MERGER AGREEMENT AND PLAN OF REORGANIZATION

EXHIBIT 2.1

MERGER AGREEMENT AND PLAN OF REORGANIZATION

      THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION (this “ Agreement” ), dated as of March 27, 2007, is entered into by and among Acuity Pharmaceuticals, Inc., a Delaware corporation (“ Acuity” ), Froptix Corporation, a Florida corporation (“ Froptix” ), eXegenics Inc. a Delaware corporation (“ Parent” ), e-Acquisition Company I-A, LLC, a Delaware limited liability company, which is a wholly owned subsidiary of Parent (“ Merger Sub I” ) and e-Acquisition Company II-B, LLC, a Delaware limited liability company which is a wholly owned subsidiary of Parent (“ Merger Sub II” ).

      WHEREAS , the Boards of Directors and/or members, as applicable, of each of Parent, Merger Sub I, Merger Sub II, Acuity and Froptix have, pursuant to the Laws of their respective States of incorporation or organization, approved this Agreement and the consummation of the transactions contemplated hereby, including (i) the merger of Froptix with and into Merger Sub I (the “ Froptix Merger” ), and (ii) the merger of Acuity with and into Merger Sub II (the “ Acuity Merger” and, with the Froptix Merger, the “ Mergers” );

      WHEREAS, the Boards of Directors and/or members, as applicable, of each of Parent, Merger Sub I, Merger Sub II, Acuity and Froptix have declared that this Agreement is advisable, fair and in the best interests of their respective shareholders, as applicable, and approved the Mergers, respectively, upon the terms and conditions set forth in this Agreement; and

      WHEREAS , the parties to this Agreement intend that the Mergers will qualify as a reorganization pursuant to Internal Revenue Code of 1986, as amended (the “ Code” ) Section 368(a)(1)(A), and the parties have agreed not take actions that would cause the Mergers not to qualify as such a reorganization.

      NOW , THEREFORE , in consideration of the covenants, promises and representations set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly and mutually acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

     Unless the context otherwise requires, the terms defined in this Article I shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms herein defined.

      1.1 As used herein, the following terms shall have the following meanings:

      “Acuity Common Stock” means the Common Stock of Acuity, par value $0.01 per share.

      “Acuity Common Valuation” shall mean $5,475,111.

      “Acuity Employee Benefit Plans” means all Employee Benefit Plans with respect to which Acuity or any ERISA Affiliate of Acuity has any obligation or liability, contingent or otherwise.

      “Acuity Option Plans” means the Acuity Pharmaceuticals, Inc. 2003 Equity Incentive Plan, Amended and Restated as of November 8, 2004.

      “Acuity Preferred Stock” means the Acuity Series A Preferred Stock and the Acuity Series B Preferred Stock.

      “Acuity Series A Preferred Stock” means the Series A Preferred Stock of Acuity, par value $0.01 per share.

      “Acuity Series A Valuation” shall mean $1,919,116.

      “Acuity Series B Preferred Stock” means the Series B Preferred Stock of Acuity, par value $0.01 per share.

      “Acuity Series B Valuation” shall mean $22,806,128.

      “Acuity Shareholder” means any holder of Acuity Shares.

      “Acuity Shares” means, collectively, all of the issued and outstanding shares of Acuity Common Stock, Acuity Series A Preferred Stock, and Acuity Series B Preferred Stock.

      “Acuity Warrant Number” shall mean 0.0909507.

      “Eligible Market” means the American Stock Exchange.

      “Employee Benefit Plans” means (i) all “employee benefit plans” (as defined in Section 3(3) of ERISA), (ii) all employment, consulting, individual compensation and collective bargaining agreements and (iii) all other employee benefit plans, policies, agreements, or arrangements, including any bonus or other incentive compensation, stock purchase, equity or equity-based compensation, deferred compensation, change in control, termination, severance, sick leave, vacation, loans, perquisites, salary continuation, health, disability, life insurance and educational assistance plans, policies, agreements or arrangements.

      “End Date” means August 30, 2007.

      “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

      “ERISA Affiliate” means any entity (whether or not incorporated) which would be treated as a single employer with Acuity under Sections 414(b), (c), (m) or (o) of the Code and the regulations thereunder.

      “Exchange Act” means the Securities Exchange Act of 1934, as amended.

      “FDA” means the U.S. Food and Drug Administration.

      “Froptix Common Stock” means the Common Stock of Froptix, par value $0.01 per share.

      “Froptix Shareholder” means any holder of Froptix Shares.

      “Froptix Shares” means, collectively, all of the issued and outstanding shares of Froptix Common Stock.

      “Froptix Valuation” shall mean $33,000,000.

      “Froptix Warrant Number” shall mean 0.2530630.

      “GAAP” means accounting principles generally accepted in the United States of America applied on a consistent basis throughout the periods indicated.

      “Governmental Authority” means any foreign, federal, national, state or local judicial, legislative, executive or regulatory body, authority or instrumentality.

      “Hazardous Substances” means any substance, waste, contaminant, pollutant or material that has been determined by any Governmental Authority to be capable of posing a risk of injury to health, safety, property or the environment.

      “Holder” means the Trustees of the University of Pennsylvania and any of the holders of any Registrable Securities who is a party to the Acuity Lockup Agreements or Froptix Lockup Agreements .

      “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses

(A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness and (H) all guaranties in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above.

      “Insolvent” means, with respect to any Person, (i) the present fair saleable value of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness, (ii) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such Person has unreasonably small capital with which to conduct its business as such business is now conducted and is proposed to be conducted.

      “Intellectual Property” means all trademarks and trademark rights, trade names and trade name rights, service marks and service mark rights, service names and service name rights, patents and patent rights, brand names, trade dress, product designs, product packaging, business and product names, logos, slogans, rights of publicity, trade secrets, inventions, formulae, industrial models, processes, designs, specifications, data, technology, methodologies, computer programs (including all source codes), any other confidential and proprietary right or information, whether or not subject to statutory registration, and all related technical information, manufacturing, engineering and technical drawings, know-how and all pending applications for and registrations of patents, trademarks, service marks and copyrights, and the right to sue for past infringement, if any, in connection with any of the foregoing, and all documents, disks and other media on which any of the foregoing is stored.

      “Law” means any law, statute, rule, regulation, judgment, decree, order, ordinance, code, regulation, arbitration award, grant, franchise, permit and license or other legally enforceable requirement of or by any Governmental Authority.

      “Letter of Transmittal” means a letter of transmittal in such form as reasonably presented to the Froptix Shareholders and the Acuity Shareholders by Parent a reasonable amount of time after to the Froptix Merger Effective Time and the Acuity Merger Effective Time, as applicable.

      “Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof and including any lien or charge arising by Law.

      “Material Adverse Effect” means a material adverse effect on the operations, condition (financial or other), assets, liabilities, earnings, or business (as now conducted or as proposed to be conducted) of the Person affected or on the transactions contemplated hereby; provided , however , that (i) any adverse change or effect that is

demonstrated to be primarily caused by conditions affecting the United States economy generally shall not be taken into account in determining whether there has been or would be a “Material Adverse Effect” on or with respect to the Person affected, or (ii) any adverse change, event or effect that is demonstrated to be primarily caused by the announcement or pendency of the Mergers or of the transactions contemplated hereby shall not be taken into account in determining whether there has been or would be a “Material Adverse Effect” on or with respect to the Person affected.

      “OTCBB” means the over-the-counter bulletin board market maintained by The Nasdaq Stock Market, Inc.

      “Parent Common Stock” means the Common Stock of Parent, par value $0.01 per share.

      “Parent Employee Benefit Plans” means all Employee Benefit Plans with respect to which Parent or any ERISA Affiliate of Parent has any obligation or liability, contingent or otherwise.

      “Parent Per Share Stock Valuation” means the per share dollar amount equal to the quotient of the Parent Valuation divided by the number of shares of the capital stock of Parent (including options and warrants to purchase capital stock of Parent) outstanding immediately prior to the Froptix Merger Effective Time, calculated on a fully-diluted basis.

      “Parent Preferred Stock” means the Parent Series A Preferred Stock and the Parent Series B Preferred Stock.

      “Parent Series A Preferred Stock” means the Series A Preferred Stock of Parent, par value $0.01 per share.

      “Parent Series B Preferred Stock” means the Series B Junior Participating Preferred Stock of Parent, par value $0.01 per share.

      “Parent Series C Preferred Stock” means the Series C Preferred Stock of Parent, par value $0.01 per share, which will have the rights and preferences set forth in the Series C Preferred Certificate of Designation.

      “Parent Valuation” shall mean $19,000,000.

      “Person” means all natural persons, corporations, business trusts, associations, unincorporated organizations, limited liability companies, partnerships, joint ventures and other entities and Governmental Authorities or any department or agency thereof.

      “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened in writing.

      “Registrable Securities” means all of (i) the shares of Parent Common Stock issued pursuant to this Agreement, (ii) the shares of Parent Common Stock issuable upon conversion of the shares of Parent Series C Preferred Stock issued pursuant to this Agreement, (iii) the shares of Parent Common Stock issuable upon exercise of the Parent Warrants issued pursuant to this Agreement or the Master Agreement and (iv) the shares of Parent Common Stock issuable upon exercise of the Adjusted Parent Options or Adjusted Parent Series C Options issued pursuant to this Agreement, together with any securities issued or issuable pursuant to the adjustment provisions set forth in the Parent Warrants or upon any stock split, dividend or other distribution, recapitalization, exchange or similar event with respect to the foregoing.

      “SEC” means the U.S. Securities and Exchange Commission.

      “Securities Act” means the Securities Act of 1933, as amended.

      “Series C Certificate of Designation” means the Series C Certificate of Designation of Parent in substantially the form attached hereto as Exhibit E .

      “Takeover Protections” shall mean any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under an entity’s charter documents or the laws of its state of incorporation.

      1.2 Each of the following additional terms is defined in the Section set forth opposite such term:

ARTICLE II
THE MERGERS

      2.1 The Mergers .

          (a) Froptix Merger. On the terms and subject to the conditions set forth in this Agreement, at the Froptix Merger Effective Time, in accordance with the terms of the Florida Business Corporation Act (the “ FBCA” ) and the Delaware Limited Liability Company Act (the “LLC Act” ), Froptix shall be merged with and into Merger Sub I. At the Froptix Merger Effective Time, the separate existence of Froptix shall cease and Merger Sub I shall continue as the surviving company (“ Surviving Company I” ).

          (b) Acuity Merger . On the terms and subject to the conditions set forth in this Agreement, at the Acuity Merger Effective Time, which shall take place immediately after the effectiveness of the Froptix Merger, in accordance with the provisions of the Delaware General Corporation Law (the “ DGCL” ) and the LLC Act, Acuity shall be merged with and into Merger Sub II. At the Acuity Merger Effective Time, the separate existence of Acuity shall cease and Merger Sub II shall continue as the surviving company (“ Surviving Company II” ).

      2.2 The Closing . The closing of the Froptix Merger and the Acuity Merger and the other transactions contemplated by this Agreement (the “ Closing” ) shall take place at the offices of Akerman Senterfitt, in Miami, Florida, commencing at 9:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective parties will take at the Closing itself) or such other date as the parties may mutually determine (the “ Closing Date” ).

      2.3 Effective Times .

          (a) Froptix Merger Effective Time . Prior to the Closing, Parent, Merger Sub I and Froptix shall prepare, and, on the Closing Date, Froptix shall file (i) with the Secretary of State of the State of Florida, Articles and a Plan of Merger in substantially the form attached hereto as Exhibit A (the “Froptix Articles of Merger” ), (ii) with the Secretary of State of the State of Delaware, a Certificate of Merger in substantially the form attached hereto as Exhibit B (the “ Froptix Certificate of Merger” ), and/or (iii) such other appropriate documents executed in accordance with the applicable provisions of FBCA and the LLC Act and shall make all other filings or recordings required under the FBCA and the LLC Act to effect the Froptix Merger. The Froptix Merger shall become effective at the later of such time as the Articles of Merger and the

Froptix Certificate of Merger are accepted for recording by the Secretary of State of the State of Florida or Delaware, as applicable. The time at which the Froptix Merger shall become effective as aforesaid is referred to as the “ Froptix Merger Effective Time .”

          (b) Acuity Merger Effective Time . Prior to the Closing, Parent, Merger Sub II and Acuity shall prepare, and, on the Closing Date, Acuity shall file with the Secretary of State of the State of Delaware, a Certificate of Merger in the form attached hereto as Exhibit C (the “Acuity Certificate of Merger” ), and/or such other appropriate documents executed in accordance with the applicable provisions of the DGCL and the LLC Act and shall make all other filings or recordings required under the DGCL and the LLC Act to effect the Acuity Merger. The Acuity Merger shall become effective at such time as the Certificate of Merger is accepted for recording by the Secretary of State of the State of Delaware. The time at which the Acuity Merger shall become effective as aforesaid is referred to as the “ Acuity Merger Effective Time .”

      2.4 Legal Effects of the Mergers .

          (a) Legal Effect of The Froptix Merger . At the Froptix Merger Effective Time, the effect of the Froptix Merger shall be as provided in this Agreement and the applicable provisions of the FBCA and the LLC Act. Without limiting the generality of the foregoing, and subject thereto, at the Froptix Merger Effective Time, all of the assets, properties, rights, privileges, powers and franchises of Froptix and Merger Sub I shall vest in Surviving Company I, and all of the debts, liabilities, obligations, restrictions and duties of Froptix and Merger Sub I shall become the debts, liabilities, obligations, restrictions and duties of Surviving Company I.

          (b) Legal Effect of The Acuity Merger . At the Acuity Merger Effective Time, the effect of the Acuity Merger shall be as provided in this Agreement and the applicable provisions of the DGCL and the LLC Act. Without limiting the generality of the foregoing, and subject thereto, at the Acuity Merger Effective Time, all of the assets, properties, rights, privileges, powers and franchises of Acuity and Merger Sub II shall vest in Surviving Company II, and all of the debts, liabilities, obligations, restrictions and duties of Acuity and Merger Sub II shall become the debts, liabilities, obligations, restrictions and duties of Surviving Company II.

2.5 Certificates of Formation and Limited Liability Company Agreements.

          (a) Certificate of Formation of Surviving Company I . As of the Froptix Merger Effective Time, by virtue of the Froptix Merger and without any action on the part of Parent, Merger Sub I or Froptix, the Certificate of Formation of Surviving Company I shall be the Certificate of Formation of Merger Sub I, as in effect immediately prior to the Froptix Merger Effective Time, until thereafter amended in accordance with the LLC Act and such Certificate of Formation; provided, however, that as of the Froptix Merger Effective Time the Certificate of Formation shall provide that the name of Surviving Company I is “Froptix, LLC.”

          (b) Limited Liability Company Agreement of Surviving Company I . As of the Effective Time, by virtue of the Froptix Merger and without any action on the part of Parent, Merger Sub I or Froptix, the Limited Liability Company Agreement of Surviving Company I shall be the Limited Liability Company Agreement of Merger Sub I, as in effect immediately prior to the Froptix Merger Effective Time, until thereafter amended in accordance with the LLC Act, the Certificate of Formation of Surviving Company I and such Limited Liability Company Agreement; provided, however, that all references in such Limited Liability Company Agreement to Merger Sub I shall be amended to refer to “Froptix, LLC.”

          (c) Certificate of Formation of Surviving Company II . As of the Acuity Merger Effective Time, by virtue of the Acuity Merger and without any action on the part of Parent, Merger Sub II or Acuity, the Certificate of Formation of Surviving Company II shall be the Certificate of Formation of Merger Sub II, as in effect immediately prior to the Acuity Merger Effective Time, until thereafter amended in accordance with the LLC Act and such Certificate of Formation; provided, however, that as of the Acuity Merger Effective Time the Certificate of Formation shall provide that the name of Surviving Company II is “Acuity Pharmaceuticals, LLC.”

          (d) Limited Liability Company Agreement of Surviving Company II . As of the Effective Time, by virtue of the Acuity Merger and without any action on the part of Parent, Merger Sub II or Acuity, the Limited Liability Company Agreement of Surviving Company II shall be the Limited Liability Company Agreement of Merger Sub II, as in effect immediately prior to the Acuity Merger Effective Time, until thereafter amended in accordance with the LLC Act, the Certificate of Formation of Surviving Company II and such Limited Liability Company Agreement; provided, however, that all references in such Limited Liability Company Agreement to Merger Sub II shall be amended to refer to “Acuity Pharmaceuticals, LLC.”

      2.6 Managers and Officers .

          (a) Managers of Surviving Company I . The initial mangers of Surviving Company I, if any, shall be the managers of Merger Sub I, if any, as of immediately prior to the Froptix Merger Effective Time, until their respective successors are duly elected or appointed and qualified.

          (b) Officers of Surviving Company I. The initial officers of Surviving Company I shall be the officers of Merger Sub I as of immediately prior to the Froptix Merger Effective Time.

          (c) Managers of Surviving Company II . The initial managers of Surviving Company II, if any, shall be the managers of Merger Sub II, if any, as of immediately prior to the Acuity Merger Effective Time, until their respective successors are duly elected or appointed and qualified.

(the “ Acuity Common Exchange Ratio” ), (ii) and a Parent Warrant to purchase a number of shares of Parent Common Stock equal to the product of the Acuity Warrant Number and the Acuity Common Exchange Ratio. One-third of the Parent Warrants will have an exercise price equal to 1.35 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 1.70 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 2.1 times the Parent Per Share Stock Valuation.

          (b) Each share of Acuity Series A Preferred Stock issued and outstanding immediately prior to the Acuity Merger Effective Time (other than Acuity Dissenting Shares) shall cease to be outstanding and shall be converted into and exchanged for the right to receive (i) a number of validly issued, fully paid and nonassessable shares of Parent Common Stock determined by dividing (x) the quotient of the Acuity Series A Valuation divided by the Parent Per Share Stock Valuation by (y) the number of shares of Acuity Series A Preferred Stock issued and outstanding at such time (not on a fully diluted basis) (the “ Acuity Series A Preferred Exchange Ratio” ), (ii) and a Parent Warrant to purchase a number of shares of Parent Common Stock equal to the product of the Acuity Warrant Number and the Acuity Series A Preferred Exchange Ratio. One-third of the Parent Warrants will have an exercise price equal to 1.35 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 1.70 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 2.1 times the Parent Per Share Stock Valuation.

          (c) Each share of Acuity Series B Preferred Stock issued and outstanding immediately prior to the Acuity Merger Effective Time (other than Acuity Dissenting Shares) shall cease to be outstanding and shall be converted into and exchanged for the right to receive (i) a number of validly issued, fully paid and nonassessable shares of Parent Series C Preferred Stock determined by dividing (x) the quotient of the Acuity Series B Valuation divided by the Parent Per Share Stock Valuation by (y) 100 multiplied by the number of shares of Acuity Series B Preferred Stock issued and outstanding at such time (not on a fully diluted basis) (the “ Acuity Series B Preferred Exchange Ratio” ), (ii) and a Parent Warrant to purchase a number of shares of Parent Common Stock equal to (w) the product of the Acuity Warrant Number and the Acuity Series B Preferred Exchange Ratio multiplied by (z) one hundred. One-third of the Parent Warrants will have an exercise price equal to 1.35 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 1.70 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 2.1 times the Parent Per Share Stock Valuation.

          (d) Each unit of membership interest of Merger Sub II issued and outstanding immediately prior to the Acuity Merger Effective Time shall remain issued and outstanding from and after the Acuity Merger Effective Time. Each certificate of Merger Sub II representing any such units shall continue to evidence ownership of such units of Surviving Company II.

      3.4 Acuity Options .

          (a) Subject to the provisions of this Article III, at the Acuity Merger Effective Time, each outstanding and unexercised option to purchase shares of Acuity Common Stock granted under any of the Acuity Option Plans or as otherwise approved by the Acuity Board of Directors (each, an “ Acuity Common Option” ), whether or not exercisable or vested, shall be converted into an option to purchase an Adjusted Parent Option, on substantially the same terms and conditions as were applicable under the Acuity Common Option. Each Adjusted Parent Option shall be exercisable for a number of shares of Parent Common Stock equal to (i) the number of shares of Acuity Common Stock subject to the Acuity Option to which such Adjusted Parent Option relates multiplied by (ii) the Acuity Common Exchange Ratio, rounded down to the nearest whole number of shares. The per share exercise price of each Adjusted Parent Option shall equal (A) the per share exercise price of the Acuity Option to which such Adjusted Parent Option relates divided by (B) the Acuity Common Exchange Ratio, rounded up to the nearest whole cent. Parent shall issue each Adjusted Parent Option to each holder of an Acuity Option upon surrender thereof or, in case such Acuity Option shall be lost, stolen or destroyed, upon receipt of an affidavit of that fact by the holder thereof and, if required by Parent, the written agreement by such Person to indemnify Parent and Surviving Company II against any claim that may be made against it with respect to such Acuity Option.

          (b) Subject to the provisions of this Article III, at the Acuity Merger Effective Time, each outstanding and unexercised option to purchase shares of Acuity Series B Preferred Stock granted under any of the Acuity Option Plans or as otherwise approved by the Acuity Board of Directors (each, an “ Acuity Preferred Option” and with the Acuity Common Options, the “ Acuity Options” ), whether or not exercisable or vested, shall be converted into an option to purchase Parent Series C Preferred Stock (an “Adjusted Parent Series C Option” ), on substantially the same terms and conditions as were applicable under the Acuity Preferred Option. Each Adjusted Parent Series C Option shall be exercisable for a number of shares of Parent Series C Preferred Stock equal to (i) the number of shares of Acuity Series B Preferred Stock subject to the Acuity Preferred Option to which such Adjusted Parent Series C Option relates multiplied by (ii) the Acuity Series B Preferred Exchange Ratio, rounded to the nearest whole number of shares. The per share exercise price of each Adjusted Parent Series C Option shall equal (A) the per share exercise price of the Acuity Preferred Option to which such Adjusted Parent Series C Option relates divided by (B) the Acuity Series B Preferred Exchange Ratio, rounded to the nearest whole cent. Parent shall issue each Adjusted Parent Series C Option to each holder of an Acuity Preferred Option upon surrender thereof or, in case such Acuity Preferred Option shall be lost, stolen or destroyed, upon receipt of an affidavit of that fact by the holder thereof and, if required by Parent, the written agreement by such Person to indemnify Parent and Surviving Company II against any claim that may be made against it with respect to such Acuity Preferred Option.

          (c) Acuity and Parent shall take any actions necessary and appropriate to cause the obligations of Acuity under the Acuity Option Plans and agreements under which the Adjusted Parent Option or Adjusted Parent Series C Option was originally

granted to be assumed by Parent at the Acuity Merger Effective Time subject to the adjustments required by Section 3.4(a) or Section 3.4(b). The terms of each Acuity Option and the Acuity Option Plans under which such Acuity Option was initially granted, in each case, as in effect immediately prior to the Acuity Merger Effective Time, shall continue to apply in all material respects to the corresponding Adjusted Parent Option or Adjusted Parent Series C Option.

          (d) Except to the extent required under the terms of the Acuity Options (and not waived by any holder thereof), all restrictions or limitations on transfer and vesting with respect to Acuity Options awarded under the Acuity Option Plans or any other plan, program or arrangement of Acuity, to the extent that such restrictions or limitations shall not have already lapsed, shall remain in full force and effect with respect to such Adjusted Parent Option or Adjusted Parent Series C Option after giving effect to the Acuity Merger.

          (e) Parent shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Parent Common Stock and Parent Series C Preferred Stock for delivery upon exercise of the Adjusted Parent Options and the Adjusted Parent Series C Options, as applicable. Within seventy-five (75) days after the Closing Date, Parent shall file a registration statement on Form S-8 (if available) (or any successor or other appropriate forms) with respect to the shares of Parent Common Stock subject to such options and shall use all reasonable efforts to maintain the effectiveness of such registration statement (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such options remain outstanding.

      3.5 Acuity Warrants . Subject to the provisions of this Article III, at the Acuity Merger Effective Time:

          (a) Pursuant to the terms of each outstanding warrant to purchase shares of Acuity Common Stock (an “ Acuity Common Warrant” ), each Acuity Common Warrant shall be assumed by Parent and shall represent the right to acquire upon exercise thereof the number of shares of Parent Common Stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Acuity Common Stock issuable upon the exercise of each Acuity Common Warrant by the Acuity Common Exchange Ratio; provided, that the aggregate exercise price of each Acuity Common Warrant shall remain unchanged. Each holder of an Acuity Common Warrant shall also receive a Parent Warrant to purchase a number of shares of Parent Common Stock equal to the product of the Acuity Warrant Number and the Acuity Common Exchange Ratio for each share of Acuity Common Stock which the Acuity Common Warrant was exercisable into immediately prior to the Acuity Merger Effective Time. One-third of the Parent Warrants will have an exercise price equal to 1.35 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 1.70 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 2.1 times the Parent Per Share Stock Valuation.

          (b) Pursuant to the terms of each outstanding warrant to purchase shares of Acuity Series B Preferred Stock (an “ Acuity Series B Preferred Warrant” ), each Acuity Series B Preferred Warrant shall be assumed by Parent and amended and converted into the right to acquire upon exercise thereof the number of shares of Parent Series C Preferred Stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Acuity Series B Preferred Stock issuable upon the

exercise of each Acuity Series B Preferred Warrant by the Acuity Series B Preferred Exchange Ratio; provided, that the aggregate exercise price of each Acuity Series B Preferred Warrant shall remain unchanged. Each holder of an Acuity Series B Preferred Warrant shall also receive a Parent Warrant to purchase a number of shares of Parent Common Stock equal to (w) the product of the Acuity Warrant Number and the Acuity Series B Preferred Exchange Ratio multiplied by 100 (z) for each share of Acuity Series B Stock which the Acuity Series B Preferred Warrant was exercisable into immediately prior to the Acuity Merger Effective Time. One-third of the Parent Warrants will have an exercise price equal to 1.35 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 1.70 times the Parent Per Share Stock Valuation. One-third of the Parent Warrants will have an exercise price equal to 2.1 times the Parent Per Share Stock Valuation.

          (c) Subject to Section 11.3, Parent shall issue each amended and converted warrant contemplated by this Section 3.5 to each holder of an Acuity Common Warrant or an Acuity Series B Preferred Warrant upon surrender thereof or, in case such warrant shall be lost, stolen or destroyed, upon receipt of an affidavit of that fact by the holder thereof and, if required by Parent, the written agreement by such Person to indemnify Parent and Surviving Company II against any claim that may be made against it with respect to such Acuity Common Warrant or an Acuity Series B Preferred Warrant.

      3.6 Surrender and Exchange of Froptix Securities . As soon as practicable after the Froptix Merger Effective Time and subject to Section 11.3, upon (i) surrender of a certificate or certificates representing the Froptix Shares that were outstanding immediately prior to the Froptix Merger Effective Time (each a “ Froptix Stock Certificate” ) to Parent (or, in case such certificates shall be lost, stolen or destroyed, an affidavit of that fact by the holder thereof pursuant to Section 3.11) and (ii) delivery to Parent of an executed Letter of Transmittal, Parent shall deliver to the record holder of the Froptix Shares surrendering such certificate or certificates, a warrant agreement or agreements and a certificate or certificates (or evidence of shares in book-entry form) registered in the name of such shareholder representing the number of shares of Parent Common Stock and Parent Warrants to which such holder is entitled under Section 3.1(a). In the event of a transfer of ownership of Froptix Shares that is not registered in the transfer records of Froptix, a certificate (or evidence of shares in book-entry form) representing the proper number of whole shares of Parent Common Stock may be issued to a Person other than the Person in whose name the Froptix Stock Certificate so surrendered is registered, if, upon delivery by the holder thereof, such Froptix Stock Certificate shall be properly endorsed or shall otherwise be in proper form for transfer and the Person requesting such issuance shall have paid any transfer and other taxes required by reason of the issuance of shares of Parent Common Stock to a Person other than the registered holder of such Froptix Stock Certificate or shall have established to the reasonable satisfaction of Parent that such tax either has been paid or is not applicable, and shall have demonstrated, to the reasonable satisfaction of Parent, that the transfer of such Froptix Shares to the requesting person was accomplished in conformity with all applicable securities Laws and with any other agreements restricting the transfer of the Froptix Shares, to which such Froptix Shares are subject. As of the Froptix Merger Effective Time, each Froptix Share issued and outstanding immediately prior to the Froptix Merger Effective Time shall no longer be outstanding and shall automatically be canceled and retired and until the certificate or certificates evidencing such shares are surrendered, each certificate that immediately prior to the Froptix Merger Effective Time represented any outstanding Froptix Share shall be deemed at and after the Froptix

Merger Effective Time to represent only the right to receive upon surrender as aforesaid the consideration specified in Section 3.1(a) for the holder thereof.

      3.7 Surrender and Exchange of Acuity Securities . As soon as practicable after the Acuity Merger Effective Time and subject to Section 11.3, upon (i) surrender of a certificate or certificates representing Acuity Shares that were outstanding immediately prior to the Acuity Merger Effective Time (each an “ Acuity Stock Certificate” ) to Parent (or, in case such certificates shall be lost, stolen or destroyed, an affidavit of that fact by the holder thereof pursuant to Section 3.11) and (ii) delivery to Parent of an executed Letter of Transmittal, Parent shall deliver to the record holder of the Acuity Shares surrendering such certificate or certificates, a warrant agreement or agreements and a certificate or certificates (or evidence of shares in book-entry form) registered in the name of such shareholder representing the number of shares of Parent Common Stock or Parent Series C Preferred Stock and Parent Warrants to which such holder is entitled under Section 3.3(a), Section 3.3(b) and Section 3.3(c). In the event of a transfer of ownership of Acuity Shares that is not registered in the transfer records of Acuity, a certificate (or evidence of shares in book-entry form) representing the proper number of whole shares of Parent Common Stock or Parent Series C Preferred Stock, as applicable, may be issued to a Person other than the Person in whose name the Acuity Stock Certificate so surrendered is registered, if, upon delivery by the holder thereof, such Acuity Stock Certificate shall be properly endorsed or shall otherwise be in proper form for transfer and the Person requesting such issuance shall have paid any transfer and other taxes required by reason of the issuance of shares of Parent Common Stock or Parent Series C Preferred Stock, as applicable, to a Person other than the registered holder of such Acuity Stock Certificate or shall have established to the reasonable satisfaction of Parent that such tax either has been paid or is not applicable, and shall have demonstrated, to the reasonable satisfaction of Parent, that the transfer of such Acuity Shares to the requesting person was accomplished in conformity with all applicable securities Laws and with any other agreements restricting the transfer of the Acuity Shares, to which such Acuity Shares are subject. As of the Acuity Merger Effective Time, each Acuity Share issued and outstanding immediately prior to Acuity the Merger Effective Time (other than Acuity Dissenting Shares) shall no longer be outstanding and shall automatically be canceled and retired and until the certificate or certificates evidencing such shares are surrendered, each certificate that immediately prior to the Acuity Merger Effective Time represented any outstanding Acuity Share (other than Acuity Dissenting Shares) shall be deemed at and after the Acuity Merger Effective Time to represent only the right to receive upon surrender as aforesaid the consideration specified in Section 3.3(a), Section 3.3(b) and Section 3.3(c), as applicable, for the holder thereof.

      3.8 Transfer Books; No Further Ownership Rights in Froptix Shares . All shares of Parent Common Stock and Parent Warrants issued upon the surrender for exchange of Froptix Stock Certificates in accordance with the terms of this Article III shall be deemed to have been issued (and paid) in full satisfaction of all rights pertaining to the Froptix Shares previously represented by such Froptix Stock Certificates, and at the Froptix Merger Effective Time, the share transfer books of Froptix shall be closed and thereafter there shall be no further registration of transfers on the share transfer books of Surviving Company I of the Froptix Shares that were outstanding immediately prior to

the Froptix Merger Effective Time. From and after the Froptix Merger Effective Time, the holders of Froptix Stock Certificates that evidenced ownership of the Froptix Shares outstanding immediately prior to the Froptix Merger Effective Time shall cease to have any rights with respect to such shares, except as otherwise provided for herein or by applicable Law.

      3.9 Transfer Books; No Further Ownership Rights in Acuity Shares . All shares of Parent Common Stock, Parent Series C Preferred Stock and Parent Warrants issued upon the surrender for exchange of Acuity Stock Certificates in accordance with the terms of this Article III shall be deemed to have been issued (and paid) in full satisfaction of all rights pertaining to the Acuity Shares previously represented by such Acuity Stock Certificates, and at the Acuity Merger Effective Time, the share transfer books of Acuity shall be closed and thereafter there shall be no further registration of transfers on the share transfer books of Surviving Company II of the Acuity Shares that were outstanding immediately prior to the Acuity Merger Effective Time. From and after the Acuity Merger Effective Time, the holders of Acuity Stock Certificates that evidenced ownership of the Acuity Shares outstanding immediately prior to the Acuity Merger Effective Time shall cease to have any rights with respect to such shares, except as otherwise provided for herein or by applicable Law.

      3.10 No Fractional Shares or Warrants . No fraction of a share of Parent Common Stock or Parent Series C Preferred Stock (including any Parent Warrant to purchase a fraction of a share of Parent Common Stock or Parent Series C Preferred Stock) shall be issued upon the surrender for exchange of a Froptix Stock Certificate or Acuity Stock Certificate (or evidence of such shares in book-entry form), no dividends or other distributions of Parent shall relate to such fractional share interests and such fractional share interests will not entitle the owner thereof to vote or to any rights of a stockholder of Parent. Each holder of Froptix Shares or Acuity Shares who would otherwise be entitled to a fraction of a share of Parent Common Stock or Parent Series C Preferred Stock (after aggregating all fractional shares of Parent Common Stock or Parent Series C Preferred Stock that otherwise would be received by such holder) shall, receive from Parent, in lieu of such fractional share, one share of Parent Common Stock and/or Parent Series C Preferred Stock, as the case may be.

      3.11 Lost, Stolen or Destroyed Certificates . If any Froptix Stock Certificate or Acuity Stock Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Froptix Stock Certificate or Acuity Stock Certificate to be lost, stolen or destroyed and, if required by Parent, the written agreement by such Person to indemnify Parent and Surviving Company I or Surviving Company II, as applicable, against any claim that may be made against it with respect to such Froptix Stock Certificate or Acuity Stock Certificate, Parent will issue, subject to Section 11.3, in exchange for such lost, stolen or destroyed Froptix Stock Certificate or Acuity Stock Certificate, Parent Common Stock or Parent Series C Preferred Stock, as applicable, and Parent Warrants pursuant to this Agreement.

      3.12 Dissenting Shares . Notwithstanding anything in this Agreement to the contrary, Acuity Shares which are issued and outstanding immediately prior to the Acuity

Merger Effective Time and which are held by stockholders properly exercising appraisal rights available under Section 262 of the DGCL (the “ Acuity Dissenting Shares” ) shall not be converted into or be exchangeable for the right to receive the shares of Parent Common Stock or Parent Series C Preferred Stock, as applicable, and Parent Warrants, unless and until such holders shall have failed to perfect or shall have effectively withdrawn or lost their rights to appraisal under the DGCL. Acuity Dissenting Shares shall be treated in accordance with Section 262 of the DGCL. If any such holder shall have failed to perfect or shall have effectively withdrawn or lost such right to appraisal, such holder’s Acuity Shares shall thereupon be converted into and become exchangeable only for the right to receive, as of the Acuity Merger Effective Time, shares of Parent Common Stock or Parent Series C Preferred Stock, as applicable, and Parent Warrants. Acuity shall give (a) Parent and Froptix prompt notice of any written demands for appraisal of any Acuity Shares, attempted withdrawals of such demands and any other instruments, served pursuant to the DGCL and received by Acuity relating to rights to be paid the “fair value” of Acuity Dissenting Shares, as provided in Section 262 of the DGCL and (b) Parent the opportunity to participate in, and after the Closing, direct, all negotiations and proceedings with respect to demands for appraisal under the DGCL. Acuity shall not, except with the prior written consent of Parent and Froptix, voluntarily make or agree to make any payment with respect to any demands for appraisals of Acuity Shares. Acuity or Surviving Company II, as applicable under Section 262 of the DGCL, shall comply will all notice requirements under such Section.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACUITY

     Except as set forth on the Schedule of Exceptions delivered to Parent in connection with this Agreement, Acuity represents and warrants to Parent as of the date of this Agreement as follows:

      4.1 Organization and Standing . Acuity is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Acuity has the requisite corporate power and authority to own and operate its properties and assets, and to carry on its business as currently conducted. Acuity is presently qualified to do business as a foreign corporation in the Commonwealth of Pennsylvania and in each other jurisdiction in which the failure to be so qualified would have a Material Adverse Effect with respect to Acuity. True and accurate copies of Acuity’s Certificate of Incorporation (the “ Acuity Certificate” ) and Acuity’s By-laws (the “ Acuity By-laws” ), each as in effect as of the date hereof and at the Closing, have been delivered to Parent.

      4.2 Corporate Power . Acuity has all requisite legal and corporate power and authority to execute and deliver this Agreement and to carry out and perform its other obligations hereunder.

      4.3 Authorization . All action on the part of Acuity and its officers, directors and security holders necessary for the authorization, execution and delivery of this Agreement and the performance of its respective obligations hereunder, has been taken or will be taken prior to or upon the Closing, as applicable. This Agreement has been duly

executed by Acuity and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes and will constitute a valid and legally binding obligation of Acuity, except (i) as limited by Laws of general application relating to bankruptcy, insolvency and the relief of debtors and (ii) as limited by rules of Law governing specific performance, injunctive relief or other equitable remedies and by general principles of equity.

      4.4 Subsidiaries . Acuity does not own or control, directly or indirectly, any interest in any corporation, partnership, limited liability company, association, other business entity or Person. Acuity is not a participant in any joint venture, partnership or similar arrangement. Since its inception, Acuity has not consolidated or merged with, acquired all or substantially all of the assets of, or acquired the stock of or any interest in any Person.

      4.5 Capitalization .

          (a) The authorized capital stock of Acuity on the date hereof and immediately prior to the Closing consists, and shall consist, of 19,584,956 shares of Acuity Common Stock, of which 2,116,877 shares of Acuity Common Stock are issued and outstanding, and 13,997,179 shares of Acuity Preferred Stock, of which 742,000 are designated Acuity Series A Preferred Stock and of which 13,255,179 are designated Acuity Series B Preferred Stock. Immediately prior to the Closing, 742,000 shares of Acuity Series A Preferred Stock were issued and outstanding and convertible into Acuity Common Stock on a one-for-one basis, and 8,817,679 shares of Acuity Series B Preferred were issued or outstanding and convertible into Acuity Common Stock on a one-for-one basis. The Acuity Common Stock and the Acuity Preferred Stock have the rights, preferences, privileges and restrictions set forth in the Acuity Certificate and under Delaware Law. All issued and outstanding shares of Acuity’s capital stock have been duly authorized and validly issued in compliance with applicable Laws, and are fully paid and nonassessable and free and clear of Liens or third party rights and of any restrictions on transfer, except for transfer restrictions of the federal and state securities laws. To Acuity’s knowledge, each holder of any capital stock of Acuity is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

          (b) There are no options, warrants, preemptive rights, rights of first refusal, put or call rights or obligations or anti-dilution or other rights to purchase or acquire from Acuity any of Acuity’s authorized and unissued capital stock. There are no rights to have Acuity’s capital stock registered for sale to the public in connection with the Laws of any jurisdiction, no agreements relating to the voting of Acuity’s voting securities (except as contemplated hereby) and no restrictions on the transfer of Acuity’s capital stock or other equity securities, other than those arising under applicable securities Laws. All outstanding shares, options and warrants were issued pursuant to and in compliance with a valid exemption from registration under the Securities Act, and have been issued in compliance with applicable state securities Laws. The exercise price of each option to purchase or acquire from Acuity any of Acuity’s authorized and unissued capital stock was intended to constitute a price which is equal to or greater than the fair

      4.9 Intellectual Property

          (a) Acuity owns or licenses for use (with a right of sublicense) certain Intellectual Property ( “Acuity Intellectual Property” ), such Acuity Intellectual Property being all that is necessary for the business of Acuity as presently conducted. To Acuity’s knowledge, neither Acuity’s material pre-clinical and clinical development candidates and processes to make such candidates, nor any Acuity Intellectual Property, infringe or will infringe on the valid and subsisting Intellectual Property rights of others that Acuity is aware of or, to Acuity’s knowledge, any other rights of others. No claim is pending or, to Acuity’s knowledge, threatened, alleging any such infringement or with respect to the ownership, validity, license or use of, or any infringement resulting from, either the Acuity Intellectual Property or the sale of any material products or services by Acuity. No loss or expiration of the Acuity Intellectual Property is pending or, to Acuity’s knowledge, threatened. The Schedule of Exceptions contains a complete list of the patents and patent applications, trademark applications and registrations, copyright registrations, and domain name registrations within Acuity Intellectual Property. There are no outstanding options, licenses or other agreements relating to the Acuity Intellectual Property, and Acuity is not bound by or a party to any options, licenses or agreements with respect to the Intellectual Property of any other person or entity. Acuity is not violation of any license, sublicense, or other agreements to which it is a party or otherwise bound relating to any Intellectual Property. Acuity is not obligated to make any payments by way of royalties, fees or otherwise to any owner or licensor of or claimant to any Intellectual Property with respect to the use thereof in connection with the conduct of its business as presently conducted. There are no agreements, understandings, instruments, contracts, judgments, orders or decrees to which Acuity is a party or by which it is bound that involve indemnification by Acuity with respect to infringements of Intellectual Property. To Acuity’s knowledge, all registrations owned by or on behalf of Acuity, and applications to governmental or regulatory authorities in respect of such Acuity Intellectual Property, are valid and in full force and effect. To Acuity’s knowledge, no other person is infringing on the Acuity Intellectual Property.

          (b) Each former and current officer, employee and consultant of Acuity has executed a Confidential Information and Invention Assignment Agreement, substantially in the form(s) delivered to Parent, and each such agreement remains in full force and effect pursuant to its terms. To Acuity’s knowledge, no officer or employee or consultant is in violation of such proprietary information agreement or of any prior employee contract, proprietary information agreement or other agreement relating to the right of any such individual to be employed by, or to contract with, Acuity, and, to Acuity’s knowledge, the continued employment by Acuity of its present employees, and the performance of Acuity’s contracts with its independent contractors, will not result in any such violation. Acuity has not received any written notice alleging that any such violation has occurred.

          (c) The Acuity Merger does not and will not materially or adversely affect any rights of Acuity or Surviving Company II to use any material Acuity Intellectual Property.

      4.10 Title to Properties and Assets; Liens . Acuity has good and marketable title to its properties and assets, and has good title to all its leasehold interests, in each case subject to no Lien or lease, other than (i) for Liens for current taxes not yet due and payable, and provided for on the applicable financial statements, and (ii) de minimis Liens and defects in title which do not in any case, individually or in the aggregate, materially detract from the value, continued ownership, use or operation of the property subject thereto or materially impair business operations, and that have not arisen otherwise than in the ordinary course of business (the “Permitted Liens” ). With respect to the property and assets it leases, Acuity is in compliance with such leases in all material respects and holds a valid leasehold interest free of all Liens other than Permitted Liens. Acuity’s properties and assets are in good condition and repair in all material respects. Acuity does not currently own, and has never owned, any real property.

      4.11 Compliance with Other Instruments and Laws . Acuity is not in violation or default of any provision of the Acuity Certificate or the Acuity By-laws, each as amended and in effect on the date hereof and as of the Closing. Acuity is not in violation of, default under or breach of any provision of any agreement, instrument, mortgage, deed of trust, loan, contract, commitment, judgment, decree, order or obligation to which it is a party or by which it or any of its properties or assets are bound, which violation, default or breach, individually or in the aggregate, would or could reasonably be expected to have a Material Adverse Effect on Acuity. Acuity is not in violation of any provision of any federal, state or local statute, rule or governmental regulation, judgment, injunction or decree of any governmental authority, which violation, individually or in the aggregate, would or could reasonably be expected to have a Material Adverse Effect on Acuity. The execution and delivery of this Agreement by Acuity, and Acuity’s performance of and compliance with the terms hereof, or the consummation of the Acuity Merger and the other transactions contemplated hereby, will not result in any violation, breach or default, be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any Acuity Material Agreement or any of the foregoing provisions, require any consent or waiver under any Acuity Material Agreement or any of the foregoing provisions (other than any consents or waivers that have been obtained), result in the creation of any Lien upon any of the properties or assets of Acuity, trigger any right of cancellation, termination or acceleration under any Acuity Material Agreement or any of the foregoing provisions, create any right of payment in any other person or entity (except as set forth herein), or result in a Material Adverse Effect on Acuity. Acuity has delivered to Parent and Froptix copies of all written communications to and from the FDA and written summaries of all such oral communications. Acuity has no knowledge that could reasonably lead it to believe that the FDA will not approve any of its proposed products or that questions the validity of its clinical trials.

      4.12 Litigation . There is no action, suit, proceeding or investigation pending or, to Acuity’s knowledge, threatened against or affecting Acuity or its properties or rights before any court or by or before any governmental agency. The foregoing includes, without limitation, actions pending or, to Acuity’s knowledge, threatened involving the prior employment of any of Acuity’s employees, their use in connection with Acuity’s business or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. Acuity is not

a party or subject to, and none of their respective assets is bound by, the provisions of any order, writ, injunction, judgment or decree of any Governmental Authority. There is no action, suit or proceeding initiated by Acuity currently pending or which Acuity intends to initiate.

      4.13 Governmental Consents . No consent, approval or authorization of or registration, qualification, designation, declaration or filing with any governmental authority on the part of Acuity is required in connection with the valid execution and delivery of this Agreement or the consummation of any transaction contemplated hereby.

      4.14 Permits . Acuity has all franchises, permits, licenses, and any similar authority necessary for the conduct of its business as now being conducted by it, and Acuity reasonably believes it can obtain, without undue burden or expense, any similar authority for the conduct of its business as planned to be conducted. Acuity is not in default in any material respect under any of such franchises, permits, licenses, or other similar authority. Acuity has complied in all material respects with all federal, state or foreign Laws applicable to its business.

      4.15 Brokers or Finders . Acuity has not engaged any brokers, finders or agents, and Acuity has not incurred, and will not incur, directly or indirectly, as a result of any action taken by Acuity or any of its affiliates, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement and the transactions contemplated hereby.

      4.16 Tax Returns and Payments . Acuity has accurately prepared and timely filed all United States income tax returns and all state and municipal tax returns required to be filed by it, if any, has paid all taxes, assessments, fees and charges owed by it (regardless of whether shown on any such tax return) or has otherwise made adequate provision for the payment of all taxes, assessments, fees and charges owed by it. Acuity has withheld or collected from each payment made to each of its employees, the amount of all taxes (including, but not limited to, federal income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be withheld or collected therefrom, and has paid the same to the proper tax receiving officers or authorized depositaries. Acuity has not been advised in writing (a) that any of its returns have been or are being audited or (b) of any deficiency in assessment or proposed adjustment to its federal, state or other taxes. No assessment or proposed adjustment of Acuity’s United States income tax or state or municipal taxes is pending. Acuity is not currently the beneficiary of any extension of time within which to file any tax report or return. No claim has been made by a Governmental Authority in a jurisdiction where Acuity does not file reports and returns that it is or may be subject to taxation by that jurisdiction. There are no Liens on any of the assets of Acuity that arose in connection with the failure or alleged failure to pay any tax. Acuity has withheld and paid all taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor or third party. Acuity has not waived any statute of limitations in respect of taxes or agreed to any extension of time with respect to a tax assessment or deficiency. Acuity has not entered into a closing agreement pursuant to Section 7121 of the Code. Acuity has not made any payments,

and is not and will not become obligated under any contract entered into on or before the Closing Date to make any payments in connection with the transactions contemplated by this Agreement, or in connection with a combination of the transactions contemplated by this Agreement and any other event, that will be non-deductible under Code Section 280G or subject to the excise tax under Code Section 4999 or that would give rise to any obligation to indemnify any Person for any excise tax payable pursuant to Code Section 4999. Acuity is not a party to or bound by any tax allocation or tax sharing agreement or has any current or potential obligation to indemnify any other Person with respect to taxes. Except for consolidated income tax liabilities of any wholly-owned corporate subsidiaries it has owned since their inception, Acuity does not have any liability for taxes of any person under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local or foreign income tax Law), or as transferee, successor, by contract or otherwise. References in this Section to Acuity include references to any and all subsidiaries of Acuity that may affect its liability. Acuity has not participated in any reportable transaction as contemplated in Treasury Regulations Section 1.6011-4.

      4.17 Employees . The employment of each employee of Acuity is terminable at will. No employee of Acuity has been granted the right to continued employment by Acuity or to any material compensation following termination of employment with Acuity. To Acuity’s knowledge, no employee of Acuity, nor any consultant with whom Acuity has contracted, is in violation of any term of any employment contract, noncompetition or proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, Acuity or any judgment, decree or order of any court or administrative agency under which it is subject; and to Acuity’s knowledge the continued employment by Acuity of its present employees, and the performance of Acuity’s contracts with its independent contractors, will not result in any such violation. Neither the execution or delivery of this Agreement, nor the carrying on of Acuity’s business by the employees and independent contractors of Acuity, nor the conduct of Acuity’s business as now conducted will conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee or independent contractor is now obligated and of which Acuity is aware. Acuity has not received any notice alleging that any such violation has occurred. Acuity is not in default with respect to any obligation to any of its employees. No employee of Acuity is represented by any labor union or covered by any collective bargaining agreement. There is no pending or, to Acuity’s knowledge, threatened dispute involving Acuity and any employee or group of its employees. Acuity has complied and is currently complying with all applicable Laws relating to employment and employment practices, terms and conditions of employment, and wages and hours, except for noncompliance that, individually and in the aggregate, would not have a Material Adverse Effect on Acuity.

      4.18 Employee Benefit Plans .

          (a) Schedule 4.18 of the Schedule of Exceptions sets forth a correct and complete list of all Acuity Employee Benefit Plans. Each Acuity Employee Benefit Plan, and its related documents, has been made available to Parent. No Acuity Employee