Document:

EX-10.26  PROMISSORY NOTE

 

Exhibit 10.26

PROMISSORY NOTE

	 	 	 
	$5,000.00

	 	June 15, 2006

     FOR VALUE RECEIVED, and intending to be legally bound, Tenby Pharma Inc. (the “Maker”), hereby
unconditionally and irrevocably promises to pay to the order of Randy Milby (the “Payee”), in
lawful money of the United States of America, the sum of five thousand dollars ($12,500.00) on or
before the earlier of (i) December 31, 2010 or (ii) the date that the Maker (or a wholly owned
subsidiary of the Maker) consummates a merger or similar transaction with an operating business
(the “Maturity Date”).

     Interest shall accrue on the outstanding principal balance of this Promissory Note on the
basis of a 360-day year daily from the date of issuance until paid in full at the rate of four
percent (4%) per annum, and shall be due and payable at the Maturity Date, or the prepayment date,
if any, whichever is earlier. This Promissory Note may be prepaid in whole or in part at any time
or from time to time prior to the Maturity Date.

     For purposes of this Promissory Note, an “Event of Default” shall occur if the Maker shall:
(i) fail to pay the entire principal amount of this Promissory Note when due and payable, (ii)
admit in writing its inability to pay any of its monetary obligations under this Promissory Note,
(iii) make a general assignment of its assets for the benefit of creditors, or (iv) allow any
proceeding to be instituted by or against it seeking relief from or by creditors, including,
without limitation, any bankruptcy proceedings.

     In the event that an Event of Default has occurred, the Payee or any other holder of this
Promissory Note may, by notice to the Maker, declare this entire Promissory Note to be forthwith
immediately due and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Maker. In the event that an Event of Default
consisting of a voluntary or involuntary bankruptcy filing has occurred, then this entire
Promissory Note shall automatically become due and payable without any notice or other action by
Payee. Commencing five days after the occurrence of any Event of Default, the interest rate on
this Note shall accrue at the rate of 8% per annum.

     The nonexercise or delay by the Payee or any other holder of this Promissory Note of any of
its rights hereunder in any particular instance shall not constitute a waiver thereof in that or
any subsequent instance. No waiver of any right shall be effective unless in writing signed by the
Payee, and no waiver on one or more occasions shall be conclusive as a bar to or waiver of any
right on any other occasion.

     Should any part of the indebtedness evidenced hereby be collected by law or through an
attorney-at-law, the Payee or any other holder of this Promissory Note shall, if permitted by
applicable law, be entitled to collect from the Maker all reasonable costs of collection,
including, without limitation, attorneys’ fees.

 

 

     All notices and other communications must be in writing to the address of the party set forth
in the first paragraph hereof and shall be deemed to have been received when delivered personally
(which shall include via an overnight courier service) or, if mailed, three (3) business days after
having been mailed by registered or certified mail, return receipt requested, postage prepaid. The
parties may designate by notice to each other any new address for the purpose of this Promissory
Note.

     Maker hereby forever waives presentment, demand, presentment for payment, protest, notice of
protest, and notice of dishonor of this Promissory Note and all other demands and notices in
connection with the delivery, acceptance, performance and enforcement of this Promissory Note.

     This Promissory Note shall be binding upon the successors and assigns of the Maker, and shall
be binding upon, and inure to the benefit of, the successors and assigns of the Payee.

     This Promissory Note shall be governed by and construed in accordance with the internal laws
of the State of New York. All disputes between the Maker and the Payee relating in any way to this
Promissory Note shall be resolved only by state and federal courts located in New York County, New
York, and the courts to which an appeal therefrom may be taken.

     IN WITNESS WHEREOF, the undersigned Maker has executed this Promissory Note as of June 15,
2006.

	 	 	 	 	 	 	 
	 	 	MAKER:	 	 
	 
	 	 	 	 	 	 
	 	 	TENBY PHARMA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Randy Milby	 	 
	 

	 	 	 	 

     Name: Randy Milby
	 	 
	 

	 	 	 	     Title: President	 	 

2EX-10.27 TERMINATION AND ACKNOWLEDGEMENT AGREEMENT

 

Exhibit 10.27

TERMINATION AND ACKNOWLEDGEMENT AGREEMENT

          By their respective signatures, the undersigned hereby agree and acknowledge that the notes
set forth below, any modifications or amendments or renewals thereof, and any and all rights and
interests of each of the undersigned with respect thereto, shall be terminated and shall have no
further effect as of the Closing (as defined in that certain Series A Stock Purchase Agreement,
dated on or about the date hereof, by and among Tenby Pharma, Inc., a Delaware corporation
(“Tenby”) and the purchasers signatory thereto):

	 	1.	 	Promissory Note, dated February 7, 2006, issued by Tenby to Randy Milby in the
principal amount of $12,500.00.
	 
	 	2.	 	Promissory Note, dated June 15, 2006, issued by Tenby to Randy Milby in the principal
amount of $5,000.00.

     At the Closing, the undersigned is hereby completely and forever discharged and released from
all of their respective duties and obligations under, and any claims arising under or related to
the notes set forth above.

     IN WITNESS WHEREOF, the parties hereto have executed this Termination and Acknowledgement
Agreement on this 13th, day of September, 2006.

	 	 	 	 	 
	 	 	 
	 	          /s/ Randy Milby
 	 
	 	Randy Milby 	 

	 	 	 	 	 
	 	TENBY PHARMA, INC.

 	 
	 	By:  	   /s/ Barry Butler
 	 
	 	 	Barry Butler, Chief Executive OfficerEX-10.28  LOAN AGREEMENT

 

Exhibit 10.28

					
	Confidential
	 	 
	 	EXECUTION VERSION

LOAN AGREEMENT

     THIS LOAN AGREEMENT (this “Agreement”) is dated and entered into as of February 14, 2006 by
and between SIRION THERAPEUTICS, INC., a North Carolina corporation (“Borrower”), and PHARMABIO
DEVELOPMENT INC., a North Carolina corporation
(“Lender”).

BACKGROUND

     WHEREAS, Borrower has requested certain credit facilities and Lender is willing to
extend such credit facilities to Borrower, subject to and upon the terms and conditions of this
Agreement;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the parties hereby agree as follows:

ARTICLE I

Definitions

     1.1
Definitions. Capitalized terms used but not defined in the text of this
Agreement shall have the meanings ascribed to them on Exhibit A attached hereto and
incorporated herein by reference.

ARTICLE II

Amount and Terms of Loan

     2.1
Advances.

          (a) Subject to and upon the terms and conditions set forth herein, Lender agrees, at any
time and from time to time, from and after date hereof and prior to December 31, 2006 (the
“Maturity Date”), to make advances (each an “Advance” and collectively the “Advances”) to Borrower
at such times and in such amounts as Borrower shall request pursuant to this Agreement, up to an
aggregate principal amount of Five Million Dollars ($5,000,000) (the “Commitment”) in lawful money
of the United States of America in immediately available funds. The Commitment shall become
available to Borrower only as follows:

	 	(i)	 	Two Hundred Fifty Thousand Dollars ($250,000) of the Commitment shall be
available on the date hereof;
	 
	 	(ii)	 	Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) shall be
available upon the occurrence of Milestone One, at which point the
Commitment shall equal an

 

 

	 	 	 	aggregate principal amount of Two Million Five
Hundred Thousand Dollars ($2,500,000), subject to the
terms and conditions of this Agreement. “Milestone One”
shall mean the earlier to occur of (A) the consummation
by Borrower of a Licensing Transaction (as defined
below) that provides for the payment by Borrower of
aggregate up-front consideration (i.e., fees payable
upon consummation as compared, for example, with
milestone, royalty or similar payments) in excess of One
Million Dollars ($1,000,000), or (B) the consummation by
Borrower of at least two Licensing Transactions, without
regard to the amount of up-front consideration. For
purposes of this Agreement, a “Licensing Transaction”
shall mean a transaction, approved by Borrower’s Board
of Directors (including the affirmative vote of at least
one director designated by Lender), by which Borrower
licenses, controls or otherwise gains rights to a
Product.
	 
	 	(iii)	 	Upon the occurrence of Milestone One and Milestone Two, an additional Two Million Five
Hundred Thousand Dollars ($2,500,000) shall be available, at which point the Commitment shall
equal an aggregate principal amount of Five Million Dollars ($5,000,000), subject to the terms
and conditions of this Agreement. “Milestone Two” shall mean the earlier to occur of (A) the
consummation by Borrower of two or more Licensing Transactions that collectively provide for
the payment by Borrower of aggregate up-front consideration in excess of Two Million Dollars
($2,000,000), or (B) the consummation by Borrower of at least four Licensing Transactions,
without regard to the amount of up-front consideration.

          (b) Notwithstanding anything to the contrary herein, Lender shall have no
obligation to make any Advances in excess of the $250,000 aggregate amount specified
in Section 2.1(a)(i) above unless and until Lender’s investment committee shall have
approved the availability of each of the Commitment amounts under Section 2.1(a)(ii)
and Section 2.1(a)(iii). Lender agrees to use commercially reasonable efforts to
obtain such approval promptly after the date hereof.

          (c) Borrower may use the Commitment, as in effect from time to time, on a
revolving basis by borrowing Advances, repaying the Advances in whole or in part, and
reborrowing, all in accordance with the terms and conditions of this Agreement. The
aggregate outstanding amount of the Advances at any time shall not exceed the
Commitment as in effect at such time. If at any time, the aggregate outstanding
principal amount of the Advances exceeds the Commitment, Borrower shall immediately
pay to Lender the amount of such excess in immediately available funds.

2

 

          (d) Each Advance shall be a principal amount of a loan, evidenced by the Note
referred to below.

     2.2
Use of Proceeds. Borrower will use the Advances only for Licensing Transactions or
for company operations and working capital purposes (a) consistent with Borrower’s budget as
approved by Borrower’s Board of Directors (including the affirmative vote of at least one director
designated by Lender), or (b) otherwise as approved by Borrower’s Board of Directors (including the
affirmative vote of at least one director designated by Lender).

     2.3
Notices of Advances; Disbursement of Funds.

          (a) Whenever Borrower desires to obtain an Advance, Borrower shall give to Lender a written
notice of the requested Advance, signed by an authorized officer of Borrower (each a “Notice of
Advance”), and received no later than 1:00 p.m. United States Eastern Time ten (10) Business Days
before the day on which Borrower desires the Advance to be made. The Notice of Advance shall
specify: (i) the aggregate principal amount of the Advance to be made; (ii) the date on which
Borrower desires the Advance to be made, which date shall be a Business Day; and (iii) an account
of Borrower to which the Advance shall be directed and wire transfer instructions. The giving of
each Notice of Advance shall constitute a representation and warranty by Borrower to Lender that
the conditions precedent set forth in Section 3.2 have been satisfied.

          (b) Whenever Borrower desires to obtain an Advance, Lender shall make available to Borrower,
at the account of Borrower specified to Lender, not later than 2:00 p.m. United States Eastern Time
on the date specified in the applicable Notice of Advance the aggregate amount of such requested
Advance, subject to terms and conditions of this Agreement. Each such amount shall be an Advance
under this Agreement and the Note referred to below. Each Notice of Advance requesting an Advance
shall be irrevocable when sent by Borrower, unless otherwise agreed by Lender.

          (c) The amount of each Advance shall not be less than the lesser of (i) Two Hundred Fifty
Thousand Dollars 250,000 or (ii) the entire principal amount remaining under the Commitment at the
date of such Advance.

          (d) Notwithstanding anything to the contrary contained herein, unless otherwise
determined by Borrower’s Board of Directors (including the affirmative vote of at least one
director designated by Lender), subject to Section 2.1(b),

               (i) if Milestone One shall have occurred and any Commitment amount remains available
under Section 2.1(a)(ii) as of the first closing of a Qualified Financing (the “Remaining Milestone
One Amount”), then (A) immediately prior to such closing, the Borrower shall be deemed to have
received an Advance in an amount equal to the Remaining Milestone One Amount (which amount shall be
converted as described in Section 2.6), and (B) promptly

3

 

following such closing, Lender shall make available to Borrower, at the account of Borrower
specified to Lender, an amount equal to the Remaining Milestone One Amount; and

               (ii) if Milestone Two shall have occurred and any Commitment amount
remains available under Section 2.1(a)(iii) as of the first closing of a
Qualified Financing (the “Remaining Milestone Two Amount”), then (A)
immediately prior to such closing, the Borrower shall be deemed to have
received an Advance in an amount equal to the Remaining Milestone Two Amount
(which amount shall be converted as described in Section 2.6), and (B)
promptly following such closing, Lender shall make available to Borrower, at
the account of Borrower specified to Lender, an amount equal to the
Remaining Milestone Two Amount.

     2.4 Note and Security Agreement. Borrower’s obligation to pay the principal of, and
interest on, the Advances made by Lender shall be evidenced by a single promissory note (the
“Note”) duly executed and delivered by Borrower in the form
of Exhibit B attached hereto and
secured by a security interest under the security agreement the parties are entering into
contemporaneously with this Agreement (the “Security Agreement”). All Advances made by Lender to
Borrower, and all payments in respect thereof, shall be recorded by Lender and shall be set forth
on the grid attached to the Note. Failure to make any such notation on such grid, however, shall
not affect Borrower’s obligations in respect of such Advances.

     2.5 Repayment; Interest; Reduction of Commitment.

          (a) Unless converted earlier as set forth below, Borrower shall pay the aggregate outstanding
principal amount of, and all accrued interest on, all Advances on or before the Maturity Date,
unless any such amount becomes due and payable sooner pursuant to the provisions of this Agreement.
Borrower may prepay any Advance or any accrued interest on Advances at any time and from time to
time without penalty, on the following terms and conditions: (i) Borrower shall give Lender at
least three (3) Business Days’ prior written notice of its intent to prepay and of the amount of
the prepayment, (ii) the prepayment shall have been approved by Borrower’s Board of Directors
(including the affirmative vote of at least one director designated by Lender), and (iii) each
prepayment shall not be less than the lesser of $250,000 all principal and accrued interest then
outstanding.

          (b) Borrower agrees to pay interest in respect of the outstanding principal amount of each
Advance from the date the proceeds are made available to Borrower until repaid. Interest on the
outstanding principal amount of each Advance shall accrue and be payable at a rate per annum equal
to eight percent (8%), or, if less, the maximum rate permitted by Law (the “Base Rate”). Interest
shall be calculated on the basis of a 360-day year for the actual number of days elapsed.

          (c) Accrued interest shall be due and payable upon any payment of principal, on the amount
paid.

          (d) The outstanding principal amount of an Advance or any accrued interest amounts thereon
that are not paid when due shall accrue interest on a daily basis at the lesser of

4

 

(i) three percent (3%) in excess of the Base Rate, or (ii) the maximum rate permitted by Law,
such accrual beginning on the date payment is due and continuing until the date payment is
made in full.

          (e) All payments of principal and interest described above shall be made to Lender in
lawful money of the United States of America in immediately available funds at such place or
account as Lender may designate from time to time.

          (f) If Borrower’s rights with respect to any Product are terminated pursuant to the terms
and conditions of the agreements governing the applicable Licensing Transaction, then such
Licensing Transaction shall be treated as if it had never been consummated for purposes of
determining whether Milestone One or Milestone Two have occurred. If pursuant to the preceding
sentence Milestone One or Milestone Two shall be determined not to have occurred, then the
Commitment automatically shall be deemed reduced effective as of the date that Borrower’s
rights with respect to the applicable Product were terminated.

     2.6 Automatic Conversion.

          (a) Notwithstanding anything to the contrary contained herein, unless otherwise
determined by Borrower’s Board of Directors (including the affirmative vote of at least one
director designated by Lender), all outstanding principal amounts of Advances and any accrued
but unpaid interest amounts thereon will automatically be converted upon the first closing of
a Qualified Financing into the type of New Securities offered in such Qualified Financing and
Lender’s obligation to make Advances hereunder shall be terminate.

          (b) The number of shares of New Securities into which such principal and interest
shall be converted shall be determined as described in this Section 2.6(b).

               (i) If the pre-money valuation of Borrower in connection with the Qualified Financing is
equal to or less than three times the aggregate outstanding principal of, and accrued but unpaid
interest on, all Advances, then such principal and interest shall be converted into that number of
shares of New Securities that on an as-converted to Common Stock basis (i.e., as if the New
Securities were converted to Common Stock based on the conversion rate of the New Securities) when
added to the aggregate Fully-Diluted Common Stock immediately before the first closing of such
Qualified Financing (such sum, the “Pre-Money Fully-Diluted Common Stock”) would be equal to the
Applicable Percentage of the Pre-Money Fully-Diluted Common Stock. “Applicable Percentage” means
the greater of (A) sixty percent (60%) or (B) that percentage equal to (x) the aggregate
outstanding principal of all Advances and accrued interest thereon divided by (y) the pre-money
valuation of Borrower in connection with the Qualified Financing.

               (ii) If the pre-money valuation of Borrower in connection with the Qualified Financing is
greater than three times the aggregate outstanding principal of, and accrued but unpaid interest
on, all Advances, then such principal and interest shall be converted

5

 

into that number of shares of New Securities that on an as-converted to Common Stock basis would be
equal to fifty percent (50%) of the Pre-Money Fully-Diluted Common Stock.

          (c) Borrower will not, by amendment of its Articles of Incorporation or Bylaws, or through any
reorganization, recapitalization, reclassification, merger, consolidation, transfer of assets,
dissolution, issue or sale of securities, or any other action, avoid or seek to avoid the
observance or performance of any of the terms of this Section 2.6, but will at all times in good
faith assist in carrying out all the provisions of this Section 2.6 and in taking all such action
as be necessary or appropriate in order to protect the rights of Lender against impairment.

          (d) Borrower shall, as soon as reasonably practicable after the first closing of a Qualified
Financing issue and deliver to Lender a certificate or certificates for the number of shares of
New Securities to which Lender is entitled upon conversion pursuant to this Section 2.6.

     2.7 Alternative Milestone Payment. If Milestone Two shall not have occurred by the
first closing of a Qualified Financing, then promptly following the occurrence of Milestone Two,
Lender shall make available to Borrower, at the account of Borrower specified to Lender, an amount
equal to Two Million Five Hundred Thousand Dollars ($2,500,000); provided, however, that Lender’s
obligation under this Section 2.7 shall terminate if Milestone Two shall not have occurred by
December 31, 2007, and, provided further, that Lender shall have no obligation under this Section
2.7 unless and until Lender’s investment committee shall have approved the availability of either
the Commitment amount under Section 2.1(a)(iii) or the milestone payment under this Section 2.7.
For the avoidance of doubt, the Parties acknowledge that the milestone payment under this Section
2.7 is in lieu of Advances that Borrower might have received with respect to the Commitment amount
under Section 2.1(a)(iii) had Milestone Two occurred before consummation of a Qualified Financing.

ARTICLE III

Conditions Precedent

     3.1 Initial Conditions Precedent to Lender’s Obligations. The obligation of
Lender to perform its obligations under this Agreement is subject to the condition precedent that
Lender shall have received from Borrower on the date hereof a certificate, executed by the
appropriate officer of Borrower and dated as of the date hereof, together with and certifying (i) a
copy of the Articles of Incorporation of Borrower, as amended and in effect as of the date hereof;
(ii) a copy of the Bylaws of Borrower, as amended and in effect as of the date hereof; (iii) a copy
of the resolutions of the Board of Directors of Borrower authorizing the execution and delivery of
the Transaction Documents and the performance by Borrower of the Transactions as in full force and
effect as of the date hereof; (iv) that the representations and warranties contained in ARTICLE IV
are true and correct as of the date hereof; (v) that Borrower has complied with all the agreements
and satisfied all the conditions herein on its part to be performed or satisfied on or prior to the
date hereof; and (vi) that no event has occurred and is continuing that constitutes an

6

 

Event of Default (as defined in Section 7.1 hereof) or that would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.

     3.2
Conditions Precedent to All Advances. The obligation of Lender to make each Advance
shall be subject to the further conditions precedent that, on the date of such Advance:

          (a) the representations and warranties contained in ARTICLE IV are true and correct in all
material respects on and as of the date of such Advance (except that those representations and
warranties which are qualified as to material, materiality, Material Adverse Effect or similar
expressions, or are subject to the same or similar type exceptions, shall be true and correct in
all respects), before and after giving effect to such Advance, as though made on and as of such
date;

          (b) Borrower shall have performed, satisfied and complied with all covenants, agreements and
conditions required under the Transaction Documents to be performed, satisfied or complied with on
or prior to the date of such Advance;

          (c) no event has occurred and is continuing, or would result from such Advance, which
constitutes an Event of Default, or would constitute an Event of Default but for the requirement
that notice be given or time elapse or both; and

          (d) all principal amount of Advances, accrued interest or commitment fees under this
Agreement, which are due and payable at the time of such Advance, if any, shall have been paid in
full.

ARTICLE IV

Representations and Warranties

     Borrower hereby represents and warrants to Lender as follows:

     4.1 Organization and Qualification. Borrower is a corporation duly organized, validly
existing and in good standing under the Laws of the State of North Carolina, and Borrower is
qualified to do business as a foreign corporation in each jurisdiction in which such qualification
is required, except where failure to so qualify has not had, or would not reasonably be expected to
have, a Material Adverse Effect. Borrower does not own or control, directly or indirectly, any
interest in any other corporation, partnership, limited liability company, joint venture,
association, or other business entity. Borrower has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its businesses as now conducted and as
proposed to be conducted.

     4.2 Authority and Consents. Borrower has all necessary corporate power and authority
to execute and deliver the Transaction Documents and to consummate the Transactions. The execution
and delivery of the Transaction Documents and consummation of the Transactions have been duly
authorized by all necessary corporate action on the part of

7

 

Borrower and no other corporate proceedings on the part of Borrower are necessary to
authorize the Transaction Documents or to consummate the Transactions. The Transaction Documents
have been duly and validly executed and delivered by Borrower and constitute valid, legal and
binding agreements of Borrower, enforceable against Borrower in accordance with their respective
terms. No consent, authorization or order of, or filing or registration with, any Governmental or
Regulatory Authority is required to be obtained or made by Borrower for the execution, delivery and
performance of the Transaction Documents or the consummation of the Transactions. Neither the
execution, delivery and performance of the Transaction Documents by Borrower nor the consummation
by Borrower of the Transactions will (a) conflict with or result in any breach of any provision of
the Articles of Incorporation or Bylaws of Borrower; (b) violate any Law applicable to Borrower or
the Transactions; or (c) result in the creation of any Lien upon any assets of Borrower pursuant to
the terms or provisions of, or will not conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a default under any
agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit or other
instrument to which Borrower is a party or by which Borrower or any of its properties may be bound.

     4.3 Capitalization. The authorized capital stock of the Company consists of (i) one
million (1,000,000) shares of Common Stock, of which One Hundred Thousand (100,000) shares are
issued and outstanding. All such issued and outstanding shares have been duly authorized and
validly issued, are fully paid and nonassessable, and are owned beneficially and of record by Susan
Benton (25,000 shares), Phillipe Boulangeat (25,000 shares), Barry Butler (25,000 shares), and Dr.
Roger Vogel (25,000 shares). There are no outstanding rights, options, warrants, conversion rights
or agreements for the purchase or acquisition from the Company of any shares of its capital stock
other than the rights created by the Transaction Documents. There are no preemptive or similar
rights to purchase or otherwise acquire shares of capital stock of the Company pursuant to the
Company’s Articles of Incorporation or any agreement to which the Company is a party, there are no
rights of any Person to require the Company to purchase securities of the Company held by such
Person, and there is no agreement or restriction (such as a right of first refusal, right of first
offer, proxy, voting trust or voting agreement) with respect to the sale or voting of any shares of
capital stock of the Company (whether outstanding or issuable upon conversion or exercise of
outstanding securities) other than the rights created by the Transaction Documents.

     4.4 Absence of Undisclosed Liabilities. No Debt is outstanding with respect to or owed
by Borrower. On the date hereof, Borrower does not have any material liabilities or obligations of
any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due,
arising out of transactions entered into, or any state of facts existing on or prior to the date of
this Agreement that would be required under GAAP to be reported on the balance sheet of Borrower,
other than liabilities and obligations arising in connection with the Transactions.

     4.5 No Defaults. Borrower is not in violation or default of any provision of its
Articles of Incorporation or Bylaws, or in breach of or default with respect to any provision of
any agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by which it or any of its
properties

8

 

are bound; and there does not exist any state of fact which, with notice or lapse of time or both,
would constitute an event of default or default, as defined in such documents or instruments, on
the part of Borrower, and, to Borrower’s knowledge, no other party to any such documents or
instruments is in default thereunder in any respect.

     4.6 Contracts and Other Commitments. On the date hereof, Borrower does not have and is
not bound by any contract, agreement, mortgage, deed of trust, lease, franchise, license,
indenture, commitment, or other instrument, written or oral, absolute or contingent.

     4.7 No Litigation or Other Actions. There are no legal or governmental actions, suits,
proceedings or investigations pending or, to Borrower’s knowledge, threatened to which Borrower is
or may be a party or of which property owned, licensed or leased by Borrower is or may be the
subject. Borrower is not a party to or subject to the provisions of any material injunction,
judgment, decree or order of any Governmental or Regulatory Authority.

     4.8 Properties and Assets. Borrower has valid title to all the properties and assets
used or held for use in its business, subject to no Lien of any kind except those under the
Security Agreement or those that are not material in amount and do not adversely affect the use
made and proposed to be made of such property by Borrower. Borrower holds its leased properties
under valid and binding leases. Borrower does not own any registered Intellectual Property.
Borrower has not received notice or other communication of any actual, alleged, or potential
infringement, misappropriation or unauthorized use of Intellectual Property owned or used by any
other person.

     4.9 Compliance with Laws. Borrower has been and is in compliance in all material
respects with all applicable Laws in respect of the conduct of its business, the ownership of its
properties and all Products. Borrower has all franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals necessary for the conduct of its business
as now being conducted unless the failure to possess such franchises, permits, licenses, consents
and other governmental or regulatory authorizations and approvals, individually or in the
aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect.

     4.10 Taxes. Borrower has filed all federal, state, local and foreign income and other
tax returns required to be filed by it and has paid or accrued all taxes shown as due thereon,
except where failure to do so would not reasonably be expected have a Material Adverse Effect, and
Borrower has no knowledge of a tax deficiency which has been or might be asserted or threatened
against it.

     4.11 Key Personnel. As of the date hereof, Susan Benton, Phillipe Boulangeat, and
Barry Butler are employees of Borrower. As of the date hereof, no officer, consultant or key
employee of Borrower has terminated or, to the knowledge of Borrower, has any present intention of
terminating his or her employment or engagement with Borrower.

     4.12 FDA Matters. Neither Borrower nor any officer, consultant or key employee of
Borrower has (a) been debarred by the FDA; (b) been debarred, excluded, suspended, or otherwise
ineligible to participate in federal health care programs such as Medicare or Medicaid

9

 

or in federal procurement and non-procurement programs; (c) been a party to a
settlement, consent, or similar agreement with the FDA, Office of Inspector General, or U.S.
District Attorney regarding the promotion or marketing of any pharmaceutical product; or (d)
been convicted of violating any applicable Laws as a result of its promotion or marketing of
any pharmaceutical product.

     4.13
Disclosure. Borrower understands and confirms that Lender will rely on the
foregoing representations in effecting the Transactions. All disclosure provided to Lender
regarding Borrower, its business and the Transactions, including the representations in this
Agreement, furnished by or on behalf of Borrower, taken together in the aggregate, are true and
correct and do not contain any untrue statement of material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. No material event or circumstance has occurred or information
exists with respect to Borrower or its condition (financial or otherwise), properties, business,
prospects, or results of operations, which has not been disclosed to Lender.

ARTICLE V

Covenants of Borrower

     So long as any of the Advances or other obligations of Borrower under this Agreement shall
remain unpaid or outstanding or Lender shall have any Commitment hereunder, Borrower shall comply
with the following covenants:

     5.1 Compliance with Licensing Transaction Agreements. Borrower shall perform and
fulfill all of its obligations, and shall cause its Subsidiaries, if any, to perform and fulfill
all of their respective obligations under each of the agreements related to any Licensing
Transaction as necessary to maintain Borrower’s and its Subsidiaries’ respective rights in such
agreements in full force and effect in all material respects. Borrower shall provide written notice
to Lender within five (5) Business Days of Borrower’s or any of its Affiliate’s receipt of any
notice from any other parties to any of the agreements described in the preceding sentence
proposing or threatening to terminate any such agreement. Borrower shall use commercially
reasonable efforts to ensure that all agreements related to any Licensing Transaction do not
include any terms or conditions that prohibit or restrict (a) Borrower granting a security interest
in Borrower’s rights thereunder, (b) assignment by Borrower of such agreements to Borrower’s
Affiliates, or (c) any change of control of Borrower (or Affiliate assignee of Borrower).

     5.2 Notice of Events of Default and Certain Other Events. Borrower agrees to provide
prompt (but in any case not later than three (3) Business Days after any such event) written notice
to Lender of the occurrence of any Event of Default, or any litigation, governmental proceeding or
investigation or other event that would reasonably be expected to have a Material Adverse Effect.

     5.3 FDA Correspondence. Borrower agrees to promptly (and in any case not later than
three Business Days after submission or receipt) provide to Lender copies of material
correspondence to or from the FDA related to any Product including, without limitation, any FDA
action letters. Additionally, Borrower shall use commercially reasonable efforts to keep

10

 

Lender informed of, and provide copies of material data and other primary documents
regarding, all material Product developments, including, clinical trial results, other regulatory
communications, Intellectual Property status, prescription and net sales data, and manufacturing
and supply information.

     5.4 Compliance. Borrower shall comply in all material respects with all applicable
Laws in respect of the conduct of its business, the ownership of its properties and all Products.
Borrower shall maintain in full force and effect all franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals necessary for the conduct of its
business unless the failure to possess such franchises, permits, licenses, consents and other
governmental or regulatory authorizations and approvals, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.

     5.5 No Grant of Rights. Borrower will not grant any right to any third party
that would conflict with the rights granted to Lender hereunder or enter into any agreement
that would impair its ability to perform its obligations under this Agreement.

     5.6 Maintenance of Insurance. Borrower shall at all times maintain insurance in full
force and effect with sound and reputable insurance companies of the types and in the amounts that
Borrower reasonably believes is adequate for its business, including, but not limited to, insurance
covering product liability and all real and personal property owned, licensed or leased by Borrower
against all risks customarily insured against by similarly situated companies.

     5.7 Debt. Without the prior written consent of Lender, Borrower shall not create or incur or
allow to be created, incurred or exist any Debt, except Debt which is junior and subordinate in
right of payment to the Obligations (such Debt being referred to herein as “Junior Debt”), so long
as prior to the creation of such Junior Debt the holder thereof has agreed to subordination terms
and conditions in form and substance reasonably satisfactory to Lender providing for the
subordination of the Junior Debt to the Obligations.

     5.8 Liens. Without the prior written consent of Lender, Borrower shall not create or
incur or allow to be created, incurred or exist any Lien upon or with respect to any of Borrower’s
assets or properties, except Liens securing Debt or other obligations which are junior and
subordinate in right of payment to the Obligations (such Liens being referred to herein as “Junior
Liens”), so long as prior to the creation of such Junior Liens the holder thereof has agreed to
subordination terms and conditions in form and substance reasonably satisfactory to Lender
providing for the subordination of the Junior Liens to the Obligations.

     5.9 Disposition of Assets Related to Products. Borrower agrees not to sell, assign,
license, lease or otherwise transfer all or any significant portion of its assets, properties or
rights owned (or otherwise held) relating to any Product, in one or a series of related
transactions, unless such disposition has been approved by Borrower’s Board of Directors (including
the affirmative vote of at least one director designated by Lender).

     5.10 Corporate Existence; Business. Borrower will (a) maintain and preserve in full
force and effect its corporate existence, and (b) continue to engage in the business in which it is
engaged on the date hereof.

11

 

ARTICLE VI

Grant of Certain Preferred Rights by Borrower to Lender

     Borrower hereby grants to Lender (which for purposes of this ARTICLE VI shall mean and include
its Affiliates) a preferred provider relationship whereby Lender shall have a first and preferred
opportunity to negotiate for a period of thirty (30) days with Borrower (which for purposes of this
ARTICLE VI shall mean and include its Subsidiaries, if any) to provide to Borrower any services
which Lender provides to customers, which Borrower has decided to outsource or otherwise engage a
service provider to perform during five year period following the date hereof, including without
limitation clinical development, sales and marketing services, commercialization services, and
similar services. Borrower shall allow and grant Lender the right to provide such services if
Lender agrees to provide such services on competitive terms and conditions.

ARTICLE VII

Events of Default

     7.1 Events of Default. The occurrence of each of the following events
shall be considered an event of default (each an “Event of Default”):

          (a) Borrower shall fail to pay any principal of, or interest on, the Note when the same
becomes due and payable and three (3) Business Days have elapsed following receipt of notice of
such non-payment from Lender to Borrower;

          (b) any representation or warranty made by Borrower under this Agreement shall prove to have
been incorrect or untrue in any material respect when made or deemed made;

          (c) Borrower shall fail to perform or observe any term, covenant or agreement contained in
this Agreement required to be performed or observed by Borrower in any material respect;

          (d) one or more judgments, decrees or orders for the payment of money shall be entered against
Borrower involving in the aggregate a liability of $250,000 or more, and any such judgment, decree
or order shall continue without discharge or stay for a period of sixty (60) days;

          (e) Borrower or any of its Affiliates is (i) debarred by the FDA; (ii) debarred, excluded,
suspended, or otherwise ineligible to participate in federal health care programs such as Medicare
or Medicaid or in federal procurement and non-procurement programs; (iii) a party to a settlement,
consent, or similar agreement with the FDA, Office of Inspector General, or U.S. District Attorney
regarding the promotion or marketing of any Product with a fine greater than $250,000; or (iv)
convicted of violating any Law as a result of its promotion or marketing of any Product;

12

 

          (f) Borrower shall default in the performance or observance of any agreement or
instrument relating to any Debt, or any other event shall occur or condition exist, and the effect
of such default, event or condition is to cause or permit the holder of any such Debt to cause any
such Debt to become due prior to its stated maturity;

          (g) Lender shall determine in good faith that a material adverse change shall have occurred in
the condition (financial or otherwise), properties, business, prospects or results of operations of
Borrower that materially impairs Borrower’s ability to satisfy its obligations under the Loan
Documents;

          (h) the Security Agreement ceases to be in full force and effect;

          (i) either Barry Butler shall have terminated his employment with Borrower, or Dr. Roger
Vogel shall have ceased to devote at least fifty percent (50%) his full professional time to the
performance of services as a consultant to or independent contractor of Borrower;

          (j) Borrower shall (i) commence a voluntary case under the federal bankruptcy Laws (as
now or hereafter in effect), (ii) file a petition seeking to take advantage of any other Laws
relating to bankruptcy, insolvency, reorganization, winding up or composition for adjustment of
debts, (iii) consent to or fail to contest in a timely manner any petition filed against it in an
involuntary case under such bankruptcy Laws or other Laws, (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, (v)
admit in writing its inability to pay its Debts as they become due, (vi) make a general assignment
for the benefit of creditors, or (vii) take any corporate action for the purpose of authorizing or
effecting any of the foregoing; or

          (k) a case or other proceeding shall be commenced against Borrower or any of its
subsidiaries in any court of competent jurisdiction seeking (i) relief under the federal bankruptcy
Laws (as now or hereafter in effect) or under any other Laws relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like for Borrower or any of its subsidiaries or for all or any
substantial part of their respective assets, and such case or proceeding shall continue without
dismissal or stay for a period of sixty (60) consecutive days, or an order granting the relief
requested in such case or proceeding (including, but not limited to, an order for relief under such
federal bankruptcy Laws) shall be entered.

     7.2 Effect of Event of Default. If any Event of Default shall have occurred, then
Lender (a) may, by notice to Borrower, declare the Commitment and Lender’s obligation to make
Advances to be terminated, whereupon the same shall forthwith terminate, and (b) may, by notice to
Borrower, declare the Note, all interest thereon and all other amounts payable under this Agreement
to be forthwith due and payable, whereupon the Note, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by Borrower; provided, however, that if an Event
of Default specified in Sections 7.l(j) or 7.1(k) shall occur,

13

 

(i) the Commitment and the obligation of Lender to make Advances shall automatically be
terminated and (ii) the Note, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any kind, all of which
are hereby expressly waived by Borrower.

ARTICLE VIII

Miscellaneous

     8.1 Entire Agreement; Amendments. This Agreement and the other Transaction Documents
embody the entire agreement and understanding between the parties hereto with respect to the
subject matter thereof and supersede all prior agreements (oral or written), understandings,
negotiations and discussions dealing with the same subject matter. No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in the Transaction Documents
shall affect, or be used to interpret, change or restrict, the express terms and provisions of the
Loan Documents. If any provision contained in this Agreement shall be deemed to conflict with any
provision of any of the other Transaction Documents, then the provision contained in this Agreement
shall be controlling. The parties, from time to time during the term of this Agreement, may modify
any of the provisions hereof only by an instrument in writing duly executed by the parties.

     8.2 Notices. All notices and other communications required to be given by either party shall
be in writing. All notices shall be to the parties and addresses listed below (or other addresses
provided by written notice to the other party under this Section 8.2), and shall be deemed
sufficiently given (a) when received, if delivered personally or sent by facsimile transmission
with confirmed receipt, or (b) one Business Day after the date mailed by first class mail or sent
by a nationally recognized overnight delivery service with charges prepaid for next Business Day
delivery.

	 	 	 	 	 
	 

	 	If to Borrower:
	 	Sirion Therapeutics, Inc.
	 

	 	 	 	c/o Rx Development Resources, LLC
	 

	 	 	 	3110 Cherry Palm Drive, Suite 350
	 

	 	 	 	Tampa, FL 33619
	 

	 	 	 	Attention: President
	 

	 	 	 	Fax: (813) 910-9585
	 
	 	 	 	 
	 

	 	With a copy to	 	 
	 

	 	(which shall not	 	 
	 

	 	constitute notice):
	 	R. Reid Haney
	 

	 	 	 	Ward Rovell, Professional Association
	 

	 	 	 	101 E. Kennedy Boulevard
	 

	 	 	 	Suite 4100
	 

	 	 	 	Tampa, Florida 33602
	 

	 	 	 	Fax: (813) 222-8701

14

 

	 	 	 	 	 
	 

	 	If to Lender:
	 	PharmaBio Development Inc.
	 

	 	 	 	4709 Creekstone Drive
	 

	 	 	 	Riverbirch Bldg., Suite 200
	 

	 	 	 	Durham, NC 27703
	 

	 	 	 	Attn: President
	 

	 	 	 	Fax: (919) 998-2090
	 
	 	 	 	 
	 

	 	With copies to	 	 
	 

	 	(which shall not	 	 
	 

	 	constitute notice):
	 	PharmaBio Development Inc.
	 

	 	 	 	4709 Creekstone Drive
	 

	 	 	 	Suite 200, Riverbirch Building
	 

	 	 	 	Durham, NC 27703
	 

	 	 	 	Attention: General Counsel
	 

	 	 	 	Fax: 919-998-2090
	 
	 	 	 	 
	 

	 	 	 	Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan, L.L.P.
	 

	 	 	 	2500 Wachovia Capitol Center
	 

	 	 	 	Raleigh, NC 27601
	 

	 	 	 	Attn: Christopher B. Capel
	 

	 	 	 	Fax: (919) 821-6800

     8.3 No Waiver; Remedies. No failure or delay on the part of Lender in either exercising or enforcing any
right under this Agreement will operate as a waiver of, or impair, any such right. No single
or partial exercise or enforcement of any such right will preclude any other or further exercise
or enforcement thereof or the exercise or enforcement of any other right. No waiver of any such
right will have effect unless given in a
signed writing. No waiver of any such right will be deemed a waiver of any other right.
The rights and remedies set forth in this Agreement are cumulative and not exclusive of any
rights or remedies provided by Law or otherwise.

     8.4
Severability. If any part or parts of any Loan Document are held to be illegal, void or ineffective, the remaining portions of such Loan Document shall remain in full force and effect. If any of the terms or provisions is in conflict with any applicable Laws, then such term(s) or provision(s) shall be deemed inoperative to the extent that they may conflict therewith, and shall be deemed to be modified or
conformed with such Laws. In the event of any ambiguity respecting any term or terms hereof, the parties agree to construe and interpret such ambiguity in good faith in such a way as is appropriate to ensure its enforceability and viability.

     8.5 Interpretation. The headings contained in this Agreement are used only as a matter of convenience, and in no way define, limit, construe or describe the scope or intent of any section of this Agreement. All references to “Dollars” or $ shall mean the official currency of the United States of America except as expressly stated otherwise in this Agreement.

     8.6 Publicity. Except as otherwise required by applicable Law or by obligations pursuant to any listing agreement with or rules of any securities exchange or automated quotation system, each party shall, and shall cause its Affiliates to, not, issue any press release or make any

15

 

other public statement relating to, connected with or arising out of the Loan Documents or the
matters contained therein without the other parties’ prior written approval, which approval shall
not be unreasonably withheld or delayed.

     8.7 Further Assurances. Each party shall, without further consideration, take such
further action and execute and deliver such further documents as may be reasonably requested by the
other party in order to carry out the provisions and purposes of this Agreement.

     8.8 Counterparts. This Agreement and any amendment hereto may be executed in any
number of counterparts and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument. The execution of this Agreement and any
such amendment by any party hereto will not become effective until counterparts hereof have been
executed by both parties hereto. The exchange of copies of this Agreement or amendments thereto and
of signature pages by facsimile transmission or by email transmission in portable digital format,
or similar format, shall constitute effective execution and delivery of such instrument(s) as to
the parties and may be used in lieu of the original Agreement or amendment for all purposes.
Signatures of the parties transmitted by facsimile or by email transmission in portable digital
format, or similar format, shall be deemed to be their original signatures for all purposes.

     8.9 Governing Law. This Agreement, and the rights and obligations of the parties
arising hereunder or in connection herewith, including, without limitation, the interpretation,
performance, enforcement, breach or termination thereof and any remedies relating thereto, shall be
governed by and construed in accordance with the Laws of the State of North Carolina, as applied to
agreements executed and performed entirely in the State of North Carolina, without regard to its
conflicts of law rules.

     8.10 Attorneys’ Fees. In any action, proceedings or litigation by Lender to collect
amounts due and payable to Lender under the Loan Documents, Lender shall be entitled to recover
from Borrower all fees, costs and expenses of collection, including without limitation, such
reasonable fees and expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expense of appeals.

     8.11
Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns, provided that Borrower
may not assign or transfer any or all of its rights or delegate any or all of its obligations under
the Loan Documents, including by operation of law, without the prior written consent of the Lender,
and any attempted assignment or transfer by Borrower without consent shall be null and void.
Nothing in this Section 8.11 shall preclude the transfer of Borrower’s rights and obligations under
the Loan Documents in conjunction with a merger in which Borrower is not the surviving entity.

     8.12 Disclaimer. Neither Lender nor Borrower, nor any of such party’s Affiliates,
directors, officers, employees, subcontractors or agents shall have, under any legal theory
(including, but not limited to, contract, negligence and tort liability), any liability to any
other

16

 

party hereto for any loss of opportunity or goodwill, or any type of special, incidental, indirect
or consequential damage or loss, in connection with or arising out of this Agreement.

     8.13 Jurisdiction. Any action or proceeding seeking to enforce any provision of, or
based upon any right arising out of, this Agreement may be brought against either party in the
courts of the State of North Carolina, or, if it has or can acquire jurisdiction, in the United
States District Court for the Eastern District of North Carolina, and each of the parties consents
to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or
proceeding.

[signature page follows]

17

 

[Signature Page to Loan Agreement]

     IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above written.

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	SIRION THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Barry Butler	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Barry Butler	 	 
	 	 	Title:  President/Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	PHARMABIO DEVELOPMENT INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Tom Perkins 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Tom Perkins	 	 
	 	 	Title:  Senior Vice President	 	 

18

 

EXHIBIT A

DEFINITIONS

     “Affiliate” shall mean any individual or entity directly or indirectly controlling, controlled
by or under common control with, the specified individual or entity. For purposes of this
Agreement, a person shall be deemed to control another person if such person possesses, directly or
indirectly, the power to direct or cause the direction of the management, business and affairs of
such other person, whether through the ownership of voting securities, by contract, or otherwise.

     “Business Day” shall mean any day, other than a Saturday, Sunday or legal holiday,
during which banks in North Carolina are open for the conduct of their banking business.

     “Common Stock” shall mean Borrower’s common stock, $0.001 par value per share.

     “Debt” shall mean (i) indebtedness for borrowed money, (ii) obligations evidenced by notes,
bonds, debentures, or other similar instruments, (iii) obligations to pay the deferred purchase
price of property or services, (iv) obligations as lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases, and (v) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv) above; provided,
however, Debt shall not include any Debt of Borrower under this Agreement.

     “FDA” shall mean the United States Food and Drug Administration.

     “Fully-Diluted Common Stock” on any date shall mean the sum of (i) the Company’s outstanding
Common Stock shares, (ii) if applicable, shares of Common Stock issued or issuable upon conversion
of any preferred stock of the Company, upon conversion of any convertible debt of the Company
(other than under the Loan Documents) or upon exercise of any outstanding rights, options and
warrants to acquire Common Stock, and (iii) if any, Common Stock shares available for grant under
any existing stock option plan or other equity compensation plan or that will be available for
grant under any such plans that are taken into account for purposes of establishing the pre-money
valuation of Borrower in a Qualified Financing.

     “GAAP” shall mean generally accepted accounting principles, applied on a consistent basis.

     “Governmental or Regulatory Authority” shall mean any foreign, federal, state, or local court,
or governmental or regulatory agency or authority.

     “Intellectual
Property” shall mean all: trade, business, product and domain names; trademarks;
service marks; copyrights; patents; inventions; discoveries; trade secrets; business and technical
information; proprietary compilations of data or information; know-how; formulas

 

 

and techniques; methods; regulatory filings and approvals; computer software; all intellectual
property rights, registrations, licenses and applications pertaining to any of the foregoing; and
all related documentation and goodwill.

     “Investors’ Rights Agreement” shall mean the Investors’ Rights Agreement among the Parties and
certain founding shareholders of Borrower, dated as of the date hereof, being entered into
contemporaneously herewith.

     “Law” shall mean any federal, state, provincial, local or foreign law, statute, rule,
regulation, order, writ, injunction, judgment or decree of any Governmental or Regulatory
Authority.

     “Lien” shall mean any lien, security interest, mortgage, pledge, encumbrance, charge or claim.

     “Loan Documents” shall mean this Agreement, the Note, the Security Agreement, and any other
documents required or necessary to consummate the transactions contemplated by this Agreement.

     “Material Adverse Effect” shall mean a material adverse effect on the condition (financial or
otherwise), properties, business, prospects or results of operations of Borrower, or a material
adverse effect on the manufacture, marketing, distribution or sale of any Product in the United
States or other jurisdiction with respect to which Borrower has acquired rights pursuant to any
Licensing Transaction.

     “New Securities” shall mean a new class of Borrower’s preferred stock having any preference,
priority as to dividends, assets or other rights superior to any preference, priority as to
dividends, assets or other rights of Borrower’s existing capital stock.

     “Obligations” shall mean Borrower’s liabilities and obligations under the Loan
Documents.

     “Product” shall mean any ophthalmic product acquired in connection with a Licensing
Transaction.

     “Qualified Financing” shall mean Borrower’s sale to venture capital, private equity,
institutional or similar investors (other than Lender or Lender’s Affiliates), one or more of which
did not previously hold shares of capital stock of Borrower, of New Securities, in a single
transaction, or in a series of related transactions, in which (i) the consideration paid to
Borrower by such venture capital, private equity, institutional or similar investors (other than
Lender or Lender’s Affiliates) in such transaction(s) is at least Fifteen Million Dollars
($15,000,000), and (ii) the pre-money valuation of Borrower is at least Fifteen Million Dollars
($15,000,000).

     “Transactions” shall mean, collectively, the transactions contemplated by the Transaction
Documents.

2

 

     “Transaction Documents” shall mean, collectively, the Loan Documents and the Investors’ Rights
Agreement.

     Additional defined terms are set forth in the location indicated below:

	 	 	 
	Defined Term	 	Location
	“AAA”
	 	§ 8.15(b)
	“Advances”
	 	§ 2.1(a)
	“Agreement”
	 	Preamble
	“Applicable Percentage”
	 	§ 2.6(b)(i)
	“Base Rate”
	 	§ 2.5(b)
	“Borrower”
	 	Preamble
	“Commitment”
	 	§ 2.1 (a)
	“Dispute”
	 	§ 8.14
	“Event of Default”
	 	§ 7.1
	“Junior Debt”
	 	§ 5.7
	“Junior Liens”
	 	§ 5.8
	“Lender”
	 	Preamble
	“Licensing Transaction”
	 	§ 2.1(a)(ii)
	“Maturity Date”
	 	§ 2.1(a)
	“Milestone One”
	 	§ 2.1(a)(ii)
	“Milestone Two”
	 	§ 2.1(a)(iii)
	“Note”
	 	§ 2.4
	“Notice of Advance”
	 	§ 2.3(a)
	“Post-Conversion Fully-Diluted Common
Stock”
	 	§ 2.6(b)(i)
	“Remaining Milestone One Amount”
	 	§ 2.3(d)(i)
	“Remaining Milestone Two Amount”
	 	§ 2.3(d)(ii)
	“Security Agreement”
	 	§ 2.4

3

 

EXHIBIT B

FORM OF NOTE

 

 

EXECUTION VERSION

PROMISSORY NOTE

			
	 	 	 
	$5,000,000
	 	February 14, 2006

     FOR VALUE RECEIVED, SIRION THERAPEUTICS, INC., a North Carolina corporation (“Borrower”),
hereby promises to pay to the order of PHARMABIO DEVELOPMENT INC., a North Carolina corporation
(“Lender”), in lawful money of the United States of America in immediately available funds, the
lesser of (i) the principal sum of Five Million ($5,000,000) and (ii) the aggregate unpaid
principal amount of all Advances (as defined in the Loan Agreement referred to below) made by
Lender to Borrower pursuant to the Loan Agreement (as defined below), together with interest
accrued thereon. The interest shall accrue on the unpaid principal amount of each Advance at the
rates and in the manner provided in the Loan Agreement. Payment of the principal amount of this
Note and accrued interest on this Note shall be made at the times and in the manner provided in the
Loan Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed to
them in the Loan Agreement.

     Each Advance made by Lender to Borrower, and all payments made on account of the principal
amount hereof, shall be recorded and endorsed by Lender on the grid attached hereto which is a part
of this Note. Failure to so record and endorse such Advances and payments, however, shall not
affect Borrower’s obligations in respect of such Advances.

     This Promissory Note is the Note referenced in the Loan Agreement between Borrower and Lender
dated as of the date of this Note (as same may be amended from time to time, the “Loan Agreement”),
and is entitled to the benefits of the Loan Agreement. The Loan Agreement, among other things, (i)
provides for the making of certain Advances by Lender to Borrower from time to time, the principal
amount of each such Advance being a principal amount evidenced by this Note, and (ii) provides that
this Note is secured by, and Borrower has granted a security interest in, certain of its assets as
set forth in that certain Security Agreement between Borrower and Lender dated as of the same date
as this Note.

     In case an Event of Default (as defined in the Loan Agreement) shall occur and be continuing,
the unpaid principal amount of, and accrued interest on, this Note may be declared to be due and
payable in the manner and with the effect provided in the Loan Agreement.

     Borrower hereby waives presentment, demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance and enforcement of this Note.

     This Note shall be governed by and construed in accordance with the Laws of the State of North
Carolina without regard to the conflicts of law rules of such state.

     Lender and Borrower agree that disputes relating to this Note shall be subject to the
provisions of the Loan Agreement entitled “Internal Review” and “Arbitration” set forth in Sections
8.14 and 8.15 thereof, respectively.

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	SIRION THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

ADVANCES AND PAYMENTS OF PRINCIPAL

	 	 	 	 	 	 	 	 	 
	 	 	Amount	 	Amount of Principal	 	Unpaid	 	Notation
	Date	 	of Advance	 	Paid or Prepaid	 	Principal Balance	 	Made By

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]