Document:

EX-10.3 Amended & Restated Venture Loan Agreement

 

EXHIBIT 10.3

AMENDED AND RESTATED VENTURE LOAN AND SECURITY AGREEMENT

	 	 	 
	 

	 	Executed as of March ___, 2007
	 
	 

	 	Effective as of September 14, 2005

by and among

HORIZON TECHNOLOGY FUNDING COMPANY LLC,

a Delaware limited liability company

76 Batterson Park Road

Farmington, CT 06032

as Lender

and

ACUITY PHARMACEUTICALS, LLC f/k/a e-Acquisition Company II-B, LLC,

a Delaware limited liability company, successor by merger to Acuity Pharmaceuticals, Inc.

3701 Market Street

Philadelphia, PA 19104

And

EXEGENICS, INC.,

a Delaware corporation

1250 Pittsford-Victor Road

Pittsford, NY 14534

collectively, as Borrower

COMMITMENT AMOUNT: $4,000,000

Commitment Termination Date:      September 15, 2005

 

 

     WHEREAS, the Lender and Acuity Corp originally entered into a certain Venture Loan and
Security Agreement dated as of September 14, 2005 (the “Original Loan Agreement”), pursuant to
which the Lender made a loan to Acuity Corp (the “Original Loan”) in the original principal amount
of Four Million Dollars ($4,000,000) as evidenced by a certain Secured Promissory Note dared
September 14, 2005 executed by Acuity Corp in favor of Lender (the “Original Note”);

     WHEREAS, in connection with the making of the Loan, Acuity Corp granted each of Horizon
Technology Funding Company II LLC and Horizon Technology Funding Company III LLC a warrant to
purchase certain preferred stock of Acuity Corp (collectively, the “Original Warrants”), which
Original Warrants, by virtue of the Merger (as hereafter defined), will constitute warrants of
eXegenics;

     WHEREAS, pursuant to a certain Merger Agreement and Plan of Reorganization dated on or about
the Execution Date hereof (the “Merger Agreement”) by and among Acuity Corp, Froptix Corporation,
eXegenics, e-Acquisition Company I-A, LLC, and e-Acquisition Company II-B, LLC, Acuity Corp shall
be merged with and into e-Acquisition Company II-B, LLC, with e-Acquisition Company II-B, LLC
surviving the merger and changing its name to Acuity Pharmaceuticals, LLC (“Acuity”) and pursuant
to which the capital stock of Acuity Corp shall be converted into the right to receive capital
stock of eXegenics (the “Merger”);

     WHEREAS, pursuant to the Merger Agreement and by operation of law, all of the debts,
liabilities, obligations, restrictions and duties of Acuity Corp shall become the debts,
liabilities, obligations, restrictions and duties of Acuity;

     WHEREAS, Acuity has requested that the Lender consent to the Merger;

     WHEREAS, Lender is willing to consent to the Merger, as evidenced by it execution of this
Agreement, provided that (a) Acuity Corp, Acuity and eXegenics execute this Agreement pursuant to
which, among other things, Acuity and eXegenics will assume the Obligations and grant a security
interest in all of their personal property (as set forth herein) to secure the Obligations, and (b)
Acuity and eXegenics execute a secured promissory note which will amend and restate the Original
Note;

NOW THEFORE, the Lender, Acuity and eXegenics 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:

     “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.

1

 

     “Account Collateral” means accounts receivable due or to become due under all purchase
orders and contracts for the sale of products or the performance of services or both (and related
general intangibles in the nature of rights to payment) and the proceeds thereof.

     “Acuity” means Acuity Pharmaceuticals, LLC f/k/a e-Acquisition Company II-B, LLC, a
Delaware limited liability company which is a wholly owned subsidiary of eXegenics, successor by
merger to Acuity Corp.

     “Acuity Corp” means Acuity Pharmaceuticals, Inc, a Delaware corporation.

     “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, collectively, Acuity and eXegenics.

     “Borrower’s Home State” means Pennsylvania.

     “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

     “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 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(b) of this
Agreement.

     “Commitment Termination Date” has the meaning set forth on the cover page of this
Agreement.

2

 

     “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.

     “Effective Date” means September 14, 2005.

     “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.

     “Execution Date” means the date on which this Agreement is executed, as set forth on
the cover page of this Agreement.

     “eXegenics” means eXegenics, Inc., a Delaware corporation.

     “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 the 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

3

 

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.

     “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, 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.

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

     “Intellectual Property” means all of Borrower’s right, title and interest in and to
patents, patent rights (and applications and registrations therefor), trademarks and service marks
(and applications and registrations therefor), inventions, 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,
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.

     “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 set forth on the cover page of 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

4

 

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.

     “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, 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, with respect to the Loan, the per annum rate of interest (based on
a year of twelve 30-day months) equal to the greater of (a) 11.50% or (b) 11.50% plus the
difference between (i) the one month LIBOR Rate, as reported in the Wall Street Journal, on
the date which is five (5) days before the Funding Date for the Loan (or, if such date is not a
Business Day, the next earlier Business Day) and (ii) 3.00%. Notwithstanding the foregoing, the
Loan Rate shall not exceed the highest rate permitted by applicable law

     “Maturity Date” means July 1, 2008, 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 amended and restated 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
reasonable 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, or by any other agreement between Lender and Borrower, and whether or not for the
payment of money), 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.

     “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;

5

 

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

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

                    (d) Indebtedness of Borrower in an aggregate original principal amount not to exceed Two
Hundred Fifty Thousand Dollars ($250,000) which is secured by Liens permitted under clause (e) of
the definition of Permitted Liens;

                    (e) Other Indebtedness in an aggregate original principal amount not to exceed Five Hundred
Thousand Dollars ($500,000);

                    (f) The Junior Obligations (as defined in the Subordination Agreement); and

                    (g) Extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness above, provided that the principal amount thereof is not increased or the
terms thereof are not modified to impose more burdensome terms upon Borrower.

     “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 that Borrower has adequately bonded
such Lien or reserves sufficient to discharge such Lien have been provided on the books of
Borrower);

                    (c) Liens identified on the Disclosure Schedule;

                    (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 that Borrower has adequately bonded such Lien or reserves sufficient to
discharge such Lien have been provided on the books of Borrower);

                    (e) Liens upon any equipment or other personal property acquired by Borrower after the
Effective Date 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 such Liens

6

 

are confined solely to the equipment or other personal property so acquired and the proceeds
thereof and the amount secured does not exceed the acquisition price thereof;

                    (f) licenses of Intellectual Property entered into in the ordinary course of business (whether
as licensor or licensee);

                    (g) bankers’ liens, rights of setoff and similar Liens incurred on deposits made in the
ordinary course of business and Liens in favor of financial institutions arising in connection with
Borrower’s deposit accounts or securities accounts held at such institutions to secure customary
fees and charges;

                    (h) any judgment, attachment or similar Lien not resulting in an Event of Default hereunder;

                    (i) Liens securing the Junior Obligations (as defined in the Subordination Agreement); and

                    (j) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described above but any extension, renewal or replacement Lien must be limited to the
property encumbered by the existing Lien and the principal amount of the indebtedness may not
increase.

     “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.

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

     “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.

     “Subordination Agreement” means the Amended and Restated Subordination Agreement,
dated on or about the Execution Date, among Borrower, Lender and The Frost Group, LLC.

     “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 directly or indirectly
through Subsidiaries.

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

7

 

          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. Loan; 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 on or before Commitment Termination Date, the Loan in the
amount of Commitment Amount.

                    (b) The Loan and the Note. The obligation of Borrower to repay the unpaid principal
amount of and interest on the Loan shall be evidenced by the Note issued to Lender.

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

                    (d) Termination of Commitment to Lend. Notwithstanding anything in the Loan
Documents, Lender’s obligation to lend the undisbursed portion of the Commitment Amount to Borrower
hereunder shall terminate on the earlier of (i) at 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 the Commitment Amount to
Borrower shall terminate if, in Lender’s sole judgment, 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.

8

 

          2.2 Payments.

                    (a) Scheduled Payments. Borrower shall make payments of accrued interest only on the
outstanding principal amount of the Loan through and including July 1, 2007 and commencing August
1, 2007, twelve (12) 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. 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 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, provided that such fee shall not be due if
(i) such late payment is the first such late payment made by Borrower and (ii) such payment is paid
within ten (10) days of when such payment is 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 any 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 all Events of Default are cured, at a
per annum rate equal to the Default Rate.

9

 

          2.3 Prepayments.

                    (a) Mandatory Prepayment Upon 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 three (3) Business Days’ prior written notice to Lender, Borrower may, at its option,
prepay all, and not less than all, of the Loan in full 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 twenty-four (24) months from the Effective Date three
(3%) percent of the then outstanding principal balance of the Loan, or (B) if the Loan is prepaid
more than twenty-four (24) months after the Effective Date, one and one-half (1.5%) 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 10:00 a.m.
Connecticut time, on the date on which such payment is due. Borrower shall make such payments to
Lender via wire transfer as follows:

	 	 	 	 	 
	Payment via wire transfer:
	 	 	 	 
	Credit:

	 	Horizon Technology Funding Company LLC	 	 
	Bank Name: 

Bank Address:

	 	ABN Amro/LaSalle Bank NA CDO Trust Services
 

135 South LaSalle Street, Suite 1625
	 	 
	 

	 	Chicago, Illinois 60603	 	 
	 

	 	Attn: Greg Meyers, 312-904-0283	 	 
	Account No.:

FFCT-Reference Account Number

	 	2090067 – Trust GL
 

721771.1
	 	 
	ABA Routing No.:

	 	071000505	 	 
	Reference:

	 	Acuity 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.

10

 

          2.5 Procedure for Making Loan.

                    (a) Notice. Whenever Borrower desires that Lender make the Loan, Borrower shall
notify Lender of the date on which Borrower desires Lender to make the Loan. Borrower’s notice
shall be made at least five (5) Business Days in advance of the desired Funding Date, unless Lender
elects at its sole discretion to allow the Funding Date to be within five (5) Business Days of the
notice. Borrower’s execution and delivery to Lender of the 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 Sections 3.1
and 3.2.

                    (b) Loan Rate Calculation. Prior to each Funding Date, Lender shall establish the
Loan Rate with respect to the Loan, which shall be set forth in the Note to be executed by Borrower
and shall be conclusive in the absence of a manifest error.

                    (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 Lender a good faith deposit in the
amount of Twenty Thousand Dollars ($20,000) (the “Good Faith Deposit”). The Good Faith
Deposit will be utilized to pay the Commitment Fee.

                    (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; provided, however, that Borrower shall not be liable for any such expenses
which in the aggregate exceed Ten Thousand Dollars ($10,000).

                    (c) Commitment Fee. On the Effective Date, Borrower paid Lender a commitment fee in
the amount of Twenty-Five Thousand Dollars ($25,000) (the “Commitment Fee”). The
Commitment Fee shall be retained by Lender and be deemed fully earned upon receipt. No further
amounts shall be due hereunder as a commitment or similar fee.

          2.7 Joint Liability. Each of Acuity and eXegenics covenants and agrees with Lender as
follows:

                    (a) The Obligations include all present and future indebtedness, duties, obligations, and
liabilities, whether now existing or contemplated or hereafter arising, of each of Acuity and
eXegenics, other than Permitted Indebtedness.

                    (b) Reference in this Agreement and the other Loan Documents to the “Borrower” shall mean each
or any one of Acuity and eXegenics, jointly and severally, unless the context requires otherwise.

                    (c) Acuity and eXegenics in the discretion of their respective management are to agree among
themselves as to the allocation of the benefits of the proceeds of the Loan,

11

 

provided, however, that each shall be deemed to have represented and warranted to Lender at
the time of allocation that each use of proceeds is permitted under this Agreement.

                    (d) For administrative convenience, Acuity hereby irrevocably appoints eXegenics as its
attorney-in-fact, with power of substitution (with the prior written consent of Lender in the
exercise of its sole and absolute discretion), in its respective name or in the name of eXegenics
or otherwise to take any and all actions with respect to this Agreement, the other Loan Documents,
the Obligations and/or the Collateral (including, without limitation, the proceeds thereof) as
eXegenics may so elect from time to time, including, without limitation, actions to enter into,
execute, deliver, amend, modify, restate, substitute, extend and/or renew this Agreement, any other
Loan Documents, security agreements, mortgages, deposit account agreements, instruments,
certificates, waivers, letter of credit applications, releases, documents and agreements from time
to time. The foregoing appointment is coupled with an interest, cannot be revoked without the
prior written consent of Lender, and may be exercised from time to time through eXegenics’
Responsible Officer, or other Person or Persons designated by eXegenics to act from time to time on
behalf of eXegenics.

                    (e) Lender assumes no responsibility or liability for any errors, mistakes, and/or
discrepancies in the oral, telephonic, written or other transmissions of any instructions, orders,
requests and confirmations between Lender and any one or more of Acuity and eXegenics in connection
with the Loan or any other transaction in connection with the provisions of this Agreement.

          2.8 Inter-Company Debt, Contribution. Without implying any limitation on the joint
and several nature of the Obligations, Lender agrees that, notwithstanding any other provision of
this Agreement, Acuity and eXegenics may create reasonable inter-company indebtedness between or
among them with respect to the allocation of the benefits and proceeds of any Loan under this
Agreement. Acuity and eXegenics agree among them, and Lender consents to that agreement, that
each of them shall have rights of contribution from all of the other to the extent either of them
incurs Obligations in excess of the proceeds of the Loan received by, or allocated to purposes for
the direct benefit of, such company. All such indebtedness and rights shall be, and are hereby
agreed by Acuity and eXegenics to be, subordinate in priority and payment to the indefeasible
repayment in full in cash of the Obligations, and, during the existence of an Event of Default
unless Lender agrees in writing otherwise, shall not be exercised or repaid in whole or in part
until all of the Obligations have been indefeasibly paid in full in cash. Each of Acuity and
eXegenics agrees that all of such inter-company indebtedness and rights of contribution are part
of the Collateral and secure the Obligations.

          2.9 Borrower is an Integrated Group. Each of Acuity and eXegenics hereby represents
and warrants to Lender that it will derive benefits, directly and indirectly, from the Loan, both
in its separate capacity and as a member of the integrated group to which it belongs and because
the successful operation of the integrated group is dependent upon the continued successful
performance of the functions of the integrated group as a whole, (i) the terms of the Loan
provided under this Agreement are more favorable than would otherwise be obtainable by them
individually, and (ii) the additional administrative and other costs and reduced

12

 

flexibility associated with individual loan arrangements which would otherwise be required if
obtainable would substantially reduce the value to them of the Loan.

          2.10 Primary Obligations. The obligations and liabilities of each of Acuity and
eXegenics under this Agreement shall be primary, direct and immediate, shall not be subject to any
counterclaim, recoupment, set off, reduction or defense based upon any claim that Acuity and
eXegenics may have against the other Borrower, Lender and/or any guarantor and shall not be
conditional or contingent upon pursuit or enforcement by Lender of any remedies it may have against
Acuity and eXegenics with respect to this Agreement, or any of the other Loan Documents, whether
pursuant to the terms hereof or thereof or by operation of law. Without limiting the generality of
the foregoing, Lender shall not be required to make any demand upon either Acuity or eXegenics, or
to sell the Collateral or otherwise pursue, enforce or exhaust its remedies against either Acuity
or eXegenics or the Collateral either, before, concurrently with or after pursuing or enforcing its
rights and remedies hereunder. Any one or more successive or concurrent actions or proceedings may
be brought against either Acuity and eXegenics under this Section 2.10, either in the same action,
if any, brought against any one or more of Acuity and eXegenics or in separate actions or
proceedings, as often as Lender may deem expedient or advisable. Without limiting the foregoing,
it is specifically understood that any modification, limitation or discharge of any of the
liabilities or obligations of either Acuity or eXegenics, any other guarantor or any obligor under
any of the Loan Documents, arising out of, or by virtue of, any bankruptcy, arrangement,
reorganization or similar proceeding for relief of debtors under federal or state law initiated by
or against Acuity and eXegenics, in their respective capacities as a Borrower, or under any of the
Loan Documents shall not modify, limit, lessen, reduce, impair, discharge, or otherwise affect the
liability of each Borrower under this Agreement in any manner whatsoever, and this Section 2.10
shall remain and continue in full force and effect. It is the intent and purpose of this Section
2.10 that each of Acuity and eXegenics shall and does hereby waive all rights and benefits which
might accrue to any guarantor by reason of any such proceeding, Acuity and eXegenics each agree
that they shall be liable for the full amount of the obligations and liabilities under this Section
2.10 regardless of, and irrespective of, any modification, limitation or discharge of the liability
of any one or more of either Acuity or eXegenics, any guarantor or any obligor under any of the
Loan Documents, that may result from any such proceedings.

     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:

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

                    (b) Note. Borrower shall have duly executed and delivered to Lender the Note in the
amount of the Loan, which shall cause the Original Note to be cancelled and Lender shall deliver
the Original Note to Lender marked cancelled.

13

 

                    (c) UCC Financing Statements. Lender shall have received such documents, instruments
and agreements, including UCC financing statements or amendments to UCC 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 UCC financing statements it deems necessary
to perfect its security interest in the Collateral.

                    (d) Secretary’s Certificate. A certificate of the secretary or assistant secretary of
each 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 the Note.

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

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

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

          3.2 Post-Closing Conditions. Within thirty (30) days of the Execution Date, the
Borrower shall deliver the following to the Lender:

                    (a) Account Control Agreements. Account Control Agreements for all of Borrower’s
deposit accounts and accounts holding securities duly executed by all of the parties thereto, in
the forms provided by Lender.

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

                    (c) Other Documents. Such other documents and completion of such other matters, as
Lender may 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.

14

 

     4. Creation of Security Interest.

          4.1 Grant of Security Interest. Borrower grants to Lender a valid and 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 and in order to secure
prompt, full and complete performance by Borrower of each of its covenants and duties under each of
the Loan Documents. 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 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

15

 

securities account or otherwise, wherever located, now owned or hereafter acquired and
Borrower’s books relating to the foregoing, excluding, in each case, any debt or equity securities
of eXegenics in any Subsidiary or other Investment, including, without limitation, Froptix, LLC;
and

                    (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 receivables,
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”). Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy
Court) holds that a security interest in the underlying Intellectual Property is necessary to have
a security interest in the Rights to Payment, then the Collateral shall automatically, and
effective as of the date hereof, include the Intellectual Property to the extent necessary to
permit perfection of Lender’s security interest in 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 immediately notify Lender in writing signed by
Borrower of the brief details thereof and 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.

          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 any Loan, whereupon such security interest shall terminate. Lender
shall, at Borrower’s sole cost and expense, 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 and at any additional bona fide places of business established by Borrower from
time to time. 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 and is continuing, 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

16

 

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 use its commercially
reasonable efforts to (i) protect, defend and maintain the validity and enforceability of its
material Intellectual Property and promptly advise Lender in writing of material infringements
which become known to Borrower, and (ii) not allow any Intellectual Property material to Borrower’s
business to be abandoned, forfeited or dedicated to the public except in the ordinary course of
Borrower’s business.

          4.8 Lien Subordination. Lender agrees that the Liens granted to it hereunder in
equipment and other personal property acquired by Borrower after the date hereof (“Third Party
Equipment”) which secure Indebtedness constituting Permitted Indebtedness under subclause (d) of
the definition of Permitted Indebtedness shall be subordinate to the Liens of existing or future
lenders providing equipment financing and equipment lessors for Third Party Equipment or if such
lenders prohibit the granting of Liens to other lenders, Lender shall release its Lien on such
Third Party Equipment and the proceeds thereof; provided that such Liens are confined solely to the
equipment so financed and the proceeds thereof and are Permitted Liens. Upon the expiration of the
Liens of such other lenders or the termination of their prohibition of Liens in favor of other
Lenders, the Third Party Equipment shall automatically become part of the Collateral, and Lender is
authorized at that time to amend any filed financing statement(s) to reflect that change.
Notwithstanding the foregoing, the Obligations hereunder shall not be subordinate in right of
payment to any obligations to other lenders, 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 and is continuing,
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 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. Acuity is a limited liability company and
eXegenics is a corporation, in each case, duly organized and validly existing and in good standing
under the laws of its state of incorporation or organization and qualified and licensed to do
business in, and is in good standing in, any state 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,

17

 

except for such states as to which any failure to so qualify would not 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. 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 the Collateral,
free and clear of Liens except for Permitted Liens. Borrower has good title and ownership of, or is
licensed under, all of Borrower’s current Intellectual Property. Borrower has not received any
communications alleging that Borrower 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. Except for Cytoclonal Pharmaceutics Inc., Borrower has not done business under any
name other than that specified on the signature page hereof. Borrower’s jurisdiction of

18

 

incorporation, chief executive office, principal place of business, and the place where
Borrower maintains its records concerning the Collateral are presently located in the state and at
the address set forth on the cover page of this Agreement. The Collateral is presently located at
the address 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 could have a material
adverse effect on Borrower or the aggregate value of the Collateral. Borrower does not have
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 or may hereafter be 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
could reasonably be expected to have a material adverse effect on the financial condition, business
or operations of Borrower since December 31, 2006.

          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, or which could
in the future be reasonably expected to materially adversely affect, 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, (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 and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or a transaction, for
which such Person’s property would constitute an unreasonably small capital.

          5.12 Subsidiaries. Acuity has no Subsidiaries.

          5.13 Catastrophic Events; Labor Disputes. None of Borrower or 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 could reasonably be 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

19

 

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 could reasonably be 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 knowledge of Borrower, no officer, employee or consultant of
Borrower is, or is now expected to be, in violation of any term of any employment contract,
proprietary information agreement, nondisclosure agreement, noncompetition agreement or any other
material contract or agreement or any restrictive covenant relating to the right of any such
officer, employee or consultant to be employed by Borrower because of the nature of the business
conducted or to be conducted by Borrower or relating to the use of trade secrets or proprietary
information of others, and to Borrower’s knowledge, the continued employment of Borrower’s
officers, employees and consultants does not subject Borrower to any material liability for any
claim or claims arising out of or in connection with any such contract, agreement, or covenant.

                    (b) No Present Intention to Terminate. To the knowledge of Borrower, no officer of
Borrower, and no employee or consultant of Borrower whose termination, either individually or in
the aggregate, could reasonably be 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 Patient Enrollment. Acuity has enrolled not less than ten (10) human patients in
a Phase II clinical trial of its “Cand5” drug for the treatment of age related macular
degeneration, which trial has been approved by the FDA to be conducted in the United States.

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

          6.3 Financial Statements, Reports, Certificates. Acuity 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 Acuity’s
operations during such period, certified by Acuity’s president, treasurer or chief financial
officer

20

 

(each, a “Responsible Officer”); (b) as soon as available, but in any event within one
hundred twenty (120) days after the end of Acuity’s fiscal year, audited financial statements of
Acuity 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 Acuity’s fiscal year or the date of Acuity’s board of directors’ adoption, Acuity’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. eXegenics, promptly as they are available and in
any event: (x) at the time of filing of eXegenics’ Form 10-K with the Securities and Exchange
Commission after the end of each fiscal year of eXegenics, the financial statements of eXegenics
filed with such Form 10-K; and (y) at the time of filing of eXegenics’ Form 10-Q with the
Securities and Exchange Commission after the end of each of the first three fiscal quarters of
eXegenics, the financial statements of eXegenics filed with such Form 10-Q. In addition, Borrower
shall deliver to Lender (i) promptly upon becoming available, copies of all statements, reports and
notices sent or made available generally by Borrower to its security holders; (ii) immediately 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
Borrower is commenced that is reasonably expected to result in damages or costs to Borrower of One
Hundred Fifty Thousand Dollars ($150,000) 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 discovery 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, and will, upon request, furnish Lender with proof 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).

21

 

          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 and repair and shall make all necessary replacements thereof
and renewals thereto so that the value and operating efficiency thereof shall at all times be
maintained and preserved. 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. Borrower shall not permit any such material item of Collateral to be operated
or maintained in violation of any applicable law, statute, rule or regulation. 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, and as Lender may reasonably request. 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. 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.

          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

22

 

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.

     7. Negative Covenants. Borrower, until the full and complete payment of the
Obligations, covenants and agrees that Borrower shall not, except in accordance with the terms of
the Merger Agreement:

          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 facility 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 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; or (ii) Transfers of worn-out or
obsolete equipment.

          7.5 Distributions. (i) Pay any dividends or make any distributions on its Equity
Securities; (ii) purchase, redeem, retire, defease or otherwise acquire for value any of 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, Equity Securities, obligations or
securities 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 and provided that Borrower may pay stock dividends required by the terms of any existing
class of preferred stock of Borrower so long as no Event of Default has occurred and remains
uncured.

          7.6 Intentionally Omitted.

          7.7 Change in Ownership. (a) Engage in or permit any of its Subsidiaries to engage in
any business other than (i) the businesses currently engaged in by Borrower or reasonably related
thereto (ii) or the business of any entity acquired by eXegenics, by purchase of stock or assets,
by merger or otherwise, after the date hereof or (b) have a material change in its ownership of
greater than forty-nine percent (49%) (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).

          7.8 Transactions With Affiliates. Enter into any contractual obligation with any
Affiliate or engage in any other transaction with any Affiliate except upon terms at least as
favorable to Borrower as an arms-length transaction with Persons who are not Affiliates of

23

 

Borrower; provided that Lender hereby consents to the incurrence of the Junior Obligations (as
defined in the Subordination Agreement).

          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, (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 Intentionally Omitted.

          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 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 it deems 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 (a) with respect to Intellectual Property
related to Borrower’s core ophthalmology technology, non-exclusive licenses entered into in the
ordinary course of business and (b) with respect to Intellectual Property outside of the field of
ophthalmology, licenses entered into in the ordinary course of business and/or consistent with
Borrower’s current business plan.

          7.15 No Restriction on Acquisitions. Notwithstanding anything contained herein to the
contrary, this Agreement shall not restrict or otherwise limit eXegenics from making acquisitions
of or Investments in any Person, by stock or asset purchase, merger, combination or otherwise, and
Lender’s consent shall not be required for eXegenics to engage in such a transaction.

24

 

     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 within three (3)
days of the relevant Payment Date or the Maturity Date, or (ii) any other portion of the
Obligations within ten (10) days after receipt of written notice from Lender that such payment is
due.

          8.2 Certain Covenant Defaults. If Borrower fails to perform any obligation under
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 neglects 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 is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of
any trustee, receiver or Person acting in a similar capacity and such attachment, seizure, writ or
distress warrant or levy has not been removed, discharged or rescinded within ten (10) 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 ten (10) 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 Lender seeking to attach by a
trustee or other process any funds of the 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 the 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 (other than Lender) seeking to foreclose or attach any
such accounts or securities.

          8.7 Default on Indebtedness. One or more defaults shall exist under any agreement
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 One Hundred Fifty

25

 

Thousand Dollars ($150,000) 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 One Hundred Fifty Thousand Dollars ($150,000) shall
be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10)
days or more.

          8.9 Misrepresentations. If any material representation in any warranty,
representation, statement, certification, or report made to Lender by Borrower or any officer,
employee, agent, or director of Borrower shall prove to have been false or misleading in any
material respect when made or furnished.

          8.10 Intentionally Omitted.

          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, 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 and during the
continuance thereof, 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:

26

 

                    (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 as
Lender may 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;

                    (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;

                    (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 are 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. 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.

27

 

          9.3 Effect of Sale. Upon the occurrence of an Event of Default and during the
continuance thereof, 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 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 and during the
continuance thereof, 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

28

 

or a third party as the Code permits; and (j) to otherwise act with respect thereto as though
Lender were the outright owner of the Collateral.

          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.

          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 Scheduled Payments, 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.

29

 

          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 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 Lender, and each of 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

30

 

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 Lender as a direct and sole result of Lender’s gross negligence or willful misconduct.
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, each of its partners, and each
of their 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 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 prepaid facsimile to Borrower or to Lender, as the case may be, at their
respective addresses set forth below:

	 	 	 	 	 
	 

	 	If to Borrower:
	 	eXegenics, Inc.
	 

	 	 	 	3701 Market Street
	 

	 	 	 	Philadelphia, PA 19104
	 

	 	 	 	Attention:
	 

	 	 	 	Fax: (215) 966-6186
	 

	 	 	 	Ph: (215) 966-6180
	 
	 	 	 	 
	 

	 	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

31

 

     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 the Loan, provided that such participant or assignee
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 each of 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 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 and all discharges or waivers of, or

32

 

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 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 on 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.

          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

33

 

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.

     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. EACH OF BORROWER AND LENDER HEREBY SUBMITS 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.

     16. No Defaults. By virtue of its execution and delivery of this Amended and Restated
Loan Agreement, Lender hereby acknowledges as of the Execution Date that it has no knowledge of any
Default or Event of Default by Borrower under the Original Loan Agreement or Original Note.

[Remainder of page intentionally left blank.]

34

 

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

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 	 	ACUITY PHARMACEUTICALS, LLC	 	 
	 	 	f/k/a e-ACQUISITION COMPANY II-B,	 	 
	 	 	LLC, a Delaware limited liability company	 	 
	 	 	successor by merger to ACUITY	 	 
	 	 	PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EXEGENICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

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

member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Gerald A. Michaud

Title: Managing Member	 	 

35

 

LIST OF EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A

	 	Disclosure Schedule
	Exhibit B

	 	Intentionally Omitted
	Exhibit C

	 	Form of Note
	Exhibit D

	 	Intentionally Omitted
	Exhibit E

	 	Form of Officer’s Certificate

 

 

EXHIBIT A

DISCLOSURE SCHEDULE

Acuity hereby certifies 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 Acuity as it appears in its Articles of Formation, as amended
to date is: Acuity Pharmaceuticals, LLC.

                    (b) Acuity’s state of organization is: Delaware.

                    (c) Acuity’s taxpayer identification number is 33-1054746.

                    (d) The following is a list of all corporate names, dba or trade names used by Acuity in the
past five years: Acuity Pharmaceuticals, Inc. and e-Acquisition Company II-B, LLC

                    (e) The following is a list of all Subsidiaries of Acuity: None.

                    (f) The address of Acuity’s headquarters and chief executive office is: 3701 Market
Street, Philadelphia, PA 19104. The following is a list of all States where Acuity’s
headquarters and chief executive office has been located in the past five years:
Pennsylvania.

                    (g) The following is a list of all States where Acuity’s property and assets have been located
in the past five years: Pennsylvania.

                    (h) The following is a list of all of Acuity’s deposit accounts (bank name, address and
account names and numbers): M & T Bank, 601 Dresher Road, Horsham, PA 19044, Account Name:
Acuity Pharmaceuticals, Inc., Checking Account Number 8892617781.

                    (i) The following is a list of all of Acuity’s accounts holding securities (broker/bank name,
address and account names and numbers): MTB Investment Group, 255 East Avenue, Rochester, NY
14604, Account Name: Acuity Pharmaceuticals, Inc., Account Number 2001552.

 

 

eXegenics hereby certifies the following information to Lender:

Information For UCC Financing Statements and Searches and Deposit Accounts and Accounts Holding
Securities.

                    (a) The exact corporate name of eXegenics as it appears in its Certificate of Incorporation,
as amended to date is: eXegenics, Inc.

                    (b) eXegenics’ state of incorporation is: Delaware.

                    (c) eXegenics’ taxpayer identification number is 75-2402409

                    (d) The following is a list of all corporate names, dba or trade names used by eXegenics in
the past five years:

                    (e) The following is a list of all Subsidiaries of eXegenics: Acuity and Froptix.

                    (f) The address of eXegenics’ headquarters and chief executive office is: 1250
Pittsford-Victor Road, Pittsford, NY 14534.

                    (g) The following is a list of all States where Borrower’s headquarters and chief executive
office has been located in the past five years: New York.

                    (h) The following is a list of all States where eXegenics’ property and assets have been
located in the past five years: New York.

                    (i) The following is a list of all of Borrower’s deposit accounts (bank name, address and
account names and numbers):

                    (j) The following is a list of all of Borrower’s accounts holding securities (broker/bank
name, address and account names and numbers):

 

 

EXHIBIT B

(INTENTIONALLY OMITTED)

 

 

EXHIBIT C

AMENDED AND RESTATED SECURED PROMISSORY NOTE

	 	 	 
	$4,000,000.00

	 	Dated as of: September ___, 2005
	 

	 	Executed as of: March ___, 2007

     FOR VALUE RECEIVED, the undersigned, ACUITY PHARMACEUTICALS, LLC, a Delaware limited liability
company and EXEGENICS, INC., a Delaware corporation (collectively, “Borrower”), HEREBY,
JOINTLY AND SEVERALLY PROMISE TO PAY to the order of HORIZON TECHNOLOGY FUNDING COMPANY LLC, a
Delaware limited liability company (“Lender”) the principal amount of Four Million Dollars
($4,000,000.00) or such lesser amount as shall equal the outstanding principal balance of 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 from the date of this Note shall accrue at the
Loan Rate or, if applicable, the Default Rate. The Loan Rate for this Note is 12.23% 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. Borrower shall make payments of accrued
interest only on the outstanding principal amount of the Loan on the first day of each month
(“Payment Date”), commencing November 1, 2005, through and including July 1, 2007.
Commencing on August 1, 2007, and continuing on consecutive Payment Dates thereafter, Borrower
shall make to Lender twelve (12) level payments of principal plus accrued interest on the then
outstanding principal amount due hereunder of Three Hundred Fifty-Five Thousand Seven Hundred
Twenty-Five and 68/100 Dollars ($355,825.68). If not sooner paid, all outstanding amounts hereunder
and under the Loan Agreement shall become due and payable on July 1, 2008.

     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, a certain Amended and
Restated Venture Loan and Security Agreement dated as of the date hereof by and among 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 hereof
upon the happening of certain stated events.

     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.

 

 

     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.

     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.

     This Note amends and restates in its entirety a certain Secured Promissory Note dated
September 14, 2005 (the “Original Note”) executed by Acuity Pharmaceuticals, LLC, successor by
merger to Acuity Pharmaceuticals, Inc., in favor of the Lender. Nothing contained herein shall be
deemed a repayment or novation of the Original Note.

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

	 	 	 	 	 	 	 
	 	 	BORROWER:

ACUITY PHARMACEUTICALS, LLC, successor by merger
to Acuity Pharmaceuticals, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EXEGENICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

 

 

EXHIBIT D

(INTENTIONALLY OMITTED)

 

 

EXHIBIT E

FORM OF OFFICER’S CERTIFICATE

     TO: HORIZON TECHNOLOGY FUNDING COMPANY LLC

     Reference is made to the Amended and Restated Venture Loan and Security Agreement dated as of
March ___, 2007 and effective as of September 14, 2005 (as it may be amended from time to time, the
“Loan Agreement”) by and among ACUITY PHARMACEUTICALS, LLC, successor by merger to ACUITY
PHARMACEUTICALS, INC., and EXEGENICS, INC. (collectively, “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:

ACUITY PHARMACEUTICALS, LLC, successor by merger to
	 

	 	Acuity Pharmaceuticals, Inc.

 

 

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	EXEGENICS INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:EX-10.8 Technology License Agreement

 

EXHIBIT 10.8

TECHNOLOGY LICENSE AGREEMENT

          License Agreement (“Agreement”), effective as of August 3, 2006 between THE BOARD OF TRUSTEES
OF THE UNIVERSITY OF ILLINOIS, (the “University”), and ACUITY PHARMACEUTICALS, INC., a Delaware
corporation, having its principle place of business at 3701 Market Street, Philadelphia, PA, 19104
(“Licensee” or “Acuity”).

Preliminary Statement

          University holds certain rights to the Technology described below and desires to have the
Technology commercialized. Licensee wishes to obtain the right to use the Technology for
commercial purposes. Therefore, in consideration of the mutual obligations set forth below and
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
University and Licensee agree as follows.

ARTICLE I

DEFINITIONS

          The following capitalized terms are used in this Agreement with the following meanings:

	1.1.	 	“Effective Date” means August 3, 2006.
	 
	1.2.	 	“FDA” means the United States Food and Drug Administration, or any successor thereto.

	1.3.	 	“IND” means an “investigational new drug application” as defined by the United States Food,
Drug, and Cosmetic Act, as amended (the “Act”), and applicable FDA rules and regulations or a
foreign equivalent.

	1.4.	 	“Inventions” means all devices, machines, methods, processes, manufactures, compositions of
matter and uses, and Technical Information, contained in the disclosure entitled “CW081
Silencing of TGF ß Receptor Expression by SiRNA.”
	 
	1.5.	 	“Licensed Field” means the inhibition of and treatment of ophthalmic disease.

	1.6.	 	“Licensed Patents” means (a) the patents and patent applications listed on Schedule
1 and any continuations, divisionals, reissues, renewals, re-examinations, foreign
counterparts, or substitutions of or to the above.

	1.7.	 	“Licensed Product” means any product or process or license for information, in the Field of
Use, that is distributed by Licensee that is covered by any of the University’s rights in the
Technology.

	1.8.	 	“NDA” means a “new drug application,” as defined in the Act and applicable FDA rules and
regulations, including an application of the type described in section 505(b)(2) of the Act.

1

 

	1.9.	 	“Net Sales” means the total gross proceeds to Licensee on sales and any other distributions
of Licensed Products to third parties, less deductions for the following to the extent
actually paid with respect to such sales or distributions:

	 	(a)	 	Customary rebates;
	 
	 	(b)	 	Commissions allowed to distributors or direct sales force;
	 
	 	(c)	 	Amounts repaid or credited to customers on account of rejections or returns of
specified products for which a royalty was paid under this Agreement; and
	 
	 	(d)	 	Freight and other transportation costs, including insurance charges, and
duties, tariffs, sales and excise taxes and other governmental charges based directly
on sales, turnover or delivery of the specified products;

	1.10.	 	“Net Sublicense Payments” means (a) cash payments made to Licensee in consideration of the
sublicense; and (b) the fair market value of any non-cash consideration received by Licensee
from a Sublicense in consideration of a Sublicense; provided, however that the following shall
not be included in the calculation of Net Sublicense Payments (i) reasonable amounts received
in exchange for equity investments in Licensee where no Sublicense is granted in consideration
for such amounts received in exchange for equity investments; (ii) sponsored research funding
paid to Licensee by a sublicensee in a bona fide transaction for future research to be
performed by Licensee, where no Sublicense is granted in consideration for such amounts
received in exchange for future research to be performed by Licensee; (iii) payments for
consulting services actually performed by Licensee in a bona fide transaction at arms length
rates where the consulting services do not utilize the Technology; and (iv) intellectual
property rights received by Licensee from a Sublicensee, including, but not limited to,
licenses or sublicenses to intellectual property rights, covenants not to compete against
Licensee, or agreements not to assert claims against Licensee where no sublicense to
Technology is granted in exchange for such rights.
	 
	1.11.	 	“Royalty” or “Royalties” means all amounts payable under Section 3 of this Agreement.

	1.12.	 	“Sublicense” means any grant by Licensee of any rights to a Sublicensee in accordance with
Article II of this Agreement.

	1.13.	 	“Sublicensee” means any person or entity to which a Sublicense is granted in accordance with
Article II of this Agreement.

	1.14.	 	“Technical Information” means the non-patented technical information and know-how belonging
to University that is (a) relating to the Inventions or Licensed Patents or Licensed Products,
(b) communicated, transferred or otherwise conveyed to Licensee by any of the University or
any employee or agent of the University, and (c) which, at the time it is communicated to
Licensee, is not in the public domain in the same form as communicated to Licensee.

	1.15.	 	Technology” means the Inventions, Licensed Patents and Technical Information, collectively.

2

 

	1.16.	 	“Territory” means all countries where patent rights are enforceable with respect to patents,
and worldwide for Technical Information.

ARTICLE II

GRANT OF LICENSE

	2.1.	 	Grant. Subject to Licensee’s compliance with the terms and conditions of this Agreement,
University hereby grants to Licensee the exclusive right and license, including the right to
sublicense, to use the Technology, and to the extent not prohibited by law, to make, have
made, use, import, sell or otherwise commercialize Licensed Products within the Licensed Field
and within the Territory, which shall be worldwide for pending patent applications and
Technical Information, and which shall be any country in which claims of a Licensed Patent are
issued and enforceable.
	 
	2.2.	 	Reservations.

	 	(a)	 	University reserves for itself all rights not granted herein and the
irrevocable right to identify, make, have made, use and have used only for any research
or educational purpose, the Technology within the Licensed Field and within the
Territory.

	 	(b)	 	Inventions may have been conceived with the use of United States government
funds under a grant from an agency or department of the United States Government.
Therefore, there is reserved from the rights granted hereunder the rights, if any, of
the United States government to practice the Inventions for its own purposes in such
manner to which it is entitled. University further reserves for itself the right to
grant to the United States Government a royalty-free license or licenses, with the
right to sublicense, to the Technology to the extent that such grant of license(s) is
or may be required by funding agreements between the University and the United States
Government relating to the Technology.

	 	(c)	 	Rights to any Technology not expressly granted to Licensee hereunder or
reserved to third parties are hereby expressly reserved to the University, and such
Technology are licensed under this Agreement only to the extent owned by, or assigned
to, the University. No title in or to the Technology is transferred to Licensee
pursuant to this Agreement. The University does not and shall not have any obligation
to pay Licensee a royalty or any other fee for any of the rights reserved to the
University in this Section 2.2.

	2.3.	 	Sublicenses. In the event that Licensee sublicenses any of its rights to any Sublicensee,
such Sublicense shall contain license, audit and confidentiality terms no less restrictive
than those set forth herein and no terms shall create a conflict with this Agreement, and if
requested, Licensee shall provide a complete copy of all Sublicenses entered into by Licensee
within five (5) business days of University’s request. Licensee further agrees to provide
University with a copy of each report received by Licensee from a Sublicensee pertinent to any
royalties or other sums owing to Licensee. University shall be a third party beneficiary in
all Sublicenses, and shall be named as such in writing in all Sublicenses.

	2.4.	 	No Obligation to Update Technology. Except as expressly stated in this Agreement, none of
University or any faculty, staff, employee or student of the University shall have any

3

 

	 	 	obligation to provide Licensee or any Sublicensee with any updates of or additional
Technical Information owned, controlled or in the possession of any of them.

ARTICLE III

PAYMENTS

	3.1.	 	Royalties and Reimbursements. For the licenses granted in Section 2.1 of this Agreement,
Licensee shall:

	 	(a)	 	within three (3) business days of the execution of this Agreement, pay
University a non-refundable licensing fee in the amount of $25,000;
	 
	 	(b)	 	within thirty (30) days of the first and second anniversary of the Effective
Date, pay University a non-refundable licensing fee in the amount of $25,000;
	 
	 	(c)	 	within thirty (30) days of the third anniversary of the Effective Date, pay
University a non-refundable licensing fee in the amount of $50,000;
	 
	 	(d)	 	within thirty (30) days of the fourth anniversary of the Effective Date, pay
University a non-refundable licensing fee in the amount of $50,000;
	 
	 	(e)	 	within thirty (30) days of the fifth anniversary of the Effective Date and each
subsequent anniversary thereafter until the Licensee receives NDA approval on its first
Licensed Product, pay University an annual non-refundable licensing fee in the amount
of $100,000;
	 
	 	(f)	 	pay University a Royalty equal to three percent (3%) of Net Sales of Licensed
Products sold, leased, rented, licensed or otherwise distributed by Licensee during the
term of this Agreement, if any. If no valid claim of any issued patent among the
Licensed Patents covers the Licensed Products in a country of the Territory, then the
royalties shall be reduced to one and one-half percent (1.5%) of Net Sales of Licensed
Products sold, leased, rented, licensed or otherwise distributed by Licensee in such
country of the Territory.

	3.2.	 	Milestones and Milestone Payments. Licensee agrees to make the milestone payments to
University as set forth below (the “Milestone Payments”) within forty-five (45) days after the
occurrence of each event set forth on such Schedule.

	 	 	 	 	 
	Milestone	 	Payment
	First Phase I Clinical Trial initiated
	 	$	100,000	 
	First Phase III Clinical Trial initiated
	 	$	350,000	 
	First NDA Approval in the U.S
	 	$	500,000	 
	First NDA Equivalent Approval outside of US
	 	$	500,000	 
	Upon first $25,000,000 of commercial sales of any Licensed
Products
	 	$	1,000,000	 

Each of the foregoing payments shall be made only once. Thereafter, no additional Milestone
Payments shall be due or payable by Licensee for License Products.

	3.3.	 	Calculations and Payment of Royalties.

4

 

	 	(a)	 	Royalties shall be paid in quarterly increments (the “Royalty Period”).
Royalties shall be calculated for each Royalty Period as of the last day of each such
Royalty Period. Payment of Royalties with respect to each Royalty Period shall be due
within sixty (60) days after the end of Royalty Period, beginning with the earlier of
(i) the Royalty Period in which the first sale of a Licensed Product occurs, or (ii)
the Royalty Period for which Annual Minimum Royalties are due.

	 	(b)	 	Within sixty (60) days of the end of each Royalty Period (whether or not
Royalties are due), Licensee shall deliver to University a true and complete accounting
of sales or distributions of any Licensed Product and revenues from those sales by
Licensee and its Sublicensees for each country of sales origin during such Royalty
Period and deductions taken, with a separate accounting for each Licensed Product of
sales and receipts by country, and a detailed calculation of the Royalty payment due
University for such Royalty Period, in each case in form and substance as set forth on
Exhibit A attached to this Agreement. If no sales of Licensed Products were
made or other payments due in such Royalty Period, then Licensee’s statement shall so
state.

	 	(c)	 	Each Annual Minimum Royalty payment shall be accompanied by a calculation of
the Annual Minimum Royalty such that University can verify the amount of the payment.

	3.4.	 	Royalty stacking and combination products: The royalty rate will not diminish for combination
products or stacking royalties.

	3.5.	 	Annual Minimum Payments. Beginning one year after the Licensee or any Sublicensee receives
NDA approval on its first Licensed Product, it the total payments actually paid to University
payments (including any payments required pursuant to this Article III) for any annual period
are less than $400,000, Licensee shall pay University an amount (the “Annual Minimum Royalty”)
for that annual period equal to the difference between the payments actually paid for such
annual period and the Annual Minimum Royalty owing for that annual period. Such payment shall
be made within forty five days of the end of each year of this Agreement beginning one year
after the Licensee receives NDA approval on its first Licensed Product. If this Agreement is
terminated by Licensee for any reason during any year, a pro-rata Annual Minimum Royalty shall
be paid.

	3.6.	 	Sublicense Fees. During the Term, Licensee will pay to University a sublicense fee equal to
twelve (12%) of the Net Sublicense Payments received by Licensee from Sublicensees who sell
Licensed Products pursuant to a Sublicense.

	3.7.	 	Records. Licensee shall keep, and shall cause Sublicensees to keep, accurate records in
sufficient and customary detail such that the amounts payable may be verified. During the
term of this Agreement and for a period of seven (7) years following termination, upon the
written request of University, but not more than once in any calendar year, Licensee shall
provide a copy of its books and records regarding the sale of Licensed Products, to a
representative of University that is trained in auditing to audit such books and records. If
Licensee disputes the findings of such representative and the parties are unable to resolve
the matter in 30 days, then, at Licensee’s expense, University shall select an auditor from an
independent certified public accounting firm from Ernst and Young, KPMG, PWC or

5

 

	 	 	Deloitte & Touche to perform an audit, and the results shall be binding upon the University
provided Licensee provides the auditors all reasonably requested information. Such records
shall include but not be limited to invoice registers and original invoices; product sales
analysis reports; price lists, accounting general ledgers; sublicense and distributor
agreements; price lists, product catalogues and marketing materials; financial statements
and income tax returns; sales tax returns; inventory and production records and shipping
documents. No separate confidentiality agreement will be required to conduct such an
examination or audit, and the results of the audit shall be treated as Confidential
Information unless and until a related legal action is taken. Additionally, it is
understood that the University or its representative will be allowed to keep a copy of all
documents provided by the Licensee hereunder and all documents created by the University or
its representative in connection with such examination or audit for archival purposes.

	3.8.	 	Payments. All amounts owing to University under this Agreement shall be paid in U.S.
dollars, by check or other instrument representing immediately available funds payable to “The
University of Illinois,” or in a wire transfer sent to an account listed below or such other
account as may be designated by University from time to time.

JPMorgan Chase Bank, NA

New York NY

ABA/Routing No. 021000021

Account Title: University of Illinois Operations

Account Number: 11-12201

Reference: OTM/CW081/Acuity

Swift code: CHASUS33 if from foreign country

Please email cashmgmt@uillinois.edu with anticipated wire amount, where it is coming
from, etc.

If Licensee or any Sublicensee receives payment in a currency other than U.S. dollars, such
currency will be converted directly from the currency in the country of sales origin to U.S.
dollars on the date initial payment was made, without intermediate conversions, and payments
will be made based on such conversion. The conversion rate shall be the applicable rate of
exchange of Citibank, N.A., in New York, New York, on the last day of each month during
which revenues are received by Licensee during the Royalty Period.

	3.9.	 	Overdue Payments. Overdue Payments shall bear simple interest until paid at the lower of the
annual rate of 18% or the highest rate permitted by law. Interest accruing under this Section
shall be due University on demand

	3.10.	 	Termination Report and Payment. Within sixty (60) days after the date of termination of
this Agreement, Licensee shall make a final report and payment to University as set forth in
this Agreement for the then-current Royalty Period.

	3.11.	 	Commercialization; Progress Report.

	 	(a)	 	Licensee shall use its commercially reasonable efforts to bring Licensed
Products to market within the Licensed Field in the United States and other large
markets in the Territory, and to develop such markets through a thorough and vigorous
program for

6

 

	 	 	 	the commercial exploitation of the Licensed Products and Technology. In the event
that (i) neither Licensee nor any of its Sublicensees files an IND, or its
equivalent, with the FDA, or a similar agency in another jurisdiction, for a Licensed
Product before or on the 4th anniversary of the Effective Date; or (ii) neither
Licensee nor any of its Sublicensees files an NDA, or its equivalent, with the FDA,
or a similar agency for the a Licensed Product within ten (10) years after filing the
related IND, University shall have the right to terminate the Agreement upon 90 days
notice to Licensee and Licensee’s failure cure within such 90 day period.

	 	(b)	 	Licensee shall further provide to the University:

	 	(i)	 	a copy of all business plans distributed to prospective investors
and all financial information distributed to any shareholder regardless of class
of shares;
	 
	 	(ii)	 	promptly as made available by Licensee to any third party, any
updates of the above; and
	 
	 	(iii)	 	on or before the anniversary date of each year during the term
of this Agreement, a written report summarizing performance against the goals
set forth in the Milestones.

	3.12.	 	Patent Costs.

	 	(a)	 	Licensee agrees to pay $3,746.90 to University to reimburse University for
unreimbursed patent costs incurred for the Technology for all filings in New Zealand,
Australia, Mexico, Israel and Singapore, and any other countries that are requested by
Licensee, within five (5) days of the Effective Date, and to reimburse all patent costs
therefore for such countries on an ongoing basis (“Patent Costs”). In addition, for
US, Canada, EPO, India and China, Licensee will reimburse University for all patent
costs specifically related to the Licensed Field which result from requests or
suggestions made by Acuity.

	3.13.	 	No Refunds or Credits. Other than for overpayment of royalties as determined pursuant to
Section 3.7 hereof, all amounts paid to the University pursuant to this Agreement shall be
non-refundable.

ARTICLE IV

WARRANTIES; INDEMNIFICATION

	4.1.	 	Limited Representation. University represents that it has the right, power and authority to
enter into and perform its obligations under this Agreement.

	4.2.	 	Disclaimer of Warranties. THE TECHNOLOGY IS LICENSED “AS IS” AND WITHOUT WARRANTIES OF ANY
KIND. EXCEPT AS SET FORTH IN SECTION 4.1 ABOVE, UNIVERSITY DISCLAIMS ALL WARRANTIES, EXPRESS
OR IMPLIED, RELATING IN ANY WAY TO THE RIGHTS LICENSED HEREUNDER, THE TECHNOLOGY OR THE
LICENSED PRODUCTS, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR

7

 

PURPOSE AND THE STATUTORY WARRANTY OF INFRINGEMENT. LICENSEE AND ITS SUBLICENSEES ASSUME
THE ENTIRE RISK AND RESPONSIBILITY FOR THE SAFETY, EFFICACY, PERFORMANCE, DESIGN,
MARKETABILITY, TITLE AND QUALITY OF ALL TECHNOLOGY AND LICENSED PRODUCTS. Nothing
contained in this Agreement shall be construed as either a warranty or representation by
University as to the validity or scope of any Licensed Patents.

	4.3.	 	Limitation of Liability. University assumes no liability in respect of any infringement of
any patent or other right of third parties due to the activities of Licensee or any
Sublicensee under this Agreement. In no event shall University, including its trustees,
directors, officers, faculty, staff, students, employees, consultants and agents
(collectively, the “Agents”), be responsible or liable for any direct, indirect, special,
punitive, incidental or consequential damages or lost profits to Licensee, Sublicensees or any
other individual or entity regardless of legal theory. The above limitations on liability
apply even though University, or any of its Agents, may have been advised of the possibility
of such damage. Licensee shall not, and shall require that its Sublicensees do not, make any
statements, representations or warranties or accept any liabilities or responsibilities
whatsoever with regard to the University or its Agents that are inconsistent with any
disclaimer or limitation included in this Article 4.

	4.4.	 	Indemnification. None of the University or its Agents (each an “Indemnified Person”) shall
have any liability to Licensee, any Sublicensee or any other person or entity for or on
account of (and Licensee agrees and covenants, and agrees to cause each of its Sublicensees to
agree and covenant not to sue any Indemnified Person in connection with) any injury, loss, or
damage of any kind incurred by Licensee or Sublicensees or any other person or entity, whether
direct, indirect, special, punitive, incidental, consequential or otherwise arising under any
legal theory (and further excluding without limitation any existing or anticipated profits or
opportunities for profits lost by Licensee or any Sublicensee), arising out of or in
connection with or resulting from (i) this Agreement, the Technology and Licensed Products and
any activities undertaken hereunder; (ii) the production, use or sale of the Licensed Products
by Licensee or its Sublicensees, or (iii) any advertising or other promotional activities with
respect to either of the foregoing. Licensee shall indemnify and hold each Indemnified Person
harmless against all claims, demands, losses, damages or penalties (including but not limited
to reasonable attorney’s fees and expenses at the pretrial, trial or appellate level) made
against any Indemnified Person with respect to items (i) through (iii) above, whether or not
such claims are groundless or without merit or basis.

	4.5.	 	Insurance. Licensee shall obtain and carry in full force and effect, and shall cause its
Sublicensees to obtain and carry in full force and effect, insurance with the coverages and
limits, the nature and extent of which shall be commensurate with customary practices among
similarly situated companies in Licensee’s industry; but in no event shall the general
liability insurance be less than (i) $1,000,000 per occurrence, with an aggregate minimum of
$2,000,000 for personal injury or death, and (ii) $1,000,000 per occurrence, with an aggregate
minimum of $2,000,000 for property damage. Prior to the sale of any Licensed Product to any
third party, Licensee shall secure product liability insurance in an amount consistent with
industry practice, but in any event not less than $1,000,000 per occurrence and $5,000,000 in
aggregate. Such insurance will be written by an insurance company authorized to do business in
the Commonwealth of Pennsylvania, will name the University

8

 

	 	 	as an additional named insured under such insurance policy or policies and shall require
thirty (30) days written notice to be given to University prior to any cancellation,
endorsement or other change. Within five days of execution of this Agreement, Licensee will
provide University, for itself and on behalf of any Sublicensee, with appropriate
certificates of insurance reflecting the obligations of Licensee pursuant to this
subsection.

	4.6.	 	Survival. Licensee’s obligations under this Article 4 shall survive the expiration or
earlier termination of all or any part of this Agreement.

ARTICLE V

PROSECUTION AND MAINTENANCE; CONFIDENTIALITY

	5.1.	 	Prosecution and Maintenance. University shall be responsible for prosecuting and maintaining
the Licensed Patents. As set forth in Section 3.12 above, Licensee shall pay promptly when
due all Patent Costs, and the University reserves the right to abandon any or all Licensed
Patents and to terminate this Agreement if such payments are not timely. So long as Licensee
is not in material breach of this Agreement, University shall instruct patent counsel to
provide Licensee with copies of all material communications transmitted to University or
submitted by University from or to the United States Patent and Trademark Office (and
corresponding foreign authorities) with respect to the Licensed Patents.
	 
	5.2.	 	Additional Applications.

	 	(a)	 	If Licensee wishes the University to file a patent application with respect to
any of the Technology in any jurisdiction in which an application has not already been
filed, Licensee shall identify the jurisdiction and the applicable Licensed Patent in
writing to University at least 60 days prior to any bar date, and University shall have
sixty (60) days after it receives such written notice in which to file such a patent
application at Licensee’s expense, which the University may require be prepaid.

	 	(b)	 	If University determines to abandon a patent application in any territory
previously filed with respect to any of the Inventions, it will give Licensee advance
notice of such determination as is reasonably practicable. Licensee may, by written
notice to University, elect at its sole cost and in the name of University, to prepare,
file, prosecute and maintain such patent applications and patents in countries of its
choice throughout the world. In such case, University shall assign (or grant Licensee
a perpetual royalty free license, if an assignment can not be made) to Licensee all of
its rights under such patent or patent application in any country in which University
wished to abandon its patent rights and Licensee chose to continue prosecution and/or
maintenance of such patent rights.

	5.3.	 	Interferences. University will give Licensee written notice promptly upon the declaration of
any interference involving any of the Licensed Patents. If Licensee then gives University
written notice within thirty (30) days that Licensee does not wish to pay for the costs of the
interference, then (a) University and Licensee will negotiate in good faith to establish a
mutually acceptable basis on which Licensee may continue its licenses under this Agreement
with respect to such Licensed Patents without such payments, or (b) Licensee may elect to
terminate this Agreement pursuant to Sections 7.2 below. Licensee shall not be

9

 

	 	 	obligated to pay or reimburse any costs
of the interference during the period of
negotiation. However, if University and
Licensee have not negotiated a mutually
acceptable amendment to this Agreement
within thirty (30) days after Licensee
notifies University of its intent not to
pay for the subject interference,
Licensee will thereafter be obligated to
pay or reimburse all costs previously and
thereafter incurred in connection with
the interference unless Licensee gives
notice of termination pursuant to Section
7.2 below. Licensee agrees that it will
not, and will not permit any Sublicensee
to, directly or indirectly initiate,
support, or without the express written
consent of the University participate in,
any interference involving any of the
Licensed Patents.

	5.4.	 	Confidentiality.

	 	(a)	 	Licensee shall treat as confidential all proprietary information with respect
to the Technology (including but not limited to protecting such proprietary information
from disclosure to third parties without authorization) and shall cause the same of all
Sublicenses. University shall treat as Confidential all financial information and
product plans of Licensee that are marked as confidential. Each party and its
Sublicensees shall take such reasonable actions as are necessary to safeguard the
confidentiality of any confidential information with respect to which the recipient has
an obligation to keep confidential pursuant to this Section 5.4. With respect to
disclosure to third parties, the receiving party shall first obtain from the third
party a written confidentiality agreement which protects the information disclosed at
least to the same extent as recipient uses to protect its own most valuable trade
secrets, and which contains a prohibition of disclosure to additional third parties.

	 	(b)	 	The provisions of Section 5.4(a) shall not apply to information which (i) was
previously known to the recipient at the time of disclosure, (ii) is in the public
domain at the time of disclosure, (iii) becomes a part of the public domain after the
time of disclosure, other than through disclosure by Licensee or Sublicensee or a third
party who is under an agreement of confidentiality with respect to the subject
information, (iv) is independently developed without utilization of the proprietary
information, or (v) is required to be disclosed by law or court order and is not
covered by a protective order. For information disclosed under this paragraph b(v),
such information will continue to be treated as set forth above but for disclosure
required by law or court order.

	 	(c)	 	This Section 5.4 shall survive the expiration or termination of this Agreement.

ARTICLE VI

INFRINGEMENT

	6.1.	 	Notification. If either party becomes aware of the infringement of any patent under the
Licensed Patents within the Licensed Field, it shall immediately notify the other in writing
of all details available. University and Licensee shall then use good faith efforts to
determine within sixty (60) days of the notice referred to above, whether and in what manner
to proceed against such infringer, and a mutually acceptable allocation of any costs and
recoveries resulting from such action. If the parties are unable to so agree, the

10

 

	 	 	University shall have the first right to determine how to proceed against such infringer in
accordance with this Article 6.

	6.2.	 	University Right to Prosecute. Subject to Section 6.1 above, if a third party infringes or
allegedly infringes any Licensed Patents within the Licensed Field which University wishes to
prosecute, University may, at University’s discretion, proceed against the infringer in the
name of University and/or Licensee, and will notify Licensee of its determination in this
regard within forty-five (45) days of the end of the negotiation period set forth in Section
6.1 above. Licensee will cooperate in all reasonable respects with University and execute any
documents and instruments necessary or appropriate for University to exercise its rights under
this Section 6.2. Any actions by University pursuant to this clause shall be at University’s
own expense and Licensee shall inform University of all material developments in such
proceedings, and shall provide University with all correspondence and pleadings related to any
such action. Recoveries collected by University shall be paid (i) first, to University in the
amount of all reasonable out-of-pocket costs and expenses incurred by University in such
action, (ii) then to Licensee to reimburse Licensee for its documented and reasonable
out-of-pocket costs and expenses incurred in cooperating with University in such action as
requested by University, and (iii) the remainder, if any, shall be paid in proportion to each
party’s legal expenses incurred in such enforcement action.

	6.3.	 	Licensee Right to Prosecute. Subject to Sections 6.1 and 6.2 above, if a third party
infringes or allegedly infringes any patent under the Licensed Patents within the Licensed
Field, if Licensee has standing, Licensee may prosecute, or if no standing. Licensee may
request the University to prosecute, the infringer by appropriate legal proceedings, provided
that Licensee shall employ counsel reasonably satisfactory to University, shall inform
University of all material developments in such proceedings, and shall provide University with
all correspondence and pleadings related to any such action. Licensee shall be responsible
for all costs and expenses of any enforcement activities, including legal proceedings, against
infringers that Licensee initiates. University agrees to cooperate in all reasonable respects
with any enforcement proceedings at the request of Licensee, and at Licensee’s expense.
University may be represented by University’s counsel in any such legal proceedings, at
University’s own expense (subject to reimbursement under this Section 6.3), acting in an
advisory but not controlling capacity. The prosecution, settlement, or abandonment of any
proceeding under this Section shall be at Licensee’s reasonable discretion, provided that
Licensee shall not have any right to surrender any of University’s rights to the Technology or
to grant any infringer any rights to the Technology other than a Sublicense subject to the
conditions which would apply to the grant of any other Sublicense. Recoveries collected by
Licensee shall be paid first, to Licensee in the amount of all documented and reasonable
out-of-pocket costs and expenses incurred by Licensee in such action, (ii) then to University
to reimburse University for its documented and reasonable out-of-pocket costs and expenses
incurred in cooperating with Licensee in such action as requested by Licensee, and (iii) the
remainder, if any, shall be paid in proportion to each party’s legal expenses incurred in such
enforcement action. Holders of exclusive licenses shall have the right to grant nonexclusive
Sublicenses consistent with the rights granted herein in settlement of such enforcement action
provided such Sublicenses do not conflict with any license granted by University to a third
party.

11

 

ARTICLE VII

TERMINATION

	7.1.	 	University Right to Terminate. University shall have the right (without prejudice to any of
its other rights conferred on it by this Agreement or otherwise) to terminate this Agreement
if Licensee:

	 	(a)	 	is in default in payment of any amount or other consideration or reimbursement
required under this Agreement, or the making of any reports required to be made by
Licensee pursuant to this Agreement, and Licensee fails to remedy any such default
within forty-five (45) days after written notice thereof by University;
	 
	 	(b)	 	materially breaches any part of Section 2 or Section 5.4 and Licensee fails to
remedy any such breach within twenty (20) days after written notice thereof by
University;
	 
	 	(c)	 	is in breach of or defaults with respect to any provision of this Agreement
other than (a) above (including but not limited to milestones) and Licensee fails to
remedy any such breach or default within seventy-five (75) days after written notice
thereof by University;
	 
	 	(d)	 	files any action to challenge any of University’s rights in the Technology, and
such termination shall be immediate upon the filing of such action;
	 
	 	(e)	 	intentionally makes any materially false report and such termination shall be
immediate upon notice;
	 
	 	(f)	 	commences a voluntary case as a debtor under the Bankruptcy Code of the United
States or any successor statute (the “Bankruptcy Code”), or if an involuntary case is
commenced against Licensee under the Bankruptcy Code and the petition in such case is
not dismissed within sixty (60) days of the commencement of the case, or if an order
for relief shall be entered in such case, or if the same or any similar circumstance
shall occur under the laws of any foreign jurisdiction; or
	 
	 	(g)	 	fails to achieve a milestones set forth in Section 3.11(a) within ninety (90)
days after written notice thereof by University.
	 
	 	(h)	 	fails to receive revenues for the sale or license or other distribution of
Licensed Products in each country in the Territory during any twelve (12) month period
after first commercial sale of a Licensed Product in such country. Such termination
under this Section 7.1(h) shall be on a country-by-country basis; provided, however,
that the University shall not have the right to terminate this Agreement under this
Section 7.1(h) if after the twelve-month period set forth above, Acuity shall be using
its commercially reasonable efforts to bring new Licensed Products to market within the
Licensed Field in the United States and other large markets in the Territory pursuant
to an IND that has been filed prior to the end of the twelve-month period referenced
above.

At the election of University exercised in its sole discretion by written notice to Licensee, and
in lieu of terminating this Agreement, University may either (i) declare the license rights granted
under

12

 

this Agreement to Licensee to be non-exclusive, and grant to such third parties any and all
additional non-exclusive rights to the Technology as the University shall determine in its sole
discretion, or (ii) otherwise continue the rights of Licensee under this Agreement on such other
terms and conditions as University shall determine in its sole discretion.

	7.2.	 	Licensee Right to Terminate. Licensee may terminate this Agreement at any time by written
notice to University at least ninety (90) days prior to the termination date specified in the
notice.

	7.3.	 	Termination of Patent Rights Only. This Agreement shall terminate with respect to Licensed
Patents automatically on a country-by-country basis upon the expiration or invalidity of the
last-to-expire of all patent rights in the Licensed Patents in each such country. The
remainder of the rights granted hereunder shall terminate in twenty (20) years.
	 
	7.4.	 	Effect of Termination.

	 	(a)	 	If this Agreement terminates for any reason, on the effective date of
termination Licensee shall immediately cease and to the extent required hereunder its
Sublicensees, to immediately cease using the Technology and, making, having made and
selling the Licensed Products, and shall return to University, or deliver or destroy as
University directs, all copies of the Technology then in its possession.

	 	(b)	 	Notwithstanding the termination or expiration of this Agreement for any reason,
the following provisions shall survive:

	 	(i)	 	Licensee’s obligation to pay fees and royalties and costs
hereunder that are accrued and remaining unpaid or unperformed under the terms
of this Agreement prior to such termination (including without limitation the
delivery and continuing benefits, if any, of any Equity Rights);
	 
	 	(ii)	 	Sections 3.7, 8.2 – 8.5 and 8.9 – 8.14;
	 
	 	(iii)	 	any cause of action or claim of Licensee or University, accrued
or to accrue, because of any breach or default of this Agreement by the other
party.

ARTICLE VIII

MISCELLANEOUS

	8.1.	 	Assignment. Except in the event of a consolidation, reorganization, merger or sale of
substantially all stock or assets (meaning at least 80% by value) to an assignee, this
Agreement shall not be assigned by Licensee without the prior written consent of University
granted or withheld in the discretion of the University. Prior to any such assignment
becoming effective with a third party that is not publicly traded (i) Licensee must deliver
written notice of the transaction and a copy of the applicable purchase agreement not less
than three (3) days before the effective date; and (ii) the successor entity or Licensee
delivers to University a written assignment and assumption by such successor entity of all of
the terms and conditions of this Agreement, such agreement to be in form and substance
satisfactory to the University.

13

 

	8.2.	 	Entire Agreement, Amendment and Waiver. This Agreement (including any attached schedules)
contains the entire understanding of the parties with respect to the subject matter of this
Agreement and supersedes any and all prior written or oral discussions, arrangements, courses
of conduct or agreements. This Agreement may be amended only by an instrument in writing duly
executed by the parties. The waiver of an obligation hereunder shall not constitute a waiver
of any other obligation, and shall not constitute a permanent waiver of that obligation.

	8.3.	 	Notices. All notices required or desired to be given under this Agreement, and all payments
to be made to University under this Agreement, shall be delivered to the parties at the
addresses set forth below. Notices may be given (i) by hand or (ii) by a nationally
recognized overnight delivery service. The date of delivery shall be the date as verified by
signed receipt.

	 	 	 
	If to University

Office of Technology Management

Attention: Director

w/ copy to University Counsel

University of Illinois at Chicago

1737 W. Polk St., Suite 312

Chicago, IL 60612

Fax: 312 996-1995

	 	If to Licensee

Acuity Pharmaceuticals, Inc.

3701 Market Street,

Philadelphia, PA, 19104

Fax: 215-966-6186

	8.4.	 	Severability. If any one or more of the provisions of this Agreement should for any reason
be held by any court of competent jurisdiction to be invalid, illegal or unenforceable, such
provision or provisions shall be reformed to approximate as nearly as possible the intent of
the parties, and the validity of the remaining provisions shall not be affected.

	8.5.	 	Governing Law; Jurisdiction. This Agreement is governed and interpreted under the laws of
Illinois applicable to contracts made and to be performed entirely within Illinois by Illinois
residents. All actions or proceedings related to this Agreement shall be litigated in courts
located within the city of Chicago, Illinois, USA.

	8.6.	 	Marking. Licensee shall place in a conspicuous location on any Licensed Product (or its
packaging where appropriate) made or sold under this Agreement a patent notice in accordance
with applicable laws.

	8.7.	 	United States Manufacture. To the extent required by United States statute, rule or
regulation or by the terms of any grant or other funding agreement applicable to the
University with respect to the Inventions, (a) Licensed Products for sale in the United
States of America will be manufactured or produced substantially in the United States of
America, and (b) it will not grant any exclusive sublicenses under this Agreement unless the
Sublicensee agrees that any Licensed Products for sale in the United States of America will be
manufactured or produced substantially in the United States of America.

	8.8.	 	Export Controls. To the extent that the United States Export Control Regulations are
applicable, Licensee shall not, without having first fully complied with such regulations, (i)
knowingly transfer, directly or indirectly, any unpublished technical data obtained or to be

14

 

	 	 	obtained from University, or (ii) knowingly ship, directly or indirectly, any product
produced using such unpublished technical data.

	8.9.	 	Implementation. Each party shall, at the request of the other party, execute any document
reasonably necessary to implement the provisions of this Agreement.

	8.10.	 	Counterparts. This Agreement may be executed in multiple counterparts, each of which when
taken together shall constitute one and the same instrument.

	8.11.	 	Remedies. Due to the proprietary nature of the subject matter of this Agreement, the
parties agree that their respective rights and obligations under this Agreement may be
enforced by injunction, specific performance, or other equitable relief, without prejudice to
any other rights and remedies the parties may have.

	8.12.	 	Relationship of Parties. The parties to this Agreement are independent contractors. There
is no relationship of principal to agent, master to servant, employer to employee, or
franchiser to franchisee between the parties. Neither party has the authority to bind the
other or incur any obligation on its behalf.

	8.13.	 	Headings. The headings of the sections, subsections, and paragraphs of this Agreement have
been added for convenience only and shall not be deemed to be a part of this Agreement, nor
shall they affect the interpretation or construction of this Agreement in any manner.

	8.14.	 	Agreement Conflicts. In the event of a conflict between this Agreement and any Schedule
attached hereto, the terms of the Schedule shall control.

	8.15.	 	Advertising. Licensee shall not use (and shall prohibit its Sublicensees from using) the
names of University or any of its Agents in any commercial activity, marketing, advertising or
sales brochures without the prior written consent of University, which may be granted or
withheld in University’s sole discretion. Notwithstanding the foregoing, Licensee may use the
name of University in a non-misleading fashion in (i) executive summaries, business plans,
offering memoranda and other similar documents used by Licensee for the purpose of raising
financing for the operations of Licensee as related to the Licensed Products; (ii) as required
in Sublicenses to vest University’s interests as a third party beneficiary, and (iii) as
required in any securities reports required to be filed with the Securities and Exchange
Commission.

	8.16.	 	Compliance with University Conflict Policies. Licensee acknowledges and agrees that it will
use reasonable efforts to avoid potential conflicts of interest between the University and
University employees who may also be employees, consultants, shareholders or directors of
Licensee. Licensee agrees to cooperate with University with respect to the University of
Illinois Policy on Conflicts of Commitment and Interest, which is available at
http://www.research.uiuc.edu/coi/index.asp, and to work constructively with University to
manage and mitigate any conflicts that may arise in the course of this and related agreements
between it and University.

15

 

          IN WITNESS WHEREOF, the parties hereto have caused this Exclusive License Agreement to be
executed by their respective duly authorized officers or representatives on the date indicated
below.

	 	 	 	 	 	 	 	 	 	 	 
	THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ILLINOIS	 	 	 	ACUITY PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen K. Rugg
 

Stephen K. Rugg

Comptroller
	 	 
	 	By:
	 	/s/ Dale R. Pfost
 

Dale R. Pfost

President and Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Michele M. Thompson 	 	 	 	 	 	 	 	 
	 

	 	 

Michele M. Thompson, Secretary
	 	 	 	 	 	 	 	 

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]