, and any fees or
other amounts which remain unpaid after such amounts are due. If an Event of
Default has occurred and the Obligations have been accelerated (whether
automatically or by Lender's election), Borrower shall pay interest on the
aggregate, outstanding accelerated balance hereunder from the date of the Event
of Default until such Event of Default shall have been cured prior to
acceleration of the Loan or waived by Lender or all Obligations are paid in
full, at a per annum rate equal to the Default Rate.

          2.3 Prepayments.

               (a) Mandatory Prepayment Upon an Acceleration. If the Loan is
accelerated following the occurrence of an Event of Default pursuant to Section
9.1(a) hereof, then Borrower, in addition to any other amounts which may be due
and owing hereunder, shall immediately pay to Lender the amount set forth in
Section 2.3(b) below, as if the Borrower had opted to prepay on the date of such
acceleration.

               (b) Upon ten (10) Business Days' prior written notice to Lender,
Borrower may, at its option, at any time, prepay all of the Loan by paying to
Lender an amount equal to (i) any accrued and unpaid interest on the outstanding
principal balance of the Loan; (ii) an amount equal to (A) if the Loan is
prepaid within twelve (12) months from the Funding Date thereof, four (4%)
percent of the then outstanding principal balance of the Loan, (B) if the Loan
is prepaid more than twelve (12) months from the Funding Date thereof but less
than twenty-four (24) months from the Funding Date, three (3%) percent of the
then outstanding principal balance of the Loan, or (C) if the Loan is prepaid
more than twenty-four (24) months from the Funding Date thereof, one (1%)
percent of the then outstanding principal balance of the Loan; (iii) the
outstanding principal balance of the Loan and (iv) all other sums, if any, that
shall have become due and payable hereunder.

          2.4 Other Payment Terms.

               (a) Place and Manner. Borrower shall make all payments due to
Lender in lawful money of the United States. All payments of principal,
interest, fees and other amounts payable by Borrower hereunder shall be made, in
immediately available funds, not later than


                                       11

<Page>

10:00 a.m. Connecticut time, on the date on which such payment is due. Borrower
shall make such payments to Lender as follows:

     Payment to Horizon via Wire
     Transfer                        Horizon Technology Funding Company
                                     LLC
     Credit:
     Bank Name:                      ABN Amro/LaSalle Bank NA CDO Trust
                                     Services
     Bank Address:                   135 South LaSalle Street, Suite 1625
                                     Chicago, Illinois 60603
                                     Attn: Greg Meyers, 312-904-0283
     Account No.:                    2090067 - Trust GL
     FFCT-Reference Account Number   721771.1
     ABA Routing No.:                071000505
     Reference:                      ActivBiotics Invoice #

               (b) Date. Whenever any payment is due hereunder on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall be included in the computation of interest
or fees, as the case may be.

          2.5 Procedure for Making the Loans.

               (a) Notice. Borrower shall notify Lender of the date on which
Borrower desires Lender to make the Loan at least five (5) Business Days in
advance of the desired Funding Date, unless Lender elect at its sole discretion
to allow the Funding Date to be within five (5) Business Days of Borrower's
notice. Borrower's execution and delivery to Lender of a Note shall be
Borrower's agreement to the terms and calculations thereunder with respect to
the Loan. Lender's obligation to make the Loan shall be expressly subject to the
satisfaction of the conditions set forth in Section 3.

               (b) Loan Rate Calculation. Prior to the Funding Date, Lender
shall establish the Loan Rate with respect to the Loan, which shall be set forth
in the Note and shall be conclusive in the absence of a manifest error. Once
established, the Loan Rate shall be fixed for the term of the Loan.

               (c) Disbursement. Lender shall disburse the proceeds of the Loan
by wire transfer to Borrower at the account specified in the Funding Certificate
for the Loan.

          2.6 Good Faith Deposit; Legal and Closing Expenses; and Commitment
Fee.

               (a) Good Faith Deposit. Borrower has delivered to Borrower a good
faith deposit in the amount of Twenty Five Thousand Dollars ($25,000) (the "Good
Faith Deposit"). The Good Faith Deposit will be utilized to pay a portion of the
amounts due to Lender under Section 2.6(b) below and the balance will be applied
to the Commitment Fee.


                                       12

<Page>

               (b) Legal, Due Diligence and Documentation Expenses. Borrower
shall pay to Lender concurrently with its execution and delivery of this
Agreement Lender's legal, due diligence and documentation expenses in connection
with the negotiation and documentation of this Agreement and the Loan Documents,
which amount shall not exceed Eight Thousand Dollars ($8,000) without the prior
consent of Borrower.

               (c) Commitment Fee. Borrower shall pay Lender concurrently with
its execution and delivery of this Agreement a commitment fee in the amount of
Twenty-Five Thousand Dollars ($25,000) to Horizon (the "Commitment Fee"). The
Commitment Fee shall be retained by Lender and be deemed fully earned upon
receipt.

          2.7 Taxes.

               (a) Any and all payments by or on account of any Obligations by
the Borrower hereunder (or by any Guarantor) shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if
Borrower (or any Guarantor) shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower (or such Guarantor) shall make such deductions and (iii) the
Borrower (or such Guarantor) shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay all Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

          (c) The Borrower and each Guarantor shall indemnify Lender within
thirty (30) days after written demand therefor for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section 2.7
paid by Lender (and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto during the period prior to the Borrower's
making the payment demanded under this paragraph (c)), whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by Lender shall be conclusive
absent manifest error.

          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower (or any Guarantor) to a Governmental Authority, the
Borrower (or such Guarantor) shall deliver to Lender the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Lender.

     3. Conditions of Loan.

          3.1 Conditions Precedent to Closing. At the time of the execution and
delivery of this Agreement, Lender shall have received, in form and substance
reasonably satisfactory to Lender, all of the following (unless Lender has
agreed to waive such condition or document, in


                                       13

<Page>

which case such condition or document shall be a condition precedent to the
making of the Loan and shall be deemed added to Section 3.2):

               (a) Loan Agreement. This Agreement duly executed by Borrower and
Lender.

               (b) Warrants. The Warrants duly executed by Borrower.

               (c) Secretary's Certificate. A certificate of the secretary or
assistant secretary of the Borrower with copies of the following documents
attached: (i) the certificate of incorporation and bylaws of Borrower certified
by Borrower as being complete and in full force and effect on the date thereof,
(ii) incumbency and representative signatures, and (iii) resolutions authorizing
the execution and delivery of this Agreement and each of the other Loan
Documents.

               (d) Good Standing Certificates. A good standing certificate from
Borrower's jurisdiction of organization and the state in which Borrower's
principal place of business is located, each dated as of a recent date.

               (e) Certificate of Insurance. Evidence of the insurance coverage
required by Section 6.8 of this Agreement.

               (f) Consents. All necessary consents of shareholders and other
third parties with respect to the execution, delivery and performance of this
Agreement, the Warrant and the other Loan Documents.

               (g) Legal Opinion. A legal opinion of from Borrower's counsel
addressed to Lender covering the matters set forth in Exhibit D hereto.

               (h) Account Control Agreements. Account Control Agreements for
all of Borrower's deposit accounts and accounts holding securities located in
the United States duly executed by all of the parties thereto, in the forms
provided by Lender.

               (i) Guaranty and General Security Agreement. An unlimited
Guarantee executed and delivered by ABI Canada in favor of Lender in
substantially the form of Exhibit F attached hereto and made a part hereof.

               (j) Guaranty and General Security Agreement. An unlimited
Guarantee executed and delivered by Metaphore Pharmaceuticals, Inc. in favor of
Lender in substantially the form of Exhibit G attached hereto and made a part
hereof.

               (k) Other Documents. Such other documents and completion of such
other matters, as Lender may reasonably deem necessary or appropriate.

          3.2 Conditions Precedent to Making a Loan. The obligation of Lender to
make the Loan is further subject to the following conditions:

               (a) No Default. No Default or Event of Default shall have
occurred and be continuing.


                                       14

<Page>

               (b) Landlord Agreements. Borrower shall have provided Lender with
a Landlord Agreement for each location where Borrower's books and records and
the Collateral is located (unless Borrower is the fee owner thereof).

               (c) Note. Borrower shall have duly executed and delivered to
Lender a Note in the amount of the Loan.

               (d) UCC Financing Statements. Lender shall have received such
documents, instruments and agreements, including UCC financing statements or
amendments to such financing statements, as Lender shall reasonably request to
evidence the perfection and priority of the security interests granted to Lender
pursuant to Section 4. Borrower authorizes Lender to file any UCC financing
statements, continuations of or amendments to such financing statements it deems
necessary to perfect their security interest in the Collateral.

               (e) Funding Certificate. Borrower shall have duly executed and
delivered to Lender a Funding Certificate for the Loan.

               (f) Other Documents. Such other documents and completion of such
other matters, as Lender may reasonably deem necessary or appropriate.

          3.3 Covenant to Deliver. Borrower agrees (not as a condition but as a
covenant) to deliver to Lender each item required to be delivered to Lender as a
condition to the Loan, if the Loan is advanced. Borrower expressly agrees that
the extension of the Loan prior to the receipt by Lender of any such item shall
not constitute a waiver by Lender of Borrower's obligation to deliver such item,
and any such extension in the absence of a required item shall be in Lender's
sole discretion.

     4. Creation of Security Interest.

          4.1 Grant of Security Interest. Borrower grants to Lender a valid,
continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure prompt, full and complete payment of any
and all Obligations now or hereafter owed to Lender and in order to secure
prompt, full and complete performance by Borrower of its covenants and duties
now or hereafter owed to Lender under each of the Loan Documents (other than the
Warrant). The "Collateral" shall mean and include all right, title, interest,
claims and demands of Borrower in and to all personal property of Borrower,
including without limitation, all of the following:

               (a) All goods (and embedded computer programs and supporting
information included within the definition of "goods" under the Code) and
equipment now owned or hereafter acquired, including, without limitation, all
laboratory equipment, computer equipment, office equipment, machinery, fixtures,
vehicles (including motor vehicles and trailers), and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing, wherever
located;

               (b) All inventory now owned or hereafter acquired, including,
without limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work


                                       15

<Page>

in process and finished products including such inventory as is temporarily out
of Borrower's custody or possession or in transit and including any returns upon
any accounts or other proceeds, including insurance proceeds, resulting from the
sale or disposition of any of the foregoing and any documents of title
representing any of the above, and Borrower's books relating to any of the
foregoing;

               (c) All contract rights and general intangibles (except to the
extent included within the definition of Intellectual Property), now owned or
hereafter acquired, including, without limitation, goodwill, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, software, computer programs, computer disks,
computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payment intangibles, commercial tort claims, payments of insurance and
rights to payment of any kind;

               (d) All now existing and hereafter arising accounts, contract
rights, royalties, license rights, license fees and all other forms of
obligations owing to Borrower arising out of the sale or lease of goods, the
licensing of technology or the rendering of services by Borrower (subject, in
each case, to the contractual rights of third parties to require funds received
by Borrower to be expended in a particular manner), whether or not earned by
performance, and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by Borrower and
Borrower's books relating to any of the foregoing;

               (e) All documents, cash, deposit accounts, letters of credit
(whether or not the letter of credit is evidenced by a writing), certificates of
deposit, instruments, promissory notes, chattel paper (whether tangible or
electronic) and investment property, including, without limitation, all
securities, whether certificated or uncertificated, security entitlements,
securities accounts, commodity contracts and commodity accounts, and all
financial assets held in any securities account or otherwise, wherever located,
now owned or hereafter acquired and Borrower's books relating to the foregoing;

               (f) Any and all claims, rights and interests in any of the above
and all substitutions for, additions and accessions to and proceeds thereof,
including, without limitation, insurance, condemnation, requisition or similar
payments and proceeds of the sale or licensing of Intellectual Property to the
extent such proceeds no longer constitute Intellectual Property; but

               (g) Notwithstanding the foregoing, the Collateral shall not
include any Intellectual Property; provided, however, that the Collateral shall
include all accounts receivable, accounts, and general intangibles that consist
of rights to payment and proceeds from the sale, licensing or disposition of all
or any part, or rights in, the foregoing (the "Rights to Payment").

          4.2 After-Acquired Property. If Borrower shall at any time acquire a
commercial tort claim, as defined in the Code, Borrower shall promptly notify
Lender in writing signed by the Borrower of the brief details thereof and, upon
Lender's request, grant to Lender 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 Lender.


                                       16

<Page>

          4.3 Duration of Security Interest. Lender's security interest in the
Collateral shall continue until the payment in full and the satisfaction of all
Obligations and termination of Lender's commitment to fund the Loan, whereupon
such security interest shall terminate. Lender shall, at Borrower's sole cost
and expense, promptly execute such further documents and take such further
actions as may be reasonably necessary to make effective the release
contemplated by this Section 4.3, including duly executing and delivering
termination statements for filing in all relevant jurisdictions under the Code.

          4.4 Location and Possession of Collateral. The Collateral is and shall
remain in the possession of Borrower at its location listed on the cover page
hereof or as set forth in the Disclosure Schedule. Borrower shall remain in full
possession, enjoyment and control of the Collateral (except only as may be
otherwise required by Lender for perfection of its security interest therein)
and so long as no Event of Default has occurred, shall be entitled to manage,
operate and use the same and each part thereof with the rights and franchises
appertaining thereto; provided that the possession, enjoyment, control and use
of the Collateral shall at all time be subject to the observance and performance
of the terms of this Agreement.

          4.5 Delivery of Additional Documentation Required. Borrower shall from
time to time execute and deliver to Lender, at the request of Lender, all
financing statements and other documents Lender may reasonably request, in form
satisfactory to Lender, to perfect and continue Lender's perfected security
interests in the Collateral and in order to consummate fully all of the
transactions contemplated under the Loan Documents.

          4.6 Right to Inspect. Lender (through any of its officers, employees,
or agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower's usual business hours, to inspect Borrower's books and records
and to make copies thereof and to inspect, test, and appraise the Collateral in
order to verify Borrower's financial condition or the amount, condition of, or
any other matter relating to, the Collateral.

          4.7 Protection of Intellectual Property. Borrower shall (i) protect,
defend and maintain the validity and enforceability of its Intellectual Property
and promptly advise Lender in writing of material infringements, and (ii) not
abandon, forfeit or dedicate to the public any Intellectual Property material to
Borrower's business without Lender's prior written consent.

          4.8 Lien Subordination. Lender agrees that the Liens granted to it
hereunder in Third Party Equipment shall be subordinate to the Liens of future
lenders providing equipment financing and equipment lessors for equipment and
other personal property acquired by Borrower after the date hereof ("Third Party
Equipment"); provided that such Liens are confined solely to the equipment so
financed and the proceeds thereof and are Permitted Liens. Notwithstanding the
foregoing, the Obligations hereunder shall not be subordinate in right of
payment to any obligations to other equipment lenders or equipment lessors and
Lender's rights and remedies hereunder shall not in any way be subordinate to
the rights and remedies of any such lenders or equipment lessors. So long as no
Event of Default has occurred, Lender agrees to execute and deliver such
agreements and documents as may be reasonably requested by Borrower from time to
time which set forth the lien subordination described in this Section 4.8 and
are reasonably acceptable to Lender. Lender shall have no obligation to execute
any


                                       17

<Page>

agreement or document which would impose obligations, restrictions or lien
priority on Lender which are less favorable to Lender than those described in
this Section 4.8.

     5. Representations and Warranties. Except as set forth in the Disclosure
Schedule, Borrower represents and warrants as follows:

          5.1 Organization and Qualification. Borrower is a corporation duly
organized and validly existing under the laws of its state or country of
incorporation and qualified and licensed to do business in, and is in good
standing in, any state or country in which the conduct of its business or its
ownership of Property requires that it be so qualified or in which the
Collateral is located, except for such jurisdictions as to which any failure to
so qualify would not reasonably be expected to have a material adverse effect on
Borrower.

          5.2 Authority. Borrower has all necessary power and authority to
execute, deliver, and perform in accordance with the terms thereof, the Loan
Documents to which it is a party. Borrower has all requisite power and authority
to own and operate its Property and to carry on its businesses as now conducted.

          5.3 Conflict with Other Instruments, etc. Neither the execution and
delivery of any Loan Document to which Borrower is a party nor the consummation
of the transactions therein contemplated nor compliance with the terms,
conditions and provisions thereof will conflict with or result in a breach of
any of the terms, conditions or provisions of the certificate of incorporation,
the by-laws, or any other organizational documents of Borrower or any law or any
regulation, order, writ, injunction or decree of any court or governmental
instrumentality or any material agreement or instrument to which Borrower is a
party or by which it or any of its Property is bound or to which it or any of
its Property is subject, or constitute a default thereunder or result in the
creation or imposition of any Lien, other than Permitted Liens.

          5.4 Authorization; Enforceability. The execution and delivery of this
Agreement, the granting of the security interest in the Collateral, the
incurring of the Loan, the execution and delivery of the other Loan Documents to
which Borrower is a party and the consummation of the transactions herein and
therein contemplated have each been duly authorized by all necessary action on
the part of Borrower. No authorization, consent, approval, license or exemption
of, and no registration, qualification, designation, declaration or filing with,
or notice to, any Person is, was or will be necessary to (i) the valid execution
and delivery of any Loan Document to which Borrower is a party, (ii) the
performance of Borrower's obligations under any Loan Document, or (iii) the
granting of the security interest in the Collateral, except for filings in
connection with the perfection of the security interest in any of the Collateral
or the issuance of the Warrant. The Loan Documents have been duly executed and
delivered and constitute legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity.

          5.5 No Prior Encumbrances. Borrower has good and marketable title to
its Collateral, free and clear of Liens except for Permitted Liens. Borrower has
good title and ownership of, or is licensed under, all of its current
Intellectual Property. Borrower has not


                                       18

<Page>

received any communications alleging that it has violated, or, by conducting its
business as proposed, would violate any proprietary rights of any other Person.
Borrower has no knowledge of any infringement or violation by it of the
intellectual property rights of any third party and has no knowledge of any
violation or infringement by a third party of any of its Intellectual Property.
The Collateral and the Intellectual Property constitute substantially all of the
assets and property of Borrower.

          5.6 Name; Location of Chief Executive Office, Principal Place of
Business and Collateral. Borrower has not done business under any name other
than that specified on the signature page hereof. Borrower's jurisdiction of
organization, chief executive office, principal place of business, and the place
where it maintains its records concerning the Collateral are presently located
in the jurisdiction and at the addresses set forth on the cover page of this
Agreement. The Collateral is presently located at the addresses set forth on the
cover page hereof or as set forth in the Disclosure Schedule.

          5.7 Litigation. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency in which an adverse
decision is reasonably expected to have a material adverse effect on Borrower or
the aggregate value of the Collateral. Borrower has no knowledge of any such
pending or threatened actions or proceedings.

          5.8 Financial Statements. All financial statements relating to
Borrower or any Affiliate that have been delivered by Borrower to Lender present
fairly in all material respects Borrower's financial condition as of the date
thereof and Borrower's results of operations for the period then ended.

          5.9 No Material Adverse Effect. No event has occurred and no condition
exists which is reasonably expected to have a material adverse effect on the
financial condition, business or operations of Borrower since June 30, 2005.

          5.10 Full Disclosure. No representation, warranty or other statement
made by Borrower in any Loan Document (including the Disclosure Schedule),
certificate or written statement furnished to Lender contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained in such certificates or statements not
misleading. There is no fact known to Borrower which materially adversely
affects its ability to perform its obligations under this Agreement.

          5.11 Solvency, Etc. Borrower is Solvent (as defined below) and, after
the execution and delivery of the Loan Documents and the consummation of the
transactions contemplated thereby, Borrower will be Solvent. "Solvent" means,
with respect to any Person on any date, that on such date (a) the fair value of
the property of such Person is greater than the fair value of the liabilities
(including, without limitation, contingent liabilities) of such Person, (b) the
present fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured and (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature.


                                       19

<Page>

          5.12 Subsidiaries. Borrower has no Subsidiaries, except as listed on
the Disclosure Schedule.

          5.13 Catastrophic Events; Labor Disputes. Neither Borrower nor its
properties is or has been affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or other casualty that is reasonably expected to have a material adverse
effect on the financial condition, business or operations of Borrower. There are
no disputes presently subject to grievance procedure, arbitration or litigation
under any of the collective bargaining agreements, employment contracts or
employee welfare or incentive plans to which Borrower is a party, and there are
no strikes, lockouts, work stoppages or slowdowns, or, to the knowledge of
Borrower, jurisdictional disputes or organizing activity occurring or threatened
which is reasonably expected to have a material adverse effect on the financial
condition, business or operations of Borrower.

          5.14 Certain Agreements of Officers, Employees and Consultants.

               (a) No Violation. To the Borrower's knowledge, no employee of the
Borrower, nor any consultant with whom the Borrower has contracted, is in
violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Borrower; and to the Borrower'
knowledge the continued employment by the Borrower of its present employees, and
the performance of the Borrower's contracts with its independent contractors,
will not result in any such violation. The Borrower has not received any notice
alleging that any such violation has occurred.

               (b) No Present Intention to Terminate. Except for James Warren,
to the knowledge of Borrower, no officer of Borrower, and no employee or
consultant of Borrower whose termination, either individually or in the
aggregate, is reasonably expected to have a material adverse effect on the
financial condition, business or operations of Borrower, has any present
intention of terminating his or her employment or consulting relationship with
Borrower.

          5.15 Compliance with Laws. Borrower is in compliance with all
Requirements of Law, except to the extent that the failure to comply therewith
would not, in the aggregate, reasonably be expected to have a material adverse
effect on the Borrower and its Subsidiaries.

     6. Affirmative Covenants. Borrower, until the full and complete payment of
the Obligations covenants and agrees that:

          6.1 Good Standing. Borrower shall maintain its corporate existence and
its good standing in its jurisdiction of incorporation and maintain
qualification in each jurisdiction in which the failure to so qualify could
reasonably be expected to have a material adverse effect on the financial
condition, operations or business of Borrower. Borrower shall maintain in force
all licenses, approvals and agreements, the loss of which could reasonably be
expected to have a material adverse effect on their financial condition,
operations or business.

          6.2 Government Compliance. Borrower shall comply with all statutes,
laws, ordinances and government rules and regulations to which it is subject,
noncompliance with


                                       20

<Page>

which could reasonably be expected to materially adversely affect the financial
condition, operations or business of Borrower.

          6.3 Financial Statements, Reports, Certificates. Borrower shall
deliver to Lender: (a) as soon as available, but in any event within thirty (30)
days after the end of each month, a company prepared balance sheet, income
statement and cash flow statement covering Borrower's operations during such
period, certified by Borrower's president, treasurer or chief financial officer
(each, a "Responsible Officer"); (b) as soon as available, but in any event
within one hundred twenty (120) days after the end of Borrower's fiscal year,
audited financial statements of Borrower prepared in accordance with GAAP,
together with an unqualified opinion on such financial statements of a
nationally recognized or other independent public accounting firm reasonably
acceptable to Lender; and (c) as soon as available, but in any event within
ninety (90) days after the end of Borrower's fiscal year or the date of
Borrower's board of directors' adoption, Borrower's operating budget and plan
for the next fiscal year; and (d) such other financial information as Lender may
reasonably request from time to time. From and after such time as a Borrower
becomes a publicly reporting company, promptly as they are available and in any
event, it shall deliver to Lender: (x) at the time of filing its Form 10-K with
the Securities and Exchange Commission after the end of each fiscal year of such
Borrower, the financial statements of such Borrower filed with such 10-K and (y)
at the time of filing such Borrower's Form 10-Q with the Securities and Exchange
Commission after the end of each of the first three fiscal quarters of such
Borrower, the financial statements of Borrower filed with such Form 10-Q.
Borrower shall deliver to Lender (i) promptly upon becoming available, copies of
all material statements, reports and notices sent or made available generally by
Borrower to its security holders; (ii) promptly upon receipt of notice thereof,
a report of any material legal actions pending or threatened against Borrower or
the commencement of any action, proceeding or governmental investigation
involving the Borrower is commenced that is reasonably expected to result in
damages or costs to Borrower of Two Hundred Fifty Thousand Dollars ($250,000) or
more; and (iii) such other financial information as Lender may reasonably
request from time to time.

          6.4 Certificates of Compliance. Each time financial statements are
furnished pursuant to Section 6.3 above, Borrower shall deliver to Lender an
Officer's Certificate signed by a Responsible Officer in the form of, and
certifying to the matters set forth in Exhibit E hereto.

          6.5 Notice of Defaults. As soon as possible, and in any event within
five (5) days after the occurrence of a Default or an Event of Default, Borrower
shall provide Lender with an Officer's Certificate setting forth the facts
relating to or giving rise to such Default or Event of Default and the action
which Borrower proposes to take with respect thereto.

          6.6 Taxes. Borrower shall make due and timely payment or deposit of
all federal, state, and local taxes, assessments, or contributions required of
it by law or imposed upon any Property belonging to it, and will execute and
deliver to Lender, on demand, appropriate certificates attesting to the payment
or deposit thereof; and Borrower will make timely payment or deposit of all tax
payments and withholding taxes required of it by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes applicable to Borrower, and will, upon request, furnish
Lender with proof


                                       21

<Page>

satisfactory to Lender indicating that Borrower has made such payments or
deposits; provided that Borrower need not make any payment if the amount or
validity of such payment is contested in good faith by appropriate proceedings
which suspend the collection thereof (provided that such proceedings do not
involve any substantial danger of the sale, forfeiture or loss of any material
item of Collateral or Collateral which in the aggregate is material to Borrower
and that Borrower has adequately bonded such amounts or reserves sufficient to
discharge such amounts have been provided on the books of Borrower).

          6.7 Use; Maintenance. Borrower shall keep and maintain all items of
equipment and other similar types of personal property that form any significant
portion or portions of the Collateral in good operating condition, reasonable
wear and tear excepted, and will comply in all material respects with all laws,
rules and regulations to which the use and operation of the Collateral may be or
become subject. Such obligation shall extend to repair and replacement of any
partial loss or damage to all items of equipment and other similar types of
personal property that form any significant portion or portions of collateral,
regardless of the cause. Borrower shall not permit any such material item of
Collateral to become a fixture to real estate or an accession to other personal
property, without the prior written consent of Lender, not to be unreasonably
withheld. With respect to items of leased equipment (to the extent Lender has
any security interest in any residual Borrower's interest in such equipment
under the lease), Borrower shall keep, maintain, repair, replace and operate
such leased equipment in accordance with the terms of the applicable lease.

          6.8 Insurance. Borrower shall keep its business and the Collateral
insured for risks and in amounts, as is customary for companies in Borrower's
industry and at Borrower's stage of development. Insurance policies shall be in
a form, with companies, and in amounts that are satisfactory to Lender. All
property policies shall have a lender's loss payable endorsement showing Lender
as an additional loss payee and all liability policies shall show Lender as an
additional insured and all policies shall provide that the insurer must give
Lender at least thirty (30) days notice before canceling its policy. At Lender's
request, Borrower shall deliver certified copies of policies and evidence of all
premium payments. Proceeds payable under any policy shall, at Lender's option,
be payable to Lender on account of the Obligations, but unless an Event of
Default shall have occurred, such payment to Lender shall not cause any
prepayment penalty to become due under Section 2.3. Notwithstanding the
foregoing, so long as no Event of Default has occurred and is continuing,
Borrower shall have the option of applying the proceeds of any casualty policy,
toward the replacement or repair of destroyed or damaged property; provided that
(i) any such replaced or repaired property (a) shall be of equal or like value
as the replaced or repaired Collateral and (b) shall be deemed Collateral in
which Lender has been granted a first priority security interest and (ii) after
the occurrence and during the continuation of an Event of Default all proceeds
payable under such casualty policy shall, at the option of Lender, be payable to
Lender, on account of the Obligations. If Borrower fails to obtain insurance as
required under Section 6.8 or to pay any amount or furnish any required proof of
payment to third persons and Lender, Lender may make all or part of such payment
or obtain such insurance policies required in Section 6.8, and take any action
under the policies Lender deems prudent. On or prior to the first Funding Date
and prior to each policy renewal, Borrower shall furnish to Lender certificates
of insurance or other evidence satisfactory to Lender that insurance complying
with all of the above requirements is in effect.


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<Page>

          6.9 Security Interest. Assuming the proper filing of one or more
financing statement(s) identifying the Collateral with the proper state and/or
local authorities, the security interests in the Collateral granted to Lender
pursuant to this Agreement (i) constitute and will continue to constitute first
priority security interests (except to the extent any Permitted Liens may have a
superior priority to Lender's Lien under this Agreement) and (ii) are and will
continue to be superior and prior to the rights of all other creditors of
Borrower (except to the extent of such Permitted Liens).

          6.10 Further Assurances. At any time and from time to time Borrower
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Lender to make effective the purposes of this
Agreement, including without limitation, the continued perfection and priority
of Lender's security interest in the Collateral.

          6.11 Private Equity Investment. Borrower shall permit Lender or its
assignees, at Lender's option, to purchase up to Five Hundred Thousand
($500,000) of the securities sold in Borrower's next round of private equity
financing at the same price and on the same terms as paid and received by the
lead investor of the private equity financing. Borrower agrees that it shall
notify Lender promptly upon the execution by Borrower of a term sheet or letter
of intent setting forth the terms and conditions of such financing and in any
event within five (5) days of such execution. For the avoidance of doubt,
Section 6.11 hereof shall not apply in a public offering of securities by
Borrower nor shall it apply in the event the investors of ABI Canada (or either
of them) exercise their respective put rights pursuant to the Put and Support
Agreement.

     7. Negative Covenants. Borrower, until the full and complete payment of the
Obligations, covenants and agrees that, without the prior written consent of
Lender, it shall not:

          7.1 Chief Executive Office. Change its name, jurisdiction of
incorporation, chief executive office, principal place of business or any of the
items set forth in Section 1 of the Disclosure Schedule without thirty (30) days
prior written notice to Lender.

          7.2 Collateral Control. Subject to its rights under Sections 4.4 and
7.4. remove any items of Collateral from Borrower's facilities located at the
address set forth on the cover page hereof or as set forth on the Disclosure
Schedule.

          7.3 Liens. Create, incur, assume or suffer to exist any Lien or permit
any of its Subsidiaries to create, incur, assume or permit to exist any Lien of
any kind upon any of Borrower's Property, whether now owned or hereafter
acquired, except Permitted Liens.

          7.4 Other Dispositions of Collateral. Convey, sell, lease or otherwise
dispose of all or any part of the Collateral to any Person (collectively, a
"Transfer"), except for: (i) Transfers of inventory in the ordinary course of
business; (ii) Transfers of worn-out or obsolete equipment; (iii) Transfers
permitted under subclauses (f) and (1) of the definition of Permitted Liens with
respect to Collateral or (iv) Transfers of Collateral during the term of the
Loans equal in aggregate value to less than Two Hundred Thousand Dollars
($200,000).

          7.5 Distributions. (i) Pay any cash dividends or make any cash
distributions on its Equity Securities; (ii) purchase, redeem, retire, defease
or otherwise acquire for value any of


                                       23

<Page>

its Equity Securities (other than repurchases pursuant to the terms of employee
stock purchase plans, employee restricted stock agreements or similar
arrangements in an aggregate amount not to exceed One Hundred Thousand Dollars
($100,000)); (iii) return any capital to any holder of its Equity Securities as
such; (iv) make any distribution of assets, obligations or securities of any
other Persons to any holder of its Equity Securities as such; or (v) set apart
any sum for any such purpose; provided, however, Borrower may pay dividends
payable solely in common stock.

          7.6 Mergers or Acquisitions. Merge or consolidate with or into any
other Person or acquire all or substantially all of the capital stock or assets
of another Person.

          7.7 Change in Ownership. Engage in or permit any of its Subsidiaries
to engage in any business other than the businesses currently engaged in by
Borrower or reasonably related thereto or have a material change in its
ownership of greater than thirty-three percent (33%) (other than by the sale by
Borrower of Borrower's Equity Securities in a public offering or to venture
capital investors so long as Borrower identifies to Lender the venture capital
investors prior to the closing of the investment or pursuant to any transaction
contemplated in the Put and Support Agreement).

          7.8 Transactions With Affiliates. Enter into any contractual
obligation with any Affiliate or engage in any other transaction with any
Affiliate except upon prices, terms and requirements at least as favorable to
Borrower as an arms-length transaction with Persons who are not Affiliates of
Borrower, except for contractual obligations between Borrower and ABI Canada (or
shareholders of either of them, as applicable) pursuant to the Co-Development
License or Put and Support Agreement or the Research Agreements, or contractual
obligations entered into with an Affiliate in connection with the sales of
Equity Securities of the Borrower.

          7.9 Indebtedness Payments. (i) Prepay, redeem, purchase, defease or
otherwise satisfy in any manner prior to the scheduled repayment thereof any
Indebtedness for borrowed money (other than amounts due or permitted to be
prepaid under this Agreement) or lease obligations; provided, that the Borrower
may prepay its obligations to Silicon Valley Bank, N.A., (ii) amend, modify or
otherwise change the terms of any Indebtedness for borrowed money or lease
obligations so as to accelerate the scheduled repayment thereof or (iii) repay
any notes to officers, directors or shareholders.

          7.10 Indebtedness. Create, incur, assume or permit to exist any
Indebtedness except Permitted Indebtedness.

          7.11 Investments. Make any Investment except for Permitted
Investments.

          7.12 Compliance. Become an "investment company" or a company
controlled by an "investment company" under the Investment Company Act of 1940
or undertake as one of its important activities extending credit to purchase or
carry margin stock, or use the proceeds of any Loan for that purpose; fail to
meet the minimum funding requirements of the Employment Retirement Income
Security Act of 1974, and its regulations, as amended from time to time
("ERISA"), permit a Reportable Event or Prohibited Transaction, as defined in
ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or
violate any other


                                       24

<Page>

law or regulation, if the violation could reasonably be expected to have a
material adverse effect on Borrower's business or operations or could reasonably
be expected to cause a material adverse change, or permit any of its
Subsidiaries to do so.

          7.13 Maintenance of Accounts. (i) Maintain any deposit account or
account holding securities owned by Borrower except accounts with respect to
which Lender is able to take such actions as they deem necessary to obtain a
perfected security interest in such accounts through one or more Account Control
Agreements; or (ii) grant or allow any other Person (other than Lender) to
perfect a security interest in, or enter into any agreements with any Persons
(other than Lender) accomplishing perfection via control as to, any of its
deposit accounts or accounts holding securities.

          7.14 Negative Pledge Regarding Intellectual Property. Create, incur,
assume or suffer to exist any Lien of any kind upon any Intellectual Property or
Transfer any Intellectual Property, whether now owned or hereafter acquired,
other than licenses or contracts to or from Borrower and its Subsidiaries for
the development, use, sharing or commercializing of Intellectual Property,
including the Kaneka License, the Pfizer License and the Co-Development Licenses
or licenses entered into in connection with a transaction negotiated at
arms-length and for adequate consideration in the ordinary course of business;
provided, that notwithstanding anything contained herein to the contrary,
Borrower shall not grant a security interest in any of its Intellectual Property
(including, without limitation, any such licenses or contracts) to any Person.

     8. Events of Default. Any one or more of the following events shall
constitute an "Event of Default" by Borrower under this Agreement:

          8.1 Failure to Pay. If Borrower fails to pay when due and payable or
when declared due and payable in accordance with the Loan Documents: (i) any
Scheduled Payment on the relevant Payment Date or on the relevant Maturity Date,
or (ii) any other portion of the Obligations within five (5) Business Days after
receipt of written notice from the applicable Lender that such payment is due.

          8.2 Certain Covenant Defaults. If Borrower fails to perform any
obligation under Section 4.6, Section 6.8 or violates any of the covenants
contained in Section 7 of this Agreement.

          8.3 Other Covenant Defaults. If Borrower fails or neglect to perform,
keep, or observe any other material term, provision, condition, covenant, or
agreement contained in this Agreement (other than as set forth in Sections 8.1,
8.2 or 8.4 through 8.13), in any of the other Loan Documents and Borrower has
failed to cure such default within thirty (30) days of the occurrence of such
default. During this thirty (30) day period, the failure to cure the default is
not an Event of Default.

          8.4 Intentionally Omitted.

          8.5 Seizure of Assets, Etc. If any material portion of Borrower's
assets are attached, seized, subjected to a writ or distress warrant, or are
levied upon, or come into the possession of any trustee, receiver or Person
acting in a similar capacity and such attachment


                                       25

<Page>

seizure, writ or distress warrant or levy has not been removed, discharged or
rescinded within twenty (20) days, or if Borrower is enjoined, restrained, or in
any way prevented by court order from continuing to conduct all or any material
part of its business affairs, or if a judgment or other claim becomes a lien or
encumbrance upon any material portion of Borrower's assets, or if a notice of
lien, levy, or assessment is filed of record with respect to any of Borrower's
assets by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, and the same is not paid within twenty (20) days after Borrower receives
notice thereof: provided that none of the foregoing shall constitute an Event of
Default where such action or event is stayed or an adequate bond has been posted
pending a good faith contest by Borrower.

          8.6 Service of Process. The service of process upon any Lender seeking
to attach by a trustee or other process any funds of Borrower on deposit or
otherwise held by Lender, or the delivery upon Lender of a notice of foreclosure
by any Person seeking to attach or foreclose on any funds of Borrower on deposit
or otherwise held by Lender, or the delivery of a notice of foreclosure or
exclusive control to any entity holding or maintaining Borrower's deposit
accounts or accounts holding securities by any Person seeking to foreclose or
attach any such accounts or securities.

          8.7 Default on Indebtedness. One or more defaults shall exist, which
defaults have not been cured within the applicable cure period, if any, under
any agreement of Borrower with any third party or parties which consists of the
failure to pay any Indebtedness at maturity or which results in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of
Indebtedness in an aggregate amount in excess of Two Hundred Thousand Dollars
($200,000) or a default shall exist under any financing agreement with Lender or
any of Lender's Affiliates.

          8.8 Judgments. If a judgment or judgments for the payment of money in
an amount, individually or in the aggregate, of at least Two Hundred Thousand
Dollars ($200,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of twenty (20) days or more.

          8.9 Misrepresentations. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty, representation, statement,
certification, or report made to Lender by Borrower or any officer, employee,
agent, or director of Borrower.

          8.10 Breach of Warrant. If Borrower shall breach any material term of
the Warrant.

          8.11 Unenforceable Loan Document. If any Loan Document shall in any
material respect cease to be, or Borrower shall assert that any Loan Document is
not, a legal, valid and binding obligation of Borrower enforceable in accordance
with its terms.

          8.12 Involuntary Insolvency Proceeding. If a proceeding shall have
been instituted in a court having jurisdiction in the premises seeking a decree
or order for relief in respect of Borrower in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee,


                                       26

<Page>

custodian, trustee (or similar official) of Borrower or for any substantial part
of its Property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
sixty (60) consecutive days or such court shall enter a decree or order granting
the relief sought in such proceeding.

          8.13 Voluntary Insolvency Proceeding. If Borrower shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, shall consent to the entry of an order for relief in
an involuntary case under any such law, or shall consent to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian (or
other similar official) of Borrower or for any substantial part of its Property,
or shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action in furtherance of any of the foregoing.

     9. Lender's Rights and Remedies.

          9.1 Rights and Remedies. Upon the occurrence of any Default or Event
of Default, Lender shall not have any further obligation to advance money or
extend credit to or for the benefit of Borrower. In addition, upon the
occurrence of an Event of Default, Lender shall have the rights, options, duties
and remedies of a secured party as permitted by law and, in addition to and
without limitation of the foregoing, Lender may, at its election, without notice
of election and without demand, do any one or more of the following, all of
which are authorized by Borrower:

               (a) Acceleration of Obligations. Declare all Obligations whether
evidenced by this Agreement, by any of the other Loan Documents, or otherwise,
including (i) any accrued and unpaid interest, (ii) the amounts which would have
otherwise come due under Section 2.3(b)(ii) if the Loan had been voluntarily
prepaid, (iii) the unpaid principal balance of the Loan and (iv) all other sums,
if any, that shall have become due and payable hereunder, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.12 or 8.13 all Obligations shall become immediately due and payable
without any action by Lender);

               (b) Protection of Collateral. Make such payments and do such acts
as Lender considers necessary or reasonable to protect Lender's security
interest in the Collateral. Borrower agrees to assemble the Collateral if Lender
so requires and to make the Collateral available to Lender or as Lender may
otherwise designate. Borrower authorizes Lender and its designees and agents to
enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any Lien which in Lender's determination appears or is claimed to
be prior or superior to its security interest and to pay all expenses incurred
in connection therewith. With respect to any of Borrower's owned premises,
Borrower hereby grants Lender a license to enter into possession of such
premises and to occupy the same, without charge, for up to one hundred twenty
(120) days in order to exercise any of Lender's rights or remedies provided
herein, at law, in equity, or otherwise;


                                       27

<Page>

               (c) Preparation of Collateral for Sale. Ship, reclaim, recover,
store, finish, maintain, repair, prepare for sale, advertise for sale, and sell
(in the manner provided for herein) the Collateral. Lender and its agents and
any purchasers at or after foreclosure are hereby granted a non-exclusive,
irrevocable, perpetual, fully paid, royalty-free license or other right, solely
pursuant to the provisions of this Section 9.1, to use, without charge,
Borrower's Intellectual Property, including without limitation, labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any Property of a similar nature, now
or at any time hereafter owned or acquired by Borrower or in which Borrower now
or at any time hereafter has any rights; provided that such license shall only
be exercisable in connection with the disposition of Collateral upon Lender's
exercise of its remedies hereunder and such license shall immediately terminate
upon the disposition of the Collateral;

               (d) Sale of Collateral. Sell the Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Borrower's premises)
as Lender determines is commercially reasonable; and

               (e) Purchase of Collateral. Credit bid and purchase all or any
portion of the Collateral at any public sale.

Any deficiency that exists after disposition of the Collateral as provided above
will be paid immediately by Borrower.

          9.2 Set Off Right. Any time after the occurrence of an Event of
Default, Lender may set off and apply to the Obligations any and all
indebtedness at any time owing to or for the credit or the account of Borrower
or any other assets of Borrower in Lender's possession or control, whether or
not the Obligations have matured and whether or not the Lender is otherwise
fully secured.

          9.3 Effect of Sale. Upon the occurrence of an Event of Default, to the
extent permitted by law, Borrower covenants that it will not at any time insist
upon or plead, or in any manner whatsoever claim or take any benefit or
advantage of, any stay or extension law now or at any time hereafter in force,
nor claim, take nor insist upon any benefit or advantage of or from any law now
or hereafter in force providing for the valuation or appraisement of the
Collateral or any part thereof prior to any sale or sales thereof to be made
pursuant to any provision herein contained, or to the decree, judgment or order
of any court of competent jurisdiction; nor, after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and, to
the full extent legally permitted, except as to rights expressly provided
herein, hereby expressly waives for itself and on behalf of each and every
Person, except decree or judgment creditors of Borrower, acquiring any interest
in or title to the Collateral or any part thereof subsequent to the date of this
Agreement, all benefit and advantage of any such law or laws, and covenants that
it will not invoke or utilize any such law or laws or otherwise hinder, delay or
impede the execution of any power herein granted and delegated to Lender, but
will suffer and permit the execution of every such power as though no such
power, law or laws had been made or enacted. Any sale, whether under any power
of sale hereby given or by virtue of


                                       28

<Page>

judicial proceedings, shall operate to divest all right, title, interest, claim
and demand whatsoever, either at law or in equity, of Borrower in and to the
Property sold, and shall be a perpetual bar, both at law and in equity, against
Borrower, its successors and assigns, and against any and all Persons claiming
the Property sold or any part thereof under, by or through Borrower, its
successors or assigns.

          9.4 Power of Attorney in Respect of the Collateral. Borrower does
hereby irrevocably appoint Lender (which appointment is coupled with an
interest), the true and lawful attorney in fact of Borrower with full power of
substitution, for it and in its name to file any notices of security interests,
financing statements and continuations and amendments thereof pursuant to the
Code or federal law, as may be necessary to perfect, or to continue the
perfection of Lender's security interests in the Collateral. Borrower does
hereby irrevocably appoint Lender (which appointment is coupled with an
interest) on the occurrence of an Event of Default, the true and lawful attorney
in fact of Borrower with full power of substitution, for it and in its name: (a)
to ask, demand, collect, receive, receipt for, sue for, compound and give
acquittance for any and all rents, issues, profits, avails, distributions,
income, payment draws and other sums in which a security interest is granted
under Section 4 with full power to settle, adjust or compromise any claim
thereunder as fully as if Lender were Borrower itself; (b) to receive payment of
and to endorse the name of Borrower to any items of Collateral (including
checks, drafts and other orders for the payment of money) that come into
Lender's possession or under Lender's control; (c) to make all demands, consents
and waivers, or take any other action with respect to, the Collateral; (d) in
Lender's discretion to file any claim or take any other action or proceedings,
either in its own name or in the name of Borrower or otherwise, which Lender may
reasonably deem necessary or appropriate to protect and preserve the right,
title and interest of Lender in and to the Collateral; (e) endorse Borrower's
name on any checks or other forms of payment or security; (f) sign Borrower's
name on any invoice or bill of lading for any account or drafts against account
debtors; (g) make, settle, and adjust all claims under Borrower's insurance
policies; (h) settle and adjust disputes and claims about the accounts directly
with account debtors, for amounts and on terms Lender determines reasonable; (i)
transfer the Collateral into the name of Lender or a third party as the Code
permits; and (j) to otherwise act with respect thereto as though Lender was the
outright owner of the Collateral to the extent not prohibited under the Code or
other applicable law.

          9.5 Lender's Expenses. If Borrower fails to pay any amounts or furnish
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Lender may do any or all of the
following: (a) make payment of the same or any part thereof; or (b) obtain and
maintain insurance policies of the type discussed in Section 6.8 of this
Agreement, and take any action with respect to such policies as Lender deems
prudent. Any amounts paid or deposited by Lender shall constitute Lender's
Expenses, shall be immediately due and payable, shall bear interest at the
Default Rate and shall be secured by the Collateral. Any payments made by Lender
shall not constitute an agreement by Lender to make similar payments in the
future or a waiver by Lender of any Event of Default under this Agreement.
Borrower shall pay all reasonable fees and expenses, including without
limitation, Lender's Expenses, incurred by Lender in the enforcement or attempt
to enforce any of the Obligations hereunder not performed when due.


                                       29

<Page>

          9.6 Remedies Cumulative. Lender's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Lender shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Lender of one
right or remedy shall be deemed an election, and no waiver by Lender of any
Event of Default on Borrower's part shall be deemed a continuing waiver. No
delay by Lender shall constitute a waiver, election, or acquiescence by it.

          9.7 Application of Collateral Proceeds. The proceeds and/or avails of
the Collateral, or any part thereof, and the proceeds and the avails of any
remedy hereunder (as well as any other amounts of any kind held by Lender, at
the time of or received by Lender after the occurrence of an Event of Default
hereunder) shall be paid to and applied as follows:

               (a) First, to the payment of out-of-pocket costs and expenses,
including all amounts expended to preserve the value of the Collateral, of
foreclosure or suit, if any, and of such sale and the exercise of any other
rights or remedies, and of all proper fees, expenses, liability and advances,
including reasonable legal expenses and attorneys' fees, incurred or made
hereunder by Lender, including, without limitation, Lender's Expenses;

               (b) Second, to the payment to Lender of the amount then owing or
unpaid on the Loan for any accrued and unpaid interest, the amounts which would
have otherwise come due under Section 2.3(b)(ii), if the Loan had been
voluntarily prepaid, the principal balance of the Loan, and all other
Obligations with respect to the Loan (provided, however, if such proceeds shall
be insufficient to pay in full the whole amount so due, owing or unpaid upon the
Loan, then to the unpaid interest thereon, then to the amounts which would have
otherwise come due under Section 2.3(b)(ii), if the Loan had been voluntarily
prepaid, then to the principal balance of the Loan, and then to the payment of
other amounts then payable to Lender under any of the Loan Documents); and

               (c) Third, to the payment of the surplus, if any, to Borrower,
its successors and assigns, or to the Person lawfully entitled to receive the
same.

          9.8 Reinstatement of Rights. If Lender shall have proceeded to enforce
any right under this Agreement or any other Loan Document by foreclosure, sale,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely, then and in
every such case (unless otherwise ordered by a court of competent jurisdiction),
Lender shall be restored to its former position and rights hereunder with
respect to the Property subject to the security interest created under this
Agreement.

     10. Waivers; Indemnification.

          10.1 Demand; Protest. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Lender on which Borrower may in any way be
liable.

          10.2 Lender's Liability for Collateral. So long as Lender complies
with its obligations, if any, under the Code, Lender shall not in any way or
manner be liable or


                                       30

<Page>

responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause other than
Lender's gross negligence or willful misconduct; (c) any diminution in the value
thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other Person whomsoever. All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower.

          10.3 Indemnification and Waiver. Whether or not the transactions
contemplated hereby shall be consummated:

               (a) General Indemnity. Borrower agrees upon demand to pay or
reimburse Lender for all liabilities, obligations and out-of-pocket expenses,
including Lender's Expenses and reasonable fees and expenses of counsel for
Lender from time to time arising in connection with the enforcement or
collection of sums due under the Loan Documents, and in connection with any
amendment or modification of the Loan Documents or any "work-out" in connection
with the Loan Documents. Borrower shall indemnify, reimburse and hold the
Lender, and its respective successors, assigns, agents, attorneys, officers,
directors, shareholders, servants, agents and employees (each an "Indemnified
Person") harmless from and against all liabilities, losses, damages, actions,
suits, demands, claims of any kind and nature (including claims relating to
environmental discharge, cleanup or compliance), all costs and expenses
whatsoever to the extent they may be incurred or suffered by such Indemnified
Person in connection therewith (including reasonable attorneys' fees and
expenses), fines, penalties (and other charges of any applicable Governmental
Authority), licensing fees relating to any item of Collateral, damage to or loss
of use of property (including consequential or special damages to third parties
or damages to Borrower's property), or bodily injury to or death of any person
(including any agent or employee of Borrower) (each, a "Claim"), directly or
indirectly relating to or arising out of the use of the proceeds of the Loan or
otherwise, the falsity of any representation or warranty of Borrower or
Borrower's failure to comply with the terms of this Agreement or any other Loan
Document. The foregoing indemnity shall cover, without limitation, (i) any Claim
in connection with a design or other defect (latent or patent) in any item of
equipment or product included in the Collateral, (ii) any Claim for infringement
of any patent, copyright, trademark or other intellectual property right, (iii)
any Claim resulting from the presence on or under or the escape, seepage,
leakage, spillage, discharge, emission or release of any Hazardous Materials on
the premises owned, occupied or leased by Borrower, including any Claims
asserted or arising under any Environmental Law, (iv) any Claim for negligence
or strict or absolute liability in tort, or (v) any Claim asserted as to or
arising under any Account Control Agreement or any Landlord Agreement; provided,
however, Borrower shall not indemnify Lender for any liability incurred by such
Lender as a direct and sole result of Lender's gross negligence or willful
misconduct, as applicable. Such indemnities shall continue in full force and
effect, notwithstanding the expiration or termination of this Agreement. Upon
Lender's written demand, Borrower shall assume and diligently conduct, at its
sole cost and expense, the entire defense of Lender, its partners, and its
respective, agents, employees, directors, officers, shareholders, successors and
assigns against any indemnified Claim described in this Section 10.3(a).
Borrower shall not settle or compromise any Claim against or involving Lender
without first obtaining Lender's written consent thereto, which consent shall
not be unreasonably withheld.

               (b) Waiver. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
THIS AGREEMENT OR ANYWHERE ELSE, BORROWER AGREES


                                       31

<Page>

THAT IT SHALL NOT SEEK FROM LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY
THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

               (c) Survival; Defense. The obligations in this Section 10.3 shall
survive payment of all other Obligations pursuant to Section 12.8. At the
election of any Indemnified Person, Borrower shall defend such Indemnified
Person using legal counsel satisfactory to such Indemnified Person in such
Person's reasonable discretion, at the sole cost and expense of Borrower. All
amounts owing under this Section 10.3 shall be paid within thirty (30) days
after written demand.

     11. Notices. Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by certified mail,
postage prepaid, return receipt requested, by prepaid nationally recognized
overnight courier, or by facsimile to Borrower or to Lender, as the case may be,
at their respective addresses set forth below:

     If to Borrower:   ActivBiotics, Inc.
                       110 Hartwell Avenue
                       Lexington, MA 02421
                       Attention: Steve Gilman
                       Fax:(781)274-8638
                       Ph:(781)372-4855

     If to Lender:     Horizon Technology Funding Company LLC
                       76 Batterson Park Road
                       Farmington, CT 06032
                       Attention: Legal Department
                       Fax:(860) 676-8655
                       Ph:(860) 676-8654

     The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.

     12. General Provisions.

          12.1 Successors and Assigns. This Agreement and the Loan Documents
shall bind and inure to the benefit of the respective successors and permitted
assigns of each of the parties; provided, however, neither this Agreement nor
any rights hereunder may be assigned by Borrower without Lender's prior written
consent, which consent may be granted or withheld in Lender's sole discretion.
Lender shall have the right without the consent of or notice to Borrower to
sell, transfer, assign, negotiate, or grant participations in all or any part
of, or any interest in Lender's rights and benefits hereunder. Lender may
disclose the Loan Documents and any other financial or other information
relating to Borrower or any Subsidiary to any potential participant or assignee
of any of the Loan, provided that such participant or assignee


                                       32

<Page>

agrees to protect the confidentiality of such documents and information using
the same measures that it uses to protect its own confidential information.

          12.2 Time of Essence. Time is of the essence for the performance of
all obligations set forth in this Agreement.

          12.3 Severability of Provisions. Each provision of this Agreement
shall be several from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.

          12.4 Entire Agreement; Construction; Amendments and Waivers.

               (a) Entire Agreement. This Agreement and each of the other Loan
Documents dated as of the date hereof, taken together, constitute and contain
the entire agreement between Borrower and Lender and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
between the parties, whether written or oral, respecting the subject matter
hereof. Borrower acknowledges that it is not relying on any representation or
agreement made by Lender or any employee, attorney or agent thereof, other than
the specific agreements set forth in this Agreement and the Loan Documents.

               (b) Construction. This Agreement is the result of negotiations
between and has been reviewed by Borrower and Lender executing this Agreement as
of the date hereof and their respective counsel; accordingly, this Agreement
shall be deemed to be the product of the parties hereto, and no ambiguity shall
be construed in favor of or against Borrower or Lender. Borrower and Lender
agree that they intend the literal words of this Agreement and the other Loan
Documents and that no parol evidence shall be necessary or appropriate to
establish Borrower's or Lender's actual intentions.

               (c) Amendments and Waivers. Any and all discharges or waivers of,
or consents to any departures from any provision of this Agreement or of any of
the other Loan Documents shall not be effective without the written consent of
Lender. Any and all amendments and modifications of this Agreement or of any of
the other Loan Documents shall not be effective without the written consent of
Lender and Borrower. Any waiver or consent with respect to any provision of the
Loan Documents shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on Borrower in
any case shall entitle Borrower to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, waiver or consent
affected in accordance with this Section 12.4 shall be binding upon Lender and
Borrower.

          12.5 Reliance by Lender. All covenants, agreements, representations
and warranties made herein by Borrower shall be deemed to be material to and to
have been relied upon by Lender, notwithstanding any investigation by Lender.

          12.6 No Set-Offs by Borrower. All sums payable by Borrower pursuant to
this Agreement or any of the other Loan Documents shall be payable without
notice or demand and shall be payable in United States Dollars without set-off
or reduction of any manner whatsoever.


                                       33

<Page>

          12.7 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.

          12.8 Survival. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations or commitment to fund remain outstanding. The obligations of
Borrower to indemnify Lender with respect to the expenses, damages, losses,
costs and liabilities described in Section 10.3 shall survive until all
applicable statute of limitations periods with respect to actions that may be
brought against Lender have run.

     13. Relationship of Parties. Borrower and Lender acknowledge, understand
and agree that the relationship between Borrower, on the one hand, and Lender on
the other, is, and at all time shall remain solely that of a borrower and
lender. Lender shall not under any circumstances be construed to be a partner or
a joint venturer of Borrower or any of its Affiliates; nor shall Lender under
any circumstances be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrower or any of its Affiliates, or to owe any
fiduciary duty to Borrower or any of its Affiliates. Lender does not undertake
or assume any responsibility or duty to Borrower or any of its Affiliates to
select, review, inspect, supervise, pass judgment upon or otherwise inform
Borrower or any of its Affiliates of any matter in connection with its or their
Property, any Collateral held by Lender or the operations of Borrower or any of
its Affiliates. Borrower and each of its Affiliates shall rely entirely on their
own judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment or supply of information undertaken or assumed
by Lender in connection with such matters is solely for the protection of Lender
and neither Borrower nor any Affiliate is entitled to rely thereon.

     14. Confidentiality. All information (other than periodic reports filed by
Borrower with the Securities and Exchange Commission) disclosed by Borrower to
Lender in writing or through inspection pursuant to this Agreement that is
marked confidential shall be considered confidential. Lender agrees to use the
same degree of care to safeguard and prevent disclosure of such confidential
information as Lender uses with its own confidential information, but in any
event no less than a reasonable degree of care. Lender shall not disclose such
information to any third party (other than to Lender's partners, attorneys,
governmental regulators, or auditors, or to Lender's subsidiaries and affiliates
and prospective transferees and purchasers of the Loan, all subject to the same
confidentiality obligation set forth herein or as required by law, regulation,
subpoena or other order to be disclosed) and shall use such information only for
purposes of evaluation of its investment in Borrower and the exercise of
Lender's rights and the enforcement of its remedies under this Agreement and the
other Loan Documents. The obligations of confidentiality shall not apply to any
information that (a) was known to the public prior to disclosure by Borrower
under this Agreement, (b) becomes known to the public through no fault of
Lender, (c) is disclosed to Lender by a third party having a legal right to make
such disclosure, or (d) is independently developed by Lender. Notwithstanding
the foregoing, Lender's agreement of confidentiality shall not apply if Lender
has acquired indefeasible title to any Collateral or in connection with any
enforcement or exercise of Lender's rights and remedies under this Agreement
following an Event of Default, including the enforcement of Lender's security
interest in the Collateral.


                                       34

<Page>

     15. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CONNECTICUT, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. BORROWER AND
LENDER HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN THE STATE OF CONNECTICUT. BORROWER AND LENDER HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

                  [Remainder of page intentionally left blank.]


                                       35

<Page>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                       BORROWER:
                                       ACTIVBIOTICS, INC.


                                       By: /s/ Steven C Glman
                                           -------------------------------------
                                       Name: Steven C Glman
                                       Title: President & CEO


                                       LENDER:

                                       HORIZON TECHNOLOGY FUNDING
                                       COMPANY LLC
                                       By: Horizon Technology Finance, LLC, its
                                       sole member


                                       By: /s/ Robert D. Pomeroy, Jr.
                                           -------------------------------------
                                       Name: Robert D. Pomeroy, Jr.
                                       Title: Managing Member


                                       36
<Page>
                                    EXHIBIT A

                               DISCLOSURE SCHEDULE

         Borrowers hereby certify the following information to Lender:

Section 1.   INFORMATION FOR UCC FINANCING STATEMENTS AND SEARCHES AND DEPOSIT
             ACCOUNTS AND ACCOUNTS HOLDING SECURITIES.

         (a) The exact corporate name of ABI as it appears in its
[Articles/Certificate] of Incorporation, as amended to date is: ActivBiotics,
Inc.

         (b) The exact corporate name of ABI Canada as it appears in its
Articles of Incorporation, as amended to date is: ActivBiotics (Canada) Inc.

         (c) ABI's state of incorporation is: Delaware.

         (d) ABI Canada's jurisdiction of incorporation is: Ontario, Canada.

         (e) The organizational ID number of ABI from its jurisdiction of
incorporation is 2662985.

         (f) The organizational ID number of ABI Canada from its jurisdiction of
incorporation is 2061378.

         (g) ABI's taxpayer identification number is 52-2006101.

         (h) ABI Canada's taxpayer identification number is 9999999.

         (i) The following is a list of all corporate names, dba or trade names
used by ABI in the past five years: Merlin Technologies, Inc.

         (j) The following is a list of all corporate names, dba or trade names
used by ABI Canada in the past five years: N/A.

         (k) The following is a list of all Subsidiaries of ABI: Metaphore
Pharmaceuticals, Inc.

         (l) The following is a list of all Subsidiaries of ABI Canada: None.

         (m) The address of ABI's headquarters and chief executive office is:
110 Hartwell Avenue, Lexington, MA 02421. The following is a list of all States
where ABI's headquarters and chief executive office has been located in the past
five years: Massachusetts.

         (n) The address of ABI Canada's headquarters and chief executive office
is: 3-251 Queen Street South, Suite 812, Mississauga, Ontario, Canada L5M 1L7.

         (o) The following is a list of all States where ABI's property and
assets have been located in the past five years: Massachusetts.


<Page>

         (p) The following is a list of all Provinces where ABI Canada's
property and assets have been located in the past five years: Ontario, Canada.

         (q) The following is a list of all of ABI's deposit accounts (bank
name, address and account names and numbers): See Attachment A.

         (r) The following is a list of all of ABI Canada's deposit accounts
(bank name, address and account names and numbers): See Attachment A.

         (s) The following is a list of all of ABI's accounts holding securities
(broker/bank name, address and account names and numbers): Not applicable.

         (t) The following is a list of all of ABI Canada's accounts holding
securities (broker/bank name, address and account names and numbers): Not
applicable.


<Page>

                                  ATTACHMENT A

SECTIONS 1(i) AND (j): LIST OF BORROWER'S ACCOUNTS:

         1.    OPERATING ACCOUNT:  ACCOUNT # 3300422277

               Silicon Valley Bank
               One Newton Executive Park
               Suite 200
               Newton, MA 02462

         2.    INVESTMENT ACCOUNT:  ACCOUNT # 486-02492-10 RR ZGO

               Silicon Valley Bank Securities
               3003 Tasman Drive
               Santa Clara, CA 95054

<Page>

                             PERMITTED INDEBTEDNESS

         ABI has a stand-by letter in the amount of $161,252 for the benefit of
Glenborough Realty Trust pursuant to the lease between these parties, dated as
of September 23, 2005. The letter of credit is held by Silicon Valley Bank.

<Page>

                                    EXHIBIT B

                               FUNDING CERTIFICATE

         The undersigned, being the duly elected and acting ___________________
of ACTIVBIOTICS, INC., a Delaware corporation ("Borrower"), does hereby certify
to HORIZON TECHNOLOGY FUNDING COMPANY LLC ("Lender") in connection with that
certain Venture Loan and Security Agreement dated as of the date hereof by and
between Borrower and Lender (the "Loan Agreement"; with other capitalized terms
used below having the meanings ascribed thereto in the Loan Agreement) that:

         1.       The representations and warranties made by Borrower in
                  SECTION 5 of the Loan Agreement and in the other Loan
                  Documents are true and correct as of the date hereof.

         2.       No event or condition has occurred that would constitute a
                  Default or an Event of Default under the Loan Agreement or any
                  other Loan Document.

         3.       Borrower is in compliance with the covenants and requirements
                  contained in SECTIONS 4, 6 AND 7 of the Loan Agreement.

         4.       All conditions referred to in SECTION 3 of the Loan Agreement
                  to the making of the Loan to be made on or about the date
                  hereof have been satisfied.

         5.       No material adverse change in the general affairs, management,
                  results of operations, condition (financial or otherwise) or
                  prospects of Borrower, whether or not arising from
                  transactions in the ordinary course of business, has occurred.

         6.       The proceeds of the Loan shall be disbursed as follows:

         Disbursement from Lender:
                  Loan Amount                        $5,000,000
                  Less:
                  Legal and Due Diligence Fees       $    8,000
                  Balance of Commitment Fee          $        0

         Net Proceeds due from Lender:               $4,992,000

<Page>

The net proceeds of the Loan in the amount of $4,992,000 shall be transferred to
Borrower's account as follows:

                  Account Name:
                  Bank Name:
                  Bank Address:
                  Attention:
                  Telephone:
                  Account Number:
                  ABA Number:

Dated: _________, 2006
                                                BORROWER:
                                                ACTIVBIOTICS, INC.


                                                By: ____________________________

                                                Name: __________________________

                                                Title: _________________________

<Page>

                                    EXHIBIT C

                             SECURED PROMISSORY NOTE

$5,000,000.00                                                      Dated: [Date]

         FOR VALUE RECEIVED, the undersigned, ACTIVBIOTICS, INC., a Delaware
corporation ( "BORROWER"), HEREBY PROMISES TO PAY to the order of HORIZON
TECHNOLOGY FUNDING COMPANY LLC, a Delaware limited liability company ("LENDER")
the principal amount of ____________ Dollars ($__________) or such lesser amount
as shall equal the outstanding principal balance of the Loan (the "LOAN") made
to Borrower by Lender pursuant to the Loan Agreement (as defined below), and to
pay all other amounts due with respect to the Loan on the dates and in the
amounts set forth in the Loan Agreement.

         Interest on the principal amount of this Note shall accrue from the
date of this Note through and including the date on which such principal amount
is paid in full at the Loan Rate or, if applicable, the Default Rate. The Loan
Rate for this Note is % per annum based on a year of twelve 30-day months. If
the Funding Date is not the first day of the month, interim interest accruing
from the Funding Date through the last day of that month shall be paid on the
first calendar day of the next calendar month. Commencing __________, 200_,
through and including ________, 200_, on the first day of each month (each an
"INTEREST PAYMENT DATE") Borrower shall make payments of accrued interest only
on the outstanding principal amount of the Loan. Commencing on ________, 200_,
and continuing on the first day of each month thereafter (each a "PRINCIPAL AND
INTEREST PAYMENT DATE" and, collectively with each Interest Payment Date, each a
"PAYMENT DATE"), through and including [ ], Borrower shall make to Lender
twenty-four (24) equal payments of principal plus accrued interest on the then
outstanding principal amount due hereunder of _______ Dollars ($________). If
not sooner paid, all outstanding amounts hereunder and under the Loan Agreement
shall become due and payable on January 1, 2010.

         Principal, interest and all other amounts due with respect to the Loan,
are payable in lawful money of the United States of America to Lender as set
forth in the Loan Agreement. The principal amount of this Note and the interest
rate applicable thereto, and all payments made with respect thereto, shall be
recorded by Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Note.

         This Note is referred to in, and is entitled to the benefits of, the
Venture Loan and Security Agreement dated on or about the date hereof by and
between Borrower and Lender (the "Loan Agreement"). The Loan Agreement, among
other things, (a) provides for the making of a secured Loan to Borrower, and (b)
contains provisions for acceleration of the maturity upon an Event of Default
(as defined in the Loan Agreement).

         This Note may not be prepaid, except as set forth in SECTION 2.3 of the
Loan Agreement.

         This Note and the obligation of Borrower to repay the unpaid principal
amount of the Loan, interest on the Loan and all other amounts due Lender under
the Loan Agreement is secured under the Loan Agreement.

<Page>

         Presentment for payment, demand, notice of protest and all other
demands and notices of any kind in connection with the execution, delivery,
performance and enforcement of this Note are hereby waived.

         Borrower shall pay all reasonable fees and expenses, including, without
limitation, reasonable attorneys' fees and costs, incurred by Lender in the
enforcement or attempt to enforce any of Borrower's obligations hereunder not
performed when due. This Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Connecticut, without
reference to conflict of laws principles.

         NOTE REGISTER; OWNERSHIP OF NOTE. The ownership of an interest in this
Note shall be registered on a record of ownership maintained by Borrower or its
agent. Borrower shall register any transfers of any interest in this Note on
such register within ten (10) days of notice by the last registered holder of
such transfer. Notwithstanding anything else in this Note to the contrary, the
right to the principal of, and stated interest on, this Note may be transferred
only if the transfer is registered on such record of ownership and the
transferee is identified as the owner of an interest in the obligation. Borrower
shall be entitled to treat the registered holder of this Note (as recorded on
such record of ownership) as the owner in fact thereof for all purposes and
shall not be bound to recognize any equitable or other claim to or interest in
this Note on the part of any other person or entity.

         IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
by its officer thereunto duly authorized on the date hereof.

                                             BORROWER:
                                             ACTIVBIOTICS, INC.

                                             By: _______________________________

                                             Name: _____________________________

                                             Title: ____________________________

<Page>

                                    EXHIBIT D

              ITEMS TO BE COVERED BY OPINION OF BORROWER'S COUNSEL

         1. Borrower is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware, and is duly qualified and
authorized to do business in the State of Massachusetts.

         2. Borrower has the full corporate power, authority and legal right,
and has obtained all necessary approvals, consents and given all notices to
execute and deliver the Loan Documents and perform the terms thereof.

         3. The Loan Documents have been duly authorized, executed and delivered
by Borrower and constitute valid, legal and binding agreements, and are
enforceable in accordance with their terms.

         4. To our knowledge, there is no action, suit, audit, investigation,
proceeding or patent claim pending or threatened against Borrower in any court
or before any governmental commission, agency, board or authority which draws
into question the validity of the Loan Documents.

         5. The Shares (as defined in the Warrant) issuable pursuant to exercise
or conversion of the Warrant have been duly authorized by Borrower and, when
issued in accordance with the terms thereof, will be validly issued, fully paid
and nonassessable.

         6. The shares of Common Stock issuable upon conversion of the Shares
have been duly authorized and reserved and, when issued in accordance with the
terms of Borrower's [Articles/Certificate] of Incorporation, as amended, will be
validly issued, fully paid and nonassessable.

         7. The execution and delivery of the Loan Documents are not, and the
issuance of the Shares upon exercise of the Warrant in accordance with the terms
thereof will not be, inconsistent with Borrower's [Articles/Certificate] of
Incorporation, as amended, or Bylaws, do not and will not contravene any law,
governmental rule or regulation, judgment or order applicable to Borrower, and
do not and will not conflict with or contravene any provision of, or constitute
a default under, any indenture, mortgage, contract or other agreement or
instrument of which Borrower is a party or by which it is bound or require the
consent or approval of, the giving of notice to, the registration or filing with
or the taking of any action in respect of or by, any federal, state or local
government authority or agency or other person, except for the filing of notices
pursuant to federal and state securities laws, which filings will be effected by
the time required thereby.

<Page>

                                    EXHIBIT E
                          FORM OF OFFICER'S CERTIFICATE

         TO: HORIZON TECHNOLOGY FUNDING COMPANY LLC

         Reference is made to the Venture Loan and Security Agreement dated as
of ________, 200_ (as it may be amended from time to time, the "LOAN AGREEMENT")
by and between ACTIVBIOTICS, INC. ("BORROWER") and HORIZON TECHNOLOGY FUNDING
COMPANY LLC ("LENDER"). Unless otherwise defined herein, capitalized terms have
the meanings given such terms in the Loan Agreement.

         The undersigned Responsible Officer of Borrower hereby certifies to
Lender that:

1.       No Event of Default or Default has occurred under the Loan Agreement.
         (If a Default or Event of Default has occurred, specify the nature and
         extent thereof and the action Borrower proposes to take with respect
         thereto.)

2.       The information provided in Section 1 of the Disclosure Schedule is
         currently true and accurate, except as noted below.

3.       Borrower is in compliance with the provisions of SECTIONS 4, 6 AND 7 of
         the Loan Agreement, except as noted below.

4.       Attached herewith are the [monthly financial statements pursuant to
         Section 6.3(a) of the Loan Agreement/annual audited financial
         statements pursuant to Section 6.3(b) of the Loan Agreement]. These
         have been prepared in accordance with GAAP and are consistent from one
         period to the next except as noted below.

         NOTES TO ABOVE CERTIFICATIONS:

         _______________________________________________________________________

         _______________________________________________________________________

                                            BORROWER:
                                            ACTIVBIOTICS, INC.

                                            By: ________________________________
                                            Name: ______________________________
                                            Title: _____________________________